1.

2

Innovative all-in-one smart CCTV High-performance motion control system

Firefighting Safety

Quick & accurate smart flame detector

Medical Diagnosis & Treatment Device

Tumor neovascularization control system

Business Overview Ⅰ. COMPANY

Video Surveillance Motion Control System

Company overview Equity structureSpin-off background of Hansun Engineering Co., Ltd.

3

2. Company Introduction

KRISS Joint Venture (Hansun ST Co., Ltd.)

Construction(Electricity/Firefighting/Machinery)

Flame Detector

UV+CCTV UV IR

CCTV(Wide-area surveillance system)

Firefighting construction & product business since 1998

Promoting CCTV (Wide-area surveillance system) business

Name Hansun ST Co., Ltd.

Registration number

437-81-00287

CEO Kim Su-Un

Foundation 2015. 12. 04.

Foundation capital

845 million KRW

Address267 Gajeong-ro, Yuseong-gu, Daejeon 34113, Rep. of Korea

Stockholder InvestmentEquity rate

Kim Su-Un338 million KRW(cash)

40%

Lee Yun-Sung338 million KRW(cash)

40%

KRISS169 million KRW(spot)

20%

Total 845 million KRW 100%

Ⅰ. COMPANY

Business organization & Partners Core staffs

4

3. Business Organization

CEO / CTO

Education▪ Hanyang Univ. Architectural Eng. Ph.D. (completion)

Career

▪ ‘06~’16 : KRISS researcher▪ ‘07~’10 : Andong Univ.adjunct professor

▪ ‘04~’06 : KMTL co., Ltd.

Result ▪ patent : 27 ▪ paper : 3

Director

Education▪ Ulsan Univ. Mechatronics Eng.

Career▪ Hansun Engineeringdirector▪ Hansun ST CEO

KIM SU-UN

Principal Research Scientist

▪ Principal researcher▪ UST Medical physics Ph.D.(2015)

▪ R&D adviser▪ KRISS Principal researcher▪ Hanyang Univ.Mechanical Eng. Ph.D.(1985)

▪ Technical adviser▪ KRISS Principal technician▪ Chungnam Univ.Mechanical Eng. Master(2002)

Product Designer

▪ Electric circuit design▪ Hanbat Univ.Electronics Eng.

▪ Product design▪ Korea PolytechnicUniv. Industrial Design

▪ MGMC Design CEO▪ Gachongil Univ.

Industrial Design

HA TEAHOON CHOI MANYONG

LEE SONG GU

LEE YUN-SUNG

SONG SANGWON KIM JU SU

CEOCTO

Research institute

HansunEngineering Co.,

Ltd.KRISS

Management Sales

Manufacturing

Ⅰ. COMPANY

PARK JEONKHACK

5

1.

ISS-WA601 2

▪ Best award of the top 100 R&D performances in 2016 (first prize)

▪ Good Design

IR Laser Illuminator Costs Saving Temperature Control

▪ System operation process

(Crime and fire situation)

Ⅱ. PRODUCTISS series (All-in-one Smart CCTV)

ISS-WA60 Features (structure & function)

6

Human detection technology3

▪ Technique situation of human detection

- Focused on pedestrian

- Difficulties for many kinds of human activities

▪ IR camera(Human detecting)

▪ Special situations(Camouflage, Environmental condition)

Region of surveillance4

Required distance for

facial recognition

(Head height:280mm)

▪ SD CCTV(2.7m), Full HD CCTV (7.2m), UHD

CCTV(14.4m)

Surveillance range of

ISS-WA60

▪ Distance for identification : Max. 60m

▪ Surveillance area for identification :

64times area of Full HD CCTV

1. ISS series (All-in-one Smart CCTV) Ⅱ. PRODUCT

7

5

▪ Existing HD CCTV images

▪ ISS-WA60 images

6

Data store and transport7

Running people Moving vehicle

1.

Identifiable image acquisition Situational image acquisition

ISS series (All-in-one Smart CCTV) Ⅱ. PRODUCT

8

Specification

1.

8 9

ISS series (All-in-one Smart CCTV) Ⅱ. PRODUCT

Media reports

Tilt PlayloadRigid axis supporting over 80% playload

(low influence to running motor)

Resolution 0.002°

Max. Speed 20°/sec

Playload over 20Kg

9

HPPT series

2.

1 2

HPPT series (Motion Controller) Ⅱ. PRODUCT

HPPT series Features (structure & function)

10

Applications

2.

3 Land Systems

Airborne Systems

HPPT series (Motion Controller) Ⅱ. PRODUCT

11

3.

1

UVIP series Technology and Features

▪ Combining IR thermal camera & IR thermal imaging technology withflame detection sensor▪ Recognizing acceptable level or artificial flame▪ Advancement of fire alarm

accuracy (false alarm prevention)

Smart Flame Detector Ⅱ. PRODUCT

UVIP (Smart flame detector applied infrared thermal imaging)

▪ Safety inspection results of special building alarm system

▪ Malfunction handling cases of fire station

(Korea fire protection association, 2014)

(Min. of public safety & security, 2014)

FacilitiesInstall

number

Good Normal Poor

Number Ratio(%) Number Ratio(%) Number Ratio(%)

Automatic fire

detection24,481 13,941 56.9 10,143 41.4 397 1.6

Automaticfire prompt

alarm3,713 3,095 83.4 534 14.4 84 2.3

Classification 2009 2010 2011 2012 2013 2014

Handling number

of cases3,183 3,760 4,124 2,659 16,750 17,578

13

4.

ISS-WA1201

Surveillance area

Identifiable area

(Installation height 9m)▪ Angle : 25°, Distance : 50m ~ 128m

Face recognition area

(Installation height 9m)▪ Angle : 25°, Distance : 128m ~ 225m

Specification2

Continuous Product Innovation Ⅱ. PRODUCT

▪ Development of ultra-high performance all-in-one smart CCTV

▪ Securement of highest performance level by enlarging

surveillance distance and area

▪ Securement of market competitiveness in military and special purpose surveillance system

Pan-Tilt manufacturing technology

▪ Normal pan-tilt performance: under precision while 1M(10m/s, 100M) movement

▪ Pan-tilt performance for military/special purpose: applying stepping

motor(high price)

▪ High-speed and high-resolution pan-tilt device capable of changing

height ▶ Main inventor : Su-Un Kim

: 10-1488407 (KOR_registration), 6059409(JPN_registration), 2535825(UK_application), PCT/WO2016-052792, 2016-0269647(USA_registration), 11-20140002755(GER_ application), 105830435(CHN_registration)

▪ Improving low precision and securing price competitiveness by applying

ball screw(stepping motor replacement) with capable of tens and

hundreds of gear ratio conversion

▪ Pan-tilt resolution, speed : Max. 0.002(°), 25(°/Sec)

Tracing & surveillance system technology

▪ Conventional tracing technology : impossible implementation of complex

algorithm such as motion detection, frame difference, and impossible tracing

of immobile subjects

▪ Camera tracing and surveillance system and method for security using

thermal image coordinate

: 10-1172747 (KOR_registration), 9274204 (USA_registration) 201180039379.1 (CHN_application), GB 1217859.6 (UK_application), 5688456 (JPN_registration), 13104668.8 (HK_application) ▶ Main inventor : Su-Un Kim

▪ Integration technology of IR thermal imaging CAM, tracing &

surveillance CAM, motion control device, binary image processing system,

subject detection, and coordinate sampling control system

Globalsurveillance

Thermal image

Tracingsurveillance

14

1 2

5.

Panning

Tilting

Core Elementary Technology Ⅱ. PRODUCT

Analysis of whole surveillance area

Original IR thermal image

Image after binary processing

Smart flame detection technology using IR thermal image

▪ Conventional IR flame detector: misrecognition by high temperature

facilities, heaters, and thermal illuminators in industry sites

▪ Surveillance camera combined with thermal image camera : 10-2017-

0046652 (KOR_application)

▶ Main inventor : Su-Un Kim

▪ Application of IR thermal camera and signal processing technology :

enhancing the accuracy of fire alarm by exactly classifying the acquired

flame signal is whether dangerous or not

Design of module type surveillance camera

▪ Nonexistence of all-in-one concept design of camera, additional device

and control system

▪ Surveillance camera combined with multiple image sensor : 30-0774400

(KOR_registration)

▪ Surveillance camera combined with thermal image camera : 30-0786610

(KOR_registration) ▶ Main inventor : Su-Un Kim

▪ Securing design rights for the all-in-one design of additional modules

and data processing device

15

5.

3 4

Ⅱ. PRODUCTCore Elementary Technology

16

1. IP Camera Market Trend Ⅲ. MARKET

2013 2014 2015 2016 2017 2018 2019

3,556 4,196

4,699

5,592 6,158

6,774 7,451

CAGR 13.1%

2013 2014 2015 2016 2017 2018 2019

1,419 1,674

1,875 2,231

2,457

2,826

3,249

CAGR 14.8%

Internal CCTV market External CCTV market

(100 million KRW) (100 million USD)

▪ Replacement period of CCTV integrated with pan-tilt device: 5 years

(continuous occurrence of replacement demand)

▪ Import reliance on high performance pan-tilt devices → advantage to

enhancing market share by securing price/quality competitiveness

CCTV installation quantity and market scale of public

institution∙private sector

Source: Ministry of security and public administration

2011

2012

2013

3.6 million3.2 million

over4.0 million

▪ Increase of crime prevention policy by continuous terrorism

▪ CCTV system concept extension : simple image surveillance →

tracing surveillance and subject recognition

▪ Application increase of military and special purpose camera to

private purpose

1

Issues of IP Video Surveillance system application

▪ Camera performance, image quality, data transmission efficiency and data loss in transmission are raised as issues to apply surveillance system

▪ Surveillance performance, image quality, high-performance main computer, and data transmission system of ISS series satisfy the needs of major markets

Global IP Video Surveillance & VSaaS Market

17

Video surveillance system and service market2

1.

600 702

821 961

1,124 1,315

1,539

1,801

2,100

0

500

1,000

1,500

2,000

2,500

2016 2017 2018 2019 2020 2021 2022 2023 2024

Mark

et

scale

(100 m

illion U

SD

)

North

America

34%

Asia Pacific

32%

Europe

22%

Latin America9%

MEA3% ▪ 2016 market scale : 60 billion USD

(CAGR 17.0%, ‘2015~’2024)

▪ Market subdivision : HW, SW, cloud

based solution and service

(HW share 50%)

▪ Market share : NA > Asia-Pacific >

Europe > LA > MEA

▪ Expectation of demand increase in LA,

MEA region because of increasing terror

and crime rate

(Global IP Video Surveillance & VSaaS Market (2016 – 2022), KBV Research, 2016)

(zk research, 2014)

Ⅲ. MARKETIP Camera Market Trend

18

2. Product Competitiveness

Smart CCTV1

HONEWELL NEXPTZ3020HD AXIS Q1922 AXIS Q87-E DUAL PTZ ISS-WA60

Camera type

Fixed Visible Camera - - - 1/3” CMOS 1280*960

Infra Red Camera - Uncooled 640*480 Uncooled 640*480 Uncooled 640*512

Zoom Camera 1/2.8” CMOS 1920*1080, 16x zoom - 1/3” CMOS 1920*1080, 30x zoom 1/2.5” CMOS 2592*1944, 30x zoom

Internalsystem devices

Temp. controller - - - Peltier Module

Computer - - - Intel i7, dual-core, 16GB memory

Storage - - - 2TB

Network switch PoE Giga Ethernet

Required network line UTP 1Gbps UTP 100Mbps UTP 1Gbps UTP 100Mbps

Water / dust protection IP-67 IP-66 IP-66 IP-65

Dust, rain, night discrimination impossible possible possible possible

Automatic facial identification impossible impossible impossible > 30 people/1min

Illumination - - IR LED Infrared Laser Class 1

Additional module - - -Flame, Sound, Behavior, Radiation,

Speaker

Country of manufacture USA Sweden Sweden Rep. of Korea

Price 25,000 USD 26,000 USD 49,000 USD 36,000 USD

▪ Outdoor high-spec CCTV

products

▪ Expensive products by

durability and robustness

towards outdoor conditions

Ⅲ. MARKET

19

2.

Pan-Tilt device2

FLIR Panasonic Hanwha Techwin Yujin System Hansun ST

D48E D300E-EX AW-PH400 SPT-3100 OPT-1200S HTTP series

May Payload (Kg) 6.8 40 8 30 50 30

Pan resolution (°) 1.003° 0.003° 0.008° 1° 0.1° 0.002°

Tilt resolution (°) 0.006° 0.003° 0.008° 1° 0.1° 0.002°

Max. pan speed (°/sec) 100°/sec 22°/sec 90°/sec 6°/sec 5°/sec 25°/sec

Max. tilt speed (°/sec) 50°/sec 22°/sec 90°/sec 6°/sec 3.5°/sec 25°/sec

Driving method Step motor Servo motor Motor Motor Step motor Servo motor / Screw

Price 10,000 USD 38,500 USD 13,900 USD 490 USD 14,000 USD 18,100 USD

▪ Securement of world-class

resolution/speed and price

competitiveness

▪ Extensible payload for

product purpose and size

Ⅲ. MARKETProduct Competitiveness

20

1. Business Roadmap

Content1st stage 2nd stage 3rd stage

2017 2018 2019 2020 2021

Technologycommerciali

zation loadmap

Market environment

(IP surveillance market)

Hansun ST product family

Technology securement

▪ International IP securement and commercialization of camera surveillance system

▪ Pan-tile technology commercialization

▪ Securing international right of thermal imaging flame detector technology

▪ Securement of widearea surveillance extension technology → concealment penetration and surveillance area extension (Phased array antenna ect.)

▪ Additional development of ISS-series applied module (Portfolio expansion)

▪ Design research of military, special purpose surveillance solution

Company management

▪ Venture company, new-techcertification

▪ Series-B investment attraction

▪ InnoBiz, high-tech company

▪ Series-C investment attraction

▪ IPO promotion

▪ Sales 200 million dollarachievement

▪ Defense venture certification

▪ Brand awareness expansion

▪ Global midsize company takeoff(World Class)

Business model

>22.1 billion dollar >41.6 billion dollar (CAGR 37.3%)>78.7 billion dollar (PLC

maturity)

▪ Intelligent video surveillance demand expansion▪ Leading market growth (Asia-Pacific, Latin America, Eastern Europe)

▪ Analog surveillance replacement demand▪ Government safety mandates ↑

▪ Generalizing high-performance system in public

▪ High-tech of special facility surveillance

ISS-WA60 sample supply ISS-WA60 release (in-/external)

HTTP release (internal) HTTP (external market entrance)

External market expansion (Southeast Asia→Middle Ease , Latin America) ISS-WA120 release(high-performance,)

Global leading company(FLIR) ODM supply

UVIP release (in-/external) Application range expansion of mart fire detection system (Smart city ect.)

Global leading company of smart surveillance system

Assembly/QC/AS

SmartCCTV

Pan-Tilt

Flame detector

Korea Research Instituteof Standards & Science

Design research/reliability test

Manufacturing partners

▪ Imaging Source (GER)▪ Flir, Intel (USA)▪ LS cable&system (KOR)▪ Hansun Engineering(KOR)

Camera module, componentsoutsourcing cooperation

Optimization designOrder production

Commercializationproduct

(ODM supply)

• City crime prevention• National major facility• Military facility• Public facility security• Commercial security

• Military• Surveillance & Detection• Robotics• Test & Measurement

• Firefighting safety facility• Disaster monitoring system

Ⅳ. VISION

21

2. Value Chain

Manufacturing cooperation system1

Zoom camera

Fixed visible camera

IR camera

On board computer

Cable (special production)

Module assembly

Custom order to professional manufacturer

Manufacturing partners Hansun ST Co., Ltd.

▪ Parts outsourcing (production efficiency)

▪ Applying parts from GER/USA with high awareness & reliability

▪ Producing main module & system

▪ Operating assembly & QC line(durability & A/S warranty)

Market & Service2

▪ IP surveillance market▪ Network camera & Video S/W market▪ Video surveillance as a service market▪ Smart Cities & Smart Governance/Safety market

Asia

42%

Europe 20%

America

32%

Middle East & Africa 6%

Video-surveillance share by region

A Majority of the public approve of CCTV systems

Ⅳ. VISION

22

3.

11.02

42.28 43.32

49.82

44.17

0

10

20

30

40

50

60

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Opera

ting P

rofit R

atio

(%) S

ale

s (0

.1 b

illion K

WR)

지능형 스마트 CCTV

고속 고분해 팬틸트

지능형 불꽃감지기

순이익률

1

Prototype supply ISS, HTTP launch Portfolio Brand awareness increase Global customer diversity

Sales Growth Prospect Ⅳ. VISION

Sales Plan

▪ Next 5 years CAGR :

217.2%

▪ IPO scheme : 2019

▪ Sales expansion by

increasing global

customers

(Unit: million KRW) Unit price

2017 2018 2019 2020 2021

Quantity Operating profit Quantity Operating

profit Quantity Operating profit Quantity Operating

profit Quantity Operating profit

Intelligent smart CCTV

Domestic 40 - - 150 6,000 300 12,000 800 32,000 1,500 60,000

Export 40 100 4,000 1,500 60,000 3,000 120,000 3,000 120,000 5,000 200,000

High performance

pan-tilt

Domestic 20 - - 200 4,000 1,650 33,000 1,900 38,000 3,250 65,000

Export 20 - - 1,000 20,000 2,000 40,000 3,000 60,000

Smart flamedetector

Domestic 5 - - 500 2,500 1,000 5,000 2,000 10,000

Export 5 - - 500 2,500 1,000 5,000 2,000 10,000

Total sales account 4,000 70,000 190,000 240,000 405,000

Operating profit 200 billion KRW achievement(IPO propulsion)

Operating profit 400 billion KRW

23

4.

Thailand Turkey

▪ Consultation progress for installing

surveillance system to the border

(Ministry of Defense)

▪ Consultation progress for installing

security system to nationwide

hospitals (Ministry of Home Affairs)

▶ Purchasing quantity : 3,000 pcs ▶ Purchasing quantity : 850 pcs

Development

We have the most complete Design, experience and skills to make it possible.

Design

We are creating good design that the world needs.

Stunning portfolios

We value experience the most, and are always doing our best to the experience.

Thinking

We always think customers first.

Optimizing consumer’s

condition and needs

Saudi Arabia Kuwait Mexico

▪ Consultation for basic

system purchase & phased

module application

▪ Export MOU contract of security & surveillance system

▶ Purchasing Qt.: 800 pcs ▶ Purchasing Qt. : 400 pcs ▶ Purchasing Qt. : 600 pcs

First step

Second step

Contract of major purchasing country1

Ⅳ. VISIONMarket Entry Strategy

24

Business cooperation with global leading company (FLIR)2

4. Market Entry Strategy

▪ Partnership with FLIR Korea

: Supply consultation of high

performance pan-tilt device

(ODM)

Ⅳ. VISION

25

5.

Capital requirement for business1

(Unit : million KRW) 2017 2018 2019 2020 2021

staff salary subtotal staff salary subtotal staff salary subtotal staff salary subtotal staff salary subtotal

R&D 3 50 150 3 50 150 3 55 165 4 55 220 4 60 240

Business/management 2 40 80 3 40 120 5 45 225 5 45 225 6 50 300

Production/quality 2 35 70 2 35 70 5 40 200 6 40 240 6 45 270

Distribution 1 35 35 2 35 70 3 40 120 3 40 120 3 45 135

AS 1 35 35 2 35 70 3 40 120 3 40 120 3 45 135

Accounting 1 35 35 1 35 35 2 40 80 2 40 80 2 45 90

total 10 405 13 515 21 910 23 1,005 24 1,170

Personnel expense

General management expense

(Unit : million KRW)2017 2018 2019 2020 2021

Office rent 18 18 24 24 24

Warehouse rent 12 12 15 15 15

Vehicle rent 96 96 218 218 218

Fixture expense 60 60 120 120 180

Equipment 50 74 94 126 148

total 236 260 471 503 585

(Unit : million KRW) 2017 2018 2019 2020 2021

Marketing 50 100 150 200 250

General management 236 260 471 503 585

Personnel 405 515 910 1,005 1,170

Finance 0 10 30 30 40

Reserve (10%) 69.1 88.5 156.1 173.8 204.5

total 760.1 973.5 1,717.1 1,911.8 2,249.5

Sale & management expense

▪ Calculating office rent and management expense for 2017~2018 to 18 million won/year, and 2019~2021 to 24 million won/year

▪ Calculating vehicle rent and operating expense for 2017~2018 to one (0.8 million won/month), 2019~2021 to two (1 million won/month)

▪ Calculating fixture expense as 20% of personnel expense

Financial Condition Ⅳ. VISION

Annual capital requirement Ratio of capital requirement except material expense (‘2017~’2021)

26

Capital requirement for business (continue)1

Production/development expense

(Unit : million KRW)2017 2018 2019 2020 2021

Mold 500 110 60 100 100

Material 2,000 35,000 95,000 120,000 202,500

New product 300 600 900 900 900

Assembly 200 300 600 800 500

Tech-value - 30 30 30 -

Listing fee - - 100 - -

Certification 50 100 150 - -

Total 3,050 36,140 96,840 121,830 204,000

▪ CCTV mold: injection mold development cost 400 million KRW, extrusion mold

development cost 20 million KRW, silicon mold development cost 50 million KRW

▪ Pan-tilt mold: injection mold development cost 100 million KRW, extrusion mold

development cost 10 million KRW

▪ Product packing: styroform mold 30 million KRW

▪ Certification: NET, NEP, IP, ISO, internal and external certification

▪ Technology assessment: request technology value evaluation to KIBO or KISTI

(KOSDAQ preparation)

▪ Smart flame detector mold: injection mold development cost 50 million KRW,

extrusion mold development cost 10 million KRW

마케팅 비용

5.0%

일반관리비

13.7%

인건비

26.7%

재무비용

0.7%

예비비(10%)

4.6%

금형비

5.8%

신제품개발

24.0%

조립설비

16.0%

기술가치평가

0.6%

상장수수료

0.7%

인증비

2.0%

Capital requirement

3,810

37,114

98,557

123,742

206,250

0

50,000

100,000

150,000

200,000

250,000

2017년 2018년 2019년 2020년 2021년

Capital re

quirem

ent

for

busi

ness

(million K

RW

)

5. Financial Condition Ⅳ. VISION

27

5.

Income estimation2

(Unit : million KRW) 2017 2018 2019 2020 2021

1. Sales 4,000 70,000 190,000 240,000 405,000

subtraction: management expense 0 0 0 0 0

2. Cost, selling & administrative expense (loss “-”)

addition: non-operating income (loss “-”)

subtraction: selling & administrative expense 760.1 973.5 1,717.1 1,911.8 2,250

manufacturing expense 3,050 36,140 96,840 121,830 204,000

3. Operating income (loss “-”)

addition: investment income (loss “-”)

subsidy income 300

non-operating income

subtraction: non-operating expense

4. Ordinary income (total loss “-”) 490 32,887 91,443 116,258 198,751

subtraction: income tax (10%) 49 3,288.65 9,144.29 11,625.82 19,875.05

5. Net income (net loss “-”) 441 29,597.85 82,298.61 104,632.38 178,875.45

Financial Condition Ⅳ. VISION