Ann: Elsight Company Update, page-22

Special Report: Elsight is set to commence commercialisation of its “company maker” Halo technology and has strong confidence of capitalising on the commercial opportunity faster than initially expected.

Halo is the latest secure data transmission tech from Elsight’s (ASX:ELS) suite of products.

It is essentially a credit card-sized receiver and sender of data over cellular networks, which can be inserted into any device – making it applicable in a wide range of markets and technology.

For example, the card can be inserted into a drone and then be controlled remotely — with the signals being transmitted in data packets over a cellular network, like 4G.

The Halo unit essentially aggregates multiple networks by ‘binding’ them together — unlocking higher bandwidth (essentially the power of several cellular connections) for the end user.

While one cellular connection may struggle with transmitting large data packets, such as those created by streaming 4K video for example, several of them working together make it a relative breeze.

The smaller size of the product means it can be inserted into tech barely bigger than a credit card — meaning the possibilities are endless.

Elsight has pointed to the drone market, the autonomous vehicle market, the tablet market, and the IP security camera market – each estimated to be multi-billion-dollar markets.

While other solutions on the market are able to aggregate data connections in this fashion, Elsight’s Halo has a competitive advantage in the size of its tech and the security layer it offers the end user.

It offers real-time encryption of the data being transmitted to a Halo unit, meaning the data is safe from prying eyes.

“Because we’re able to aggregate four different SIM cards from four different service providers, hackers need to crack four different systems instead of just the one,” Elsight CEO Nir **ay told *.

“We collect the data in real-time and encrypt it, then we divide the data into pieces and encrypt each piece again and only then do we stream the pieces via different cellular networks. From here our algorithm on the receiver side collects all the pieces, decrypts them and connects them together again.”

This all happens in the space of 200 milliseconds, whereas **ay says competitor products can take seconds to transmit the data — and that differential can be the difference between life and death.

“When we talk about security, like communication with a sniper, or unmanned vehicle that you have to drive remotely or operate drones…the latency becomes a very big issue,” **ay said.

It’s for these reasons that Halo is being hyped as a “company maker” – so news that it will be ready for sale in June this year is a step-change that Elsight’s fortunes could arrive sooner than expected.

“Customers have been lining up for this”

Elsight says it has built up a potential sales pipeline of more than 200 customers from its targeted verticals just waiting for the company to release the Halo tech.

**ay pointed to pre-existing customer interest that would become revenue when the product is released. Pre-existing interest comes from multiple companies including Israel Aerospace Industries (IAI) that completed a proof of concept last year, saying they were waiting for the final product to be released.

“They [IAI] have a lot of unmanned vehicles for military and border patrols, and of course they have a lot of drones,” **ay said.

“And they aren’t the only ones waiting for Halo…customers have been lining up for this.”

However, the company wasn’t initially expecting Halo to be ready for sale this year.

“We didn’t calculate any income from the Halo in our internal projections for this year because we weren’t sure that it would be ready for sale in 2019,” **ay admitted.

“The revenue that will come from Halo will be outside our previous revenue projections and as such we are expecting revenue to be much higher than we originally planned for 2019.”

Right now, Elsight is building its presence in Australia, following the appointment of business development expert Brad Wilmore, Raj Logaraj, who brings extensive connections throughout the Indo Pacific region and former commissioner of the Australian Federal Police, Mick Keelty to the company.

The latter appointment, **ay said, provided a clue as to Elsight’s intentions in the Australian market.

“Think about every police car today, they all have computers in the dashboard of the vehicle, which they use to communicate,” he said.

“That communication channel is built over a cellular network, but it’s only one connection, so they have a lot of blind spots and it’s not very secure.”

Speaking to * fresh from a sales trip to Singapore, **ay revealed that it was talking to some very big fish.

Reeling in big fish

**ay revealed the company was talking to some of the biggest telecommunications companies in the world and leading suppliers and manufacturers of autonomous vehicles. It also boasts that it is in discussions with multiple government departments.

“For telecoms providers in particular, they have a big issue with how to protect IoT devices over cellular — because they are using one sim card to protect devices,” **ay said.

“Once you’re using only one sim card it is easy to intercept it and disarm your device. We’re trying to solve that problem for a lot of telecommunications companies right now.”

“While we remain focused on immediate revenue that will entail some smaller deals that we can execute quickly, we’re targeting some big names with our product,” said **ay.

But it takes a while to reel in big fish.

“For example, we’re in contact with a very big car manufacturer because we want to see our technology in every car in the future — but that will take time,” said **ay.

Needless to say, Elsight is thinking big, and the launch of its new Halo product has instilled strong confidence that it can capitalise on the commercial opportunity quicker than initially expected.