So we’re growing in every aspect of our business, certainly year-over-year, except – and of course, Swivel has added $1.5 million in revenue as well, but we’re growing in every aspect of our business, except for Africa right now.
Unidentified Analyst: I see. So then you expect basically in the fourth quarter from Swivel about as much as you’ve made in the first three quarters. Did I get that right?
Michael DePasquale: We expect Swivel to continue to grow absolutely. And to meet our objectives, we will meet our objectives that were defined and stated in our original acquisition plan.
Unidentified Analyst: On the hardware margins, I’ve been seeing, I think, anywhere from 37% to 47%. This quarter, I guess, there’s a low amount of hardware. I’m not sure if the margins are good number here to use, but what do you expect your margins at on average going forward gross margin?
Michael DePasquale: I think they’re pretty consistent. The hardware that we sell that goes alongside our software, right, to finger scanners that we sell to our enterprise customers, the margins are generally in the area that you just described depends on the product, but it’s generally in the 30s, 40% range, give or take. The Africa hardware, obviously, can be in that range as well. It could be a little bit lower. It could be a little bit higher depends on the project and the process. But those are pretty good ranges for hardware and expectation going forward.
Unidentified Analyst: Okay. I noticed in your 10-Q, Hong Kong 500,000 bond and a reserve. Is that bond now at risk?
Michael DePasquale: It’s on our balance sheet. Its money that we were paid for the work that we did there, and it’s held in a bond. It’s being rolled over, and our auditors wanted us to put it in reserve in case something happened there. It’s in China. So the money is in China. It’s not in Hong Kong. So we’re doing what we need to.
Unidentified Analyst: I think the 10-Q just said that you haven’t received any proceeds or interest. So was there supposed to be interest or I’m wondering what the status of that bond is?
Michael DePasquale: I’ll let Ceci answer the detailed question. But yes, the bond definitely had – it was an interest-bearing note.
Cecilia Welch: Yes, it was a bond that had interest-bearing. The first bond, we received the interest bearing was rolled over to the second bond, and we have not received that interest yet.
Unidentified Analyst: And how long has that been going on for? Is that couple of years or something or I’m a little confused?
Cecilia Welch: The funds were due on June of last year.
Unidentified Analyst: So does that mean this bond is now at risk?
Michael DePasquale: It could be, Dan, which is why we have a reserve for it. We’re working with our Chinese partners, but it could be. Clearly, as money owed BIO-key, it’s been that bond, the initial bond was purchased in, I want to say, 2019 or ’18.
Cecilia Welch: Yes it was 2019 to 2020 and 2020 to 2021 yes.
Unidentified Analyst: Okay. Is that $500,000 included in the cash sale?
Cecilia Welch: It is not. It is separate on the balance sheet.
Unidentified Analyst: Okay get it. All right on the – when is the $500,000 in debt to BBVA have to be paid off?
Cecilia Welch: That’s similar to a PPP loan that’s something that we acquired with Swivel. It is a very low-interest loan. They had basically interest-free for the first year, and it’s being repaid now at about $11,000 per month. And like I said, the interest, you’ll see the interest expense is very low on yes income statement. It’s like we paid like $3,600 so far this year, I believe.
