Conversation with Cleve Tsung, CEO of Passport Technology

Introduction / Background of Cleve Tsung

• Career Path: University of Pennsylvania -> Pepsi (Strategic Planning) -> Product Manager (Wireless Company, acquired by Verizon Wireless) -> MBA (UCLA) -> Finance (M&A Banker) -> Head of Corporate Development (Mattel) -> Passport Technology.
  • Notable acquisitions: Thomas the Tank Engine, Mega Bloks.
• Connections with Passport Technology:
  • Met Scott Dowdy at Australis Capital.
  • Assisted in merger advice for Passport and ASAI.
  • Elevated to CEO post-merger.

Overview of Passport Technology Products

• Four Major Buckets: Payments, Cage Automation, Loyalty, Compliance Software.
  • Payments: ATM transactions, Cash advance, Debit, Check cashing, Unique ATM switch.
  • Cage Automation: Software and hardware for cashier operations behind casino cages, Automated jackpot dispensing.
  • Loyalty Products: Automation for loyalty program enrollment, point management via kiosks.
  • Compliance Software: Helps casinos manage regulatory obligations.

Benefits to Casinos

• Holistic Approach: Emphasizes customer-centric custom solutions.
• Technology Enhancements:
  • Payments: Unique ATM switch offering surge pricing, loyalty tier-specific pricing, and reliable data streams.
  • Cage Automation: Enhanced cashier accuracy and transaction speed.
  • Loyalty Products: Customizable and rapid response to customer needs, enhancing patron experience and brand image.

Industry Applicability

• Primarily focused on Casinos, but with potential for broader applications.
  • Payments, loyalty products could extend into retail and marketing.
  • Current focus remains on filling the white space in casinos.

Merger with Automated Systems America (ASAI)

• Merger Synergies: Geographic and Expertise.
  • Passport: International; Sales-oriented.
  • ASAI: Domestic; R&D-focused.
• Merger Success Indicators: Increased sales and new product deployments.
  • Significant funding from Peak Rock Capital as proof of growth potential.

Addressing Fraud

• International: Points-to-point encrypted (P2P encryption), tokenization.
• Domestic: Limited retention of credit card information, truncated storage for auditing purposes.

Future Plans (18-24 months)

• Goals:
  • Enhance product deployment and white-space growth.
  • Expand into new markets.
  • Scale operations.
• Positioning for Inflection Point:
  • Potential for mergers, acquisitions, or further financing (private or public).

Final Thoughts

• Cleve Tsung's Vision: Achieving growth, demonstrating product validity, and positioning for strategic opportunities to benefit employees and shareholders.
• Interview Conclusion.