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Sense Holdings - providing security, value, peace of mind and return on investment to companies who invest in their biometric products for authentication and time and attendance



Services
Security Systems
OTC: SEHO

Sense Holdings, Inc.

4503 NW 103^rd Ave. – Suite 200
Sunrise, FL 33351
Phone: 954-726-1422



Dore Scott Perler
President and
Chief Executive Officer

Interview conducted by:
Walter Banks
Co-Publisher

CEOCFOinterviews.com
September 2002

Bio of CEO,
Dore Scott Perler: Chairman, CEO, President, Director

·         Co-founder of Sense Holdings, Inc

·          VP of Sales for Ansel Communications for Southeast U.S. and Latin America.   Grew business for networking communication products from $20 million annual sales to $50 million between 1995 and 1998.

·          Co-founder and VP Sales for LatinRep Associates, Inc. Manufacturers Rep organization for Southeast U.S. and Latin America for high-tech computer peripheral products. Responsible for establishing distribution channel and reseller channel. Helped form LatinChannels, a trade show event bringing U.S. manufacturers and Latin American buyers together in one venue. LatinRep now has 35 employees with sales exceeding 15 million a year.

·          17 years in Sales and Marketing Management in the Computer manufacturing, distribution, and reseller markets with Gates FA Distributing, WJL Products, Inc, Caltek Components, and California Micro.

·          Contributing editor and columnist for Computer Shopper and Computer Monthly Magazines creating a weekly column on the evolving world of microprocessors, memory products and peripheral components.

·          CNS for all Novell Networking products.

Company Profile:

SENSE Holdings Inc.™, Inc. (SEHO) is a leading designer, developer, manufacturer and provider of enabling technology for biometrically secured human authentication and identification and time and attendance systems. SENSE's CheckPrint T/A, is a biometric clock, which uses fingerprint characteristics to help determine who is on duty and monitor time, attendance, identification, authentication and security.
 
BioClock comes as a standalone unit comprised of a Pentium Class Processor, TFT Flat Panel Display, power supply, silicon based fingerprint sensor, and proprietary hardware and software. CheckPrint T/A solution automatically authenticates the employee, totals hours, and calculates the correct pay rates. Sense has BioClock models to support any size employee base. Their Desktop Unit provides users with the ability to secure a computer terminal, and files and folders via, fingerprint identification technology. They also offer a Biometric Identification / Smart Card Identification Solution. The meCard can be used with fingerprint biometric technology, or as an individual identification solution.

Sense Licenses all software applications for Time and Attendance and Access Control to third Party Developers and OEM's for Custom Development. They are actively seeking partners to expedite the integration of its explosives detection and biometric authentication and identification technology into aviation, banking and finance, food preparation, gaming, healthcare, hotel, insurance, law enforcement, manufacturing, military, public safety, security, restaurant, retail, and travel applications-with industry-specific calibration.

activeX - SENSE Holdings Inc.™, Inc. Software Developers Kit. SENSE Holdings Inc.™ has developed a Biometric SDK to aid developers in the creation of robust biometric fingerprint applications. The SDK is separated into 3 categories - imaging, algorithm, and database. Depending on your development needs you can purchase as much or as little of the SDK as you require.

SENSE Holdings Inc.™ has developed for white-collar installations the fingerprint biometric and smart card desktop unit (SDTU). Developers utilizing the Biometric SDK from SENSE Holdings Inc.™ can develop and deploy on Windows 98 and Windows 2000 workstations secure fingerprint enhanced biometric and smart card applications.

SENSE Holdings Inc.™ has developed a generic biometric database. The database has the ability to store biometric data from any biometric device, fingerprint, facial, voice, etc.

New Product Development:
Sense Holdings is an innovator in the research and development of micro-sensor explosives detection. It owns patents and intellectual property that enable explosives detection and biometrically secure authentication and identification systems. They have integrated advanced biometric and micro-electromechanical sensor (MEMS) technology into mechanical and electronic control devices that improve and secure many business processes.

CEOCFOinterviews: Mr. Perler, please give us a brief history of Sense Holdings.

Mr. Perler: “Sense Holdings was formed in July of 1998, as a custom developer of Biometric hardware and software. In essence, we are custom application developers who have taken a different approach to the market. We have developed a time and attendance product to be able to track employees into work with their fingerprints. We have also developed Smart Card applications, where we can store critical data on a Smart Card and secure that with a biometric fingerprint. We have developed Access Control applications to be able to open doors and secure facilities with fingerprints and biometric technology. In essence, what we are is a turnkey solution provider; going out to multiple businesses and industries and providing the total solution.”

CEOCFOinterviews: What would you say is your most recent and exciting news?

Mr. Perler: “We are currently working with some very large accounts, developing products for the Airline and Security industry. In addition, we have just started working on homeland security applications. Our focus is on securing businesses with biometrics. Since 911, this has become a very exciting time for product development and we are offering different solutions to different industries.”

CEOCFOinterviews: How are you currently generating your revenues?

Mr. Perler: “Our BioClock with our CheckPrint T/A solution for automatically authenticating the employee, totals hours, and calculates the correct pay rates is what is bringing the revenue in. Right now, we are going directly into businesses and introducing our product. We feel that we can show any business owner a return on investment by installing our product. We eliminate the abuse, the buddy punching; we keep the employee honest and we have the ability to lease the product for approximately two hundred dollars a month.”

CEOCFOinterviews: With what types of companies do you have large developing contracts?

Mr. Perler: “We are working on some large developing contracts, with some fortune 100 type companies for future deployment of this product on a large-scale basis. Our product is a time clock with some custom development in it, to do specific functions. It is based on fingerprints; we don’t need any other identifier. Besides our wall mount unit, we also have a Desktop version of our finger print technology, which is a USD device that can hook up to any PC and be able to eliminate the need for any password or pin-word. It enables you to log you onto the Internet with a fingerprint, to transaction processing, access a secured URL, and a variety of corporate functionality that is a little different from the hourly worker that is punching into a time clock. We actually secure the Desktop.

We can go into an environment like an American Express or Citi Bank, where they might have 10,000 agents on computers, and be able to secure those desktop PCs to know whose accessing what. We are currently developing applications to the banking and finance industry to be able to access critical environments with a fingerprint so they know exactly who was in, what finger they used, what time and so on. The applications are as many as you can think of: Healthcare, Banking and Finance, Casinos and Gaming, and any environment where you would have to show a form of identification.”

CEOCFOinterviews: Have you considered ATM applications?

Mr. Perler: “We are working on modifying the product to be able to function in an outdoor environment, which would be necessary for an ATM application.. However, the product would need some additional development to get to that point.”

CEOCFOinterviews: Is the time and attendance market a global industry?

Mr. Perler: “Absolutely! What is interesting about the time and attendance market is that it is a global industry and we are not limited by a particular market. Every company has employees and those employees either punch a time card, swipe a badge or sign a sheet. What we create is an unsupervised and secure environment. We don’t need a security guard watching the clock, so the security guard who would be paid 12-15 dollars per hour is eliminated as well.

We eliminate the need of a bookkeeper adding up the time cards at the end of the week because we have created software to electronically calculate all the data. We transmit over a standard PC network, and our product is a TCP/IP device. We streamline the entire operation. We have software that allows an administrator to edit on-line and export the data electronically to over 200 payroll companies. We have really provided a complete solution from clock-in to paycheck. We have never had a business owner that didn’t think this made sense.”

CEOCFOinterviews: Do businesses generally see some return on investment within the first year?   

Mr. Perler: “We can say safely that with twenty-five employees or more we can show a return on investment in about four months. It is pretty much a “no brainer” to a lot of these business owners. We have had good success, we are still in an economy that is struggling a little bit and people are holding back on money that they are spending. However, we are starting to see increased sales on a monthly basis.”

CEOCFOinterviews: Is your product useful to smaller companies as well?

Mr. Perler: “We can go into any business with five or more employees. With five or more employees, I would suggest the desktop version of the product; they don’t really need the wall-mounted version.”

CEOCFOinterviews: Can you give us a picture of your business model?

Mr. Perler: “We have a variety of products that we are offering right now. We have custom solutions and we are direct sellers. We work with manufacture rep firms, industry specific sales people that are going out there targeting industries and we have revenue coming in from the time and attendance business. We have created a software developers kit that we are working with third party developers who license our software and hardware and develop applications for different industries. It could be prisoner control or a variety of applications for healthcare or access for stockbroker trading rooms. We have created a three-tier business model to be able to bring revenue via multiple avenues. We also have a maintenance program where once our units are in the field, the first year is covered under the price of the unit, the second year we are bringing in maintenance dollars based on units installed.”

CEOCFOinterviews: I understand that your product is applicable to many different areas, including firefighters.

Mr. Perler: “Yes, we are in the Fire Department in Queens, NY, and in Trump place in Manhattan for access to the new apartment buildings that are on the Westside Highway. Our product is also in a candle company in Brooklyn, in a surfboard manufacturer in California, Dylan’s Candy Bar, which is a retail, six thousand square foot candy store in Manhattan. In addition, we are in trucking facilities, investment banking firms where we are opening the front door with the users fingerprint. Therefore, what’s interesting about the product is that it is really not limited to any industry.”

CEOCFOinterviews: With multiple purposes and uses such as the tracking of firemen while on the job.

Mr. Perler: “Yes, we were actually profiled yesterday on CNBC, where they showed a few of our installations. We are looking to develop the product to get into the Port Authorities, and the fire departments, and really be able to provide accurate tracking for who is coming and going.”

CEOCFOinterviews: It sounds to me like you have an unlimited market in size and opportunity.

Mr. Perler: “We are in a global market. We feel that we have developed a product that is not industry specific. I am not limited to just selling into airports for instance. Because we are the manufacturer and the developer of the product, we have the ability to change it and modify it based upon what customer requirements are. We might have the ability to go into an airport environment and then the next day, go onto a cruise ship and be able to provide tracking. Our customers could potentially be every manufacturing company with employees, every un-supervised facility where there is a need for a product like this.

We are in the infancy of this technology, so many companies have never even heard of Biometrics or what it can do for them. Our role is to expose the technology and make people aware of what is out there and things that can be done. We look forward to introducing it into many markets.

We are a company that is a little over four years old, so we have been around the block more than one time. We were involved in the development of this product way before 911. Since that time, there seems to be an increased abundance of companies that have gotten involved in biometrics and security because it is a buzzword right now. However, a lot of learning needs to be done. We have been installing for over three years now. We have working products and satisfied customers. We have created a product that shows that the technology can be implemented into different areas.”

CEOCFOinterviews: Would you say this could be a billion dollar market for you?

Mr. Perler: “Absolutely!”

CEOCFOinterviews: What sets your company apart from other biometrics companies?

Mr. Perler: “The fact that we can walk into any business and provide a solution. Because we have developed the hardware and the software, we have the ability to change it. I can walk into a prison or a jail, they can tell me that they are looking to track work release prisoners, and we can actually create that application. Other companies that are device manufacturers build a finger print sensor but they have to partner with other companies to go out there and provide a solution. We have the software developers, the technicians and engineers, so we can actually design the product and it can become a custom product to each individual customer. That is why customers feel comfortable dealing with us because if they have a software or hardware problem, they can pick up the phone and call us and they get it all here.”

CEOCFOinterviews: So are your revenues based on the creativity of your program?

Mr. Perler: “Yes our customers pay licensing fees for our developers kit or any tools that we provide. If there are any products that are developed off our developers kit, Sense Holdings will receive royalty revenues. That is a great model for us because the core technology that we have developed over the last four years, we can actually offer a major head start for these developers to take our tools and be to market in thirty days as opposed to three years, because of what we have created and provide. What that costs them is a license fee and based on their success and sales, they will pay us a percentage of that to be able to get to market quicker.”

CEOCFOinterviews: Has your product pipeline been built through R&D or acquisitions?

Mr. Perler: “We have normally developed our products in-house. However, about sixteen months ago Sense Holdings acquired a company called Micro Sensor Technologies, Inc., which was the exclusive license holder and patent holder to an explosive detection technology, currently being developed at Oakridge National Laboratory (ORNL) in Tennessee. Oakridge is in the prototype stage right now in developing a micro-electromechanical sensor (MEMS) technology.”

CEOCFOinterviews: What will Sense Holdings roll be with the MEMS technology?

Mr. Perler: “When that technology is a little more robust, Sense will make a hand-held explosive detector to be able to go into customs, airports, a variety of environments to provide explosive detection. That is something that we are working on with Oakridge and developing it on a phase type implementation. We believe that we have another eighteen months before that technology becomes marketable. We are excited because we think that our MEMS technology will set us aside from many other companies in that arena also, which is a little different than the biometrics. These things are all under the Sense Holdings umbrella and it all plays in with our homeland security aspects of our company.”

CEOCFOinterviews: Do you have the cash and/or credit to continue to develop and market your products?

Mr. Perler: “We currently have a 1.1 million dollar outstanding loan that has a conversion clause. We offer our share- holders the ability to convert that to equity. We currently have about 2.3 million dollars cash in the bank, so even paying the loan back in full, we are in a good cash position. We keep our burn low in the company and we spend only when necessary. We have been on the field through a tough market and we plan to stay around.”

CEOCFOinterviews: About how far away is profitability?

Mr. Perler: “We need one good deal to become profitable. Having a company of twelve employees, we burn approximately ninety thousand dollars a month. We can be profitable in ninety days. We are currently bringing in revenue and are right around the corner from profitability. We have deals on the plate right now.”

CEOCFOinterviews: In closing, what would you like to say to your shareholders and potential investors?