Nextech AR Solutions Corp. Reports Q2 Results Showing Continued Record Growth in 3D Modelling for Ecommerce and Web3.0 Business
-
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 $500 K
Subsequently,
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 $500 K -
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
$1m ill per month to approximately$500,000 -
The wind-down of eCommerce business is expected to add
$1 -2 million -
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:
Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited) |
||||||||
| As at | ||||||||
|
|
|||||||
| 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 |
|
||
|
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 |
|
||
Condensed Consolidated Interim Statements of Comprehensive Loss (Expressed in Canadian dollars) (Unaudited) |
||||||||||||||||
| Three months ended | Three months ended | Six months ended | Six months ended | |||||||||||||
| 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 |
|
||||
Condensed Consolidated Interim Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited) |
||||||||||||||||
| Three months ended | Three months ended | Six months ended | Six months ended | |||||||||||||
| 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
Title:
Call Date:
Time:
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
CEO and Director
About Nextech AR
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220818005680/en/
For further information:
Investor Relations
investor.relations@Nextechar.com
866-ARITIZE (274-8493) Ext 7201
Source:
