Voxtur Analytics Corp.

Good morning, ladies and gentlemen, and welcome to the Voxter Analytics earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, July 26, 2023. I would now like to turn the conference over to Mr. Jordan Ross. Please go ahead, sir.

Good morning, everyone. Thank you for joining us for the Boxster fourth quarter and year-ended 2022 and first quarter 2023 earnings call, where we will discuss our financial results and business highlights. Please note that our Q4 and year-ended 2022 results were released July 17, 2023, and our Q1 2023 results were released July 24, 2023. and can be accessed on CDAR and our website at voxter.com. Joining me today are CEO Gary Yeoman and CFO Robin Dyson. We will begin with prepared remarks and then move into a Q&A. If we are unable to get to your questions, you're always welcome to contact me directly at george.voxter.com. Robin will begin by reviewing... After that, Gary Yeoman has to hear progress through various organic and inorganic growth initiatives, as well as some of the operational efficiencies. Before we get started, please be advised that some of the information that we will share on this call may contain forward-looking statements. 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 expectations. Further, 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 as we believe that they provide a meaningful measurement of financial performance and valuations. These 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 releases distributed on July 18, 2023 and July 24, 2023, as well as our management discussion and analysis, both of which are available at on CDAR and on our website at voxtr.com. A replay of today's call will also be posted on our website. Finally, please note that all references to amounts or currency during today's call are to Canadian dollars unless otherwise stated. I'll now turn the call over to our CFO, Robin Dyson.

Thank you, Jordan. Good morning, everyone, and thank you for joining us today. As I am sure each of you are aware, in March of this year, the company's auditors at that time, Markham LLP, resigned from the Voxter annual audit engagement, providing no reason for such resignation. This left the company in a very difficult position with respect to onboarding a new audit firm and starting the audit process over entirely. We have worked extremely diligently with M&P, the company's new auditors, to file our audited annual financial statements. This was completed July 17th. Our 2023 Q1 financial statements were filed July 24th. As a result of the late filing of the Q1 material, our shares were halted from trading. A revocation of this halt has now been issued by the OSC, and we have filed an application with the TSX-V to resume the trading of our shares. We expect trading will resume in the very near term, and we will keep investors updated on this status. Before discussing financial results, I will first address market conditions and Boxer's response. U.S. prime interest rate increases over the course of 2022 were unprecedented. From the beginning of 2022 to the end of the first quarter of 2023, rates increased from 3.25% to 8%. This rapid increase in interest rates had a detrimental impact on the revenue of various Boxer lines of business, particularly appraisal services, capital markets, and titles. In response to our lower than expected revenue, the company has focused on cost reductions and adjustments to the company's strategy, which Gary Yeoman, our CEO, will speak to further later in this call. I will now address material changes in the company's balance sheet. In 2022, the company acquired Bluewater. To finance the cash component of the purchase price of this acquisition, the company expanded its credit facility with the Bank of Montreal by $30 million USD thus increasing long-term debt recorded. As at March 31st, 2023, the company was not in compliance with one of its financial covenants with respect to its credit facilities. As the company does not have a waiver of its covenant for at least one year beyond the recording date, in accordance with IFRS, the company has re-classified the full outstanding balance as current as opposed to long-term in the 2023 Q1 financial statements. With respect to the year end of December 31st, 2022, the company completed goodwill and intangible asset impairment testing and determined that an impairment loss of approximately $185 million was required to be recorded, thus reducing goodwill and intangible assets by this amount. This impairment loss is not reflective of what the company believes the related future value of the acquired businesses will be, but rather what can be fully supported without making future growth assumptions beyond a very modest amount. Boxster is not alone in recording impairment losses in 2022. Other comparative companies have recorded proportionately greater losses. Shifting to our discussion of revenue. Revenue increased to $151 million for fiscal 2022 as compared to $96 million for fiscal 2021. This increase is primarily attributable to an increase in U.S.-based revenue resulting from business acquisitions which closed between September 2021 and September 2022. In the first quarter of 2023, revenue decreased to $28.7 million as compared to $40.8 million for the same period in the prior year. This decrease was primarily attributable to, one, the negative impact of significantly increased interest rates in 2023 on our appraisal services line of business, and two, the negative impact on revenue of amendments made to a services agreement with the related parties. which took effect January 1, 2023. While the amendments resulted in decreased top line revenue, it allowed the company to shift responsibility for a significant amount of the associated direct costs to the related parties. I will now address gross profit. Gross profit increased to $55 million for 2022 as compared to $37 million for 2021. This increase is primarily attributable to the increase in revenue that we have discussed and the composition of revenue due to business acquisitions completed in the latter half of 2021 and 2022. Despite the decrease in revenue in the first quarter of 2023 compared to the first quarter of 2022, gross profit was relatively flat, decreasing from $13.9 million to $13.5 million. This primarily relates to the composition of revenue and cost improvements. We are committed to growing revenue. However, our primary focus is attaining profitability. I will now turn the call over to Gary Yeoman, our CEO, to provide a business and strategy update.