Sequiam 10-K filed today; Paragraph concerning Biolock
BioLock
On September 13, 2005, we entered into a five-year, Exclusive Co-Operative Development and Supply Agreement with Black & Decker’s subsidiary, Kwikset Corporation. The purpose of this relationship is to develop, market and sell biometric enabled security door hardware and systems.
We, together with Kwikset Corporation, have developed the BioLock: a biometrically accessible door lock system to be applied to external and internal doors. Kwikset has since branded the BioLock the ‘Smart Scan’ for its introduction to the Home Depot chain of stores and other retail stores. The Smart Scan was introduced into Home Depot in a limited pilot program in November 2006 and is slated for nationwide release through Black and Decker partners in May-June 2007.
The system uses a Kwikset deadbolt and a biometric sensor with matcher developed at our laboratories in Orlando, Florida. When a valid finger is detected on the biometric sensor, it activates the remote control accessory module to open the lock.
The BioLock biometric module is a completely self-encapsulated device that incorporates advanced AC Capacitive biometric sensing technology. The technology can read through dirt and oil and overcomes many of the common ‘real world’ failings of previous biometric devices. The BioLock features a simple 3-step enrollment of fingerprints on the sensor and no computers or servers are required. The BioLock can hold up to 50 fingerprints and operates using either battery power or house low voltage power for at least 12 months average operation without the need to replace batteries. The BioLock features automatic detection of the bolt position and avoids the common issue of the consumer having to worry about the position of the bolt when they leave their home. The BioLock also features a user-friendly interface via an integrated LCD screen that allows users to be named and features such as automatic timing out of fingerprint records. The BioLock also comes with 2 keys for backup in case of battery failure, a low battery warning indicator and a lifetime finish warranty.
During 2006, we provided Kwikset with the biometric and electronic components of the BioLock and Kwikset performed the remaining manufacturing of the BioLock. Limited deliveries of the BioLock commenced during the fourth quarter of 2006. For the year ended December 31, 2006, revenues earned from the sale of the BioLock were $51,024. For the year ended December 31, 2006, revenues earned from the sale of the biometric and electronic components of the BioLock were $952,162.
In future years, we expect to earn revenues from the BioLock by selling the product, providing non-recurring engineering services and earning a royalty on non-Sequiam BioLock sales.
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