NEW YORK and TORONTO, May 14, 2020 (GLOBE NEWSWIRE) -- NexTech AR Solutions (NexTech) (OTCQB: NEXCF) (CSE: NTAR) (FSE: N29), an emerging leader in augmented reality for eCommerce, and Virtual Events, reported results of its first quarter ended March 31, 2020. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.
Q1 2020 highlights:
- Revenue grows 177% to $2.5 million
- Gross Profit grows 267% to $1.3 million
- Working Capital of $3.5 million
- Full report has been filed and is available on SEDAR
- Q1 earnings will be released after the close at 4:30pm
Bridge Name: Nextech AR Solutions
Conference ID: 597-9019
Dial in: +1 (435)-777-2200
Evan Gappelberg, CEO of NexTech. comments, “We are pleased to report that our first quarter 2020 results were positive and very strong across our business segments. These results were driven by new customer additions, expansion of product lines and increases in conversions from our e-commerce channels." He continues, “We are uniquely positioned with our AR e-commerce and Virtual Events business units to not just survive this pandemic but thrive because of it. Our pipeline of potential deals remains very high and sales activity continues to progress quickly. There has never been more business opportunity in our lifetime for virtual learning, virtual conferences, or virtual events, and e-commerce”.
Kashif Malik, CFO of NexTech comments, “I am very pleased that our team has responded so well to the restrictions imposed by COVID-19. Our level of engagement with customers and prospects remains high throughout the quarter. We were able to effectively deliver uninterrupted professional services to our customers despite the pandemic.”
NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited - Expressed in Canadian dollars)
| March 31, 2020 | December 31, 2019 | ||||
| $ | $ | ||||
| ASSETS | |||||
| Current assets | |||||
| Cash | 2,309,656 | 2,849,344 | |||
| Receivables (Note 3) | 620,896 | 403,651 | |||
| Prepaid expenses and deposits | 219,725 | 200,650 | |||
| Inventory | 1,598,394 | 1,353,584 | |||
| Total current assets | 4,748,671 | 4,807,229 | |||
| Non-current assets | |||||
| Equipment (Note 4) | 137,486 | 146,555 | |||
| Intangible assets and goodwill (Note 5) | 3,927,448 | 3,683,079 | |||
| Total non-current assets | 4,064,934 | 3,829,634 | |||
| TOTAL ASSETS | 8,813,605 | 8,636,863 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| LIABILITIES | |||||
| Current liabilities | |||||
| Accounts payable and accrued liabilities (Note 6) | 1,050,408 | 1,243,528 | |||
| Other payables (Note 7) | 97,771 | 230,174 | |||
| Total current liabilities | 1,148,179 | 1,473,702 | |||
| Long-term liabilities | |||||
| Deferred income tax liability | 72,717 | 96,956 | |||
| Total Long-term liabilities | 72,717 | 96,956 | |||
| TOTAL LIABILITIES | 1,220,896 | 1,570,658 | |||
| EQUITY | |||||
| Share capital (Note 9) | 16,551,989 | 15,210,041 | |||
| Convertible debentures (Note 8) | 835,830 | 1,025,595 | |||
| Reserves (Note 9) | 2,163,919 | 1,407,330 | |||
| Deficit | (11,959,029 | ) | (10,576,761 | ) | |
| TOTAL SHAREHOLDERS’ EQUITY | 7,592,709 | 7,066,205 | |||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 8,813,605 | 8,636,863 | |||
NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Comprehensive Loss
For the three months ended March 31, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)
| 2020 | 2019 | |||||
| $ | $ | |||||
| Revenue | 2,491,985 | 901,111 | ||||
| Cost of sales | (1,144,136 | ) | (534,094 | ) | ||
| Gross profit | 1,347,849 | 367,017 | ||||
| Operating expenses | ||||||
| Sales and marketing | 1,499,315 | 696,952 | ||||
| General and administrative | 763,082 | 382,054 | ||||
| Research and development | 373,331 | 583,909 | ||||
| Amortization (Note 5) | 88,253 | 31,476 | ||||
| Depreciation (Note 4) | 9,849 | 16,093 | ||||
| Foreign exchange loss (gain) | 1,694 | (42,981 | ) | |||
| Total operating expenses | 2,735,524 | 1,667,503 | ||||
| Operating loss | (1,387,675 | ) | (1,300,486 | ) | ||
| Financing expense | - | - | ||||
| Loss before income taxes | (1,387,675 | ) | (1,300,486 | ) | ||
| Deferred income tax recovery | 24,239 | - | ||||
| Net loss | (1,363,436 | ) | (1,300,486 | ) | ||
| Other comprehensive income (loss) | ||||||
| Exchange differences on translating foreign operations | 488,316 | - | ||||
| Total comprehensive loss | (875,120 | ) | (1,300,486 | ) | ||
| Loss per common share | ||||||
| Basic and diluted loss per common share | (0.02 | ) | (0.03 | ) | ||
| Weighted average number of common shares outstanding | 61,378,508 | 51,030,728 | ||||
NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
For the three months ended March 31, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)
| Number of shares | Share capital | Equity portion of convertible debenture | Reserves | Deficit | Total | |||||
| $ | $ | $ | $ | $ | ||||||
| Balance, December 31, 2018 | 43,687,872 | 6,365,393 | - | 423,463 | (2,345,482 | ) | 4,443,374 | |||
| Partial escrow cancellation | (400,000 | ) | - | - | - | - | - | |||
| Acquisition of AR Ecommerce LLC | 2,000,000 | 1,620,000 | - | - | - | 1,620,000 | ||||
| Shares released from escrow for services | - | 60,000 | - | - | - | 60,000 | ||||
| Shares issued for exercise of warrants | 8,461,500 | 2,605,750 | - | - | - | 2,605,750 | ||||
| Stock-based compensation | - | - | - | 361,851 | - | 361,851 | ||||
| Net loss | - | - | - | - | (1,300,486 | ) | (1,300,486 | ) | ||
| Translation of foreign operations | - | - | - | - | - | - | ||||
| Balance, March 31, 2019 | 53,749,372 | 10,651,143 | - | 785,314 | (3,645,968 | ) | 7,790,489 | |||
| Balance, December 31, 2019 | 60,509,250 | 15,210,041 | 1,025,595 | 1,407,330 | (10,576,761 | ) | 7,066,205 | |||
| Convertible debentures | 347,663 | 208,597 | (189,765 | ) | - | (18,832 | ) | - | ||
| Shares issued for exercise of warrants | 513,305 | 406,764 | - | - | - | 406,764 | ||||
| Shares issued for exercise of options | 1,007,500 | 305,675 | - | - | - | 305,675 | ||||
| Shares issued to settle related party liability | 47,799 | 38,239 | 38,239 | |||||||
| Share-based payment | 478,341 | 382,673 | - | 268,273 | - | 650,946 | ||||
| Net loss | - | - | - | - | (1,363,436 | ) | (1,363,436 | ) | ||
| Translation of foreign operations | - | - | - | 488,316 | - | 488,316 | ||||
| Balance as at March 31, 2020 | 62,903,858 | 16,551,989 | 835,830 | 2,163,919 | (11,959,029 | ) | 7,592,709 | |||
NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Cash Flows
For the three months ended March 31, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)
| 2020 | 2019 | ||||
| OPERATING ACTIVITIES | |||||
| Net loss | (1,363,436 | ) | (1,300,486 | ) | |
| Items not affecting cash: | |||||
| Amortization of intangible assets | 88,253 | 31,476 | |||
| Deferred income tax recovery | (24,239 | ) | - | ||
| Depreciation of property and equipment | 9,849 | 16,093 | |||
| Shares issued to settle related party liability | 38,239 | - | |||
| Share-based payments | 650,946 | 361,851 | |||
| Shares released from escrow for services | - | 60,000 | |||
| Changes in non-cash working capital items | |||||
| Receivables | (217,245 | ) | (213,475 | ) | |
| Prepaid expenses and deposits | (19,075 | ) | (409,887 | ) | |
| Inventory | (244,810 | ) | (267,849 | ) | |
| Accounts payable and accrued liabilities | (325,523 | ) | (169,480 | ) | |
| Net cash used in operating activities | (1,407,041 | ) | (1,891,757 | ) | |
| INVESTING ACTIVITIES | |||||
| Cash acquired on a business combination | - | 128,670 | |||
| Purchase of equipment | - | (12,125 | ) | ||
| Acquisition of HootView | - | (85,664 | ) | ||
| Net cash used in investing activities | - | 30,881 | |||
| FINANCING ACTIVITIES | |||||
| Proceeds from exercise of options and warrants | 712,439 | 2,605,750 | |||
| Net cash provided by financing activities | 712,439 | 2,605,750 | |||
| Foreign exchange | 154,914 | 95,739 | |||
| Net change in cash | (539,688 | ) | 840,613 | ||
| Cash, beginning | 2,849,344 | 1,646,858 | |||
| Cash, ending | 2,309,656 | 2,487,471 | |||
About NexTech AR Solutions Corp.
NexTech is an emerging leader in the rapidly growing AR industry, estimated to hit $120 billion by 2022, according to Statista. NexTech, the first publicly traded “pure-play” AR company, began trading on the CSE on October 31st, 2018. NexTech has a two-pronged strategy for rapid growth including growth through acquisition of eCommerce businesses and growth of its omni-channel AR SaaS platform called ARitize™.
The company is pursuing four multi-billion-dollar verticals in AR.
ARitize™ For eCommerce: The company launched its technologically advanced webAR for eCommerce early in 2019 and has been rapidly signing up customers onto its SaaS platform. Customers include Walther Arms, Wright Brothers, Mr. Steak, and Budweiser. NexTech has the first ‘full funnel’ end-to-end eCommerce solution for the AR industry including its 3D product capture, 3D ads for Facebook and Google, ‘Try it on’ technology for online apparel, 3D and 360-degree product views, and ‘one click buy’.
ARitize™ University: having launched in June 2019, the app-based solution allows companies and educational establishments to leverage all of their existing 2D assets - YouTube videos, PDF documents, PowerPoint decks, images, etc. - and then overlay immersive 3D-AR experiences on top of that content for an interactive training experience that drives productivity.
ARitize™ Hollywood Studios: the studio has created a proprietary entertainment venue for which it is producing immersive content using 360 video, and augmented reality as the primary display platform.
ARitize™ 3D-AR-360 Advertising Platform: launched in Q1 2020 the ad platform will be the industry's first end-to-end solution whereby the company will leverage its 3D asset creation into 3D, 360, AR ads. In 2019, according to IDC, global advertising spend will be about $725 billion.
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:
Evan Gappelberg
Chief Executive Officer
info@nextechar.com
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”, “looking forward” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements regarding the Company increasing investors awareness are based on the Company’s estimates and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of NexTech to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including capital expenditures and other costs. There can be no assurance that such statements will prove to be accurate, as actual results and 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.