Nextech3D.ai Reports +157% Year to Date Revenue Growth
*Q2 & Six Months 2023 Financial Highlights*
· *Six months revenue up +157% compared to same period last year*
· *Q2 revenue up +155% compared to same period last year*
· *Q2 Gross profit remained consistent at 39%*
*TORONTO, ON / ACCESSWIRE / August 22, 2023 / **Nextech3D.AI** *(formally "Nextech AR Solutions Corp'' or the "Company") (OTCQX:NEXCF)(CSE:NTAR)(FSE:EP2), a Generative AI-Powered 3D model supplier for Amazon, P&G, Kohls and other major e-commerce retailers is pleased to report its financial and operating results for its second quarter ended June 30, 2023.
Please join Evan Gappelberg, Chief Executive Officer and Andrew Chan, Chief Financial Officer after the close today August 22, 2023 at 5:00 P.M. ET where Nextech3D.ai will host a conference call to discuss these financial results.
*Evan Gappelberg - CEO Commentary:*
"Our results for Q2 were in line with our prelim numbers as we achieved record sales of $1.4 million +155% over Q2 2022. However, based on the current order flow from Amazon and others, we are projecting a breakout Q3 quarter with revenue of $1.7 million." He continued, "In Q3 we are not only seeing our revenue accelerate but our focused team has been successful in reducing our burn down to a minimum level that I have not seen in years. I'm excited to report to our loyal shareholders that with contributions from increased revenue and shares for services on an unconsolidated basis, *we've reduced Nextech3D.ai's cash burn down to $300,000* which when combined with our recent capital raise, gives me the confidence in saying that we won't need to raise additional capital for the next 12 months. Nextech3D.ai's groundbreaking generative-AI technology positions the Company as a leading AI solution globally for scaling 3D model production in the thriving e-commerce, gaming, and manufacturing industries. Furthermore, thanks to our latest funding round, our cash position is now robust enough to accommodate the increased demand we anticipate in the second half of 2023 and beyond."
*Unaudited Q2 2023 Financial Highlights:*
· Three month quarterly revenue up +155% compared to same period last year;
· Sequential quarterly revenue grew 8%
· Delivery of over 50,000 3D models to date
*6 Months Ending Ending June 30, 2023:*
· Year to date revenue up +157% compared to same period last year;
· Gross profit remained consistent at 39%
*Condensed Consolidated Interim Statements of Financial Position*
As at
*June 30, 2023* *December 31, 2022*
*Assets*
*Current assets*
Cash & cash equivalents (Note 3)
$ 3,810,323 $ 3,777,117
Receivables (Note 4)
104,657 744,331
Deferred asset (Note 5)
211,641 256,818
Contract asset (Note 12)
199,546 332,197
Prepaid expenses
376,558 310,906
Inventory
- 45,289
Non current assets held for sale
- 501,188 4,702,725 5,967,846
*Non-current assets*
Equipment (Note 6)
193,336 278,463
Deferred consideration (Note 14)
199,320 -
Deferred tax asset
191,306 -
Right of use asset (Note 7)
- 829,278
Finance lease receivable on sublease (Note 7)
914,665 -
Intangible assets (Note 8)
2,128,558 3,313,741
Goodwill (Note 8)
6,434,004 6,746,378
*Total assets*
$ 14,763,914 $ 17,135,706
*Liabilities and Shareholders' Equity*
*Current liabilities*
Accounts payable and accrued liabilities (Note 9)
$ 3,899,601 $ 2,641,918
Deferred revenue (Note 12)
281,044 437,746
Lease liability (Note 7)
176,328 222,250
Liabilities associated with assets held for sale
92,532
4,356,973 3,394,446
*Non-current liabilities*
Lease liability (Note 7)
514,297 582,586
Deferred income tax liability
- 29,974
*Total liabilities*
4,871,270 4,007,006
*Shareholders' Equity*
Share capital (Note 10)
87,677,731 83,271,707
Reserves
16,238,629 12,754,706
Accumulated Other Comprehensive Income
1,184,974 827,101
Shareholder's equity attributable to Nextech shareholders
(97,867,520) (85,898,862)
*Total common shareholders' equity*
7,233,814 10,954,652
Non controlling interest
2,658,830 2,174,048
*Total equity*
9,892,644 13,128,700
*Total liabilities and shareholders' equity*
$ 14,763,914 $ 17,135,706
*Condensed Consolidated Interim Statements of Comprehensive Loss*
*Three months ended* *Three months ended* *Six months ended* *Six months ended*
*June 30, 2023* *June 30, 2022* *June 30, 2023* *June 30, 2022*
*Revised (Note 2)* *Revised (Note 2)*
*Revenue (Note 12)*
$ 1,405,003 $ 551,945 $ 2,706,197 $ 1,062,156
*Cost of sales (Note 13)*
(875,033) (347,303) (1,642,341) (601,786)
*Gross profit*
529,970 204,642 1,063,856 460,370
*Operating expenses:*
Sales and marketing (Note 13)
1,358,985 1,249,004 3,009,293 2,901,712
General and administrative (Note 13)
2,673,998 3,941,315 5,265,627 6,963,302
Research and development (Note 13)
877,262 880,272 1,757,166 1,907,466
Stock based compensation (Note 10)
1,084,471 878,286 2,255,142 1,457,091
Amortization (Note 8)
500,094 750,429 1,030,753 1,478,807
Depreciation (Note 6)
15,546 31,580 44,877 63,239
Right of use amortization (Note 7)
(118) 19,227 55,728 38,453
6,510,238 7,750,113 13,418,586 14,810,070
*Other expense (income)*
Loss (gain) on disposition (Note 14)
(34,830) - 160,149 -
Impairment of goodwill (Note 14)
- - 184,097 -
Impairment of intangible assets
- 2,702,313 - 2,702,313
Foreign exchange gain (loss)
743,127 (843,903) 649,165 (402,023)
708,297 1,858,410 993,411 2,300,290
*Loss before income taxes*
(6,688,565) (9,403,881) (13,348,141) (16,649,990)
Current income tax expense
(9,019) (7,128) (18,039) (14,256)
Deferred income tax recovery
98,639 121,852 203,306 260,785
*Net loss from operations*
$ (6,598,945) $ (9,289,157) $ (13,162,874) $ (16,403,461)
*Income (loss) from discontinued operations*
$ - 295,605 $ - $ (293,636)
*Other comprehensive loss*
Exchange differences on translating foreign operations, continuing operations
454,321 11,126 357,873 11,126
Exchange differences on translating foreign operations, discontinued operations
- (1,571) - (26,258)
*Total comprehensive loss*
$ (6,144,624) $ (8,983,997) $ (12,805,001) $ (16,712,229)
*Non controlling interests*
(494,717) - (1,194,216) -
*Total comprehensive loss attributable to Nextech shareholders*
$ (5,649,907) $ (8,983,997) $ (11,610,785) $ (16,712,229)
*Income (loss) per common share*
Basic and diluted loss per common share, continuing operations
(0.06) (0.09 (0.11 (0.17)
Basic and diluted loss per common share, discontinued operations
- - - -
Weighted average number of common shares outstanding
Basic and diluted
109,766,574 99,725,256 108,353,964 98,334,837
*Condensed Consolidated Interim Statements of Cash Flows* *Three months ended* *Three months ended* *Six months ended* *Six months ended*
*June 30, 2023* *June 30, 2022* *June 30, 2023* *June 30, 2022*
*Revised (Note 2)* *Revised (Note 2)*
*Cashflows from operating activities*
Net loss, continuing operations
$ (6,598,945) $ (9,289,157) $ (13,162,874) $ (16,403,461)
Net loss, discontinuing operations
295,605 - (293,636)
*Items not affecting cash*
Amortization of intangible assets
500,094 750,429 1,030,753 1,478,807
Deferred income tax recovery
(98,639) (121,852) (203,306) (260,785)
Impairment of intangible assets & goodwill
- 2,702,313 184,097 2,702,313
Amortization of right to use asset
(118) 19,227 55,728 38,453
Finance income on sublease
41,576 - 41,567 -
Depreciation of property and equipment
15,546 31,580 44,877 63,239
Employee pay program
(84,506) 148,500 225,087 865,566
Treasury shares for employee pay program
- - (201,717) -
Stock based compensation
1,084,471 878,286 2,255,142 1,457,091
Write off equipment
- - 85,679 -
Deferred consideration receivable on sale of PET
5,910 - (199,320) -
Gain on write off of right of use assets
(120,626) - (120,626) -
*Changes in non-cash working capital balances*
Receivables
836,414 600,222 706,634 662,372
Deferred asset
56,281 (153,185) 45,177 (153,185)
Contract asset
53,928 (68,653) 132,651 192,567
Prepaid expenses
16,836 362,636 (35,827) 217,305
Inventory
- 160,434 434,765 1,022,339
Accounts payable and accrued liabilities
(1,148,207) 739,778 (1,131,989) (109,080)
Deferred revenue
(258,268) (200,758) (156,702) (186,861)
Deferred tax liability
- - - -
*Cashflows from operating activities, continuing operations*
$ (5,698,253) $ (2,605,203) $ (9,970,204) $ (8,496,077)
*Cashflows from operating activities, discontinued operations*
- (792,705) - (210,879)
*Cashflows from investing activities*
Purchase of equipment
(7,603) (37,485) (36,603) (84,038)
Purchase of short term investments
- - -
Interest on lease liability
(7,122) (6,890) (13,945) (13,602)
*Net cash provided by (used in) investing activities, continuing operations*
$ (14,725) $ (38,685) $ (50,548) $ (86,756)
*Net cash provided by (used in) investing activities, discontinued operations*
- (5,690) - (10,884)
*Cashflows from financing activities*
Proceeds from Employee Pay Program
701,794 - 2,281,014 -
Proceeds from private placement, net of issuance costs
(6,350) 1,910 2,645,380 8,938,406
Payment of lease obligations
19,801 (74,369) (111,698) (147,767)
Receivables financing (net)
2,297,143 - 2,297,143 -
Issuances to non controlling interest, net of issuance costs
2,277,289 - 2,364,037 -
*Net cash provided by (used in) financing activities, continuing operations*
$ 5,289,677 $ (43,090) $ 9,475,876 $ 8,893,406
*Net cash provided by (used in) financing activities, discontinued operations*
- (29,369) - (102,767)
Change in cash during the period
(423,301) (3,514,742) (544,876) (13,957)
Cash, beginning of period
3,502,217 10,781,775 3,786,493 7,237,296
Effects of foreign exchange on cash
731,407 (203,765) 568,706 (160,072)
*Cash, end of period, continuing operations*
3,810,323 6,048,083 3,810,323 6,048,083
*Cash, end of period, discontinued operations*
- 1,015,185 - 1,015,185
*Cash, end of period*
$ 3,810,323 $ 7,063,268 $ 3,810,323 $ 7,063,268
*Supplemental cash flow information*
Taxes paid
21,607 (224) 22,407 21,571
Interest paid
11,221 9,022 16,688 17,857
Interest received
17,766 11,956 51,555 39,329
*Earnings Call Details*
*Title: *Nextech3D.ai 2023 Second Quarter Earnings & Conference Call
*Call Date: *Tuesday, August 22, 2023
*Time:* 5:00PM (GMT-04:00) Eastern Time (US and Canada)
*Participant Details*
*Participant Toll-Free Dial-In Number:* 1 (888) 330-2024
*Participant Toll Dial-In Number: *1 (646) 960-0187
*Conference ID: *7778367
*Webcast Link: *https://events.q4inc.com/attendee/996074403
For those unable to join the live event, a recording of the presentation will be posted on the Company's IR website.
*Update on Previously Announced Warrant Issuances*
The Company previously announced on July 13, 2023 that in order to manage its cash flow and reduce or possibly eliminate its dependency of raising capital for payroll or contractor expenses it has renewed its previous share purchase warrant program pursuant to which, over the ensuing 12 month period, it will issue an aggregate of 6,661,388 share purchase warrants (the "Warrants") to its service providers in connection with their employment and/or consulting arrangements with the Company. Each Warrant will be exercisable to acquire one common share of the Company (an "Underlying Share") at an exercise price of Cdn$0.55 for a period of one year. The Company has now issued these warrants as of August 21, 2023.
*Recent News*
· Nextech3D.ai Announces New Production Record Having Delivered More Than 50,000 3D Models
· Nextech3D.ai Provides Earnings Call Details for Q2 2023 Financial Results August 22nd
· Nextech3D.ai Reports Record Preliminary Q2 Revenue Up +155% To $1.4Mill & Guides Towards Breakout Q3 Revenue +200% of $1.7Mill - $1.9Mill Amid Surging 3D Model Demand
*The Public Company CEO Experience Podcast*
Nextech3D.ai has recently "The Public Company CEO Experience Podcast," featuring Evan Gappelberg, a highly accomplished three-time public company CEO and serial entrepreneur. The podcast offers listeners an exclusive behind-the-scenes look into the dynamic life of a public company CEO with valuable insights, while also discussing trending topics and providing business updates on Nexech3D.ai, Toggle3D.ai, and ARway.ai. To learn more please visit https://www.nextechar.com/investors/the-ceo-experience
*Listen Now*
https://publiccompanyceoexperience.buzzsprout.com/
*Subscribe*
https://www.nextechar.com/the-ceo-experience/subscribe
*About Nextech3D.ai*
Nextech3D.ai, formerly known as "Nextech AR Solutions Corp" or the "Company," (OTCQX:NEXCF)(CSE:NTAR)(FSE:EP2), is a versatile augmented reality and AI technology company that utilizes its proprietary artificial intelligence (AI) to craft immersive 3D experiences at scale for E-COMMERCE. The Company's primary focus lies in creating high-quality 3D WebAR photorealistic models for Amazon and various other online retailers. Nextech3D.ai has adopted a unique approach to creating shareholder value beyond its operating business of creating 3D models.
The Company also develops or acquires disruptive AI-technologies, which are subsequently spun out to shareholders as standalone public companies. This spin-out strategy allows Nextech3D.ai to issue stock dividends to its shareholders while maintaining significant ownership in the public spin-out, without dilution to the parent company Nextech3D.ai.
Notably, Nextech3D.ai successfully spun out "ARway," (OTCQB:ARWYF)(CSE:ARWY) its spatial computing platform, as a standalone public company on October 26, 2022. The Company retains a 49% stake with 13 million shares in ARway Corp. while distributing 4 million shares to Nextech AR shareholders.
Similarly, Nextech3D.ai accomplished its second spin-out launching Toggle3D.ai, (OTC:TGGLF)(CSE:TGGL) an AI-powered 3D design studio aimed at competing with Adobe. The Company retains a 44% stake with 13 million shares in Toggle3D.ai Corp.
To learn more, please follow us on Twitter, YouTube, Instagram, LinkedIn, and Facebook, or visit our website: https://www.Nextechar.com.
For further information, please contact:
*Investor Relations Contact*
Lindsay Betts
investor.relations@Nextechar.com
866-ARITIZE (274-8493) Ext 7201
*Nextech3D.ai*
Evan Gappelberg
CEO and Director
866-ARITIZE (274-8493)
*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.
*SOURCE: *Nextech3D.ai
View source version on accesswire.com:
https://www.accesswire.com/776017/Nextech3Dai-Reports-157-Year-to-Date-Revenue-Growth