On Track Innovations Ltd. (OTIV)

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"Israel is short-sighted., I lost hope of it"

Less than a year after the hostile takeover and turnaround management OTI (On Track), Ofer Tzifrmn CEO for six months, trying to regain her greatness and all-American Board of Directors is assisted
by 09/24/2013, 08:33 Globes' Tali birds
{GOOG auto translated from Hebrew}

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Quiet, scenic Upper Galilee, fresh air and the surrounding pastoral office OTI (On Track) Rosh Pina, quite hide the storm that occurred within the company over the last year. OTI , one of the oldest technologies born here - and probably the most northerly - gave a little less than a year hostile takeover by American investors who managed to dismiss Oded Bashan (65 ), Founder, Chairman and CEO oust entire board and management upheaval actually make almost from beginning to end.
OTI has developed contactless smart card-based NFC technology (right down to a depth of occupation, do not get discouraged), always was one of the small Israeli companies and the relative anonymity of those traded in the U.S. capital market. At its peak was worth "only" $ 164 million (compared to 54 million now), and despite this - or perhaps because of it - managerial revolution took place within its walls and actually enforced it (the result of Activism U.S. institutional quite aggressively) is an exception Israeli scene of Wall Street, and by the best of our recollection there another Israeli company experienced what happened to the OTI.
This does not necessarily mean that the results were not legitimate struggle. Bashan, OTI founding 23 years ago, failed in his role and even refused to admit his farewell letter to the company's employees. OTI (see graph) failed to earn - not a dime - during the last decade and a half, and consequently capital market has turned a cold shoulder as ice. Initial IPO (performed German Stock Exchange Neuer Markt) stock lost 86%, and secondary offering conducted in February 2011 Wall Street lost 45%.
This data for the new board and management OTI appointed by him - they want to change. Turnaround management company set out last December, and in March this year he was appointed CEO Ofer Tzifrmn, across the parking operations manager of the company, who was a member of the first 10 employees OTI. Tzifrmn, an attorney by profession, is quite motivated when he talks about OTI and its future , but in the same breath refuses elegantly pointing out the previous management, and more specifically - the former boss.
- Why you have been chosen as CEO?
"The new board was looking for a candidate from within the company and outside, but it was not a mandatory condition in his eyes. Fate, and I was here and I adjusted to his demands."
- This is an American board net. He really wants to take the company forward or take it apart and sell each part to the highest bidder?
"God forbid! Breaking down this stupid move, and if the Board would like it - it has long been doing it. Process for American investors have committed is quite unusual, even in their own terms, so their goal is to maximize the potential of OTI. Simply because I agreed to take the role myself. "
Tzifrmn claims the board has not allocated tables for results, kind or another, and clarifies that the board is far from a rubber wall. "And I'm quite surprised that.'s Board of directors be serious about pursuing it."
Before we return to the managerial revolution and the future of OTI management expects the company's move to the side to explain what the company does. OTI is one of the industry pioneers contactless smart card (Contactless Smart Card), and that NFC (Near Field Communication) which means a magnetic field eliminates the need to create contact between the card and the reader device (such as the need B"gyotz "fueling a credit card machine that gas station).
This technology serves almost every card from detection switches (such as a secret doorway required) through credit cards, to a free ticket - a monthly "bundle". Still, OTI known principally for parking solution, Izzy - Park, conquered the Israeli market well before you could pay for parking via mobile apps.
Izzy - Park Recall is pretty simple device, which can be loaded for 300 shekels, hang it on the car window, run two clicks and shop with peace of mind without worrying about getting a parking ticket. Now, apps like pango captured the Israeli market, Izzy - Park, especially in the Israeli market is no longer a growth engine material, but Ltzifrmn have a belly full of the State of Israel, and the way it permits the operation of Izzy - Park, pango and others. "OTI has made a strategic mistake when launched mobile application of its own, But this mistake has been buy and we have such an app designed for the international market and not Israel, "admits Tzifrmn.
"Still, Izzy - Park fighting for its place in the Israeli market," he says in a tone slightly Zionist. He said the company operates under government tender it won a tender has expired mid-2015 and now run by the Economic Union of Local Authorities.
"Apart from Izzy - Park, pango is the second company that won the tender to operate a national electronic parking ticket. Cellupark, which is a competitor of pango, forced to go to any city separately to allow it to run its services within its borders. Has not announced a new tender, which means beginning mid-2015 it will be possible to pay for parking in the country only through a mobile device, and that since the beginning of 2014 will be canceled card usage charge paper. This is bad Israeli consumers that there will be competition. Not only that our solution is much cheaper (per device is 89 shekels and no additional costs as opposed to those same operator height, above the price of parking required application like pango - TT), he maintains that the private consumer mobile app allows to find the location and not everyone wants to know where Hannah.
"I do not understand why the consumer should impose one solution, and much more expensive. In this case, Israel is short-sighted. I lost hope for her and I say this with great regret," says Tzifrmn. He said that without a new tender hack dismissal may be flown Izzy workers - Park. "This is about a hundred people. Rather what the State of Israel? Rid of them because of that tender? These people roll. Possible employment in the region is quite limited." OTI has 267 employees.
Be tender or will not, Tzifrmn hope that the activity of Izzy - Park outside of Israel, which began four years ago, OTI will compensate for the loss of market share in Israel. "There are already 35 cities in France, 28 Italian cities, one city in the U.S., Austin, Texas, and others have adopted the Izzy - Park".
Although the activity parking OTI makes Tzifrmn emotional, this activity is not the main growth engine of the company. OTI, as part of the managerial revolution last year, decided to focus on solutions for NFC mobile market - an industry that makes hot minute. "More and more smartphones are NFC Enabled, meaning they have a smart card, which means you can pay through them. OTI directed the payments market and that's a huge market." By 2015, more than half of the smartphones sold in the world would allow NFC technology, and industry applications NFC as a whole should grow at an annual average of 35% between 2011 to 2016 to 34.5 billion dollars.
Tzifrmn explains that this market has evolved interests rather interesting game, in fact, may faithfully serve the OTI. "There is a war between banks and mobile operators actually have banks that are allowing their subscribers to pay through the device. U.S. has a body called ISIS, which is a collaboration of all major mobile operators, and its purpose is to teach the consumer about NFC technology. This is a technology called disruptive technology (disruptive technology), and is primarily disrupts the pattern of banks.
"OTI helps both cellular companies through technology NFC, and banks - through a security solution (looks like plug it can be connected to mobile device via microphone socket) enable the Bank to bypass the operator," says Tzifrmn and clarifies that the solution to the bank has already made through the customer first. "I'm not taking a position in the market. I have a solution to the bank and mobile operator simultaneously." OTI, of course, is not alone in the NFC and competes against giants like gemalto and others, but this competition is not the Tzifrmn stressful. "It's good to have competition."
- Back slightly backwards. When you receive the reins over to you, the first thing you need to do?
"I need to concentrate on one market, rather than spread out on a lot of activities to ensure that the energy of the company Ttoal direction where growth potential is highest. Therefore, we went from B2C and B2B only interested in (So Easy Action - Park France sold local operator, TT ), and we stopped to be System Integrator's what the activity ID (sold back SuperCom, TT) demanded of us. "
- Why do you think OTI failed to make until now?
"This is a good question, and I think the unclear business focus is bothered her. As a small company, it's hard to be a leading player in every market. Society of its size must focus on, which means that it has a specific agenda and focused her singers up to the last management to production workers."
- And now the company has been seeing a return to profitability on the horizon?
"Yes. What is happening now is not a walk in the park, but it looks pretty encouraging."
"Growth engine": OTI T-Mobile sues for patent infringement
Almost every company knows that the first thing she should do as soon as she develops something (no matter what) is patented. No matter if he becomes a commercial product, patenting prevent - at least theoretically - other companies to imitate him, and if one of them did do so, a claim for patent infringement will make its way to her and she could leave quite a few cash.
Even small OTI understood this, and in light of the American Board received arms (USA itself "patented" the claims for patent infringement), Tzifrmn takes seriously its claim had departed before his appointment, and even calls the heel property results OTI's intellectual side leg of its current operations, "claiming that he was" trying to isolate the two legs, and make sure that each exists in its own right. "
Story that it was. In March 2012, the OTI lawsuit for patent infringement against none other than T-Mobile USA, Cellular giant Central American operations of Deutsche Telekom of Germany. OTI claimed in its lawsuit that T Mobile sold mobile phones with NFC technology and patent violation of OTI on the same technology. "T-Mobile is not the only player that violates this patent," says Tzifrmn, "but it is the first player chosen him to open a legal battle that in her case the violation is quite clear. Besides, we can not financially manage simultaneously several such lawsuits against various companies."

Act I, as mentioned, went away and now it's on the upper track. In June this year, as part of a preliminary court hearing a claim made before a judge and jury - the so-called jargon Markman hearing - the judge accepted all OTI's claims, and later also rejected the appeal filed by T-Mobile.
Such hearing the judge examines the evidence gained from each of the two parties, the plaintiff and the defendant, and determines whether the plaintiff, who claims that the defendant violated copyright, there is a "Case". Thus, Markman hearing could signal what will be the future of the claim - court or settled out of court. In the case in question, it appears that OTI and T Mobile does march to the court but it is still a long way. Optimistic scenario, vanquish OTI T Mobile and maybe you will get huge sums from its own terms. OTI pessimistic scenario loses at trial, then "we will discuss only one leg, the leg business," says Tzifrmn but makes it clear that OTI "There Patent and Board policy is now to be aggressive on the image to maintain its intellectual property." To be continued.
Ousted founder sells shares, the Board buys
OTI takeover battle underway by the end of 2011, only a year later he decided in favor of American investors, and Oded Bashan, founder, CEO and chairman of the company, was forced to retire from her.
Who started the fight is the investment fund C.Silk & Sons, pretty small American Foundation founded by Charlie Silk and Sons Mark and Stephen Massachusetts. The investment policy of the Fund is based on strategy and what CRFA (stands for Cash Rich Fallen Angel), namely the identification of stocks that have lost quite a bit of their value but have the potential upside for long and Ldaonsiid minimal. Fund has a holding of 12.1% of the company, and thus became the largest shareholder her.
Later this fund joined American private investor, much more aggressive and extroverted, Jerry Ivey name (Jerry Ivy) actually made for Silk New most dirty work. Ivey, a former cosmetics manufacturer, has launched a website called all shareholders OTI reunite for this struggle, this holding 9.5% of the equity.
Dust control, as, decided in favor of Silk and Ivy and the Board of OTI had to turn the South, and those Americans caught eight directors, each connection between them and Israel is purely coincidental. Chairman of the Company has Dimitrios Angelis (43), a consultant pharmaceutical companies previously worked with giants like McKinsey and Merrill Lynch. Replacing the entire board directors with an American passport is quite significant for OTI. According to U.S. securities laws, state This makes it an American or a foreign company, so from January 2014 OTI will detail the financial results according to the rules of GAAP and IFRS, and will submit the papers to the American Exchange as a local (ie DEF14 and K10 and F20, etc. ).
And here's something else suggesting that the Board of OTI changed his nationality. Recently, a number of his friends bought shares of the Company, 735 thousand in number, for a million dollars, thus expressed confidence in the future. "This is an example of the American adage put money where their mouth is," says Tzifrmn. "This is the best evidence that the board believes the company and is here for a long time."
However, Oded Bashan and his fan make sure to sell shares of the Company (million dollars this year), and sever the umbilical cord that connected them privately for nearly a quarter century.

http://www.globes.co.il/news/article.aspx?did=1000880887