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NexTech AR Solutions Reports First Quarter 2020 Results

NEW YORK and TORONTO, May 14, 2020 (GLOBE NEWSWIRE) -- NexTech AR Solutions (NexTech) (OTCQB: NEXCF) (CSE: NTAR) (FSE: N29), an emerging leader in augmented reality for eCommerce, and Virtual Events, reported results of its first quarter ended March 31, 2020. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

Q1 2020 highlights:

  • Revenue grows 177% to $2.5 million
  • Gross Profit grows 267% to $1.3 million
  • Working Capital of $3.5 million
  • Full report has been filed and is available on SEDAR
  • Q1 earnings will be released after the close at 4:30pm
    Bridge Name: Nextech AR Solutions
    Conference ID: 597-9019
    Dial in: +1 (435)-777-2200

Evan Gappelberg, CEO of NexTech. comments, “We are pleased to report that our first quarter 2020 results were positive and very strong 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 AR e-commerce and Virtual Events business units to not just survive this pandemic but thrive because of it. Our pipeline of potential deals remains very high and sales activity continues to progress quickly. There has never been more business opportunity in our lifetime for virtual learning, virtual conferences, or virtual events, and e-commerce”.

Kashif Malik, CFO of NexTech comments, “I am very pleased that our team has responded so well to the restrictions imposed by COVID-19. Our level of engagement with customers and prospects remains high throughout the quarter. We were able to effectively deliver uninterrupted professional services to our customers despite the pandemic.”

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

    March 31, 2020 December 31, 2019
    $ $
ASSETS      
Current assets      
Cash     2,309,656     2,849,344  
Receivables (Note 3)     620,896     403,651  
Prepaid expenses and deposits     219,725     200,650  
Inventory     1,598,394     1,353,584  
Total current assets     4,748,671     4,807,229  
       
Non-current assets      
Equipment (Note 4)     137,486     146,555  
Intangible assets and goodwill (Note 5)     3,927,448     3,683,079  
Total non-current assets     4,064,934     3,829,634  
       
TOTAL ASSETS     8,813,605     8,636,863  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
LIABILITIES      
Current liabilities      
Accounts payable and accrued liabilities (Note 6)     1,050,408     1,243,528  
Other payables (Note 7)     97,771     230,174  
Total current liabilities     1,148,179     1,473,702  
       
Long-term liabilities      
Deferred income tax liability   72,717     96,956  
Total Long-term liabilities     72,717     96,956  
       
TOTAL LIABILITIES     1,220,896     1,570,658  
       
EQUITY
Share capital (Note 9)     16,551,989     15,210,041  
Convertible debentures (Note 8)     835,830     1,025,595  
Reserves (Note 9)     2,163,919     1,407,330  
Deficit     (11,959,029 )   (10,576,761 )
TOTAL SHAREHOLDERS’ EQUITY     7,592,709     7,066,205  
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   8,813,605   8,636,863  
       

NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Comprehensive Loss
For the three months ended March 31, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)

      2020  2019 
      $ $
Revenue   2,491,985     901,111  
Cost of sales   (1,144,136 )   (534,094 )
Gross profit   1,347,849   367,017  
     
Operating expenses    
Sales and marketing   1,499,315     696,952  
General and administrative   763,082     382,054  
Research and development   373,331     583,909  
Amortization (Note 5)   88,253     31,476  
Depreciation (Note 4)   9,849     16,093  
Foreign exchange loss (gain)   1,694     (42,981 )
Total operating expenses    2,735,524     1,667,503  
         
Operating loss     (1,387,675 )   (1,300,486 )
Financing expense     -     -  
Loss before income taxes   (1,387,675 )   (1,300,486 )
Deferred income tax recovery   24,239     -  
Net loss   (1,363,436 )   (1,300,486 )
     
Other comprehensive income (loss)    
Exchange differences on translating foreign operations   488,316     -  
Total comprehensive loss   (875,120 )   (1,300,486 )
     
     
Loss per common share    
Basic and diluted loss per common share   (0.02 )   (0.03 )
Weighted average number of common shares outstanding 61,378,508   51,030,728  
         

NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
For the three months ended March 31, 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  
Stock-based compensation   -     -   -     361,851   -     361,851  
Net loss   -     -   -     -   (1,300,486 )   (1,300,486 )
Translation of foreign operations   -     -   -     -   -     -  
Balance, March 31, 2019   53,749,372     10,651,143   -     785,314   (3,645,968 )   7,790,489  
             
Balance, December 31, 2019   60,509,250     15,210,041   1,025,595     1,407,330   (10,576,761 )   7,066,205  
Convertible debentures   347,663     208,597   (189,765 )   -   (18,832 )   -  
Shares issued for exercise of warrants   513,305     406,764   -     -   -     406,764  
Shares issued for exercise of options   1,007,500     305,675   -     -   -     305,675  
Shares issued to settle related party liability   47,799     38,239         38,239  
Share-based payment   478,341     382,673   -     268,273   -     650,946  
Net loss   -     -   -     -   (1,363,436 )   (1,363,436 )
Translation of foreign operations   -      -   -     488,316   -     488,316  
Balance as at March 31, 2020   62,903,858     16,551,989   835,830     2,163,919   (11,959,029 ) 7,592,709  
             

NexTech AR Solutions Corp.
Condensed Consolidated Interim Statements of Cash Flows
For the three months ended March 31, 2020 and 2019
(Unaudited - Expressed in Canadian dollars)

    2020  2019 
       
OPERATING ACTIVITIES    
Net loss   (1,363,436 )   (1,300,486 )
     
Items not affecting cash:    
Amortization of intangible assets   88,253     31,476  
Deferred income tax recovery   (24,239 )   -  
Depreciation of property and equipment   9,849     16,093  
Shares issued to settle related party liability     38,239     -  
Share-based payments   650,946     361,851  
Shares released from escrow for services     -     60,000  
     
Changes in non-cash working capital items    
Receivables   (217,245 )   (213,475 )
Prepaid expenses and deposits   (19,075 )   (409,887 )
Inventory   (244,810 )   (267,849 )
Accounts payable and accrued liabilities   (325,523 )   (169,480 )
Net cash used in operating activities   (1,407,041 )   (1,891,757 )
     
INVESTING ACTIVITIES    
Cash acquired on a business combination   -     128,670  
Purchase of equipment   -     (12,125 )
Acquisition of HootView     -     (85,664 )
Net cash used in investing activities   -     30,881  
     
FINANCING ACTIVITIES    
Proceeds from exercise of options and warrants   712,439   2,605,750  
Net cash provided by financing activities   712,439     2,605,750  
     
Foreign exchange   154,914     95,739  
     
Net change in cash   (539,688 )   840,613  
Cash, beginning   2,849,344     1,646,858  
Cash, ending   2,309,656     2,487,471  
       


About NexTech AR Solutions Corp.

NexTech is an emerging leader in the rapidly growing AR industry, estimated to hit $120 billion by 2022, according to Statista. NexTech, the first publicly traded “pure-play” AR company, began trading on the CSE on October 31st, 2018. NexTech has a two-pronged strategy for rapid growth including growth through acquisition of eCommerce businesses and growth of its omni-channel AR SaaS platform called ARitize™.

The company is pursuing four multi-billion-dollar verticals in AR.

ARitize™ For eCommerce: The company launched its technologically advanced webAR for eCommerce early in 2019 and has been rapidly signing up customers onto its SaaS platform. Customers include Walther Arms, Wright Brothers, Mr. Steak, and Budweiser. NexTech has the first ​ ‘full funnel’ end-to-end eCommerce solution for the AR industry including its 3D product capture, 3D ads for Facebook and Google, ‘Try it on’ technology for online apparel, 3D and 360-degree product views, and ‘one click buy’.

ARitize™ University: having launched in June 2019, the app-based solution allows companies and educational establishments to leverage all of their existing 2D assets - YouTube videos, PDF documents, PowerPoint decks, images, etc. - and then overlay immersive 3D-AR experiences on top of that content for an interactive training experience that drives productivity.

ARitize™ Hollywood Studios: the studio has created a proprietary entertainment venue for which it is producing immersive content using 360 video, and augmented reality as the primary display platform.

ARitize™ 3D-AR-360 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, 360, AR ads. In 2019, according to IDC, global advertising spend will be about $725 billion.

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

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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