On Track Innovations Ltd. (OTIV)
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vision of OTI is to approach contactless solutions that are based on contactless smart
cards to support vertical markets of payment, ID and petroleum
CEOCFOinterviews: Mr. Bashan, what was the vision of OTI in the beginning and how has it developed over time?
Mr. Bashan: The vision of OTI is to put solutions that are based on contactless smart cards to support vertical markets of payment, ID and petroleum. The company was started by a group of individuals fourteen years ago in a small garage that developed patents and intellectual property. This founding group of individuals are all with the company today. The company today is a publicly traded company on NASDAQ. We have more than 200 employees and this is a story of a small group doing everything with their own ten fingers.
CEOCFOinterviews: Will you tell us how your product works in the petroleum market and why you chose the petroleum industry?
Mr. Bashan: We have a solution where we put contactless smart cards on vehicles, to identify vehicles to the system in order to make sure the right type of fuel and the right driver is filling a specific vehicle. It is a classical solution. We saw the need to eliminate cash and provide more information to different fleets and to provide a marketing tool for the oil company and as a result, we have developed this product.
CEOCFOinterviews: What do you actually sell to your various customers and what is in your technology that others do not have?
Mr. Bashan: We are selling solutions that are based on our hardware and software. The hardware consists of contactless cards, readers and the software consists of different applications we provide. We have one of the strongest backgrounds today in terms of the technology. We have a superior technology that is tested and proven with a low risk from the customer prospective and we provide the customer with a complete solution and not just a component. That eliminates much of the effort from the customers side. We have the experience and the intellectual property on how to implement contactless solutions in a real life environment.
CEOCFOinterviews: Please give us examples of two or three types of solutions.
Mr. Bashan: One of the solutions we provide is a contactless credit card that you can use for payment and making different purchases. Another solution that is very sophisticated today is an ID tool to authenticate and verify ones identity. It is done by biometrics, encryption and other forms of identification. This is being deployed in the border crossing between Israel and the Gaza Strip, where we provide identification means for Palestinian daily workers who would like to enter into Israel on a daily basis.
CEOCFOinterviews: Please tell us about your MasterCard PayPass?
Mr. Bashan: MasterCard PayPass is a program by MasterCard to introduce contactless payments into the U.S. market. OTI provides the technology behind MasterCard PayPass; the form of the card technology and the reader technology.
CEOCFOinterviews: Do you monitor the equipment and what is your role when you set up a new company?
Mr. Bashan: We provide the cards, the reader and the software. We usually work with another third party, who provides the installation and the system support.
CEOCFOinterviews: Are there areas that you are not penetrating geographically that you would like to and how do you reach potential customers in these areas?
Mr. Bashan: We have identified the regions that we believe are most appropriate for our products and that is where we focus our efforts. We work through direct channels sometimes as well as in some of the regions through distributors, strategic and channel partners to get the right audience. The majority of our business is in private companies.
CEOCFOinterviews: Focusing on the three markets is part of your marketing effort; please tell us what steps you have taken and what still needs to be done to have it focus the way you would like?
Mr. Bashan: Over the last fifteen months, we have focused and shifted our resources and identified some of the requirements in to other market places to create a complete solution for the three verticals of ID, payment and petroleum. The things that weve done include field tests, pilots, beta sites interpretations, and gathering requirements, getting feedback and implementing the feedback from the different customers. I think today we are at a point where the product is mature. It is tested, and well proven and ready to market.
CEOCFOinterviews: Will you tell us about the financial picture of the company?
Mr. Bashan: The Company has a strong balance sheet with a good cash flow. We have not been burning cash in the last year. We have raised and now have about 29 million dollars on our balance sheet and very little debt. We are geared up to support large scale of limitation of the different programs that we support.
CEOCFOinterviews: Do you need to maintain an inventory of the physical components?
Mr. Bashan: All of our products are using the same basic materials so the inventory is not very high.
CEOCFOinterviews: Why should investors be interested in OTI, and what should they know that they might not realize when the first look at the company?
Mr. Bashan: When investors are looking at the company, OTI is a company that is a technology leader in a very high growth market; the contactless payment market. We have a strong revenue model that allows us to generate revenue not just from the product that we sell, but also for the usage of the product. That creates a reoccurring revenue model that is very attractive. In addition, we have strong worldwide customer base and we are a technology leader.
CEOCFOinterviews: In closing, as CEO, what do you focus on throughout the day?
Mr. Bashan: Making sure that our strategy is being executed properly, and making sure that it delivers on time. I make sure that we increase shareholder value.
We are selling solutions that are based on our hardware and software. The hardware consists of contactless cards, readers and the software consists of different applications we provide. We have one of the strongest backgrounds today in terms of the technology. We have a superior technology that is tested and proven with a low risk from the customer prospective and we provide the customer with a complete solution and not just a component. That eliminates much of the effort from the customers side. We have the experience and the intellectual property on how to implement contactless solutions in a real life environment. - Ohad Bashan
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