Urbanimmersive Inc V.UI

Again regarding financial statement Q1

[kaykay22222]

Yes, we made a net loss of $1.1m. But when you look closer $500k was non-recurring M&A and Setup costs and $600k non-cash relevant costs (shares, amortization, ...) So we pretty much broke even on the worst quarter ever (mortgage rates 7%+ and no inventory) - Also current assets $2.7m vs current liabilities $1.5m (the current portion of long term debt of $3.5m is misleading, because it will be rolled over in Dec) - so net working capital of $1.2m against a real  cash burn of $100k-150k. So we should have liquidities for the next 10 quarters. I don't talk about better revenue situation when the market pivots or cost initiatives that are underway.

[Torontojay]

There are a few points worth mentioning.  1) Variable rates are higher at the end of Q1 versus fiscal year end. 2) In addition to variable rates being higher, the first quarter does not capture the complete interest expense that will appear on future financial statements as the latest acquisition did not occur at the start of Q1. You have increasing debt and increasing variable

[kaykay22222]

Ever heard of seasonality of the housing market? Oct-Dec is worst quarter. So they broke even during the worst quarter. $80-100k more interests  per quarter won't hurt their business

[kaykay22222]

Also wages of $1.5m per quarter, hosting fees, Homevisit headquarter rent, ... will come down gradually due to synergies. $800k direct fees will come down when they transition editoring business from Vietnam to France.

[Torontojay]

The company has to execute. Hopefully, they can weather the storm and survive which I believe is going to be a tumultuous year. The turnaround can begin in 2024 when the storm will likely be in the rear view mirror.   

[kaykay22222]

Of course the risks are real. But it's not as grim as you suggest.

[kaykay22222]

Also bond rates are going down, and 30y Mortgage rates made a double top, because they follow the 10y + small risk premium. When Mortgage rates are between 4.5-5% we will have much more home sellers.

[Torontojay]

They actually are losing money even if you remove the non recurring expenses. The company has to pay for:  1) tangibles/intangibles.  2) lease payments  Negatives for the company: 1) Interest expense moving higher.  2) risks on how the company manages its recent acquisitions. It is highly speculative on how much synergies can be achieved.  3) poor

[kaykay22222]

Amortization is non-cash payment and poor Bs. They have positive working capital $1.2m. The debt will be rolled over with discount in interest compared to CCC bonds, etc.