Nextech AR Solutions Corp. Reports Record Q3 Sequential Growth As 3D Modeling Revenue Surges +192% and Gross Profit Margin Improves To +60%
Nextech AR Solutions Corp. (NEXCF) reported strong Q3 2022 results, with technology services revenue rising by 66% to approximately $920K and 3D modeling revenue surging over 192% compared to Q2 2022. The company's gross profit margin improved to 60%, leading to a gross profit of around $555K. Total revenue for the quarter reached $3 million, with a gross profit of about $1.34 million. Looking forward to Q4, Nextech expects a $700,000 order and aims for continued growth in 3D modeling production.
- Q3 technology services revenue increased by 66% to approximately $920K.
- 3D modeling revenue surged over 192% versus Q2 2022.
- 3D model production increased by 110% from Q2 2022.
- Gross profit margin improved to 60%, up from 37% in Q2 2022.
- Total revenue for Q3 reached $3 million with a gross profit of approximately $1.34 million.
- A $700,000 order for 3D models expected to be delivered in Q4 2022.
- Total revenue decreased from $5.5 million in Q3 2021 to $3 million in Q3 2022.
- Net loss from operations was $4.35 million for Q3 2022.
-
Q3 technology services revenue up +
66% from Q2 2022 hitting approximately$920 K -
Q3 3D modeling revenue surges over +
192% versus Q2 2022 -
Q3 3D model production increased +
110% versus Q2 2022 -
Q3 technology services gross profit margin improves to +
60% versus37% reported in Q2 2022 -
Q3 gross profit was approximately
$555 K60%
CEO Commentary:
“Q3 was a transformational quarter for Nextech AR, as demand, production and our revenue from 3D modeling has significantly ramped up. This is evident with our sequential production of 3D models up by over +
2022 Q3: 3D Model and Technology Services Financial Highlights
-
Q3 technology services revenue up +
66% from Q2 2022 hitting approximately$920 K -
Q3 3D modeling revenue surges over +
192% versus Q2 2022 -
Q3 3D model production increased +
110% versus Q2 2022 -
Q3 technology services gross profit margin improves to +
60% versus37% in Q2 2022 -
Q3 gross profit was approximately
$555 K60%
2022 Q3: Legacy E-commerce Business Results
-
E-commerce generated over
$2 million $800 K$1 million $2 million - The Company expects to be fully out of the legacy e-commerce business in Q4, 2022
2022 Q3 Totals
-
Total revenue for the quarter was
$3 million -
Total gross profit for the quarter was approximately
$1.34 million
2022 Q4 Outlook
-
$700,000 - Several quotes have been issued for large RFPs, which could close in Q4 2022
- Ramp up of 3D model production to meet the growing demand from the largest Prime ecommerce marketplace as well as re-orders, sets the stage for a substantial increase in 3D model production in Q4, 2022 and continuing in 2023
ARway
-
Trading in ARway began on
October 26, 2022 . With a current market price of approximately$2 $26 million dollars
Condensed Consolidated Statements of Financial Position
| As at | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash & cash equivalents | $ |
5,278,516 |
|
$ |
7,237,296 |
|
| Receivables (Note 4) |
|
624,694 |
|
|
1,081,164 |
|
| Deferred asset (Note 7) |
|
260,639 |
|
|
- |
|
| Contract asset (Note 14) |
|
261,692 |
|
|
386,202 |
|
| Prepaid expenses (Note 5) |
|
472,442 |
|
|
749,474 |
|
| Inventory (Note 6) |
|
640,852 |
|
|
3,389,098 |
|
| Non-current assets held for sale (Note 17) |
|
534,664 |
|
|
- |
|
|
8,073,499 |
|
|
12,843,234 |
|
|
| Non-current assets | ||||||
| Equipment (Note 8) |
|
354,527 |
|
|
377,242 |
|
| Right-of-use asset (Note 9) |
|
919,096 |
|
|
1,079,319 |
|
| Intangible assets (Note 10) |
|
4,200,687 |
|
|
6,419,934 |
|
|
7,061,970 |
|
|
8,790,529 |
|
|
| Total assets | $ |
20,609,779 |
|
$ |
29,510,258 |
|
| Liabilities and Shareholders' Equity | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities (Note 11) | $ |
2,309,942 |
|
$ |
2,759,017 |
|
| Deferred revenue (Note 14) |
|
471,835 |
|
|
609,001 |
|
| Lease liability (Note 9) |
|
259,348 |
|
|
290,357 |
|
|
3,041,125 |
|
|
3,658,375 |
|
|
| Non-current liabilities | ||||||
| Lease liability (Note 9) |
|
644,420 |
|
|
786,755 |
|
| Deferred income tax liability |
|
399,962 |
|
|
712,215 |
|
| Loan payable |
|
- |
|
|
90,896 |
|
| Total liabilities |
|
4,085,507 |
|
|
5,248,241 |
|
| Shareholders' Equity | ||||||
| Share capital (Note 12) |
|
82,185,705 |
|
|
70,570,760 |
|
| Reserves |
|
12,608,012 |
|
|
10,671,525 |
|
| Accumulated other comprehensive income |
|
1,790,153 |
|
|
1,978,469 |
|
| Deficit |
|
(80,059,598 |
) |
|
(58,958,737 |
) |
|
16,524,272 |
|
|
24,262,017 |
|
|
| Total liabilities and shareholders' equity | $ |
20,609,779 |
|
$ |
29,510,258 |
|
Condensed Consolidated Statements of Comprehensive Loss
| Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||
| Revenue (Note 14) | $ |
3,012,440 |
|
$ |
5,524,902 |
|
$ |
8,755,637 |
|
$ |
18,885,741 |
|
| Cost of sales (Note 15) |
|
(1,668,490 |
) |
|
(3,895,320 |
) |
|
(5,159,245 |
) |
|
(11,961,736 |
) |
| Gross profit |
|
1,343,950 |
|
|
1,629,582 |
|
|
3,596,392 |
|
|
6,924,005 |
|
| Operating expenses: | ||||||||||||
| Sales and marketing (Note 15) |
|
1,702,695 |
|
|
4,187,583 |
|
|
6,022,831 |
|
|
12,837,426 |
|
| General and administrative (Note 15) |
|
2,592,343 |
|
|
3,704,359 |
|
|
10,903,087 |
|
|
9,746,546 |
|
| Research and development (Note 15) |
|
1,157,408 |
|
|
1,863,709 |
|
|
3,064,874 |
|
|
5,386,473 |
|
|
5,452,446 |
|
|
9,755,651 |
|
|
19,990,792 |
|
|
27,970,445 |
|
|
| Other expense (income) | ||||||||||||
| Stock-based compensation (Note 12) |
|
311,301 |
|
|
(574,131 |
) |
|
1,768,392 |
|
|
2,384,912 |
|
| Amortization (Note 10) |
|
597,354 |
|
|
682,889 |
|
|
2,076,161 |
|
|
1,276,798 |
|
| Right of use amortization (Note 9) |
|
77,624 |
|
|
64,735 |
|
|
204,476 |
|
|
144,057 |
|
| Gain on short-term investments |
|
(90,744 |
) |
|
- |
|
|
(90,744 |
) |
|
(219,321 |
) |
| Gain on contingent consideration |
|
- |
|
|
102,400 |
|
|
- |
|
|
(1,413,648 |
) |
| Depreciation (Note 8) |
|
36,941 |
|
|
37,286 |
|
|
111,182 |
|
|
97,321 |
|
| Impairment of intangible assets (Note 10) |
|
- |
|
|
- |
|
|
2,702,313 |
|
|
- |
|
| Foreign exchange gain |
|
(566,648 |
) |
|
(252,992 |
) |
|
(965,988 |
) |
|
(371,369 |
) |
|
365,828 |
|
|
60,187 |
|
|
5,805,792 |
|
|
1,898,750 |
|
|
| Loss before income taxes |
|
(4,474,324 |
) |
|
(8,186,256 |
) |
|
(22,200,192 |
) |
|
(22,945,190 |
) |
| Current income tax expense |
|
(7,128 |
) |
|
- |
|
|
(21,384 |
) |
|
- |
|
| Deferred income tax recovery |
|
126,777 |
|
|
- |
|
|
387,562 |
|
|
- |
|
| Net loss from operations | $ |
(4,354,675 |
) |
$ |
(8,186,256 |
) |
$ |
(21,834,014 |
) |
$ |
(22,945,190 |
) |
| Income (loss) from discontinued operations (Note 17) | $ |
(49,090 |
) |
$ |
(30,418 |
) |
$ |
733,153 |
|
$ |
(343,250 |
) |
| Other comprehensive loss | ||||||||||||
| Exchange differences on translating foreign operations, continuing operations |
|
(183,470 |
) |
|
410,785 |
|
|
(205,569 |
) |
|
293,753 |
|
| Exchange differences on translating foreign operations, discontinued operations (Note 17) |
|
10,286 |
|
|
2,769 |
|
|
17,253 |
|
|
2,343 |
|
| Total comprehensive loss | $ |
(4,576,949 |
) |
$ |
(7,803,120 |
) |
$ |
(21,289,177 |
) |
$ |
(22,992,344 |
) |
| Income (loss) per common share | ||||||||||||
| Basic and diluted loss per common share, continuing operations |
|
(0.05 |
) |
|
(0.09 |
) |
|
(0.22 |
) |
|
(0.28 |
) |
| Basic and diluted loss per common share, discontinued operations |
|
- |
|
|
- |
|
|
0.01 |
|
|
- |
|
Weighted average number of common shares outstanding |
||||||||||||
Basic and diluted |
98,641,286 |
86,125,077 |
99,201,669 |
82,002,671 |
||||||||
Condensed Consolidated Statements of Cash Flows
| Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||
| Cashflows from operating activities | ||||||||||||
| Net loss | $ |
(4,354,675 |
) |
$ |
(8,186,256 |
) |
$ |
(21,834,014 |
) |
$ |
(22,945,190 |
) |
| Discontinued operations |
|
(49,090 |
) |
|
(30,418 |
) |
|
733,153 |
|
|
(343,250 |
) |
| Items not affecting cash | ||||||||||||
| Amortization of intangible assets |
|
597,354 |
|
|
682,889 |
|
|
2,076,161 |
|
|
1,276,798 |
|
| Impairment of intangible assets and goodwill |
|
- |
|
|
- |
|
|
2,702,313 |
|
|
- |
|
| Deferred income tax recovery |
|
(126,777 |
) |
|
- |
|
|
(387,562 |
) |
|
- |
|
| Amortization of right to use asset |
|
77,624 |
|
|
13,466 |
|
|
204,476 |
|
|
92,788 |
|
| Depreciation of property and equipment |
|
36,941 |
|
|
37,286 |
|
|
111,182 |
|
|
97,321 |
|
| Gain on digital assets |
|
- |
|
|
- |
|
|
- |
|
|
(219,321 |
) |
| Gain on short-term investment |
|
(90,744 |
) |
|
- |
|
|
(90,744 |
) |
|
- |
|
| Gain on contingent consideration |
|
- |
|
|
102,400 |
|
|
- |
|
|
(1,413,648 |
) |
| Shares for services |
|
581,286 |
|
|
78,535 |
|
|
1,446,852 |
|
|
1,378,382 |
|
| Stock-based compensation |
|
311,301 |
|
|
(574,131 |
) |
|
1,768,392 |
|
|
2,384,912 |
|
| Changes in non-cash working capital balances | ||||||||||||
| Receivables |
|
(223,510 |
) |
|
(797,207 |
) |
|
438,862 |
|
|
(582,729 |
) |
| Deferred asset |
|
(107,454 |
) |
|
- |
|
|
(260,639 |
) |
|
- |
|
| Contract asset |
|
(68,057 |
) |
|
69,342 |
|
|
124,510 |
|
|
(23,387 |
) |
| Prepaid expenses |
|
59,727 |
|
|
411,727 |
|
|
277,032 |
|
|
459,252 |
|
| Inventory |
|
1,228,785 |
|
|
(514,123 |
) |
|
2,251,124 |
|
|
(1,369,957 |
) |
| Accounts payable and accrued liabilities |
|
(342,533 |
) |
|
1,399,775 |
|
|
(451,613 |
) |
|
1,305,476 |
|
| Deferred revenue |
|
49,695 |
|
|
133,360 |
|
|
(137,166 |
) |
|
1,190,248 |
|
| Cashflows from operating activities, continuing operations | $ |
(2,716,519 |
) |
$ |
(6,804,199 |
) |
$ |
(11,248,643 |
) |
$ |
(18,288,269 |
) |
| Cashflows from operating activities, discontinued operations |
|
296,392 |
|
|
(369,156 |
) |
|
220,962 |
|
|
(424,036 |
) |
| Cashflows from investing activities | ||||||||||||
| Purchase of equipment |
|
(15,951 |
) |
|
(27,653 |
) |
|
(83,606 |
) |
|
(138,572 |
) |
| Proceeds from sale of digital assets |
|
- |
|
|
- |
|
|
- |
|
|
2,765,356 |
|
| Interest on lease liability |
|
(8,441 |
) |
|
- |
|
|
(22,043 |
) |
|
- |
|
| Net cash provided by (used in) investing activities, continuing operations | $ |
(24,392 |
) |
$ |
(27,653 |
) |
$ |
(105,649 |
) |
$ |
2,626,784 |
|
| Cashflows from financing activities | ||||||||||||
| Repayment of loan |
|
(90,896 |
) |
|
- |
|
|
(90,896 |
) |
|
- |
|
| Proceeds from exercise of options and warrants |
|
- |
|
|
123,986 |
|
|
- |
|
|
1,416,934 |
|
| Proceeds from Employee Pay Program |
|
1,488,526 |
|
|
- |
|
|
1,488,526 |
|
|
- |
|
| Proceeds from private placement, net of issuance costs |
|
- |
|
|
- |
|
|
8,938,406 |
|
|
- |
|
| Proceeds from public offering, net of issuance costs |
|
- |
|
|
- |
|
|
- |
|
|
12,632,937 |
|
| Payment of lease obligations |
|
(90,934 |
) |
|
(13,145 |
) |
|
(238,701 |
) |
|
(148,923 |
) |
| Payment of contingent consideration |
|
- |
|
|
(18,902 |
) |
|
- |
|
|
(18,902 |
) |
| Net cash provided by (used in) financing activities, continuing operations | $ |
1,306,696 |
|
$ |
91,939 |
|
$ |
10,097,335 |
|
$ |
13,882,047 |
|
| Change in cash during the period |
|
(1,137,823 |
) |
|
(7,109,069 |
) |
|
(1,035,995 |
) |
|
(2,203,474 |
) |
| Cash, beginning of period |
|
7,063,268 |
|
|
15,395,005 |
|
|
7,237,296 |
|
|
10,684,952 |
|
Effects of foreign exchange on cash |
|
(634,979 |
) |
|
(27,373 |
) |
|
(910,835 |
) |
|
(222,914 |
) |
| Cash, end of period, continuing operations |
|
5,278,516 |
|
|
8,258,563 |
|
|
5,278,516 |
|
|
8,258,563 |
|
| Cash, end of period, discontinued operations |
|
11,950 |
|
|
- |
|
|
11,950 |
|
|
- |
|
| Cash, end of period | $ |
5,290,466 |
|
$ |
8,258,563 |
|
$ |
5,290,466 |
|
$ |
8,258,563 |
|
| Supplemental cash flow information | ||||||||||||
| Taxes paid |
|
220 |
|
|
(224 |
) |
|
21,790 |
|
|
8,743 |
|
| Interest paid |
|
5,600 |
|
|
9,022 |
|
|
23,457 |
|
|
16,298 |
|
| Interest received |
|
34,392 |
|
|
11,956 |
|
|
73,721 |
|
|
33,426 |
|
Conference Call Details:
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/348498012
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
866-ARITIZE (274-8493)
About Nextech AR
On
To learn more about ARway, visit https://www.arway.ai/.
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/20221117006024/en/
For further information:
Investor Relations
investor.relations@Nextechar.com
866-ARITIZE (274-8493) Ext 7201
Source:
FAQ
What were Nextech AR Solutions' Q3 2022 revenue figures?
How did Nextech's 3D modeling revenue perform in Q3 2022?
What is the outlook for Nextech AR Solutions in Q4 2022?
What was the gross profit margin for Nextech in Q3 2022?
What challenges did Nextech AR Solutions face in Q3 2022?
