Q1 2022 BIO-Key International Inc Earnings Call

Good morning, ladies and gentlemen, thank you for standing by and welcome to Bio key Internationals first quarter 2022 conference call during.

Good morning ladies and gentlemen. Thank you for standing by and welcome to BioKey International's first quarter 2022 conference.

during management's prepared remarks. All participants will be in a listen only.

During managements prepared remarks, all participants will be in a listen only mode.

Afterwards, listeners will be invited to participate in a question and answer session.

Afterwards listeners will be invited to participate in a question and answer session.

As a reminder, this conference is being recorded today, Monday May 16th, 2021.

As a reminder, this conference is being recorded today Monday may 16th 2022.

I would now like to turn the call over to Kimberly Biddings, BioKeys Vice President of Product. Welcome everybody this is Kimberly B sp sons and sisters

I'd now like to turn the call over to Kimberley bidding some bio Keyes Vice president of product. Please proceed.

Thank you, and thank you for joining our call this morning. With me today are BioKeys chairman and CEO , Mike Zappasquale and our CFO , Cece Wells.

Thank you and thank you for joining our call. This morning with me today are <unk>, chairman and CEO , Mike <unk>, and our CFO he'd be well.

I'll remind everyone that today's conference call and webcast 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.

I'll remind everyone that todays conference call and webcast contain forward looking statements.

And 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, expect, anticipate, believe, think, plan, may, will, or similar words typically identify and express forward-looking statements.

Words, such as estimate project expect anticipate believe.

Plan may will or similar words, typically identify unexpressed forward looking statements.

Such forward looking statements are made based on management's beliefs and assumptions using information currently available pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Such forward-looking statements are made based on management's beliefs and assumptions using information currently available pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

For a complete description of these and other risk factors that may affect the future performance of BioKey, please see risk factors in the company's annual report filed on Form 10K with the Securities and Exchange Commission.

For a complete description of these and other risk factors that may affect the future performance of Iot. Please.

Please see risk factors in the company's annual report filed on Form 10-K, with the Securities and Exchange Commission.

Listeners are cautioned not to place undue reliance on forward-looking statements, which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to such forward-looking statements to reflect future events or circumstances that occur after today. With that, I will turn the call over to Mike Davis-Guel.

Listeners are cautioned not to place undue reliance on forward looking statements, which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to such forward looking statements to reflect future events or circumstances that occur after today with that I will turn the call over to Mike Davis.

Uh huh.

Thanks, Kim. Thanks, Kim. Good morning, and thank you for joining our call today. After my remarks this morning, I will turn the call back to Kim to review some of our marketing and sales initiatives.

No. Thanks, Ken Thanks Kim.

Good morning, and thank you for joining our call today.

After my remarks. This morning, I will turn the call back to Kim to review some of our marketing and sales initiatives.

CC will provide financial highlights for the quarter, and then we'll open the call for your questions.

<unk> will provide financial highlights for the quarter and then we'll open the call for your questions.

BioKeys licensed revenue rose 205% over Q1-21 and 267%

<unk> license revenue rose, 205% over Q1 21.

And 267% from Q4.

Our performance reflected continued growth in our installed base of customers, as well as an initial contribution from Swivel Secure, which we acquired in March 2022.

Our performance reflected continued growth in our installed base of customers as well as an initial contribution from swivel secure which we acquired in March 2022.

Our gross profit margin rose to 82.6% in the quarter, up from 59.4% in Q1-21.

Our gross profit margin rose to 82, 6% in the quarter up from 59, 4% in Q1 'twenty one.

Reflecting the year-over-year increase in our annual recurring revenue, or ARR, from software license.

Reflecting a year over year increase in our annual recurring revenue or a R. R from software licenses, which is a core focus and value driver for biotech.

which is a core focus and value driver for bio.

Beginning in Q2, our consolidated results will reflect the full quarterly benefit from the addition of Swivel Secure, which generated $3.1 million of revenue in calendar 2021.

Beginning in Q2, our consolidated results will reflect the full quarterly benefit from the addition of swivel secure which generated $3 1 million of revenue in calendar 2021.

We are still working on the acquisition accounting entries for the balance sheet. So you will see a notice from us later today that we will file our 10-K a little bit later.

We are still working on the acquisition accounting entries for the balance sheet. So you will see a notice from US later today that we will file our 10-K, a little bit later this week.

The acquisition.

The acquisition, I'm sorry, 10-Q later this...

I'm sorry, 10-Q later this week.

The acquisition will make an important contribution to our 2022 performance.

Acquisition will make an important contribution to our 2022 performance.

as it significantly expands our international team, our operations, our customer base, and our growth...

As it significantly expands our international team our operations, our customer base and our growth potential.

We are still in the early stages of integration process and will provide updates on this effort in future periods.

We are still in the early stages of integration process and we will provide updates on this effort in future periods.

We continue to advance our core identity and access management business both through inside sales efforts as well as with our growing channel alliance program. That as we call it now accounts for approximately 50% of new sales.

We continue to advance our core identity and access management business, both through inside sales efforts as well as with our growing channel Alliance program cap as we call. It now accounts for approximately 50% of new sales.

Our Port-A-Guard solution continues to gain momentum within county and municipal government agencies, higher education institutions, and other

Our portal guard solution continues to gain momentum within county, and municipal government agencies, higher education institutions and businesses and enterprises as well.

Photoguard resonates as a high value, easy to deploy solution that addresses the hybrid requirements of distributed network and cloud access caused by growing work and study from anywhere.

Total guard resonates as a high value easy to deploy solution that addresses the hybrid requirements of distributed network and cloud access caused by growing work and study from anywhere demands cut.

customers are increasingly recognizing portal guards flexibility and differentiated authentication capability

Customers are increasingly recognizing portal guards flexibility and differentiated authentication capabilities, including support for 16 different multi factor authentication methods.

including support for 16 different multi-factor authentication.

Importantly, we're seeing growing appreciation and adoption of our solutions because of BioKey's industry-leading, identity-bound biometric case.

Portly, we're seeing growing appreciation and adoption of our solutions because of <unk> industry, leading identity bound biometric capabilities.

Recent customer wins include local governments in Missouri, New Mexico, New York, South Dakota and Texas.

Recent customer wins include local governments in Missouri, New Mexico, New York, South Dakota, and Texas.

that selected Portal Guard for secure and compliant access to their mission critical.

That's selected portal guard for secure and compliant access to their mission critical systems.

Although each situation is unique, generally speaking, counties and other local government entities

Although each situation is unique generally speaking counties and other local government entities are choosing Porto guard to provide strong multifactor authentication access management and compliance for their cyber security insurance needs.

are choosing PortalGuard to provide strong multi-factor authentication, access management, and compliance for their cybersecurity insurance.

As interest in identity-bound biometrics grows, we are increasingly able to also provide our hardware solutions.

As interest in identity bound biometrics grows we're increasingly able to also provide our hardware solutions such as our fingerprint readers to enable the enhanced security and convenience of identity bound biometrics.

to enable the enhanced security and convenience of identity bound by a man.

In higher education, we added, Illinois, North Central College in the first quarter building on our identity as a service or I best footprint, which now serves two and a half million users, including students faculty and staff across 12 states.

In higher education, we added Illinois North Central College in the first quarter, building on our Identity as a Service, or IDAS, footprint, which now serves 2.5 million users, including students, faculty, and staff across 12 states.

Our most recent challenge Channel Alliance program progress was the addition of a leading edge value added distributor three <unk> technologies as a new partner.

Our most recent Channel Alliance program progress was the addition of a leading edge value added distributor 3i Technologies as a new part.

This partnership will expose an even larger base of customer prospects to biotech solutions with particular emphasis on their complementary strengths in financial services and with local government seeking enhanced I E on security solutions.

This partnership will expose an even larger base of customer prospects to BioKey solutions with particular emphasis on their complementary strengths in financial services and with local governments seeking enhanced IAM security.

We're currently developing joint marketing programs in collaboration with REI Technologies and plan to go live on these initiatives in the next several.

We're currently developing joint marketing programs in collaboration with three I technologies and plan to go live on these initiatives in the next several weeks.

We're also building on our relationship with Intel assist with whom we have a master agent referral relationships and they're distributed network.

We're also building on our relationship with Intellisys, with whom we have a master agent referral relationships.

Portal Guard is the first and only IAM platform that has been offered within their extensive network.

Portal guide is the first and only iam platform that has been offered within their extensive network and.

And already we are seeing solid conversion of prospects in their network into portal guard users.

Already we are seeing solid conversion of prospects in their network into portal guard users.

We have a number of joint events and marketing programs underway and planned for 2022.

We have a number of joint events and marketing programs underway and planned for 2022.

During Q1 2022, we began hardware deployments for our Nigeria National Identity Management Commission's National ID Enrollment Program in partnership with Sterling Bank's Nigeria's SPECTA online lending program.

During Q1 'twenty to 'twenty, two we began hardware deployments for our Nigeria National identity management commissions National IV enrollment program.

In partnership with Sterling Banks, Nigeria spectra online lending program.

The deployments are with BioT's Pocket 10 device, which provides mobile biometric enrollment to support increased adoption and use of the national identity number in mobile banking and payments across the country.

Appointments or with bio <unk> pocket 10 device, which provides mobile biometric enrollment to support increased adoption and use of the national identity number and mobile banking and payments across the country.

We expect to ramp shipments of our products as well as transactional software in the coming months.

We expect to ramp shipments of our products as well as transactional software in the coming months.

At BioKey, we continue to invest in innovation and product development, including new products, enhancements, and updates.

At <unk>, we continue to invest in innovation and product development, including new products enhancements and updates.

One example is the recent launch of important enhancements and updates to our mobile office.

One example is the recent launch of important enhancements and updates to our mobile <unk> solution.

MobileAuth is currently the only multi-factor authentication mobile app that integrates the power of identity-bound biometrics with other authentication modalities.

Mobile what is currently the only multi factor authentication mobile app that integrates the power of identity bound biometrics with other authentication modalities, allowing customers to build a more complete mfa's strategy.

allowing customers to build a more complete MFA strategy.

These methods include palm scanning with our palm positive solution.

These methods include palm scanning with our palm positive solution and facial recognition with our face positive.

Facial recognition with our base positive solution empowering mobile devices with biometric authentication methods integrated with our portal guard solution.

Empowering mobile devices with biometrical authentication methods integrated with our portal guards.

MobileAuth also supports device-based biometric authentication methods, including Apple Face ID, and Touch ID and Android Biometrics, as well as support for push token authentication.

Mobile also supports device based biometric authentication methods, including Apple face site D and touch I D and Android biometrics as well as support for push token authentication visa.

These enhancements make mobile app more powerful and even easier for customers to deploy to meet their increasing authentication and security requirements.

These enhancements make MobileAuth more powerful and even easier for customers to deploy to meet their increasing authentication and security requirements.

I also want to touch on the great work the BioKey team has done to build visibility and credibility for our company.

I also want to touch on the great work. The biotech team has done to build visibility and credibility for our company and solutions.

Our team continue to build on our base of IT industry awards and recognition, including four recent 2022 Cybersecurity Excellence Award.

Our team continued to build on our base of industry Awards and recognition, including more recent 2022 Cyber Security Excellence Awards, a security today magazine 2022, Guppies or government Security Award.

a Security Today magazine 2022 Govies or Government Security Award, and our own Kim Biddings was named for the second year in a row to Computer Resellers News Woman of the Channel Power 100.

And our own Kim Biddings was named for the second year in a row to computer reseller news woman of the channel power 100 list visa.

These industry accolades are very important in building our reputation with prospective partners and customers on a global basis.

These industry accolades are very important in building our reputation with prospective partners and customers on our

Looking forward, we see an expanding worldwide opportunity to grow our software license revenue base, driven by compelling security scalability ease of use and deployment and the strong customer value proposition of our portal guard iam platform.

Looking forward, we see an expanding worldwide opportunity to grow our software license revenue

driven by compelling security, scalability, ease of use, and deployment, and the strong customer value proposition of our PortalGuard IAM platform, along with an expanding array.

Along with an expanding array of security solutions.

We continue to look for value enhancing M&A opportunities as we have with portal guard and swivel secure Europe in order to expand our solution set customer base and sales and marketing reach always with an eye to creating greater value for our shareholders.

We continue to look for value enhancing M&A opportunities, as we have with PortalGuard and Swivel Secure Europe , in order to expand our solution set, customer base, and sales and marketing.

always with an eye to creating greater value for our shareholders.

There was a clear and growing global need for enterprises of all kinds to protect their data and systems with stronger cyber security solutions.

There is a clear and growing global need for enterprises of all kinds to protect their data and systems with stronger cybersecurity solutions.

<unk> has built a strong base of products services and partnerships to address this substantial opportunity.

BioKey has built a strong base of products, services, and partnerships to address this substantial opportunity.

Given the building momentum in our business, complemented with the addition of swivel secure Europe and further progress advancing our opportune reason after.

Given the building momentum in our business complemented with the addition of swivel secure Europe and further progress advancing our opportunities in Africa. We are reiterating our full year 2022 revenue guidance of $10 million to $13 million approximately 70%.

We are reiterating our full year 2022 revenue guidance of $10 to $13 million.

approximately 70% of which relates to contracted recurring software license revenue.

Of which relates to contracted recurring software license revenue.

Our revenue guidance represents growth of approximately 100% or more over 2021, primarily from growth in software license and complemented by hardware and services revenue that are generally tied to specific projects.

Our revenue guidance represents growth of approximately a 100% or more over 2021, primarily from growth in software license and complemented by hardware and services revenue that are generally tied to specific projects.

Our growth outlook is supported by our strong capital position, our talented global management group and product development.

Our growth outlook is supported by our strong capital position, our talented global management group and product development teams and our expanded global sales marketing and channel partner footprint.

and our expanded global sales, marketing, and channel partner footp-

We believe BioKey is positioned to reach breakeven profitability and free cash flow at the lower end of the range, subject to our mix of software and hardware revenue.

We believe <unk> is positioned to reach breakeven profitability and free cash flow at the lower end of the range subject to our mix of software and hardware revenues.

As we execute on our growth strategy, we believe the market will come to recognize and hopefully reward our progress.

As we execute on our growth strategy, we believe the market will come to recognize and hopefully reward our progress.

We are focused on building on our positive momentum for the balance of this year. With that, I'll...

We are focused on building on our positive momentum for the balance of this year.

With that I'll turn the call back to Kim.

Great, thank you, Mike. As Mike touched on, and to remind those who may be new to our company, our award-winning portal guard IAM solution provides secure and efficient identity and access management for applications on an enterprise-wide basis.

Great. Thank you, Mike as Mike touched on and to remind those who may be new to our company. Our award winning portal Guard I am solution provide secure and efficient identity and access management for application on an enterprise wide basis.

Our cloud solution addresses significant IT security challenges, including those posed by remote work or study, while also supporting a broad range of authentication factors. Our new and improved MobileAuth is the only multi-factor authentication mobile app to integrate strong Identity Bound Biometrics, or IBB, with other authentication modalities.

Our cloud solution addresses significant IP security challenges, including those posed by remote work or study while also supporting a broad range of authentication factors are new and improved mobile app is.

As the only multi factor authentication mobile app integrate strong Danny bound biometrics or IBD with other authentication modality.

In terms of marketing, one area of focus today is on developing our messaging about the power of identity-bound biometric solutions.

Terms of marketing one area of focus today is on developing our messaging about the power of identity bound biometric solution.

First, we believe that security should be centered around people as the only universal constant in a world of unpredictable variability. Second, we deliver solutions that verify the person, which are also easy to use and trusted for secure access anywhere.

We believe that securities to be centered around people as the only universal constant in a world of unpredictable variability.

We deliver solutions that verify the person, but they are also easy to use and trusted for secure access anywhere.

And third, we integrate these IBB capabilities into our large-scale civil ID and IAM solutions, including portal guards and mobile off.

Third we integrate these IBD capability into our large scale civil IV, and I am solution, including portal and mobile App.

In addition to IBB, we are developing messaging to guide our content creation and resonate with key target markets, including credit unions and banks.

In addition to ABB, we are developing messaging to guide or content creation, and resonate with key target market, including credit Union and bank.

As far as other marketing initiatives, to touch on a few, we completed several media interviews in Q1, including with Merger Market, Authority Magazine, CTO Sessions, and Cyber News. And we've had recent content submissions in key industry publications, including Payments Journal, Security Week, Cyber News, IDG Connect, Dark Reading, HelpNet Security, and Authority Magazine.

As far as other marketing initiatives to touch on a few we completed several media interviews in Q1, including with Mergermarket Authority magazine CTO session and cyber news.

And we've had recent content submissions in key industry publication, including payments Journal security wheat, Cyberneeds ITG connect dark reading, helping that security and authority magazine.

In terms of marketing and lead generation, we recently hosted two webinars, including a case study on why one banking customer adopted biometrics to move away from passwords. The other highlighted the 2022 cybersecurity predictions from a panel of IT professionals.

In terms of marketing and lead generation recently hosted two webinar.

Adding a case study on why one banking customer a darker biometrics to move away from pathway.

The other highlighted the 'twenty. Thank you cyber security predictions from our panel of it professional.

Separately, and to continue to strengthen our existing customer relationships, we launched a monthly Master Class webinar series and dedicated customer blog to share key topics and solutions updates, including why it is critical to move identity to the cloud and navigating cyber insurance requirements.

Separately and to continue to strengthen our existing customer relationships.

We launched the monthly Master class Webinar series and dedicated customer blood Phe, our key topics and solutions update including why it is critical to move I data into the cloud and navigating cyber insurance requirement.

We continue to attend and sponsor industry events such as the National Association of Counties, or NACo conference and dinner, the New York State Association of Counties or NISAC conference.

We continue to attend and Panther industry events, such as the National Association of counting or NATO conference and dinner.

In New York State Association of counties are nice that conference.

the Chief Information Systems Officer Association Technology Summit, and FinTech Meetup 2022, which is a virtual meeting platform connecting individuals and organizations from the payments, banking, and financial services community for partnership discussions, conversations, and collaboration.

The Chief Information Systems Officer Association Technology Summit.

Fintech me that 2022, which is a virtual meeting platform connecting individuals and organizations from the payment banking and financial services community for partnership discussions conversations and collaboration.

In April , we presented and exhibited at EDUCAUSE Cybersecurity and Privacy Professionals 2022, a conference for higher education.

In April we presented and exhibited edgy cause cyber security and privacy professionals 2022 a conference for higher education, and intelligence and Boston, where we connected with potential partner to join our channel Alliance partner program.

and Intellisys AMP Boston, where we connected with potential partners to join our channel alliance partner program.

In June , we'll be at the Broward County Convention Center in Florida for MSP Expo 2022.

In June we'll be at the Broward County Convention Center in Florida for MSP Expo 2022.

We continue to expand our social media presence and grow our overall following, including growing our LinkedIn followers by 110% since Q4. Our social media content continues to engage our target audiences and drive higher quality traffic to our website, biokey.com, which had over 32,000 new website visitors in Q1 alone.

We continue to expand our social media presence and grow our overall borrowing including growing our Linkedin followers by 110% since Q4, our social media content continues to engage our target target audiences and drive higher quality traffic to our website <unk> dot com, which had over 32000 new web.

That visitors in Q1 alone rigor.

Regarding our Channel Alliance Partner or CAP program, we added three I technologies as a distributor in Q1. And our Master Agent referral partner program with Intellysis continues to expand. Channel partners now represent approximately 50% of new booking and will be an integral part of our growth moving forward.

Regarding our channel alliance partner or a cap program. We added three I technologies as a distributor in Q1, and our Madison Master agent referral partner program with Intel.

To expand.

General partners now represent approximately 50% of new bucking and will be an integral part of our growth moving forward.

These and other marketing efforts that we've discussed on prior calls, along with ongoing efforts, will continue to expand our brand and position, BioKey, for further growth in 2022. And with that, I'll hand it over to CC.

These and other marketing efforts that we've discussed on prior calls.

Along with ongoing effort, we will continue to expand our brand and position <unk> for further growth in 'twenty. Thank you Andrew.

And with that I'll hand, it over to D C.

Thank you Kim.

5Q's Q122 revenue increased to 1.94 million from 1.89 million in Q121.

<unk> Q1, 'twenty two revenue increased to $1 94 million from $1 8 million in Q1 'twenty one.

driven by a 2,205% increase in software license fees, as well as an increase in services revenue, which more than offset, but just decline in the hardware.

Driven by 2205% increase in software license fee.

As well as an increase in services revenue, which more than offset by the <unk>.

And the hardware revenue.

Q1-21 included 680 in hardware revenue related to the initial

Q1, 'twenty one included 680 and hardware revenue related to the initial.

enlightening and ideas I do not want my friends red

Product shipments for the large scale project in Africa.

Gross profit grew to $1.6 million in Q1-22 from $1.1 million in Q1-21, due mainly to the increase in higher margin license fee revenue as a percentage of total revenue in the current year period.

Gross profit grew to $1 6 million in Q1, 'twenty two from $1 1 million in Q1 'twenty one.

Move to the increase in higher margin licensing revenue as a percentage of total revenue in the current year period.

Operating expenses increased to $2.6 million in Q122 from $2 million in Q121 due to

<unk> expenses increased to $2 6 million in Q1, 'twenty two from $2 million in Q1 'twenty one.

You too.

a 400,000 increase in research, development, and engineering expense for upgraded mobile off and IDAS solutions, and the 300,000 increase in SG&A and other expenses associated with the civil secure Europe .

Oh, a 400000 increase in research development and engineering expense for upgraded mobile off an iPad solution and the 300000 to 300000 increase in SG&A and other expenses associated with the civil secure your fortune.

The company reported a Q122 operating loss of 1 million versus a for 800,000 in Q121.

The company recorded a Q1 'twenty two operating loss of $1 million versus a four 800000 in Q1 'twenty one.

as greater profit gross profit was more than offset by higher operating expenses incurred to support our growth.

It was greater profit.

Gross profit was more than offset by higher operating expenses incurred to support our growth.

IOP reported a Q122 net loss available to common shareholders of $1 million or $0.12 per share as compared to a net loss of $900,000 or $0.11 per share in Q121. Total other income was $131 in Q122 versus an expense of $15,400 in Q121.

<unk> reported a Q1 'twenty two net loss available to common shareholders of 1 million or 12 cents per share as compared to a net loss of 900000 or 11 cents per share in Q1 'twenty one.

Total other income was $131 in Q1, 'twenty two versus an expense of $15 4000 in Q1 'twenty one.

IOKI ended the quarter with $13.6 million of current assets, including $5.8 million of cash and cash equivalents, $2 million of accounts receivable, and $5 million in inventory. Networking capital was $10.1 million, and the book value of stockholders' equity was $15.3 million, or $1.82 per share.

<unk> ended the quarter with $13 6 million of current assets, including $5 8 million of cash and cash equivalents.

$2 million of accounts receivable.

And $5 million in inventory.

Working capital was $10 1 million and the book value of Stockholders' equity was $15 3 million or one point or $1 82 per share.

In Q1, 'twenty two we invested approximately 550000 in net working capital to support our growth and $1 1 million of net acquired cash related to.

In Q122, we invested approximately $550,000 in networking capital to support our growth and $1.1 million of net acquired cash related to our civil security in Europe .

A single secure Europe .

Yes.

Thus far, we have managed our supply chain without any negative impact to our business and we have invested as necessary in preparation for the increasing business volume. And now I believe we can turn the call back to the operator for investor questions.

That's why we have managed our supply chain without any negative impact to our business and we have invested as necessary in preparation for the increase in business volume.

I believe we can turn the call back to the operator for.

For Investor questions.

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

At this time, we will pause momentarily to assemble our roster.

Our first question comes from Jack vendor already with Maxim Group. Please go ahead.

Our first question comes from Jack Van Der Arde with Maxim Group. Please go ahead.

Hey, guys, sorry, I was on mute there Greg.

Great. Good morning, and really appreciate the quarterly update great results.

Thanks for taking my questions I'll start with a few top line questions.

Let's see just a just an FYI I will finish.

I'm going to finish with a question on what stock compensation was for the quarter. So, I'll let you go, maybe see if you can collect that as we wait for the 10Q to come out later this week or next week. So, Michael, let me start with the first question. Great to see revenue picking up. It sounds like Swimble Secure is playing a strong part in that as well. But that acquisition did close, and this is a positive, that acquisition closed, I believe, late in the quarter in early March. So….

Finish with a question on what stock compensation was for the quarter. So I'll. Let you go maybe see if you can collect that as we wait for the 10-Q to come out later this week or next week.

So Michael let me start with the first question great to see revenue picking up it sounds like swivel secures playing a strong partner as well.

Yeah that acquisition did and this is a positive that acquisition close I believe late in the quarter in early March so.

If you have it on you can you maybe talk about how much of that licensing revenue was organic it seems like it would be quite a bit versus how much was from swivel secure in the first quarter.

Yeah.

Good morning, Jack I think I can so we closed the swivel transaction first late in the first early second week of March. So we were able to grab a about 22 days of revenue from swivel and that represented about 360.

from Swivel and that represented about $360,000 give or take. So very strong organic growth in software license revenue and of course a small, well, medium sized contribution.

Dollars give or take so a very strong organic growth in software license revenue and of course a.

Small medium sized contribution from swivel.

Okay great.

Great, that's encouraging me here and happy to hear the color there. So we'll get a second quarter, we'll get the first full impact of schools that care under the helm, which would be another further uptake, I guess just mechanically speaking.

That's encouraging to hear and I'm happy to hear the color. There. So we will get a I guess the second quarter, we'll get the first full impact upstream secure under the under the helm, which would be a good. Another further uptick I guess, just just mechanically speaking.

And then, you know, if I just switch gears, it's the Nigeria, your Compton, Nigeria. So you expect an increasing ramp of shipment to hardware in software, I believe, eventually, in Nigeria in the coming month.

And then as if I just switch gears.

Nigeria.

Into Nigeria do you expect do you expect an increasing ramp up shipments of hardware and software I believe eventually in Nigeria in the coming months.

Just a couple of follow ups there. Did anything get shipped in the first quarter 22? Or was it kind of closed down to that part? And then do you expect the shipments to begin ramping in the second quarter? Or is this more of a second half of 22 events?

Just a couple of follow ups or did anything get shipped in the first quarter 'twenty two or was it kind of closed down for that part and then do you expect shipments to begin ramping in the second quarter or is this more of a second half of 'twenty two event.

Okay, so small contribution of hardware sales in Q1, nothing significant. We do expect revenue in Q2, have already generated some revenue in Q2, and we expect that again to ramp more significantly in the second half. So that's where we're at at this point.

Okay. So small contribution of hardware sales in Q1 nothing significant.

We do expect revenue in Q2 have already generated some revenue in Q2, and we expect that again to ramp more significantly in the second half. So that's that's where we're at at this point.

Great that's helpful.

Okay, and then over 50% I heard of new bookings are coming from the Channel Alliance program. Can you just remind me how many Channel Alliance partners you have currently? And can you remind me of any growth targets for that channel program?

Okay, and then over 50% I heard of new bookings are coming from the channel lines program.

Can you just remind me how many channel Alliance partners you have currently and can you remind me of any growth targets for that for that channel program.

Well, we expect that the company, given that swivel in Europe , generates nearly 100% of their business through partners, you can expect that the majority, if not all of our business.

Well, where we expect that the company given that swivel in Europe generates.

Generates nearly 100% of their business through partners.

You can expect that the majority if not all of our business.

probably through the end of this year into the beginning of next year will come through our channel partner program for sure. So we're heading in that direction. It is a forced multiplier. It's a way for us to become much more efficient and to get greater levels of visibility in the market and greater coverage across the board. And we expect this to be a global phenomenon.

Probably through the end of this year into the beginning of next year will come through our channel partner program for sure. So we're heading in that direction. It is a force multiplier, it's a way for us to become much more efficient.

And to get greater levels of visibility in the market and greater coverage across the board and we expect this to be a global phenomenon.

So that's number one for sure we're heading in that direction.

So that's number one. For sure, we're heading in that direction. In terms of the number of partners, that number continues to grow significantly because Intellisys alone has 8,000, 8,000 vendor participants in their program.

In terms of the number of partners that number continues to grow significantly because intel assist alone.

<unk> 8000, 8000 vendor participants in their program.

So, you know, as we get more engaged with them, the number of partners that could potentially be representing our solutions is, you know, it's upwards of 5 to 10,000.

So you know as we get more engaged with them the number of partners that could potentially be representing our solutions as its upwards of five to 10000.

Right now today, I believe we have connected, touched and integrated some 200 to 400 partners, including MSPs that are representing our products across the country. Now again, if you add in Swivel across the globe.

Right now today I believe we have connected.

Connected touched and integrated are some 200 to 400 partners, including Msp's that are representing our products across the country and now again, if you add in swivel across the globe.

That's fantastic. That's fantastic to hear. Great. And then

That's fantastic that's fantastic to hear.

Great and then.

Maybe if I just remind myself to go back to CC, CC, any update on what's total stock compels in the first quarter.

Let's see maybe if I just I.

I remind myself to go back to <unk> any update on what's total stock comp was in the first quarter.

Oh, yes, thanks for that Jack is the share based compensation was approximately 110000 for the quarter.

Yes, thanks for the heads up Jack. The share-based compensation was approximately $110,000 for the quarter.

And that's for if you allocate that to both R and D and SGNA, that's the total, about 110 tests. Test the total. Yeah. Okay, excellent. Okay, guys, well that's it for me. Really, really happy to see these results. Congrats to you guys. And I'll have back in the queue.

And that's for if you allocate that to both R&D and SG&A. That's the total about 110 basketball yeah.

Okay excellent.

Okay guys. That's it for me.

Really really happy to see these results Congrats you guys and I'll hop back in the queue.

Thank you thank you Jack.

Again, if you have a question. Please press Star then one.

Again, if you have a question, please press star then 1.

As another reminder, if you have a question. Please press Star then one.

As another reminder, if you have a question, please press star then...

At this time, the Q&A session has ended. I would now like to turn the call back over to Mike de Pascuale for any closing remarks.

At this time the Q&A session has ended I would now like to turn the call back over to Mike Pasquale for any closing remarks.

Thank you well I just want to thank each and every one of you for joining today's call. We look forward to updating you on our Q1 call in May which will come.

Thank you. I just want to thank each and every one of you for joining today's call. We look forward to updating you on our Q1 call in May, which will come in May, in August , which will come around pretty quickly. In the meantime, we will participate in two virtual investor conferences in May, the HC Wainwright Conference and the Inflection Partners Conference.

In May in August , which will come around pretty quickly in the meantime, we will participate in two virtual investor conferences in May the HC Wainwright conference and the inflection partners conference.

both occurring after the week of May 25th. As always, we will continue to provide regular news updates with press releases as developments occur with the business. Once again, thank you for your time.

Both are occurring.

After that the week of May 25th.

Always we will continue to provide regular news updates with press releases as developments occur with the business. Once again. Thank you for your time today.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your line.