Intellicheck, Inc. (IDN) Q4 2021 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Intellicheck Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Mr. Gar Jackson. Sir, the floor is yours.

Thank you, operator. Good afternoon and thank you for joining us today for the Intellicheck fourth quarter and full year 2021 earnings call. Before we get started, I will take a few minutes to read the forward looking statement. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage, and similar expressions as they relate to the company or its management, as well as assumptions made by and information currently available to the company's management, identify forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on management's current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward looking statements, whether resulting from such changes, new information, subsequent events, or otherwise. Additional information concerning forward-looking statements is contained under the headings of Safe Harbor statements and risk factors listed from time to time in the company's filings with the Securities and Exchange Commission. Statements made on today's call are as of today, March 09, 2022. Management will use the financial term adjusted EBITDA in today's call. Please refer to the company's press release issued this afternoon for further definition, reconciliation, and context for the use of this term. We will begin today's call with Bryan Lewis, Intellicheck's Chief Executive Officer, and then Bill White, Intellicheck's Chief Financial Officer, who will discuss the Q4 and full year 021 results. Following their prepared remarks, we will take questions from our analysts and institutional investors. Today's call will be limited to one hour, and I will now turn the call over to Bryan.

Thank you, Gar. As you saw in the press release, Q4 SaaS revenue was $3,715,000 up 23% over the same period in 2020 with the gross profit as a percentage of revenues at 92%. SaaS revenue for 2021 was $12,970,000 up 30% over 2020. The year-over-year percentage change was significant, but as always, I want more. So what do we need to do to continue to accelerate our growth? What we have learned over the past few years is that because we have the most accurate validation technology solution, we have pricing power when it comes to both initial contracts and renewals. That said, we are very much aware that it is imperative that we continue to grow a substantive client base. We believe that we are well positioned to achieve this goal. I'll start with recapping the transformational changes we made in 2021 that we believe will serve us well going forward. First was a buildout of a proper marketing department. This team has done a number of things to raise both awareness of Intellicheck and generate inbound leads. During the year, this team updated our branding, rebuilt the website to truly optimize or being picked up in searches, created marketing collateral for the sales team and most importantly, created targeted online marketing campaigns to if not create an inbound lead, at least have our name known to make it a warm, not a cold call. The marketing campaigns have certainly paid off. Prior to the launch of these campaigns in April, we basically had zero leads coming in. The inbound leads have been steadily growing with the now over a hundred a month coming in and increasing. While most of these have been for age restricted products, these leads have been across all sectors banking, age restricted, automotive, online notaries, delivery companies, you name it. The smaller age restricted deals closed quickly while the financial services and banking prospects take longer. The inbound age restricted leads closed in 2021 had a total ACV of $230,000 with minimal cost of acquisition. That's solid growth in a vertical, considering that we did approximately $1 million in the age restricted revenues in 2021. The most important thing about all these leads is they show that the market for identity verification is enormous across multiple and varied sectors. The other thing to note about many of these leads is that they are from companies using the OCR firms, some consider our competitors. The companies are unsatisfied with OCR accuracy, have heard of us and want to give us a shot. Knowing that have such a large addressable market and the resources to increase headcount of the sales force, in 2021, we expanded the sales force and we've seen the positive effects in two ways. First is that smaller deals are not falling through the cracks and are closing quickly while each of these deals are alone aren't game changing for the company, they're quick and easy to close and ACV will add up over time. Second, your number of deals progressing through the pipeline of mid to large size prospects is continuing to increase. However, like I've always said, it isn't about the pipeline, but our ability to close the deals in the pipeline and let me be candid. I'm not happy with how some of the sales force has been performing and we are in the process of making the necessary changes. We are going to continue to grow the sales force as we find the right candidates. As I've said on multiple calls, hiring salespeople is always difficult as they're always very good at selling themselves, but not sometimes not so good at selling your product. So some of our hires are no longer with us. I've instructed Bruce to focus on hiring seasoned sales executives with identity experience. To that end, two more senior sales people with industry experience started earlier in March. I've also directed Bruce to institute a series of changes to upgrade our sales training program. Another significant step we took in 2021 was changing our billing to focus primarily on prepaid buckets of transactions that expire after 12 months or a monthly minimum with overs build in arrears. Prior to this, all building was in arrears with minimum monthly commitment that did not come close to representing a total transaction volume. Both of the new models have financial incentives for our client not to underestimate the number of transactions. The larger the bucket are guarantee, the better the price. Two notable examples of this are financial services company. Number four, who in August prepaid for what they thought would be a year's worth of transactions. At best, we estimate that they have 90 days left in that bucket. So basically what they estimated would be a year's worth of scans lasted about nine months. The second was the reseller that sales in omnichannel multibiometric platform to banks, marketplaces and healthcare systems. They pre-purchased 125,000 transactions with the expectation that it would last for a year. After going live in January, they were already halfway through that bucket. We had been able to continue to raise prices, both at renewal, and as we add new clients. As we targeted the age restricted space harder than we did before, we also took a hard look at the pricing per transaction. Typically, this was sold via an app on a smartphone or tablet with pricing per device. When we looked at the price per transaction, we determined it was far too low and moved all new age focused clients to either the transaction bucket or the monthly minimum. The results of our efforts is that the transactional price for age folks gets clients signed in 2021 are on average six times higher than in previous years. We've also modified our sales approach in the age focused space by creating a dedicated team. This group has been tasked with renewing all existing clients at the higher rates. As I said, age restricted SaaS revenue accounted for approximately $1 million of our 2021 total SaaS revenue and we believe we will see a continued increase in traction through both new customers and price increases going forward. To further aid the efforts in the sales restricted market, we spent significant time in 2021 on education efforts with legislators in many states. We believe these meetings are extremely important because most state officials do not know how easy it is to get a fake ID. When I speak with a state attorney general or a legislature member and show them a fake from their state, scan it with one of the readily available scanning programs used by many POS systems or handheld, and that fake passes, they suddenly realize why visual section and simply scanning do not work. Seeing our technology solutions at work shows them the need for validating and then they recognize that the laws have not kept up with the technology. We've also been meeting with credible organizations that are active on national and multistate level on key issues surrounding underage access to age restricted products. I'm pleased to tell you that we've now formalized a partnership with responsibility.org. This organization plays a leading role in the fight to eliminate underage drinking. It is active in all 50 states, as well as at the national and local level. This organization is supported by 11 of America stores who have expressed a commitment to responsible drinking. We expect to announce additional partnerships resulting from these endeavors. Thankfully, more and more companies are looking to do the right thing, but there's still many major corporations out there that the profits ahead of actually doing the right thing. Hopefully, the fear of the $60 million plus lawsuits for wrongful death, move them to do the right thing and if not, we believe that legislative changes should mandate it. So returning to rate increases, it is important to note that these rate increases on renewals continue to be robust with many of them starting in Q2 of this year. For example, during Q4, we renewed our department store chain client with just over 1100 locations with a 33% increase effective in Q2 of 2022. In that same period, we renewed the 1,000 location off price department store chain, where we parse not authenticated for applications to a three year yield. Year one is at the same price and now includes the no receipt return use case, which should substantially increase transaction volumes. In year two, the price increases 87% and in year three it increases 33%. Another growth area in both 2020 and 2021 has been digital adoption. This has increased dramatically and the data bears this out. From the initial beta clients in early 2019, the number of clients using us exclusively for the digital channel or for both physical and digital has grown 550% with more than 50 digital clients across multiple market verticals, including online banking, credit card issuers, background checks, delivery service and automotive dealers. And as a testament to our digital capabilities in Q4, we signed a California based online bank. This was notable as it was a direct steal from an OCR competitor. Development has begun and we anticipate Q3 implementation. The initial used case will be for account opening. Another exciting development in late Q4 is that we began a security audit necessary to start a pilot with another top five bank. As I said, many times, these can often take six months or more to complete before their information security teams allow our computers to connect. I'm not worried about passing the audit as all of our banking clients put us through one every year. The initial used case for this client is retail banking, but their teams are already discussing additional physical and digital used cases with us. Now, for what I consider the most transformational step forward as we enter 2022. You may have seen the press release last week about Platform 2.0. This new platform allows our clients to do more than just authenticate a person. We now have the tools in place to take it to the next level so they can not only be sure that the person is who they say they are, but also determine if the authenticated person is someone they want to do business with. As I have said, this transforms us from a company doing strictly, is it really John DOE to, is it really John DOE? And I know that he is someone I want to do business with through multiple validation signals. And I know it internationally, as well as domestically. We currently have two clients live on the platform and seven new and existing clients onboarding and additional clients are now planning on migrating to the platform. Keep in mind that platform 2.0 now incorporates multiple facial biometrics vendors allows for OCR validation of international documents. And in the next few weeks, we will be releasing sanctions, lookups, pep address, lookups, social security lookups with more SI those to come. All of these are upsell opportunities. Why is this new platform important identity, especially in the digital world is about more than an ID. All of our clients perform additional diligence before doing business with a person, whether it's opening a bank account, providing a loan or credit card or in an investment account. We also know that our clients were forced to choose another ID validation vendor for international documents in telecheck was one very accurate and important step in that process. Again, just one step for one region in the world. We believe that Platform 2.0 allows in telecheck to move from simply a north American ID validation company to a global identity company, which is crucial as the world evolves and becomes more digital. We built Platform 2.0 in collaboration with our clients and input from prospect by providing them multiple global steps in the identity process. Through one connection, we reduce their costs and friction, something every company is looking for. We believe the number of clients migrating to this platform proves this point. By speaking with a rather smart person the other day, who said to me, there is a hostile world out there and he was right. Hostile actors continue to increase the amount of identity theft under drinking, vaping and cannabis use continue to be a problem. We believe that we are uniquely positioned to address all of these problems. Now is about pressing the right levers to drive continued and increasing growth and we believe the changes we put in place in 2021 are the right levers. Brand awareness is improved even to quick revenue in the age restricted space, along with the growing pipeline of financial services companies. We believe of our lobbying efforts to update ID validation laws in the age space restricted space will bear fruit over time. We believe that our ongoing refinement of our sales team will allow us to capitalize on both existing markets, as well as new verticals where we are just beginning to penetrate. The buildout of Platform 2.0 featuring additional multinational ID and KYC capabilities we believe provide significant opportunities ahead both with new and existing clients. With all these exciting developments, tempering this as financial services company number two, which recently began a project that will enable them to extend credit to tens of thousands of additional merchants. This required financial services company number two, to put code freeze on all other development, which meant multiple retailers that have been expected to go live in the first half of the year will not. The above described project should be an interim delay to our short-term growth that they expect to resume integrations in the September timeframe. We believe this short-term pain now represents a likely long term gain as these new additional applications will need validations. This is very likely going to impact our Q1 results and although we still have a few weeks remaining in the quarter, we currently anticipate our first quarter SaaS revenues will be in the range of $3.2 million to $3.35 million. Moving forward, I'm happy to say as part of a general business review, we analyzed churn rate. And since 2018, the company has not lost in single major client to anything other than bankruptcy and all the financial services clients have grown their use cases. I believe the reason for basically zero return is a certainty we provide. And I always think it's best when your clients say it for you. So as Lieutenant Joe jewel of the new Han Hanover county, North Carolina Sheriff's office told the port city daily news about our technology solutions. He said it worked flawlessly. He went on to say the Sheriff's office tested 12 companies that claimed to be able to spot fake IDs and intelligent check was the only one that worked accurately. I have never heard anyone say that about the competition. I will now turn the call over to Bill who will go over our Q4 financials.

Thank you, Bryan and a good day to our shareholders, guests and listeners. I'd like to discuss some of the financial information that was contained in our press release for the fourth quarter and full year ending December 31, 2021. I'll begin with the fourth quarter results. Revenue for the fourth quarter of 2021 grew $824,000 or 27% to $3,902,000 compared to $3,078,000 in the same period of 2020. Our SaaS revenue for the fourth quarter 2021 grew $703,000 or 23% to $3,715,000 from $3,12,000 in the same period of 2020, and grew 14% sequentially over third quarter of 2021. Gross profit as a percentage of revenue was 92% for the fourth quarter of 2021 compared to 92.6% for the same period in 2020. Operating expenses, which consists of selling, general and administrative expenses and research and development expenses increased $2,598,000 or 109% to $4,987,000 for the fourth quarter of 2021 compared to $2,389,000 for the same period in 2020. The company is always looking for synergistic opportunities including merger and acquisition opportunities, including within selling, general and administrative expenses are approximately $454,000 of cost incurred related to this activity. In addition, the company incurred higher personnel, share-based compensation, consulting and marketing expenses. The company posted a net loss of $1,396,000 for the fourth quarter 2021 compared to a net income of $1,260,000 for the same period in 2020. The net loss for diluted share for the fourth quarter of 2021 was $0.07 compared to a net income per diluted share of $0.07 for the same period in 2020. Adjusted EBITDA for the fourth quarter of 2021 was negative $557,000 compared to $635,000 for the same period in 2020. Now turning to our full year 2021 results, revenue for the full year ended December 31, 2021 increased $5,658,000 or 53% to $16,393,000 compared to $10,735,000 for the same period in 2020. Our SaaS revenue for the full year ended December 31, 2021 was $12,970,000, an increase of $3,597,000 or 38% compared to $9,373,000 for the same period in 2020. Gross profit as a percentage of revenue was 78.6% for the year ended December 31, 2021 compared to 86.7% for the same period in 2020. A decrease in gross profit percentage is primarily due to higher 2021 hardware sales, which contain lower margins partially offset by the continued growth of our SaaS revenue. Excluding hardware sales and related costs, our gross profit as a percentage of revenue was 93.2% and 92.1% for the years ended December 31, 2021 and 2020 respectively. The increase in this percentage is primarily due to continued growth of our SaaS revenue. Operating expenses for the full year increased by $7,475,000 or 78% to $17,044,000 for the year ended December 31, 2021 from $9,569,000 for the same period in 2020. Selling, general and administrative expenses increased by $5,670,000 or 96% to $11,564,000 for the year ended December 31, 2021 from $5,894,000 for the same period in 2020. Research and development expenses increased $1,805,000 or 49% to $5,480,000 for the year ended December 32, 20 21 from $3,675,000 for the same period in 2020. These increases are primarily due to higher share-based compensation costs, higher personnel costs and higher marketing expenses. The company had a net loss of $4,146,000 for the year end at December 31, 2021 as compared to a net income of $558,000 for the same period in 2020. The net loss per share for the year ended December 31, 2021 was $0.22 versus a net income per diluted share of $0.03 in the prior year. The weighted average diluted common shares used in computing the per share amount was 18.7 million shares for the year ended December 31, 2021 compared to 18 million shares for the same period in 2020. Adjusted EBITDA was a negative $925,000 for the year ended December 31, 2021 compared to an adjusted EBITDA of a positive $329,000 for the same period in 2020. Now I'd like to focus on the company's liquidity and capital resources. As of December 31, 2021, the company had cash of $13.7 million, working capital defined as current assets minus current liabilities of $12 million, total assets of $25.7 million and stockholder's equity of $21.2 million. During the year ended December 31, 2021, the company's cash balance increased by $530,000 compared to a net increase in cash of $9,770,000 during the same period in 2020. Net cash provided by operating activities was $1,116,000 for the year ended December 31, 2021 compared to a net cash used in operating activities of $19,000 for the same period in 2020. Net cash used in investing activities was $662,000 for 2021 compared to $416,000 for 2020 and net cash provided by financing activities was $76,000 for the year ended December 31, 2021 compared to $10,205,000 for the same period in 2020. The company has a $2 million revolving credit facility with Citibank that is secured by collateral accounts. There are no amounts outstanding under this facility. We currently anticipate that our available cash, as well as expected cash from operations will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of December 31, 2021, the company had net operating loss carry forwards of approximately $18.7 million. I'll now turn the call back over to the operator to take your questions. Operator?

[Operator instructions] Our first question comes from line of Mike Grondahl with Northland Securities. Please proceed with your question.

Yeah, thanks guys and good afternoon. As you talk about 2.0 platform, what are maybe the three most important features that offers or the couple things that clients seem to appreciate the most about it? A - Bryan Lewis I'd say, hey, Mike, good talking to you? I would say the ability to do international is something that a lot of the clients have been asking us about. And then kind of, they all come together in a way, I guess one bit would be the ability to do more of the KYC portion of what needs to be done. I think that certainly also opens up other markets for us like brokerage firms and other things that need to register people. And then the ability to tie into things that again is it really me or, am I dead or not? So Social Security databases phone book update databases, and address, look up databases to tie things all together. So those seem to be the three things that people are asking about most. And then again, the other thing I'd say, which is more of a choice factor is some people are particular about who they want to use for facial recognition depending on how well, they think that company handles demographic bias in the results.

Got it. And then Bryan, what did you say about clients migrating? I don't know if you said a number or just an interest level, and then is there an average lift in price as a client migrates?

So there's initially no lift in price. It says they get in, get tested and then bring in the other services, which we're a reseller of. So currently we have a brand new client who is live on the system, just hasn't gone live with their clients yet. We've got an existing client who's live on the system. We've got seven in various, that are in what, active development or UAT. And then we've got, a bunch more who are now going through the specifications and planning on for when they were all over. Part of the thing is it does make it easier for them. Prior to this, when we changed things, we brought out say maybe a difference cause we have switched facial recognition vendors is required programming on their side. Now we've made it much simpler for them because it's sort of a standardized to get any of the other products that we would need to be adding to it and potentially selling to them.

Our next question comes from Scott Buck with H.C. Wainwright. Please proceed with your question.

Good afternoon guys. I'm curious, Bryan, do you know off the top of your head, what same store volumes looked like during the fourth quarter versus a year ago, trying to determine of the 27% or so year over year growth, what is actually new business versus, maybe a COVID pickup from late 2020?

The same store sales were just slightly below where they were. So it was -- there was a decent lift again, getting back to normal last year. I'd say that same store sales were very, very close. So the lift across them would've been the same quarter of a quarter and then the rest would've been new business.

Okay. That's that that's helpful. And I was wondering if you could provide a little bit of additional color on this financial service client who's adding the tens of thousands of merchants. I guess, how does one go about doing that?

How are they doing it?

Yeah, I guess it seems like a relatively big number to kind of find in the couch cushions.

That's, I'm looking at what, you know, what they are saying in their public statements about what it will do. But basically it's a play in the virtual credit card space and they're connecting to a system that is used by a lot of, you know, small merchants out there who sell maybe high value, high dollar products where people might want to be able to get an instant credit card, but nobody's going to give them a white label card. They don't do enough of it. I look at it as very much akin to what's an financial services company number one does with their merchants, but they don't do any connectivity. This system is basically the point of sale system that so many of these merchants use and they're going to tie into it to offer credit to all of them through these use virtual credit cards. So it's a big lift for them to do this, and they're looking at it as a great way to expand their credit portfolio. And we know for one thing that they really like what we do and being part of that process will be important.

Yeah, no, that's very helpful. And then Bill on, on OpEx, there was a pretty big jump from 2020 to 2021. How should we think about operating expense growth in 2022 and beyond? Are the pieces in place now or is there still a fair amount of investment remaining in order to support at the top line growth?

Yeah, most of the pieces are in place. I think you could expect in the $5 million a quarter range going forward for OpEx.

Okay. That's perfect guys. I appreciate the time. Thank you.

Our next question comes from Jeff Van Rhee with Craig-Hallum Capital Group. Please proceed with your question. Excuse me, Jeff, your line is now live.

Sorry about that guys. So yeah couple for me, I think on fin service number two, can you put a little finer point in terms of the impact on Q1 of their freeze and certainly early, but any swags that kind of Q4 potential upside they're doing just trying to put a few bounds around what the impact of this code freeze is.

Yeah. So cause they put this code freeze on, I think kind of in November is when they really told us about it so a lot, and it impacted two things. It impacted a number of retailers that you we're going to go live one. jewelry company owns a lot of different companies. One got live, but the rest didn't make their cut off. So, I would say that was it all of it? No. Was it the majority of it? I would probably hazard the answer is yes. Then it's going to be what can be done? How fast can they get this trial process done? What they're looking to do on the back end and get back to working with all the other projects. Certainly they consider the priority to get us up and running and live because it's money right to their buy online. It's just a matter of do they start in August? Do they start in September? Do they start in late September? Because it'll depend then when the retailers going to their point of sale code freeze, at the end of October or the beginning, usually the first or second week of November. So at this point in time, I don't have enough color to say what's going to happen on the back end of the year. But it wasn't major, but it wasn't minor, but it certainly, I think it was a portion of the miss that we see from where we thought we could do.

Yeah. Just to be clear on Q1, it's not lost revenue, it's lost, not lost revenue. You already have, it's lost revenue you were hoping to ramp.

It was, you are correct. It was a lost growth if you will that, I will say that, our contacts over there, they are -- they're not happy, but just the project that they’ve been in the works for a long time had been on hold and finally got the green light. So took all their resources. They had quite the list of their account managers talking to our account manager. They had certainly a nice ramp of clients that they had thought were going to be gone, but now they're not until, at least later in the year.

Yep. For enough and then, and then…

And I will say also I am very excited about the opportunity. I think it's painful now, but we know the business that we see from, what we can generate off of financial services company, number one, where they pay us directly for the service. This is going to be, I'm hoping one system integrated to all of these people's kind of sales systems that will allow for a lot more credit apps coming through the system.

Yeah. That's helpful. Two, two quick housekeepers in terms of implementations in the quarter, how many implementations, and then can you get us an update on digital? It sounds like I think you mentioned 50 customers give me a sense of what percent of revenues is now digital?

Sort of back of the envelope and this is and again, I always point out this is always low because one of our big clients they've got one pipe to us that goes to all of their processes in the place. So we don't know if it's the digital or not digital. They are going to put a tag on it one day for us. So we know what is what. So it excludes this client who's a very big client, but it's about 10% of the revenues right now and I should clarify 10% of the non-age restricted revenues is really this very, very little that's doing anything age restricted digitally at the moment, other than start some delivery clients who are beginning to grow. Implementations for the quarter generally Q4 is near zero implementation quarter anyway for anything in size because we're hitting that code freeze where nobody's going to do anything. We did have the, one of the multiple jewelry stores -- jewelry chains by that one holding company. Did go live and then and a number of smaller things like some automotive dealers and other things like that. But the one is size would be that one jeweller, which normally again, Q4 we don't really don't do major implementations.

You okay. Helpful then maybe..

One other quick thing though, is also, I forgot about this in that quarter, financial services company, number four really did begin their rollout to their retail branches in earnest. And they're rolling it out in ways every week and they expect that to be done sometimes next.

Okay. That's helpful. Then just one last for me. You commented several times about sales and certainly we're hearing that across the board, very, very hard to find sales talent, and but to put a finer point on what just I think last quarter you had a rep count of 11, eight seniors, three juniors, and I know you're adding reps and it sounds like you kind of did a stop and a reset, just put a little finer point on what does the reset look like? Like how many heads did you let go? How many you said you had just added a couple, where do we stand and then how long till those new reps really ramp to productivity?

We stand at 10 right now. I think that the reps that we just started I think because of their experience and where they came from will probably be, be productive a lot sooner than reps who didn't come from this industry. So, you know, normally I would say that if you're not seeing productivity out of a rep within, you know, say six months, that at least they're, they're getting meetings, booking meetings, and those types of things that other people can come help them with, they're probably not going to make it. I would expect these guys, we going to see something quicker than that. I'm already seeing, they're getting meetings and, and which is good. So either just the ability to know the, the industry and they're calling the right people and they're getting into new prospects, or they know people who maybe weren't so happy with the solution is that they sold in previous and now they can solve something that they know works a heck of a lot better. So I think they'll be quicker. So we're at 10 now. So, I think three ended up not working out. But the nature of the beast anymore in hiring people as you said, across the board issue, every one of my friends who's telling me, they're having a hard time finding people, but we're working hard at.

Yeah. Yeah. Sounds good. Appreciate the updates. Thanks.

Our next question comes from Rudy Kessinger with D.A. Davidson & Co.. Please proceed with your question.

Yes. Thanks for taking my questions. I guess I'll maybe ask it again on Q1. Can you quantify a bit clear how big of the impact from that code freeze with fin serve two is, or we're talking about 100,000, 200,000 on Q1. And then just at this point, do you have any visibility into the potential revenue size of that project once they get it live to those tens of thousands of retailers?

Well, what I'd say is, I couldn't tell you exactly what the impact is because it's going to be an assumption of what they told us and what we thought. So I don't know. All I can, without saying here's what our targets were for the quarter, which we really don't give. It was multiple retailers of decent size.

Got it. And then I guess the second part of that question, just on the project to get, it into the POS systems with the tens of thousand retailers, I know it's, it's certainly a new project for them too, but at this point, do you have any idea just the scope or, or potential side that that project could be in terms of revenue?

Yeah, and I'm looking at this is probably would be, you know, definitely latter half of the year before any of that came in, depending on how fast they get this project done. If I look at how often these smaller retailers that, seem to be the similar type as financial services company, number one. They can do anywhere from, five to 50 applications a month. So any one of them is not that big, but I'm looking at this as if you can get that across, even half of that client base the numbers could add up.

And then you mentioned in earlier you had, if you could just clarify, you said, I think it was a security audit pilot with another new top five bank. Could you just clarify what exactly it was? And then if you look at that top five bank, how does it compare in terms of the total scope of opportunity relative to the other top 10 banks that you already have signed them on?

If I look at these, they are, you know, in, in the top percentage of banks, in terms of accounts credit cards, all those things. So there are major top five bank, so I'm pretty excited about it. You know, the thing is it's just dealing with any bank, no matter of what the size and it seems to get worse. The bigger they are is you've got to get through this security audit. The folks that we're dealing with on the business side are super excited. You know, one of the people who's now very heavily involved in the project was doing the same thing at one of our other clients before moving to this bank. So the business people are very excited. Now, it's just a matter of making sure that we have the information security people, comfortable and as excited about us as we are about what we could do for them and that our secure procedures, since they've already passed so many other banks certainly should meet theirs as well. It's just, they, every single one of them ask the same question, just a different way. So it's not like you can standardize, here you go. Here's our report. They all have their own little idiosyncrasy.

Got it. That's it for me to questions.

Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Mr. Bryan Lewis for closing remarks.

So I just want to thank everybody for listening to the call. I am -- given the opportunities that we have given the neo bank that we signed, the big very large bank that we're doing the security audit with, plus what I see my team doing internally, I'm very excited about 2022 and I look forward to speaking to you all again in a couple of weeks about Q1. So thank you all and have a good night.

This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.