Ofer Tziperman - CEO Shay Tomer - CFO

Mike Latimore - Northland Capital Markets Ed Schwartz - Schwartz Investments Marc Silk - Silk Investment Advisors Scott Turkel - Turkel Investments Sherli Looi - Garrison, Bradford & Associates

Thank you, Kathia. And welcome everyone.

Thank you for joining us today. It's now been a little more than a year since I took the helm at OTI and along with our new management team we have been working hard executing on our new Board of Directors strategic plan to turn around OTI and put the business on the right course by focusing on our core expertise in secured cashless payment solutions.

I'm glad to report that we have made tremendous progress which is reflected in our strong financial performance in 2013. Revenues from our continuing operations were up 22% in Q4 and up 20% for the year.

It should be noted that this growth was achieved despite the vast structural and operational changes we underwent during the year. This performance helped to drive the lowest level of annual GAAP net loss in our company's history as a first step towards profitability.

Altogether, this numbers reveal our effective attention on cost controls and operational scalability while growing our top line and diversifying our revenue base within the cashless payment market. Now before I go further, I would like to turn the call over to Shay to take us through a more detailed discussion of our financial performance.

Then I will return to talk more about our operational activities and business outlook for 2014. Shay?

Thank you, Ofer, and welcome everyone. I will start with short explanation regarding the discontinued operations result.

During Q4 2013, we reached an initial agreement which eventually closed in February 2014 to sell our wholly-owned Germany subsidiary Intercard System Electronics for €700,000. Accordingly, assets and liabilities related to Intercard are presented separately in the balance sheet as the assets and liabilities held-for-sale, which was divested in February 2014.

It's important to note that the results from the SmartID division and the Intercard operations and cash flow for the resulting period are presented in the statement of operations under the statement of cash flow as discontinued operations separately from continuing operations. The net capital gain from the SmartID and Intercard divestitures totaled approximately $6 million, while the ongoing results from these operations totaled a net loss of $1.5 million for the fourth quarter of 2013 and the net loss of $2.2 million for the fiscal year 2013.

Now to our financial results for the fourth quarter and fiscal year 2013. Revenues in the fourth quarter of 2013 increased 22% to $6.2 million from $5.1 million in Q4 2012.

The increase was mainly driven by a 60% increase in revenue in our retail segment from our NFC readers sold to the U.S. market.

Now breaking down Q4 2013 total revenues by source and the percent of total revenue. Retail and mass transit revenue was $4.1 million, or 66%.

Petroleum revenue was $1.2 million or 19%. Parking revenue was $600,000 or 10%.

And finally, MediSmart and access control product revenue was $320,000 or 5% of total revenue. Looking at Q4 revenue by geographic region and the portion of each region contribution to total revenue, North America accounted for $2.6 million or 42%.

Europe accounted to $2 million or 33%. Africa accounted for $1.2 million or 19%.

And finally, Israel accounted for $360,000 or 6% of our total revenues. For fiscal year 2013 revenues increased 20% to $19.9 million from $16.6 million in 2012.

The improvement was driven by increasing our retail segment particularly NFC readers sold to the U.S. and the European market over the year.

Now breaking down 2013 total revenues by segment and the percent of total revenue. Retail and mass transit revenue was $11.7 million or 59%.

Petroleum revenue was $4.6 million or 23%. Parking revenue was $2.2 million or 11%.

And finally MediSmart and access control product revenue was $1.4 million or 7% of total revenue. Looking at 2013 revenue by geographic region and the portion of each region contribution to the total revenue, Europe accounted for $7.1 million or 35%.

North America accounted for $6.5 million or 33%. Africa accounted for $4.1 million or 21%.

Israel and Asia accounted for $1.9 million or 9%. And finally, South America accounted for $300,000 or 2% of our total revenue.

Gross margin in the fourth quarter 2013 was 49.5% compared to 49.2% in Q4 2012. For the full year, gross margin was 54% compared to 56% 2012.

Our operating expenses in Q4 2013 decreased 32% to $7.1 million from $8.4 million in the same year ago period. For fiscal 2013, operating expenses decreased 38% to $16.5 million from $26.6 million in 2012.

It is important to note 2013 operating expenses included $12.1 million in other operating income. This was mainly related to the write-off of the provision for termination recorded in Q4 in accordance with the termination and settlement agreement signed with OTI's former Chairman and CEO, Oded Bashan and former President, Ohad Bashan.

The year-over-year decrease in operating expenses was also attributable to lower headcount and the reduced management cost. We remain focused on tightly managing our expenses and overhead costs.

Q4 net income attributable to shareholders totaled $482,000 or $0.02 per share. This was a significant improvement from a net loss attributable to shareholders of $8 million or $0.25 per share in Q4 2012.

For fiscal year 2013, net loss attributable to shareholders totaled $3 million or $0.09 per share. This was an improvement from a net loss attributable to shareholders of $17.4 million or $0.54 per share in the same period last year.

The improvements for both periods were due to increased revenues, decreased operating expenses and the net capital gains from the divestiture of the SmartID and Intercard operation as I discussed previously. Q4 adjusted EBITDA loss from continuing operation; a non-GAAP measure totaled $2.9 million.

This was an improvement from an adjusted EBITDA loss from continuing operation of $7.4 million in Q4 2012. For fiscal 2013, adjusted EBITDA loss from continuing operations totaled $3.5 million, an improvement from an adjusted EBITDA loss from continuing operation of $15.4 million in 2012.

Now turning to the balance sheet. Cash, cash equivalents and short-term investments as of December 31, 2013 totaled $17.6 million.

This was up from $9.7 million at the end of the prior quarter. The increase was due to the $10 million upfront payment we received from the sale of the SmartID in December.

This completes my financial summary. I would like to turn the call back over to Ofer to provide an overview of our operational activity and business outlook.

Ofer?

Thank you, Shay. In all, 2013 marked a transformational year in the financial and operational development at OTI.

We made strong progress executing on our new strategic plan of reducing unnecessary costs, while refocusing on our core business of providing cashless payment technology and solutions and particularly NFC based contactless payments. As Shay mentioned, we successfully completed a divestitures of the non-core businesses of Parx France and SmartID and most recently Intercard System Electronics.

These strategic moves strengthened our balance sheet and streamlined our cost structure allowing us to more effectively allocate resources and capitalize on the fast growing multi billion dollar NFC and cashless payment markets. We continue to build on the momentum and traction we have established across all of our core business segments especially in the retail segment, which includes our cashless payment solutions, NFC and contactless readers.

In fact, we made tremendous progress in our retail segment during 2013 demonstrated by the 107% increase in the number of readers we shipped globally 110,000 units. These gains were the direct results of our strategic shift to focus on building our core contactless transactions and NFC technology business.

In the fourth quarter, we secured a $10 million order for NFC readers from a longstanding customer in the unattended retail market. This order represented our largest ever single reader win as well as a strong endorsement of our solutions for this market.

The $50 billion unattended machine market presents a vast growth opportunity for OTI. According to industry analysts there are more than 30 million food and drink vending machines worldwide with most lack in cashless transaction capabilities.

This huge figure is an addition to the increasing number of ticket machines, parking meters, supermarket self checkouts, Laundromats, photo kiosks, Internet access terminals and bike kiosks plus countless other point-of-sale that will eventually evolve to offering unattended cashless transactions given the advanced capabilities of our technology. There is no doubt this market represents a big opportunity for OTI and customer interest is increasing.

Following a successful pilot of program completed in December 2013, we received an initial purchase order in January this year for 10,000 Saturn 6500 readers from a leading U.S. based system integrator serving the unattended retail market.

We have since begun volume shipments of Saturn 6500 for distribution to the nationwide customer base. And I should note that this order mark the 600,000 unit milestone of total OTI Saturn readers sold to-date.

Although unfamiliar our Saturn 6500 is a secured NFC and contactless reader build specifically for the unattended machine market and it provides quick and easy support for electronic payments. Such cashless payments can easily increase sales about more than 20% since it does not limit the purchase to the cash the customer happens to have in the pocket.

All of us have at one time or at one point experience frustration when trying to buy a snack or soda from the vending machine only to realize we don't have enough change or the machine can only take limited paper denominations if at all. The Saturn 6500 solves all this, helping increased sales and enhances customer satisfaction.

So this will represent another clear example of our NFC readers meeting the demanding needs of our global customers and partners. Like with most of these opportunities a key determining factor in establishing this new relationship was our ability to quickly customize our Saturn reader to make unique specifications under a strict fine line.

This capability coupled with our highly reliable and secured NFC technology continues to provide us with a significant competitive advantage. It's also important to note that OTI has joined a small elite group of technology providers that have passed the long and rigorous certification process required by Visa MasterCard and other card associations for their payment products.

OTI has invested in meeting the high demand of such certifications as it sets us far apart from other low end non-certified competitors. And our market timing could not be more ideal; according to markets in market.com industry-wide NFC enabled applications are expected to grow at 35% compounded annual growth rate to $35 billion by 2016.

So, it's clearly the payment industry is rapidly adopting NFC technology as they increasingly recognize it as the fastest most efficient, most versatile and most secured method for payment transactions. There are several industry initiatives driving these wide scale adoption of NFC particularly a standard being set by EMV otherwise known as EuroPay MasterCard and Visa.

EMV is a global standard for the inter-operation of integrated circuit cards and point-of-sale terminals and ATMs used in authenticating credit and debit cards transactions. EMV helps to ensure the security and global inter-operability of chip-based payment cards.

As such, many countries have already implemented EMV with PIN based card holder verification, which is commonly referred to as Chip and PIN. Visa, MasterCard, Discover and American Express recently issued a mandate that requires all point-of-sale devices to support EMV standard by the end of 2015.

All the device operators will lose liability protection from these payment card associations. This mandate is expected to accelerate the adoption of NFC and contactless readers which in term will drive demand for OTI solutions.

Last month, Visa and MasterCard introduced a new set of tools and support applications designed to make it easier for banks to adopt a cloud-based secure element known as Host Card Emulation or HCE. HCE is an alternative to renting space on the SIM card from airtime operators which we likely make it easier to develop and deploy NFC payment applications.

We believe this will also increase the demand for our NFC readers. Along those lines, we plan to continue to expand our sales team in order to capitalize on this timely near term opportunities and drive revenues.

Based on orders already shift order secured in our pipeline of new business, we expect to increase our NFC reader shipments in 2014 by more than 35% to at least 150,000 units. During 2013, we also introduced the WAVE device, which is the industry first audio jack plug-in NFC smartcard payment solution.

WAVE is the first such device to receive certification from VISA and MasterCard. With their certification, OTI's WAVE technology platform is poised for large-scale implementations.

In fact, we have already begun shipping commercial quantities of our WAVE device to our banking customer in Hong Kong. We're also in advanced discussion with other banks, payment card providers, public transportation operators, loyalty and reward program encompasses.

At the same time, we are gearing up our WAVE manufacturing capacity to be able to support fast delivery to new customers. And now to our mass transit e-ticketing operation in Poland.

During 2013, our fully-owned wholly-subsidiary ASEC secured long-term contracts with several municipalities in Poland for mass transit e-ticketing services. These contracts are valued at $50 million over the 10 years period.

This business unit is already profitable and we are currently busy expanding its services to other municipalities in Poland. We are also in the process of evaluating our options to expand these services to other countries as well.

Moving on to our other business segments. In our vehicle fueling segment, we continue to make very good progress across all of our geographical markets demonstrated by growing number of implementations, a new strategic partnership.

As of 1st of April 2013, we have completely separated the sale and services of EasyFuel to our wholly-owned subsidiary OTI PetroSmart which is operating out of Cape Town, South Africa. OTI PetroSmart is OTI's exclusive value-added retailer in the petroleum segment.

This refocus resulted in some immediate business and financial gains. For example, in the fourth quarter OTI PetroSmart entered into a strategic agreement with Wayne a GE business and innovator of few dispensers and forecourt technologies.

Under the agreement, we will supply our EasyFuel Plus automatic vehicle identification components for Wayne's Fusion Forecourt System, which will be sold around the world. Wayne will rebrand EasyFuel Plus component as Wayne products and integrate them into Wayne Fusion Forecourt System.

This will provide Wayne global customer base with a secured, reliable, scalable and cost effective fleet management system. Moreover, Wayne will use its deep channel partner relationships to introduce our solution to petroleum retailers, commercial fleets and industrial and mining customers.

This agreement was the result of our longstanding relationship with Wayne, which originated with our efforts to promote and integrate the EasyFuel Plus solution in various places in Africa. It also provides a significant validation of our technology and we plan to work closely with Wayne as we offer fuel management systems in other regions.

This relationship is a representative of our effort to take advantage of opportunities for our fuel management solutions which we believe represents a significant growth driver for OTI. Wayne has an impressive track record of innovation as well as world-class sales and support network which we expect to be instrumental in meeting our customer's growing needs.

Also earlier in 2013, we formed a strategic agreement also with Tokheim, in other word leading into gas stations pumps that adopted our EasyFuel solution. With two of the world's largest pump manufacturers as our channel partners; we believe we are in an ideal position to enter into many more markets in 2014 and beyond.

Last month, we expanded EasyFuel into the consumer market with introduction of an innovative new smart vehicle tag called Moon Tag. This new device is the low cost one size fit all vehicle tag that is easily installed on any vehicle.

Moon Tags allow consumers to make payments automatically without swiping their credit card or going inside to pay. Additionally, loyalty points can be awarded automatically for each refueling.

Moon Tag opens up the huge retail market opportunity for our EasyFuel system. We have hit the ground running with strong interest from the retail gas station market and this product is being seen as a perfect loyalty offering by all companies in their ongoing battle for improved service and retain customers.

With this solution we believe we can dramatically increase our market reach into the retail market. So this vehicle fueling segment represents an important growth engine for OTI.

Our recent strategic agreements with the major gas pump manufacturers are now complemented by Moon Tag, which perfectly addresses the expensive retail market. This opens up significant opportunities for us in the U.S.

and other developed markets around the world. This is yet another example of how the contactless NFC solution can create a new payment method for huge market used daily by everyone everywhere.

Our petroleum payment solutions have already been deployed in 43 countries more than 1600 gas stations and over 100,000 commercial vehicles. We are working diligently to build on this momentum with widening pipeline of growing opportunities including within our existing customer and partner relationships.

As global demand for retail fueling technologies builds we are strongly positioned with industry leading solutions and a more key customer base to expand market share and penetrate new countries. We are confident that our EasyFuel Plus will continue to be adopted by other major market leaders.

As we have now started to report by segments it should be noted that OTI PetroSmart has already moved to profitability in 2013 and we estimate good acceleration of this business unit also in 2014. Turning to our parking segment, during 2013 we focused on increasing our market share within existing customers and regions.

Our execution was demonstrated by our ability to expand EasyPark into 15 new municipalities in 2013 bringing our total deployments to over 160 municipalities in 11 countries around the world. In the third part of 2013, we introduced EasyPark for the first time in the U.S.

with our win in Austin, Texas. Since then we have implemented EasyPark in seven cities in the U.S.

and all in advance negotiations with a number of others. We also expect to launch EasyPark in other countries around the world this year.

In the second half of last year, we launched EasyPark Mobile, which recently won the Bermuda 2013 Tech Award for most innovative new mobile app. EasyPark Mobile offers driver convenient ways to pay for parking using the mobile phones.

In addition to making payments, EasyPark mobile also allows drivers to set parking remainders, add money to prepaid accounts, manage long-term parking remotely, view parking and billing history and locate ones vehicle. The Bermuda 2013 Tech Award is a reflection of our ongoing commitment to providing innovative and industry leading cashless payment solutions based on our potential technologies.

Our proprietary parking technology allows municipalities to offer drivers a simple yet innovative parking payment system which increases revenues and reduces overhead. While the parking business is known to have long sales cycles with municipalities we believe that our intensified and expanded sales efforts in certain new countries will result in new contracts during 2014.

We believe the stickiness of the EasyPark solution coupled with its attractive recurring revenues business model can be translated into stated growth starting this year. As far as our intellectual property, there continue to be a healthy rate of new filings following from our focused R&D initiatives.

During 2013, we were issued three new patents to our expansive patent portfolio. This new patent support our ongoing effort to protect and monetize our IP through business operations licensing and related arrangements.

We continue to lay the ground work for monetization of these assets. Over the last 20 years, OTI has continuously invested in innovation.

Through the patent system, we continue to create and protect the value of technology that has been developed by our world-class engineers. With regard to our lawsuit against T-Mobile USA we are proceeding with the preparations to all the jury trail that will likely take place later this summer.

In summary, I would like to emphasize three key points. First, we continue to make strong progress executing on our strategic plan, focus on our core business of providing cashless payment solutions and monetizing our intellectual property.

As I mentioned we accomplished all primarily objectives in the first year of our strategic turnaround plan. This include growing our top line and diversifying our revenue base as well as reducing unnecessary costs and shedding non-core businesses.

Secondly, we continue to effectively manage costs and further optimize our expense structure. These initiatives allow us to decrease our total operating expenses.

We remain focused on tightly managing our expenses and overhead cost and expect further improvements in 2014. Our optimized operational structure has allowed us to more effectively leverage our core competencies and ultimately drive sustainable profitability.

Finally, with many exciting prospects and the very ambitious agenda for 2014. Our expectations for the future remains high as we build upon the momentum we have established and see a widening pipeline of growth opportunities.

As global demand for NFC based technology continues to build, we're well positioned with industry leading solutions and growing customer base. We believe these key factors and strong tailwind will help us expand our market share drive revenue and achieve profitability.

Now, with that we are ready to open the call for your questions. Operator, please provide appropriate instructions.

Hi. Good afternoon, guys.

How are you?

Very good. How are you doing Mike?

Very good. Thanks.

I just have couple of questions here, I guess you mentioned the expectations for reader growth in 2014, would you say that most of that growth is going to come from the U.S. market or is that evenly split kind of globally?

Yes. Definitely the U.S.

market was the main market joined by new leads and new wins also in the European market.

As you looked at 2014, so the growth is going to come from U.S. and European markets in the reader segment?

Yes. That's correct.

Okay. And then, can you give us any – I know you've got a nice win with Jetco for your WAVE product.

Can you give you a sense of how much volume you’re thinking from WAVE in 2014 is possible, in terms of unit volume?

Yes. We haven't disclosed any numbers to-date, but what we can say is that we see a major interest for the WAVE from different type of potential customers, the Jetco banking consortium is only one of them and was the first one to place an order even before the product was even ready for mass production, which was very encouraging news.

But, since then we are already in deep discussions with some other prospects, eventually the WAVE device is something that should be sold in the hundreds of thousands and the only question is that how soon we can reach even much higher volumes and which is subject to increasing sales efforts that we are now conducting worldwide. So we actually have very high expectations for this product moving forward.

Okay. And then you talk about goals of achieving a sustainable profitability.

Is that comment related to getting to that level in fiscal 2014, or is that just a longer term deal?

We haven't again disclosed any specific date for profitability, but as you can understand from the deals and the pipelines that we have discussed, we are very optimistic about reaching this goal as soon as possible. We did not state specifically which quarter.

Okay. And I guess is it a view that it would be sometime in fiscal 2014?

As I mentioned Mike, we did not say specifically in which quarter.

Okay. And then you talked about managing costs and expect further improvements, I guess can you just provide a little bit more clarity about how you would do that and the magnitude of it, if you can do that?

Can you repeat the question, please? I'm not sure I got it.

Yes. I mean you said your second goal for 2014 was managing cost and then you'd expect further improvements on the cost front.

Can you just provide a little more detail around that?

Yes. There are several aspects in that respect and one is obviously the headcount which we are improving all the time and always with an eye on sustaining growth as we expect it to happen.

And at the same time, we are improving our manufacturing process and our manufacturing costs including different type of deals with sub contractors on the turnkey basis that is definitely saving us on some of the running cost of the company. These together with some other procedures that we have made during the last year is going to reduce the cost even further during 2014.

Okay. And I guess this is last question, you've given a continuing operations number here for the fourth quarter.

Is the comparable third quarter revenue number – in third quarter 2013 is that $5.45 million, is that the comparable revenue number?

Hi, Mike, it’s Shay. We did not publish the revenues for the quarter – for those quarters this year, but the $5.4 million is a good ballpark from the continuing operation for the first quarter, yes.

Okay. All right.

Thank you.

Thank you.

Good morning, Ofer. How are you?

Hey, Ed. Good morning.

How are you doing?

Good. By my rudimentary calculations, fiscal year 2012 ended up with sales of $148,000 per employee.

And fiscal 2013 ended up with $110,000 per employee. How does that equate to controlling cost?

Yes. That's a good question.

Actually, as you know in the last year we were busy turning around the company, which we started by divesting some of the subsidiaries, some of the business units including SmartID, Intercard and Parx France. Those by itself – by themselves reduced the headcount in about 32% and the reflection of that is going to be shown mainly in 2014 since most of this divestitures happened towards the second half of 2013.

Well, in the case of Intercard that concluded only in February this year. So we do expect that some of this headcount is going to show in terms of higher revenues per employee this year.

Okay. So if you get back to the $148,000 per employee, you're talking $26 million plus in revenue for 2014.

In terms of cost per employees?

If your sales per employee is taken at the previous level of $148,000 not a $110,000 which is as now, that would equate to $26 million company.

Ed, it’s Shay. As I also mentioned before, we did not publish any focus yet for the future but just like a reminder as a….

Well, I'm going to stop you here for a second. This will lead into my second question, when the change of the Board occurred late 2012, it was apparent to all shareholders at that point, but the new Board wanted to be transparent.

So why is there a reluctance of the current management to give guidance?

Yes. Let me address it in a straight forward manner Ed.

Last year was mainly a year of turnaround. As you can…

Ofer you're begging the question. Why is there reluctance for the current management to give guidance?

Yes. I'm just about to complete my reply and I'm sure…

Are we going to be a $26 million company by the end of 2014 or $40 million company or $50 million company, where are we going?

Yes. We are going above the number that you have mentioned and…

Well, I mentioned a bunch of numbers, which number are we going to?

I know, I know, above the $26 million number that you've mentioned. And again, Ed, we will not publish guidance before we are completely secured about that.

We don't want to over promise or under promise. So as you can understand when I'm saying that we are confident about the future, it means that we are not going to waste everybody's time, but rather we have strong belief that we can make this company profitable so soon as possible.

Now to your question, this issue of providing guidance to the market is something that we are now discussing at the management and Board level, and I hope that we would be in a position to release something in the near future. But as of this point, Ed, we haven't come up to the situation and therefore we don't want to state specific numbers.

And again, it's not because we are reluctant, or do not want to be transparent but rather because we want to be responsible and not to repeat past mistakes by giving numbers that are not going to be met in both directions.

Okay. Now, I have a third question and then I'll go back in queue.

In a recent article, you were quoted and I don't have the exact quote in front of me that there was a great opportunity for EasyPark parking opportunities in municipalities here in the United States. How come sales are so poor in that area if there is a great opportunity?

Well, that's what I referred before when I said that specifically with municipalities the very long sales cycle. The good news is that we are already in the sales cycle as I mentioned with several municipalities.

And we believe that it's going to happen sooner than later that we will get new deals specifically in the United States. Now as far as other countries, we are also as I've mentioned going to close some additional deals in some other countries.

Each of these places Ed that we are stepping in, we have very high stickiness that's the good news, the bad news is that it takes a long time to get a contract with a municipality and that's why it may look from the outside like it takes a long time from our experience so far it is quite normal.

Okay. Well, thank you.

And good luck. And I'll go back in queue.

Thank you very much.

Hi, guys. So Ofer you talked about cutting cost a few times on this call.

So could you give us a little light besides the sale of the EID, the sale of the German factory and your strategy with the EasyPark, are there other cost cutting measures that you have done? And if so can you tell us in?

Yes. So you are talking mainly about the divestitures that we have made that have obviously contributed great deal for the cost reduction…

And also those revenues along with that as well so it's a formula?

Yes. But this revenues were not profitable and our goal eventually to bring this company to profitability.

So we are not just looking at revenues. And that was part of the reason that we have divested these companies.

Revenue is nice, but we would like to make sure that those revenues are all profitable. So that's the reason that we have stick with all the business segments that we can see a very nice growth coming for the future.

And none of the – those that we have divested will secure from our point of view in this direction. And as far as your question is going, we have reduced the headcount more than the direct number of this divestures as well as improved the running cost by reducing the cost per headcount moving forward as well as improving our manufacturing and operational structure.

So our cost of products has been reduced in order to allow us to improve our profitability from the products that we are selling right now. Those were the key factors in cost saving.

But you see you have cut that you have made inside of divestitures equated to the revenue that we are going to generate this year, you feel that you cut enough that need to be done to get your profitability?

I think that the answer to that is, at this point yes. But as I mentioned before, we are not ended just as yet.

And we are still going to improve on all of this aspect including the headcount including the operational costs. We have a clear plan in that respect and we are executing it with one goal in mind.

And that goal is making sure that we are not helping the growth opportunities that we are experiencing right now with the continuing operations.

All right. Let's switch gears here.

Out of few retailers recently, it sounds like there is a mandate in the U.S. that they have to be EMV complaint by some point in 2015, is that correct?

Yes. This is correct.

By October 2015, they all should be EMV complaint.

So by the end of 2015 or middle….

By October 2015, generally speaking for most of them. The mandate is more elaborated on specific date.

But the majority of point-of-sale should be meeting EMV by the end of 2015.

Okay. So having said that how many sales people do you have right now in New Jersey that are just focused on sales?

In the United States itself right now we have two sales people and we are now at the stage of expanding that to four and then to five within the next few months.

Okay. Because the point I'm getting at is that, the change like you have about, I don't know let's say 15, 16 months to capture writing above in the U.S.

So this should be an aggressive part of your strategy over the short-term. So I would assume it's on you, if it doesn't get executed correctly?

You are absolutely right. The reason that we are now recruiting additional sales people is to be able to meet this expected demand from the market and we are looking for experienced people that can hit the ground running with knowledgeable – which are knowledgeable enough about this readers market.

And as I mentioned great relationships. And my last question is in regard to parking, when did you send out your first in vehicle parking meter to Austin, Texas?

In March of 2013.

And how many have they ordered since?

They are in the range of few thousands of devices.

And what's the feedback there and did you expect to be more – having sold more at this point?

Actually, we are still in discussion with Austin Municipality to see how they can contribute to the sales as it was initially promised. So far it was only based on our own sales efforts.

But they should step in order to promote the solution in the city. They are also running another pilot for another expansion of the system right now.

And there the feedback that we get from customers is extremely good actually I think that you can see some of it on the easyparkusa.com Web site. People are very happy about the solution.

Okay. Actually I have one more question.

So you are not going to give guidance at this point, but have you – start giving guidance for the Board of Directors so they know that you have a plan and so they now that whether you've executed or not so at least the Board has that information?

Absolutely. The Board approved the budget for 2014, historically the guidance and we are executing accordingly.

Thanks for taking my call.

Thank you very much Marc.

Hello.

Hi, Scott.

Oh, hi. How are you?

I didn't realize it was connected. Thank you for taking my call.

I don't – I missed part of the call this morning and I hope I'm not redundant. But did you talk about the lawsuit at all?

The lawsuit with T-Mobile?

No, the lawsuit the one in Africa?

Lawsuit in Africa, we don't have any lawsuit in Africa.

Okay. Then I must be mistaken.

And as far as guidance goes, I'm not sure it's as important as other people think publicly as long as you continue to restructure the company and put your numbers up. I think that's good enough for investors for now until you have your restructuring complete, you have some financial flexibility and the ability to operate your business.

So congratulations on nice results.

Thank you very much. We appreciate it.

Hi. Good morning, Ofer.

Good job, very good improvement in the top line and cutting off operating expenses.

Thank you very much Sherli.

You are most welcome. I need to clarify something because the call wasn't quite clear.

I'm looking at your retail segment, which you mentioned earlier, you had $10 million order, I'm thinking is that $10 million order over several years, could you elaborate on that? And what kind of operating margins or gross margins to be expected from there?

And did you say the total addressable market for this retail segment is $50 billion or $50 million?

Okay. So there are several questions.

First of all, as far as this specific order this in order of three years starting from 2013 and so this is the second year for this same order. And generally, the gross margins in the company are around 50% across the different products give and take the specific products.

And as far as the total addressable market it – the question of which one of the segments as a whole NFC market we are talking about 35 billion U.S. dollars.

But this is not only for the OTI solutions. When we are talking about addressable market for the readers, the NFC readers of OTI, we are referring to about $30 million, three zero million vending machines around the world.

About $8 million or $9 million of them are in the United States. And this is not including some additional unattended market like -- vending like washing machines and like other unattended kiosks et cetera.

Okay. Very good.

Then next move up to the next question. Is it possible to get an idea of your fuel?

You are working with Wayne for example, what is a possible expected revenue for OTI?

Actually, this market represent a significant growth opportunity for us because it is mainly about the channel partners such as Wayne, such as Tokheim that now for the first time starting from this year embedding our EasyFuel solution as an integral part of their solution. Each of one these companies has tens of thousands of gas stations around the world using their equipment.

So while obviously, we do not expect all of that to happen within a year. We do expect that this year they are going to conclude the first installations with the first countries that they have selected to start with.

And then they are going to expand that on the worldwide basis. So this subsidiary as I have mentioned OTI PetroSmart was already profitable last year and is going to be more profitable this year and with very nice gross margins for that specific products in the range of 60%.

So we definitely consider that as an important growth engine.

Good. And one final question from me, yes, the near-field technology for the credit card, debit cards are very crucial within the next 15 months or 20 months of opportunity.

Do you think that the bigger names, the banks with bigger names, would they talk to OTI or would they prefer to work through another bigger name company?

Actually, we see both options already happening right now. We have some of this large banks around the world talking directly to OTI.

And at the same time, we are also working through channel partners and some of the deals in the pipeline are achieved through a channel partner. So we are not just hoping to close all of these fields directly, but also through channel partners.

Great. Keep up the good work.

Thank you very much Sherli.

Thank you very much everyone for joining us on our call today. I especially want to thank our investors for their continued support and patients as we continue to build OTI into a global leader in cashless payment solutions.

We look forward to updating you on our next call. Operator?