Ann: Trading Halt, page-80

“I for one would be really excited if IOT/M2M is the main component” – so would I, Craigvn

From the trading halt announcement of last Friday - “……pending a material announcement in regards to the Company’s completion of a commercial testing program with a potential major customer in the Equatorial Region.”

I conclude that this coming announcement centres around the testing with Globalsat as discussed in their ‘news’ coming from the MOU struck in March last year. (Red highlights are mine)

From Globalsat website “news”

SAS and Globalsat Group have commenced testing of M2M and IoT services in Central and South America

Testing will be performed using Globalsat Group’s network infrastructure and customer base

Upon completion of a successful testing program, the companies will enter negotiations on a binding commercial agreement for provision of these services to the Globalsat customer base

The testing further advances the relationship between the two companies and opens the South and Central America region to the SAS connectivity services

A commercial agreement to use the services from the Equatorial Constellation will enable Globalsat Group to provide M2M and IoT services in remote locations Sky and Space Global Ltd (ASX: SAS, “Sky and Space Global” or the “Company”) is pleased to announce it has commenced testing of Machine-to-Machine (M2M) and Internet of Things (IoT) services in the Central and South America region in partnership with Globalsat Group LLC. The partnership will potentially provide Sky and Space Global with access to a new market, while enabling Globalsat Group to expand its connectivity services.

The collaboration between the two companies started with a Memorandum of Understanding (MoU) which was signed in March 2017. The MoU allows the two companies to explore a commercial relationship with a view to SAS to providing narrow-band satellite communication services to customers of Globalsat Group in Central and South America.

The intention is that upon completion of a successful testing program, the companies will commence discussions on a binding commercial agreement to replace the existing MOU.
The testing follows the successful launch of the SAS narrowband communication satellites, the 3 Diamonds, in June 2017 and the subsequent testing, optimisation and operation of the 3 Diamonds to deliver world first phone calls, instant messaging, data transfers and financial transactions using nano-satellites during Q3 and Q4 2017.

Sky and Space Global’s CEO, Mr. Meir Moalem said:
“We are happy to be working with Globalsat Group to provide narrowband satellite communication services to Globalsat’s customers across Central and South America. We believe the testing of M2M and IoT services will allow us to further expand and promote our business in this part of the world, while providing our partner with an opportunity to deliver M2M and IoT services in remote locations and expand their coverage.”

Globalsat Group CEO, Mr. J. Alberto Palacios said:
“We welcome the opportunity to test M2M and IoT services with Sky and Space Global. We believe the market for this kind of services is growing and by using the SAS unique connectivity solution we can provide wider coverage and enhanced services to our customers in the Central and South American region.”

If this TH is in fact the prelude to a Wed ASX announcement re Globalsat, it would be highly likely to surround the successful testing of M2M and IoT services, a market that Globalsat is very keen to pursue as it opens up a huge market that will add depth to its exisiting satellite products.

This being the case, then the MOU struck in March last year, is likely now to be replaced by a more powerful and legally 'binding commercial agreement'. This transition from MOU to BCA means that there is a solid basis to move forward under a binding contractual agreement that will ultimately form the basis under which Globalsat is provided access to the Pearl constellation with a predetermined schedule of fees, payable for services provided by the SAS constellation.

This transition from MOU to “binding contractual agreement” would not only further confirm the commercial validity of the SAS Pearl network, it would form the basis of this and future income streams for SAS.

If I am off track and this is not a Globalsat based deal, completion of commercial testing remains a major step forward to commercializing the Pearl constellation.
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