We believe that the following developments will have a positive impact on our future revenues:
On May 16, 2007, Sequiam Biometrics, Inc. or Sequiam Biometrics, one of our wholly-owned subsidiaries,, and Kwikset Corporation, a subsidiary of The Black and Decker Corporation, amended that certain Cooperative Development and Supply Agreement dated as of September 13, 2005. The amended agreement provides for: (a) current payments to us for non-recurring engineering costs and test equipment; and (b) a fixed royalty payment to us for the BioLock product over a royalty term that began June 1, 2007 and is extended to May 31, 2012. The amended agreement also grants us full reseller privileges for the BioLock product based on terms and conditions set by Kwikset. Kwikset and Sequiam also further agreed to conduct a two phase cost reduction project for the BioLock product. Kwikset agreed to pay us 50% of the Phase 1 cost savings achieved for a period of twelve months following the first delivery of the cost reduced product. Kwikset also agreed to pay us 50% of the Phase 2 incremental cost savings achieved for a period of twelve months following the first delivery of the phase 2 cost reduced product. We may also sell our proprietary technology to Kwikset for use in future versions of the BioLock product.
On May 7, 2007, we announced we signed an alliance agreement with a global Fortune 100 corporation in the electronics industry.
On April 27, 2006, Sequiam Biometrics entered into a Joint Venture Agreement with Changjiang Computer Group Corporation and Magstone Innovation, Inc. The Chinese and English names of the joint venture are Shanghai Changjiang Intelligence Information Technology, LTD, and New Era Biometrics, Ltd., respectively. The joint venture is headquartered in Shanghai. The purpose of the joint venture agreement is to develop and market biometric and other information technology products and applications in China and other regions and to support Sequiam Biometrics by providing research and development for new products. The joint venture agreement grants Sequiam Biometrics exclusive rights to distribute those products in North America, Europe and Africa.
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On April 23, 2007, we announced we added our 200th reseller location. The majority of these sales locations were added within the 60 days prior to April 23, 2007 as a result of the recent expansion of our sales and business development department.
Effective April 15, 2006, Sequiam Biometrics entered into an Exclusive Distribution and Manufacturing Agreement with CJCC (China Jiangsu Construction Corporation). The purpose of this agreement is to provide the conditions and terms for the distribution of certain biometric products and services of Sequiam Biometrics, including a biometric personal digital assistant. The term of this agreement is five years and may be renewed for additional 24-month terms unless either party provides the other with written notice of termination at least 90 days prior to the expiration of the then current term.
Effective April 10, 2006, Sequiam Biometrics entered into an Exclusive License Agreement with Tacoma Technology, Inc. The purpose of this agreement is to provide the conditions and terms for the manufacturing and distribution of certain biometric products of Tacoma, including all of Tacoma’s biometric sensor modules. The term of this agreement is six years and may be automatically renewed for additional 24-month terms unless either party provides the other with 30-days prior notice of its desire not to renew.
As a result of these developments, we expect that revenues from our Safety and Security segment will continue to increase during 2007 and thereafter as we continue to focus our efforts on our biometric products.
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