TORUS INVESTMENT RESEARCH
VOLTARI CORPORATION
STAY AHEAD OF THE CURVE
RATING:
BUY
SUITE 415
601 W. 26TH STREET
NEW YORK, NY 10001
PHONE: (212) 388-5500
WWW.VOLTARI.COM
ANALYST BRIEF:
April 14, 2015
Summary
Voltari Corp. (NYSE: VLTC) is a digital advertising company that helping companies get the most out of
their marketing budgets and the lifetime value of their customers. It provides relevance-driven
merchandising, digital marketing, and advertising solutions, primarily over smartphones and other mobile
devices to brands, marketers, and advertising agencies. It also offers predictive analytics services. Voltari
Corporation conducts business under Technology sector and is part of Diversified Communication Services
industry. The company was founded in 2001 and is headquartered in New York, New York.
Voltari also offers analytics services. It uses advanced predictive analytics capabilities and real-time data
management (including sophisticated data curation and modeling) to deliver the right content to the right
person at the right time. This is a unique combination of technology, expertise and go-to-market approach
that delivers return-on-investment for the company’s customers.
The predictive models attempt to estimate the level of engagement an ad may have through the collection
of first-party data from four general data points - the time of day, location, device type and content. If
engagement is predicted to be low, then the ad is not shown. This predictive engagement system is the
basis of Voltari Pathways, which allows advertisers to track and better understand store visits resulting
from mobile impressions. When an ad is clicked on, Voltari Pathways captures purchase intent information,
such as store locator searches or looking up store hours, in-store offers or events. The technology then
identifies when a device that has been served a Voltari ad is present at specified locations, but does not
collect or use personally identifiable data.
Voltari’s revenue is earned under contracts in its advertising business, which generally has durations shorter
than six months. Its advertising contracts require it to deliver a number of impressions to identified audience
segments in a fixed period of time.
Voltari has 4.76 M outstanding shares of which 471 K shares are at this time shorted by private and
institutional investors with about 30.6 trading days to cover.
Key Indicators
Performance
Current Valuation
20.56 M
Shares Outstanding
4.76 M
Number of Shares Shorted
471 K
Revenue
12.24 M
Gross Profit
70.82 M
Net Loss (basic/diluted)
33.49 M
Cash and Equivalents
6.45 M
Total Debt Obligations
23.47 M
TORUS INVESTMENT RESEARCH
PAGE | 1
TORUS INVESTMENT RESEARCH
VOLTARI CORPORATION
STAY AHEAD OF THE CURVE
RATING:
BUY
SUITE 415
601 W. 26TH STREET
NEW YORK, NY 10001
PHONE: (212) 388-5500
WWW.VOLTARI.COM
Recent News
In April 2015, shares of Voltari were gaining 173.3% to $2.76 on heavy trading volume after renowned
activist investor Carl Icahn disclosed a stake of 4.74 million in the mobile ad company. This, giving the
investor a 52.3% stake in the company. The disclosure of Icahn's stake in Voltari comes after the company
announced the closing of a rights offering which gave shareholders the option to buy up to 4.3 million
shares of common stock in the company. The company received net proceeds of $4.6 million from the
rights offering.
Over the past two years, Voltari has made significant changes in its business segments. The company is
now fully focused on its digital media and marketing business. In January 2015, it significantly reduced the
size of its engineering department and terminated operations as part of an effort to reduce its operating
expenses, particularly the cost of research and development and the delivery of advertising. As a result the
company is making increased use of third-party vendors in the placement of mobile advertising and is
exploring with those vendors additional service offerings including the placement of advertising on desktop
computers, so-called smart TV’s and other non-mobile devices.
Pros

Voltari acts as an intermediary in the mobile ad world, as advertisers pay the company to deliver their
ads to mobile users, while the company pays website and mobile application owners for the use of its
ad space. This is a competitive industry, especially in light of the trend that is seeing advertisers and
the mobile app owner’s link directly to each other, squeezing out middlemen like VLTC. Voltari's
automated predictive analytic models have allowed it to stand out in the crowd as it leveraged its carrier
technologies to develop this predictive platform that goes one step beyond trying to use a segmented
approach to advertising.

Total revenues for the year ended December 31, 2014 increased $3.4 million, or 39.2%, compared to
the year ended December 31, 2013. This change is due to an increase in revenue from the advertising
business resulting from new customer acquisitions and an increase in sales to the company’s existing
customers. Based on the company’s recent annual report, customers individually comprising more than
10% of revenue totaled 27% in 2014, down from 40% in 2013, reflecting a broader customer base in
2014. The growth in revenue shows that VLTC's ad technology is gaining some traction.

Voltari received approximately $4.6 million in net proceeds from the rights offering by April 2015, and
it intends to use these proceeds for general corporate and working capital purposes. It seems that
Voltari will have adequate resources to fund its operations, capital expenditures and working capital
needs for the next 12 months using its cash and cash equivalents on hand and through access to the
capital markets.

Carl Icahn is known as an activist shareholder, best known for his non-wavering bullishness on Apple
calling for more than a $200 stock price, who will push in order to extract as much as possible from an
investment. With Carl Icahn owning a majority stake of common shares and nearly all the preferred
shares of Voltari, he will definitely push to maximize shareholder value, and will get his way.
TORUS INVESTMENT RESEARCH
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TORUS INVESTMENT RESEARCH
VOLTARI CORPORATION
STAY AHEAD OF THE CURVE

RATING:
BUY
SUITE 415
601 W. 26TH STREET
NEW YORK, NY 10001
PHONE: (212) 388-5500
WWW.VOLTARI.COM
Voltari has a large net operating loss tax carryforward balance that makes it an excellent buyout
candidate for any profitable company that can take advantage of those carryforwards. The company
has accumulated $410.3 million in federal and $67.5 million in state net operating loss carryforwards.
This translates to $187 million in deferred tax assets that start to expire in 2015 at the state level and
in 2019 at the federal level. Subtracting the total preferred share redemption amount from the deferred
tax asset base leaves a total of $145.8 million worth of deferred tax assets which could potentially go
to shareholders in an appropriate buyout proposal.
Cons

For the year ended December 31, 2014, the net loss was $29.3 million, compared to net loss of $10.3
million for the year ended December 31, 2013. The $19.0 million increase in net loss is primarily due
to increased loss from discontinued operations. Although the increase in net loss were partially offset
by increased revenue, decreased operating expenses from continuing operations.

Acquisition of Common Stock by Carl Icahn resulted in a change of control of the company, which
constituted a redemption event of the company’s 13% Redeemable Series J Preferred Stock with $0.001
par value per share. Upon the occurrence of a redemption event, each holder of shares of Series J
Preferred Stock has the right to require the Company to redeem all or a portion of such Holder’s shares.
If all holders of Series J Preferred Stock require the company to redeem their shares, Voltari will be
required to pay an aggregate Redemption Price of approximately $1.8 million, subject to State of
Delaware law governing distributions to stockholders. As a result, short-term liquidity may be adversely
affected.

Net operating loss carryforwards are only eligible to reduce the tax of a prospective buyer under certain
conditions. In order for the carryforwards to reduce future tax obligations for a prospective buyer, the
assets of Voltari must still operate under the new corporate umbrella in essentially the same industry
for which those operating losses caused the carryforwards. It also greatly helps if operations can be
consolidated into the buyer's larger operations rather than under a separate entity within the
corporation. This could discourage a buyout offer as it acts as a poison pill for a company that would
not be eligible to use those carryforwards.
Verdict
Voltari has tremendous fundamental values. Its technology's ability to quickly spot and target different
demographics allows Voltari to stay ahead of the curve when it comes to directing effective advertising to
mobile users. Even if Carl Icahn pushes a sale of the company for its deferred tax assets (DTA), Voltari’s
business and technology would also be a significant driver of value. One year price target would be $11.80
and long position would be rewarded.
TORUS INVESTMENT RESEARCH
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TORUS INVESTMENT RESEARCH
VOLTARI CORPORATION
STAY AHEAD OF THE CURVE
RATING:
BUY
SUITE 415
601 W. 26TH STREET
NEW YORK, NY 10001
PHONE: (212) 388-5500
WWW.VOLTARI.COM
Sources:
1.
2.
3.
VLTC Form 10-K, 31 March 2015.
http://investors.voltari.com
http://ca.finance.yahoo.com/VLTC
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the
next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving
compensation for it, and I have no business relationship with any company whose stock is mentioned in
the article.
The information contained herein is not intended to be investment advice and does not constitute any
form of invitation or inducement by Houman Farahani, CFA Candidate to engage in investment activity.
Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of
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TORUS INVESTMENT RESEARCH
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TORUS INVESTMENT RESEARCH
VOLTARI CORPORATION
STAY AHEAD OF THE CURVE
RATING:
BUY
SUITE 415
601 W. 26TH STREET
NEW YORK, NY 10001
PHONE: (212) 388-5500
WWW.VOLTARI.COM
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TORUS INVESTMENT RESEARCH
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