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Voxtur Analytics Corp V.VXTR

Alternate Symbol(s):  VXTRF

Voxtur Analytics Corp. is a real estate technology company. It offers targeted data analytics to simplify tax solutions, property valuation and settlement services throughout the lending lifecycle for investors, lenders, government agencies and servicers. Its proprietary data hub and workflow platforms more accurately and efficiently value assets, originate and service loans, securitize portfolios and evaluate tax assessments. It serves the property lending and property tax sectors, both public and private, in the United States and Canada. It has developed a Web-based enterprise platform and database to deliver offerings, such as software and data licenses, technology-managed services, and settlement services. Software and Data Licenses include digital platforms that allow mortgage originators and investors to view their mortgage asset portfolios and analyze transactional data in real time. Settlement Services include provision of full-service title, escrow and closing services.


TSXV:VXTR - Post by User

Post by pennyflippingon Sep 12, 2023 9:42am
215 Views
Post# 35631174

Good voxtur fins analysis

Good voxtur fins analysis
https://wolfofoakville.com/f/voxtur-vxtrv-05-5

wolfofoakville.com
 

Voxtur $VXTR.V (0.5 / 5)

Wolf Of Oakville
7 - 9 minutes

 

 

Well the warning signs have been there for about 15 months or so on this pile of trash. Gave it my first downgrade to 1.5 stars back in May of 2022, when the company actually reported their financials on time. It was $1.34 back then and has been on a continuous slide since. It was further downgraded to 1 star financial reviews twice since then. 

Oddly, a day after posting their annual financials nearly three months late, the regulators issued a CTO for their Q1 filings which are obviously late as well but less so than their more important annuals were. You think the regulators would have given them a few days to sort this out, but the regulators have less going for them than Voxtur does. Let's dig into their annuals:

Balance Sheet:

Current ratio of just under 1, at .98 that consists of $5.9M in cash, $9.2M in typical receivables, a staggering $12.2M in receivables from related parties (seriously, wtf?), as well as notes receivables from related parties of $2.7M against liabilities due within the next 12 months of $32.1M. $4M of that $32M is in unearned revenue, so that helps the current ratio somewhat. Voxtur has over $50M in long term debt, not including $10.6M of debt included in their short term liabilities. This debt is from three separate loans with rates at prime +4-5%, so considerably more expensive debt today than when they were entered into. So what is going on with these related party balances that account for half of their current assets?

An initial reading of note 17 within their financial statement should be an immediate yellow-red flag for any investor. Voxtur billed $14.6M in revenue for business with JEA group in 2022, a company that is 70% owned by the CEO and another director, and as of year end, $12.15M remains unpaid. They then sold these $12M of receivables to a third party at a 20% discount and wrote off the balance as a credit loss. JEA group also billed Voxtur $1.3M for rent and subleasing software in 2022. Voxtur loaned $2.5M to insiders of the company, originally due in Nov of 22, but extended until the end of 2023 where $1.2M remains outstanding. These were non interest bearing loans. Instead of collecting receivables for services to insiders or collecting overdue loans from them, the company has gone out to market and diluted shareholders on multiple occassions. Massive stench.

Cash Flow:

Voxtur burned $22.35M via operations during 2022, on the heels of burning $18.4M a year earlier. In Q4 of 2022 alone, the company burned $9M via operations. During 2022, the company incurred an additional $35M of debt, and raised over $19M from a PP, and through exercises of warrants, and utilized nearly $38M for the BlueWater acquisition. Post financials, the company raised $3.3M via another PP at 20 cents with a full warrant. Given the fact the company burned $3M per month in the final quarter of 2022, it's hard to say how long before they need to raise capital again. We should get a better indication in a few days when the company releases their first quarter.

Share Capital:

 

  • What a bloated mess this has become with 582.8M shares outstanding as of year end, with 13% dilution from the beginning of their fiscal year. This does not include the 20M shares issued post financials taking them over 600M outstanding shares
  • 21M warrants outstanding including the most recent PP
  • Over 8.1M DSU's and RSU's were converted to shares under the companies lucrative SBC program
  • 27.4M options, the vast majority well out of the money.
  • Per yahoo finance, 34% insider ownership
  • No insider activity in the open market in the last 6 months, so not even insiders are buying this dip

 

Income Statement:

What a gong show we have here. 

Revenue looks outstanding here going to nearly $151M, up from $96M or a 57% increase over 2021. That is where the good times end I'm afraid, as it is an absolute horror show beneath the revenue line. Gross profit declined by approximately 220 basis points, down to 36.7% vs 38.9% a year ago. That is over $3.3M in lost opportunity on the margin line. Total operating expenses grew by 47%, spending over $103.3M on $55.5M gross profit dollars, bringing their operational loss to $47.9M, $15.2M worse than what they achieved on the bottom line last year. This would put their break even point on the operating income line to approximately double what they actually achieved. But there is more, the company wrote off over $185M in impairment losses in 2022, tack on another $3.4M in finance charges related to their debt, and that brings you to a total loss before taxes of over TWO HUNDRED AND THIRTY MILLION DOLLARS. In previous reviews, I outlined that they likely vastly overpaid for previous acquisitions, and this $185M write down just confirms that theory. I had initially thought the Blue Water acquisition may have looked the most attractive, but given the data in these financials, perhaps not. The deal closed just before the end of Q3 with the total purchase price of over $96.4M. Yet from Sept 21st through the end of the year the company only delivered $2.8M of revenue and $314k in net income. It also includes this statement that I have never seen before regarding a mid year acquisition, "  The Company is unable to reliably determine the revenue, gross profit and comprehensive income that would have been generated for the fiscal year had the Company acquired the business January 1, 2022." Hmmm.

Overall:

So how do you even begin to evaluate the potential worth of Voxtur, now sitting at a market cap of $117M with revenues of $150M put losing about 30 cents operationally for each of those revenue dollars - particularly in this industry. Tough chore if you could make the argument that this is a well managed company, but judging by the last several financial statements, I don't think you can make that argument with a straight face. They have a history of hemorrhaging cash, significantly overvaluing their acquisitions, while in the process significantly diluting shareholders. Don't be concerned about insiders however, they're making out just fine. Over $28M in salaries, short term benefits and stock compensation within the past two years. Nearly $12M of that is from free DSU and RSU shares which won't amount to any $'s coming back to the treasury. Not to mention the accounts receivables from related parties written off. 

Downgrading further to a half star. It's a turd.

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Disclaimer:

My intent is for my reviews to be a bolt on to due diligence that you have already completed. I receive dozens of review requests a week, therefore my own DD may be great or none whatsoever. Unless otherwise stated or implied, my opinions are on the financial performance of the company based on their most recent filings and I do so without formal financial compensation. I conduct these reviews to assist other retail investors whose research skills are limited when it comes to reviewing financial statements. 

Wolf FINS Reviews are intended to be informational and are based on personal opinion. They are not intended to be financial advice, and all readers are encouraged to perform their own due diligence prior to their investment decisions, including discussions with their investment advisor. 




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