Sequiam CEO Interview
November 14, 2006
Sequiam Corporation
(OTCBB: SQUM)
EricDavid & Sons Text Interview
Nick VandenBrekel, CEO
Sequiam Corporation
EDS: Nick thanks for taking the time to speak with me and the EricDavid newsletter and web audience today about the exciting activities occurring at Sequiam Corporation.
As a good starting point for our newsletter readers, it might be appropriate to begin with a layman’s overview of the term “biometric”. It is somewhat of a new technology term for some of us. I know it relates to the automated authentication of persons by physical characteristics. Perhaps, you could add some insight into the science for us?
Nick VandenBrekel:
Biometrics is essentially the measurement of biological characteristics that verify the claimed identity of an individual. These measurements can be either physiological or behavioral. Physiological biometrics include fingerprints, face recognition, iris recognition, voice verification, retina recognition, palm vein patterns, finger vein patterns, hand geometry and DNA. Behavioral biometrics includes signature verification, posture and keystroke dynamics.
EDS: Nick. I know you are the Company Founder, as well as the CEO and Chairman. Could you give our audience a brief thumbnail overview of the Company history and development, to date?
Nick VandenBrekel:
Sequiam was founded in 1999 upon the principals that we could develop biometric technology to serve as a consumer convenience product in addition to adding the security provided by biometrics. For nearly 6 years the company has been in projected research and development, developing the products that are now coming to market. The year 2007 will be our first roll out sales year and already multitudes of orders for our products have been placed. During the R&D phase of our company history we developed relationships with fortune 500 companies who are now working with us as partners to manufacture; market and sell our biometric consumer lifestyle products. Historically, the adoption of biometrics has been concentrated on the government sector. Since 2004 there has been a shift in the dynamics of the market with an increased number of biometric products being developed for consumer markets. Sequiam is at the forefront of these developments. The main foray into the consumer sector is currently in the wireless and PC/network security application markets. The emergence of innovative and affordable consumer biometrics is only now taking place thanks to our company.
EDS: While we all have been to the Home Improvement store, and shopped the Kwikset® aisle, the very recent announcement of your development partnership with Kwikset®, for residential security products, looks to be a huge opportunity for Sequiam?
Nick VandenBrekel:
We have worked with Kwikset® and the engineering teams at Black and Decker for almost three years to develop an entire new and innovative line of consumer biometric products that can be marketed through the mass retail distribution channel. The recent Kwikset® announcement merely confirms the ongoing developments that are occurring in our laboratories to create new and exciting consumer lifestyle biometric products. The partnership with Black and Decker has been a wonderful opportunity for Sequiam to work with the world’s most credible company in the access and hardware market. The Sequiam BioLock / KwikSet SmartScan product will hit the shelves in the next few weeks and this product is but one of many that will be developed and marketed as a result of this strategic relationship. Sequiam is the exclusive global biometric provider to Black and Decker and we are already working on opportunities that stretch beyond the US marketplace.
EDS: As a former Banker myself, the award of the $2 Million Contract from the Bank of Uganda looks very interesting. With this Contract award, do you feel Banking may become another strong business niche for Sequiam Corporation?
Nick VandenBrekel:
Banking and the finance world will indeed be another strong business niche for Sequiam. Beyond the Bank of Uganda contract we are also introducing a brand new Sequiam product called the “BankPod” which is first going to be introduced in China through our Joint Venture with CJCC Corporation in Shanghai. The BankPod allows for biometric verification when conducting credit card and ATM transactions. No more need to sign for the transaction or enter a PIN code. Your fingerprint will authenticate your card. The Chinese market is so excited about this prospect that we have been offered to pilot this product with China’s largest bank. It is only a matter of time before this product will reach back to the United States and help with the fight against credit card fraud and identity theft.
EDS: The Bank of Uganda Contract seems to highlight another plus for the Company. The fact that Sequiam Corporation is a global firm with offices in the U.S., Taiwan, China, and South Africa would seem to better position the Company for a global sales reach?
Nick VandenBrekel:
It is a big advantage to have twenty four hour a day operations across the globe. In addition it gives us a direct perspective into the developments of biometric markets all over the world. Countries like China and South Africa are much more aggressive in the adoption of biometric technologies because there are few incumbent verification technologies in place. In the United States, adoption will be slower because of the existing technology infrastructure. In each case, Sequiam will offer its products to a willing and demanding market place, catering to those markets most anxious for Sequiam technology first. We recently opened our second office in China in Shanghai, the first one being in Guang Zhou. Our offices in Taiwan also cover the Japanese market where we have several clients including Fujitsu Corporation.
EDS: The website, www.sequiam.com speaks of cost effective biometric solutions for the masses. It refers to the Company’s ability to achieve previously unachievable price points. Could you elaborate a bit more on the advances that are driving the end user costs lower?
Nick VandenBrekel:
It is not necessarily the advances in biometric technology that are driving the end user costs lower but more a corporate willingness to make this technology affordable to the masses. Because Sequiam invents and innovates its own technology, it is not dependent on dictated component structures and can therefore set its own prices. We are committed to make biometrics affordable which I believe is the only way, in the long run, the technology will truly be embraced by all people.
EDS: The new distribution agreement recently announced with Fulcrum Biometrics looks like a win-win situation for both firms. Could you tell us more of your thoughts regarding potential sales opportunities with this relationship in place?
Nick VandenBrekel:
The Fulcrum distribution agreement is but one of many that are being put in place. Sequiam wants to reach as many customers as possible and the only way to do that is to put in place a credible distribution network. Through working with companies like Black and Decker and Fulcrum we can have broad access to millions of people in the US alone.
EDS: In looking over your range of product lines on the website, from BioVault, to BioLock, and to BioTime; are the product niches equally strong in the marketplace? By that I mean do you anticipate one area of the Company to have the strongest sales potential and thereby lead the way as the main revenue producer?
Nick VandenBrekel:
We believe that products like the BioLock and BioVault will have incredible appeal because they are such consumer centric products. They will definitely drive the market place for us and are high margin items. In addition they will drive our brand recognition as well. Our other products are more directed towards the OEM market where other companies (Fujitsu, Arrow, Kelimo, Tacoma, MagStone) will use our technology to create their own consumer biometric applications.
EDS: At the retail level, when can shoppers expect to see the BioLock products at retailers? Also, any plans on having the BioVault product out in select retailers by Christmas?
Nick VandenBrekel:
I am happy to announce that the BioLock products will hit the market this month, right in time for the holiday season. You can expect to see BioLock at hard ware stores all across the country and Canada in a few days. The BioVault is selling very well through our existing distributors and you can expect to see it in select retail stores by Christmas as well. The timing for our product introductions has been most fortunate.
EDS: Regarding Black & Decker, could you give more color, as to the anticipated range of price points Black and Decker plans to offer on the BioLock and what type of margins, royalties etc. SQUM will be receiving in this relationship? Based on the rollout of this product taking place in the fourth quarter with BDK, what do you feel is a conservative estimate for sales in 07?
Nick VandenBrekel:
Kwikset plans to have the SmartScan/BioLock available for an estimated retail price of $199.00. Actual prices may vary though. The relationship with Black and Decker offers Sequiam several contractual ways to earn revenue and profits and I won’t go specifically into each and every one of them. The good news is that we are certainly not a “one trick pony” and we look forward to revenues in excess of $10 million for 2007 for the BioLock alone. We are also working on several new products with the engineering teams at Kwik Set. These products will enter the market place in 2007 and beyond.
EDS: In looking at the recent Financials, combined with all the recent positive good Company sales related news, do you anticipate that operations would turn profitable, in the near term?
Nick VandenBrekel:
As I stated earlier, Sequiam is now transitioning from research and development into sales. We are actually a little ahead of our sales projections and based on current orders and product deliveries we anticipate profitability in the first quarter of 2007. We had originally anticipated profitability late in 2007 but our products are being so well received that we have drastically moved up our time table. It is clearly an excited time for us.
EDS: I know Investors are always interested in a Company’s Financing arrangements. Do you currently have a new financing arrangement in place? Does this current financing achieve the Company needs without significant shareholder dilution?
Nick VandenBrekel:
We are always aware of the fact that in order to grow fast we need to be able to fund this growth. Presently we are working on doing exactly that but without having to dilute the shareholder base. It will achieve the Company’s needs and even clean up the balance sheet considerably. The credibility of our recent successes has brought about financial facilities previously not available to companies our size.
EDS: Just to confirm, are the shares outstanding around 80 million shares and the float is around 30 million shares?
Nick VandenBrekel:
That is roughly the number
EDS: Is there anything else, in closing that you would like to add for the EricDavid newsletter and web audience?
Nick VandenBrekel:
Over the last 5 years we have worked diligently to create entire new and innovative technologies that will make our lives easier and more secure. The fact that our products are being so well received is both a compliment and confirmation that we chose the right business strategies.
I am blessed with an incredible team of engineers, programmers and designers who make Sequiam what it is today and what it will be tomorrow, the worlds leader in Consumer Lifestyle Biometrics (CLB™ a Sequiam trademark). The analyst and research firm Frost & Sullivan agrees and recently named us the fastest growing consumer biometrics company in the world. Our partners are some of the largest companies in the world and our customers enjoy global credibility. I have no doubt that Sequiam will achieve tremendous global success while continuing to build on its existing tradition of building state-of-the-art biometric technologies that will push the envelopes of imagination.
As I said almost ten years ago, at one point in the very near future, most if not all of human transactional behavior will be conducted through biology. The future is now and the future is Sequiam.
EDS: Nick, we really appreciate the Sequiam Corporation Update today, and wish you and the Company continued success.
Nick VandenBrekel:
Thanks for the opportunity and I look forward to keep your audience updated on the latest in our company developments.
This Sequiam Corporation interview was conducted by Greg Moses, a Consulting Editor to EricDavid & Sons, Inc.
For more information on EricDavid & Sons, Inc., please visit www.ericdavid.com.
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