Nextech3D.ai Reports Sales Surging +550% YoY & Record 3D Modeling Revenue For First Quarter 2023

Q1 Highlights

Multiple Breakthrough Generative AI Patents Filed
Delivered 20,000 3D Models to Amazon
Year Over Year 3D Model Revenue Growth +550%
Sequential Technology Revenue Growth +40%

Nextech3D.ai (formally "Nextech AR Solutions Corp" or the "Company") (OTCQX:NEXCF)(CSE:NTAR)(FSE:EP2), a generative AI-powered 3D model supplier for Amazon, P&G, Kohl's, and other major e-commerce retailers reports its unaudited financial and operating results for its first quarter ended March 31, 2023

Please join Evan Gappelberg, Chief Executive Officer and Andrew Chan, Chief Financial Officer after the close today May 18, 2023 at 5:00 P.M. ET where Nextech will host a conference call to discuss these financial results.

Evan Gappelberg - CEO Commentary:

"Our first quarter 2023 results are quite impressive with 550% year over year growth and 40% sequential growth over Q4, 2022. However, it only represents the early days of the megatrend for 3D models in e-commerce and marks a new beginning of our growth curve. With our breakthrough generative AI we are perfectly positioned to ride the $100 billion 3D modeling wave for the next decade." He continued, "2023 is going to be the year of AI for Nextech3D.ai…and the world. Most importantly we have been working towards this moment by investing in AI going all the way back to 2019. However, we really ramped up our investment in the summer of 2021 when we put $10 million down to acquire AI startup Threedy.ai. Today, I'm happy to report that this investment is now starting to pay dividends for our shareholders and I expect to report additional growth in the coming quarters on the back of our continuing investment in our breakthrough generative AI".

Unaudited 2023 Q1 Financial Highlights

Total technology revenue sequential quarterly growth of +40% on $1.3 million of revenue
3D model revenue increased +550% compared to Q1 2022
Gross profit increased to 41% from 39% in sequential quarters and is projected to increase in Q2

Condensed Consolidated Interim Statements of Financial Position

	March 31, 2023		December 31, 2022
Assets

Current assets
Cash & cash equivalents (Note 3)	$	3,502,217	$	3,777,117
Short-term investment		-		-
Receivables (Note 4)		-		744,331
Deferred asset (Note 6)		941,071		256,818
Contract asset (Note 13)		253,474		332,197
Prepaid expenses (Note 5)		267,922		310,906
Inventory		393,394		45,289
Non current assets held for sale				501,188
		5,358,078		5,967,846
Non-current assets
Equipment (Note 7)		200,754		278,463
Deferred consideration (Note 15)		205,230		-
Right of use asset (Note 8)		778,351		829,278
Intangible assets (Note 9)		2,816,471		3,313,741
Goodwill (Note 9)		6,624,776		6,746,378
Total assets	$	15,983,660	$	17,135,706

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable and accrued liabilities (Note 10)	$	2,750,665	$	2,641,918
Deferred revenue (Note 13)		539,312		437,746
Lease liability (Note 8)		157,994		222,250
Liabilities associated with assets held for sale				92,532
		3,447,971		3,394,446
Non-current liabilities
Lease liability (Note 8)		591,142		582,586
Deferred income tax liability		(69,373)		29,974
Loan payable		-		-
Total liabilities		3,969,740		4,007,006

Shareholders' Equity
Share capital (Note 11)		86,931,638		83,271,707
Reserves		14,380,369		12,754,706
Accumulated Other Comprehensive Income		730,653		827,101
Shareholder's equity attributable to Nextech shareholders		(91,763,291)		(85,898,862)
Total common shareholders' equity		10,279,369		10,954,652
Non controlling interest		1,734,551		2,174,048
Total equity		12,013,920		13,128,700
Total liabilities and shareholders' equity	$	15,983,660	$	17,135,706

Condensed Consolidated Interim Statements of Comprehensive Loss

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022

Revenue (Note 13)	$	1,301,194	$	510,211
Cost of sales (Note 14)		(767,308)		(254,483)
Gross profit		533,886		255,728

Operating expenses:
Sales and marketing (Note 14)		1,650,308		1,652,708
General and administrative (Note 14)		2,591,629		3,021,987
Research and development (Note 14)		879,904		1,027,194
Stock based compensation (Note 11)		1,170,671		578,805
Amortization (Note 9)		530,659		373,594
Depreciation (Note 7)		29,331		31,659
Right of use amortization (Note 8)		55,846		19,226
		6,908,348		6,705,173

Other expense (income)
Loss (gain) on disposition (Note 15)		194,979		-
Impairment of goodwill (Note 15)		184,097		-
Foreign exchange gain (loss)		(93,962)		441,880
		285,114		441,880

Loss before income taxes		(6,659,576)		(6,891,325)
Current income tax expense		(9,020)		(7,128)
Deferred income tax recovery		104,667		37,462
Net loss from operations	$	(6,563,929)	$	(6,860,991)

Income (loss) from discontinued operations	$	-	$	(589,241)

Other comprehensive loss
Exchange differences on translating foreign operations, continuing operations		(96,448)		-
Exchange differences on translating foreign operations, discontinued operations				(24,687)
Total comprehensive loss	$	(6,660,377)	$	(7,474,919)

Non controlling interests		(699,499)		-

Total comprehensive loss attributable to Nextech shareholders	$	(5,960,878)	$	(7,474,919)


Income (loss) per common share
Basic and diluted loss per common share, continuing operations		(0.06)		(0.07)
Basic and diluted loss per common share, discontinued operations				(0.05)
Weighted average number of common shares outstanding Basic and diluted		106,925,657		97,550,931

Condensed Consolidated Interim Statements of Cash Flows

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Cashflows from operating activities
Net loss, continuing operations	$	(6,563,929)	$	(6,860,991)
Discontinued operations				-
Net loss, discontinuing operations		-		(589,241)

Items not affecting cash
Amortization of intangible assets		531,458		728,378
Deferred income tax recovery		-		(138,933)
Impairment of intangible assets & goodwill		184,097		-
Amortization of right to use asset		55,846		63,082
Depreciation of property and equipment		29,331		37,117
Employee pay program		309,593		717,066
Treasury shares for employee pay program		(252,366)
Stock based compensation		1,170,671		578,805
Write off equipment		85,679		-
Deferred consideration receivable on sale of PET		(205,230)		-


Receivables		(129,780)		62,150
Deferred asset		(11,104)		-
Contract asset		78,723		261,220
Prepaid expenses		(52,663)		(145,331)
Inventory		434,756		861,905
Accounts payable and accrued liabilities		16,218		(848,858)
Deferred revenue		101,566		13,897
Deferred tax liability		(99,347)		-
Cashflows from operating activities, continuing operations	$	(4,316,481)	$	(5,841,560)
Cashflows from operating activities, discontinued operations		-		581,826

Cashflows from investing activities
Purchase of equipment		(29,000)		(46,553)
Interest on lease liability		(6,823)		(6,712)
Net cash provided by (used in) investing activities, continuing operations	$	(35,823)	$	(48,071)
Net cash provided by (used in) investing activities, discontinued operations		-		(5,194)

Cashflows from financing activities
Proceeds from Employee Pay Program		1,579,220		-
Proceeds from private placement, net of issuance costs		2,651,730		8,936,496
Payment of lease obligations		(131,499)		(73,398)
Issuances to non controlling interest, net of issuance costs		86,748		-
Net cash provided by (used in) financing activities, continuing operations	$	4,186,199	$	8,936,496
Net cash provided by (used in) financing activities, discontinued operations		-		(73,398)

Change in cash during the period		(166,105)		3,550,099
Cash, beginning of period		3,786,493		7,237,296
Effects of foreign exchange on cash		(32,161)		(5,620)

Cash, end of period, continuing operations		3,588,227		10,610,765
Cash, end of period, discontinued operations		-		171,010
Cash, end of period	$	3,588,227	$	10,781,775

Supplemental cash flow information
Taxes paid		800		-
Interest paid		5,467		9,550
Interest received		33,789		11,830

Earnings Call Details

Title: Nextech3D.ai Announces 2023 First Quarter Earnings & Conference Call

Call Date: Thursday May 18, 2023

Time: 5:00PM (GMT-04:00) Eastern Time (US and Canada)

Participant Details

Participant Toll-Free Dial-In Number: 1 (888) 330-2024

Participant Toll Dial-In Number: 1 (646) 960-0187

Conference ID: 7778367

Webcast Link: https://events.q4inc.com/attendee/768727107

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

Recent News

To learn more, please follow us on Twitter, YouTube, Instagram, LinkedIn, and Facebook, or visit our website: https://www.Nextechar.com.

About Nextech3D.ai

(formally "Nextech AR Solutions Corp" or the "Company") (OTCQX:NEXCF)(CSE:NTAR)(FSE:EP2 is a diversified augmented reality, AI technology company that leverages proprietary artificial intelligence (AI) to create 3D experiences for the metaverse. Its main businesses are creating 3D WebAR photorealistic models for the Prime Ecommerce Marketplace as well as many other online retailers. The Company develops or acquires what it believes are disruptive technologies and once commercialized, spins them out as stand-alone public Companies issuing a stock dividend to shareholders while retaining a significant ownership stake in the public spin-out.

On October 26, 2022 Nextech3D.ai spun out its spatial computing platform, "ARway" as a stand alone public Company. Nextech3D.ai retained a control ownership in ARway Corp. with 13 million shares, or a 50% stake, and distributed 4 million shares to Nextech AR Shareholders. ARway is currently listed on the Canadian Securities Exchange (CSE:ARWY), in USA on the OTCQB (OTC:ARWYF) and Internationally on the Frankfurt Stock Exchange (FSE: E65). ARway Corp. is disrupting the augmented reality wayfinding market with a no-code, no beacon spatial computing platform enabled by visual marker tracking.

On December 14, 2022 Nextech announced its second spinout of Toggle3D, an AI-powered 3D design studio to compete with Adobe. Toggle3D is expected to be public in the first half of 2023. To learn more about ARway, visit https://www.arway.ai/

For further information, please contact:

Investor Relations Contact
Lindsay Betts
investor.relations@Nextechar.com
866-ARITIZE (274-8493) Ext 7201

Nextech3D.ai

Evan Gappelberg
CEO and Director
866-ARITIZE (274-8493)

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. 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.

SOURCE: Nextech3D.ai

View source version on accesswire.com:
https://www.accesswire.com/755913/Nextech3Dai-Reports-Sales-Surging-550-YoY-Record-3D-Modeling-Revenue-For-First-Quarter-2023

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	YTD
	31-Dec-23			31-Dec-22
		$			$
Revenue		5,033,202			3,224,791
Cost of sales		(3,586,162	)		(1,593,076	)
Gross profit		1,447,040			1,631,715

Operating expenses:
Sales and marketing		4,546,502			5,013,367
General and administrative		9,362,610			13,377,575
Research and development		3,249,799			3,892,208
Stock based compensation		1,775,695			1,715,690
Amortization		2,105,689			2,655,652
Right of use amortization		55,728			76,905
Depreciation		87,824			122,930
Operating profit (loss)		(19,736,807	)		(25,222,612	)

Other income (expense):
Gain on sublease recognition		120,626			-
Loss on asset disposal		(85,679	)		-
Gain on liability		-			381,019
Impairment of intangible assets and goodwill		(7,575,263	)		(476,113	)
Foreign exchange gain (loss)		(14,393	)		1,345,593
Profit (Loss) before income taxes		(27,291,516	)		(23,972,113	)

Current income tax expense		-			(34,937	)
Deferred income tax recovery		29,974			672,148
Net income (loss) from continuing operations		(27,261,542	)		(23,334,902	)

Income (loss) from discontinued operations		(452,814	)		(4,043,424	)
Net loss		(27,714,356	)		(27,378,326	)

Other comprehensive income (loss)
Exchange differences on translating foreign operations, continuing operations		(148,958	)		(432,845	)
Comprehensive income (loss)		(27,863,314	)		(27,811,171	)

Net loss from C/O attributed to:
Parent		(25,109,547	)		(22,896,701	)
Non controlling interest - PL		(2,151,995	)		(438,201	)

Net loss from D/O attributed to:
Parent		(452,814	)		(4,043,424	)
Non controlling interest - PL		-			-

Comprehensive loss attributed to:
Parent		(25,711,319	)		(27,372,970	)
Non controlling interest		(2,151,995	)		(438,201	)


Loss per share from C/O - basic and diluted		(0.22	)		(0.24	)


Loss per share from D/O - basic and diluted		(0.00	)		(0.04	)

Weighted average number of common shares outstanding
Basic and diluted		114,085,494			100,201,691

	YTD
	31-Dec-23			31-Dec-22
Operating activities:
Net loss		(27,714,356	)		(27,378,326	)
Adjustment for:
Interest income from sublease		(39,903	)		-
Interest expense from lease		30,217			28,668
Stock based compensation		1,775,695			1,715,690
Amortization of intangible assets		2,105,689			2,655,652
Amortization of ROU		55,728			261,101
Depreciation of property and equipment		87,824			143,567
Gain on sublease recognition		(120,626	)		-
Loss on asset disposal		85,679			-
Gain on short-term investment		-			(381,019	)
Impairment of intangible assets & goodwill		7,759,360			3,178,426
Expenses paid by shares		648,891			1,917,837
Loss on PET disposal		173,534			-
Income tax expense (recovery)		-			-
Changes in non-cash working capital balances
Receivables		386,933			269,873
Contract asset		537,695			(202,813	)
Prepaid expenses		16,435			408,743
Inventory		45,289			2,954,342
Accounts payable and accrued liabilities		917,814			(24,574	)
Deferred revenue		(95,554	)		(171,255	)
Deferred tax liability		-			(673,290	)
Total operating cash flow		(13,343,656	)		(15,297,378	)

Cashflows from investing activities
Purchase of equipment		(227,250	)		(101,784	)
Payments received from sublease		66,554			-
Net cash provided by (used in) investing activities, continuing operations		(160,696	)		(101,784	)

Cashflows from financing activities
NTAR - Net proceeds from private placements		5,726,654			8,890,349
NTAR - Proceeds from Employee Pay Program		2,269,704			2,496,628
Proceeds from securities issuances to NCI		2,813,107			1,657,354
Repayment of loan		-			(90,896	)
Payments of lease liability		(203,762	)		(388,804	)
Net cash provided by (used in) financing activities, continuing operations		10,605,703			12,564,631

Effects of foreign exchange on cash		29,379			(616,272	)
Change in cash during the period		(2,898,649	)		(2,834,531	)
Cash, beginning of period		3,777,117			7,237,296
Cash, end of period, continuing operations		907,847			3,786,493

Cash, end of period, continuing operations		907,847			3,777,117
Cash, end of period, discontinuing operations		-			9,376

Taxes paid		-			27,005
Interest paid		30,217			30,910
Cash interest received		121,122			108,390

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