NexTech AR Solutions Corp. Reports Second Quarter 2021 Earnings & Conference Call Updated

NexTech AR Solutions Corp. (“NexTech” or the “Company”) (OTCQB: NEXCF) (NEO: NTAR) (CSE: NTAR) (FSE: N29) reports its financial and operating results for the second quarter 2021 ending June 30th, 2021. Subsequently, NexTech will host a conference call to discuss the second quarter results on August 12th, 2021 at 1:00 p.m. Eastern Time. Please join Evan Gappelberg, Chief Executive Officer and Andrew Chan, Chief Financial Officer to discuss these financial and operating results followed by a question-and-answer period.

Q2 Financial highlights:

  • Revenue for the three months ended June 30th, 2021 is $6.1 million an increase of over 73% compared to the three months ended June 30th, 2020 of $3.5 million.
  • Gross profit for the three months ended June 30th, 2021 is $2.3 million an increase of over 6% compared to the three months ended June 30th, 2020 of $2.2 million.
  • NexTech cash on hand as at June 30th, 2021 is $15.4 million.
  • For the six months ended June 30th, 2021 revenue increased 130% to $13.8 million, compared to the same six months period last year, while gross profit increased 59% to $5.6 million over the same period.
  • On June 25, 2021, the Company acquired 100% of the shares of Threedy.ai Inc, an AI based end-to-end platform used to produce 3D augmented reality models, accelerating our delivery time to customers.
 
NexTech AR Solution Corp.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian dollars)
(Unaudited)
 
 
As at

June 30, 2021

December 31, 2020

Assets
 
Current assets
Cash

$

15,395,005

 

$

10,684,952

 

Digital Assets (Note 4)

 

-

 

 

2,546,035

 

Receivables (Note 5)

 

1,098,070

 

 

1,312,548

 

Contract Asset (Note 14)

 

337,207

 

 

244,478

 

Prepaid expenses (Note 6)

 

1,306,844

 

 

1,354,369

 

Inventory (Note 7)

 

4,067,509

 

 

3,211,675

 

 

22,204,635

 

 

19,354,057

 

Non-current assets
Equipment (Note 8)

 

375,182

 

 

300,558

 

Right-of-use asset (Note 9)

 

1,181,799

 

 

1,034,724

 

Intangible assets (Note 10)

 

7,015,403

 

 

3,500,041

 

Goodwill (Note 10)

 

7,415,770

 

 

4,886,513

 

Total assets

$

38,192,789

 

$

29,075,893

 

 
Liabilities and Shareholders' Equity
 
Current liabilities
Accounts payable and accrued liabilities (Note 11)

$

2,433,138

 

$

2,527,437

 

Deferred revenue (Note 14)

 

1,439,910

 

 

383,022

 

Lease liability (Note 9)

 

237,029

 

 

150,662

 

Contingent consideration (Note 3)

 

472,107

 

 

2,717,859

 

 

4,582,184

 

 

5,778,980

 

Non-current liabilities
Lease liability (Note 9)

 

942,877

 

 

877,978

 

Total liabilities

 

5,525,061

 

 

6,656,958

 

 
Shareholders' Equity
Share capital (Note 12)

 

63,815,874

 

 

41,968,520

 

Reserves

 

10,230,303

 

 

6,757,098

 

Deficit

 

(41,378,449

)

 

(26,306,683

)

 

32,667,728

 

 

22,418,935

 

Total liabilities and shareholders' equity

$

38,192,789

 

$

29,075,893

 

 
 
NexTech AR Solution 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, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Revenue (Note 14)

$

6,091,552

 

$

3,529,029

 

$

13,818,255

 

$

6,021,014

 

Cost of sales (Note 15)

 

(3,798,987

)

 

(1,359,294

)

 

(8,211,265

)

 

(2,503,430

)

Gross profit

 

2,292,565

 

 

2,169,735

 

 

5,606,990

 

 

3,517,584

 

 
Operating expenses:
Sales and marketing (Note 15)

 

4,047,840

 

 

1,369,008

 

 

9,135,329

 

 

2,787,840

 

General and administrative (Note 15)

 

3,418,151

 

 

1,807,780

 

 

6,179,373

 

 

2,517,207

 

Research and development (Note 15)

 

1,330,534

 

 

265,359

 

 

3,525,491

 

 

504,553

 

 

8,796,525

 

 

3,442,147

 

 

18,840,193

 

 

5,809,600

 

 
Other expense (income)
Stock-based compensation (Note 12)

 

556,415

 

 

596,624

 

 

2,959,043

 

 

864,899

 

Amortization (Note 10)

 

179,378

 

 

132,458

 

 

593,909

 

 

220,711

 

Right of Use Amortization (Note 9)

 

45,011

 

 

-

 

 

79,322

 

 

-

 

Gain on digital assets (Note 4)

 

-

 

 

-

 

 

(219,321

)

 

-

 

Gain on contingent consideration (Note 3)

 

(1,516,048

)

 

-

 

 

(1,516,048

)

 

-

 

Depreciation (Note 8)

 

32,085

 

 

17,434

 

 

60,035

 

 

27,283

 

Foreign exchange gain

 

52,877

 

 

6,283

 

 

(118,377

)

 

7,977

 

 

(650,282

)

 

752,799

 

 

1,838,563

 

 

1,120,870

 

 
Loss before income taxes

 

(5,853,678

)

 

(2,025,211

)

 

(15,071,766

)

 

(3,412,886

)

Deferred income tax recovery

 

-

 

 

24,239

 

 

-

 

 

48,478

 

Net loss

$

(5,853,678

)

$

(2,000,972

)

$

(15,071,766

)

$

(3,364,408

)

 
Other comprehensive income (loss)
Exchange differences on translating foreign operations

 

(65,056

)

 

(308,552

)

 

(117,457

)

 

179,764

 

Total comprehensive loss

$

(5,918,734

)

$

(2,309,524

)

$

(15,189,223

)

$

(3,184,644

)

 
 
Loss per common share
Basic and diluted loss per common share

 

(0.07

)

 

(0.04

)

 

(0.18

)

 

(0.05

)

Weighted average number of common shares outstanding

Basic and diluted

 

82,298,423

 

 

65,713,035

 

 

82,298,423

 

 

63,147,313

 

 
 
NexTech AR Solution 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, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Cashflows from operating activities
Net loss

$

(5,853,678

)

$

(2,000,972

)

$

(15,071,766

)

$

(3,364,408

)

 
Items not affecting cash
Amortization of intangible assets

 

179,378

 

 

132,458

 

 

593,909

 

 

220,711

 

Deferred income tax recovery

 

-

 

 

(24,329

)

 

-

 

 

(48,478

)

Amortization of right to use asset

 

45,011

 

 

-

 

 

79,322

 

 

-

 

Depreciation of property and equipment

 

32,085

 

 

17,434

 

 

60,035

 

 

27,283

 

Gain on digital assets

 

-

 

 

-

 

 

(219,321

)

 

-

 

Gain on contingent consideration

 

(1,516,048

)

 

-

 

 

(1,516,048

)

 

-

 

Shares issued for services

 

-

 

 

-

 

 

1,299,846

 

 

38,239

 

Stock-based compensation

 

556,415

 

 

-

 

 

2,959,043

 

 

-

 

Share-based payments

 

(22,156

)

 

861,958

 

 

-

 

 

1,512,904

 

Option and warrant exercised shares outstanding

 

-

 

 

(183,737

)

 

-

 

 

(183,737

)

 
Changes in non-cash working capital balances
Receivables

 

997,883

 

 

356,792

 

 

214,478

 

 

139,547

 

Contract Asset

 

22,853

 

 

-

 

 

(92,729

)

 

-

 

Prepaid expenses

 

437,732

 

 

23,735

 

 

47,525

 

 

4,660

 

Inventory

 

606,386

 

 

(83,071

)

 

(855,834

)

 

(327,881

)

Accounts payable and accrued liabilities

 

(1,543,259

)

 

673,907

 

 

(94,299

)

 

480,787

 

Deferred revenue

 

246,841

 

 

-

 

 

1,056,888

 

 

-

 

Other payables

 

-

 

 

(97,771

)

 

-

 

 

(230,174

)

Net cash used in operating activities

$

(5,810,557

)

$

(323,596

)

$

(11,538,951

)

$

(1,730,547

)

 
Cashflows from investing activities
Purchase of equipment

 

(60,505

)

 

-

 

 

(110,919

)

 

-

 

Proceeds from sale of bitcoin

 

-

 

 

-

 

 

2,765,356

 

 

-

 

Net cash used in investing activities

$

(60,505

)

$

-

 

$

2,654,437

 

$

-

 

 
Cashflows from financing activities
Proceeds from exercise of options and warrants

 

800,184

 

 

1,404,022

 

 

1,292,948

 

 

2,116,461

 

Proceeds from private placement

 

-

 

 

3,009,047

 

 

-

 

 

3,009,047

 

Proceeds from short form prospectus, net of issuance costs

 

12,632,937

 

 

-

 

 

12,632,937

 

 

-

 

Payment of lease obligations

 

(91,212

)

 

-

 

 

(135,779

)

 

-

 

Net cash provided by financing activities

$

13,341,909

 

$

4,413,069

 

$

13,790,106

 

$

5,125,508

 

 
Change in cash during the period

 

7,470,847

 

 

4,089,473

 

 

4,905,592

 

 

3,394,961

 

Cash, beginning of period

 

7,900,016

 

 

2,309,656

 

 

10,684,952

 

 

2,849,344

 

Effects of foreign exchange on cash

 

24,142

 

 

(117,022

)

 

(195,539

)

 

37,892

 

 
Cash, end of period

$

15,395,005

 

$

6,282,107

 

$

15,395,005

 

$

6,282,197

 

 
Supplemental cash flow information
Taxes paid

 

8,967

 

 

-

 

 

8,967

 

 

-

 

Interest Paid

 

6,014

 

 

-

 

 

7,275

 

 

-

 

Interest received

 

12,171

 

 

-

 

 

21,470

 

 

-

 

Corporate Presentation Update:

Conference Call Details:

Date: Thursday, August 12th, 2021

Time: 1:00 p.m. Eastern Time

Toll Free Dial-In Number: (877) 201-0168

International Dial-In Number: (647) 788-4901

Conference ID: 2086367

Webcast Link: NexTech AR Q2, 2021 Earnings Call

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

NexTech is also pleased to reveal that an updated Corporate Presentation is now available on the Company’s website - https://www.nextechar.com/.

About NexTech AR

NexTech develops and operates augmented reality (“AR”) platforms that transports three-dimensional (“3D”) product visualizations, human holograms and 360° portals to its audiences altering e-commerce, digital advertising, hybrid virtual events (events held in a digital format blended with in-person attendance) and learning and training experiences.

NexTech focuses on developing AR solutions however most of the Company’s revenues are derived from three e-Commerce platforms: 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.

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

For further information, please contact:

investor.relations@Nextechar.com

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.

Forward-looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company's current expectations regarding future events, including with respect to the Company's financial outlook. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance. Specifically, NexTech's forecast on Total Bookings is considered forward-looking information. The foregoing demonstrates NexTech's objectives, which are not forecasts or estimates of its financial position but are based on the implementation of its strategic goals, growth prospects and growth initiatives. Management's assessments of, and outlook for, Total Bookings set out herein are generally based on the following assumptions: (a) NexTech's results of operations will continue as expected, (b) the Company will continue effectively execute against its key strategic growth priorities, (c) the Company will continue to retain and grow its existing customer base and market share, (d) the Company will be able to take advantage of future prospects and opportunities, and continue to realize on synergies, (e) there will be no changes in legislative or regulatory matters that negatively impact NexTech's business, (f) current tax laws will remain in effect and will not be materially changed, (g) economic conditions will remain relatively stable throughout the period, and (h) the industries NexTech operates in will continue to grow consistent with past experience. The Company considers these assumptions to be reasonable in the circumstances, given the time period for such projections and targets. The achievement of target revenue set out above is subject to significant risks including: (a) that the Company will be unable to effectively execute against its key strategic growth priorities and (b) the Company will be unable to continue to retain and grow its existing customer base and market share. These estimates have been prepared by and are the responsibility of management.

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the final short form prospectus of the Company dated August 12, 2020. NexTech does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

The NEO 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 using 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.

Contacts

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