Thoughts regarding the following. SCII seems like a "sell" based on this.
The following points summarize key facts regarding Sensar Corporation (Nasdaq: SCII). This information is presented to alert investors to publicly available information regarding the company. The stock price of Sensar has recently risen from $11 in mid-May to over $36, peaking on the day it announced the demonstration of its wireless technology at the recent Supercomm Show in Atlanta. In the last two days the stock has fallen to $26.
1. Upon the merger of Sensar Corporation (SCII) and Net2Wireless, the company will have approximately 43mm shares outstanding (including 14mm options with a strike price of $2.03) and a market capitalization of over $1.1bb. As of the filing of S-4 filed on April 7, 2000 with the SEC, Net2Wireless had no revenue and spend $425,000 in research and development from April to December 1999.
2. Approximately 33mm of SCII shares were registered for in the S-4 filing and will become freely tradable upon the merger of SCII and Net2Wireless. These shares will increase the tradable float of SCII from 5mm shares to 38mm shares.
3. On March 24, Sensar announced that Net2Wireless completed a private placement of over 1mm shares that will convert to Sensar shares at $29 per share. This offering was priced at a significant discount to Sensar?s stock price peak that week of $66.
4. According to Sensar?s S-4 filing, ?Net2Wireless seeks to address the limitations of the current WAP based technology in a number of ways? with their proprietary technology. But according to most major research studies, WAP is clearly seen as the protocol of choice to enable hundres of millions of handheld devices to communicate with the internet. From an IDC press release from April 2000, ?IDC predicts that by mid-2001, all digital cellular/PCS handsets shipped in the world will be WAP-capable," said Iain Gillott, vice president, Worldwide Consumer and Small Business Telecommunications research at IDC. ?
6. At Supercomm in Atlanta, Net2Wireless demonstrated their technology in connecting laptop PC?s and Window CE devices to the internet via cellphone modems. Established players such as Nokia and Ericsson have introduced competitive products in recent years. Nokia introduced a product named the Artus Wireless Data Enhancer in November 1997. According a company press release, ?The Wireless Data Enhancer also offers enhanced web browsing capabilities which improves performance over the cellular network. By reducing the volume and formatting of Web content, subscribers will be able to receive Internet data faster and have the capability to view the information on smart phones, such as the Nokia 9000 Communicator and hand-held devices. ? At Supercomm in Atlanta, Ericsson demonstrated their WebOnAir solution which significantly increases the efficiency of wireless downloading of web pages to a laptop PC?s.
7. Net2Wireless stated in a March 16, 2000 press release that it had reached an agreement with Partner Communications (Partner), a cellular carrier in Israel, to test their Value Added Services Platform. Through this agreement Partner Communications was granted an option for over 3mm shares with a strike price of $1.84, creating a profit for Partner of over $72mm. The S-4 filed by SCII further states that the ?Under the pilot agreement, Net2Wireless is testing, at its cost, its multimedia streaming media platform on Partner system.? Furthermore, ?Net2Wireless has agreed to supply the
software necessary for the initial 50,000 users free of charge.?
8. Net2Wireless acquired its core technology from the acquisition of a company called ITES in December 1999 for $1.2mm. From the S-4, "Net2Wireless was formed in December 1999. Shortly after its formation, Net2Wireless acquired technology from ITES, a development company in Israel. The initial product based on this technology was installed for pilot site testing in February 2000." |
