Having a look at ELS - Elsight Ltd as an interesting comp for RKT. Whilst they do not offer the full suite of services that RKT does, these guys supply a specific bit of technology into the BVLOS drone solution predominately focused on the defense sector. Their business is predominantly in the US, hence the USD reporting.
These guys are trading at 14x the EV that RKT is with less revenue / cash flow generation. The market is clearly placing a higher value on the potential of their hardware solution, then that of the total RKT service offering. If orders don't accelerate further for the company in the current half one could reasonably expect another capital raise on the cards for them around the same time of their convertible note conversion.
Market cap - $52mil
Current Enterprise value - $50mil
Likely Enterprise value post Convertible Note conversion in Dec - $59mil
Cash on hand - US$2mil / A$3mil
Revenue - for 6 months of US $1.1mil / A$1.7mil
Cash flow - for 6 months of US-$750k / -A$1.1mil
Prior year's numbers in USD:
The Company has US$5mil / A$7.7mil (25mil convertible notes) outstanding to GlenEagle securities (a shareholder in the company) with a face value of 30c - paying 8% p.a. with nearly all of them due to expire December this year. It's a decent amount of overhang on the register being ~16.6% of the shares on issue if they are unable to get these repaid. Upon conversion this would see GlenEagle with circa 20% of the business.
From the company's website - BVLOS Drone and UAV Connectivity Solutions | Elsight Elsight was founded in 2009 by Nir **ay and Roee Kashi, two ex-IDF soldiers from the Israeli intelligence community. Elsight’s first products were focused on the world of audio & video transmission. Following success in this area with the defense and homeland security sectors within Israel, Elsight launched a successful IPO on the Australian Securities Exchange in 2017 (ASX:ELS). In 2019, the company started to shift its focus to the unmanned market. The biggest milestone was when Elsight launched their flagship product, the Halo, the world’s premier BVLOS connectivity solution for drones and other unmanned vehicles in 2020. Halo bonds up to four LTE and 5G cellular links, as well as RF and SatCom connections, into one secure VPN pipeline, connecting drone and ground control station with an unbreakable link and providing absolute connection confidence, 24/7.
Today Elsight has become the market leader in BVLOS communication solutions, and has partnered with over 70 different drone and UAV manufacturers and operators who are all using the Halo as their connectivity solution, in many cases embedding the Halo in the design of the drone and proceeding to regulatory certification of their drone with the Halo onboard. Some of Elsight’s customers include DroneUp, Spright, SpeedBird Aero and numerous others in the United States, Europe, South America, the Middle East and Asia.
RKT Price at posting:
0.9¢ Sentiment: Buy Disclosure: Held
