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Innovative Payment Solutions
ON TRACK INNOVATIONS
INVESTOR PRESENTATION
May 2018
NASDAQ: OTIV
2
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities
laws. Whenever words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions are used, On Track Innovations Ltd. (“OTI”) is
making forward-looking statements. For example, forward-looking statements include statements regarding OTI’s intent to rollout new products and OTI’s
position to capitalize on the cashless payment market and transition to recurring revenue model. Because such statements deal with future events and are
based on OTI's current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ
materially from those described in or implied by the statements in this presentation. Forward-looking statements could be impacted by the effects of the
protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards, as well as OTI's new and existing products and OTI’s
ability to execute production on orders, as well as other risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in OTI’s
Annual Report on Form 10-K for the year ended December 31, 2016, and in subsequent filings with the Securities and Exchange Commission (“SEC”).
Although OTI believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance
that expectations will be achieved. Except as otherwise required by law, OTI disclaims any intention or obligation to update or revise any forward-looking
statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise.
OTI has filed a registration statement (including a prospectus) with the SEC and intends to file a prospectus supplement for the offering to which this
communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and any other
documents OTI has filed with the SEC for more complete information about OTI and this offering. You may get these documents for free by visiting EDGAR
on the SEC web site at www.sec.gov. Alternatively, OTI or the placement agent will arrange to send you the said documents if you request it by calling
Summer Kotb at (212) 895-3511.
© 2018 On Track Innovations, LTD.
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OTI OVERVIEW
OTI is a global provider of cashless payment
systems (i.e. payment with bank card, mobile
device/wearable, or other secure method).
We offer a variety of solutions, including technology
incorporating Near Field Communication (NFC) –
short range wireless communications between
electronic devices.
Symbol: NASDAQ: OTIV
Stock Price1: $1.21
Market Cap1: $49.8M
Shares O/S2: 41.2M
FD Shares O/S2: 42.4M
Cash(2,3): $10.5M
Debt2: $5.0M
Established: 1990
Employees: 125
TTM Revenue2 $24.2M
(1) As of May 21, 2018
(2) As of March 31, 2018
(3) Includes short-term investments
Market Served:
• Automated Retail
• Mass Transit Ticketing
• Fuel Management
• IoPT and Wearables
Diversified revenue streams:
• Product Sales
• Recurring Revenues
• Transaction Fees
OTI’s payment system on
vending machineOTI’s IoPT/Wearable
Payment Solution
OTI’s cashless fueling
payment system
4
INDUSTRY LANDSCAPE
• Consumer preferences are shifting – driven by the growth of
NFC-enabled mobile devices for payments
• The global mobile payments market is expected to grow at CAGR of 33%
through 20221
• What is driving the universal adoption of contactless
payments?
• NFC enables vendors to reshape the obsolete attendant business model,
improving margins while providing consumers with a smoother payment
experience
• Credit card issuers are starting to widely issue contactless cards by
default
• Contactless cards are “the new normal” in many European markets
• Mobile applications like Apple Pay and Android Pay expedite consumer
adoption
1) Allied Market Research
Mastercard TQM
Certifications
Compatibility and Technology
5
GLOBAL PRESENCE
Fueling
Payment
Four major regional offices
with deployments in 55
countries worldwide.
Subsidiary Companies
OTI America, Inc.
6
CUSTOMERS, PARTNERS AND CERTIFICATIONS (PARTIAL LIST)
All trademarks are the property of their respective owners
Payment & OEM Customers and Partners
Mastercard TQM
Petroleum Customers and Partners Certifications
Compatibility and Technology
28 years of experience in contactless technologies
Large enough to serve the
world’s largest companies, yet
small and nimble enough to
make quick decisions and
rapidly adopt new technologies
Pioneer and leading developer of
NFC cashless payment solutions for
the unattended payment market
Deep industry knowledge in various
vertical markets, allowing for better
fine tuned solutions to real-life
problems
Providing field-proven solutions for
over two decades demonstrates the
strength of OTI’s core technology
Deep global presence
Long list of global blue chip
satisfied customers and partners
Payment systems carry the highest
certification standards
WHY CUSTOMERS CHOOSE OTI?
8
Mass Transit Ticketing IoPT & WearablesAutomated Retail Fuel Management
MAIN LINES OF BUSINESS
Automated
Retail
IoPT &
Wearables
Fuel
Management
Mass Transit
Ticketing
Automated Retail 9
Mass Transit Ticketing Fuel Management IoPT & Wearables
AUTOMATED
RETAIL
INNOVATIVE AND ADVANCED
CASHLESS PAYMENT SOLUTIONS
10Automated RetailMass Transit Ticketing Fuel Management IoPT & Wearables
DOMINANT PLAYER IN THE
UNATTENDED RETAIL MARKET VERTICAL
Unattended retail market
• Vending machines, kiosks, ATMs,
ticket machines, EV charging stations
Cashless, NFC-enabled payment solutions
Strong market share
• Substantial market share in the U.S.
• Over 700,000 OTI hardware devices sold
worldwide
• Strong growth in the EU
• Market entry into Japan, which has 5 million
vending machines
OTI is transitioning from the one-time sale of a
product, to selling solutions with recurring revenues:
• Selling data and remote monitoring to vending machines
operators
• High-value data leads to cost savings for operators by
reducing labor costs and optimizing operations
11Automated RetailMass Transit Ticketing Fuel Management IoPT & Wearables
TURNKEY SOLUTION DRIVES RECURRING REVENUE OPPORTUNITIES
OTI Hardware(EMV Cashless Readers)
OTI Telemetry(cashless gateways & machine to
machine controllers)
OTI Software(cashless payment systems)
Turnkey
Solution
• Typically the hardware
piece that customers see
• These can accept
payments from bank
cards (magnetic strip &
chip), mobile phones &
wearables
• OTI software is installed
inside the hardware,
allowing for cloud
communications via
3G/4G
• Allows for management
of entire fleet from single
back office
• Real time monitoring,
allows for pricing
control/changes,
inventory maintenance,
etc.
• Typically the hardware
piece that customer do
not see
• Allows for communication
from cashless readers to
merchant/operator
(communicates the
monitoring information
from installed software)
• Drives high margin,
recurring revenue
opportunities
• Offers a single point of
contact for merchants
looking to implement
cashless payment
solutions
12Mass Transit TicketingAutomated Retail Fuel Management IoPT & Wearables
TICKETING
ACCESS
BOARDING CONTROL
MASS
TRANSIT
13Mass Transit TicketingAutomated Retail Fuel Management IoPT & Wearables
MASS TRANSIT TICKETING
• OTI’s cashless payment solutions are ideal for expediting
payment in time-sensitive mass transit applications
• Current e-ticket sales network includes the following
networks in Poland:
• Warsaw City Card network
• Mazovia Railway network
• Lublin City Card network
• Intercity Railway network – sold from Warsaw City
Card TVM’s network
• Current footprint in the mass-transit ticketing market:
• 309 ticket vending machines
• 530 POS terminals
• 2 Customer service centers and a call center
14Fuel ManagementMass Transit TicketingAutomated Retail IoPT & Wearables
EASYFUEL PLUS
FUEL FRAUD PREVENTION
FLEET TRACKING
FUEL
MANAGEMENT
15Fuel ManagementMass Transit TicketingAutomated Retail IoPT & Wearables
EASY FUEL PLUS – A COMPLETE SOLUTION FOR FUEL MANAGEMENT
• On-vehicle smart tag and driver carried key fob
for the fuel management market vertical
• This can act as a loyalty tool for commercial
& retail markets
• Completely wireless and easy to install
• Eliminates fraud and cash handling issues
• Improves billing and information management
• Installations in 53 countries to date
• Major global partners & customers
• Partnership with Dover Fueling System
• BP South Africa (500+ stations)
• Tokheim – presence and access to 40,000
stations worldwide
16IoPT & WearablesMass Transit TicketingAutomated Retail Fuel Management
IOPT &
WEARABLE
INTERNET OF PAYMENT THINGS
WEARABLES
17IoPT & WearablesMass Transit TicketingAutomated Retail Fuel Management
PAY CAPSULE & PAY CAPSULE FLEX
Wearable NFC payment device with integral Secure Element (SE).
Compact generic core, fits various types
of wearable items: bracelets, key chains, necklaces, belts and more.
Pay Capsule –
Communicates with mobile devices via standard audio jack:
• Personalization / Activation
• Add / remove / configure applications
• Select default payment card
• Top-up money to the SE wallet.
18IoPT & WearablesMass Transit TicketingAutomated Retail Fuel Management
PAYENABLE PLATFORM – IOPT & WEARABLES
Industry Verticals
• Jewelry
• Fashion Apparel
• Automotive In-Car
• Entertainment
• Food & Restaurants
• Smart Home
• Health & Fitness
“PayEnable is the only all-in-one solution that enables any manufacturer to turn its existing
products into payment devices.”Application
• Loyalty & Rewards
• Gift Cards
• Credit Cards
• Closed-Loop Payments
• Brand Authentication
• Location Based Promotions
Mass Transit Ticketing19
MANAGEMENT TEAM
Shlomi Cohen, Chief Executive Officer
Ye’ela Haggai-Levy, ADV., General Counsel &
Corporate Secretary
Assaf Cohen, Chief Financial Officer
Charlotte Hambly-Nuss, Managing Director OTI
PetroSmart
Agnieszka Swiatly, Managing Director OTI Europa
• President & CEO of RayV
(acquired by Yahoo!)
a provider of online video-
streaming solutions.
• President of EMEA for NICE
(Nasdaq: NICE) a publicly
traded billion-dollar
software company.
• Sales positions with Nokia
Siemens Networks,
Siemens Communications
(Frankfurt: SIE), BATM
Advanced Communications
(London: BVC) and Eldor
Computers.
• Legal Advisor at Zim
Integrated Shipping
Services Ltd.
• Associate attorney at
Hyman Spector & Mars,
LLP, in Miami, FL and S.
Friedman & Co., in Haifa,
Israel.
• B.A. in Political Economics
from the University of
California, Berkeley and a
Juris Doctorate (JD) from
the University of San
Francisco School of Law.
• OTI’s controller and
deputy CFO since 2015,
and has been responsible
for the company’s global
finance departments.
• Controller at Samgal Ltd.
• Senior CPA at Ernst &
Young.
• B.A. in economics and
accounting from the
University of Haifa and is
a Certified Public
Accountant in Israel.
• Corporate Affairs
Manager/Legal Advisor to
OTI’s erstwhile distributor
in Africa before being
appointed as CEO.
• Managing Director of OTI
Africa.
• VP Global Business
Development for
Petroleum Payment
Solutions for OTI
• VP Global Petroleum
Products and Payment
Solutions for OTI
• Head of Business
Development & Board
Advisor at MCX Telecom
• Head of Sales CEE Region
at NCR Corporation (the
owner of Retalix).
• MA in Business and
Administration
Postgraduate, Finance,
and Management from
The University of Warsaw.
Mass Transit Ticketing20
GROWTH OPPORTUNITIES
EV Charger
ATM
VendingFueling
Kiosk
Ticketing
SOLUTIONS
Recurring Revenue
Japan
U.S
Europe
Australia
Mass Transit Ticketing21
FINANCIALS
• Shifting business model focuses on higher-margin, recurring revenue
opportunities
• Cost-cutting initiatives complete with focus on sustained cash-flow positive
operations
• Future cash flows protected by +$193M in NOL carry-forwards3
(USD $ in Millions) TTM as of 3/31/18 TTM as of 3/31/17
Revenue $24.2 $20.0
Net Income (Loss) $(0.1) $(0.8)
Non-GAAP Adjusted EBITDA1 $0.8 $(0.2)
(USD $ in Millions) Mar. 31, 2018 Mar. 31, 2017
Cash & Cash Equivalents $8.4 $6.7
Short Term Investments $2.2 $3.3
Debt $5.0 $5.0
(1) Adjusted EBITDA includes add-back of stock compensation expense. Please see reconciliation for additional information.
(2) Includes income from both continuing and discontinued operations.
(3) Includes net operating loss & capital loss carry-forwards as of December 31, 2017.
($ in thousands)
-$800
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1,000
Jun. 30,
2017
Sep. 30,
2017
Dec. 31,
2017
Mar. 31,
2018
Net Income2Net Income (loss)
($ in Thousands)
Experienced Management Team
with proven track record
Financial Profile:
KEY TAKEAWAYS
• Global leader in
providing & developing
turnkey cashless
payment systems &
secured solutions
(i.e. payment with bank
card, mobile device
/wearable, or other
secure method).
• Growing government &
fortune 500 customer
base
• Multiple growth
opportunities (by both
geography & segment)
• Shifting business model
focuses on higher-margin,
recurring revenue
opportunities
• Cost-cutting initiatives
complete with focus on
sustained cash-flow positive
operations
• Future profits protected by
$193M in NOL carry-
forwards1
• Achieved EBITDA breakeven
for the first time in company
history in FY 2017
(1) Includes net operating loss & capital loss carry-forwards as of December 31, 2017.
CONTACT INFORMATION
Investor Relations Contact:Greg Falesnik
MZ North America
Managing Director
Main: 949-385-6449
Company Headquarters:Z.H.R Industrial Zone
P.O. Box 32
Rosh Pinna, 1210001
ISRAEL
Tel: +972 (4) 686-8000