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The satellite communication company Stixpay will be issued on the Tel Aviv Stock Exchange

Stixpay, which was founded by former Gilat CEO Yoel Gat, developed chips and products in the field of satellite communication based on low-orbit satellites as opposed to communication satellites in geostationary orbit * received support for the development of its products from the European Space Agency in the amount of 60 million dollars. Airbus is also a partner in the development

Satellites in low orbit. Image:
Satellites in low orbit. Image:

Yoel Gat's company SatixFy has submitted a draft prospectus for the first offering of shares and registration for trading on the Tel Aviv Stock Exchange. The company intends to raise NIS 325 million based on a company value of approximately NIS 1.4 billion.

The company develops and manufactures a new generation of advanced silicon chips for modems and antennas that will be based on satellites in low orbit (a height of several hundred kilometers) and not in the conventional geostationary orbit where the fixed communications satellites are located (36 thousand km) and provides end-to-end solutions of products and systems for the communications industry the satellite

A wide range of broadband communication services

The chips and systems it developed will be used for a wide range of broadband communication services, Wi-Fi communication in airplanes (IFC), satellite internet connectivity, communication for mobile fleets (land and sea) and satellite communication systems based on the growing demand for LEO and MEO satellites, potential markets estimated at billions of dollars. Systems based on the company's first chip, the SX-3000, were sold to a number of customers and led from 2018 to sales totaling $55 million. Among Stixpay's customers is the Airbus company, which will use it in communication satellites. Stixpay has a partnership agreement with STE worldwide in the field of commercial aviation which greatly strengthens the company's sales capabilities. Stickpay grew in 2019, before the corona epidemic, by more than 50% a year for a sales turnover of about 30 million dollars.

StixPay was established in 2012 by entrepreneur Yoel Gat, former CEO of Gilat, who serves as the company's chairman and CEO. Since its inception, the company has raised approximately $40 million and has so far received over $60 million in grants from the European Space Agency. The company develops and manufactures advanced products and technologies that are used in the development and production stages of satellite communication systems, and its products are characterized by a competitive advantage, with an emphasis on cost, physical size, weight and performance, and are based on technologies developed and owned exclusively by it. The company's communication chips are a central component of all satellite communication system components - ground end user equipment, satellite communication recorders and the network hub on the ground.

Launching thousands of satellites in low orbit

Against the background of the expected creation of thousands of low-orbit satellites (LEO) in the coming years, there is an urgent need for electronic scanning antennas, so that it will be possible to ensure continuous and high-quality communication when moving from one satellite to another. As part of a project characterized by the company, managed and financed by the European Space Authority, Stixpay has developed a unique electronic scanning antenna that will provide a solution for managing a large number of transmission and reception beams of any size. Stixpay is developing this type of solution for the OneWeb company, which is establishing a global LEO satellite communication network that will provide connectivity services to governments, businesses and communities all over the world. These developments are intended for the next generation of call recorders and end user equipment. The transition of civil aviation to the use of the new LEO satellite resources will give an advantage to the transition to the use of electronically scanned antennas. The use of mechanical antennas, which is accepted today, is almost impossible in a network powered by LEO satellites. The electronically scanning antennas developed by Stickspay allow the simultaneous use of LEO satellites and regular satellites. The cooperation with the Singapore company STE through the joint ownership of Jet-Talk, gives Stixpay an advantage in the field of commercial aviation.

In addition, Stixpay is developing a wide portfolio of chips. In this framework, Airbus participates in the development of a new Stixpay chip, the SX-4000, with a total amount of about 14 million dollars and an additional investment of 3 million dollars for software development specific to its needs and conducts negotiations with Stixpay for a procurement agreement for the first chips. Stixpay also develops for its customers satellite communication terminals based on the modem chips it developed for the provision of mobile and stationary satellite communication services. Stixpay is in advanced negotiations with one of the operators of LEO satellite systems for the sale of communication modems for the ground sector of the operator's communication systems and according to the company's assessment the agreement is expected to be signed during the first half of 2021 and the scope is estimated at approximately 30 million dollars, of which an initial agreement for the immediate start of the connection has already been made in February 2021 in the first volume of 4 million dollars.

Financing continued development

StixPay grew by 50% in 2019 to total sales of $30 million. In 2020, under the influence of the Corona epidemic, the revenues in the first half of the year amounted to 5.5 million dollars and are expected to be of a similar amount in the second half of the year as well. Despite the effects of the corona virus on global aviation, and in light of the increase in the scope of the projects, Stixpay did not lay off or lay off its employees, and in fact increased its workforce by approximately 20 additional development personnel. As of the publication date of the company's prospectus, Stixpay's total order backlog has increased and is estimated at $17.5 million.

The proceeds of the offering will be used by the company mainly to finance research and development activities and to strengthen the marketing and sales system, with an emphasis on the main target market in the USA.

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