Nextech AR Solutions Corp. (OTC: NEXCF) Reports Q1 Results Showing Record Growth in Key 3D Model and AR Business

  • 62% increase in sequential quarterly ARR (Annual Recurring Rev) growth from Q4 2021-Q1 2022
  • In 2022 first 6 weeks of Q2 3D-AR model business has already surpassed entire Q1 in ARR contract revenue
  • Average dollar amount of 3D AR model deals increased 100% from Q4 to $10,000 on avg.

TORONTO, May 16, 2022—-Nextech AR Solutions Corp. (“Nextech”or the “Company”) (OTCQB: NEXCF) (CSE: NTAR) (FSE: N29) reports its financial and operating results for the first quarter 2022 ending March 31st, 2022.

Subsequently, Nextech will host a conference call to discuss the results today, May 16, 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 Q1 Financial Highlights:

  • 62% increase in sequential quarterly Annual Recurring Revenue growth
  • Q1 Annual Recurring or Repeat Revenue now at record $1,346,000
  • Year over year $2.7 million reduction in operating expenses for Q1
  • $1.1 million reduction in sequential operating expenses for Q1 2022 vs. Q4 2021
  • Average size of our 3D AR model deals increased 100% from Q4 2021 to year to date 2022 to a $10K deal size on average
  • Two new 3D models deals signed in six figures year to date 2022

Q2 Outlook:

  • Ended Q1 2022 with 12-month ARR contracts or annual repeat customers totalling $1,346,000. Q2 to date this has grown to $1,575,000.
  • For the first 6 weeks of Q2 our 3D AR model business has already surpassed our entire Q1 in contract values signed
  • The company is seeing a strong uptick in new interest in 3D modeling for ecommerce with larger contracts and an acceleration of closed deals which we expect to continue in Q2 2022.
Condensed Consolidated Interim Statements of Financial Position
As at
March 31, 2022December 31, 2021
Current assets
Cash & Cash Equivalents$10,781,775$7,237,296
Receivables (Note 4)1,019,0141,081,164
Contract Asset (Note 13)124,982386,202
Prepaid expenses (Note 5)894,805749,474
Inventory (Note 6)2,527,1933,389,098
Non-current assets
Equipment (Note 7)376,473377,242
Right-of-use asset (Note 8)1,002,5981,079,319
Intangible assets (Note 9)5,575,7006,419,934
Goodwill (Note 9)8,670,8278,790,529
Total assets$30,973,367$29,510,258
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities (Note 10)$1,910,159$2,759,017
Deferred revenue (Note 13)622,898609,001
Lease liability (Note 8)290,357290,357
Non-current liabilities
Lease liability (Note 8)706,654786,755
Deferred income tax liability590,391712,215
Loan payable86,75690,896
Total liabilities4,207,2155,248,241
Shareholders’ Equity
Share capital (Note 11)80,202,55070,570,760
Accumulated other comprehensive income1,953,7821,978,469
Total liabilities and shareholders’ equity$30,973,367$29,510,258
Consolidated Interim Statements of Comprehensive Loss
Three months endedThree months ended
March 31, 2022March 31, 2021
Revenue (Note 13)$3,484,337$7,726,703
Cost of sales (Note 14)(2,000,937)(4,412,278)
Gross profit1,483,4003,314,425
Operating expenses:
Sales and marketing (Note 14)2,616,9484,640,087
General and administrative (Note 14)3,820,6003,747,723
Research and development (Note 14)1,027,1941,793,479
Other expense (income)
Stock-based compensation (Note 11)578,8052,402,628
Amortization (Note 9)728,378380,220
Right of Use Amortization (Note 8)63,082
Gain on short-term investments(219,321)
Depreciation (Note 7)37,11727,950
Foreign exchange gain446,626(274,564)
Loss before income taxes(7,835,350)(9,183,777)
Current income tax expense(7,128)
Deferred income tax recovery138,933
Net loss$(7,703,545)$(9,183,777)
Other comprehensive income (loss)
Exchange differences on translating foreign operations(24,687)(52,401)
Total comprehensive loss$(7,728,232)$(9,236,178)
Loss per common share
Basic and diluted loss per common share(0.08)(0.12)
Weighted average number of common shares outstanding
Basic and diluted
Consolidated Interim Statements of Cash Flows
Three months endedThree months ended
March 31, 2022March 31, 2021
Cashflows from operating activities
Net loss$(7,703,545)$(9,183,777)
Items not affecting cash
Amortization of intangible assets728,378380,220
Deferred income tax recovery(138,933)
Amortization of right to use asset63,08234,311
Depreciation of property and equipment37,11727,950
Gain on digital assets(219,321)
Shares for services717,06622,156
Stock-based compensation578,8052,402,628
Shares issued to settle related party liability1,299,845
Shares issued for exercise of options6,300
Changes in non-cash working capital balances
Contract Asset261,220(115,582)
Prepaid expenses(145,331)(390,207)
Accounts payable and accrued liabilities(848,858)1,448,960
Deferred revenue13,897810,047
Net cash used in operating activities$(5,513,047)$(5,722,095)
Cashflows from investing activities
Purchase of equipment(46,553)(50,414)
Purchase of digital assets2,765,356
Interest on lease liability(6,712)
Net cash used in investing activities$(53,265)$2,714,942
Cashflows from financing activities
Proceeds from exercise of options and warrants486,464
Proceeds from private placement, net of issuance costs8,936,496
Payment of lease obligations(73,398)(44,567)
Net cash provided by financing activities$8,863,098$441,897
Change in cash during the period3,296,786(2,565,256)
Cash, beginning of period7,237,29610,684,952
Effects of foreign exchange on cash247,693(219,680)
Cash, end of period$10,781,775$7,900,016
Supplemental cash flow information
Taxes paid
Interest Paid9,5501,261
Interest received11,8309,298

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.

Date: Monday, May 16, 2022
Time: 05:00 PM (GMT-04:00) Eastern Time (US and Canada)
Toll Free Dial-In Number: (888) 330-2024
International Dial-In Number: (646) 960-0187
Conference ID: 7778367
Webcast Link: click here to attend

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 TwitterYouTubeInstagramLinkedIn, and Facebook, or visit our website:

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: (“VCM”), (“IPL”) and (“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.

Non-IFRS Financial Measures

Total Bookings is not defined by and does not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. This non-IFRS financial performance measure is defined below. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that this non-IFRS financial measure, in addition to conventional measures prepared in accordance with IFRS, enables investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, this non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

“Total Bookings” is the total dollar value of all services/goods included in contracts with our customers. ‘Value’ is the total revenue (recognizable or not) associated with each transaction, as opposed to the amount invoiced in the period.

Please refer to the Company’s most recent management discussion and analysis for further information on non-IFRS measures.

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