10QSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended March 31, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______________to _______________.

Commission File Number 333-45678

SEQUIAM CORPORATION

(Exact name of registrant as specified in its charter)

California (State or other jurisdiction of incorporation or organization) 33-0875030 (I.R.S. Employer Identification No.)

300 Sunport Lane, Orlando, Florida 32809

(Address, including zip code, of principal executive offices)

407-541-0773

(Registrant’s telephone number, including area code)

(Former name, former address)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for the such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x       No o

The number of shares of the Registrant’s Common Stock outstanding as of May 3, 2005 was 52,457,306.

DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (Check one):    Yes o     No x

FORM 10-QSB

INDEX

	Page
PART I:  FINANCIAL INFORMATION	3
ITEM 1.  FINANCIAL STATEMENTS	3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)	4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED)	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)	6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	8
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS	19
ITEM 3.  CONTROLS AND PROCEDURES	26
PART II.  OTHER INFORMATION	27
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES	27
ITEM 6.  EXHIBITS	27
SIGNATURES	28

2

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Sequiam Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31, 2005 (Unaudited)			December 31, 2004
Assets
Current assets:
Cash	$	21,341		$	-
Accounts receivable, net		40,017			39,111
Prepaid expenses		-			97,125
Total current assets		61,358			136,236
Property and equipment, net		1,248,300			1,303,757
Acquired software, net		148,801			163,200
Intellectual properties, net		598,011			644,896
Product development costs		102,221			34,509
Loan costs, net		184,641			224,252
Deposits and other assets		8,805			8,805
Total assets	$	2,352,137		$	2,515,655
Liabilities and shareholders’ deficit
Current liabilities:
Overdraft		-		$	24,165
Notes payable		1,807,381			1,692,077
Accounts payable		752,185			706,966
Accrued expenses		155,798			96,299
Current portion of long-term debt		1,071,049			840,245
Deferred revenue		-			6,000
Deferred rents		31,525			26,141
Loans from shareholders		644,450			348,951
Accrued shaeholder salaries		1,439,792			1,349,792
Total current liabilities		5,902,180			5,090,636
Long-term debt		2,088,982			2,301,793
Total liabilities		7,991,162			7,392,429
Shareholders’ deficit:
Common shares		51,086			47,966
Additional paid-in capital		8,019,524			7,524,118
Accumulated deficit		(13,709,635	)		(12,448,858	)
Total shareholders’ deficit		(5,639,025	)		(4,876,774	)
Total liabilities and shareholders’ deficit	$	2,352,137		$	2,515,655

See accompanying notes to condensed consolidated financial statements.

3

Sequiam Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three months ended March 31,
	2005			2004
Revenues
Services	$	123,843		$	70,183
Product sales		5,012			4,881
Total Revenues		128,855			75,064
Costs and expenses:
Cost of services		225,718			277,276
Cost of product sales		6,304			3,571
Selling, general and administrative		926,448			599,420
Gain on sale of equipment		(370	)		-
Gain on debt settlement		-			(5,492	)
Total costs and expenses		1,158,100			885,759
Loss from operations		(1,029,244	)		(810,695	)
Interest expense, net		(231,533	)		(288,040	)
Net loss	$	(1,260,777	)	$	(1,098,735	)
Net loss per common share:
Basic and diluted	$	(0.03	)	$	(0.02	)
Shares used in computation of net loss per common share - Basic and diluted weighted average shares outstanding		49,116,164			44,917,334

See accompanying notes to condensed consolidated financial statements

4

Sequiam Corporation and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit

Three months ended March 31, 2005

(Unaudited)

	Common Shares
	Shares Outstanding		Par Value		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at December 31, 2004		47,965,604	$	47,966	$	7,524,118	$	(12,448,858	)	$	(4,876,774	)
Common shares issued for services		2,387,500		2,388		349,275		-			351,663
Common shares issued for salaries		732,670		733		146,131		-			146,864
Net loss		-		-		-		(1,260,777	)		(1,260,777	)
Balance at March 31, 2005		51,085,774	$	51,086	$	8,019,524	$	(13,709,635	)	$	(5,639,025	)

See accompanying notes to condensed consolidated financial statements.

5

Sequiam Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended March 31,
	2005			2004
Cash flows from operating activities:
Net loss	$	(1,260,777	)	$	(1,098,735	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization		116,741			152,912
Accretion of debt discount		149,105			146,128
Amortization of loan costs		39,611			-
Issuance of common stock in exchange for services		351,663			238,450
Issuance of common stock in exchange for salaries		146,864			-
Loss on debt settlement		-			5,492
Increase in accounts receivable		(906	)		(8,333	)
Decrease in prepaid expenses and other assets		97,125			16,280
Decrease in bank overdraft		(24,165	)		-
(Decrease) increase in accounts payable		45,219			(94,600	)
Increase in accrued shareholders salaries		90,000			90,000
Increase in other accrued expenses		59,499			3,924
Decrease in deferred revenue		(6,000	)		-
Increase in deferred rents		(617	)		-
Net cash used for operating activities		(190,637	)		(548,482	)
Cash flows from investing activities:
Equipment purchases		-			(1,954	)
Cash paid for WMW Communications		-			(30,580	)
Product development costs capitalized		(67,712	)		-
Net cash used for investing activities		(67,712	)		(32,534	)
Cash flows from financing activities:
Proceeds from sale of common stock		-			761,092
Repayment of long-term debt		-			(4,710	)
Proceeds from note payable		-			400,000
Payment of notes payable		(15,809	)		(171,346	)
Proceeds from shareholder loans		310,000			-
Repayments of shareholder loans		(14,501	)		-
Net cash provided by financing activities		279,690			985,036
Net change in cash		21,341			404,020
Cash, beginning of period		-			151,450
Cash, end of period	$	21,341		$	555,470

See accompanying notes to condensed consolidated financial statements.

6

Sequiam Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)

Non-cash activities:	2005		2004
Common Stock issued to correct error		-	$	19
Liabilities assumed with acquisition of Telepartners,Inc.		-	$	15,068
Warrants issued in connection with loan agreement		-	$	119,880

See accompanying notes to condensed consolidated financial statements.

7

Sequiam Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 -Description of Business and Acquisitions

General

We were incorporated in California on September 21, 1999 as Wedge Net Experts, Inc. On or about May 1, 2002, we changed our name to Sequiam Corporation and changed our stock symbol from “WNXP” to “SQUM.OB”. On May 19, 2004, our common stock was formally listed on the Frankfurt Stock Exchange under the symbol RSQ. We believe that listing our shares of common stock on the Frankfurt Stock Exchange will increase our profile with investors, both institutional and retail, in Germany and across Europe.

Until the acquisition of Smart Biometrics, Inc. in 2003, we were primarily focused on developing a portfolio of Internet and print enterprise-wide software products and developing custom software, databases and websites for businesses. We also operated as an Internet Service Provider and provided Internet access and web site hosting for our customers who required those services. During this period, our business was operated under one operating segment through our subsidiaries: Sequiam Software, Inc. and Sequiam Communications, Inc.

In 2003, we decided to expand our portfolio of product offerings to include biometric technology products. The expansion into the biometric technology industry was based on our belief that the terrorist events of September 11, 2001 and the increased focus on national and personal security created an increased demand for biometric technology solutions. Because of these national and global issues, and because of our existing expertise in software design and development, we believed that we were uniquely positioned to enter the biometric industry. Furthermore, our Chief Technology Officer, Alan McGinn, played an instrumental role in connection with the research and development of the BioVaultTM while associated with Smart Biometrics, Inc.

Today, our operations are divided into two distinct operating segments: Information Management and Safety and Security. Our Information Management segment utilizes our custom software skills, our contacts with the world sports communities and interactive web-based technologies. We formed our Safety and Security segment after our acquisition of Smart Biometrics, Inc. and Fingerprint Detection Technologies, Inc. Through these acquisitions, we acquired: (a) a fingerprint biometric access control system, which will be a key feature in our future product offerings; and (b) a fingerprint detection system which we believe represents a new advancement in that science.

Our Information Management segment consists of the following subsidiaries: (a) Sequiam Software, Inc.; (b) Sequiam Sports, Inc.; and (c) Sequiam Education, Inc. Our Safety and Security segment consists of the following subsidiaries: (a) Sequiam Biometrics, Inc.; and (b) Fingerprint Detection Technologies, Inc.

Development of the Business

Information Management Segment

Three principal shareholders, Nicholas VandenBrekel, Mark Mroczkowski and James Rooney, formed Sequiam Software, Inc. (formerly Sequiam, Inc.) on January 23, 2001, to research, develop, produce and market a document management software product. From its inception until April 1, 2002, Sequiam Software, Inc.’s sole business activity was the development of its software product, Sequiam Document Management System, also referred to as Sequiam DMS.

Acquisition of Brekel Group, Inc. In 2002, we acquired 99.38% of the issued and outstanding common stock of Brekel Group, Inc. We acquired Brekel Group, Inc. for its expertise in digital on-demand publishing and printing and the innovations that it brings to our document management, Internet remote print and print on-demand software applications. We also acquired Brekel Group, Inc. for its contract with the World Olympians Association and its Internet and ExtraNet expertise and product development gained from that project. Today, the business of Brekel Group, Inc. is conducted by our subsidiary Sequiam Sports, Inc., which is part of our Information Management segment.

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Acquisition of the Assets of W.M.W. Communications, Inc. Effective November 1, 2002, we acquired all of the assets of W.M.W. Communication, Inc., doing business as Access Orlando. We accounted for this transaction as an acquisition of the business of W.M.W. Communications, Inc. We acquired W.M.W. Communications, Inc. for its Internet Remote Print, commonly referred to as “IRP” and Internet Remote Print Duplicator, commonly referred to as “IRPlicator,” software products. IRP is a software product that allows computer users to print remotely to any printer via the Internet. Because IRP is highly complementary to the Sequiam DMS product, we have integrated the two products. W.M.W. Communications, Inc. also acted as an Internet Service Provider, which we incorporated into our business. Through our Internet hosting and collocation services, we host third-party web content on either our server located at our remote network operations center, or on the third party’s server that is located at our remote network operations center. Today, our subsidiary Sequiam Software, Inc. conducts the business of W.M.W. Communication, Inc. which is part of our Information Management segment.

Acquisition of the Assets of Telepartners, Inc. On June 1, 2003, we acquired substantially all of the assets of Telepartners, Inc. located in West Palm Beach, Florida. We accounted for this transaction as an acquisition of the business of Telepartners, Inc. Telepartners, Inc. developed supplemental educational products for schoolchildren in grades 1 through 12. The major asset acquired from Telepartners, Inc. was the Extended Classroom™ software, which is a supplemental educational program consisting of a video lesson library containing the same lesson concepts that are taught in our public school classrooms in the United States. Each lesson summary has been produced in high quality and digitally mastered, allowing for Internet and television broadcast distribution as well as being offered in CD and video formats. Today, our subsidiary Sequiam Education, Inc. conducts the business of Telepartners, Inc. which is part of our Information Management segment.

Safety and Security Segment

Acquisition of the Assets of Smart Biometrics, Inc. On May 9, 2003, we acquired substantially all of the assets of Smart Biometrics, Inc. located in Sanford, Florida. We accounted for this transaction as an acquisition of the business of Smart Biometrics, Inc. Smart Biometrics, Inc. is engaged in the development of biometric technologies. The BioVault™ technology, which is a secure access denial device that utilizes biometric technology and protocols to recognize a person’s fingerprint to unlock, was the major asset of Smart Biometrics, Inc. Today, our subsidiary Sequiam Biometrics, Inc., conducts the business of Smart Biometrics, Inc. which is a part of our Safety and Security segment.

Acquisition of Fingerprint Detection Technologies, Inc. On September 11, 2003, we acquired 100% of the issued and outstanding shares of common stock of Fingerprint Detection Technologies, Inc., a Florida corporation. Fingerprint Detection Technologies, Inc. has the rights to develop and market a patented and proprietary technology for fingerprint analysis using a light-emitting diode, or LED, intense headband light source. Because Fingerprint Detection Technologies, Inc. had no operating history and had not generated any revenues, we accounted for the acquisition as a purchase of its assets. Today, Fingerprint Detection Technologies, Inc. is one of our subsidiaries and is part of our Safety and Security segment.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The Company, under the rules and regulations of the Securities and Exchange Commission, has prepared the unaudited condensed consolidated financial statements. The accompanying condensed consolidated financial statements contain all normal recurring adjustments, which are, in the opinion of management, necessary for the fair presentation of such financial statements. Certain information and disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted under such rules and regulations although the Company believes that the disclosures are adequate to make the information presented not misleading. The year-end balance sheet data was derived from the audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes for the Company included in Form 10-KSB filed for the year ended December 31, 2004. Interim results of operations for the periods presented may not necessarily be indicative of the results to be expected for the full year.

9

Net Loss per Common Share

Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted loss per common share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options, adjusted for the assumed repurchase of the Company’s common stock, at the average market price, from the exercise proceeds and also may include incremental shares issuable in connection with convertible securities. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. As of March 31, 2005, the Company had 30,038,867 potentially dilutive common shares as a result of warrants and options granted and convertible debt outstanding.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries Sequiam Software, Inc., Sequiam Biometrics, Inc., Sequiam Education, Inc., Fingerprint Detection Technologies, Inc., and Sequiam Sports, Inc (the “Company”). All intercompany transactions and accounts have been eliminated.

Accounting for Stock-Based Compensation

SFAS No. 123, Accounting for Stock-Based Compensation (“FAS 123”), encourages the use of a fair-value method of accounting for stock-based awards under which the fair value of stock options is determined on the date of grant and expensed over the vesting. As allowed by FAS 123, the Company has elected to account for stock-based compensation plans under an intrinsic value method that requires compensation expense to be recorded only if, on the grant date, the current market price of the Company's common stock exceeds the exercise price the employee must pay for the stock. The Company's policy is to grant stock options at the fair market value of the underlying stock at the date of grant.

The Company has adopted the disclosure-only provisions of FAS 123. Accordingly, no compensation cost has been recognized for the stock option plans. There were no stock options granted during the three months ended March 31, 2005 and 2004. All stock options issued prior to this year have been fully vested. As such, pro forma net loss is equal to reported net loss.

Note 3 - Commitments and Contingencies

On October 1, 2002, the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) entered into amended and restated employment agreements with Sequiam Corporation and its Subsidiaries. The amended agreements replaced separate agreements with Sequiam, Inc. and Brekel Group, Inc. The agreements have an initial term of two years with automatic one-year renewals. The agreements provide for compensation in the form of minimum annual salary of $185,000 and $175,000 respectively, and allow for bonuses in cash, stock or stock options and participation in Company benefit plans. Full-time employment is a requirement of the contract. In the event that a change in control of the Company occurs without the prior approval of the then existing Board of Directors, these contracts will be deemed terminated and compensation of $5 million each is payable at termination, and $1 million annually for five years subsequent to termination will be due and payable to the CEO and CFO. For the quarters ended March 31, 2005 and 2004, Sequiam accrued and did not pay the minimum annual salaries payable to the CEO and CFO.

On November 1, 2002, the Company’s Chief Technology Officer (“CTO”) entered into an employment agreement with Sequiam Software. The agreement has an initial term of two years with automatic one-year renewals. The agreements provide for compensation in the form of minimum annual salary of $75,000 and allows for bonuses in cash, stock or stock options and participation in Company benefit plans. Full-time employment is a requirement of the contract.

10

Mr. David Dobkin was hired as the President of Sequiam Software, Inc. pursuant to an employment agreement dated as of April 1, 2004 and extends for a term of two years. Mr. Dobkin earns annual compensation of $150,000 until the Company acquires at least $3 million in new equity capital. After the Company acquires $3 million in new equity capital, Mr. Dobkin’s annual compensation will increase to $175,000. Upon the commencement of employment, Mr. Dobkin earned and was issued 50,000 shares of common stock. In addition, we paid Mr. Dobkin a sign-on bonus of $50,000, net of taxes that was also paid in common shares. We granted Mr. Dobkin stock options exercisable into two million shares of common stock at an exercise price equal to the market price as of the date of employment.

Brekel entered into a note payable with Xerox Corporation in November 2000 to finance equipment. Brekel also entered into a Document Services Agreement (“Agreement”) with Xerox Corporation (“Xerox”) on November 1, 1999 commencing April 1, 2000. During the 63-month term of the Agreement ending June 30, 2005, Xerox agreed to provide equipment and services in accordance with specified performance standards. Those standards include, among other things, a performance satisfaction guaranty by Xerox. Under the terms of that guaranty, Brekel may terminate the agreement without incurring any early termination charges. Brekel gave proper notice of such termination in March 2001. On September 3, 2002 Xerox did, contrary to the contract, assert its claim for early termination charges and for monthly minimum service charges on billings made after the termination date. Xerox had taken no action since its September 3, 2002 demand letter until June 29, 2004, when Xerox Corporation filed a lawsuit in the Circuit Court in Pinellas County State of Florida. The claim amount in controversy is approximately $1,574,000. The Company disputes these claims and believes them to be without merit. Because this matter is in very preliminary stages, management is unable to determine the likelihood of an unfavorable outcome and, accordingly, has not accrued any amount for potential losses in connection with this lawsuit.

The Company currently operates without directors’ and officers’ insurance and is at risk for those types of losses.

Note 4 - Income taxes

The Company records income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” The Company has incurred net operating losses since inception resulting in a deferred tax asset, for which a valuation allowance was provided since it is more likely than not that the deferred tax asset will not be realized.

Note 5 - Intangible Assets

As of March 31, 2005, intangible assets consist of the following:

	Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired Software		5		288,000		139,199		148,801
Intellectual Properties		5		937,650		339,639		598,011
Product Development Costs		5	$	102,221	$	-0-	$	102,221
			$	1,327,871	$	478,838	$	849,033

Amortization expense amounted to $61,238 and $97,575 for the three months ended March 31, 2005 and 2004.

The estimated future amortization expense for each of the five succeeding years is as follows:

11

September 30:
2005	$	245,130
2006		245,130
2007		245,130
2008		113,643
	$	849,033

Note 6 - Long-lived Assets Held for Disposal

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an investment may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No such impairment losses occurred during the three months ended March 31, 2005 and 2004.

Note 7- Notes and Debentures Payable

On March 5, 2003 Sequiam issued to La Jolla Cove Investors, Inc. ("LJCI"), an 8% Convertible Debenture in the principal amount of $300,000 and a warrant to purchase 2,000,000 shares of our common stock at $1.50 per share (the "Initial Financing"). Sequiam received a total of $150,000 of the principal amount of the debenture, representing the balance due at December 31, 2003.

In connection with the debenture and the warrant, Sequiam was required to register the resale of common stock to be issued to LJCI upon conversion of the debenture and exercise of the warrant. To meet this obligation, Sequiam filed a registration statement on April 27, 2003, an amended registration statement on May 7, 2003, and a second amended registration statement on June 23, 2003, all of which were withdrawn on September 5, 2003, prior to being declared effective.

Effective as of January 29, 2004, the Company entered into an Agreement of Accord and Satisfaction with LJCI pursuant to which LJCI agreed to accept $200,000 plus 100,000 shares of restricted common stock in accord and satisfaction of the debenture and warrant and other documents related to the Initial Financing. As a result, all of our obligations under the Initial Financing, including the obligation to file a new registration statement, have been terminated.

Pursuant to the accord and satisfaction, Sequiam issued 100,000 shares of restricted common stock to LJCI, which, had a fair market value of $51,000, based on a closing trading price of $0.51 per share on January 29, 2004. In addition, the Company delivered to LJCI a promissory note in the principal amount of $200,000 with interest in the amount of 8% per year, plus principal, due in six installments of $34,017 per month beginning February 1, 2004. The Company has paid the note in full.

Under the new agreement, LJCI has "piggy-back" registration rights, meaning Sequiam is obligated to include the resale of the 100,000 shares of restricted common stock by LJCI in any registered offering of securities the Company may make during any time that LJCI still holds such 100,000 shares. Unless the Company makes a registered offering, it has no obligation to register the resale of the 100,000 shares of restricted common stock.

On May 13, 2003, Sequiam entered into a loan agreement with Lee Harrison Corbin, Attorney-in-Fact For the Trust Under the Will of John Svenningsen, for a principal loan amount of $400,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, Sequiam Corporation issued two warrants to the holder to purchase 625,000 shares of its common stock at an exercise price of $0.01 per share and 350,000 shares of its common stock at $1.00 per share. The Warrants for 625,000 shares were exercised on June 25, 2003 and the warrants for 350,000 remain outstanding and expire in May 2008. The fair value of the attached warrants exceeded the value of the proceeds received from the Note and has been recorded as a debt discount of $400,000. The payment schedule was originally tied to that of the LJCI Convertible Debenture described above. However, on January 30, 2004 the Company amended the loan agreement such that all principal and interest became due on January 30, 2005. The debt discount was originally amortized over the original estimated life of the Note of 36 months. Beginning in January 2004, the remaining unamortized debt discount will be amortized over twelve months. As of March 31, 2005, the balance of the Note, net of the unamortized debt discount of $-0- was $400,000 and is included in Notes Payable.

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On December 18, 2003, Sequiam entered into a loan agreement with Lee Harrison Corbin, Attorney-in-Fact For the Trust Under the Will of John Svenningsen, for a principal loan amount of $100,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, Sequiam Corporation issued one warrant to the holder to purchase 200,000 shares of its common stock at an exercise price of $0.25 per share. The principal and accrued interest were paid in full during 2004.

On December 18, 2003, Sequiam entered into a loan agreement with Lee Harrison Corbin, for a principal loan amount of $50,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, Sequiam Corporation issued one warrant to the holder to purchase 100,000 shares of its common stock at an exercise price of $0.25 per share. The principal and accrued interest were paid in full during 2004.

On December 26, 2003, Sequiam entered into a debenture agreement (“Debenture”) with Eagle Financial, LLC, for a principal loan amount of $150,000 under a debenture bearing interest at ten percent (10%). The principal and accrued interest were paid in full during 2004. The Debenture also provided for an unconditional equity provision whereby the Corporation issued seventy five thousand (75,000) restricted shares to the Holder as an incentive to lend. The fair value of the shares was recorded as a debt discount of $30,000.

On or about October 3, 2002, General Electric Capital Corporation (“GE”) filed a lawsuit against Brekel Group, Inc. (“Brekel”), in the Circuit Court of the 9^th Judicial Circuit in and for Orange County, located in Orlando, Florida. GE claims that Brekel owes a deficiency balance in the amount of $93,833 for three digital copiers rented under a lease agreement. Brekel has returned possession of the copiers to GE, but Brekel disputes the claim for damages. On January 30, 2004 Brekel entered into a settlement agreement with GE by agreeing to pay $70,000 in 36 monthly installments of $1,945 without interest.

On February 1, 2004 Brekel entered into a settlement agreement with Precision Partners, LTD for disputed rents on a facility formerly occupied by Brekel by agreeing to pay $80,000 in 24 monthly installments of $3,510 including interest at 5%.

On January 30, 2004, the Company entered into a loan agreement with Lee Harrison Corbin, Attorney-in-Fact For the Trust Under the Will of John Svenningsen, for a principal loan amount of $400,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, the Company issued one warrant to the holder to purchase 800,000 shares of its common stock at an exercise price of $0.225 per share. The Warrant was exercised on January 30, 2004. The principal and interest became due on January 30, 2005.

On September 7, 2004, the Company entered into an unsecured loan agreement with Eagle Funding, LLC, for a principal loan amount of $200,000 under a promissory note bearing interest at eight percent (8%). The principal became due on March 7, 2005 and the interest is due monthly. In connection with this loan, the Company issued one warrant to the holder to purchase 400,000 shares of its common stock at an exercise price of $0.66 per share.

On September 30, 2004, the Company entered into an unsecured loan agreement with Lee Harrison Corbin, Attorney-in-Fact For the Trust Under the Will of John Svenningsen, for a principal loan amount of $500,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, the Company issued one warrant to the holder to purchase 1,300,000 shares of its common stock at an exercise price of $0.66 per share. The principal and interest became due on March 30, 2005.

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On September 30, 2004, the Company entered into an unsecured loan agreement with Lee Harrison Corbin for a principal loan amount of $75,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, the Company issued one warrant to the holder to purchase 195,000 shares of its common stock at an exercise price of $0.66 per share. The principal and interest became due on March 30, 2005.

On November 19, 2004, the Company entered into an unsecured loan agreement with Walter H. Sullivan III, for a principal loan amount of $100,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, the Company issued one warrant to the holder to purchase 260,000 shares of its common stock at an exercise price of $0.66 per share. The principal and interest became due on February 19, 2005.

On December 16, 2004, the Company entered into an unsecured loan agreement with Lee Harrison Corbin, Attorney-in-Fact For the Trust Under the Will of John Svenningsen, for a principal loan amount of $50,000 under a promissory note bearing interest at five percent (5%). In connection with this loan, the Company issued one warrant to the holder to purchase 150,000 shares of its common stock at an exercise price of $0.33 per share. The principal and interest became due on January 31, 2005.

The preceding information is summarized as follows at March 31, 2005:
	Face Amount		Debt Discount		Carrying Amount
Notes payable - Precision	$	37,659	$	-	$	37,659
Notes payable - GE		44,722		-		44,722
Promissory note - Lee Harrison Corbin-Trustee for John Svenningsen		400,000		-		400,000
Promissory note - Lee Harrison Corbin-Trustee for John Svenningsen		400,000		-		400,000
Promissory note - Eagle Funding, LLC		200,000		-		200,000
Promissory note - Lee Harrison Corbin-Trustee for John Svenningsen		500,000		-		500,000
Promissory note - Lee Harrison Corbin		75,000		-		75,000
Promissory note - Walter Sullivan		100,000		-		100,000
Promissory note - Lee Harrison Corbin-Trustee for John Svenningsen		50,000		-		50,000
	$	1,807,381	$	-	$	1,807,381

Each of the Notes payable to the Svenningsen Trust, Walter Sullivan, Lee Corbin and Eagle Funding are delinquent as to their due dates. On May 18, 2005 the Company entered into a new loan agreement with the Svenningsen Trust for $3.65 million that includes a roll-up of each of the existing Notes Payable for $1.55 million and $2.1 million of new money. On May 11, 2005 Walter Sullivan converted his $100,000 loan and $2,375 of accrued interest into 731,252 common shares of Sequiam Corporation at $0.14 per share. On May 18, 2005 Lee Corbin converted his $75,000 loan and $2,363 of accrued interest into 535,714 common shares of Sequiam Corporation at $0.14 per share. On May 17, 2005, effective April 7, 2005, Eagle Funding LLC extended the term of their loan to November 7, 2005. Each of these transactions is further described in Note 13 Subsequent Events.

Note 8 - Loans From Shareholders

On February 1, 2002, Mark Mroczkowski, the Chief Financial Officer and a shareholder of the Company, loaned Sequiam Software, Inc. $50,000.  On February 15, 2005 he loaned Sequiam Corporation $50,000. Interest is payable at 6%.  As of March 31, 2005, the balance due under these loans was $100,000 payable on demand together with accrued interest of $4,000.

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Nicholas VandenBrekel, the President and Chief Executive Officer and majority shareholder of the Company, has advanced money to the Company and Sequiam Software, Inc. under demand notes.  At March 31, 2005, the Company owed $532,450 on these notes, including accrued interest of $25,793.  The notes bear interest at 2% per annum and are due on demand.

Alan McGinn, the Chief Technology Officer and a shareholder of the Company, has advanced money to the Company. At March 31, 2005, the Company owed $12,000 without interest or specific repayment terms.

Note 9 -Lease Agreement and Note Payable

Prior to our acquisition of the Brekel Group, Inc., effective July 1, 2001, the Brekel Group, Inc. entered into an operating lease agreement to rent approximately 60,000 square feet of combined office and manufacturing space through June 30, 2011.  Because we determined to cease Brekel’s print and publishing operations before we acquired it, effective July 1, 2002, Brekel entered into a lease forbearance agreement for 10,000 square feet of the same space for the remaining term of the lease. In April 2004, we entered into a new lease agreement and note payable with the landlord that supercedes and replaces the lease forbearance agreement entered into by the Brekel Group, Inc. effective July 1, 2002 prior to its acquisition by us.

The new lease for 24,085 square feet is effective July 1, 2004 for a period of seventy-two months beginning July 1, 2004 and ending on June 30, 2010. The note payable was fixed at $1,600,000 together with interest thereon at a simple interest rate equal to six percent per annum. Commencing on August 1, 2004 and continuing on the first day of each month thereafter through and including June 1, 2010, we are scheduled to pay to Lender payments consisting of principal and interest in the amount of $26,517 per month.

Rental expense for the quarter ended March 31, 2005 and 2004 was $59,201and $33,134, respectively. The original amount of the note of $1,600,000 represents $893,112 of deferred rent and $706,888 of tenant improvements. The March 31, 2005 balance of $ 1,525,376 included $234,181 in current portion of long-term debt and $1,291,195 in long-term debt. The new minimum future rentals required under the operating lease and the maturities of the long-term note payable are as follows:

Year	Rentals		Maturities
2005	$	193,564	$	234,181
2006		206,773		248,624
2007		210,993		263,959
2008		215,319		280,239
2009		219,753		297,524
Thereafter		110,999		200,849
	$	1,157,401	$	1,525,376

Note 10 - Convertible Debt

On April 27, 2004, the Company closed a convertible debt transaction with Laurus Master Fund, Ltd. (“Laurus”) providing up to $3.0 million in financing. Under the arrangement, the Company delivered to Laurus a secured convertible term note, bearing interest at the Wall Street Journal Prime rate plus 2% (7.75% at March 31, 2005), in the initial amount of $2.0 million, convertible into the Company’s common stock (the “Note”), and a warrant to purchase up to 666,666 shares of the Company’s common stock.

The Note has a term of three years. Interest shall be payable monthly in arrears commencing on June 1, 2004, and on the first day of each consecutive calendar month thereafter. Monthly principal payments commenced on August 2, 2004, at the rate of $60,606. The balance of the Note at March 31, 2005 is $1,818,182 less debt discount recognized of $183,527 or a net of $1,634,655 and is included $984,844 in long-term debt and $833,338 in current portion of long-term debt. The maturities of the Note as of December 31, 2004 are as follows:

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Year	Maturities
2005	$	833,338
2006		909,096
2007		75,758
	$	1,818,182

The interest rate under the Note is subject to adjustment on a month by month basis if specified conditions are met (including that the common stock underlying the conversion of the Note and the warrant issued to Laurus are registered with the U.S. Securities and Exchange Commission and whether and to what extent the market price of the Company’s common stock for the five (5) trading days preceding a particular determination date exceeds (or is less than) the fixed conversion price applicable to the Note).

Laurus also has the option to convert all or a portion of the Note into shares of the Company’s common stock at any time, subject to specified limitations, at a fixed conversion price of $0.66 per share. The Note is secured by a first lien on all the Company’s and its subsidiaries’ assets. In connection with the Note, Laurus was paid a fee of $105,000, which is included in other assets as deferred loan costs and is being amortized over the life of the loan. Laurus received a six-year warrant to purchase up to 666,666 shares of the Company’s common stock at prices ranging from $0.83 per share to $1.16 per share. A discount of $215,915 was recognized on the value of the warrants and is being amortized as interest expense over the life of the loan. A discount of $458,339 was allocated to the beneficial conversion feature. All stock conversion prices and exercise prices are subject to adjustment for stock splits, stock dividends or similar events. The Company also agreed to file a registration statement with the U.S. Securities and Exchange Commission covering the shares issuable upon conversion of the Note and the exercise of the warrant issued to Laurus.

Laurus has committed to fund to the Company an additional $1.0 million under the financing arrangement on substantially similar terms as the initial $2.0 million funding, which additional $1.0 million will become available to the Company following its completion and/or achievement of certain conditions to funding, including, without limitation, certain performance benchmarks.

On October 27, 2004, the Company amended the terms of its agreements with Laurus by reducing the fixed conversion price of $0.66 per share to $0.33 per share; amending the principal amortization from $60,606 per month beginning August 2, 2004 to $75,758 beginning May 2, 2005; amending the six-year warrant to purchase up to 666,666 shares of the Company’s common stock at prices ranging from $0.41 per share to $0.58 per share; and granting a new six-year warrant to purchase up to 470,000 shares of the Company’s common stock at a price of $0.33 per sharein satisfaction of due and unpaid fees in the aggregate amount of $49,333. In addition Laurus agreed to release the Company from a technical default of the Securities Purchase Agreement with respect to the creation of the certain debt obligations.

Note 11 - Capital Stock

During the three months ended March 31, 2005, the Company issued 2,387,500 and 732,670 common shares for business advisory, marketing services and payroll valued at $351,663 and $146,864, respectively based on the Company’s quoted market price on the date of the related agreements.

Note 12 - Operating Segments

Pursuant to FAS 131, the Company defines an operating segment as:

·A business activity from which the Company may earn revenue and incur expenses;

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·Whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and

·For which discrete financial information is available.

The Company has two operating segments, which are defined as each business line that it operates. This however, excludes corporate headquarters, which does not generate revenue.

The Company’s operating segments are defined as follows:

The Information Management segment provides interactive web-based technologies, as well as ASP, ISP and other customer web development and software development services.

The Safety and Security segment provides fingerprint biometric access control systems technology and fingerprint identification technology.

The table below presents certain financial information by business segment for the quarter ended March 31, 2005.

	Information Management			Safety and Security			Segments Total			Corporate			Consolidated Total
Revenue from external customers		66,343			62,512			128,855						128,855
Interest expense, net		(23,864	)					(23,864	)		(207,669	)		(231,533	)
Depreciation and amortization		67,523			49,219			116,741			39,611			156,352
Segment loss		(333,913	)		(349,439	)		(683,352	)		(577,425	)		(1,260,777	)
Segment assets (1)		1,329,647			154,099			1,483,747			868,390			2,352,137

(1)Segment assets have been adjusted for intercompany accounts to reflect actual assets for each segment.

The table below presents certain financial information by business segment for the three months ended March 31, 2004.

	Information Management			Safety and Security			Segments Total			Corporate			Consolidated Total
Revenue from external customers	$	45,184		$	29,880		$	75,064		$	-		$	75,064
Interest expense, net		10,184			-			10,184			277,856			288,040
Depreciation and amortization		92,360			60,552			152,912			-			152,912
Segment loss		(352,083	)		(50,535	)		(402,618	)		(696,117	)		(1,098,735	)

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Note 13 - Subsequent Events

On May 18, 2005, Sequiam Corporation (the “Company”) closed a debt transaction with Lee Harrison Corbin, Attorney in-Fact for the Trust Under the Will of John Svenningsen(the “Trust”) pursuant to which the Trust consolidated $1.35 million in existing unsecured debt owed by the Company to the Trust and provided $2.1 million in additional financing (the “Additional Financing”) for a total of $3,450,000 (the “Loan”). The Company also issued to the Trust a warrant exercisable into 6,000,000 shares of the Company’s common stock (the “Trust Warrant”).

In connection with the Loan: (a) the Trust delivered $1,000,000 of the Additional Financing to Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”); and (b) the Company (i) reduced the conversion price of that certain secured convertible term note, dated as of April 27, 2004, made by the Company in favor of Laurus to $0.15 per share pursuant to Rule 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”) (the “Laurus Note”), and (ii) issued a warrant to Laurus exercisable into 1,500,000 shares of the Company’s common stock at an exercise price of $0.23 per share (the “Laurus Warrant”) (the “Payoff Consideration”). In return for receiving the Payoff Consideration, Laurus, the Trust and the Borrower entered into that certain Assignment, Assumption and Release, dated as of May 18, 2005, pursuant to which, Laurus assigned (the “Assignment”) all of its rights, liabilities and obligations under the Laurus Note, and all documents related thereto (collectively with the Laurus Note, the “Laurus Loan Documents”), to the Trust. In addition, Laurus released the Company from all liability whatsoever under the Laurus Loan Documents, except for any terms therein which may survive the assignment.

The $3,450,000 promissory note issued to the Trust (the “Trust Note”) has a term of two years. Interest shall be payable monthly in arrears commencing on November 10, 2005, and on the first day of each consecutive calendar month thereafter. Monthly amortization payments shall commence on May 10, 2006, at the rate of $75,000. The trust Note is secured by all of the Company’s assets.

In connection with the Loan, the Trust received the Trust Warrant to purchase up to 6,000,000 shares of the Company’s common stock at prices ranging from $0.20 per share to $0.30 per share. All stock conversion prices and exercise prices are subject to adjustment for stock splits, stock dividends or similar events. The Company also agreed to file a registration statement with the U.S. Securities and Exchange Commission covering the shares issuable upon the exercise of the Trust Warrant and the Laurus Warrant.

Of the Loan amount, the Company received approximately $1.1 million in cash after payment to Laurus of $1,000,000 toward reduction of the Laurus Note (described above). The remaining principal balance of the Laurus Note after such payment was $818,182, which balance was converted into 5,454,547 shares of common stock by Laurus at the reduced conversion rate of $0.15 per share.

In the Company’s opinion, the issuance and sale of the Trust Warrant and the Laurus Warrant described above was exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act. The Trust and Laurus are accredited investors. The securities are not subject to resale except pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act. The Trust and Laurus had an opportunity to ask management questions about the Company and had adequate access to information about the Company. No sales of securities involved the use of an underwriter and no commissions were paid in connection with the issuance or sale of any securities.

The principal documents involved in the transaction are a Securities Purchase Agreement, an Amended and Restated Master Security Agreement, an Amended, Restated and Consolidated Senior Secured Term Note, a Common Stock Purchase Warrant issued to the Trust, a Common Stock Purchase Warrant issued to Laurus, a Registration Rights Agreement, an Amended and Restated Stock Pledge Agreement, an Amended and Restated Grant of Security Interest in Patents and Trademarks for the Company and certain of its subsidiaries, a Subsidiary Guaranty, a Subordination Agreement from Mark Mroczkowski and Nick VandenBrekel to the Trust, a Subordination Agreement from Eagle Funding, LLC to the Trust, and an Assignment, Assumption and Release, each of which is dated as of May 18, 2005.

On May 11, 2005 Walter Sullivan converted his $100,000 loan and $2,375 of accrued interest into 731,252 common shares of Sequiam Corporation at $0.14 per share.

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On May 17, 2005, effective April 7, 2005, Eagle Funding LLC extended the term of their loan to November 7, 2005.

On May 17, 2005, EastGroup Properties, LP agreed to an additional six (6) month deferment of the Company’s Promissory Note payments until December 1, 2005, contingent upon the payment of April and May 2005 prior to May 31, 2005, and that all rental payments between now and December 2005 are kept current. EastGroup Properties, LP also agreed to extend the Note by twelve (12) months to represent the twelve (12) total deferred payments from December 2004 to November 2005.

On May 18, 2005 Lee Corbin converted his $75,000 loan and $2,363 of accrued interest into 552,593 common shares of Sequiam Corporation at $0.14 per share. The agreement included piggyback registration rights for all shares and warrants owned by Mr. Corbin.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

Management’s Discussion and Analysis contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as well as historical information. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that the expectations reflected in these forward-looking statements will prove to be correct. Forward-looking statements include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should,” and similar expressions, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Current shareholders and prospective investors are cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results for future periods could differ materially from those discussed in this report, depending on a variety of important factors, among which are our ability to implement our business strategy, our ability to compete with major established companies, the acceptance of our products in our target markets, the outcome of litigation, our ability to attract and retain qualified personnel, our ability to obtain financing, our ability to continue as a going concern, and other risks described from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements contained in this report speak only as of the date of this report. Future events and actual results could differ materially from the forward-looking statements. You should read this report completely and with the understanding that actual future results may be materially different from what management expects. We will not update forward-looking statements even though its situation may change in the future.

INTRODUCTION

The following discussion and analysis summarizes the significant factors affecting: (i) our consolidated results of operations for the three months ended March 31, 2005 compared to the three months ended March 31, 2004; and (ii) financial liquidity and capital resources.  This discussion and analysis should be read in conjunction with our consolidated financial statements and notes included in this prospectus. 

We are an information management and software and security technology company specializing in biological identification security systems and web-based application services for the business, education and travel industries. Our business is divided into two operating segments: (a) Safety and Security; and (b) Information Management.

We derive or plan to derive our revenues from five sources: (i) the sale and licensing of our software products; (ii) consulting, custom software services and web development services; (iii) maintenance agreements in connection with the sale and licensing of software products; (iv) Internet access and web hosting services; and (v) the sale and licensing of our biometric products. We have not yet generated revenue from the sale and licensing of our software products. Software license revenue will be recognized when all of the following criteria have been met: (a) there is an executed license agreement and software has been delivered to the customer, (b) the license fee is fixed and payable within twelve months, (c) collection is deemed probable, and (d) product returns are deemed reasonably estimable. Maintenance revenues are recognized ratably over the term of the maintenance contract, typically 12 to 36 months. Internet access and web-hosting services are recognized over the period the services are provided, typically month-to-month.

The following table shows the proportion of total revenues by segment in the three period ended March 31, 2005.

Period	Information Management	Safety and Security	Total
Three Months ended March 31, 2005	$66,343	$62,512	$128,555

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Results of Operations

The following table sets forth information regarding our financial results for 2005 and 2004.

	Three Months Ended March 31,
	2005			2004			% Change
Revenue		128,855			75,064			-72	%
Costs of services and product sales		232,022			280,847			17	%
Selling, general and administrative		926,448			599,420			-55	%
Gains on sale of equipment, impairment of equipment held for sale and debt settlement		(370	)		(5,492	)		107	%
Interest expense, net		(231,954	)		(288,040	)		19	%
Net Losses		(1,260,777	)		(1,098,735	)		-15	%

Quarter Ended March 31, 2005 compared to Quarter Ended March 31, 2004. Unless otherwise noted, references to 2005 represent the three-month period ended March 31, 2005 and references to 2004 represent the three-month period ended March 31, 2004.

Revenues. Total revenue increased by $53,791 or 72% to $128,855 in 2005, from $75,064 in 2004. This occurred because we completed certain web development, custom software development and engineering services engagements. Software and license fee revenues were unchanged at $-0- for both 2005 and 2004. Revenues from consulting, custom software services, web development services and Internet access and web-hosting services totaled $23,043 in 2005 and $45,184 in 2004, a decrease of $22,141 or 49%. Revenues from sales of the BioVault^TM were $5,061 in 2005 compared to $29,880 in 2004 a decrease of $24,819 or 83%. Revenues from the maintenance of our existing IRP customers were $-0- in 2005 compared to $-0- in 2004. During 2004 and 2003 we re-developed IRP and IRPlicator from server based products into an ASP model for use over the Internet and for marketing purposes we renamed the products PrintIt 123! and ScanIt 123!, respectively. We began generating revenues from the sale of our IRP suite of software products in the second quarter of 2004 and recorded $43,300 in ASP service fees in 2005 compared to none in 2004. We also earned $57,500 in biometric consulting fees in 2005.

During 2003 and 2004, we spent most of our time acquiring and redeveloping our products. Sales and marketing efforts did not commence until the third quarter of 2004. We believe that the high cost of the BioVaultÔ was an impediment to its sales. As a result, we developed a less expensive version 2.0 of the BioVault. The BioVault 2.0 is out of design and in the molding and casting process. We expect production to begin in the third quarter 2005. Additionally we now have several resellers for our PrintIt123 product line (formerly IRP), ScanIt123 (formerly IRPlicator) as a result of that and the BioVault 2.0 coming to market, we expect to generate increased revenues from these products during the third quarter of 2005.

During 2004, we entered into a pilot program for our PrintIt123 products with AlphaGraphics, Inc., and Sir Speedy/PIP both of whom are internationally franchised chains of print shops. In the fourth quarter 2005, we entered into sales agreements with several state college and university systems for our PrintIT123 product. Georgia Tech and the University of Mississippi each purchased for cash a prepackaged bundle of remote print transactions using our ASP service, which is to say that they are entitled to use our software, which is provided solely through hosting services run on our servers. Additionally, we are currently in discussions with other companies for the license of our other biometric technology products.

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As a result of these recent developments, we expect: (a) that consulting, custom software services, web development and web-hosting activities will make up a smaller portion of our overall revenues; and (b) that revenues from our Safety and Security segment will begin to increase in mid and late 2005.

Cost of Services and Product Sales. Cost of services and product sales were $232,022 in 2005 and $280,847 in 2004, a decrease of $48,825 or 17 %. This increase was primarily attributable to decreased production costs associated with decreased sales as a result of redesigning our products. We also increased depreciation and amortization expense that was $156,352 in 2005 and $152,912 in 2004, an increase of $3,440 or 2 %. This increase is attributable to the amortization of intellectual properties from W.M.W. Communications, Inc., Smart Biometrics, Inc., Telepartners, Inc. and Fingerprint Detection Technologies, Inc.

Selling, General and Administrative. Selling, general and administrative expenses were $926,448 in 2005 and $599,420 in 2004, a increase of $327,028 or 55 %. The significant increase was attributed to non-cash and non-recurring expenses for investment banking, consulting and other services acquired in exchange for stock totaling $498,527. The overall increase was offset in part by decreases in selling costs and costs associated with being a public company. We decreased our recurring selling and overhead expenditures such as salaries, wages and benefits for administrative and marketing personnel, computer maintenance and supplies, professional services (such as legal and accounting fees), and corporate travel expenses.

Our total payroll was $84,564 for 2005 and $208,944 for 2004. This decrease in payroll is attributable to our reduction from 24 employees in 2004, to 8 employees in 2005. The decrease in payroll has increased our liquidity and increased our cash flow for 2005. We can expect that payroll will remain constant for the next six months untill we bring our products to market. Once we establish continued sales for our software and biometric products, we expect that the payroll burden will be reduced as a percentage of total revenue.

Losses on Sale of Equipment, Impairment of Equipment Held for Sale and Debt Settlement. A loss of $370 was recognized on the sale of equipment.

Interest Expense.  Interest expense was $231,533 in 2005 and $288,040 in 2004, a decrease of $56,507 or 19%. This decrease is because no new debt discounts were recorded during the quarter.

Net Losses. We incurred net losses of $1,260,777 in 2005 and $1,098,735 in 2004, a increase of $162,042 or 14%. The increase was attributed to non-cash and non-recurring expenses for investment banking, consulting and other services acquired in exchange for stock totaling $498,527. We expect to incur additional net losses through the second quarter of 2005 as we continue to introduce our products to the marketplace. We expect cash flow to increase beginning in the third quarter of 2005 using proceeds from sales of our products. The Company presently requires sales of approximately $125,000 per month to provide a positive cash flow.

Liquidity and Capital Resources

General

Our principal use of cash in our operating activities is for selling general and administrative expenses.  Our principal source of liquidity has historically been from financing activities.  We believe that cash provided by our operating and financing activities will provide adequate resources to satisfy our working capital, liquidity and anticipated capital expenditure requirements for approximately six months. Before such time, we expect to have sufficient cash flow to continue our operations.

Operating Activities

Net cash used in operating activities was $190,637 for 2005, as a result of the net loss during the period of $1,260,777, offset by non-cash expenses of $803,985, increases in accrued shareholder salaries of $90,000 and net decrease in other working capital items totaling $176,155.

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Investing and Financing Activities

Net cash used for investing activities for 2005 was $67,712, product development costs for the BioVault 2.0 that we capitalized.

Net cash provided by financing activities was $279,690 for 2005. Proceeds from the shareholder loans accounted for $295,499. Payments of long-term debt used cash of $15,809.

Current liabilities of $5,902,180 exceed current assets of $61,358 by $5,840,822. Of that amount, $2,084,242 or 35.7% is owed to shareholders as loans and accrued but unpaid salaries under employment agreements. The officers of the Company are dedicated to its business plan and will place no undue demands on its working capital. They expect payment from future cash flows and equity capital infusions. Also included in current liabilities is $358,541 of accounts payable owed by the former Brekel Group, Inc. We are negotiating to settle these liabilities related to the former Brekel Group, Inc. at amounts less than the amounts recorded in the balance sheet. We are unable to estimate an expected settlement below the carrying amount at this time. We expect that these liabilities will be settled for cash.

Prior to our acquisition of the Brekel Group, Inc., effective July 1, 2001, the Brekel Group, Inc. entered into an operating lease agreement to rent approximately 60,000 square feet of combined office and manufacturing space through June 30, 2011.  Because we determined to cease Brekel’s print and publishing operations before we acquired it, effective July 1, 2002, Brekel entered into a lease forbearance agreement for 10,000 square feet of the same space for the remaining term of the lease. In April 2004, we entered into a new lease agreement and note payable with the landlord that supercedes and replaces the lease forbearance agreement entered into by the Brekel Group, Inc. effective July 1, 2002 prior to its acquisition by us.

The new lease for 24,085 square feet is effective July 1, 2004 for a period of seventy-two months beginning July 1, 2004 and ending on June 30, 2010. The note payable was fixed at $1,600,000 together with interest thereon at a simple interest rate equal to six percent per annum. Commencing on August 1, 2004 and continuing on the first day of each month thereafter through and including June 1, 2010, we are scheduled to pay to Lender payments consisting of principal and interest in the amount of $26,517 per month.

Rental expense for the quarter ended March 31, 2005 and 2004 was $59,201and $33,134, respectively. The original amount of the note of $1,600,000 represents $893,112 of deferred rent and $706,888 of tenant improvements. The March 31, 2005 balance of $ 1,525,376 included $234,181 in current portion of long-term debt and $1,291,195 in long-term debt. The new minimum future rentals required under the operating lease and the maturities of the long-term note payable are as follows:

Year	Rentals		Maturities
2005	$	193,564	$	234,181
2006		206,773		248,624
2007		210,993		263,959
2008		215,319		280,239
2009		219,753		297,524
Thereafter		110,999		200,849
	$	1,157,401	$	1,525,376

Since December 31, 2004, shareholders of the Company have lent $295,500 to the company in support of its operations.

We have recently acquired new financing as described below. We believe that, to the extent obtained and cleared by the SEC, such financing will be adequate to support our operations until fully supported by revenues.

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Recent Events

On May 18, 2005, Sequiam Corporation (the “Company”) closed a debt transaction with Lee Harrison Corbin, Attorney in-Fact for the Trust Under the Will of John Svenningsen(the “Trust”) pursuant to which the Trust consolidated $1.35 million in existing unsecured debt owed by the Company to the Trust and provided $2.1 million in additional financing (the “Additional Financing”) for a total of $3,450,000 (the “Loan”). The Company also issued to the Trust a warrant exercisable into 6,000,000 shares of the Company’s common stock (the “Trust Warrant”).

In connection with the Loan: (a) the Trust delivered $1,000,000 of the Additional Financing to Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”); and (b) the Company (i) reduced the conversion price of that certain secured convertible term note, dated as of April 27, 2004, made by the Company in favor of Laurus to $0.15 per share pursuant to Rule 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”) (the “Laurus Note”), and (ii) issued a warrant to Laurus exercisable into 1,500,000 shares of the Company’s common stock at an exercise price of $0.23 per share (the “Laurus Warrant”) (the “Payoff Consideration”). In return for receiving the Payoff Consideration, Laurus, the Trust and the Borrower entered into that certain Assignment, Assumption and Release, dated as of May 18, 2005, pursuant to which, Laurus assigned (the “Assignment”) all of its rights, liabilities and obligations under the Laurus Note, and all documents related thereto (collectively with the Laurus Note, the “Laurus Loan Documents”), to the Trust. In addition, Laurus released the Company from all liability whatsoever under the Laurus Loan Documents, except for any terms therein which may survive the assignment.

The $3,450,000 promissory note issued to the Trust (the “Trust Note”) has a term of two years. Interest shall be payable monthly in arrears commencing on November 10, 2005, and on the first day of each consecutive calendar month thereafter. Monthly amortization payments shall commence on May 10, 2006, at the rate of $75,000. The Trust Note is secured by all of the Company’s assets.

In connection with the Loan, the Trust received the Trust Warrant to purchase up to 6,000,000 shares of the Company’s common stock at prices ranging from $0.20 per share to $0.30 per share. All stock conversion prices and exercise prices are subject to adjustment for stock splits, stock dividends or similar events. The Company also agreed to file a registration statement with the U.S. Securities and Exchange Commission covering the shares issuable upon the exercise of the Trust Warrant and the Laurus Warrant.

Of the Loan amount, the Company received approximately $1.1 million in cash after payment to Laurus of $1,000,000 toward reduction of the Laurus Note (described above). The remaining principal balance of the Laurus Note after such payment was $818,182, which balance was converted into 5,454,547 shares of common stock by Laurus at the reduced conversion rate of $0.15 per share.

In the Company’s opinion, the issuance and sale of the Trust Warrant and the Laurus Warrant described above was exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act. The Trust and Laurus are accredited investors. The securities are not subject to resale except pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act. The Trust and Laurus had an opportunity to ask management questions about the Company and had adequate access to information about the Company. No sales of securities involved the use of an underwriter and no commissions were paid in connection with the issuance or sale of any securities.

The principal documents involved in the transaction are a Securities Purchase Agreement, an Amended and Restated Master Security Agreement, an Amended, Restated and Consolidated Senior Secured Term Note, a Common Stock Purchase Warrant issued to the Trust, a Common Stock Purchase Warrant issued to Laurus, a Registration Rights Agreement, an Amended and Restated Stock Pledge Agreement, an Amended and Restated Grant of Security Interest in Patents and Trademarks for the Company and certain of its subsidiaries, a Subsidiary Guaranty, a Subordination Agreement from Mark Mroczkowski and Nick VandenBrekel to the Trust, a Subordination Agreement from Eagle Funding, LLC to the Trust, and an Assignment, Assumption and Release, each of which is dated as of May 18, 2005.

On May 11, 2005 Walter Sullivan converted his $100,000 loan and $2,375 of accrued interest into 731,252 common shares of Sequiam Corporation at $0.14 per share.

On May 17, 2005, effective April 7, 2005, Eagle Funding LLC extended the term of their loan to November 7, 2005.

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On May 17, 2005, EastGroup Properties, LP agreed to an additional six (6) month deferment of the Company’s Promissory Note payments until December 1, 2005, contingent upon the payment of April and May 2005 prior to May 31, 2005, and that all rental payments between now and December 2005 are kept current. EastGroup Properties, LP also agreed to extend the Note by twelve (12) months to represent the twelve (12) total deferred payments from December 2004 to November 2005.

On May 18, 2005 Lee Corbin converted his $75,000 loan and $2,363 of accrued interest into 552,593 common shares of Sequiam Corporation at $0.14 per share. The agreement included piggyback registration rights for all shares and warrants owned by Mr. Corbin.

Application of Critical Accounting Policies

Software Development Costs

Costs incurred to establish technological feasibility of computer software products are research and development costs and are charged to expense as incurred. Costs of producing product masters subsequent to technological feasibility are capitalized. Capitalization of computer software costs ceases when the product is available for general release to the customers. Capitalized software costs are amortized using the straight-line method over the estimated useful life of the products or the gross revenue ratio method, whichever results in the greater amount of amortization.

Acquired Software

In connection with the acquisition of Access Orlando, the Company acquired Internet Remote Print software that was assigned a value of $288,000, representing the excess of the purchase price over the fair value of the tangible assets acquired. The acquired software is being amortized over its expected useful life of five years.

Intellectual Properties

In connection with the acquisitions of Smart Biometrics, Inc, Telepartners, Inc. and Fingerprint Detection Technologies, Inc., the Company acquired intellectual properties including patents, trademarks, technical drawings, proprietary software and other knowledge based assets that were assigned values of $700,000, $160,000 and $237,650, respectively, for a total of $1,097,650 representing the excess of the purchase price over the fair value of the tangible assets acquired. The acquired intellectual properties are being amortized over their expected useful life of five years.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) revised Statement of Financial Accounting Standard No. 123 "Share-Based Payment" (SFAS 123R). SFAS 123R requires Companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost will be recognized over the period during which an employee is required to provide service in exchange for the award (usually the vesting period). Changes in fair value during the requisite service period will be recognized as compensation cost over that period. The grant date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification This statement is effective for the first reporting period beginning after June 15, 2005. In the opinion of management, the adoption of this statement will not have a significant impact on the Company's consolidated financial statements.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

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ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined by Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the periodic reports filed by the Company with the Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to the Company's management. Based on their most recent evaluation, which was completed during the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer believe that the Company's disclosure controls and procedures provide reasonable assurance that the disclosure controls and procedures are effective to accomplish their objectives.

Changes in Internal Control Over Financial Reporting

In addition, management, including the Company's Chief Executive Officer and Chief Financial Officer, reviewed the Company's internal control over financial reporting (as defined by Rule 15(d)-15(f) of the Exchange Act), and there have been no significant changes in the Company's internal control or in other factors that could significantly affect the Company's internal control over financial reporting during the period covered by this report.

PART II: OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The information provided in Part I, Item 2 of this Quarterly Report on Form 10-QSB under the caption “Recent Events” is incorporated herein by reference.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

10.1 Non-Exclusive Reseller Agreement with IKON Office Solutions, Inc.

31.1 Certification of Nicholas VandenBrekel, Chief Executive Officer and President of Sequiam Corporation, pursuant to Rule 15d-14(a) of the Securities and Exchange Act of 1934.*

31.2 Certification of Mark L. Mroczkowski, Senior Vice President and Chief Financial Officer of Sequiam Corporation, pursuant to Rule 15d-14(a) of the Securities and Exchange Act of 1934.*

32.1 Certification of Nicholas VandenBrekel, Chief Executive Officer and President of Sequiam Corporation, pursuant to 18 U.S.C. Section 1350.*

32.2 Certification of Mark L. Mroczkowski, Senior Vice President and Chief Financial Officer of Sequiam Corporation, pursuant to 18 U.S.C. Section 1350.*

_______________________________

* Filed herewith

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SEQUIAM CORPORATION

Date: May 23, 2005

By:  /s/ Nicholas H. VandenBrekel

Nicholas H. VandenBrekel, Chief Executive Officer and President

Date: May 23, 2005

By:  /s/ Mark L. Mroczkowski

Mark L. Mroczkowski, Senior Vice President and Chief Financial Officer

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EX-10.1

  The Way Business Gets Communicated ^SM

Exhibit 10.1

NON-EXCLUSIVE RESELLER AGREEMENT

THIS NON-EXCLUSIVE RESELLER AGREEMENT (this “Agreement”) is entered into and shall be effective as of March 1, 2005, by and between Sequiam Software, Inc. with a principal place of business at 300 Sunport Lane, Orlando, Florida 32809. (“Company”) and IKON Office Solutions, Inc., with a principal place of business at 70 Valley Stream Parkway, Malvern PA 19355 (“IKON”).

Background

Company desires to grant to IKON the non-exclusive right to sell and distribute the specific products described in Exhibit A (the “Products”). IKON is engaged in the sale and distribution of copier, print and other office products and desires to have the right to sell and distribute the Products upon the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto (the “Parties”), intending to be legally bound, hereby agree as follows:

1. Authorization.

1.1 Company hereby grants to IKON a non-exclusive right and license to distribute, market and sell to end-user customers (“Customers”), maintain, support, use for demonstration purposes and display the Products or any part thereof, within the North America (the “Territory”). Licenses granted to Customers shall be between Company and such Customers. Such licenses shall be contained in the Products, and shall include the license terms set forth on Exhibit B hereto. Company hereby grants IKON a non-exclusive right to use any of Company's trade names, trademarks or logos, as supplied by Company from time to time, on or with the Products and or material in connection with the marketing of the Products, provided that IKON obtains Company’s prior written approval of any materials distributed by IKON which contain Company’s trade names, trademarks or logos. IKON shall use commercially reasonable efforts to market and promote the Products throughout the Territory. In the event of any default by any end-user of its obligations under any lease, purchase, equipment or service agreement between IKON and any end-user, or under the License Agreement between Company and such end-user, or in the event that licensed the Product is accepted for return for any reason within ninety (90) days of the applicable license date, IKON shall be entitled to transfer or assign, the underlying Product license relating to such end-user to any other end-user in mitigation its losses arising from such default.

1.2 IKON shall have the right to distribute any other products, including products that may compete with the Products.

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1.3 Company hereby grants to IKON the right to use and display Company’s trademarks (the “Company Trademarks”), but solely in connection with and to the extent necessary for the marketing, distribution and support of the Products under this Agreement. IKON’s use shall be in accordance with Company’s trademark guidelines, as issued by Company to IKON in writing from time to time. IKON shall not remove or alter Products’ copyright notices, trademarks, logos or packaging. Company retains all rights in the Company Trademarks except as specifically granted to IKON in this section. In connection herewith, IKON authorizes Company to use its name and pre-approved IKON trademarks solely for purposes of marketing the nature of the reseller relationship contemplated by this Agreement. IKON retains all rights in and to such name and trademarks, which must be used in accordance with IKON’s trademark guidelines.

1.4 Company hereby grants to IKON the right to use and display Company’s copyrighted materials (including software and printed materials included with the Products), but solely in connection with and to the extent necessary for the marketing, distribution and support of the Products under this Agreement. Company retains all rights in the materials except as specifically granted to IKON in this section.

2. Obligations of IKON.

2.1 IKON will use commercially reasonable efforts to make the Products available to Customers.

2.2 IKON will advertise and/or promote the Products in a commercially reasonable manner and will transmit Product information and promotional materials to Customers, as reasonably necessary.

2.3 IKON will provide Company with monthly “sales out” reports describing IKON’s sales of Products by district and Product, and identifying the zip code areas covered by each district.

3. Obligations of Company.

3.1 In addition to its other obligations hereunder, Company shall provide IKON with sales training for IKON’s sales personnel free of charge as reasonably requested by IKON. Company shall also provide IKON with technical training, the pricing for such services being the then current rate. Company shall maintain a fully trained staff of service and support personnel in order to perform its obligations hereunder.

3.2 IKON intends to support field based system engineers from help desks in Orlando and Scottsdale. Company will offer free training on site for help desk engineers as a one-time event and keep the help desk personnel up to date with tech bulletins and software update information as it becomes available. In addition, Company will offer additional on site training as Company determines it's necessary in the event of significant product updates of additional product offerings. Company will also offer IKON help desks a technical support "priority" hot line. This hotline shall be manned from 9:00 AM to 5:00 PM eastern standard time by a qualified Products support professional. IKON will not be responsible for any travel expenses incurred by Company in connection with its Product support obligations, unless and only to the extent approved in writing by IKON in advance.

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3.3 Company will supply IKON with (4) complete Product licenses (Virtual dongles) with access codes and documentation for delivery to the help desks, to support the above training effort, all at no charge. Such software may be freely used and will be secured by printing a demonstration watermark on all printed pages. Company and IKON will agree to regular web based training dates at which time Company will demo products for IKON sales and introduce its Company Sales Agents that shall provide support to IKON representatives. IKON and Company will agree on an initial set of target accounts and may mutually revise such lists from time to time. IKON will provide the names and contacts of all assigned Company sales representatives and may revise such names and contacts from time to time. IKON will engage company sales representatives to assist in providing demonstrations and securing final service agreements from the Company. IKON agrees not to directly pursue sale of Company Products without engaging with a Company Sales Agent or Company management.

4. Purchase Orders. All orders entered by IKON under this Agreement shall be placed by written purchase order or shall be confirmed in writing within (5) working days of oral placement, shall refer to this Agreement, and shall specify (i) the quantity and description of Products; (ii) requested delivery date(s); (iii) applicable price; (iv) the location to which the Product is to be shipped; and (v) shipping instructions.

5. Omitted - The confidential portion omitted is being separately filed with the Commission.

6. Shipping.

6.1 Unless otherwise specified in writing by Company, title and risk of loss shall pass on FOB terms upon delivery to carrier mutually agreed to by the Parties at Company’s warehouse.

6.2 Company shall use commercially reasonable efforts to deliver the Products on the delivery date specified in the applicable written purchase order and to ensure that the service provided is running according to the specifications provided. Company shall use all commercially reasonable efforts to notify IKON of any delay in shipping or if a specific delivery date cannot be achieved. Normal shipment time is five (5) days after receipt of the purchase order. All Products delivered pursuant to this Agreement shall be marked for shipment to IKON’s address set forth above or to the address specified in the applicable written purchase order. Upon receipt, IKON and/or the Customer may inspect all Products and packaging for shipping damage and may reject any damaged or inoperable item.

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7. General Indemnity; Warranty.

7.1 Company agrees to protect IKON and hold it harmless from any loss or claim incurred by IKON to the extent arising out of defects in any Product existing at the time such Product is delivered by Company, or any warranties or representations of Company relating to the Products, provided that IKON gives Company immediate notice of any such loss or claim and cooperates fully with Company in the handling thereof. IKON agrees to protect Company and hold it harmless from any other kind of loss or claim incurred by IKON to the extent arising out of its installation of any of the Products sold hereunder, including any loss or injury to the property or person of Customers or Customers’ representatives or employees, or any other person, provided that Company gives IKON immediate notice of any such loss or claim and cooperates fully with IKON in the handling thereof.

7.2 Company warrants that the Products shall be free from any defects in material and workmanship and will perform in accordance with all specifications relating thereto. Company shall use its commercially reasonable efforts to insure that the Products, at the time of delivery, shall be feee of any virus or other program routine designed to erase or otherwise harm data or other programs of the end user. Company further warrants that Company owns the Products, including all associated intellectual property rights, or otherwise has the right to grant IKON and its customers the right and license provided in this Agreement, and that neither the Products nor the associated documentation infringe any patents, copyrights, trademarks, or other proprietary rights of any third parties.

7.3 Company warrants that the Products, individually or configured together as a system, will correctly (i) recognize, accept, compare, sequence, store, retrieve, display, compute and process date-data relating to century and day-of-the-week recognition, including single century formulas and multi-century formulas, leap years; (ii) exchange date-data and interface with other software, firmware and computer hardware with which it interacts, provided, that such interacting software, firmware or computer hardware is itself capable of properly and correctly exchanging accurate date-data; and (iii) accept and respond to two-digit date-data input in a manner that resolves any ambiguities as to the century in a defined, predetermined and appropriate manner. IKON shall have the right to assign and otherwise pass through its rights under this warranty to its customers.

7.4 EXCEPT TO THE EXTENT ARISING IN CONNECTION WITH ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.

8. Confidential Information. “Confidential Information” shall mean all information, know-how, trade secrets or other material disclosed by one Party to the other pursuant to this Agreement which is marked “Confidential,” “Proprietary” or in some similar manner, including pricing information and the terms and conditions of this Agreement. Each Party shall treat as confidential all Confidential Information of the other Party, shall not use such Confidential Information except in connection with implementing this Agreement and shall not disclose such Confidential Information to any third party who has not executed an agreement to maintain the confidentiality of the Confidential Information with restrictions at least as restrictive as those set forth herein. All technical, business, sales, distribution channel, financial, marketing, pricing, planning and competitor information and the customer lists of Customers who have purchased Products from IKON are considered Confidential Information. Both Parties will ensure their compliance with all state or federal privacy acts to the extent required to allow the other to use such information for its continuing business operations, development and marketing purposes. Confidential Information does not include information that is (i) generally known and available in the public domain through no fault of the receiver; (ii) was known by the receiver prior to the date of disclosure; (iii) was received from a third party without any obligation of confidentiality; or (iv) was independently developed without reliance on Confidential Information. Given the nature of the Confidential Information and the likely consequences for each Party’s business where unauthorized use or disclosure of the Confidential Information occurs, monetary damages would not be an adequate remedy and each Party reserves the right to seek and obtain injunctive relief, in addition to any other remedy that may be available, in any proper forum.

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8.1 Marketing and Public Relations

Neither party may disclose the terms of this Agreement, or advertise, market or otherwise publicize or disclose any information concerning the relationship of the parties hereunder or any other such information in connection herewith and therewith without the prior written consent of the other party.

8.2 Marketing Development Funds

Omitted - The confidential portion omitted is being separately filed with the Commission.

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9. Term and Termination. The initial term of this Agreement shall commence on the date signed by Company, and shall continue for one (1) year thereafter unless terminated or renewed as provided below:

9.1 Either Party may terminate this Agreement upon thirty (30) days written notice of a material breach to the other and failure by the other to cure such material breach within the thirty (30) day period.

9.2 Either Party may terminate this Agreement without cause and for any reason whatsoever upon sixty (60) days prior written notice to the other.

9.3This Agreement shall terminate immediately should either Party become insolvent or should bankruptcy proceedings be commenced for or against either Party.9.4 At the end of the initial term, this Agreement shall be automatically renewed for successive one (1) year terms, unless terminated by either party by written notice to the other not less than sixty (60) days before the end of the initial term or any renewal period.

The parties each acknowledge and agree that certain customer relationships relating to the Products and services contemplated hereby may extend, by their terms, beyond the term of this Agreement. Accordingly, notwithstanding termination or expiration of this Agreement for any reason, the parties agree to work together in the exercise of good faith to develop and implement such post-termination support solutions, on a case by case basis, as may be reasonably necessary to satisfy any surviving customer obligations.

10. Source Code Escrow

10.1 The Parties shall enter into a standard escrow agreement with a third party escrow agent regarding escrow of the source code for the software Products covered hereunder. IKON will pay the fees for the maintenance of such escrow account.

10.2 Upon the occurrence of a Source Code Delivery Event, Company shall deliver to IKON a full and complete set of the source code, for the most current version of each of the software Products, on computer magnetic media; all necessary and available information, proprietary information, and technical documentation that shall enable IKON to create, maintain and/or enhance the software Products without the aid of Company or any other person or reference to any other materials; maintenance tools (test programs and program specifications); proprietary or third-party systems utilities (compiler and assembler descriptions); description of the system/program generation; and descriptions and locations of programs not owned by Company, but required for use and/or support. The license granted hereunder includes the right, exercisable upon such delivery, to use such materials for purposes of IKON's providing internally, or procuring from independent contractors, such maintenance and support as IKON may require with respect to the software Products and, as incident thereto, to copy and modify the source code of the software Products in support of the authorized uses of the software Products.

10.3 For purposes of this Agreement, "Source Code Delivery Event" means that either (i) IKON and/or any Customer encounters Company's inability, failure, or unreasonably refuses to correct material error(s) in the software Products following completion of the remedial procedures provided in this Agreement, for any reason, or otherwise to carry out in any material respect the maintenance or support obligations set forth in the Maintenance Agreement for any reason; (ii) Company files a petition in bankruptcy or petition to take advantage of any insolvency action, makes an assignment for the benefit of its creditors, consents to the appointment of a receiver for itself or the whole or substantially all of its property, is adjudicated a bankrupt on a petition in bankruptcy filed against it, files a petition or answer seeking reorganization or arrangement or other aid or relief under any bankruptcy or insolvency laws for the relief of debtors, or is the subject of an order, judgment, or decree entered by a court of competent jurisdiction appointing a receiver for Company or the whole or substantially all of its property, or approval of a petition filed against Company or the whole or substantially all of its property, or approval of a petition filed against Company seeking reorganization or arrangement of Company under any bankruptcy or insolvency laws or any other law for the relief of debtors; or (iii) Company ceases to reasonably support the software Products.

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11. Effect of Termination. Upon termination, neither Party shall be liable to the other for any indirect or consequential damages or costs, including lost profits, losses on unfulfilled contracts, or losses of any commitment or investment made in reliance upon this Agreement or the representations of the Parties. All indemnity and warranty obligations, and IKON’s obligations to pay for Products and to service Products shall survive. IKON shall cease representing that it is authorized to sell Company products and shall cease using any Trademarks. Upon expiration or earlier termination of this Agreement, IKON shall return, or destroy and certify such destruction in writing, all materials hereunder that utilize or display the Company’s Trademarks.

12. Infringement Indemnification by Company. Company shall indemnify and hold IKON harmless from and against any and all claims brought against IKON, and shall reimburse IKON for any judgments, damages, cost or expenses payable by IKON to the party bringing such action together with costs and expenses incurred by IKON, including reasonable attorneys’ fees relating thereto, as a result of any infringement by the Products of any third party’s intellectual property rights. If the Products, or any part thereof, are, or in the reasonable opinion of Company is likely to become, the subject of any claim for infringement of such third party intellectual property rights, or if it is judicially determined that the Products, or any part thereof, infringes any such third party’s intellectual property rights, then Company may, at its option and expense, either (i) procure for IKON the right under such third party intellectual property rights to sell or use, as appropriate, the Products or (ii) replace or modify the Products or parts thereof, with other suitable and reasonably equivalent technology or parts so that the Products become non-infringing or (iii) if it is not commercially reasonable to take the actions specified in items (i) and (ii) immediately preceding, repurchase from IKON any Products remaining in IKON’s inventory together with shipping and insurance costs incurred by IKON for such Products.

13. Assignment. This Agreement is personal to Company and IKON and shall not be assigned by either without the prior written consent of the other.

14. No Agency. This Agreement does not constitute IKON as a partner, agent, or franchisee of Company, or authorize IKON to represent or act for Company in any manner, or create any obligation on behalf of Company. IKON shall be solely responsible for determining its resale prices and, except as expressly set forth herein, shall operate its business in whatever manner it deems appropriate.

15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument; however, this Agreement shall be of no force or effect until executed by both Parties.

16. No Implied Waivers. The failure of either Party at any time to require performance by the other Party of any provision hereof shall not affect in any way the full rights to require such performance at any time thereafter. The waiver by either Party of a breach of any provision hereof shall not be taken, construed, or held to be a waiver of the provision itself or a waiver of any breach thereafter or any other provision hereof.

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17. Entire Agreement. The entire agreement between the Parties is incorporated in this Agreement and the Exhibits, which supersede all prior discussions and agreements, including all contrary terms in IKON’s purchase orders or other writings. There are no representations, agreements or understandings, expressed or implied, affecting this Agreement which are not expressly set forth herein. This Agreement may only be modified by a written agreement signed by both Parties. This Agreement shall not be supplemented or modified by any course of dealing, trade usage or any inconsistent terms in any purchase order or confirmation.

18. Compliance with Applicable Laws.

18.1 Export and Import Controls. IKON acknowledges that the Products and the technical data received from Company in accordance with the terms hereunder may be subject to export and import controls of the United States or another government authority in the Territory. In the performance of its obligations, IKON will comply with all laws, regulations and orders, and agrees to commit no act which, directly or indirectly, would violate any United States or any other applicable law, regulation or order.

18.2 Authorizations. Each party shall at its own expense make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits and authorizations (collectively “Authorizations”) required under applicable law, regulation or order required for it to perform its obligations under this Agreement.

19. Compliance with Laws. The parties shall be mutually responsible, as applicable, for complying with the laws and regulations applicable in the Territory, or any nation, or political subdivision thereof, in which they engage in business in performing their respective responsibilities hereunder. Each party will bear their applicable expenses and costs related to compliance with such laws and regulations.

20. Governing Law. This Agreement shall be governed by the law of the Commonwealth of Pennsylvania.

The parties executing this Agreement warrant that they have the requisite authority to do so.

IKON OFFICE SOLUTIONS, INC.	COMPANY
By: ______________________________	By: ________________________
Name: Dan Nero	Name: Mark L. Mroczkowski
Title: National Director of Professional Services	Title: Senior Vice President and CFO
Date: ____________________________	Date: March 11, 2005

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EXHIBIT A

Omitted - The confidential portion omitted is being separately filed with the Commission.

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EXHIBIT B

FORM OF LICENSE AGREEMENT

The actual licenses set forth in this Exhibit B granted to end-user customers shall run from Company to such customers and shall contain the terms and conditions set forth in the attached form of License Agreement. Any revisions must be pre-approved in writing by Company. Such form shall at all times include the following clause:

IKON Agreement. This Agreement shall not be deemed in any manner to alter, modify or amend in any manner whatsoever the terms and conditions of any agreement between Customer and IKON Office Solutions, Inc. and/or IKON Financial Services (“IFS”). All of the rights and obligations of Customer under such agreements shall continue in full force and effect notwithstanding any termination, cancellation, waiver or claim arising under this agreement. In the event of default by Customer under any such agreement, IKON Office Solutions, Inc. and/or IFS may, in addition to any other remedies it may have, elect to terminate your license and/or remove any or all licensed products and equipment.

HOSTED SERVICES AGREEMENT

THIS HOSTED SERVICES AGREEMENT (this “Agreement”) is made as of this ___ day of _______, 2005 (the “Effective Date”) by and between Sequiam Software, Inc., a California corporation (the “Company”) with principal offices located at 300 Sunport Lane, Orlando, FL 328089 and the entity identified below (the “Subscriber”).

WITNESSETH

WHEREAS, the Company develops, markets, owns and operates services known as: (a) Print It, 123!, which enables subscribers to print or copy documents from their computer to printers at local or other sites; and (b) Scan It, 123!, which enables subscribers to scan documents and transmit such scanned documents to a central print manager (Print It, 123! and Scan It, 123! and other services referred to under the brand Smart Access Suite are hereinafter collectively referred to as the “Services”);

WHEREAS, the Company provides the Services online by accessing the Services using an Internet website;

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WHEREAS, the Subscriber has evaluated the Services and examined the capabilities of the Services, and now wishes to subscribe and obtain access to the Services subject to the terms and conditions of this Agreement; and

WHEREAS, the Company desires to grant to the Subscriber and the Subscriber desires to obtain from the Company a non-exclusive license to access the Services subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual benefits of the covenants and restrictions herein contained, the Company and the Subscriber hereby agree as follows:

1. Definitions

(a) “Authorized Person” shall mean: (i) employees and legal counsel of the Subscriber who agree to maintain the confidentiality of the Confidential Information in consideration for receiving such Confidential Information; and (ii) individuals or organizations who are authorized in writing by the Subscriber to receive the Confidential Information.

(b) “Documentation” shall mean the documents, instructions and other materials furnished or published by the Company concerning the Services.

(c) “Enhancement” shall mean: (i) modifications to the Services which improve or expand the functionality or features of the Services and which may be released by the Company from time to time for a fee at the Company’s discretion; or (ii) such modifications as requested by the Subscriber and approved by the Company in writing.

(d) “Password” shall mean that certain password and user name assigned by the Company to the Subscriber for purposes of accessing the Services.

(e) “Subscriber Data” shall mean any information, data, or any other technology uploaded, posted, processed, transmitted, or submitted by the Subscriber.

(f) “Subscriber Facilities” shall mean the office facilities of the Subscriber.

(g) “Unauthorized Access” shall mean any access to the Services or Documentation except for: (i) the exclusive purposes of using and accessing the Services according to the Documentation on the Internet using the Password; (ii) searching, retrieving, processing, and downloading Subscriber Data; and (iii) training employees of the Subscriber in the use of the Services.

(h) “Unauthorized User” shall mean any individual who accesses the Services or Documentation except for: (i) employees of the Subscriber authorized by the Subscriber to access the Services and Documentation for: (x) the exclusive purpose of using and accessing the Services according to the Documentation on the Internet using the Password and (y) searching, retrieving, processing, and downloading Subscriber Data; (iii) training employees of the Subscriber in the use of the Services; and (ii) Authorized Persons who are authorized in writing by the Company to access the Services and Documentation.

(i) “Update” shall mean modifications to the Services which improve or expand the performance of the Services (as the case may be) which may be provided by the Company from time to time, excluding Enhancements.

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2. License

(a) Grant of License. The Company hereby grants, and the Subscriber hereby accepts, a non-exclusive, non-transferable license to access the Services and to use the Documentation at the Subscriber Facilities for the License Term (defined below), and to use the Services and the Documentation as expressly provided herein.

(b) Additional Restrictions on Use. Subscriber is expressly prohibited from:

i)   modifying the Services or allowing the Services to be modified without the prior written consent of the Company. If the Services are modified, such modifications shall be the sole and exclusive property of the Company and the Company shall own all of the rights, title and interests to such modifications and any resulting computer software, including (but not limited to) any and all copyrights, patents and trade secrets related thereto;

ii)  using the Services or any materials incident thereto to develop computer software without the prior written consent of the Company;

iii) using the Services for any purpose other than as originally intended by this Agreement; and

iv) causing or permitting the reverse engineering, reformatting, recasting, disassemble or recompilation of the Services.

(c) Password. Upon payment as provided in Section 3, the Company shall assign to the Subscriber the Password for purposes of accessing and using the Services during the License Term. The Subscriber shall access the Services only using the Password. The Subscriber shall be responsible for the confidentiality and maintenance of the Password. The Subscriber shall not assign the Password and all assignments of the Password by the Subscriber shall be void. Upon termination of this Agreement in accordance with Section 5 herein, the Password shall be automatically cancelled.

(d) Unauthorized Use. The Subscriber shall take reasonable measures to prevent Unauthorized Users from accessing the Services and Documentation and from using the Password. The Subscriber shall take reasonable measures to prevent Unauthorized Access to the Services, Documentation, and Password.

(e) Lawful Purpose. The Subscriber represents and warrants that the Subscriber Data and the Subscriber’s access to the Services shall not violate any contract, statute, rule, regulation, or other obligation under which the Subscriber is bound. The Subscriber further represents and warrants that it shall not access the Services to conduct or solicit the performance of any business or activity that is tortious or prohibited by law.

(f) Access. The Subscriber hereby acknowledges that the Services require establishment and maintenance of a dedicated Internet access to the Services by the Subscriber with specific provision capacity that is purchased by the Subscriber. The Company shall provide necessary additional bandwidth as specified by the Company from time to time and as may be modified by the Company from time to time. Acquiring access to the Services does not include the establishment and maintenance of Internet access to the Services. The Subscriber shall be responsible for any costs in connection with accessing the Services on the Internet, including (without limitation) telephone, communications, Internet service provider costs, computer hardware, modem, fees charged by third parties, insurance, Internet access software, or any other costs incurred by the Subscriber in accessing the Services.

(g) Subscriber Data. The Subscriber hereby grants The Company a worldwide and non-exclusive license to use and transfer the Subscriber Data, in whole or part, for the purpose of maintaining the Services or performing the Services pursuant to this Agreement. The Company will use all reasonable commercial means to ensure the confidential transfer of the Subscriber Data by means of industry standards encryption. The Company will control access to all physical hosting to ensure the confidentiality and integrity of the Subscriber Data. The Company shall not have the obligation to access, review, maintain or store the Subscriber Data without fees. The Subscriber may purchase such services at fees offered by the Company pursuant to this Agreement. The Subscriber shall be responsible for uploading, converting, and maintaining the Subscriber Data.

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3. Fees and Taxes

(a) Fees. In consideration for the license granted by the Company under this Agreement, and all services provided by the Company under this Agreement, the Subscriber shall pay a fee in accordance with the following schedule. The Subscriber may also be charged fees for other professional services or internet services that may be mutually agreed to the Subscriber and the Company.

(b) Taxes. All fees described herein are exclusive of all federal, state, municipal or other governmental excise, sales, value-added, use, personal property and occupational taxes, excises, withholding obligations and other levies now in force or enacted in the future and, accordingly, the Subscriber will pay all such taxes and levies other than any tax or levy on the net income of the Company.

(c) Fee Increases. The Company may increase the Dongle fee and the Scan It 123! fee and any additional fees at any time by written notice to the Subscriber at least 30 days in advance of the effective date of such increase. The new fee will not apply to any Dongle purchased until a new Dongle is acquired by the Subscriber. If the Subscriber objects to such increase, the Subscriber may terminate this Agreement in accordance with Section 5 herein.

(d) Failure to Pay Fees. The Subscriber hereby acknowledges that the Company may deactivate the Password and deny access to the Services if the Subscriber fails to pay any amount due under this Agreement on or before the 45th day after receipt of the invoice. Once the Company receives payment from the Subscriber, the Password will be reactivated and access to the Services will be restored.

4. Ownership

(a) Title. The Company represents that it owns all proprietary rights, including all patent, copyright, trade secret, trademark, trade name and other proprietary rights, in and to the Services, necessary to fulfill its obligations under the terms of this Agreement. The Subscriber acknowledges that the license granted under this Agreement does not provide the Subscriber with title to or ownership of the Services, including any corrections, enhancements, updates or other modifications to the Services, whether made by the Company or any third party. The Subscriber acknowledges that the license granted under this Agreement only provides the Subscriber a right of limited use under the terms and conditions of this Agreement. The Subscriber shall keep the Services free and clear of all claims, liens and encumbrances.

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(b) Transfer. Under no circumstances shall the Subscriber sell, license, sublicense, publish, display, distribute, or otherwise transfer to a third party the Services, any copies thereof, in whole or in part, without the Company’s prior written consent, unless otherwise provided for in this Agreement.

5. Term and Termination

(a) Effective Date and Term. This Agreement and the license granted hereunder shall be effective as of the Effective Date set forth at the beginning of this Agreement and shall remain in effect until terminated as provided in this Agreement (the “License Term”).

(b) Termination for Cause. The Company shall have the right to terminate this Agreement and the license granted herein upon the occurrence of any of the following events: (i) in the event the Subscriber fails to comply with any of the terms and conditions of this Agreement and such default has not been cured within 30 days after receiving written notice; or (ii) in the event the Subscriber: (w) terminates or suspends its business; (x) becomes subject to any bankruptcy or insolvency proceeding under Federal or state statute; (y) becomes insolvent or subject to direct control by a trustee, receiver or similar authority; or (z) has wound up or liquidated, voluntarily or otherwise. The Subscriber shall have the right to terminate this Agreement upon the occurrence of any of the following events: (i) in the event the Company fails to comply with any of the terms and conditions of this Agreement and such default has not been cured within 30 days after written notice; or (ii) in the event the Company: (w) terminates or suspends its business, (x) becomes subject to any bankruptcy or insolvency proceeding under Federal or state statute; (y) becomes insolvent or subject to direct control by a trustee, receiver or similar authority; or (z) has wound up or liquidated, voluntarily or otherwise.

(c) Effect of Termination for Cause. If the Company terminates this Agreement under Section 5(a) above, the obligations of the Company and the Subscriber in Sections 2(b), (c), (d), (e), (f), and (g), 4, 5, 6, 7, and 8, and rights and obligations which accrued prior to termination or expiration, and provisions of this Agreement which by their express terms are intended to survive termination or expiration of this Agreement, shall survive termination of this Agreement. Within 30 days after termination of this Agreement, the Subscriber shall return to the Company, at the Subscriber’s expense, any software or other materials related to the Services, and deliver to the Company a certification, in writing signed by an officer of the Subscriber, that any software or other materials related to the Services have been returned or destroyed, as requested by the Company, and their use discontinued. Nothing contained herein shall limit any other remedies that either party may have for the default of the other under this Agreement nor relieve either party of any of its obligations incurred prior to such termination.

(d) Termination Without Cause. In the event the Subscriber desires to terminate this Agreement without cause, the Subscriber shall provide written notice of same to the Company. Termination shall be effective 30 days after date of such notice. In the event of the Subscriber’s termination without cause, Sections 2(b), (c), (d), (e), (f), and (g), 4, 5, 6, 7, and 8, and rights and obligations which accrued prior to termination or expiration, and provisions of this Agreement which by their express terms are intended to survive termination or expiration of this Agreement, shall survive termination of this Agreement. Within 30 days after termination of this Agreement, the Subscriber shall return to the Company, at the Subscriber’s expense, any software or other materials related to the Services, and deliver to the Company a certification, in writing signed by an officer of the Subscriber, that any software or other materials related to the Services have been returned or destroyed, as requested by the Company, and their use discontinued.

6. Confidential Information

(a) Definition. For their mutual benefit, the Company and the Subscriber shall discuss certain confidential information including but not limited to, the Subscriber’s web usage tracking and the Services. The parties acknowledge that: (i) the terms and conditions of this Confidentiality clause; (ii) the existence and content of the discussions between the Company and the Subscriber; and (iii) information concerning the Services and other information, including but not limited to, each party's plans, designs, costs, prices and names, finances, marketing plans, business opportunities, personnel, research, development, source code, object code, or know-how, will be considered confidential (“Confidential Information”). Confidential Information shall not include information that: (i) is now or subsequently becomes generally available to the public through no fault or breach on the part of receiving party (the “Recipient”); (ii) the Recipient can demonstrate to have had rightfully in its possession prior to disclosure to the Recipient by the disclosing party (the “Discloser”); (iii) is independently developed by the Recipient without the use of any Confidential Information; or (iv) the Recipient rightfully obtains from a third party who has the right to transfer or disclose it.

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(b) Nondisclosure and Nonuse of Confidential Information. The Recipient agrees to use reasonable care, but in no event no less than the same degree of care that it uses to protect its own confidential and proprietary information of similar importance, to prevent the unauthorized use, disclosure, publication or dissemination of Confidential Information. The Recipient agrees to accept the Discloser's Confidential Information for the sole purpose of meeting its obligations under the terms of this Agreement. The Recipient agrees not to use Confidential Information otherwise for its own or any third party's benefit without the prior written approval of an authorized representative of the Discloser in each instance. The Recipient may disclose Confidential Information if required by any judicial or governmental request, requirement or order; provided that the Recipient will take reasonable steps to give the Discloser sufficient prior notice in order to contest such request, requirement or order by notifying the Discloser of such request.

(c) Ownership of Confidential Information. All Confidential Information, and any Derivatives thereof, remains the property of the Discloser and no license or other rights to Confidential Information is granted or implied hereby. For purposes of this Agreement, “Derivatives” shall mean: (i) for copyrightable or copyrighted material, any translation, abridgment, revision or other form in which an existing work may be recast, transformed or adapted; (ii) for patentable or patented material, any improvement thereon; and (iii) for material which is protected by trade secret, any new material derived from such existing trade secret material, including new material which may be protected by copyright, patent and/or trade secret.

(d) No Warranty. All Confidential Information remains the property of the Discloser and no license or other rights in the Confidential Information is granted hereby. The Discloser warrants that it has the right to disclose the Confidential Information to the Recipient. Otherwise, all Confidential Information is provided “AS IS” and without any warranty, express, implied or otherwise, regarding its accuracy or performance. The Recipient will return all tangible Confidential Information, including but not limited to all computer programs, documentation, notes, plans, drawings, and copies thereof, to the Discloser immediately upon the Discloser's written request.

(e) Terms. The Recipient's duty to protect the Discloser's Confidential Information shall expire three (3) years from the date of disclosure of Confidential Information.

7. Limited Warranty

(a) Scope of Limited Warranty. The Company warrants to the Subscriber that for 90 days commencing upon the letter of acceptance concerning the Services at the Subscriber's Facilities: (i) the Services will substantially comply with the published specifications set forth in the Company’s Documentation for the Services; and (ii) the media on which the Services is furnished shall be free from defects in materials and faulty workmanship under normal use (the “Initial Warranty Period”). The Company makes no warranty as to the Services after the ninety days. The Company does not warrant that the Services will meet the Subscriber’s requirements or will operate in combinations with other software or non-supported platforms/operating systems/databases, which may be selected for use by the Subscriber, or that the operation of the Services will be uninterrupted or error-free. The Company also warrants to the Subscriber, that for a period of ninety 90 days commencing upon delivery of any subsequent release of any new version, Enhancement or Update of the Services, that new version Enhancement or Update will substantially comply with the Documentation for that version, Enhancement or Update.

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(b) Sole Remedy. The Subscriber’s sole and exclusive remedy under the Initial Warranty Period shall be, at the Company’s election, to (i) provide program services to correct any material defects which would cause the Services to not comply with the Documentation; (ii) replace the defective Services with Services that complies with the Documentation; or (iii) refund all license and support fees paid to the Company which relate to the non-complying Services and may terminate this Agreement immediately, subject to section 5. If the Company elects to pursue (i) or (ii) and the Company is unable to complete that choice within 30 days of notification by the Subscriber, then the Subscriber will be entitled to the remedy under (iii). The above remedies are available only if the Company is notified in writing, within the Initial Warranty Period, upon discovery of the defects by the Subscriber, and that the Services have not been: (x) altered, or modified by any party other than the Company or the Company’s approved third party provider; (y) subjected to negligence, or computer or electrical malfunction; or (z) used, adjusted, or installed other than in accordance with instructions furnished by the Company. During subsequent Warranty Periods related to any Enhancement or Update of the Services, the Subscriber’s sole and exclusive remedy will be to continue to be supported under the prior Enhancement or Update of the Services. Further, should the Subscriber hire a third party independent consultant not contracted by the Company to perform services for the Subscriber using the Services, or should said consultant create modifications or derivative works of the Services, the Company shall have no liability to the Subscriber for said services, modifications, derivative works, or outputs of use of the Services.

(c) Disclaimer of Any Other Warranty.  EXCEPT FOR THE EXPRESS LIMITED WARRANTY STATED ABOVE, THE COMPANY MAKES NO PROMISES, REPRESENTATION OR WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO ANY SERVICES, INCLUDING ITS CONDITION, ITS CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, OR THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, AND THE COMPANY SPECIFICALLY EXCLUDES ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

8. Limitation of Liability

(a) The Subscriber agrees that Company’s liability hereunder for damages arising from performance or nonperformance of the Services, shall be as set forth above in Section 7, and shall in the event of ordinary negligence not exceed the amount paid by the Subscriber pursuant to this Agreement. With the exception of acts of willful misconduct or gross negligence, the Subscriber and the Company agree that the Subscriber and the Company will not be liable for any lost profits, costs of procurement of substitute goods or services, or for any claim or demand by any other party except in regard to violations under sections 2, 4, and 6 of this Agreement. In no event will any party to this Agreement be liable for consequential, incidental, special, indirect, or exemplary damages arising out of this Agreement, even if the parties have been advised of the possibility of such damages. These limitations shall apply notwithstanding any failure of essential purpose of any limited remedy.

9. Miscellaneous Provisions

(a) Notices. All notices under this Agreement shall be in writing and shall be deemed to have been given: (i) in the case of delivery, when delivered to the address set forth on the signature page to this Agreement; (ii) in the case of mailing, on the third business day after deposit in the U.S. Mail, postage prepaid, certified or registered mail and addressed to the other party at the address set forth on the signature page to this Agreement; and (iii) in all other cases when the same has been actually received by the other party. Either party may change its address to which said notices are to be sent by the giving of notice of such change as set forth herein.

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(b) Force Majeure. Neither party shall be responsible for any failure to perform (except for payment obligations) due to unforeseen circumstances or to causes beyond its control, including but not limited to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, flood, accidents, strikes, carrier service interruptions, power failure, computer failure, network telecommunications activity, telecommunications and network failure, Internet failure, third party software defects, or shortages of transportation facilities, fuel, energy, labor or materials. A party whose performance is affected by a force majeure condition shall be excused from such performance to the extent required by the force majeure condition so long as such party takes all reasonable steps to avoid or remove such causes of nonperformance and immediately continues performance whenever and to the extent such causes are removed.

(c) Headings. The headings in this Agreement are for purposes of reference only and shall not affect the meaning or construction of any provision of this Agreement.

(d) Severability. The provisions of this Agreement are severable, and if any clause or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect, in that jurisdiction only, such clause or provision, or part thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision of this Agreement in any jurisdiction.

(e) Amendments, Waivers and Consents. Any amendment or waiver of any provision of this Agreement and any consent to any departure from any provision of this Agreement shall be effective only if made or given by both parties in writing.

(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same agreement.

(g) Governing Law and Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, without giving effect to the principles of conflicts of law. The Company and the Subscriber consent to the jurisdiction of any federal district court or state court having jurisdiction in Orange County, Florida.

(h) Entire Agreement. This Agreement constitutes the full understanding between the parties hereto with respect to the subject matter hereof, and no statements, written or oral, made prior to or at the signing hereof shall vary or modify the terms hereof.

[signature on following page]

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IN WITNESS WHEREOF,the parties hereto have executed this Hosted Services Agreement as of the date first set forth above.

THE COMPANY:	THE SUBSCRIBER:
Sequiam Software, Inc.	_____________________________
By:  _________________________________	By: _________________________________
Print Name:      Mark Mroczkowski	Print Name: ___________________________
Title:      Senior Vice President and CFO	Title: ________________________________
Date: ________________________________	Date: ________________________________
Address:  300 Sunport Lane	Address: _____________________________
Orlando, FL 32809

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SCHEDULE A

HOSTED SERVICE FEES AND PAYMENT PROVISIONS

Company	Start Date of Service
Billing Address	Payment Terms	Monthly
City, State, Zip	Project Name
Phone Fax URL	Number of Users
Main Contact	Email Direct Phone
Billing Contact	Email Direct Phone
Technical Contact	Email Direct Phone

PAYMENT TERMS

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EX-31.1

Exhibit 31.1

Certification

I, Nicholas H. VandenBrekel, certify that:

1.I have reviewed this Quarterly Report on Form 10-QSB of Sequiam Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Intentionally omitted];

(c) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The small business issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: May 23, 2005	/s/ Nicholas H. VandenBrekel
	Nicholas H. VandenBrekel
	President & Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Mark L. Mroczkowski, certify that:

1.I have reviewed this Quarterly Report on Form 10-QSB of Sequiam Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [intentionally omitted];

(c) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The small business issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: May 23, 2005	/s/ Mark L. Mroczkowski
	Mark L. Mroczkowski
	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

RULE 15d-14(b)

and

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sequiam Corporation (the “Company”) on Form 10-QSB for the period ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas H. VandenBrekel, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered therein.

/s/ Nicholas VandenBrekel

Nicholas VandenBrekel

President and Chief Executive Officer

May 23, 2005

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

RULE 15d-14(b)

and

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sequiam Corporation (the “Company”) on Form 10-QSB for the period ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark L. Mroczkowski, Senior Vice President, Secretary, Chief Financial Officer & Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered therein.

/s/ Mark L. Mroczkowski

Mark L. Mroczkowski

Senior Vice President, Secretary, Chief Financial Officer & Principal Financial Officer

May 23, 2005