NEXCF - Nextech AR Solutions Corp. Reports Q2 Results Showing Continued Record Growth in 3D Modelling for Ecommerce and Web3.0 Business

August, 18 2022 04:30 PM NexTech AR Solutions Corp

Q2 delivered 30% Sequential growth in Annual Recurring Revenue to almost $1 million

Q2 showed a record 40% growth in Web3.0 3D modeling revenue

Record Q2 Annual Recurring Revenue And Repeat Revenue at $1,566,000

Q2 cash burn decreased to $1 million per month, the Company expects an expense reduction of $500K/month in the 2nd half of 2022

Nextech AR Solutions Corp. (“Nextech”or the “Company”) (OTCQB: NEXCF) (CSE: NTAR) (FSE: N29) reports its financial and operating results for the second quarter 2022 ending June 30, 2022.

Subsequently, Nextech will host a conference call to discuss the results today, August 18, 2022 at 5:00 P.M. Eastern Time. Please join Evan Gappelberg, Chief Executive Officer and Andrew Chan, Chief Financial Officer to discuss these financial and operating results.

2022 Q2 Financial Highlights:

30% Q2 sequential growth in ARR to almost $1,000,000
Record Q2 Annual Recurring Revenue And Repeat Revenue at $1,566,000
Decreased cash burn to $1 million/month in Q2 2022, in Q3/Q4 expecting the burn to be $500K/month due to shares for services program.
40% Q2 Sequential growth in Web3.0 3D modeling revenue
Two six figure deals in the first half of 2022

Q3 Outlook:

With the newly implemented shares for services plan in place, the Company will be reducing its monthly burn from about $1mill per month to approximately $500,000/ month extending the cash runway for at least 12 months.
The wind-down of eCommerce business is expected to add $1-2 million in cash to the Company's cash balance and is expected to be completed in Q3/Q4 2022
Onboarding of major new customers in Q3 is expected to show a meaningful ramp-up in Q3/Q4 Web 3.0 3D modeling revenue
ARway spinout and listing on the Canadian Securities Exchange (CSE) is expected to happen in Q3, 2002 and will provide a stock dividend of 4,000,000 shares for all Nextech AR shareholders on a pro-rata basis.

Management changes effective as of 8/19/2022:

Paul Duffy will be stepping down from the board of directors of Nextech AR and transitioning from President to the Chief Metaverse Officer for ARway. We sincerely thank Paul for all his dedication and hard work as both a board member and President at Nextech AR and look forward to his new and exciting role at ARway, where we are confident that he will be adding tremendous shareholder value.

Evan Gappelberg will remain CEO and will be taking on the additional role of Chairman of the Board for Nextech AR.

Ori Inbar is leaving his role as a director of Nextech to pursue other activities in the Metaverse and we thank him for his contributions and wish him all the best. The Company currently has no plans to replace him on the board.

NexTech AR Solutions Corp. Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited)





As at






June 30, 2022

December 31, 2021
Assets









Current assets




Cash & cash equivalents

$
7,063,268


$
7,237,296

Receivables (Note 4)


418,792



1,081,164

Deferred asset (Note 7)


153,185



-

Contract asset (Note 13)


193,635



386,202

Prepaid expenses (Note 5)


532,169



749,474

Inventory (Note 6)


2,366,759



3,389,098




10,727,808



12,843,234

Non-current assets




Equipment (Note 8)


371,603



377,242

Right-of-use asset (Note 9)


967,529



1,079,319

Intangible assets (Note 10)


4,560,991



6,419,934

Goodwill (Note 10)


6,783,493



8,790,529

Total assets

$
23,411,424


$
29,510,258






Liabilities and Shareholders' Equity









Current liabilities




Accounts payable and accrued liabilities (Note 11)

$
2,649,937


$
2,759,017

Deferred revenue (Note 14)


422,140



609,001

Lease liability (Note 9)


273,974



290,357




3,346,051



3,658,375

Non-current liabilities




Lease liability (Note 9)

683,759



786,755

Deferred income tax liability

492,242



712,215

Loan payable

78,521



90,896

Total liabilities


4,600,573



5,248,241






Shareholders' Equity

Share capital (Note 12)


80,352,960



70,570,760

Reserves


12,150,387



10,671,525

Accumulated other comprehensive income


1,963,337



1,978,469

Deficit


(75,655,833
)


(58,958,737
)



18,810,851



24,262,017

Total liabilities and shareholders' equity

$
23,411,424


$
29,510,258

NexTech AR Solutions Corp. Condensed Consolidated Interim Statements of Comprehensive Loss (Expressed in Canadian dollars) (Unaudited)











Three months ended

Three months ended

Six months ended

Six months ended


June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021
Revenue (Note 14)

$
3,234,735


$
6,091,552


$
6,719,072


$
13,818,255

Cost of sales (Note 15)


(1,546,479
)


(3,798,987
)


(3,547,416
)


(8,211,265
)
Gross profit


1,688,256



2,292,565



3,171,656



5,606,990










Operating expenses:








Sales and marketing (Note 15)


1,827,030



4,047,840



4,443,978



9,135,329

General and administrative (Note 15)


4,503,273



3,418,151



8,323,873



6,179,373

Research and development (Note 15)


880,272



1,330,534



1,907,466



3,525,491




7,210,575



8,796,525



14,675,317



18,840,193










Other expense (income)








Stock-based compensation (Note 12)


878,286



556,415



1,457,091



2,959,043

Amortization (Note 10)


750,429



179,378



1,478,807



593,909

Right of use amortization (Note 9)


63,770



45,011



126,852



79,322

Gain on short-term investments


-



-



-



(219,321
)
Gain on contingent consideration


-



(1,516,048
)


-



(1,516,048
)
Depreciation (Note 8)


37,124



32,085



74,241



60,035

Impairment of intangible assets (Note 10)


2,702,313



-



2,702,313



-

Foreign exchange gain (loss)


(845,966
)


52,877



(399,340
)


(118,377
)



3,585,956



(650,282
)


5,439,964



1,838,563










Loss before income taxes


(9,108,275
)


(5,853,678
)


(16,943,625
)


(15,071,766
)
Current income tax expense


(7,128
)


-



(14,256
)


-

Deferred income tax recovery


121,852



-



260,785



-

Net loss from operations

$
(8,993,551
)

$
(5,853,678
)

$
(16,697,096
)

$
(15,071,766
)









Other comprehensive income (loss)








Exchange differences on translating foreign operations


9,555



(65,056
)


(15,132
)


(117,458
)
Total comprehensive loss

$
(8,983,996
)

$
(5,918,734
)

$
(16,712,228
)

$
(15,189,224
)









Loss per common share








Basic and diluted loss per common share


(0.09
)


(0.07
)


(0.17
)


(0.19
)
Weighted average number of common shares outstanding Basic and diluted


99,725,256



81,276,585



98,736,780



79,346,880

NexTech AR Solutions Corp. Condensed Consolidated Interim Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited)











Three months ended

Three months ended

Six months ended

Six months ended


June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021
Cashflows from operating activities








Net loss

$
(8,993,551
)

$
(5,853,678
)

$
(16,697,096
)

$
(15,071,766
)









Items not affecting cash








Amortization of intangible assets


750,429



179,378



1,478,807



593,909

Impairment of intangible assets and goodwill


2,702,313



-



2,702,313



-

Deferred income tax recovery


(121,852
)


-



(260,785
)


-

Amortization of right to use asset


63,770



45,011



126,852



79,322

Depreciation of property and equipment


37,124



32,085



74,241



60,035

Gain on digital assets


-



-



-



(219,321
)
Gain on contingent consideration


-



(1,516,048
)


-



(1,516,048
)
Shares for services


148,500



(22,156
)


865,566



1,299,846

Stock-based compensation


878,286



556,415



1,457,091



2,959,043










Changes in non-cash working capital balances






Receivables


600,222



997,883



662,372



214,478

Deferred asset


(153,185
)


-



(153,185
)


-

Contract asset


(68,653
)


22,853



192,567



(92,729
)
Prepaid expenses


362,636



437,732



217,305



47,525

Inventory


160,434



606,386



1,022,339



(855,834
)
Accounts payable and accrued liabilities


739,778



(1,543,259
)


(109,080
)


(94,299
)
Deferred revenue


(200,758
)


246,841



(186,861
)


1,056,888

Net cash used in operating activities

$
(3,094,507
)

$
(5,810,557
)

$
(8,607,554
)

$
(11,538,951
)









Cashflows from investing activities








Purchase of equipment


(37,485
)


(60,505
)


(84,038
)


(110,919
)
Proceeds from sale of digital assets


-



-



-



2,765,356

Interest on lease liability


(6,890
)


-



(13,602
)


-

Net cash provided by (used in) investing activities

$
(44,375
)

$
(60,505
)

$
(97,640
)

$
2,654,437










Cashflows from financing activities








Proceeds from exercise of options and warrants


-



800,184



-



1,292,948

Proceeds from private placement, net of issuance costs


1,910



12,632,937



8,938,406



12,632,937

Payment of lease obligations


(74,369
)


(91,212
)


(147,767
)


(135,779
)
Net cash provided by (used in) financing activities

$
(72,459
)

$
13,341,909


$
8,790,639


$
13,790,106










Change in cash during the period


(3,211,341
)


7,470,847



85,445



4,905,592

Cash, beginning of period


10,781,775



7,900,016



7,237,296



10,684,952

Effects of foreign exchange on cash


(507,166
)


24,142



(259,473
)


(195,539
)









Cash, end of period

$
7,063,268


$
15,395,005


$
7,063,268


$
15,395,005










Supplemental cash flow information








Taxes paid


21,571



8,967



21,571



8,967

Interest paid


8,308



6,014



17,857



7,275

Interest received


27,498



12,171



39,329



21,470

Conference Call Details:

Please join Evan Gappelberg, Chief Executive Officer and Andrew Chan, Chief Financial Officer to discuss these financial and operating results, followed by a question and answer period.

Title: Nextech AR Solutions Corp. Announces Second Quarter 2022 Earnings & Conference
Call Date: Thursday August 18, 2022
Time: 05:00 PM (GMT-04:00) Eastern Time (US and Canada)
Toll Free Dial-In Number: 1 (888) 330-2024
International Dial-In Number: 1 (646) 960-0187

Conference ID: 7778367
Webcast Link: https://events.q4inc.com/attendee/572595313

For those unable to join the live event, a recording of the presentation will be posted on the Company's investor relations website.

To learn more, please follow us on Twitter , YouTube , Instagram , LinkedIn , and Facebook , or visit our website: https://www.Nextechar.com .

On behalf of the Board of Nextech AR Solutions Corp.
Evan Gappelberg
CEO and Director

About Nextech AR

Nextech AR Solutions is the engine accelerating the growth of the metaverse. Using breakthrough AI, Nextech AR is able to quickly, easily and affordably ARitize (transform) vast quantities and varieties of existing assets at scale making products, people and places ready for interactive 3D use, giving creators at every level all the essential tools they need to build out their digital AR vision in the metaverse. Our platform-agnostic tools allow brands, educators, students, manufacturers, creators, and technologists to create immersive, interactive and the most photo-realistic 3D assets and digital environments, compose AR experiences, and publish them omnichannel. With a full suite of end-to-end AR solutions in 3D Commerce, Education, Events, and Industrial Manufacturing, Nextech AR is in a unique position to meet the needs of the world’s biggest brands and all metaverse contributors.

Nextech funds the development of its AR and metaverse growth initiatives through its e-Commerce platforms, which currently generate most of its revenue. Nextech's e-commerce platforms include vacuumcleanermarket.com (“VCM”), infinitepetlife.com (“IPL”) and Trulyfesupplements.com (“TruLyfe”). VCM and product sales of residential vacuums, supplies and parts, and small home appliances sold on Amazon. These e-commerce platforms serve as an incubator for developing and testing Nextech's leading-edge AR, AI and machine learning applications for powering next-generation e-commerce technology.

Forward-looking Statements

The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Certain information contained herein may constitute “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as, “will be” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements regarding the completion of the transaction are subject to known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove to be accurate, as future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Nextech will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220818005680/en/

For further information:

Investor Relations
Lindsay Betts
investor.relations@Nextechar.com
866-ARITIZE (274-8493) Ext 7201

Company Name:	NexTech AR Solutions Corp
Stock Symbol:	NEXCF
Market:	OTC
Website:	nextechar.com