Q4 2020 BIO-Key International Inc Earnings Call
Good morning, ladies and gentlemen. Thank you for standing by and welcome to buy Oki International fourth quarter and full-year 2020 conference call during Management's prepared remove all participants will be in listen-only mode afterwards listeners will be invited to participate in a Q&A session as a reminder. This conference is being recorded today, Thursday, March 25th, 2021. I would now like to turn the call over to Kimberly Johnson bio Keys vice president of product marketing, please begin.
Thank you. And thank you for joining us this morning participating on today's call are by Okies chairman and CEO Chief Revenue officer. Fred corsentino and see me about CC Welch. I'd like to remind everyone that today's conference call and webcast may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements words such as estimate project expects anticipate believe service plan. May will or similar words generally identify an Express forward-looking statement. Such forward-looking statements are made based on Management's I believe and assumptions made based on information currently available pursuant to the safe harbor provisions of the private Securities litigation Reform Act of 1995. Yep.
Complete description of these and other risk factors that may affect the future performance of Bio key International. Please see risk factors in the company's annual report filed on form 10-K, and in fact other filings with the Securities and Exchange Commission listeners are cautioned not to place undue Reliance on forward-looking statements, which speak only as of the date hereof, the company undertakes, no obligation to disclose any revisions to forward-looking statements to reflect events or circumstances that occur after today now, I'd like to turn the call over to call Mike. Thank you, Kim and good morning everyone and thank you for joining our call today.
As I begin, I want to thank the entire bio team for their hard work and commitment during a very challenging year.
I want to acknowledge our customers who stepped up to secure their Assets in what has been an unprecedented time in our history speaking on behalf of the entire bio key Glock organization. We have never been more enthusiastic and opportunistic and optimistic about our future as we are today.
Despite the challenges posed by the COVID-19 pandemic 2020 was a transformational year for Bio key and importantly during 2020. We were able to accomplish a major recapitalisation of the company putting us on a very sound financial footing for years to come and we also completed the acquisition and integration of pistol start the developer of portal guard identity and access management solution the purchase substantially enhanced our suite of security ID and authentication Solutions our talent pool a customer base and our addressable market and also provided a very significant contribution to our second-half performance in late 2020. We began a business activity gradually moving towards more normalized levels following COVID-19 related disruptions to our sales and marketing dialogues.
our business benefits from
ITC security challenge is driven by the shift to remote work and studies which obviously grew very rapidly in response to the pandemic as a result We Believe virtual all Enterprises have been irreversibly altered to allow for a broader variety of work program paradigms and the resulting far more complex demands on Security application ID and access management challenges that bio key is uniquely positioned to provide.
Now with the gradual normalization of business activity. We are ramping our sales and marketing initiatives to build and engage with a growing list of customer prospects that may benefit from our biometric and identity and access Management Solutions. We're developing growing interest and engagement for our fortiguard solution across Enterprise markets off and in higher education particularly now that we are able to offer it as a non off-premise solution as well meaning close to hosted in the cloud identity and it's a service solution as we call it. We launched fortiguard Hai Desu in the fourth quarter less than six months after closing the acquisition and it has been very well received in the market as more and more Enterprises are transitioning their it infrastructure to an asset-light Cloud Model that better supports remote users.
We believe this trend has been accelerated by the pandemic impact on work from home and study from Home Trends and having let the genie out of the bottle. It seems that such hybrid work model here to stay creating significant. It security challenges as more users require access to mission-critical data and applications outside the Enterprise firewall.
This channel just complicates cybersecurity for companies of all sizes and across all Industries a recent study by Infosys suggest that it is not just lost revenue or profit off but hundreds of billions of dollars of brand value are at risk from security breaches. Unfortunately prominent security breaches like solarwinds continue to occupy headlines, but these terrible events do serve to keep it security risks top-of-mind and it led the high-profile endorsements that value Solutions cars can provide.
In the wake of the solar winds breach the cyber security and infrastructure Security Agency saw a commended the use of multi-factor authentication strategies essentially every wage separately FBI Private Industry notifications and advisory alerts suggest incorporating a biometric into multi-factor authentication strategies Microsoft also continues to use growing password less as a central theme for their Enterprise messaging including Alternatives such as Biometrics and fight off in practice many used mobile phones as buy tokens, but last year the fight or Alliance recommended providing users with multiple Fido token options. Do we think this posture built on the value proposition as portal Garden hour, dates vital to tokens amongst a total of over fifteen different authentication factors month.
We're also looking at other factors, too.
Add to our already robust platform in the coming year that will be easily integrated and provide the broadest possible Universe of customer application a limitation capability one constant that continues to differentiate bio-key in the market is our core strength in Biometrics. We have unique capabilities as the said by Metric management system for Enterprise or school system and our technology is scalable to any size i d platform such as those required in Mobile communication networks, Choi Bank networks and even enormous National or civil ID programs.
To that end by Okie has established a beachhead in some very large projects in Africa and we are pursuing other opportunities across the continent both direct as well as through our Channel partner program. We just recently initiated commercial Hardware deployments in support of our large contracts in Nigeria. Where where by we purchased a fingerprint reader Hardware to support by Metric enrollment as a result of range of factors outside of our control primarily related to the pandemic and some project in Nigeria. These initiatives were delayed in 2020, but are now moving into gear and we expect activity to grow in future periods these projects represent what can have significant upside to our Revenue plan in 2021 and Beyond
We entered 2021 with a very strong balance sheet and cash position that positions us to execute on our growth strategies and fully tap the sales potential of our back-end team enhanced product portfolio and growing partner. The customer relationships are sound financial position also serves as well when dealing with large Enterprise and government customer prospects in Partners regarding our ability to support them over the long term.
Financial strength also allows us to make prudent investments in our business including potential tuck-in Acquisitions new product development as well as sales and marketing resources and initiatives ICC will review shortly rq-4 and fiscal twenty-twenty top-line results showed year-over-year improvements and we expect these positive Trends to accelerate in 2021 supported by a pipeline of opportunities recurring Revenue contract backlog and strong outlook for our solution based on a global basis with particular emphasis in North America, Africa and Asia for the full year 2021. We anticipate revenues of eight to twelve billion dollars with potential upside primarily related to our Africa business as well as some other opportunities.
the midpoint of this
Would represent more than 250% growth over fiscal 2020 revenue and approximately 150% growth over the four million dollar annualized Revenue run rate based on our 20 20 second-half performance, which benefited from the portal guard acquisition. Let me now turn the call over to Fred corsentino r a m e r o to highlight a few key developments and opportunities that we see in our business Fred. Thank you Mike. I'd like to highlight a few areas that underscore Jake ISM for the business. First off is Mike mentioned. We launched our software-as-a-service model for the portal guard business to build on our on premises Solutions and position by okija dissipate in the trend towards acid light or cloud-based it infrastructure Solutions a porter guard identity as a service platform or ideas as we call it includes a higher wage.
Scalable framework hosted within an AWS Cloud infrastructure that can integrate with our customers other cloud-hosted data and solutions this new paradigm provides a range of benefits to all parties including a scalable procurement experience with a far lower upfront cost for the customer while providing a stable and far more predictable recurring software update your screen for bio-key versus variable or episode license sales. Our teams are very focused and building traction for our Cloud Solutions and building a growing base off of annual recurring software Revenue. I mentioned on our last call that we have we have integrated our sales and marketing functions around three primary verticals education with financial services and government within the higher-ed vertical. One of our priorities is to Target larger institutions, given our recognition in the market are significant in South
Customer base and the value we provide we will continue to strengthen our position in the education segment.
As discussed in today's release we are very excited about bio Keys Channel Alliance program, which we consider to be a key Force multiplier in our go-to-market. If it's as a result, we are focusing a significant portion of our time on this program working to steadily build and support our base or productive Partnerships the cap program expands out paths to Market by leveraging partner contacts market knowledge and sales reach to new customers where our Technology Solutions are a great fit. We have more than 50 partners and I'm confident that we can more than double that base in the coming months and continue to grow the channel on a global basis. We are fast becoming a channel sent your company and expect Revenue to grow significantly in the short and long-term.
We also developing programs to support each of our partners and have Incorporated.
Direct assist program to help them close deals.
As for ongoing Investments to me now technology leadership, we recently completed development of Bio Keys core Vector segment technology or VST, which provides intelligent device driver may be a cloud delivery and our new web key platform to leverage VST for manage store for installation and updates providing better performance and a better user experience.
Fortiguard 6.5 which was released in q1 and the number of new cloud and mobile capabilities. For example, it supports Microsoft Azure active directory as a primary real-time directory in the cloud. Thereby eliminating the need for on-premise active directory and providing a stronger Cloud only option in terms of Market directions home. We think that mobile ID including four payments as well as work from home and study from home are enduring trench that also paid very significant. It challenges related to security badge ID authentication and access management. We also believe that by Okie with its core biometric Technologies is uniquely positioned to solve these and all challenges that today's organizations face. We're making progress on revenue and on recurring Revenue growth as seen in our Q4 results and as Mike mentioned in his remarks,
Google exceeds 100% for 2021 with that I'll pass the call over to see so you for A Brief Review of our financial results CC.
Thank you Fred by Okies Q4 Revenue double to 1.1 million from 535019 mainly due to the revenue contribution related to Puerto guard which was acquired as of June 30th 2020 revenues for 2020 increased 25% to 2.8 million from 2.3 million in fiscal 2019 with the increased due largely to the acquisition which more than offset, the impact of IT project delays and disruptions related to the pandemic the commercially Revenue increased $120,000 in Q4. Went from 943000 to 3:20 with Q3 and Q4 being the first two quarters.
He would include part of art gross margin improved to 71% in Q4 and 72 for the full year from negative levels in the prior years. Neither of which is the comparable do to non-cash and non-operating charges and 2019. That did not recur in 2020.
Excluding the prior-year one-time impairment charge of seven million dollars for operating lost improved 34% to 1.4 million from a loss of two point two million into for 19 likewise for the full year twenty-twenty operating loss improved 21% to 5.2 million from 6.6 million in 2,019. Also, excluding the prior-year impairment on the bottom line by Okee reported a net loss to stockholders of 1.4 million or 18 cents a share. Thank you for calling compared to a net loss of 9.5 or $5.29 per share and few for $19.
For the full year twenty-twenty then.
Net loss was 9.8 million or $2.08 per share versus the 14.6 million or $8.21 a share in 2019 off the one-time impairment charge and 20/20 net loss included 4.2 million of interest expense plus half a million costs related to the extinguishment of debt partially offset the game of a $341,000 for the paycheck protection proceeds loan, which has been fully forgiven following the recapitalisation net interest expense was reduced to less than 16,000 in Q4 as compared to 390 6219.
As mentioned be recapitalized the company in July via underwriting of the common stock and warrants and we paid off prior indebtedness. There was $232,000 note payable related to age Crystal star portal guard acquisition at the end of the year and we had more than 19 million of current assets including about Seventeen million of cash and cash equivalents or $2.17 per common share with that. We can now turn the call back to the operator for investor questions.
Operator now again the question and answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the key to withdraw your question, please press * then two.
Our first question today comes from Jack Vander with Maxim group.
Great. Good morning. Hi Michael. Fred & CeCe. Thanks for taking my questions. Let's let's start with a question on on the revenue guidance for 20 28 between 8 to 12 million, which is encouraging this exceeded my expectation certainly, so can you provide maybe some more color at the drivers of this page Avenue guidance? Uh, Michael maybe how much from in if you can't break out things. That's that's okay. But whatever you can maybe share roughly as a breakout of portal Garb or dead and if there's any Africa contract Revenue contribution in embedded in their that'd be helpful.
Thank you, Jack and good morning. I appreciate the question. I think I can share some color on the revenue guidance certainly eight to twelve million. We are attempting to be conservative as we mentioned in our press release and I mentioned in our prepared comments. We see there's also significant upside on the app or site as you know, the contracts are significant. They've been delayed now nearly a year. So remember we had expected to begin generating Revenue in the second half of 2020 that has slipped. We've now begun to deploy technology, but everything is is certainly behind, you know, approximately three-quarters to a year so long there is significant upside in that guidance range. If in fact the African business accelerates more significantly, so we do have some job
Revenue
Associated with the African business in that guidance range, but the the bulk and the base for that range is our Core Business which is both mentally our Biometrics and our identity and access management fortiguard solution right now. So that's that's the way we're looking at it at this point in time.
Got it. That's helpful. I appreciate the color there and then just maybe between the I don't know maybe the lines are getting blurred. Now that portal guards been integrated for for quite some time now, but is there anything you can you can share in terms of maybe the growth the revenue growth rates? You're You're Expecting for 20 21 between the core biopsy Biometrics business. And then and then Portico would you expect them to grow at a similar Pace or is there is one going to outpace the other as far as 2021 goes, you know, it's an interesting question because there's an integration of the the metric technology that's also in the portal guard solution. Right? So, you know fundamentally they're going to grow together for sure, but we are expecting to see significant growth in our identity and access management are portal guard platform and remember in my prepared comments. And as you have heard us say before we support over
Being authentication factors. So Biometrics is only one of those factors right? There are fourteen others that we support pins tokens cards Keys, you know all those things. If I do. So, you know, we we we will see both of those businesses grow as we proceed through the year, but they'll also grow together because some customers will opt out of Biometrics and some won't but it doesn't matter. We love all our children and we're going to support all those authentication factors and support our customers in whatever they require.
Fantastic, love all the children got it. It sounds like the children are growing and that's great to hear and then just maybe maybe as long I'm going to have to more kind of questions as relates to the first quarter. Um, so you did mention this 500k Revenue expectations for the first quarter from from the Africa contract with Nigeria. You're already commencing the delivery the first shipment if I just back up from that just in general for total revenue and the first quarter just given seasonality if if there's any other factors, do you expect the first quarter Revenue to be flat up or down from fourth quarter, or is it too hard to tell? Well, I, you know, we don't provide quarterly. God says, you know, we're providing annual guidance because we don't feel yet. We're we're able to be predictable and not to to do that. We really want to make sure again where as accurate as possible.
as we come into twenty Twenty-One, I will say this about the the the quarter we
Announced earlier this week that we would generate approximately half a million dollars from our Africa contract. And you know, if you look at our run rate business office, it's pretty clear that you will that we will see sequential growth from Q4 of twenty-twenty into q1 of 20 21 know where we'll end up we'll see but but we're certainly believing they'll be significant potential and opportunity for sequential growth from Q4 to q1.
Okay, got you. And then if I may ask as well just because it's it is March 25th. There's only you know a few days left in this quarter how what's your confidence level or certainty of of receiving that 500k payment or at least recognizing that primary care of revenue for the first quarter is is there a risk that a portion of it or all of it slips into the the second quarter right now? It's it's hi.
Okay, fantastic, and then maybe just like what's your what's your overall sentiment your current sentiment or feeling of just regarding the status of Nigeria and Africa as a whole is there a clear positive trend that you can point to or any visibility just in terms of like the reopening of their economy and and the country altogether?
Well, you know the economy is open the country has been open, but but certainly been stumbling, you know, their economy is solely based not solely but mainly based around oil and oil has recovered. Although it's been episode all in the context of price. So, you know that's been challenging for them. But I will say this about our projects and our programs there. There is an edict on the streets supported by the World Bank funded by the World Bank to the tune of 480 or so million dollars almost a half a half a billion dollars to put in place and identity management solution that can help create an ecosystem for Prestige in in Nigeria. So right now the edict is in place to enroll every citizen in dead.
And provide them what's called a Nigerian identity management number or a name number? That number is akin to our social security number here in the US wage if in fact individuals are not enrolled and do not get that number. They will have a very difficult time participating and everything that the country offers including on the commercial side having a cell phone because their SIM card is going to be tied to the name number any of the social services programs that the country provides welfare based Healthcare, all of those things. They will not be able to participate partake in those services without a name number. So there's a lot of pressure right now to get this done. It's been the wait but everything that we're seeing leads to and you can look at Birth.
the
You can Google Nigeria and them and registrations and enrollment. It's not going exactly smoothly for them, but it's moving and it's going to move very aggressively. So I feel encouraged right now that 2021 will be a breakout year there for us and we're not relying just solely on Nigeria. So you're going to see other things coming from us in other countries and with other partners that can expand our opportunity base including selling portal guard across those territories. You know, Kenya is emerging as a high-tech hub spot not only in Africa, but but in that whole sector of the world and so there's plenty of tech opportunity there for grown and upside potential. So yeah, we're we're pretty encouraged right now about the the potential in the opportunity.
Fantastic. Okay, excellent. And then just maybe one one more question, maybe two more questions for me. You know, Michael you talked about your strong backlog and Thursday. You said pipeline as well in the prepared remarks. Are you able to quantify anything with regards to the backlog or pipeline? Or maybe you want to keep that undisclosed for now, but is there any way any comments you or additional color? You can provide with regard to the backlog and pipeline. Yeah, we don't we don't have the numbers now to share but I can say it's growing and and it it's some of it is took the opportunity and potential we have in Africa but a significant part of it as well is within our court business in Biometrics and portal guard and also with our cap program. I think Fred in his prepared comments made it clear that a force multiplier for us is the expansion of our Channel lines program. So getting more and more feet on the street dead.
Through this partner Network to sell our Solutions. And now that we have an eye desk. We have a cloud-based solution available msps page a service providers mssp managed service security providers love selling the cloud solution because it doesn't require a lot of on-premise installation and support so that's going to be a a big significant part of our growth as well going forward.
Okay, great. And then just one final question, you know, the Biometrics capability you cited Remains, the core differentiator of first competitors are other solutions that are out of space. So maybe either either Michael or Fred. Can you maybe just talk about what what you're seeing in the marketplace when negotiating, um new potential contract wins or customer wins wage. Are there any competitors you're consistently seeing at the at the deal table or the bay coughs and how are your your win rates kind of tracking or trending?
I think I'll let Fred handle that.
Yeah, Jack. So Biometrics is definitely a differentiated and we're we're seeing the most traction right now is with our cat partner growth. So we offer something very different and not that they know and understand the certain markets customers are are require. So that's where we've seen the most tractor right now as it relates to competitors, you know there there's always the typical competitive landscape. So there's no one particular competitive that it stands out and what it comes to Al Biometrics unparalleled. We we certainly have the best solution bring it into the port of our classroom.
Okay. Fantastic. Well guys, I appreciate the added color and congrats on the trunk finish the year and wish you the best of luck in 2021. That's it for me. Thank you Jack.
And again, if you do have a question, please press star and then 1 to join our queue. Our next question comes from Dan a private investor. I'm done. I'm getting at least initial or John on Nigeria stuff. But I was wondering was there any movement on the Telecom deal that you can tell us about?
You talking about the African deal then or yes domestic similar nature. Everything is starting off together and so took both of our contracts are moving forward.
So does that guidance that you gave us include revenues from both those Nigerian deals as I described before we've taken a conservative approach em, I won't repeat myself again. But we've taken a conservative approach there is certainly Revenue in the guidance from Africa, but but at a minimal level
All right so much talked about in the news about chip shortages. Do you have the hardware inventory necessary to or it can you manufacture it or get it to ramp the way you'd like to if the if the revenues do come in? Well, that's a great question. You know, it's interesting. We were a little bit limited in our ability to Supply Hardware this first quarter because of some chip shortages from some of our suppliers. So that was a bit of a challenge but we are now very well prepared to be able to deliver products in the coming quarters. And so we we've arranged with our suppliers to be sure that we can do that song again. We don't like getting too far ahead of ourselves. Remember that we operate on a cash basis in in the third world. And so it's a balancing act but we're off.
pretty confident that
We can satisfy the the demand for the next three quarters.
Okay, and and are you still manufacturing the product in China? Are they ramped up or?
Yeah, yes. The answer is yes, and we are now in a in a normalized state right now. So we're we're back to we're back to where we need to be off and that includes manufacturing products like our side swipe site touch equal those products are are now fully available and our manufacturing lines are back open in full swing. That's great. What do you expect your break-even number going forward to be? I think it was about 1.8 oil change or is that still a good number? Yeah, we we think based on the mix and so it really depends on the mix. But but we're we're looking at now about two to two point two million.
I see so that that's because of lower margins on the hardware might be something more harder at that it you know, not necessarily we've we've made Investments as you know, we've we've expanded our staff we've you know, certainly opened our African subsidiary. So there's some upfront cost and expense that we're experiencing right now. Some of it again is mixed right the margins on Hardware if it's our Hardware or one thing if it's third-party Hardware there a little bit lower. So it takes all of that into consideration.
I see so then have you begun hiring staff for the African office? I know you hadn't done that yet, except for no. No, we're we're right now on the customer. So, you know as things are opening and we see the need and we'll have a requirement for support and so forth. We will do that but we have not made any significant investment in staff in Africa as of this point today. And what would you consider a fully staffed African office? If if you could make that kind of a I I can't even imagine it really depends on the ramp how fast and how significant you know, those contracts have you know, how to face value of approximately 75 million dollars. And so if they ramp more quickly moved more aggressively and our other business continues to expand for example with our partner Network and the salad portal Garg
Across the territory gets more significant. There may be more staff required. But right now I couldn't answer that question. Okay. May I ask a couple of questions on poor regard that I'll get back in the queue.
Are you seeing any pork sales where the customer is also interested in buys the biometric component? Absolutely.
Okay, I be charged extra for the biometric capability or is that just built into poor guard now the that's that's a good question. The answer is it's an authentication Factor within portal guard. There is an upsell for the hardware right that's required to if it's finger scanners to support the solution in the system and you know it it it's it's part and parcel of our offering today and it needs to be part and parcel of our offering.
Okay. Thanks. I'll get back to you.
And again, if you have any further questions, please press star and then one at this time.
It looks like our next question will be a follow-up from Dantanna's private investor. I just got a couple more here.
What was the sg&a in the fourth quarter? Do you have that broken out?
Si si.
As far as I mean what what the sound cost the general administrative marketing et cetera? Yeah. I don't walk in front of me. But the total the one point seven million I'm going to say that there was probably four hundred and selling maybe 500 in the marketing and the rest in sg&a in DNA. Okay, just off the top of my head. All right. Thank you. And what were the one time charge is the one-time charges must have been down the fourth quarter. I'm wondering how how big they were.
Yes, we have paid paid the debt off in the third quarter. So on the press release we put out the one-time like interest charges et cetera are down in our non-cash charges were down as well for compensation expenses, et cetera.
Okay, and I noticed that the the cash flow was down 1.4 million is that because revenues counted in the quarter weren't collected until a quarter.
We actually did have a a larger shipment at the tail end of the quarter versus the beginning.
Okay.
What was the accounts receivable and deferred revenue?
What was the deferred revenue and the answers you have?
I guess I can wait for the cue but I just thought you might have the numbers. Yeah. No, I I have a total deferred revenue at the end of the year was we had long-term and short-term short-term or car with them and non-current so we had a total of almost 700,000 therefore deferred.
and
Accounts receivable is 5:48.
Okay. Got it. Last question from Mike price is about back where you made purchase the fourth quarter. Are you looking to add more shares if you don't want to answer? That's okay. I'm just asking yeah, probably.
Okay. Okay. That's all I got. Thank you. Thank you, Dan.
And again to join our queue simply, press star and then one.
Our next question will come from a shock meta a private investor.
Yes. Hi. Thank you for taking my question. I have a couple of questions just on the African contracts the two that you want them, you know the value, uh is $75 billion the contract I just wanted to understand. I think the when the contracts were one we it was supposed to be over a 2-year period that the contracts would be performed and you know, I understand about the delay. And so and so if we reset them, you know, let's say it's starting out kind of around now in terms of the first quarter is the company expecting that we're going to be learning, you know, approximately 75 million in revenues over the coming two years. Is that a reasonable assumption? I just wanted to understand assuming that these contracts, uh, get executed, you know, according to wage.
How they were one. So that was my first question is in terms of eventual revenue from these and and kind of the timeline that we expect. I know the ramp up as a little bit um off waiting to be firmed and so on but I just wanted to clarify that
great question and the answer is yes. Our expectation is now on a two-year basis that the potential for those contracts has continues May believe continues to be seventy-five million dollars. So we expected the ramp to be a gradual ramp and then to to hit full swing a couple of quarters off after the start. So that's still Our intention in our plan again, as I mentioned a number of times in my prepared remarks and also in the Q&A, you know, we're being very conservative about our guidance because it is unpredictable. We've seen again the delays everything that we're seeing indicates that things are going to start up and our goal and objective is to is to hit that $75 million over the next 24 months.
And then if I can ask in terms of you know, sort of mix on in terms of Hardware or software in terms of that rug you level uh over the over the life some of the contract as well as kind of what kind of bottom line kind of ugh impacts. Can we expect you know, if these are performed according to plan well for sure in the beginning as we've mentioned a number of times in the past year, there's a lot of Hardware up front to be able to facilitate the entire ecosystem identity management and authentication ecosystem. So there's a lot of Hardware up front as you age. So on our announcement this week. In fact, the first shipment is finger scanners to support the enrollment for individuals across the club.
So that's good.
To be a big part of it and obviously the margins on Hardware are not like the margins on software. So our software margins, especially in Puerto guard or Biometrics could be upwards of you know, eighty 90% off. We're obviously ranges depending upon Hardware that we manufacture or third party and you know that can be anywhere from 20% to two fifty or sixty so, um, it's a wide range, but for sure we wouldn't do it if it wasn't profitable and so on the significant numbers that we could be talking about here, you know, the large number that we think it'll have a a very positive impact to the bottom line as we move forward.
Right, okay.
The other question that I had was just in terms of the other opportunity. Do you actually mentioned that your I think looking at other opportunities in Africa?
So I think just the general question is this a lot of things that she'll a lot of potential kind of opportunities that were talking about just in terms of volume of our fees and so on that you might be going after or um, and is the size of some of these like similar to a potentially the the size of some of these other ones that you made that you won last year.
Well, there's some of that and there's also what I would consider our standard business. So for example selling portal gardas, I mentioned before across perhaps banking finance and home care or in manufacturing. So selling our core product for identity management is doing authentication to the commercial and government agency topology in Africa. We're doing the same in Asia. We're going to start ramping up there again outside of China, of course, but in Japan and Singapore, we're going to be selling portal guard and portal guard like Solutions including our Biometrics across that landscape and so that's not episode old. That's more money. You know, again, it's more mainstream and it's more of what we do similar in nature to what we do here in North America and in Europe, so that's our goal and objective. So to build that base business as wage,
So not not just the you know, the event based business but the recurring kind of our type business that we're building here in the in the u.s. To build that across.
Okay.
Okay. Yeah, that's that's all I have. Thank you very much for for taking my question. Thank you for the for the questions. Thank you.
Our next question comes from David flooring private investor.
Good morning.
Morning, David. I'm a long-time investor going way back to when Tom see was with passage and I'm just curious off with how you guys announced your contracts. Why don't you ever put a dollar value? Even for some of the smaller ones and if it's not worth putting a dollar value on there what good is it off the announcement of the contract?
That's a great question. I get that question probably ten times a year from from investors in and other interested parties the challenge that we had in general and this is really gotten gotten it's ramped up for us over the last twenty-four months or so the customers we deal with use our technology to secure their infrastructures, and they do not like
Their competitors or hackers or anyone else?
To know number one what they're using and what they're doing. And so we have a very difficult time forget the dollar value. We have a very difficult time sometimes naming our customer in and when we do sometimes we take a risk we we there's a backlash let's let's put it this way it happens. And so we have to be very cautious number one in naming who were doing business with but so we're very cautious about that. So that that's the simple answer and those are the facts.
This will conclude our question-and-answer session. I'd like to turn the call back over to Mike for any closing remarks.
Thank you everyone, and I appreciate the time that you took today to participate in our call. We look forward to updating you on our first quarter call in late April or early May and we will continue to provide interim news and updates as warranted. Thank you very much and have a great day.
The conference has now concluded thank you for attending today's presentation. You may now disconnect.
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