Critical Control Solutions Corp. (TSX:CCZ) CEO Interview


Critical Control Solutions Corp.
CEO and President: Alykhan Mamdani



WSA:  Good day from Wall Street, this is Juan Costello Senior Analyst with the Wall Street Analyzer. Joining us today is Alykhan Mamdani the CEO of CriticalControl Solutions Corporation.  The company trades on the TSX, Toronto Stock Exchange, ticker symbol CCZ. Thanks for joining us today Alykhan.

Alykhan Mamdani:  Thank you very much Juan.

WSA:  Great now starting off please give us a history and overview there of the company for some of our listeners into your story.

Alykhan Mamdani:  Sure.  Two minutes or less, we started back in 2000 and were primarily about improving things, processes for government, hospitals, banks and we have some traditional contracts from back then where we, on an outsourced basis managed different departments for the government. Like filing statistics of birth registry, from start to finish, we managed that.  In 2005 we focused in to a particular sector where we saw an opportunity to create software to optimize business processes.  So we entered the oil and gas business in 2005.  As a services company we built intellectual property over a period of time and now the oil and gas services portion of our business in the last year 2013 was about 60%.  We’re going to 70% this year and next year we’re anticipating that business to be 80% of our business, that’s where the bulk of our growth is.

WSA:  Great.  And can you talk about the launch of the ProTrend software here in the US?

Alykhan Mamdani:  Sure, we started off in Canada where we built a series of applications where we have significant market presence.  And the business in Canada developed a little bit ahead of the US because it’s much more regulatory driven in Canada, with the government owning the mineral rights in all the land.  So the government’s regulations on how reporting should go and so we built a series of tools that enabled the producer to get data from the field quickly and to have it auditable.  So when they reported it and paid the royalties to the government that was done efficiently.  One of our core products where we have the, clearly a market leadership position, the software’s called ProTrend.

So in Canada we have significantly more than half of all of the meters in Canada on our system.  We’ve redesigned for the US market and in the US more and more we see regulation coming in and we see with the new Sarbanes–Oxley requirements of audit ability and revenue protection.  We see a growing demand for management of key production data and that’s what ProTrend is designed to do.  We’ve redesigned it for the US market, specifically the different business processes down there and we’re launching it.  And it’s already been looked at – being looked at by everyone from small producers right to the multinational who have already used the product in Canada so we’re very excited about our expansion in the US.

WSA:  Definitely and what are some of the key trends that you’re focusing on right now in the sector and how you position your company to capitalize?

Alykhan Mamdani:  Well more and more the US market is – has changed, either you’ve got increased regulation but you also have a departure from the historic companies in specific areas that were drilling in their area.  Now all of a sudden you’ve got even midsized producers in Houston drilling in Kentucky or drilling in Colorado where the new plays are.  And so with that change what we have is a growing demand for access to information from the field to a place that’s further away.  As that becomes more of a demand the requirement of technology to facilitate that demand increases.

WSA:  And what are some of the factors that you feel make the company unique from some of the other players there in the sector?

Alykhan Mamdani:  Well, there’s a lot of software companies in oil and gas, all the software is not well penetrated in the oil and gas business for process optimization there are a number of software companies have done that in various different ways.  But primarily they’ve all been the traditional model of you design software licenses, products that you need to buy, you need to install, you need to maintain and that has significant inefficiencies.  We’re basically the Office 365 answer to all of those things, where everything that we’ve done right when we started 10 years ago wasn’t even called cloud based then but Software As A Service or Application Service Offering.  It’s now in the cloud, all of our software there’s no upfront licensing fees, it’s pay as you go, pay per well, pay per transaction and it’s all 100% cloud based.

WSA:  Excellent and what are some of the key goals and initiatives that you’re hoping to accomplish over the next six to 12 months?

Alykhan Mamdani:  Well we have three or four key applications in the Canadian market and three of them have already been launched in the US.  Our objective is to penetrate – now we’ve primarily started in the operations where objective is to geographically expand throughout the United States with different office as a key advancement of that.  Last month we opened up our office in Shreveport Louisiana, which is our first entry into the Gulf States.  So we went from the operations into the Gulf Coast there, our objective over the next 18 months is to continue our expansion into the United States.

WSA:  Great and perhaps you can walk us through your background and experience and talk a little bit about the management team there again.

Alykhan Mamdani:  Sure, for a company our size if you look at the board of directors it’s a very strong board of directors. We have – our chairman for instance is the former president and CEO of TransCanada Pipelines.  He built that organization from a five billion dollar company to a 25 billion dollar company and he’s bringing significant governance and expertise and contacts to the company.  So for a company our size we have significant depth in management, my background, in addition to finance and law, which are most recent.  I started out involved in technology working for Exxon here in Canada and I’ve applied my business and law and finance skills to that and that’s where we started and that’s where critical control is really built on.

WSA:  So as far as investors in the financial community are concerned as you recently also received some banking facilities.  Do you believe that your company, that story in your message and upside are completely understood and appreciated by investors and if not what do you wish they better understood about the company?

Alykhan Mamdani:  Everyone has a pitch about a company; they’ve got all this upside.  So they start out by telling you that we’ve got this new product, we’re going to launch it and it’s going to do all these fascinating things and here’s my hockey stick projection.  I’ve got all of that upside with my expansion and my new products that are coming up so I’ve got all that up-side but my risks, my downside is significantly limited.  I have 50 million in revenue, I’ve been – and I’m cash flow positive for the last many years.  I’ve got history, I’ve got traction, a bulk of my revenue is actually recurrent.  So fundamentally if you look at my balance sheet most of my expenses are – there have been expenses in the past, there’s no significant capitalization, there’s some but not very much.  If you look at our balance sheet it’s clean, we have very little to no debt and we’re borrowing money at four percent, three percent.  We’re in a great position financially, we’ve got a strong balance sheet, we’ve got great shareholders, we’ve got great upside and very little downside.

WSA:  Well we certainly look forward to continue to track the company’s growth and reporting your upcoming progress and we like to thank you for taking the time to join us today Alykhan.  Before we conclude to recap some of your key points why do you believe investors should consider the company as a good investment opportunity today?

Alykhan Mamdani:  Well a number of very significant size institutions own a significant proportion of CriticalControl and they’re doing this for the upside.  We recently – our last small financing that we did it was at prices higher than today and it was all institutionally driven.  So we’ve got a very good institutional base and they’re doing it for the upside over the next six quarters, eight quarters, that’s where we see significant progress in our business plan.  I’m very excited about it, last year I even picked up a million shares in the market; I am the most optimistic about our prospects than it have been ever in the history of our company.  So we’re putting our money where our mouth is and our objective now is to execute.  We are – we have the financial resources, we have the plan and we’re in the midst of execution.



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