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spk09: Ladies and gentlemen, good morning. Thank you for standing by. Welcome to the Voxter First Quarter 2021 Earnings Call. I would now like to turn the conference over to Jordan Ross, Voxter's Chief Investment Officer, for opening remarks.
spk00: Thank you and good morning, everyone. Thank you for joining us for the Q1 2021 Earnings Call of Voxter. Joining me today, our Chairman and Chief Executive Officer, Gary Yeoman. President Jim Albertelli and Chief Financial Officer Robin Dyson. We caution you not to place undue reliance on forward-looking statements and undertake no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in our expectation. On today's call, we will report using both IFRS and non-GAAP financial measures. We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons, as we believe they provide meaningful information with respect to the financial performance and value of the company. Non-GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with IFRS. To see the reconciliation of these non-GAAP measures, please refer to our press release distributed earlier this week on May 31st and our management discussion and analysis, both of which are available at sadar.com and on our website at voxter.com. A replay of today's call will also be posted on the website. Finally, please note that all references to amounts or currencies during today's call are in Canadian dollars unless otherwise stated. I will now turn the call over to Gary Yeoman.
spk07: Thank you, Jordan. And good morning, everyone. And thank you for joining us. This was a great quarter for our company as we continue to execute against our strategic growth initiatives and deliver strong financial results. Specifically, we achieved 183% increase in revenue and 197% increase in gross margin year-over-year for the first quarter. This substantial increase comes as a result of critical milestones achieved by the company, both in the fourth quarter of 2020 and the first quarter of 2021. In October 2020, the company acquired the assets of Apex Software, which added critical functionality to our desktop valuation platform and enabled us to cross-sell our existing products throughout the United States to more than 2,200 existing Apex clients. In February 2021, the company acquired the assets, sorry, in February 2021, the company acquired Boxer Technologies, Brightline title, and certain technology assets of James E. Abertalli. This acquisition of the Boxer Group was a critical turning point that prompted the company's name change from I Look About to Boxer and laid the foundation for future growth. Specifically, this acquisition allowed the company to expand its footprint in the United States, and to diversify its related focused offerings. The first full month of operations for the consolidated entity, including the Boxer Group, was March 1st to March 31st, 2021. For this period, consolidated revenue was approximately $7.3 million. From the date of acquisition, February 3rd to March 31st, 2021, the Boxer Group generated revenue of approximately $8.7 million. Had this acquisition been completed in January, we estimate that the revenue generated by Boxer for the three months ended March 31st would have been approximately $12 million. This would have resulted in consolidated revenue for the quarter of approximately $17.8 million. Further, the company achieved a 275% increase in adjusted EBITDA year-over-year for the first quarter, going from a loss of $665,000 in the first quarter of 2020 to a $1.2 million gain for the first quarter of 2021. The Voxer Group generated adjusted EBITDA of approximately $1.7 million. Had the acquisition been completed, we estimate the adjusted EBITDA generated by the Voxer Group for the first quarter would have been approximately $2.7 million. This would have resulted in consolidated adjusted EBITDA for the first quarter of approximately $2.2 million. Finally, in March 21, the company entered into an agreement to acquire ANOW, or what is known as Appraisals Now Limited, an automated appraisal workflow management platform for the global appraisal market. This is a pivotal acquisition for Voxter that bolsters our recurring revenue stream and accelerates the development of our data ingestion engine. In addition to these accretive acquisitions, the company has taken steps to maintain financial stability in the face of headwinds caused by the COVID-19 pandemic and resulting foreclosure moratoriums. Specifically in February, we expanded our partnership with the Bank of Montreal by increasing our credit facilities with the technology and innovation group. They also invested in our company as well. as equity investors. And further in March, we closed an oversubscribed non-broker private placement of common shares of the company for gross proceeds of $35 million. We believe the success of the private placement is a strong sign of confidence from our investors and reflects their support for our growth strategy. As you can see, we have had a strong first quarter and are well positioned to continue our growth trajectory throughout the remainder of 2021. I'll now turn the call over to Voxer President Jim Albertelli to provide additional guidance as to the company's strategic plan for the remainder of 2021.
spk04: Jim? Thank you, Gary. Good morning, everyone, and thank you for joining us. As you've just heard, we had a strong start to the year, which has given us the momentum to continue our growth trajectory. First, I'd like to discuss some of the recent initiatives and how they contribute to our overarching goal of modernizing and digitizing the real estate finance life cycle. Our Voxter Valuation Group has seen tremendous growth as a result of the ANOW acquisition. The ANOW platform is the only digitized appraisal records platform in North America that allows appraisers to sync their workflow directly to their lender, creating a more streamlined, customized process. ANOW has reduced appraisal turnaround times by more than 25% by putting the entire business into one interface. This is a critical step towards achieving Uberization across the real estate finance life cycle. It also brings the added benefits of greater efficiency and cost savings for home buyers, which is always our guiding principle. The Voxter Assessment Group has also experienced exponential growth as a result of the Apex acquisition in October of last year. The acquisition added critical functionality to our leading desktop valuation platform and has enabled us to accelerate our expansion beyond the Canadian market to cross-sell our tax assessment offerings throughout the US to over 2,200 APEX clients. Consisting primarily of counties and municipalities, these 2,200 clients comprise 70% or represent 70% of the US population. The combination of our pre-existing imagery technology and mobile optimized assessment technology with APEX's automated sketching technology allows us to capitalize on market gaps and expand into adjacent industries to bolster our offerings across the enterprise. In our title and settlement group, we have maintained profitability as a result of our countercyclical business model, which has allowed us to pivot from default and REO title into the more high volume refinance transactions we're seeing today. In addition to traditional title, escrow and settlement services, we have developed an innovative alternative to title insurance aimed at reducing closing costs for homeowners across the U.S. Our platform aggregates title data and uses decisioning algorithms to facilitate the production of title opinions with efficiency and scalability. Each opinion provides coverage equivalent to that of a traditional title policy and is backed by transactional liability insurance issued by an AM Best A-rated carrier. The insurance is fully transferable, extends for the life of the loan, and is administered by experienced industry professionals with mortgage expertise, resulting in a claims process that is much simpler, faster, and more likely to result in the payment of a claim than a traditional title insurance policy would. Finally, because these opinions are not generated within confines of title insurance regulation, they are priced commensurate with the risk and offered at a fraction of the cost of traditional title insurances. In states with filed or promulgated title insurance rates, the cost of our alternative may be up to 80% less than traditional title insurance. In many cases, the savings realized are as much as the entire monthly mortgage payment, a meaningful amount to most borrowers. With this alternative, we are bringing the benefit directly to the consumers who need it most. Finally, our data and analytics group has seen substantial growth in the first quarter, both organic and inorganic growth. Organically, we have continued to develop our InfoX platform with a focus on addressing client needs and responding to industry trends. For our lender clients, we've expanded our integrations to include additional data sources and loan origination systems. For our servicing clients, we've expanded our automated client interaction and workflow capabilities in response to evolving loss mitigation demands we see today as a result of COVID-19. And for our investor clients, we have enhanced our diligence capabilities to include automated court event monitoring and risk analysis. Inorganically, our acquisition of ANOW as the only secure end-to-end AI enabled and route optimized solution for North American appraisal market has accelerated the development of our data ingestion engine. As a result, we remain committed to the acquisition of data that is accretive to our offerings across the enterprise. Before we wrap up, I'd like to take a moment to discuss our sales efforts and the consultative approach that we have adopted to better serve our clients. Following the closing of the Voxer acquisition and the consolidation of the ILA and Voxer sales teams, we have continued to gain momentum and expand our sales pipeline across all business units. The merger created a unique opportunity for us to expand our product offerings while also expanding our footprint through a consultative sales approach and cross-selling to existing clients. It's our land and expand approach. Our distinct combination of offerings is uniquely valuable to lenders, services, and investors and moves us toward a digital reality that accomplishes our goals of lowering costs for consumers and increasing returns for investors. In summary, we had a strong first quarter and our pipeline is robust. We believe that the sales momentum we've gained during these few months is an indication of the need in our industry for more intelligent, innovative solutions that can be applied throughout the real estate finance life cycles. We remain committed to providing these solutions and look forward to sharing future results with you. Thank you for your support and your time today. We will now take any questions that you may have.
spk09: At this time, if you would like to ask a question, please use the chat feature to send a message directly to me, Rena O'Brien, and I will see that you are added to the queue. When you are next in the queue, I will call your name and unmute you. so that you may ask your question. Please stand by while we compile the question queue.
spk00: Gary, you are on mute in case you were trying to answer some of the questions.
spk09: Gavin, do you want to go ahead first?
spk01: Sure, yeah. Can you hear me? Yes. I can. Okay, great. I wanted to start out on your title insurance alternative. Jim, you gave some good color there in terms of how you see the market opportunity and the advantages of this product. Can you just talk about some of the gating items that you're trying to work through, both from a lender perspective and from a regulatory perspective? Sure. And then maybe if you could help us understand kind of the, you know, a size of our representative client or anything to help us kind of understand the size of the opportunity there. Go ahead, Jim.
spk04: Yeah, yeah, yeah, certainly. So first, Gavin, you know, when you talk about the gating that's involved in our next steps, let's talk about where we are today first and the gates that we've already traveled through. Because the Voxter has settlement services provide traditional title insurance to mid and large size mortgage banks and lenders. We've already built the pipe. to provide directly into loan origination systems and commonly referred to as LOSs like Ellie Mae or Empower with Black Knight. We've already provided the ability to and the pipe to deliver a traditional title insurance product or our alternative. So to provide at scale, the infrastructure is already constructed and ready to be delivered. Secondarily, because many mortgages originated and sold on the secondary market, they are originated according to Fannie, Freddie or Jenny standards. The second gate that we've passed through is the Freddie Mac gate. So we have done a thorough analysis of the lending guidelines on Fannie, Freddie and Jenny. And what we've determined and confirmed with Freddie Mac is that our alternative to title insurance meets all of the requisite standards necessary for a loan to enter into a Freddie Mac securitization. Furthermore, we've already produced a loan, and it is currently in a Freddie Mac securitization. The second gate was Fannie Mae. We've worked closely with Fannie Mae. I've met with the former head of single family, which was Andrew Bonsall, both while he was head of single family and after he left Fannie Mae recently. It was the past couple of months. and discussed it, and we've created a novel approach that will allow us to also provide our product in a Fannie Mae securitization. So the Fannie and Freddie gates have been passed through, and we're in the process of working through a pilot with a top 20 servicer and a top 20 bank at this time. So both of those are currently in flight. On the FHA and VA side, which create securities that ultimately are backed by Ginnie Mae, essentially FHA and VA standards have already been met. Our product would satisfy both the FHA and the VA, which is critical with the different things that are occurring in the country, not only the result of COVID, but also with the upward housing pressure and its effect on veterans. We have tremendous tailwind both at the VA and FHA for alternative to title insurance. We are working with Ginnie Mae to educate Ginnie as to the efficacy of our AM Best A-rated insurance. Of course, those insurance carriers that are behind our product are every bit as robust as a traditional title insurance company. So our next gate is coming as early as next week, and that's with Jenny May to continue that discourse and conversation. And we're working with Biden appointees to move this initiative forward. So that is the second component, kind of the second gating component of the production. When you think about what's the size of the market, well, between the U.S. and Canada, there's approximately 1.4 million new loans created monthly. So I would say that if you thought about just shirt sizing the current generated loans per month, that would be an initial indicator. On top of that, of course, you have the loans that transfer in the securitization process that require new title insurance policies. and other specialty title insurance products and services. So it's tremendously larger than that. But I think if you just took a swag at it, you said, okay, there's a million potential units a month and that we could attack in short order. I think that's a fair assessment of what's possible from the standpoint. The nice part about the alternative two is that first we have a a patent that is pending for the process of producing this combination. The attorney opinion in our data ingestion engine with the route optimization component for the attorneys that would provide this within our technology environment. And for us, it would be almost 100% margin business for Vox proper. So it's tremendously lucrative opportunity. It reduces the cost of title insurance between 20% and 80%, and maybe even more than that at higher dollar amounts. It is efficient. It is end-to-end encrypted. It is dual-factor authenticated for the participants that come in the environment. It will be more efficient. There will be no lost insurance policies when loans trade because we have an immutable record, and we can produce at scale, and we can produce in the current pipe That's already been built where we wherein we deliver our current title insurance products. So, you know, we've been you know, it's like they say in any innovation, you know, the overnight success took years to build. We're in that we are living proof of that. We've been working with, you know, that we worked initially with Trump appointees and and the executives and housing. prior to Trump's departure, and now we're working closely with the Biden administration. Now, we believe because of the singular rate structure across the country, it has the ability to ameliorate racial disparity, which we think is a key guiding principle of our company.
spk07: And to list on NASDAQ.
spk04: Someone came in and asked a question about listing on NASDAQ, I believe.
spk07: Yeah. Well, let's finish this up, Jimmy, first, and then we'll move to the next question.
spk04: Yeah. So I think, Gavin, in short, much of the gating has been accomplished. The work and the ground roots has been accomplished. We're working to get a couple of what we think are lodestar or indicative representative lenders across the finish line with the With this process, we believe the increasing rate structure and the tightening up of the refinance market is going to engender us to our lending clients. They're going to look to distinguish themselves when they put out a disclosure. They're going to want a lower cost disclosure. We believe that the equanimity for all racial groups, we believe what it can do to increase the home buying power of veterans, all are tailwinds that are going to help this technology proliferate. And look, people always then want to know, well, when, when will you start seeing this? You know, look, it's hard for me to give you an exact, you know, timeline because I'm working with compliance folks, legal folks in large financial institutions, generally that the sales cycle is a six to nine month sales cycle, but it's, is it realistic to believe that we could be producing in Q1 of 2022 at volume and scale? That's very realistic. And that's, you know, our goal is to continue with the pilot, complete the education piece with Ginny and the custodians that maintain the securities, which we are already doing now. And I think at that point in time, you'll see really a metamorphosis will be part of meaningful change for consumers throughout the U.S. in the housing space.
spk01: That's great. Thanks for all that color. Maybe just I'll lob in kind of one more before I kind of pop. the line here and it's on the a now acquisition uh can you give us a sense of kind of their their existing market penetration uh you know how you're thinking about gaining share and gaining clients with that platform um and then are there any kind of synergies that we should be thinking about between kind of a now and and their existing kind of platform uh versus versus kind of the clearosity business and some of the valuation work that you were already doing
spk07: Yeah, I'll take a stab at that, Jim. Sure. First of all, with ANOW and the concentration level, you know, ANOW is a platform that's fully digitized. So effectively, it allows appraisers to go out in the field and forgetting that the tape and the clipboard and the graph paper and the pen and Going back, which we do today, and filling it in a file on the computer and then transporting that through a PDF and XML is a little bit archaic and it's very time consuming and it's expensive for the consumer. Ultimately, it's expensive for the appraiser because they're limited to... you know, maybe appraisal to appraisal half a day. So with this technology and have it fully digitized where we've replicated every appraisal record in North America, it allows, you know, the appraiser to increase his productivity just on that platform alone by 25%. We certainly have a number of other measures to be able to increase that productivity, which I won't get into at this stage. But with respect to this concentration level of improving the business, I will tell you that we're doing approximately 25 Zoom calls a week right now with primarily major lenders. But the whole synergy between the two is that we know that with with the complexity and the technology that Marty Haldane has developed, that we believe that with the appraisal management companies that are out there today, and there's well over 300 throughout the U.S. of repute, we believe that we can reduce their cost right out of the chute by 25% by endorsing our technology and workflow platform rather than having to do things manually, which most are doing today. We also believe that most appraisal management companies of which we've had one, which have witnessed historically very low margins because of the cost of appraisers to do it because of, because of the manualization of the whole process. We do believe that, you know, by introducing, you know, technology for appraiser reviews, um, Uberization, you know, of the product is, is going to, um, distinctively increase the margins of the business and increase the productivity. So, you know, from a synergistic standpoint, we are putting, you know, the, basically the theory into practice with, with the valuation, with the Boxer valuation group that we have right now, and we're endorsing that and bringing that on. And, you know, we fully expect to be able to decrease our costs, you know, I think 50%, but I think realistically 25 is a good number to start off with. And that's amazing productivity for us. So I'm not sure if I've answered all the questions there, Gavin.
spk04: And Gavin, I'd add something to what Gary had to say, which I think part of your question was about seeing some of that functionality across our product suite. There are a couple of key components that I think are going to resonate. One is the route optimization component of the ANOW platform. the ability to route optimize service providers. So for example, we were talking about the attorney opinion. Well, you know, if you have attorneys or notaries or other participants that are out there that need to meet with clientele, being able to route optimize and create efficiencies for the deployment of those resources are key. And Marty has effectively done that. I call it herding cats. He's effectively done that with the appraisers. Second piece I think is that'll resonate across the product suite. is the ability of the AI-enabled aspect of what Marty's built to be leveraged across the platform. Marty has created in the ANOW platform the ability for consumers to provide and to schedule their own appointments via text and to use artificial intelligence to read the text, chat comments, to view multiple scheduling elements, and to then deploy and reschedule so that the consumer can have a seamless experience with the appraiser. If you look at the customer service surveys of appraisals for consumers, a lot of it's all around the uncertainty. The uncertainty of what the value will be, we can solve for that. The uncertainty around what the timeline looks like, we can solve that. The uncertainty around the individual coming to their home. So we add with our artificial intelligence a degree of certainty on all of those components. and security for consumers, and that last 10 yards, I'll say, to scoring, we've covered off efficiently, effectively, and we'll see that technology deployed elsewhere.
spk07: And just one last point that I'll make to that to talk about the adoption. Right now, there's currently over 100,000 transactions a month that are currently appraisers that are using it. Marty's platform. Our goal is between now and the end of the year that we're going to be in excess of 400,000 a month. That is our goal. It doesn't mean that we've papered, you know, guaranteed and take that to the bank. But we think it's realistic. And we do know that the way things are being done right now by charging $700 and taking 28 days for a bank to get an appraisal back to them is not something that's sustainable, acceptable, and will be, you know, continue to be adopted without, you know, criticism in the way things are done. So, we know that we can increase that productivity by a minimum of 25%. And I expect, you know, as much as 55% as we fulfill, you know, the technology on that.
spk01: That's very helpful. Congrats on all your progress and I'll pass the line.
spk07: Thank you.
spk01: Thank you, Gavin.
spk08: Thanks, Gavin. Marius, you're next up.
spk04: No, listen, it was...
spk02: Can you guys hear me okay?
spk07: I can now.
spk02: First of all, congratulations on such a wonderful quarter. The first question that I have is you did a private placement and you made one acquisition so far. Are there any more acquisitions in the pipeline? And also, can you comment on the NASDAQ listing? Thank you.
spk07: Well, I'll start off with the acquisitions. I think that everyone that has kind of followed my history know that we've been in our philosophy, certainly as a management team, is that we're open to acquisitions. To show that we have discipline in this area, there are four main aspects to our acquisition. First of all, it has to be in real estate. Number two, it has to be technology-driven. And so that's non-negotiable. The third aspect, it has to be accretive. So, you know, if we can buy these businesses at, you know, five to seven times and roll them into our marketplace, we're trading at 15, you know, that's, you know, our definition of accretive. The last, but certainly not least important, is the synergies. We take an example of Apex. Apex is a software. There are 2,200 counties across the country. We have been able to increase synergies. their business significantly with new contracts. I don't want to get into specifics because there's many that we're papering as we speak, but the business has grown exponentially by virtue of our mobile technology that we've tied in together. But even more impressively is that they have introduced us to many counties where we're bringing in our desktop valuation tools, our imagery applications that we built and the synergies we built on that. Effectively, we're going to get to the point where we don't really want to distinguish between the two and we'll just start reporting on those collectively together. But, you know, we're looking at massive increases. It's been a material success. You know, Cliff and the whole team at Apex, you know, should be commended. They've commanded, you know, fit into our team extremely well. And everything that we had hoped for in an acquisition has come through, you know, with the acquisition of Apex. So we're very, very happy there. So with that in mind and with that concept in mind, certainly we intend, you know, to continue to grow. And there will be acquisitions that take place. We're currently sitting with about $29 million of cash in the bank, plus or minus Canadian. And we want to be able to put that to good use and exponentially increase the returns we're getting for investors. I mean, at the end of the day, it's all about profits and it's all about increasing investor value. So we'll continue to do that. With respect to NASDAQ or New York Stock Exchange or whatever, let's just say that we believe in collaboration. We're talking to a number of experts in the field with respect to the benefits and any negativities that roll out of moving to a larger exchange. whether we do a dual exchange, whether we move to the U S there's no question. A lot of our business right now, the majority of our businesses in the U S although Canada is continuing to expand and double digit growth. So we're happy there. So in due time, we'll certainly be commenting on that, but, I would say to you that we're in a material collaboration process and making sure that, you know, it takes abilities to raise your children. And certainly we're just not hopping into anything, you know, without, you know, undue caution and being, you know, attentive to all of those respective matters. So certainly it's on the radar, but, you know, no decision has been made directly at this time.
spk08: Okay. Thank you, Donnie. You're next up.
spk07: I think you're on mute, Donnie. Hi, Garrett.
spk03: Sorry about that.
spk06: I just wanted to ask, what part of this company do you see the greatest growth coming from?
spk07: Well, you know, I think the highest, the best way to put that is going to be our growth in technology. So we have four main business units, taxation, valuation, title, you know, and our lobster ingestion engine. And so in the taxation side, the growth is going to become from a real property tax analytics platform where we have a predictive valuation tool that can tell you whether your taxes are too high, too low, and by how much. And our growth is going to come in that area. Again, it's software as a service model. We'll roll it out to municipalities. We'll roll it out to counties. And we'll certainly roll out. you know, in a B to C form, you know, in to the consumers. So, you know, again, in, in the taxation side, software as a service will, and our major growth will come in that area from a valuation standpoint, obviously the ingestion of Marty's world-class, you know, workflow digitized platform is going to be phenomenal. I think that you're going to see significant growth in that area over, you know, starting in, in, the latter part of Q2, but more materially in three and four. There's a time lag to onboard when we're dealing with major financial institutions and appraisers for that matter. There's a little bit of a time lag that goes with that, but you're certainly going to see, you know, massive adaptation of this software as a service model. So our growth and valuation is, will primarily come, you know, in that area. From a title standpoint, you know, we kind of mix that in with our box your ingestion engine, everything is about doing things quicker, faster, more accurate, and certainly, you know, from a cost effective basis cheaper. So there'll be a commingling of these services. And Jimmy, maybe you want to add on, you know, some of that growth on the on the title side, I think you're, obviously much more of an expert than I am in that side.
spk04: Yeah. Well, um, we have a, we have a couple of different, um, avenues for growth, um, in the title world. Uh, one, we are, clearly we're pivoting, um, to capture more and more of the, um, of the purchase money business in addition to the refinance flow that we've received. So, so we're making addition additional investments to capture purchase money. We believe the purchase market's going to remain robust for the, at least the foreseeable future next 12 to 24 months. And so we're doing that. There, there is some additional technology that it's out there that, that we will append to our system and hopefully we'll have some more details for the marketplace shortly on that. We expect to have that as a real hook to help grow that business very quickly. In addition, don't forget, this company has tremendous tailwinds that have been dormant. You know, we have a tremendous amount of technology that is in the default arena. So when we're talking about biggest growth aspects, in addition to Marty's, to the ANOW platform being part of the Voxter valuation suite, and that has tremendous opportunity and upside. Even with the number of transactions we're doing, it's a small penetration and we just see a vast upside there. What Gary just referred to in the tax arena with the analytics to be able to tell you about your tax, too high, too low, and by how much, is a brand new marketplace in the U.S. And then the title ingestion component, the engine, and the ability to do this alternative has vast upside. So picking one of these thoroughbreds, to be the winner of the race right now is tough. All of them have a lot of potential. Any one of them could support a company on their own. And so it really remains to be seen as market adoption occurs, where the market changes and goes, we'll be prepared for it. And again, We'll also be prepared in our default technology. We have a dormant bankruptcy environment over at Wells Fargo. Our bankruptcy environment is at Mr. Cooper, large mortgage servicers. We also provide default technology management for other servicers. All of that is waiting on the sideline to join the battle as soon as the moratorium is lifted. So you've got You've got origination and what I call the call business. And then you have the put business, which has been dormant because of the moratorium. The combination of those two are going to be tremendous growth for Voxter into 2022 and beyond. And so that's why it's so tough to pick a horse at this point.
spk07: Does that answer your question, Donnie? Yes. Thank you. Okay. You're welcome.
spk09: All right. Thank you, M.P., Your question, please.
spk03: Thank you. I'm mute. Yeah, I am. Thanks. So I peppered a whole bunch of questions in here. What do the cross-selling opportunities look like? What competitive advantage does the integrated company enjoy versus the standalone offerings of the previous acquired companies. I'll ask them all at once. How does the A&L acquisition complete the different offerings of the company? And after you've answered that, can you give some color on the board of director members? And then I guess lastly, what are the key drivers for the business for the different offerings? How does interest rate volatility impact the business? How does a strong economy impact the business? How does a weak economy impact the business? And I guess lastly, does the current technological advantages and integrations of the company help with attracting and closing new acquisitions?
spk06: Okay. So that's, you know, I started writing this down halfway through. So what were the first two questions? And then we'll take them one at a time.
spk03: They're in the chat. If you can pull up your chat, it's on your chat. Okay. Okay.
spk09: Gary, the first question was, what did the cross-selling opportunity look like?
spk07: Okay, good. And second question?
spk09: What competitive advantages does the integrated company enjoy versus being standalone? Yep.
spk07: Okay, so I'll take a stab at the cross-selling first, and I think this will be just kind of an ebb and flow with Jimmy and myself. From a cross-selling, I mean, as most people know, I started the Altus Group out of my house. And so this $2.5 billion company became an expert on how do you cross-sell. If you're doing valuations and you've got valuation data, then it makes some sense to integrate that in with sales. with taxation. And since you are dealing with the valuation and you're building new buildings and then hooked in with costs, we've taken that same kind of philosophy and basically said, you know, if we're doing valuations for lending, you know, we'll apply that same data and the same, you know, philosophy and incorporating that into taxation. And since, you know, in both cases, you need a valuation and everyone pays tax. A lot of cases, what is initiating the valuation? It's usually someone acquiring a property. So if you're acquiring a new property, then you have title. And, you know, and if you're going to need title insurance and you're going to need a proper ingestion engine to do that. So when I look at it, every one of them are dealing with, you know, the same integral or an integrated point. And that is the evaluation that's typically required because of a transaction that is being generated. So what, what Jim's team has done has put together, you know, a basket class, you know, sales team, and that is evolving if, You have to understand from last, you know, call it March, where we have a company that's valued at $10 million, $12 million, to where we are today, that's, you know, it's over $400 million. But if we take the non-voting shares, we're... encroaching on a half a billion dollars. We've certainly had to, you know, we've had some growing curves and we know that the existing sales team that we had in place was not sufficient. So Jim, because of his vast experience, I'm going to toot your horn a bit here, Jim. Jim knows who the best in class people are in the multitude of different disciplines. So we hired an individual by the name of Matt Herrick that basically was a senior executive at Old Republic. a guy that's been in the business forever and knows everyone. And he has built up an absolute A team with respect to our selling. And to that end, we've got, you know, $80 million of new business in the pipeline. If we take, you know, a risk, um review on that and to bring some certainty as far as new you know absolute new um opportunities come into place even if we applied an 80 discount to that you know we've got you know at least you know close to 20 million dollars of new opportunities that we have virtual certainty on generating between now and the end of the year These are new opportunities, new businesses, in addition to what we have right now. So this whole integration of cross-selling in that is a no-brainer. And all of our salespeople are well-versed on the different businesses that we're in. Jim, you want to talk about the integration of that as a second question?
spk04: Yeah. So when I mentioned in my prepared remarks that when I referred to it as the land and expand strategy, I look at, you know, multiplicity, a number of ways that we can grow our business organically or inorganically. One of the organic methodologies is to take the MSAs, the master services agreement we have with our financial clients, of which, you know, combined, we have over 250 master services agreement with you know, banks and financial institutions, mortgage servicers, et cetera, investors, small to large, right? And in that master service agreement, many times it takes to get to that point, you know, 12 months is a good representative timeline when it's a Wells Fargo or a JP Morgan or a Bank of America. So that's of that robustness. So to have those in place allows us to land and expand. And I think Gary alluded to it. I know Gary alluded to it, which is if you're going to originate a residential commercial mortgage, the sine qua non, the without which you can't do it, that's a rough Latin translation, is a valuation transaction. and is a status on the title component, right? So having the knowledge around those two components is key and essential to create new loan products. Having one allows you to sell the other. We've already seen this with clients where we provided our title or our title technology or title reports, and it's expanded into valuation. Because we've had the MSA, we've been at the table, and they can append easily the additional products and services. Another prime example was the opportunity we had recently to bid on some work for Wells Fargo. We bid on some replacement policy work. Why could we do that? Because we already were deploying technology at Wells Fargo to be able to do that. So Some of that is how the integrated offerings are better than the standalone is having the ability to do that land and expand. You know, the ANOW acquisition completes the offerings in a number of fashions. First, the ANOW offering allows our current technology in the chlorosity that was formerly in the chlorosity space to really move it into the 21st century. The chlorosity technology was very strong on its own, but the component and the ability to deliver in a end-to-end encrypted format all the way the last, I'll say, 10 yards I mentioned earlier to a consumer and now allow other products and services to ultimately be delivered to consumer expands our B2B business to a B2C business and gives us exposure to the end user. I think that component opens up twofold. One, it took what we had and it made it best in class. Two, It took B2B and gave us a B2C delivery mechanism, which will open up other partnerships in the future. For example, the partnership that may be with homeowners insurance, right? Where we can actually, now that we're touching consumers and we're touching consumers on every transaction, as opposed to just the winning transactions, because every transaction needs a valuation. We now have the pipe to pipe all the valuation and touch a consumer. So I think that might answer that question. I'm just going through your chat here.
spk03: Before you jump to the board of directors, if you could then maybe talk about what the different offerings are in terms of the impact of business for interest rates, strong economy, weak economy.
spk07: yeah for those yep so so we'll deal with the board of directors but just back to jimmy's comments they actually give me some valuable insight there jim and now i know that if i'm ever asked a question i don't know the answer i'll just let you talk in latin and uh get get me off the hook with respect to the board of directors, um, this was this, there's a lot of tough decisions, but you know, obviously when you're in business, you know, um, you have to do the right things, uh, for the growth of the business. So first of all, I just want to talk about the passport of directors that will be leaving at the end of this, um, quarter, um, their service, their insight, their mentorship has been invaluable. Um, But as we have transitioned in our business, where we were doing more work in the US, we're certainly opening up the channels of services that we're offering with respect to title. to the valuation side, and certainly even in taxes we're expanding in the U.S., we know that there has to be a transition as far as how you look at the board of directors. You do need experience. You do need mentorship. But we also have a pragmatic position to take, and that is If you're on the board of directors, we're not looking for fancy names. We're looking for people that can help us, you know, bring in business. We're looking for people that can help us attract money and certainly bring a lot of credibility and integrity to the process. We have the credibility and we had the integrity with the past board of directors are phenomenal. We've now reached the next phase. And so we're pleased to say, you know, I'll speak on behalf of, you know, some of the guys we brought in on Canada. I'm going to let Jimmy touch on the U.S. side. But from a Canadian perspective, we brought in Ray Williams. And Ray Williams is currently the vice chair of National Bank. Tremendous experience and exposure for us. But most importantly, most people don't know that Ray started the whole mortgage origination business for the National Bank. So that type of mentorship and experience will bode as well in Canada where most of their business is done. So we're really, really happy. You can mingle that with Jim Kelsey, who came on our board last year, partway through the year, who was formerly head of diversified for the Bank of Montreal, then moved to vice chair's position. Having two top five senior executives in the bank, in the areas of vocation that we're specializing in right now, This is not a small cap company board. This is a blue chip, you know, top class, you know, board of directors we have right now. And topping that off, we have a very well known and experienced board member in the name of Mike Harris. Now, most people know Mike as the former Premier of Ontario. You know, many years, Premier of Ontario brought in a lot of major people. Many important pieces of law and practices that still have stand the test of time. Mike is very experienced in government. A lot of our clients are in the counties, municipalities, provincial and state level. Mike's vast experience and helping us be able to channel areas in that sector is invaluable. So we're very fortunate to have Mike on our team. And Jimmy, maybe you can talk a little bit about some of our U.S. members, if that's okay.
spk04: Sure, sure. So, you know, yeah, on the board of directors, a couple of things to consider too is We were really looking for the best people across the board, Gary mentioned, that could generate business. We also want to be sensitive to our diversity requirements as a board. and our responsibility to society in general. So we were very thoughtful about who are the best people in the marketplace that will check those boxes and be able to really do all the things that Gary mentioned and continue on with the vision. Joe Murin is the former head of Ginnie Mae. He's on our board today. He will continue on the board. He is a tremendous resource. He's also very influential and an owner of New Day Financial, one of our mortgage clients. So long, long track record with Joe. He is very knowledgeable in this space and a super resource. We brought in one of the former head of the mortgage trading department, managing director of BlackRock, Mark Polisov. No one knows the mortgage resi trading space better than he. He left recently, created his own fund, raised tremendous dough to deploy. and the MSR space. And he adds and will help us expand in the capital markets, delivering our products and services to cap markets and really building that, helping us build that business unit and chart back course. We brought in the head of digital strategy at a major bank, Christy Sokominit. And Christy has led that charge for Flagstar. She'll be joining our our board as well. So we're super excited about her. We brought in Grant Moon. Grant is the CEO of Home Captain. He is a veteran. He's a Pacific Islander. He helps us expand our products and services and gives us an opportunity to bid on certain contracts. He expands that. And I think it's great that we have a veteran on board. he can help us lead that charge. Like I spoke about with the VA, he knows the VA lending very well. He has connection to all the major mortgage lenders and has led his company to have a number of MSAs with lenders that'll be accretive to Boxster. So when you're looking at the different board members that we've brought in on, we've expanded our depth and breadth across capital markets and adding that expertise We've added to our diversity with Ray and Christy and Grant. We've added to our scope and our reach within financial institutions with our board. And I think I couldn't be happier with the board members that they've agreed to work with us. They all bring new and interesting perspectives that are just going to be accretive to our overall operations.
spk07: Also, guys, not the least, but certainly one of the most important is Marty Haldane, which is also coming on. Marty, along with the acquisition of ANOW, was invited to the board primarily and strongly encouraged by me because Marty's depth and experience from a technology standpoint is something that we need at our board level. We're a technology company. You know, whether, you know, it's indexing data, whether it's building, you know, technology to enhance the valuation or taxation side of business like we didn't talk about, you know, Marty's tool that he's developed will also equally help not just valuation. for lending, the valuation for tax. So it's important. But Marty's depth from a technology standpoint, not only as a programmer, but understanding the applications of real estate valuation integrated with technology. is an integral part that we need on our board. So again, we think we balanced it with Jim, myself, and Marty as not in independence, and then bringing the majority of our group in as independents. Like Jim said, we've got, you know, and Grant, by the way, is not just a veteran, but a decorated veteran. So we really have diversity. We really have that depth of experience. And we think we've covered all aspects of the business. We're really, really, I'm personally, I'm very grateful to all, not just the past guys that have served who I love dearly, but also very grateful for our new members coming in and giving us the confidence to be able to get to that next level. So that's our board. I'll just touch on economy quickly because I know we're getting to the top of the hour soon and we should end. But what we like, you know, for the most part is change. It's not so much whether it's a bad economy or a good economy. For us, change is a big thing. And if you get change in valuations, you know, if interest rates change, you're going to get a volume and volume is good for us. The only thing that is really, you know, materially affected us, you know, on a short term basis is this whole moratorium that has been placed on foreclosures. We know that there's literally millions of properties are going to be subject to foreclosure. Doesn't mean that they're, you know, in bankruptcy and they're going to have, you know, the properties taken from them. But you do have to go through a process. And, you know, in Jim's particular case, the business that he ran when foreclosure was normal, that business had generated close to $100 million a year of revenue and $20 million of profit. All of that business is there, and that is going to come back because we do know the moratorium is going to be lifted. You know, you certainly have to ask Mr. Biden as far as when that will be lifted because no one has that answer. Right now, we're told the end of June, but it may be the end of September or maybe the end of the year. But I do know that for one thing, that business is not going away and that's going to come back with a flourish. And we are the only ones, and certainly Jim's former company, the law firm, is totally reliant on us for technology. So that business is going to come back with a, with a, with a boom for us. And it's going to have a material impact on our profitability, you know, and our revenue. And so from an economy standpoint, we're, we're pretty much, you know, risk adverse from highs and lows of the economy with exception of the unusual situation, you know, with respect to the moratorium, Jimmy, anything else to add on the, on the economic side?
spk04: No, I think, Gary, you've really couched it well. Both businesses can function well in either market, whether the prices are appreciating or depreciating, whether the rates are high or low. We have products and services that can address all of those changes. And as Gary mentioned, when the moratoria are lifted across the country, then you're going to see – I think you're going to see – It's the best of times, it's the worst of times, both of which we will benefit from as an enterprise.
spk03: And then the last question, sorry, the last question just is around the technological advantages of Voxter attracting and closing new businesses, because I'm going to assume that there are a whole bunch of businesses that are going to start looking at you as the acquirer of preference.
spk07: Well, we hope so, and we're certainly getting that from our discussions. I mean, all the main big title companies have approached us with respect to having access to this technology. Many of the major lenders are certainly looking at us in a material way. Our whole tax process, when we talk about rolling out the RPTA, that's one thing, but what we didn't disclose was the fact that every major lender that is out there not only is looking at valuations to assure that they protect the loan, but they also have a material exposure with respect to tax. Tax is the largest expense after debt service. And so if they're pining and getting security with respect to the valuations, they also should look at tax. It's not abnormal for, you know, a $6,000 to $10,000 property tax bill to come in place. And if we're able to show that that property may be exposed to an increase in $5,000 or $6,000, it may materially impact, you know, on whether they want to make a loan or not. And conversely, if we can lower taxes by four or five thousand dollars, then it materially enhances the value of the property and secures, you know, the lender with respect to his, you know, satisfying that he's less risk adverse by having, you know, a material cost reduced. So, you know, from a from a technology standpoint, yes. You know, we've got, you know, so much, you know, to offer in that area. And so as a result of this, you know, some of these opportunities are quick closing, like with the appraisers, and some take a little bit longer with the onboarding of title ingestion engine, with the onboarding of Marty's platform. The credit unions, for example, are able to pivot and adapt a little bit quicker. The larger institutions be able to remove from one platform onto the new one is a transition and does take time. And so I think we got, you know, room for one more question and we need to wrap it up. Is there another one out there or do we shut it down? Lee? I just got a note from him. You're still there, Lee?
spk05: Yeah. Hey, Gary. How are you doing? Am I off mute? Yes, you are. Yeah. Obviously, just want to congratulate you guys on how things have come together. I've been a happy shareholder for a couple of years now. My question is, obviously, the ecosystem you guys have built has taken a lot of heavy lifting to optimize, work out how the ecosystem all comes together. I guess my question is, when do you envisage that you will see a full year revenue cycle looking forward with the entire ecosystem fully optimized?
spk07: Well, it's a loaded question, Lee. I mean, I could say... you know, basically I could say from the third quarter to the third quarter, but quite frankly, you know, everything that we're doing and you've known me for a long time, Lee, and you know that anytime we get an opportunity to improve the business, improve our profits, and if it adds a slight twist to what we're doing, we're going to take advantage of that. But, you know, we think that, you know, Marty's going to see some, you know, positive, you introductions to his business. We got our BTA that probably won't roll out in a material way until the early 2021. But we will see, you know, probably some very significant contracts that have come in place this year, whether it's at the provincial level, the state level, you know, a municipal level, we do know that is being adopted. It is a go to tool that will be endorsed by by many. So, you know, from an RPTA standpoint, we'll start seeing some acknowledgement and recognition probably in the third quarter and improving, but in a material way in 2022. Marty, again, third quarter, fourth quarter. I think that, you know, to prepare everybody, we'll probably have some nice announcements and some, you know, new contracts that we may be able to press release later on in the second quarter. But as far as fully adapting and integrating and realizing that revenue, partially in the third quarter and then more material where in the fourth quarter and beyond.
spk05: All right. Thanks. Okay.
spk09: All right.
spk05: Okay, guys.
spk09: Oh, that concludes the question and answer session. Thank you, everybody. I'm going to turn it back over to Gary Yellman for closing remarks.
spk07: Thank you very much. And I really do appreciate the questions. And it's kind of a watershed moment for us, given the fact that this is our first webinar. quarterly reporting that we've had on an earnings call and it's a transition from you know where we were and again so thankful and grateful to the four the founders of this company the Jeff Young and the Jeff Hacks and how this whole business has emerged but anyways it's been exciting and hopefully this is a good start of many things to come but in closing we're pleased with our strong start to the year we're confident in our outlook for the remainder of the year I'd like to thank our investors and clients for the partnership and certainly my colleagues for their exceptional efforts and dedication to our company. Thank you all for joining us on the call today, for your interest in growing our company. Certainly enjoy the rest of the day. And again, thank you for everything. This will terminate the meeting. Thank you, guys.
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