My concern would be if all warrants had exercised and converted which they have not at this point. However, If so then I do understand what the fully dilutive amount would be at that time.
As you stated, you should do much more due dilegence as you don't fully understand Sequiam's products, the partners they have in place, nor the management team.
However, Lets examine your point about all of the warrants being exercised and use the fully dilutive amount which seems to be your primary concern.
If all warrants were exercised and converted the outstanding shares would be approximatley 168 million. Currently the outstanding is around 93 million. At the current share price of .12 the fully diluted would equate in a market cap for Sequiam of approximatley $20 million.
If Sequiam were to generate approximately $10 million in revenue in 2008 then the company would be trading at 2 times projected revenue which in my opinion is very low considering the expected growth of this company as compared to other companies involved in biometrics. What other companies are you comparing to Sequiam?
In looking at past 10-Q's you are not giving any credit towards cost reduction and non-recurring R&D expenses. The royalities from Black and Decker will flow immediately to the bottom line as R&D for the product has already been expensed. Also, the fourth quarter will be the first time an entire quarter of royalties will be recorded as revenue so there is no logical way to look at past financials and conclude your basis for margins going forward in my opinion.
New products in addition to the Smartscan are also being deployed in mass. Biovault, Biobox, ScanQ just to name a few. I.E. Sharper Image which has what appears to be a very aggressive marketing campaign which just began and Sequiam's products are displayed on page 18 as Exclusive. Will be interesting to see how well they are perceived by the consumer, then again we won't know for several more weeks.
Also, with the recent appointment of high level execs from both Intel and Microsoft on board I feel these individuals can contribute a great deal of knowledge which should translate in to success for controlling costs in the future while increasing revenue due to contacts they may have.
I'm not trying to convince you this is the place you should invest and if as you said you don't feel this is the best opportunity to explore as an investment than I would find other investments which would better take up your time.
Sequiam is a penney stock and speculative investment. You should take that into consideration as well. It is not a perfect world but then again. It is not like the fully dilutive shares outstanding is in the billions or astronomically high compared to other penney speculative investments.
What have you learned about other Biometric companies that has sparked your interest? Can you name some other companies involved in Biometrics?
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