Q & A: Michael Meeks

Riptide Technologies Inc., along with its eSuccess subsidiary, is known to many in the Net betting industry for its fraud control and protection products. Many more know the company because it was chosen as the supplier of risk management services for the Interactive Gaming Council almost a year-and-a-half ago. Like many Internet gambling companies, Riptide/eSuccess is still fairly young, but it has had plenty of time to find success, and lots of it. A quick look on their company websites--www.riptidetech.com and www.esuccesssolutions.com--shows just how busy they've been. During the past six months eSuccess has acquired numerous clients, and is now part of a reverse takeover.

IGN recently interviewed Michael Meeks, who founded Riptide Technology and currently serves as president of eSuccess. Meeks has significant experience in software as it relates to telecommunications, gaming and lotteries. He will be one of the featured presenters in February at the Gaming & Casinos 9th Annual Australasian Gold Coast Convention discussing, "Fables and Facts - What is happening in the Gaming Industry?"

IGN: Can you give me some background on eSuccess and its corporate structure?

Michael Meeks: Well first, we have to talk about Riptide. Riptide was formed in 1996 as a software consulting company and we managed to secure some large contracts, mostly with a large company called GTECH Corporation. GTECH is the world's largest supplier of online lottery systems. We were involved in installing GTECH's product, customizing the software. Basically we were installing lottery systems on behalf of GTECH. That was one of our divisions, and it grew--at its peak was around 50 employees doing work for GTECH.

We were Riptide, we were doing consulting work for GTECH and we had all of this gaming expertise and transaction processing expertise. But, we also did other work within Riptide. It was a consulting shop so Riptide's expertise was technology. And within that we did work for NEC Electronics and a company called Tipco out of Silicon Valley. We did a very large teamwork for them; it was a very large project. We worked for some very large telecommunications companies here in Vancouver and probably one of the largest contracts Riptide still has is with a state organization called the DDTP--Deaf and Disabled Telecommunications Program.

Basically, everyone who has a telephone in California pays a surcharge that goes into a trust fund for deaf and disabled people. That trust fund is utilized to supply them with equipment that allows them to communicate with other people. So we bid on a very large RFP and ended up winning it to provide a centralized database to support a very large call center that they have. So, that program is live and we're supporting it on a daily basis. We, as in Riptide. So Riptide was generating all of this revenue, we had a very large and good team of people here and we were reinvesting our consulting business profits back into the company and using that to develop new products.

IGN: Is that when you bid on the RFP for the Interactive Gaming Council?

MM: Well, first we bid upon an RFP put out by the Connecticut State Lottery for an auditing system. One of the people on the Riptide board is the chief technological officer and one of the founders of GTECH, Don Stanford. He encouraged us to go and build an auditing system, he felt there was a big opportunity there. We had the expertise to do it, so we were actually encouraged to go build it. So we did. Then we bid on Connecticut and happened to win it. Connecticut is run by a GTECH competitor called Autotote Corporation. So we won that, built and installed the system and it went very well. Subsequently, we continued bidding on additional lotteries. In conjunction with that, or parallel to that, we bid on the contract released by the Interactive Gaming Council for the centralized database system. And because of our pedigree in handling huge amounts of data, being able to support very large database transactions and our integrity and trust in dealing with gaming data, we won that.

At this point Riptide had a consulting business, we now had this product called Integrity and we'd won this contract with the IGC for what we call Citadel. And part of that project - well, the first thing we did on that project was we acquired the company that came in number two. It was a company called Casino Watch out of Curacao.

They had a database and an existing system up and running, so we bought their stuff and integrated some of their stuff--we took their best, we put their system in with ours.

Then, we learned a lot of things at that point. First up, we looked at the opportunities that were provided by the two products, which were immense. Then we looked at how much time and effort we were spending on consulting. Because we were a self-financing company we were having to pay a lot of attention to the consulting side of the business. So we made the strategic decision to split the two companies. Doing product development you need a different mindset, you need a different focus, you need to be able to focus explicitly on the products instead of being an expert on everything, where we needed to focus on some very specific opportunities.

We took all of the product-based intellectual property, all the contracts we had, all the people associated with the products and shifted them into eSuccess. Then Riptide remains a consulting company.

We did a private placement in February of last year, and in February 2000 we formed eSuccess with our first private placement. That was our initial investment, it was with an investment house in Vancouver, and that was for $1 million U.S. And then we trucked along on that for a while. We went out to do our second round of financing, and we had a couple different options to go at that time. We had a firm that wanted to finance us and keep it private, and then we had a firm come in and say, "Wait a minute, there's a huge opportunity here." They offered us a public offering. And because part of our strategy for growth is acquisitions, we decided to take the public route.

We're going through a reverse takeover. We're working with a syndicated investment group, a company out of Alberta called Roche Securities, a company out of Toronto called Bay Street Direct, and another company out of Toronto and Montreal called Groom Capital. We've doing our next round right now, so we're doing another round of financing as a private company and that private round will facilitate a public offering. Anybody coming in investing in our company will get free trading shares in a very short amount of time. It's a company called ICJ Resources--that's their stock ticker on the CDNX.

IGN: That sounds pretty exciting. When is this supposed to go through?

MM: The RTO should be complete in March. We hope to have our financing done by the end of the month. The RTO is contingent upon the successful closing of our financing. We were oversubscribed on the first million. So now we're out closing the next $4-1/2 million, those are Canadian numbers.

IGN: What else do you have happening?

MM: We also signed some pretty awesome contracts, which has moved us into some significantly new areas. We signed a contract with the Canadian Pari-mutuel Association. We'll be auditing every single racetrack across Canada. We're working with the tracks themselves. CPMA is a Canadian federal government agency, it's not a private thing. They're the regulatory body that controls all of the tracks, so we're starting out with a racetrack in Vancouver, Hastings Park, which is one of the largest racetracks in Canada. We're rolling it out, if all goes well - which we fully expect it to, we'll be doing all 55 racetracks across Canada. So, we'll be auditing all of those.

Well, this press release hasn't hit the street just yet, but we've signed an agreement with Virtgame.com. They're integrating our product into their system and we're also integrating their jurisdictional screening product into Citadel. So, for those people who want screening, we can offer screening.

IGN:Have you been getting many calls for screening capabilities?

MM: At this point, not really. But the big market coming up will be government lotteries and they're going to demand jurisdictional screenings.

IGN: Can you explain what kind of work it took for Riptide/eSuccess to be able to work with government lotteries?

MM: It's important to understand the nature of our business, because we're auditing government lotteries. We are also checked out constantly by the FBI, by the IRS, they do all kinds of background integrity checks on everyone. So, we are a very, very clean company and that's worth a lot. Not everyone can get in and start doing work for a government lottery.

We've got a number of additional lotteries that are signing up for our auditing products: Two in the United States and one outside of the U.S. in the Caribbean.