Good morning, everyone. Thank you for joining us for the Voxtur first quarter earnings call where we will discuss our financial results for the period ended March 31, 2022 Please note that our results were yesterday May 30th after the market closed and can be access on SEDAR or on our website at voxtur.com.

Joining me today are Executive Chairman, Gary Yeoman; CEO, Jim Albertelli; and CFO, Angela Little. We will begin with prepared remarks and then move into Q&A session.

If we are unable to get to your question, you are always welcome to contact me directly at [email protected]. Angela Little will start by discussing our financial results, Gary Yeoman will then present our strategic vision and initiatives for 2022 and their updates.

Finally, Jim Albertelli will provide an update on how we achieving our goals through organic growth opportunities and 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 valuation. 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 release distributed yesterday May 30th. And our Management's Discussion and Analysis both of which are available @sedar.com.

And on our website @voxer.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 in Canadian dollars unless otherwise stated. I'll now turn the call over to our CFO, Angela Little.

Thank you, Jordan. Good morning and thank you everyone for joining us.

2022 is off to a great start for our company. We continue to reinvest in the company as well as execute against our strategic growth initiatives, and are pleased to report that revenue and gross profit have continued to increase quarter-over-quarter and year-over-year.

Q1 2022 revenue was $40.8 million which represents 182% increase over Q1, 2021 and a 5% increase over Q4, 2021. Q1, 2022 gross profit was $13.9 million representing a 93% increase over Q1, 2021 and an 11% increase over Q4, 2021.

Q1, 2022 revenue and gross profit increased over Q4 despite normal seasonality in the title and valuation market as well as interest rate increases, illustrating the company is rate agnostic as its impacts were offset by increases in default title and valuation, as well as increases in HELOC activity. We expect to continue to see increases in these areas, particularly in Q3 and Q4 of 2022.

Revenue from US Operations represented approximately 96% of total revenue for Q1, 2022, up from approximately 87% for Q1, 2021 and 94% for Q4, 2021. This is a result of our continued expansion into US markets, following the Apex, Voxtur, Anow, Xome and Benutech acquisitions.

Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $32 million leaving the company well positioned to continue executing on its strategic growth plans. For 2022, our focus continues to be on revenue growth.

As I already noted, we can expect continued growth from default title and valuation and HELOC activity. We also expect increases from Benutech and our other SaaS offerings, as well as new product offerings, including the attorney opinion letter, Real Property Tax analytics enhancements, and Voxtur Wealth.

These increases will primarily be in the third and fourth quarter of 2022. As a result of the increases in revenue combined with efficiencies and synergies gained from the investments made over the last year, we anticipate positive EBITDA during the latter part of 2022.

With regard to the 2022 guidance, we're confident both the revenue range of $170 million to $190 million, and the gross profit range of $87 million to $97 million are appropriate based on our Q1 results and anticipated projections for the remainder of 2022. I will now turn the call over to our Executive Chairman, Gary Yeoman, to provide additional guidance and to the company's strategic focus for the remainder of 2022.

Thank you, Angela. And good morning, everyone.

And thank you for joining us. The material investments we've made in the first quarter are in flight.

As we leverage our investments in human capital, technology, and infrastructure we remain focused on SaaS based solutions. From the beginning Voxtur’s targeted accretive acquisitions with a focus on data as a foundation for tools that can reduce costs and inefficiencies in real estate transactions.

A few constant pillars remained at the core of our playbook. We look for opportunities to grow organically within each business unit.

You've watched as we've work to strategically integrate our acquisitions with existing technology to expand our footprint within each client base. Positioning is another key growth strategy as we continue to build, scale and drive growth in our core business units, valuation tax and title.

We continue to refine our business model and invest accordingly, asking which products are best suited to drive our multifaceted growth plan. This together with our investments in data enable us to continually expand our capabilities to meet client needs in the changing market.

We remain steadfast in our commitment to reduce the cost of homeownership. This is evidenced by our Voxtur AOL platform which combines sophisticated title processes with legal expertise to create attorney opinion letters with accuracy and scale.

This alternative to title insurance offered at a fraction of the cost directly for the benefit of the consumer is gaining traction quickly with lenders of all sizes. Further, we are expanding our Real Property Tax analytics product capabilities by leveraging a proprietary algorithm built on 40 years of historical data to generate comparison modeling.

We combined Voxtur verified data attributes, mapping imagery and census data with local assessment data to analyze property values and verify taxes. Finally, we have accelerated the development of our Voxtur Wealth platform to create an asset management tool to facilitate more intelligent management of real estate assets.

Every facet of the client's real estate investment will be transparent, and Voxtur verified. As we continue to integrate our acquired businesses with our organized business, we're seeing substantial efficiencies and strategic synergies resulting from operating on a single platform.

We will continue to focus on capturing market share and improving our SaaS based applications even further. We are confident in our ability to sustain strong growth and long-term profitability.

Our previous guidance implies a profitability improvement in the second half of the year, which we expect to adhere to. I will now turn the call over to our CEO, Jim Albertelli, to highlight our execution and operational strategies, Jim?

Thanks, Gary. Good morning, everyone.

And thank you for joining us. Our first quarter results are indicative of our continuing investment and the market opportunity with us which add to current environment necessitates continued discipline, and we are actively evaluating our priorities to ensure that we scale sustainably and efficiently.

We continue to look for efficiency gains across the organization as we remain focused on areas that drive growth and have a proven return profile. Our strategic focus on growth through increased market share is evidenced by new partnerships in investments and infrastructure.

Our partnerships allow us to concomitantly expand our expertise and our product offerings. This organic growth strategy, which includes scale base leverage, balanced unit economics, and methodical asset utilization will allow us to grow efficiently and profitably.

Additionally, we continue to refine our strategy with the upcoming launch of our Voxtur AOL. And as you know, our AOL as an alternative to title insurance has been approved for use by both Fannie Mae and Freddie Mac.

As agency acceptance becomes more widespread, we see more opportunities for increased market share through organic growth and partnerships. Since our last earnings call, we've been actively engaged with our lending partners fielding inquiries and guiding Tier 1and Tier 2 lending institutions through the Voxtur AOL onboarding process.

We are also leveraging relationships across the enterprise to build a robust distribution network. As Gary mentioned, we intend to launch two new platforms.

First, we will deploy Real Property Tax analytics, RPTA in the United States as a tool for consumers to determine whether their taxes are too high, or too low and by how much. We anticipate that this will bring unexpected transparency to taxation as Voxtur facilitates consumer appeals through data.

By assimilating and normalizing historical data from multiple sources, Voxtur can provide lenders, investors and homeowners with unprecedented insight into their most significant home operating expense. This offering will open the door to new lending standards as mortgage servicers will have to do a proper data driven comparison to choose the best line of sight on one of the largest expenses being carried on their books.

We see this as an exciting opportunity. Second, Voxtur Wealth is an aggregation of various data elements that we assemble in our normalized data mesh architecture directly for the benefit of the homeowner.

It's another cloud native technology that combines all of the real property data in one location to allow wealth advisors and consumers to manage their highest value assets. Each of these three transformative platforms marks a significant milestone in the Voxtur story.

Voxtur continues to invest in solutions to serve our consuming constituents, financial institutions, mortgage servicers, mortgage investors, taxing authorities, and ultimately consumers. Finally, we see the Default business rent finally ramping up.

This increase in our niche business gives us unique insight into the business of originating and servicing mortgages, which in turn allows us to better address the issues that each servicer, lender investor faces. Voxtur continues to instill confidence through its partnerships allowing continued growth in this business line.

Borrowers across the United States saw gain of over $3.2 trillion in equity in 2021 alone, according to CoreLogic. And with a whole, a hot housing market driving up home prices, many homebuyers or homeowners are finding themselves with increased equity.

As a result, we also expect to see growth in home equity as borrowers adjust for inflation. We will be prepared to serve this market as well as with products that are currently in production.

Financial institutions see value in technology and innovation. Voxtur is quickly becoming one of the most trusted providers in the space.

We are well positioned to continue providing intelligent, data driven solutions that will flourish with the macroeconomic tailwind. And we will continue our mission to make homeownership more affordable.

The opportunity before us is significant. And we look forward to achieving our goals that we have set forward for 2022 and beyond.

Thank you for joining us on the call today. We are appreciative of your time and your interest.

We'd be happy to answer any questions that you may have at this time. I'll hand it over to the operator to start the Q&A.

Thank you.

Hi, good morning. So quick question for me.

And I believe you guys briefly mentioned this earlier on. So when looking at the current cycle with regards to the inflationary and interest rate environment, can you provide more color as to how the velocity of home ownership transactions could evolve?

And how that could impact Voxtur’s business going from here?

Sure, I'll take that question. I mean, this is really, really important to look at our four main business operations.

First of all, let's look at our tax platform. Everyone knows that there's two certainties in life, death and taxes, and taxes don't go away no matter what the price is.

So having this new offering Real Property Tax Analytics, new offering in the US that is we've been providing this in Canada for some time now. It is basically anti-cyclical.

We will be there in good times and we'll be there in bad times. One thing you can't avoid this taxes and what we want to do is bring certainty to the integrity of that amount.

So that's a nice anti-cyclical offering that we have. The other end anti cycling offering that we have is the asset management fee.

With our programmatic asset management platform we will have the ability to provide certainty and cost savings in the management of those assets. Again, anti-cyclical in operating a house, you need to deal with taxes, you need to deal with mortgage payments.

You need to deal with grass cutting, snow removal, pest control, pool service. You need to deal with insurance.

You need to deal with if you're buying or selling a property, or you're managing opportunities for mortgage renewals. All of that has nothing to do with inflation, it is anti-cyclical, and that brings a consistency in our valuation.

Now with the other two offerings with Jim and Stacy's new Provide Attorney Opinion Letter, obviously, the number of transactions will change with the advent of interest rates, but what is important in our view is that, by us being able to provide a new title alternative, which basically would may constitute as much as 50% or more in savings on that title, we think market penetration will more than offset any decline in the number of transactions to take place. We also think that that holds true with our valuation.

As everyone knows, Fannie has talked about the intervention of the new desktop, valuation platform, desktop evaluation platform is going to reduce the number of requirements for the appraiser to sign off. What does that mean are digitized appraisal valuation process will climb to the top of the ladder, also, which goes without mentioning, they've also now going to require sketches.

And in addition to sketches, some kind of augmented, floorplan layouts. We have the number one sketch, mobile application in North America, it's been around for 40 years; it is NC certified.

We believe that we carry the largest repository of sketches in North America. The advent of this digitized valuation process, which originally started with our Anow acquisition and basically augmenting that with the sketch which we have generated from our Apex company, combining those two together, we think it's going to separate us.

So what we have is two businesses that we're going to get increased market penetration to offset any cyclicality in the decline, and to businesses that are anti-cyclical total because taxes and asset management are not affected by that.

Hi, good morning. And thanks for the update.

As I think of the gross margin expansion to the year. Are there ways you're thinking about expanding margins across segments such as Xome or the settlement services?

Or do you think a lot of the margin expansion since Q4 will that come from new solutions under the business?

Angela, do you want to address that?

Sure, I'm happy to. Thanks for the question.

Yes, we are obviously in Q1, we have seen margin expansion from the Benutech, which we acquired in December. As we look through the remainder of the year, we do expect increases from the consolidation of valuation are a now staff based product, gaining efficiencies across the rest of the valuation platform, as well as expansion in some of our other SaaS businesses, and expansions from some of the activity that Gary just discussed in AOL, enhancements to the real property tax, and our real wealth product.

Okay, that’s helpful.

So, Christian -- Chris, I was just going to say, to bring a little bit more clarity, we expect with our SaaS based products, that we're going to have margins that are going to be north of the gross margins north of 80%. And in most cases, profit margins that will be north of 70%.

So as the increase in those new products start taking place, and you're going to see an acceleration in our gross margin. Hence, when we gave our forecasts with respect to revenues, and profit margins, all of that was modestly included in the enhancement of the new offerings that are coming out.

Okay, perfect. Then [Indiscernible] a lot of the expansion through the year.

I’ll ask one more question. It's related to one of the products to the AOL product, just looking for maybe more candid commentary from what Jim spoke on earlier.

But in your conversations with Tier 1 and 2 lenders, just wondering, yes, from your seat what you’re hearing in the marketplace, their appetite for moving over from traditional insurance products. And maybe as a last question, what catalysts we can look out for, as you guys keep us updated through the year.

Yes, sure. So this is Jim Albertelli.

So I've been in personal contact with five of the top 10 lending institutions. And we've fielded inquiries from barring one, say nine of the top 10 Tier 1 lending institutions in the United States around the product offering.

As you know, the onboarding process does take some time, the education process takes some time. So the first, I'll say the first half of this month it was really spent with the GSEs having direct conversations that we were facilitating, so you could get the lay of the land.

At this point in time now we're beyond that. We're in the contracting phase with several lenders.

Think about the increase in rates as being a great catalyst. And a tailwind for Voxtur and so far as in two regards.

One, the reduction in the cash out refinance business. And the limitation on supply means that every loan is that much more important.

Whereas in the past two years, they were drinking out of a fire hose, and really, there was no appetite, interest or inclination and innovation, quite frankly, if they would have they would have taken their eye off of unique market opportunity. Now all that's changed.

And it's that exchange has been accelerated, we're looking at least two additional interest rate increases, I believe, to continue to tamp down on inflation. And certainly supply side economics are going to change that in the near term.

So from our vantage point, the conversation with the lenders becoming more competitive on a per unit basis, by being able to disclose what is oftentimes more than $1,000 Delta, in the expenses around a closing is pretty compelling. And so with the market signing up, where you're seeing a number of lenders doing what layoffs, staunch the flow of talent, at the same time is increased the consumers wallet share or retain the clients that they have in their service portfolio.

And to do so they need more competitive products. And that's where the AOL comes into place.

Additionally, several lenders were under different forms of consent orders, as you can imagine, with various regulatory bodies in the US. Some of those are necessitating a refinance of large tranches of their portfolio for disaffected and minority borrowers.

And as the AOL provides a tremendous opportunities, since there'll be paying the closing costs, reducing that cost profile and being more effective. So that's what's transpiring today.

I expect that the contracting process will be resolved and the distribution network we've signed a number of large providers settlement services in the country to confidentiality agreements, we're in the process of looking at who the top one or two or three providers might be that can help us distribute the product at scale, that have considerable market share and have the same approvals or complimentary approvals to Voxtur. And so we see all of those factors coming together in throughout June and into July and starting that production in earnest.

And then it'll be really a rapid scale exercise. But I think we've got at least a two if not three pronged attack at scale, internally and externally.

So I think we're well positioned for that Q3, Q4 growth targets that we're highlighting.

Good morning, everyone. I've couple of questions, sort of in a few different orders, obviously, in the [mic] that came out recently there is talk about a 20 to 1 consolidation.

Is that in preparation for an up listing and really require something that extreme in the 20 to 1 consolidation?

Right, well, yes, it is, Colin, as far as with respect to proposed up listing. Obviously, we're completing our perspective on circular and ready to make application for an up listing, which will take a little bit of time because we haven't filed prospectus before.

But we were advised by our large institutions that are leading this exchange that we have to go to the shareholders, and we have to get permission to consolidate, if it is necessary. So their advice was, keep it as high as you can, knowing full well that there'll be an abundance of changes hopefully in a much more positive way as far as our revenue and profits increased so will our share price.

And so it gives us complete flexibility on what that consolidation, if any, is needed. So it is not saying that we're going to do a 20 to 1 what is it is saying is giving us total flexibility, so that we can evaluate what the market conditions are.

Test waters as far as what would be the most soluble price as far as what we put on the marketplace, and then govern ourselves accordingly. So it's just -- it's a caretaking safekeeping measure so you don't have to go back to the shareholders again.

Understood. Is there any contemplation of doing TSX prior to a US listing?

Or would you do them concurrent still?

Yes, it'll be a dual listing. But we suspect and again, I don't have certainly, we suspect that the TSX listing will come first, given there'll be less scrutiny since we're already on the venture.

And the US listing would take a little bit more time, because obviously, we're not on a major scan in the US right now. And so they're reviewing all of our acquisitions, our circulars, and the prospectus.

All of that is going to take some time, and hopefully not as much as one might think. So, we believe strongly that the opportunity to be able to explain software as a service offerings to be able to have that opportunity to expand it to a larger customer base, including pension funds, as well as retail and others is extremely important.

And, as , I mean, there's a number of indexes out there, whether it's the Bessemer Cloud Index Fund, or whether it's Software Equity Group, when you go to those publications, and you take a look at what software as a service providers are trading at. We believe that we as a company, given our offerings that we not only have but the new offerings that are out there, we believe that we have all the indications from revenue growth, increase in profit margins, profitability that will put us in the strong position in the third and fourth quarters.

And profit margins, obviously, will all increase in material way as we go through the year. And we think that that will having that understanding of who we are and what we're doing, and expanding that to a larger base, including the US, of course, will manifest itself into hopefully better multiples as far as what we're trading at right now.

Okay, cheers. And the other question I have is share based compensation that seems to be fairly consistently high on the financials.

Is that a permanent fixture? Is this mostly a function of the acquisitions?

It's more a function of the acquisitions, Colin that we've had to obviously, when you're putting together acquisitions, there's a lot of variables, and it comes to getting people across the line and over the table. And one of the key things is basically, key employee retention.

And so the issue of restricted share units is a key retention opportunity for us. We believe that it is you're going to see significant leveling off of that, but never will it disappear.

Because if we do an acquisition, not only the ability to kind of take advantage of the synergies with the technology that we're acquiring, but making sure that the brains behind all of that is that we got that knowledge retention, as well. And so that will always be used as a tool.

But more so because we have been fairly prolific in our acquisitions over the last year. And so I think it's more than an anomaly than a rule.

Gary, I can provide a little -- for 2022, if you'd like that number is sort of front loaded in Q1, just how the grands and investing took place, and it will go down considerably for Q2, and then it will go down again, for Q3 and Q4, based on what's currently out there.

So that's based on just what you see now without any further, I mean, another acquisition would change that obviously, correct?

That is correct. Yes.

Okay. Angela, while I've got you, the other questions I have are sort of around this the cash flow from operations of the day sales outstanding.

The cash flow from operations seem to be getting more materially impacted by many non-cash elements. I think out of the $11 million operating loss, about $8 million round milled numbers was from non-cash operating or non-cash items.

Is that going to be getting partially corrected by the share based compensation issues?

That will be part of it. There's also, Q1 also from a timing perspective does have more expenses, some of them adjustments to EBITDA than some of the other quarters.

The amortization that you see in that add back that's going to continue just based on the acquisitions in the intangibles. But I do think you'll see some improvement in some of those other areas.

In terms of the intangibles, is that basically on a 10 year, even straight line amortization?

For the most part, yes, we look at each acquisition, obviously, on its own and do a fair value and purchase price allocation analysis. But that's a fair average for the consolidated.

And I've been noticing that day sales outstanding has been laxing. Is that any particular business that's dropped or is that just a market function or what's driving the DSO?

You're speaking of the accounts receivable.

Yes, day sales outstanding. Yes.

Yes. Some of that is going to correct itself in Q2, we are expecting for the accounts receivable to go down quite a bit.

We're going to be collecting on some of the related party balances. So I think you'll see a big improvement from Q1 to Q2.

Okay. I was going to ask you about that AR stuff.

I know this is a picky, tricky thing. But I know you cured it in the past and you have a great relationship with BMO, but you have another debt covenant breach.

We do.

Where -- how could you view -- do you to expect that to solve quickly as it did the last time?

I do. I expect it to be solved for Q2, as you mentioned, I mean, BMO is obviously been a great partner to us and continues to be a great partner.

We are in the midst of revising the loan cabinets for through the rest of this year. So I expect we will be in compliance for Q2.

We won't have a need for a waiver. And we should be good for the end of the year.

Okay, that's great to hear. The other question I have is gross margin looks like it is back.

So you had decent margins last year sort of early just after the acquisition. It's sorted to trend down a little bit and then you had the Xome acquisition that materially impacted it.

Correct.

It's expanded again which is great to see. I have run some sensitivity analysis but is it basically that the new business as it expands.

So I did a simple math, which was a $1 million of around 80% gross margin gives you about a 1.23% increase in gross margin. Is that roughly what we're seeing is just your marginal business is now just coming in at higher mark like significantly higher margins and the core businesses dragging it back.

And by core, sorry not core, but legacy business like Xome is the primary drags on at this point.

Yes. And I think back to Gary's point, I mean, obviously, our focus is on the more staff based products and transitioning to that model.

So you're right, that traditional valuation, the acquisition of Xome clearly had an impact as we move forward. And we had the Benutech acquisition in December.

So that's certainly helping. And we continue to look for ways to enhance those SaaS based offerings, AOL will be [Indiscernible] as well as the additional tax products.

So I do, I sort of echo what Gary's already said. I think by the back half of the year, you're going to see that improved quite a bit.

Yes, Colin, if I can just expand on that a bit. We basically we have merged all of our valuation offerings into what we call Voxtur valuation.

And if you explore what's happening in the marketplace today, especially with the advent in July of Fannie bringing on the new desktop valuation protocol, what you're going to see is a really, really nice mix for us because traditional valuation is not going to go away. It's going to be here to stay.

How quickly the transition into a digitized valuation platform with the desk, with the sketches, and that is yet to be determined, but clearly what you have to offer is both. And so, Anow is way ahead of its time.

But that full digitized platform along with an insurance wrapper around that we think is going to be extremely prolific. And then when you add on our repository of sketches, which with their floorplan layout, you put those two together, we think we're in rarefied air, when we think we're going to complement nicely with the Xome traditional valuation process.

So we'll be able to offer both. In addition to that, you have other alternative valuations like broker price opinion, evaluations, et cetera, that are also notably higher margin of business.

So I think that come July and the third and fourth quarters, the valuation margins will improve. Again, everybody knows, if you took a look at all other AMCs around the country that their margins, gross margins are typically somewhere around 22% to 23%.

Our blend is higher is going to continue to go higher, Colin.

Good. Thank you.

So Angela, in Q1, you stated that you were on revenue target. And you've bolstered that again, today, maybe moderately lazy, from time to time.

I took the approach of taking $170 million, and divided it by four, which gave me 42.5 as the low end.

Right.

You came in at 40.8. So I'm guessing, which is only 4% off, by the way, which is great.

So my laziness paid off. Look, so my question then is, do you anticipate seeing sort of a steady ramp in the revenue throughout the year, so it's not, I've just assumed as four equal quarters, but I'm going to guess it has some sort of ramp built into it.

Yes. It does.

So Q2, we don't really anticipate a dramatic change from Q1. It's Q3 and Q4, where I think you're going to see the most significant increases.

And I think, sort of the combination of the new products that we discussed new business, there's -- we are going to have new volumes from default across the enterprise in a title valuation, and in our default back office. I think all of this combined are going to make Q3 and Q4 much better than what we've seen in Q1 and Q2.

And with that, would we anticipate -- would there be any anticipation of potentially upgrading guidance when you get greater vision on Q3?

Potentially, I think, like I said, we're not really expecting Q2 to be dramatically different from Q1. So I think we would want to wait and get a little more clarity on how quickly some of those new products come on.

And then also how quickly some of the default work shows up. So I think there's opportunity, but at this point, I wouldn't want to commit to a firm date.

And, Colin, and you also realized, Colin, I was just going to say you also realize that sometimes we're low on providing guidance, because what we want to do is we want to over deliver and under promise, but the reason that we issued is that we don't want it, we didn't want the market to anticipate that we're another $100 million a year revenue business. And so we felt very comfortable.

We think that the upside in the new product offerings is substantial. And the only question is that how quick will it start penetrating in the third and fourth quarters, but we're very confident with respect to what the growth is going to look like, and what the total addressable [Tech Difficulty].

So we think our upside is unlimited. But we also want to maintain somewhat, what we call humbleness, in our approach to providing guidance, but we thought we had to do something given that, based on our pricing and that we didn't think that the market truly anticipate us do generating that $172 million to $190 million guidance, so that's why we issue that.

Okay. One question around the, are you guys seen any or do you anticipate seasonality within the numbers?

Or are the businesses so desperate that you don't expect seasonality to be material through your numbers?

Well, like I said at the offset, I think there was a question asked earlier about cyclicality and cyclicality and seasonality. They're although they're not the same.

There's some [Tech Difficulty] to each other. Maybe I'll just turn it over to you.

And you can talk about now the issues. And we can go from there.

Yes, happy to do that. There's just so much upside for the Voxtur businesses that the net effect, which would you normally see in a business, you wouldn't see the growth in Q1 over Q4.

And what you're really seeing now is that we have the benefit of the default title, call valuation technologies that are in place, taking some of that, what wouldn't be normal seasonality out of, if you were just all on origination business, but then at the same time, I don't see Q4 seasonality being a major impact from the standpoint of our global business. Because like we mentioned, I think, on the last earnings call, and certainly echo it again today, that a lot of the auditing of the portfolio's that was necessitated after the moratorium, or the moratoria really was multiple in place.

As a result of that some of that is just going to come off in June and July, and really give us some good tailwind. So where we might, where you might if you were in the standard business, and you had no new product offerings, you might see that if you were just in, let's say, just in purchase money mortgage, obviously, people don't want to move around the holidays.

And typically Q4 and Q1 are depressive, and Q2 and Q3 are accretive to your business on an annual basis. I don't really see that being an impact for us, We, I expect the fall to come back in line, the home equity, that closed in second mortgage businesses starting so as the home equity line of credit, I mentioned that $3.2 trillion opportunity, our product is more cost effective.

And we have nothing in our numbers for that. So in my estimation, it's, we should grow through Q3 and Q4.

And you should see the results of vary, you won’t see the seasonality effect really.

And, Colin, I think that it’s, I think at this time, it's also important to kind of get back to our strategy. I mean, listen, real estate is the largest asset class.

And if you take all the other asset classes put together and add them up, they still don't equal the value of real estate. Right now, we've 100% focused on residential, but residential prior in the primary market spot.

So I think that to give the listeners some kind of foresight into what else may be happening, we fully intend to be robust in the secondary marketplace as well with mortgage portfolios are bought and sold and transact in the capital marketplace. We want to start participating in those offerings and using the existing technology platforms that we have.

We also know that there's a whole opportunity to double our business and getting into the ICI or Investment Industrial Commercial side, which is also potentially on our sidelines as well. So not only will we be increasing market penetration through our technology offerings in the residential side, but and then primary market but we are going to get into the secondary market, and we will ultimately down the road, start looking at the ICI pieces too.

So we've got just unlimited growth potential with this real estate. [Tech Difficulty]

So with all the acquisitions that you've made, and now that the technology sectors is softening, and a lot of layoffs are starting to happen. Are you starting to see the ability for cost control?

And for savings potentially on labor costs in the tech -- for some of your tech sector or tech?

Yes, look, you have to remember, for product technology offerings, that are all taking place, starting in the third and fourth quarter as far as revenue. That doesn’t means that there was substantive amounts of labor generated on the software engineering side of our business.

And so we've basically established ourselves that we wanted to be the 40:60 company, 40% of all of the technology people being employee so that what the project is up and running that we maintain responsibility and the architectural freedom to be able to maneuver and 60% is outsourced because we can get at a much more affordable rates. And so we've got considerable costs that we've inherited over the last kind of 12-month in building these platforms and getting them completed.

So I think that you're going to see natural attrition, just with the advent of our new product offerings. And then, obviously, we constantly have to look at austerity measures in areas that are not as profitable and lower margin business, and have that transition into go to sleep at night and make money because technology is taking over.

So, Jim, I'm not sure if you have, you want to add any, to any of that, but it's kind of in our wheelhouse is that how we're thinking on these kind of austerity measures, Colin.

Yes, I'd say similarly, what Gary highlighted was the amount of investment, how many companies can launch three new products or services relatively simultaneously, all freedoms to an overall platform effort, all took various scrums, and focus for different dev teams. So there was quite a bit of labor and recruiting, is the tech market slowing down such that we could see further reduction in costs?

No, I don't think the tech mark is necessarily seeing that much of a slowdown at this point. However, leveraging some of our variable costs per unit in offshore and other resources, bringing them up to speed because you have to provide a certain knowledge base for people to program.

And especially when they're outside of the industry, they may have code but they have to know tax or they have to know how to title or they have to know evaluation right. So that takes a little bit of a ramp but to Gary's point, with those platforms being released and launched and the development waning becomes more of an enhancement and a maintenance project, well, then you should see some cost reduction.

And obviously, with the additional sales of those platforms, you see additional revenue, that's higher margin. So the combination those effects should resonate well for you.

Hey, Colin, time is running up here. And I think that there may be a one or two other questions from some other.

Is there anything, one final point you want to make before we and again, very much appreciate your questions.

Perfect timing, I just wanted to sort of get, a, little bit more, I don't know, if you gave it enough color on Voxtur Wealth, and then just will there be any chances of either client announcements or some sort of gut -- something that will signal to us that there is, before the AOL, RPTA and Voxtur Wealth launch? Will there be some sort of announcements or we're going live in these markets or, and with these partners, that type of information.

We have to be somewhat cryptic, as you already know, a lot of the lenders and the clients do not want notoriety unless it directly benefits them. So we have to be respectful of their wishes.

And so we have to be somewhat cryptic in that and maybe [Tech Difficulty] whatever. And so to the extent that clients will allow us to use it, that's fine.

Others want us to be a little bit more cryptic, which we will respect. With respect to Voxtur Wealth, stay tuned on that.

We're going to, we will be offering much more color on that in the future. We believe that within the next kind of 20 days, we'll have our MVP ready to the launch two clients in the marketplace.

And we'll have a much more robust website to detail all of that. And certainly, significantly more color on the attributes of that will take place there.

Oh, hey, good morning. Couple questions for me.

I mean it sounds like there's been a lot of conversations on the AOL product with lenders. Curious, what types of volumes you're discussing with those customers?

Is it purchase refi? Anything else?

Can you shed any light on?

Yes, sure. Jim, do you want to take over?

Yes, absolutely. I could do that.

Happy to. Yes, so when you're talking about volume, remember, let's take a look in relation to what we had projected.

And we had looked at a 10,000 unit a month production level by the end of Q4 and then we would ramp up and we believe that we could be at modestly but 100,000 units a month by the end of next year, right. So in the discussion with the lenders that we're having now it hasn't been about scale about ramp but about signing up additional distribution, because of the numbers that we're discussing.

One top tier lender loan has a special project and looking at north of 50,000 units. So pretty prolific production, I think we're still very conservative to think that we do 10,000 by the end of the year.

I think we can exceed that, perhaps by a large margin. But we're looking at moving towards how do we get from today to roughly 10% of the market and the mix, as you'd expect, this is really, the first batch looks like, it'll be where lenders have more and more control, which is in that refinance business, which, again, we're not, we don't have a trailing history of a large percentage.

So it's all growth to us, right. So we're looking at, could we could capture, I mean more than 10% of the transactions by the end of next year.

And I think that's fair, I think that's over 100,000 units. So the lenders we're talking to certainly can support that.

The second piece of it is the education with their loan officers, right. And I think there's another piece that really benefits us, which is the fair lending laws.

For example, once you roll out AOL, and you go to a marketplace, and you offer it to one group of constituents, it's not like you can offer something else to the other folks at the same price point. In other words, there are fair lending concerns that once you provide this cost reduction to one group of consumers that should be to all.

And the second tailwind really for us that should really help us is that consumers now even when they're in the purchase market, and our product is set up and approved for purchase, both for Fannie and Freddie, in the purchase market, when you look at it, people are going out and getting those pre-qualifications. And they're even certain lenders out there that are providing like, we'll call it bridge financing.

So consumers can compete against the hedge funds by having essentially an all cash offer, there's a product out there called Cash Edge, for example, it's a nice product out there, almost like a bridge loan. Well, that's these, the AOL is primed, where you get that pre-qualification and your costs are $1000 or $2,000 less than you're less likely to be steered to a captive title company or some other third party.

So I think you're going to see the combination of, it'll be refinances at first that's, that goes right into the production model with, like I said, at Tier 1 lender, or one of the top couple of mortgage originators, you'll see that in production. And quite frankly, they need to do it to be competitive.

Otherwise, they'll lose wallet share in this already tightening market. And then the second thing you'll see is consumers becoming more educated, taking their pre-qualifications that they need, especially in that I call it $200,000 to $500,000 US range, where the hedge funds have their typical buy box, these alternative products, and the reduction in the closing costs should be pretty compelling for those consumers as well.

Hope that helps.

And, Jim, just to make sure that for everyone's benefit, when you're giving your estimates of 10,000, up to 100. Remember that's on a per month transaction basis, right?

Correct. I'm talking monthly units of the future.

Thank you.

Got it. And then just secondly for me, it sounds like you see default volumes kind of building nicely through the year.

Can you just remind us how much upside there is to quarterly numbers? Maybe versus 2019 levels?

And how much torque that might be there and maybe what you've included in your guidance for that. And that's it for me.

Thank you.

Yes, I think we're, look, we've been pretty conservative on our guidance. We do around the percentage of default and Angela can take a look at that guidance and give it to you break down, the actual percentage that's default related.

But I think that at this point in time we are, we've again with that we're fairly conservative in nature. We believe that some of the things we've talked about the raising rate environment and the opportunity with home equity.

But on the other side, all of the I'll say bill collection, infrastructure and firing back up will result in additional default and you can see that right now I think there was an article in the Wall Street Journal recently talking about around the unsecured loan and the auto loans already seeing an uptick in default activity. Well, that's just the precursor for larger asset, right, such as homes.

So I see all of those things coming together in Q3 and Q4 and be right on target with our guidance. What could it mean as an impact, and again, I look at the monthly impact, it could easily mean close to $750,000 million $1 million in net revenue towards the end of Q3 and beginning of Q4.

I could see those numbers start to, again, on a net income basis be in that range. So I wouldn't be shocked to see that.

I also would be shocked to see there's some conversation about different related parties, which is, again, like a laboratory for some of our technologies. And one of our technologies goes into production, was created there in the bankruptcy space for one of the three largest Tier 1 lenders.

So that portends well too for our default business starting to crank up as far as on the revenue side, and that's over an 80% gross margin. So there's some hidden gems in that default analysis as well.

And, Gavin, I'm going to remind Jim, that when we merge together a year and change ago, one of the things that we looked at, aside from this gem, which is the attorney opinion letter, and is the more well-rounded suite of offerings that we wanted to provide our clients was a Jim business was a very profitable business when normal defaults are taking place, to the tune of about a $1.5 million a month, this was pre-moratorium. And so that was a pretty influential consideration when we did this merge was, him returning to material, profitable business.

And then with the augmentation of the attorney opinion letter, we thought it was a homerun. And that's all coming true as planned.

It's the merger that we did, albeit it's taken much longer for this moratorium and the hangover of COVID. All of the thesis that we went behind, and strategy that we put together in this merger, I think has turned out extremely well both for Jim's team at ALAW before the merger and offset, at, I look about which obviously rolled together become Voxtur.

So I think everything is just coming together nicely as planned. And we expect continually improvement in our financial results because of that.

Any more questions?

Okay. Well, on behalf of everyone here at the Voxtur team, we thank you all for supporting us and for following us today and your questions and look forward.

And certainly Jim and his whole team are available to anyone at their back and call as far as questions or answers. So thanks very much everyone for participating today.

And we'll end the meeting. Thank you.