NexTech AR Solutions Reports Record Second Quarter 2020 Results

Nachrichtenquelle: globenewswire
25.08.2020, 22:33  |  130   |   |   

VANCOUVER, British Columbia, Aug. 25, 2020 (GLOBE NEWSWIRE) -- NexTech AR Solutions (NexTech) (OTCQB: NEXCF) (CSE: NTAR) (FSE: N29), an emerging leader in augmented reality (AR) for eCommerce, AR learning applications, and AR-enhanced video conferencing and virtual events, reported record results for its second quarter ended June 30, 2020. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

Q2 2020 highlights:

  • Revenue grows 290% to $3.5 million
  • Gross Profit grows 484% to $2.1 million with a 61% margin
  • Working Capital of $5.6 million
  • Total Bookings $3.7 million
  • Full report has been filed and is available on SEDAR 

Q2 earnings will be released after the close today at 4:30pm

Bridge Name: NexTech AR Solutions
Conference ID: 597-9019
Dial in: +1 (435) 777-2200
Toll-Free + 1 (800) 309-2350

Evan Gappelberg, CEO of NexTech comments, “We are extremely pleased to report that our record second quarter 2020 results are continuing into Q3 and are showing strong momentum 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 augmented reality, e-commerce and InfernoAR video conferencing and virtual events business units to thrive in this new economy being led by a digital transformation across technology. There has never been more business opportunity in our lifetime for augmented reality, virtual learning, virtual conferences, or virtual events, and e-commerce and we see strong business trends continuing in Q3 and beyond.” 

Kashif Malik, CFO of NexTech comments, “Q2 has been an amazing quarter and I am thrilled to see the team firing on all cylinders by delivering on sales. With the successful integration of our Jolokia acquisition in Q2 we are now positioned for a rapid acceleration in our business as we continue to land more deals and look for additive acquisitions that further expand and grow our business.”


NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited - Expressed in Canadian dollars)

       
    June 30, 2020 December 31, 2019
    $ $
ASSETS      
Current assets      
Cash   6,282,197   2,849,344  
Receivables (Note 4)   264,104   403,651  
Prepaid expenses and deposits   195,990   200,650  
Inventory   1,681,465   1,353,584  
Total current assets   8,423,756   4,807,229  
       
Non-current assets      
Equipment (Note 5)   242,303   146,555  
Intangible assets (Note 6)   2,250,734   1,420,552  
Goodwill (Note 6)   3,997,440   2,262,527  
Total non-current assets   6,490,477   3,829,634  
       
TOTAL ASSETS   14,914,233   8,636,863  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
LIABILITIES      
Current liabilities      
Accounts payable and accrued liabilities (Note 7)   1,748,473   1,243,528  
Other payables (Note 8)   -   230,174  
Contingent consideration (Note 3)   1,067,181   -  
Total current liabilities   2,815,654   1,473,702  
       
Long-term liabilities      
Deferred income tax liability   48,478   96,956  
Total Long-term liabilities   48,478   96,956  
       
TOTAL LIABILITIES   2,864,132   1,570,658  
           
EQUITY          
Share capital (Note 10)   23,562,376   15,210,041  
Convertible debentures (Note 9)   -   1,025,595  
Reserves (Note 10)   2,565,234   1,407,330  
Deficit   (14,077,509 ) (10,576,761 )
TOTAL SHAREHOLDERS’ EQUITY   12,050,101   7,066,205  
       
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   14,914,233   8,636,863  


NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Comprehensive Loss
For the three and six months ended June 30, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)

  For the three months ended June 30, For the six months ended June 30,
  2020 2019 2020 2019
  $ $ $ $
Revenue 3,529,029   905,915   6,021,014   1,807,025  
Cost of sales (1,359,294 ) (534,094 ) (2,503,430 ) (1,068,187 )
Gross profit 2,169,735   371,821   3,517,584   738,838  
         
Operating expenses        
Sales and marketing 1,547,995   558,743   3,047,310   1,255,695  
General and administrative 1,927,105   462,116   2,690,187   844,170  
Research and development 563,671   164,867   937,002   748,776  
Amortization (Note 6) 132,458   31,476   220,711   62,951  
Depreciation (Note 5) 17,434   8,249   27,283   24,342  
Foreign exchange loss (gain) 6,283   70,334   7,977   27,352  
Total operating expenses 4,194,946   1,295,785   6,930,470   2,963,287  
         
Operating loss (2,025,211 ) (923,964 ) (3,412,886 ) (2,224,449 )
Loss before income taxes (2,025,211 ) (923,964 ) (3,412,886 ) (2,224,449 )
Deferred income tax recovery 24,239   -   48,478   -  
Net loss (2,000,972 ) (923,964 ) (3,364,408 ) (2,224,449 )
         
Other comprehensive income (loss)        
Exchange differences on translating foreign operations (308,552 ) -   179,764   -  
Total comprehensive loss (2,309,524 ) (923,964 ) (3,184,644 ) (2,224,449 )
         
         
Loss per common share        
Basic and diluted loss per common share (0.04 ) (0.02 ) (0.05 ) (0.04 )
Weighted average number of common shares outstanding 65,713,035   53,790,361   63,147,313   52,356,663  


NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Changes In Shareholders' Equity
For the six months ended June 30, 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  
Shares issued for acquisition payable 100,000   66,630     -     -     -     66,630  
Private placement 566,000   339,600     -     -     -     339,600  
Stock-based compensation -   -     -     523,702     -     523,702  
Net loss -   -     -     -     (2,224,449 )   (2,224,449 )
Balance, June 30, 2019 54,415,372   11,057,373     -     947,165     (4,569,931 )   7,434,607  
             
Balance, December 31, 2019 60,509,250   15,210,041     1,025,595     1,407,330     (10,576,761 )   7,066,205  
Convertible debentures 1,910,163   1,161,935     (1,025,595 )   -     (136,340 )   -  
Shares issued for exercise of warrants 2,057,504   1,734,861     -     -     -     1,734,861  
Shares issued for exercise of options 1,195,666   381,600     -     -     -     381,600  
Shares issued for purchase of Jolokia 1,000,000   1,491,889     -     -     -     1,491,889  
Shares issued to settle related party liability 47,799   38,239     -     -     -     38,239  
Share-based payment 810,006   648,005     -     864,899     -     1,512,904  
Private placement 1,528,036   3,208,876     -     -     -     3,208,876  
Share issuance costs -   (313,070 )   -     113,241     -     (199,829 )
Net loss -   -     -     -     (3,364,408 )   (3,364,408 )
Translation of foreign operations -   -     -     179,764     -     179,764  
Balance as at June 30, 2020 69,058,424   23,562,376     -     2,565,234     (14,077,509 )   12,050,101  


NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Cash Flows
For the three and six months ended June 30, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)

  For the three months ended June 30, For the six months ended June 30,
  2020 2019 2020 2019
         
OPERATING ACTIVITIES        
Net loss (2,000,972 ) (923,964 ) (3,364,408 ) (2,224,449 )
         
Items not affecting cash:        
Amortization of intangible assets 132,458   31,476   220,711   62,951  
Deferred income tax recovery (24,239 ) -   (48,478 ) -  
Depreciation of property and equipment 17,434   8,249   27,283   24,342  
Shares issued to settle related party liability -   -   38,239    
Share-based payments 861,958   161,851   1,512,904   523,702  
Shares released from escrow for services -   -   -   60,000  
Option and warrant exercised shares outstanding (183,737 ) -   (183,737 ) -  
         
Changes in non-cash working capital items        
Receivables 356,792   (262,168 ) 139,547   (475,643 )
Prepaid expenses and deposits 23,735   (237,958 ) 4,660   (647,845 )
Inventory (83,071 ) (399,609 ) (327,881 ) (667,458 )
Accounts payable and accrued liabilities 673,907   (709,979 ) 480,787   (879,459 )
Other payables (97,771 ) -   (230,174 ) -  
Net cash used in operating activities (323,506 ) (2,332,103 ) (1,730,547 ) (4,223,858 )
         
INVESTING ACTIVITIES        
Cash acquired in a business combination -   -   -   128,670  
Cash paid for acquisition of HootView -   -   -   (85,664 )
Purchase of equipment -   -   -   (12,125 )
Net cash used in investing activities -   -   -   30,881  
         
FINANCING ACTIVITIES        
Proceeds from exercise of options and warrants 1,404,022   -   2,116,461   2,605,750  
Net proceeds from private placement 3,009,047   339,600   3,009,047   339,600  
Net cash provided by financing activities 4,413,069   339,600   5,125,508   2,945,350  
         
Foreign exchange (117,022 ) (266,280 ) 37,892   (170,541 )
         
Net change in cash 3,972,541   (2,258,782 ) 3,432,853   (1,418,168 )
Cash, beginning 2,309,656   2,487,471   2,849,344   1,646,858  
Cash, ending 6,282,197   228,689   6,282,197   228,689  

(Above excerpts from the condensed consolidated interim financial statements should be read in conjunction with the financial statement notes).


Non-IFRS Measures
This News Release makes reference to certain non-IFRS measures such as “Total Bookings” and “Backlog”. These non-IFRS measures are not recognized, defined or standardized measures under IFRS. Our definition of Total Bookings and Backlog will likely differ from that used by other companies and therefore comparability may be limited.

Total Bookings and Backlog should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. These non-IFRS measures should be read in conjunction with our condensed consolidated interim financial statements and the related notes thereto as at and for the three and six months ended June 30, 2020. Readers should not place undue reliance on non-IFRS measures and should instead view them in conjunction with the most comparable IFRS financial measures. See the reconciliations to these IFRS measures below:

  Three months ended June 30,   Six months ended June 30,
    2020
    2019     2020
    2019
Total Bookings $ 3,680,111     $ 905,915     $ 6,239,291     $ 1,807,025  
Total Revenue   3,529,029       905,915       6,021,014       1,807,025  
Adjustment for bookings   151,082       -       218,277       -  
Adjustment for backlog   (51,000 )     -       (118,195 )     -  
Backlog $ 100,082     $ -     $ 100,082     $ -  


About NexTech AR
NexTech is one of the leaders in the rapidly growing Augmented Reality market estimated to grow from USD $10.7B in 2019 and projected to reach USD $72.7B by 2024 according to Markets & Markets Research; it is expected to grow at a CAGR of 46.6% from 2019 to 2024.

The company is pursuing four verticals:

InfernoAR: An advanced Augmented Reality and Video Learning Experience Platform for Events, is a SaaS video platform that integrates Interactive Video, Artificial Intelligence and Augmented Reality in one secure platform to allow enterprises the ability to create the world’s most engaging virtual event management and learning experiences. Automated closed captions and translations to over 64 languages. According to Grandview Research the global virtual events market in 2020 is $90B and expected to reach more than $400B by 2027, growing at a 23% CAGR. With NexTech’s InfernoAR platform having augmented reality, AI, end-to-end encryption and built in language translation for 64 languages, the company is well positioned to rapidly take market share as the growth accelerates globally.

ARitize For eCommerce: The company launched its SaaS platform for webAR in eCommerce early in 2019. NexTech has a ‘full funnel’ end-to-end eCommerce solution for the AR industry including its Aritize360 app for 3D product capture, 3D/AR ads, its Aritize white label app, its ‘Try it On’ technology for online apparel, 3D and 360-degree product views, and ‘one click buy’.

ARitize 3D/AR 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/AR ads. In 2019, according to IDC, global advertising spend will be about $725 billion.

ARitize Hollywood Studios: The studio is in development producing immersive content using 360 video, and augmented reality as the primary display platform.

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:

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.


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