Urbanimmersive Inc.

Maybe we can start now, Simon.

Yeah, I just admit two more. I think we're, yeah, we have, we can start definitely. Perfect.

All right. So I will do the introduction. Thank you everyone for being with us today. I'm recognizing a lot of names that we, that I've been following Urban Immersive for a quarter to quarters. So it's a pleasure to see you again today. For those who don't know me, my name is Justin Lemire. I'm the CEO, co-founder of Urban Immersive. Welcome to our fourth quarter financial results, end of the year, investors conference call. For a reason of being efficient and stay efficient and respect our time, We'll be doing this call in English, but we will take both English and French questions at the end. Joining me today, as usual, I have Simon Bédard, our CFO, and I'm just looking at my screen and I see François Hugliberge, our new Executive Vice President. During the call, we might make forward-looking statements during future financial performance, operations, products, and even Although we believe our expectations are reasonable, we cannot guarantee these results. So again, we caution you to read and consider all the risk factors described in our last MD&A. If not, it's going to be on CDAR pretty soon or in our annual information form that you can find on CDAR again. So the agenda will be quite different, slightly different, sorry, compared to the last quarter. So what we want to do is Simon will start by going to the last quarter and year-end financial highlights. He will talk about some business highlights as well. And then afterwards, what we thought that you could appreciate today, because it's the end of the year, we're starting a new year, we thought that we would take 15 minutes and do a short urban immersive deck presentation so that we can put everyone on the same foot in regards are in regards of how the management is staying urban immersive how we describe it and what is you know our focus and goals uh going forward so without start of a bill i will turn the call to simon simon hi good afternoon everyone uh we see we have a lot of participants investors today so thanks for uh your interest in being uh present on that uh on that call today

So what I'd like to do is similar to what I've done in the last quarter, just maybe put some color into the financials that were published in the press release this morning. I want to apologize. We don't have the FIDR filing yet, but the French version should be available within the next hour from my friends at Grant Thornton are telling me. uh sorry they had some some quality uh issues uh quality control issues this morning and the english version should follow uh within 48 hours that said if you have more detailed questions with regards to those financial statements once they are available in cedar really feel free to contact me by phone or email and i will answer all questions you have with regards to our our financial so um In terms of our Q4 and 2021 financial results, to start with, if we talk about revenues, for the year, we end up, we closed the year at slightly above 4 million in revenues compared to 4.6 last year. So it's an 11% decrease. That decrease is, I would say, is explained in most cases by the decrease in sales of 3D photography equipment. That was expected. By the way, by 600,000, if you remember last year, we were pretty happy to have acquired email solutions and benefit from the good, solid year of demand for 3D cameras at the beginning of the pandemic. But we knew that it won't be sustainable over the years. Sorry, there's someone.

Okay, we're back.

uh yeah so uh so that was expected uh that of course we'll go back to a normal level of sales uh what is this normal level maybe next year we can expect some sometimes something around two to four hundred thousand dollars but not what we've seen at the beginning of the pandemic where people were at time to buy cameras and try it and basically uh that was a a boom but that was a one-time thing so we don't expect this to continue um On the side, if we look at the SaaS sales, we're down 7% compared to last year. But, of course, you may know that our company is still today mostly transactional-driven, you know, in terms of the revenues transactional-based, meaning that, yes, we're progressively moving to some recurring revenue streams with the new subscription package that we have that just saying, well, talk about a bit later, but still to deal with, we're heavily transactional based. And the fact that the market is in terms of number of transactions, in terms of number of listings is down just this year compared to last year, 30, near to 30% or 23%. That's in Canada with Centris, but in the U S it's also in that range of between 25 to 30%. And if you remember last year, we were down 30%. So if you accumulate that we're physically down 60% over two years in terms of, again, inventory and number of transactions. And if you combine this to a very quick turnover ratio where properties and houses are sold most of the time within 24 to 48 hours, and they don't need that much of marketing tools because they can sell it pretty easily, that's just another factor that we're facing Right now, we think that all this, of course, should be temporary. We don't have a crystal ball, well, we're going to be back to a normal market. But just to put things in perspective, I was talking about Centris. Right now, I think we have around 35,000 listings on Centris. We used to have 120 at that time, usually. So, of course, we were affected by this, but the fact that we're 7% down, In that type of market, I think it's positive. We're even gaining customers. We're not losing customers at all. We're gaining customers with our new subscription package and all different fronts. So that's why it's important to understand the market here when we look at our numbers. Also, what's important in the last quarter is that you'll see that we have our first quarter of photo service. uh we have revenues of 307 307 000 of photo service we had those acquisitions if you remember were on june 30th so we have only one quarter uh this year but uh but the ones that were acquired in june have maybe uh uh represent approximately 1.8 million on an annual basis of revenues plus uh of course the ones that you've seen that we acquired in q1 2022 in November and December, meaning that today I'm not here to make guidance of what's going to be our revenues next year, but based on what all those companies that we've acquired have done in the last 12 months, as we posted on our website, we are at run rate revenues of approximately $11 million. And out of this $11 million, we have roughly $3 million in SaaS, As I said, half a million may be in hardware, and the 7.5 million remaining is photo service. So even Q1 2022, you can expect that we'll have maybe two to four weeks of revenues of those new acquisitions that were done in November, December, but we won't have the full effect even in Q1. We will do have in Q2. And if we talk about Q4, Q4, our revenues were 1.1 million compared to 1.4 last year. So we're down 24% on Q4, but we've seen that the number of listings have decreased more in Q4 this year. Overall, over the year, as mentioned, in terms of the number of listings and inventory, that was down 30%. So still, I think we're doing pretty good in this very challenging market. talking about uh 3d tours uh that's that's a positive thing on our end is that we see we experience a lot a lot of growth in the number of 3d tours uh in fact 237 percent compared to q4 last year uh we're talking maybe in dollars around roughly around 70 to 80 thousand dollars of new uh of revenues of 3d tours this year and that should continue to grow fast because we uh You may have seen a few updates we provided before Christmas with regards to new contracts, including Offerpad, for instance, that should scale up and deploy more and more cities over the months. So we should see that trend should continue in terms of number of territories to grow fast in the next month. That's what we expect. In terms about gross margin, we're pretty stable compared to last year. For the three-month period, we were at 61% overall compared to 63 last year. And for the year, we're at 65 compared to 68. So pretty stable. Of course, it depends on the mix of the revenues because on the SAS portion, our gross margin is somewhere between 82 and 87%. And on the service, photo service, more 35 to 40. And on the equipment, it's a bit lower. So depending... depending on the mix, of course, that will affect our gross margin. But basically, this should be representative of next year, and even probably we could improve that a little bit when we're going to talk about some efficiency gains that we will have with the synergies and acquisitions that you say we'll cover a bit more later. In terms of net income, there's a lot of noise this year on the you know, you can see we have a loss of 3.7 million for the year, but including 3.2 million of other expenses. And out of that 3.2, there's 3 million or 2.9, in fact, that comes from all the adjustments made with regards to the conversion of the debentures, the convertible debentures that are all done, as you know, as of today. So this is non-recurring, so it won't be there next year, but there was just a one-time journal entries this year. But of course, that explains most of why we have that loss for the year. In terms of balance sheet, we're still in pretty good shape. In fact, as you know, we did a $3 million private placement in April that we used in part for our acquisitions. At the end of September, we had 2 million of equities. I can tell you that as of today, we're near a million, so we used an additional million for the acquisitions that were done, completed in November and December. So we're still in good shape. We have enough to operate and execute our business plan, no problem there. Of course, with that million, that will serve as a cushion going forward, so we don't expect to use more than that on acquisition. unless we raise additional capital or debt or some external funding. And other than that, as you know, throughout the year, we've eliminated our convertible debentures. We reduced our debt, in fact, by 4.7 million throughout the year, including 4.5 just for the convertible debentures. uh so uh so basically again i think our balance sheet is in good shape and uh yeah that's pretty much the point i wanted to cover um there's in dmdna and financial you'll have some information by segment uh where we now track three different segments uh one is the software uh one is the photography equipment and one is the service So, again, hopefully I'll be able to post it on CEDAW pretty soon so you can come back to me if you have further questions. And on that, I think I'll turn the mic to you, Justin, if you want to maybe give a quick business update through the presentation.

Absolutely, Simon. But just before we jump to the next point on the agenda, is there anyone who would like to ask specific questions about financial that Simon just covered? or you still think about your questions and you're going to keep it for the end, it's like you want, you know, we can take a couple of minutes just to go over and clear the financial side of it if you want. Otherwise, you know, we're just going to keep on continuing. So, are we seeing any questions right now? I will say, raise your hand, but you're just, everybody is kind of closing his camera. So, I'm not seeing anyone.

I just have one. That's it. Simon, you mentioned that you currently have about a million in cash and you're not using any more cash for acquisitions. So how should we think about the acquisition strategy going forward? Since there's been a decline in the stock price, so maybe it's not as attractive anymore. pay in shares or raise more cash by issuing new shares. So how do you think about that?

Yeah, but I mean, we're not, as you've seen, we've closed eight acquisitions or six acquisitions just in December. So right now we're on the integration phase. It's going very well, as you say, we'll cover that in a sec. So we're not we're not a week or two to basically announce a new acquisition. And we do have a lot of things on our plate really. So we're pretty optimistic about what's coming. And of course, hopefully the market will also be more on the red than on the green. So basically all to say is that by the time we're back on track with acquisition, we think and we hope that our start price would be at higher levels.

Yeah, perfect. Thank you. And if it's not, we can also, you know, kind of just delay some of the deals or look for any other kind of structure to close those deals. Any other question or we move forward to just open your mic if you want to ask a question to Simon and just ask your question. You're more than welcome. And like I said, you know, we're going to keep answering questions. at the end. So I promise, all right, I'm going to go into a deck. It's very seldom that we're doing that on the conference call, investor conference call. I think it might be the first time if I do remember, but I promise we'll be short. I'll try to do it in 10 minutes. Hopefully I will not lose everyone, but 10 to 15 minutes, just covering 15, 20 slides. And the reason why we wanted to do it is that we were getting a lot of calls, Simon and I, and through those calls, we are realizing that we often have to kind of realign the storytelling with some investors who think we're, some investors think we are a metaverse business. Some investors think that we're just a podiatry business and so on and so forth. So I think that The goal of this deck is kind of redefining for everyone. You know, I see defining for everyone, you know, on the same page, what is urban immersive and where we're going. So I'm going to share my screen in a second. Hopefully you're all going to see it, except if you're on your cell phone and what's on a smaller device, you might have some problem seeing it. So I'm going to comment those slides here. Just going to click on the So, like Simon said, this is the way we describe Event Immersive on the TSX on our website. We're basically a technology business that provides services in the market of real estate society. Put it in other words, I like to say that we're a tech-powered real estate society business. That's another way to present Urban Immersive. Run rate of $11 million. And today, you know, including the photographers who are on their payroll, paper job and on their payroll, we're turning around 115 employees. If you consider the head office with the developers and the management and everything, we're probably turning around 30 employees. We're based in Montreal and course we'll listen on cs adventure so this is i don't go in detail but i just want to remind people that we're not a startup i mean we've been in this business for more than 10 years and the first thing that my brother and i did uh 10 years ago was to design this spaceship kind of prototype of multi-lens camera but it was a real prototype by the way and in 2009 we tried to um raise money to commercialize business and uh this is why in 2012 we kind of jumped on the tsx venture at that time and here in canada and quebec particularly we were adding access to a tax kind of advantage for an investor called area so to uh to raise money but uh this camera never the light so we kind of uh create all the software uh surrounding qd tour but you know we're not newcomers we've we've been trying a lot of things in the real estate supply business from developing camera software business solutions and so forth so we know you know the business pretty well and some of the engineers working with me to develop those software i've been working with them for more than 25 years so This is our staff. This is not something you're going to find on market, but you know, when we sit down and try to evaluate what is the size of our market and our market is real estate or core market. Of course, at the end of the deck, we'll talk about addressable markets, but our core market is real estate photography for the purpose of marketing. So basically, you know, to sell a house. So when we considering that activity for residential commercial and rentals, We are estimating that this is a niche market of $4 billion just in North America. Potentially, in our estimation, something about $7 to $8 billion worldwide. Here in North America, we're estimating about 30 million shoots a year. Shoot for us is a photographer taking a star and go and shoot a house and bring back 25, 35 images with all the media that comes with that. And roughly, that generates a billion images per year. So this is our market. Like Simon said, this is a transactional market. I mean, our business is linked to the housing inventory. So if the housing inventory ramps up, we're going to ramp up. If it's going down because our business model, as we're going to see in this slide, is mostly 9% transactional-based, we're going to follow the trend. And unfortunately, right now, the trend is historic. Most of the MLSs we talk with, they never saw such a low inventory of house for sale. I'm not sure I like those numbers, the way I'm presenting it today, but those are real. I mean, the market is down 22%. Urban receipts is down 11% year over year. And our new acquisitions are just coming into our pipeline of revenue in the last quarter. If you take just the stats, like Simon said, minus 7%. Overall, we feel we're winning clients. We don't feel that we're losing clients, but what we're seeing is that our photographers, our clients, are doing less business overall. This is why, I mean, you know, it's kind of a bad place to be right now. But, you know, I'm a positive person, and I don't think it's going to get worse. And we're hearing that, you know, the interest rate should increase. So that will kind of hopefully slow down a little bit, you know, some of the interest of buyers or people sending their house. In any case, I think we're kind of the – we are at the bottom of the barrier right now. So I think the decision will just go start and ramping up again. And, of course, like Simon said, you know, we potentially – 60% down compared to what numbers should usually be in terms of listings, in terms of house for sale. So our vendors should follow the trend and potentially just, you know, beat the trends actually, because we believe right now we're beating, you know, we're kind of succeeding in that very, very difficult market. I'm talking to a lot of entrepreneurs in the real estate space, and they are on the same position right now. All right, so the supply chain business in itself, it's a business that is transforming a lot, and it's definitely shifting to a technology-driven, high-volume business. So basically, you have to do a lot of transactions per day because it's a highly competitive landscape, and you need to bring a lot of value in terms of technology. So basically, we kind of spread all the parts that you need to succeed in class business like you need to have online booking system you need to have the capture hardware not just a camera but you might need a 3d camera you might need a drone so you need to have the officialized hardware you need to uh post edit your images to increase you know the the the white balance to put a blue sky on the external uh facade uh images so you need to have this service you need to create youtube video slideshow because youtube is one of the the most popular search engine in real estate of course you need to provide 3d tours it's the must-have today and for plan is kind of i will say basically more important than 3d tours right now on the market there's a lot of interest even in some states like here in canada four plans are mandatory uh this is a common product it's a you know you definitely need to provide websites we call it property website so it's a website dedicated to showcase one house for sale you need a system to deliver 100 images high quality images you know images cannot be just transferred by email so you need to have some sort of a solid system to transfer your image and you need a very performance payment system to get paid when you look at all those things that you need to run a photography business today Urban Resist is the only company offering and owning every portion, every technology required to the business right now. And that's giving us a lot of advantages over a competition. I will start from the bottom. Of course, the after-sales support is easier for Urban Resist to do because we're providing each part. We're not relying to third parties. for 3D tours, for floor plans, for photo editions, everything is done internally. So of course we have a pretty difficult to beat turnaround delivery time. We can deliver faster than our competitors because there are fewer parties involved. We have more flexibility in our packages we can offer and deal with our clients. We keep our margins pretty high for the value we bring. And we like to tell, market that we we are one of the most competitive business right now in terms of pricing so being a one-stop shop is definitely bringing a lot of value to our clients and it's positioning urban immersive for winning many deals many contracts with real estate agents and offers the business model when you look at each of the parts there's some portion of those those required Elements that you need to run a photography business that are not technology, like taking a picture, you need to have a human doing that. You need to have a software. Photo editing and images, even if AI is super well advanced and a lot of people tell that they are photo editing images with computer, you still have some human. The human will do a better job. And the floor plans, you need somebody to draw floor plans and put furniture, write the room's name and stuff like that. Those services, we are offering to our clients. So we call them service on demand. And it is transactional based. So each time somebody wants to have a photographer on site, the client pays and we send a photographer, same thing for photo edition and floor plans. And the rest is mostly technology. And we're still offering it every part, even if there's no line with the booking system, we are offering it. And it's still transactional for most of the parks. So we're charging, for example, $5 to render a slide show deal, $40 to render a 3D tour, $15 to create a property website, and $3 to transfer the image. You need to think about this park here as a Dropbox kind of platform to transfer the high quality images. We added this here. a new service that Simon briefly talked during the financial highlight, what we call the prime subscription. So the prime subscription is basically for $30 a month. Agents can subscribe to that plan, and each time they order one of our photographers, we're going to bundle all the technologies we can offer to them. So this is a very popular subscription right now, and we'll talk a little bit later in the deck about it. Simon briefly talked about the distribution of revenues. So 3 million in SAS, $8 million in services. I just want to add for the SAS, we're still serving around 1,700 real estate photographers. So this number here is our independent photographers using our technology to serve their agents, their clients. They're generating around 206,000 probably per site per year. In terms of services, so we're talking about our photographers. we're serving around 12,000 real estate agents and doing around 50,000 shoots a year, photo shoots a year. So basically, this is including all our acquisitions that we've done during 2021. When we talk about technology and you cite from the history, the timelines of Urban Immersive, you know, we started with a 360 camera design. We're still passionate, highly passionate about 3D technology. We'll always kind of keep that in our products and really kind of hope that someday, you know, 3D tours will get back on the market. And this is different to what COVID-19 has created, generated a demand for 3D tours. This is our core technology. And we believe that we have right now one of the most complete 3D tour solution on the market. If you look at all the features we are offering, a few companies can... can state that they have all this in their 3D solution. So, of course, each time we're doing a 3D tour, we're providing a dollhouse. This is the way we commonly call all this kind of 3D tours and room segmentation. We can measure on the floor and with tape. We're having our own built-in floor plan drawing software built in. in the 3D tour itself. So even our clients can play with it and can change the floor plans if they want. So we're not using AutoCAD. We're not using a third-party software to create our floor plans. We use the AI-powered classification system that we acquired from TourBot in 2018 to automatically put a tag in rooms to say this is a fitness room, a kitchen, so on and so forth. We have those tags also that you can put some graphic and links, some are calling that hotspot, 3D hotspot. This is pretty unique to Urban Immersive. So we are showing an interactive map of people within the room. This is not picture of people actually, it's a real video. So you can see people in their live stream video on the map. And of course, we have the avatar. So the 3D social spaces where you can visit with friends and interact with them. So whether you can interact by chatting or you can interact with video conferencing. The next slide is something pretty special for us because, you know, we are running a photography business. We are offering photography services and we want to be highly efficient. And the only way you can achieve profitability and keep your margins by going fast, you need to do a shoot. Super fast. Being two hours in the house, you know, it's too long. So we want our photographers to do six to seven shoots per day. And in order to do that, we've developed our own capture app that is three times faster than anything else that we've seen on the market to scan a house. It works on iPhone, iPad. It uses advanced computer vision alignment system to create those maps when you shoot. It's fully integrated within our workflow, so it's definitely improving the productivity of our people. And we also have some features that enable suppliers to add additional information on the map for adding value in post-production. We recently launched what we call the automated building insights and analytics reports. So for every tour we providing with our prime subscription, people will receive a detailed report about the property. So they will know how many sinks, showers that the building has, how many doors, outside doors, inside doors, and so on and so forth. So it's highly detailed and really appreciated with some of our clients like Upper Path, for instance, that are refurnishing many of the homes they're buying to resell them. This is unique to Urban Immersive. We call it UI Meet 3D. So basically, it's the avatar that you can see people visiting the home with you in a 3D space, and we just opened their video camera, so it becomes some sort of a 3D view conference. I will tell you that we're presenting UI Meet 3D to many industry leaders, And it's making a lot of noise right now, and we're expecting to have some significant partnership to announce soon. Many of the people within the industry, and as you see, I'm not using that word today, but we've been told and people are telling us that it might be the version 1.0, after all, of metaverse. You know, being able to be all together within an environment, visually interacting, where you are within the space, what you're looking at, and with the view system. It's definitely something that has a lot of value for our clients, partners, MLSs, brokers, and so on. And we have filed four provisional patents on that. And basically the reason why we use a provisional patent is basically because we want it to go fast in protecting our idea And also, we want to make sure that nobody will patent something on top of varieties that, you know, basically will force us to not, you know, promote this technology. So, so far, we have four provisional patents on that. We're working on the fifth one. It's basically related to the way we're presenting avatars when there are multiple people on the same axis, the way we are controlling user, control user experience, and so on and so forth. About the 3D Tour, we have today what we believe one of the most complete 3D marketing website suite on the market. So basically, those are websites dedicated to showcase the best way possible 3D tours. We have more than 20 customizable designs. We accept other medias like still pictures, video, and so on. So it's a solution that is highly... appreciated by our clients because once you have 3D tours, you need to distribute it, you need to promote it, and we have a complete solution to that. The way you know we run a photography business, we, over the years, 2013 actually, we started developing our own business solution, ERP or CRM, whatever you want to call it. It's a system that helps managing a photography business. And today we're using it to manage our own photography business. And what is particular with our solution is that we've developed over the years a business intelligence allowing to create instant booking. What does it mean? It means that we can, in real time, without any delays, find the closest photographers for the next shoot. So when an agent comes on our platform and they want to book a photographer at 2 o'clock Saturday, the system will find the right photographers for the right services for the right client at 2 o'clock. and the booking is confirmed. There's no other communication. They will be sure that the photographers will be there. So the system calculate the travel time, calculate the service time. And at the end of the day, it gave us the possibility to improve the productivity of the businesses we are acquiring. To give you an example, once the business we acquired, we were doing 3.5 shoots a day. And today they're running at seven shoots a day with this system. So we see rapidly the difference using our system. Oh, and I like to say this is an autonomous algorithm. You know, behind that, we don't use Google Map or any other software. It's our own business intelligence. In terms of on-demand services, it's a recap. So we are offering 3D scanning and photography services for plan drawing, image enhancements, It's all pay-per-job. And in terms of photography, we have around 130 real estate photographers. It's difficult to know the exact numbers because some photographers are working 20 hours, some photographers are working 40 hours, or they're full-time, part-time, whatsoever. But they are offering the complete package of visual content capturing, 3D scanning. On one appointment, basically, our photographers are equipped to deliver all the services of Urban Immersive. Foreplan drawings is done offshore. Most of the foreplan drawing is done in Paris. I would say most, maybe 50-50. 50% is done here in Quebec using our own software. And we like to say that we've developed some sort of a marketplace so we can engage really rapidly new people to work on their system and to help, you know, with the volume. Foto Edition is the same. And right now, as we speak, we are doubling our Foto Edition team in Paris. The reason is that because some of the businesses that we have acquired recently are paying with offshore companies three times what it cost us to post-edit images. So we expect to increase the margins of some of our biggest acquisitions that we've done recently. Photo editions can be anything from blue skies, .

My mother is very weak. My mother is very weak. You find the guy?

No, I'm trying to.

It looks like you succeeded to shut it down. And we're terribly sorry about that. It's the first time it's happening. We've been hacked on that call. Are you hearing me? Yeah, OK. So first time, first experience. So it's not us. It's not stayed very bad mercy. Hopefully you know that. And hopefully those young guys that have a lot of fun. It's trying to mute Samuel Montez. Simon, if you can. I see Samuel Montez. Can you just set it down? What? And Marie also. Yeah. So we're. Sorry for that. We're going to try to get back to a meeting. Otherwise, we're going to have to terminate that. So are we good to continue? Are we going to have other people?

I think you can. Can you stop?

I think. I don't know how it works with Zoom with Simon, but can you stop people getting on the call?

Yeah.

Well, all right. Let's close it, Simon. Let's close the call. Okay. Sorry, everyone. And the next time we'll use.

We'll use something else.

Full-time call. Goodbye.