Euroz note from November. Next big catalyst.

According to Euroz, the house broker for SFI, they anticipate another block purchase order. In my opinion, if this is accurate than it would confirm Eagleview's intention to acquire SFI. The timing would likely be around Q2 CY18 once all the systems or majority of, have been delivered.
PE firms don't pay away revenue, the business model of a PE firm is to acquire bolt on or complimentary businesses, streamline the cost base and either IPO or sell the newly formed business. Once Eagleview start producing revenue in the US an offer for SFI will come very quickly.

Investment case
Spookfish (SFI) has announced that the FAA has approved the SFI camera system for commercial use in the US. US partner, EagleView (EV) has also recently placed the first order for multiple camera systems to be put to use in their North American operations. EV has now committed and sunk considerable capital in SFI (we estimate ~A$20m+) in the form of direct funding at a company level (EV own 12.2% of SFI) and camera system orders. In order to make a return on their investment it is in EV’s interest to put these systems to work. In our view the initial purchase marks the beginning of a commercial roll out that could see SFI capturing the majority of EV’s aerial imagery in the US.
We maintain our Spec. BUY recommendation with a price target of $0.15/sh.

Key points
- Should the SFI camera system perform in commercial rollout as expected, we would anticipate another block purchase by calendar year end. This could be a significant share price catalyst in our view.
- The U.S. Federal Aviation Agency (FAA) has approved the Spookfish Supplemental Type Certificate (STC) for the latest generation of Spookfish camera system.
- EV is now able to rollout the system in their commercial operations. This paves the way for the payment of royalties to SFI.
-EV recently submitted their first purchase order for multiple camera systems for use in the US.
- This purchase order comes after 3 months of testing, equating to 100+ test flights and resulting in 400-500 hours of  flying time.
- We understand that once this purchase order is delivered EV will have approximately 10 systems available for operation in the US for a total capital cost of ~ A$12m (we estimate US$1m per system).
- SFI’s current production rate is 3-4 systems per month with excess capacity.
- EV will advance a considerable portion of the funds required by SFI to manufacture their camera systems. The result being we expect minimal working capital drain on SFI for the roll out.
- SFI finished the Sept Q with $10.4m in cash.
- We see this initial purchase order as potentially servicing only a portion of EV’s aerial imagery needs.
- Thus far EV has also committed via the conversion a convertible note and participation in a recent capital raising, A$8.3m in obtaining their 12.2% shareholding in SFI at an average price of $0.064.
- The Australian business is also now live and producing revenue.