Q2 2021 Nextech Ar Solutions Corp Earnings Call
Good afternoon, ladies and gentlemen, welcome everyone to the next take our solutions Corp. 'twenty 'twenty, one second quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks.
There'll be a question and answer session.
<unk> will be provided at that time for you to queue up for questions I'd like to remind everyone that this call is being recorded today Thursday August 12th 'twenty 'twenty one yesterday after markets closed next take a our solutions Corp, released its financial results for the second quarter ending June.
30th 'twenty 'twenty one.
A copy of the earnings disclosure is available on our website and on SEDAR. Some of the information discussed on this call is based on information as of today August 'twenty 'twenty 'twenty, one and contains forward looking statements that involve risks and uncertainties.
Our results may differ materially from those set forth in such statements for a discussion of these risks and uncertainties you should review the forward looking statements disclosure in the earnings press release as well as in our SEDAR filings. During this call. We will discuss I S. R. S result, and not up.
I F R S financial measures.
A reconciliation between I F. R. S results and not non I F. R. S financial measures is available in our N DNA, which can be found on SEDAR.
Neither this call nor the webcast archive may be rerecorded or otherwise reproduced or distributed without prior written permission from next tech.
To begin our call I think Appleberry CEO will discuss the highlights of our first quarter as well as recent business developments, followed by Andrew Chan C. E. S. L. CFO, who will review our financial results and outlook. Finally, and then will make some closing remarks before opening the line for <unk>.
Our questions I'll now turn the call over to Bank Appleberry C E O.
Thank you very much for that in true good afternoon, ladies and gentlemen.
Welcome everybody to our next Tex Q2, 'twenty 'twenty one results.
I wanted to think.
Everybody that's here today.
We have.
Brad.
Giddings who's going to be managing our investor relations.
Ford next tech, Brad if you're with US I think there's a piece here for you to to interact with our Investor base.
Thank you for the introduction of Evan I appreciate it and.
To all of our investors I look forward to working with you.
And.
Helping you in any way that we can.
Thank you Evan.
You're welcome Brett.
So.
To begin I wanted to thank our.
Thank everybody for joining us all of our employees from all over the world, including Canada.
States Europe and.
In Asia Pacific I want to thank them for their continued support of our mission and our business next tech successes in Q2 and it really throughout <unk>.
2021 were made possible through the hard work creativity and dedication.
Our talented and valued employees, our culture of organizational learning and respectful collaboration is energizing and really driving business excellence. So thank you for all your hard work and.
That we're really just getting started so if we look at our Q2.
Q2 was fueled by the combination of all of our businesses not just one we're unique a small cap company and that we have diversified businesses augmented reality is of course our focus.
And we are more confident than ever that.
We are the leading augmented reality company.
With our products in the industry today augmented reality is the fastest growing part of our business and it's connected to everything we sell which is really creating this incredible flywheel effect within our company.
As of now many of you have seen this week's announcements are.
A our way.
<unk> Tec.
Signed the definitive agreement to acquire a our way, which will expand its augmented reality solutions to include meta versus solutions.
M. A R way is a U K U K based spatial computing company.
And this acquisition will be our way gives us an augmented reality SDK or software development kit.
Providing us with spatial mapping, which is key to the meta versus you you'd need the spatial mapping platform. It is critical to building the metaphors and it really rounds out <unk> offering with what we believe is an essential building block of our complete augmented reality suites.
Products.
We are pleased that a airways founders Barron and Nick are joining next tax team as we integrate this important functionality into the next tech offerings, a otway already is in market today and brings an impressive list of clients, including British Pella.
London Guild Hall, Westfield Mall, London, Bosch and many others most importantly.
Are we has already developed.
The ecosystem they have over a thousand developers that develop augmented reality experiences and it's been averse platform on its platform that uses its scanning technology and this is without any budget.
Or any ad spending.
Completely bootstrap with.
With next tech now driving.
It's going forward growth plans, we expect to see a rapid expansion of this ecosystem and rapid ramp up of developers and customers. The platform is currently a SaaS platform that has the potential to generate significant revenue in 'twenty 'twenty, one and beyond.
When paired with our existing air content creation tools, including three D. A ice product creation tools and hollow ex people holographic human creation tools. We believe that we can create tremendous value throughout our technology stack and be first to market with a meta versus.
Studio offering.
I believe that this acquisition is a major turning point for our company and for augmented reality businesses, specifically, becoming a key driver of revenue.
This met averse announcement is just the beginning and in the coming weeks next tech will continue to expand on our product suite and we will continue to announce a well defined product and solution umbrella strategy, including what we view are the critical components of our complete.
Augmented reality offering.
Super excited about.
About the meta versus.
Let's talk about Q2.
Which is in the rearview mirror.
So in 2020, when you look at the landscape when we came into 'twenty 'twenty and 'twenty 'twenty one even.
We we had huge tailwind from our E com and virtual events business fueled by the pandemic and a complete lockdown of society, which was once well hopefully a once in a business a lifetime opportunity.
<unk> will probably never experienced that again and.
And so with the rollout of vaccines in 'twenty 'twenty, one things have now normalized.
However, we are seeing a sharp pick up again in our virtual events business because of the Delta variance were seen repeat customers that are now coming back to the table.
Booking more virtual and hybrid events.
Than they were prior to Delta. So there was a bit of a bump I'd say in our demand.
In Q2, that's now starting to turn up.
In Q3, and Q4, so while Q2 'twenty 'twenty, one is a down quarter over Q1, 'twenty 'twenty one year over year, we're up 73%.
And for the first six months of 'twenty 'twenty one.
Our revenue is up a 130% over 'twenty 'twenty, which is no small feat for a small.
Public company.
However, well.
Like all you investors, we see the stock is down we are not satisfied with these results. We believe that Q2 will be our slowest quarter in 2021 and that it was a quarter of change for our company, we were dealing with the economic reopening and the cross currents in our events business, which means.
From a 100% virtual in 'twenty 'twenty 400 per cent reopening in Q2. We also started the transition to a self serve highly scalable business model across all our businesses, which is ongoing development work that is expected to be complete.
In early Q4, we're in the process of turning all our platforms into scalable solutions. This means exponential growth is ahead of us MAU.
Most importantly for shareholders.
We are working on the integration of all our augmented reality solutions into one unified platform. So that our customers can log in and get a dashboard with the selection of all our augmented reality solutions from a single login.
Where they are for E commerce.
D. A R ads human holograms, all those creator tools.
Even the meta versus solution studio. Our newest addition to the next tech family will be <unk>.
Part of this one dashboard one view.
This offering is a major undertaking for the company and will allow us to be a leader in the HR space.
As we move forward into Q3 and Q4, we are now seeing a reacceleration in our technology services businesses, we see booked deals with some notable wins.
Including Schneider electric United Nations.
Recently, we announced Ryerson added another $150000 in augmented reality lab orders north well health.
Our northeastern H M. MAU has just come back and Reorders.
Kohl's has tripled down on their E R.
Services with US says a 300% increase in business from Coles, 100% increase in business from Kmart.
So as we go into the second half of 'twenty 'twenty one.
I feel we are positioned better than ever to take advantage of our multi decade multi trillion dollar megatrend in augmented reality that is just getting started it reminds me and is very similar to the birth of the internet back in 1995.
Nobody really understood. It you had a dial up modem. So the experience was sub optimal but today 25 years later, we now take the Internet for granted as we shop on Amazon, We search on Google and we get our daily dose of news from C N N or.
Yahoo, or or or wherever it is just part of everything we do and we take it for granted.
Augmented reality will be the same way and we are.
Our first mover with an incredibly valuable technology stack, allowing us to create many meta versus and populate these many meta versus with our augmented reality solutions.
So just to recap.
In just the first half of 'twenty 'twenty. One we've started turning are a our solutions into self serve low touch no touch businesses that could grow exponentially. We've laid a solid foundation with the transformative acquisition of three D. A I for scaling content creation and three D products for E Commerce.
And if simultaneously created a solution for scaling the creation of human holograms in a R by leveraging artificial intelligence technology to bring to market. What we believe is very valuable technology, which is human teleportation on demand we call that hollow ex all of that.
Yeah.
In one word is hollow X, we've just acquired.
A our way.
Which puts us in the meta versus.
Puts us at the forefront of augmented reality technology with the ability to create three D spatial maps and populate it with our a R. Providing an unknown rivaled a our solution for use of the meta versus which we believe which mark zuckerberg the CEO of Facebook believes.
Which.
The CEO of Microsoft believes the seat.
Oh of unity beliefs.
Is very very valuable.
That of course is the Metaverse finally, we've signed key partnership agreements with Microsoft Ericsson, and Singtel, which expands our global reach into their customer base with.
With Hollow X, we've announced that we're integrating with hollow lens for in a our experience like none other.
Of course, the global event market, even without a pandemic is still a 30 billion dollar a year industry and so why backs.
Is our product offering for that industry, it's our showcase platform for enterprise customers to host fully customized large scale events globally as hybrid events.
We have live chat live streaming and we do have our newly launched a our room, which our investors have patiently been waiting for it is alive and it is launched.
We have a full broadcast suite.
<unk> gamification and of course, a full suite of augmented reality experiences live X.
Is a platform that's being used by some of the biggest and best companies in the world, including Schneider Electric M.
M I T harbored.
The U N and many many others our business model has not changed as we are in the augmented reality virtual experience business, which is the fastest growing highest demand technology on the market today.
The imminent products and solutions umbrella strategy mentioned earlier on this call will be more well defined.
That will essentially lay out what we have always set out to do which is to lead the way in a our solutions and offerings. In conclusion next tech is focused on its key strategic priority of maintaining financial strength and liquidity.
Since inception, the company has been advancing efforts in evaluating potential acquisitions to optimize its capital structure improve liquidity and enhance long term shareholder value. We will continue to walk this path and we are in discussions with multiple exciting a our companies both.
Large and small.
In our Q2 'twenty 'twenty one results once again.
We are reinforcing the importance of our three foundational pillars, we're a leader in augmented reality technology underpinned by enabling a digital transformation and growing our key verticals like education entertainment events retail medical and marketplaces.
<unk> X. We are full steam ahead I have total confidence in our plan and in our team and the direction that our company is going with that I'm going to turn the call over to Andrew Chan, Our Chief Financial Officer, who will provide further commentary on.
Quarterly financials.
Andrew take it away.
Yes.
Thank you Ivan and good afternoon, everybody as a reminder, unless otherwise stated all figures reported on today's call are in Canadian dollars and under IR for us.
As I mentioned earlier, our total revenue in the second quarter was up 73% to $6.1 million a strong growth for product sales technology services and renewable software increased.
Total revenue for the first half of the year was up 130% to $13.8 million.
Product sales grew 43% to $4.4 million for the quarter and grew 88% to $10.4 million during which during the first half of 'twenty 'twenty one due.
Due to the expanded product offerings, adding additional sales channels and increased capacity to fill sites to facilitate the fulfillment of sales.
Our technology services grew 632% to $1.4 million for the quarter and 1066% to $2.7 million for the first half of 'twenty 'twenty one.
As previously noted the nature of this revenue will vary from quarter to quarter based on the number size and timing of customer projects that are underway.
We continue to be pleased with the diversity and strength of our total revenue base.
Gross profit increased by 6% to $2.3 million for the quarter and increased by 41% to $5.6 million for the first six months.
As a percentage of revenue gross profit was 38% in Q2 compared to 61% for the same period last year.
This was a higher this was a result of a higher product cost and delivery cost and customer service costs associated with technology surfaces as.
As we coped with higher demands for our products and services during this period.
Total bookings for technology services was steady at $1.7 million this quarter with 4 million for the first half of the six months. After deducting revenues recognized in this quarter, we had a backlog of $2.2 million as at June 30th 'twenty 'twenty, one the majority of which will be recognized as revenue before the end of the year.
Operating expenses for Q2 were $8.8 million compared to $3.4 million in the prior period. The increase in operating expenses again was primarily due to higher headcount and related compensation costs and sales and marketing research and development and corporate expenditures as the company continues to grow and invest in its growth strategy.
We had a net loss of $5.9 million compared to a loss of $2.3 million in the prior period largely due to the factors that I just mentioned.
Over the past two quarters, we've aggressively expanded our team size skill set and capabilities across all functions organically as.
As well as through our acquisitions.
We believe that these investments will continue to support our growth strategy.
At June 30th 'twenty 'twenty, one we had cash of $15.4 million inventory of $4.1 million and a positive working capital of $17.6 million.
We continue to operate in this unusual period with the pandemic. However, we continue to monitor and respond to the conditions as they unfold.
With that I'll turn the call back over to Evan.
Thank you Andrew in closing I'd like to thank our employees, our loyal shareholders and our partners for their continued support as we remain focused on preserving and increasing the long term value of our company.
Behalf of next Tech I would like to thank you for your support and as always for taking the time for joining us on this call. Operator, we are now ready for questions and answers.
At this time if you have a question. Please press Star then the number one and your telephone keypad well pause for just a moment to compile the Q&A roster.
And your first question comes from Lisa Thompson with Zacks Research.
Hi, Lisa.
Hi, Kevin Hi, Andrew.
So.
To start I cover the big picture of what's going on.
You have a lot of discretion as to how you want to treat the ecommerce business.
What is the current strategy now.
So the current strategy. If you were listening Lisa is the meta versus.
We can.
Yeah, So the E com business is.
Our business as you know that we have.
We've been growing.
Our 2019 it continues to grow and you know from <unk> perspective, we continue to use it as a sandbox. We've just taken all of our augmented reality AR experiences that we created on those websites.
Converted them into much better experiences by using the three D. AI AI technology that we just acquired so we're upgrading updating and enhancing our those sites to increase the value and increase.
The click through rates.
Okay do you have any.
Our objective is to you know, whether it's cash flow positive or whether you should just grow revenue, but doesn't really matter.
I mean at this point.
You know, we're just coming out of 'twenty, 'twenty, which was a year of just hyper growth because as you know.
Everything shut down so we're kind of assessing what to do next with our E com business, but clearly it's not our focus Lisa.
Right.
Right.
Okay.
Then onto the aorta.
Can you describe a little bit.
And the way closed yet or no.
I believe its closing on.
And I think it's the 18th of August, but you know the definitive agreement is signed.
So yeah for all practical purposes, it's done deal.
And can you talk a little bit.
You said they have any.
S class for them. So how do you get paid holiday charge people for what they provide.
Well to date, they've been charging people for usage. So you could sign up for free and then you can.
Start dropping in.
Spatial maps and then dropping in a our experiences and then you pay them a monthly subscription.
For using their platform, but we're going to.
Restructure the whole payment.
Our plan there because we see lots more value and so right now it's it's set up for success, but we were going to take it to the next level Lisa.
And when you integrate all these different tools into Europe.
Our strategy with a single log in.
Thank you.
Charge people like is it all going to be standardized.
No you'll have different yes.
Yeah. So.
Content piece will likely be you know over time that becomes more of a commodity.
Content piece, but they'll pay for platform usage, so you'll pay a subscription fee and then you'll pay for usage just like you do with any kind of cloud service kind of thing.
Okay, Alright that makes sense and how far off is that being.
That's it that's in motion now so there will be a likely multiple releases first release in Q4, and then the second and complete release will probably be Q1 of 'twenty 'twenty two.
Okay.
And let's I.
I wanted to go back to just expenses.
Took a big initiative to streamline a lot of things last quarter, where we are.
Our baseline operating expense level.
We are aggressively.
<unk>.
Controlling our expenses and the goal is.
Is to bring our you know the burn down to in the range of $1 billion a month.
So we're working very very hard internally to bring the burn down and ultimately you know the goal is to get to cash flow positive, which.
You know that that's that's what we're focused on so we're in the process of.
Executing on that as we speak.
So to just look at say Q3 versus Q2.
If you take whatever you spent in Q3.
$1 million gain on contingent consideration.
Is that the dollar amount, we should look for or is that going to come down.
I'm going to let you take that offline with Andrew.
Yeah, Yeah, you could talk to Andrew about that.
Okay, Alright sounds good.
Talk a little bit more about Medicare.
All right.
Awesome.
I'm still trying to understand it.
Yes, so think of the meta versus Lisa as being you know like you can either watch a movie which is the current.
State of the augmented reality space or you could essentially walk into a movie.
And have it.
Envelop you, where it's all around you so imagine.
You have augmented reality experiences today, where you scan a QR code and you put a product in your room, and you're able to see it in your space or interact with it.
And you don't have to scan a QR code imagine you're in your room.
If you're able to just.
Visualize and augmented reality experience, it's permanently there like a piece of furniture today, that's in your living room imagine the augmented reality experience is also <unk>.
In your living room at a geolocation.
And it's always on always present always there and so you can imagine you know in your living room, maybe it's not that it's it is exciting but imagine you know you go to museums or you go to play.
Places, where it would be more exciting even a theme park and you have experiences that are always on so you know that's kind of the.
The meta versus in a nutshell. It. So you know we we now have the technology scan, which which is the key foundational piece with a our way create a spatial map. That's a three D map with geolocation pins inside that back and then drop in a our experience that live.
<unk>.
In that map.
Forever.
Hmm is that.
Is that clearer I'm trying.
Oh it is.
I'm trying to envision a portfolio for instance.
They figure out how to sell that product.
[laughter].
Well I don't think it's that hard to sell because believe it or not.
We've already seen use case.
You know there was just this ariana Grande better versus concert that just happened the other day.
Through our epic games, I believe and so the better versus already started and so from our standpoint.
If you approach.
Enterprise accounts.
Imagine you know a sporting event, but let's just use that as an example, you you go to a Yankee stadium or Shea Stadium, if you're a new Yorker and you walk in.
And theirs.
Our met adverse experience, there, where you have way finding where you could find your seats and there's arrows that are literally directing you where there's holograms.
Either past players or current players that are popping into your experience as you're walking around this.
This full on.
Immersive worlds of hollow grams, and that's something that I think pretty easy to understand.
And for our sales guys. They couldnt be more excited they want to start selling this yesterday.
So I think it's actually going to be a relatively easy Seo because everybody is looking for more immersive experience.
When they go.
Out and about in the world today.
Alright, well that sounds great. Okay. So my last question.
E.
Updated guidance, either revenues or bookings or any way to look at 'twenty 'twenty, one 'twenty 'twenty two.
We have not talked about 2022.
We have come out and kind of revised our.
'twenty 'twenty, one our range to 30 to $35 million to $50 million.
Which is oh.
Over 100%.
From 'twenty 'twenty.
And you know, we see a 'twenty 'twenty two as a pivotal year, where our augmented reality business really starts to take off where the SaaS platform. So this year, it's still a year of building the technology out.
And next year, we kind of see like in Q4 and beyond we see the tech starting to really take off the augmented reality tech stack.
Okay, I thought just clarify 30 to 35.
35 to 15 million U S. That's an old one.
All of our numbers are Canadian.
We reported an 80 at where Canadian Okay, just checking.
Sure.
Well I think this is Bob is in U S dollars.
Right so.
But weapon.
Yeah, Okay, so that might've been.
Yeah, that's possible, but when we report our numbers Theyre always Canadian.
Right right, Okay, great. Thank you so much.
Thank you Lisa.
Okay.
Okay.
And again for any questions. Please press Star then one on your telephone keypad.
And your next question comes from.
Tomorrow data shows.
Yes, Hi, Evan.
Hi, there.
Question, what is the strategy to bring content creators from Youtube to have significant pharma was maybe hundreds of thousands maybe millions of phones to Belive X platform, what's the strategy on doing that.
So we currently are not.
Pursuing our strategy of bringing.
The youtubers to lay backs right now live X today is primarily being used for our enterprise customers.
When <unk> becomes a self service platform, which isn't going to happen until Q4 of this year, where these youtubers can then go in and create their own Youtube channel slash marketplace.
So that's you know not.
Alible today.
Building that out and it'll be available in Q4.
And one more question so all of them.
We will be a direct competitor.
Richard capabilities.
Yeah. It's basically the same you know you almost can't tell the difference except it's a little prettier.
I was kind of pleasantly surprised at how well the design was done on a our room and all my next Investor call. I think it's about time that I demo it or all of the investors or maybe we baked a little video to show you guys what that is because.
It is exciting yes.
Also Hoffman devaluation, you've talked about it before <unk> 5 billion and $5 six 5 billion.
I'm an early investor in next tug Havent sold a share continue to buy more but what how would you explain the GAAP in the market between <unk> and our Hoffman is hopping only bigger because they've got an early start in this.
The story.
No there's a little more to the story. So your first question actually is the key to unlocking the value that happen has achieved so hop in.
Is a self serve platform that you know is not for enterprise or it's not white glove. Our platform is white glove, which is why we land big enterprise customers like M. I T. Harvard Johnson, <unk> Johnson, United and all of these names that I brought up many many times.
<unk> Ah they need white glove service. So in Q4 of this year when we launch our self serve.
Version of live X that will attract the youtubers it will be head to head competitive with hop in and when that happens.
The valuation should start to show up in next tech as we start to sign up more and more people because basically happens allows you to use their platform for you know, it's like $99 a month or a couple of hundred dollars a month.
Because as you know its self serve so are our platform is not able to do that today, but we've been in development on building that and that will be in market Q4, 'twenty 'twenty one.
Okay and Bureau mind me asking one more thing how is the education part of next step moving the universities.
All of these labs.
Building out or is it all kind of built out now start to expand with other universities other than horizon.
So we're building our it it's I'd say, maybe 90% build out so ryerson, obviously as our our biggest and best University customer and as I mentioned are they just re ordered another $150000 worth of work.
Mintage reality.
M Labs, Microsoft is our Ed Tech partner that now is introducing us to do there.
Customers. So there's a list of about 18 new.
Our universities and Microsoft has introduced us to the first one and there will be additional introductions, we're creating a very unique augmented reality offering in Ed Tech that we believe is going to be very very well received a very valuable.
But it is just getting started meeting Ryerson like you said is the burst.
We believe there'll be significant sign ups from additional universities between.
Peter.
Okay. Thank you that's all the questions I had I appreciate it thanks.
Thank you very much.
Thank you.
Okay.
Your next question comes from Ken Ken Mccarthy, with Mike and investments.
Yes, Evan.
When do you plan on releasing a holler.
Hologram in Hughes dating App.
[laughter] you know that's very good question I'm sure you want to use it as do a lot of people.
Does that answer that so I I totally get what you want we are launching the technology. So so we might not launch at the hologram dating at what we were probably going to do is take a little bit of a different approach, where we will be the technology.
Rider.
Sure.
Match for Tinder bore the dating apps that already have the audience and so it'll be like a premium service is the way I view, it where if you're one of those apps.
And you wanted to see a hologram of somebody.
There might be an additional upcharge of which we would get a piece of so it's still in development. It's not something that we could do today I don't know that we're going to launch our own dating app.
That's it.
It's a big undertaking so the idea is to have the technology working in other people's dating apps with this already you know.
Tens of millions of people using those apps.
I understand.
Another question earlier, when you were talking with Lisa you mentioned when you were explaining the med averse to her and you picked you've described it as a movie.
One being able to be immersed again into the movie.
Do you see a market do you see an actual market.
In Hollywood for example, where one can go to the theater or watch T V using glasses and using your technology.
Become part of the movie.
100%, yes.
In fact.
The movies as we know it's the industry is changing very very dramatically, where it's no longer as you know you're going to walk into a movie Theater movie Theater near me just close so the movie theaters kind of had their run and so now everything is live streaming.
In on demand and so if you think of being able to be in a movie or experience.
<unk> as part of the meta versus.
That's kind of the future I think of entertainment, where movies will be different it'll be it'll be a different format than what we're used to and so yeah I mean it'll be.
It's Hollywood definitely part of the whole med averse play to answer your question.
Well as mixed SEC doing anything at the moment to garner that business.
We just acquired a our way and we're looking at.
All of the different opportunities that are in front of us and we're going to initially.
Try to bring to market.
Solution.
That's key.
Can rapidly scale and so we haven't actually decided which one of those solutions, it's going to be it could be Hollywood it could be a sports arenas.
Could be a corporate offices could be shopping malls. So you know we're going to go after all of those businesses.
But you know what's going to happen first what's imminent is still a question mark.
And one more question has there been any progress with <unk>.
Your contact with them that SEC.
There is progress.
Although I cannot do.
Detail it on this call I do plan.
In the near term future to come out with a press release that will explain a NASDAQ so all of our shareholders.
And it all interested parties.
So just you know I know everybody's been super patient I need a little more time for that.
Thank you very much.
Thank you.
And again for any questions. Please press Star then the number of wind.
And your next question comes from David Ellis with research capital.
However.
Great to hear the results.
Regressing nicely quick.
Quick question on the.
US Airways as an example, but when you have a car or a company I was just wondering about your valuation metrics and how you pay for it or have you been doing pretty good job of keeping the share count down, but I'm just wondering.
You've got 15 million in cash whether you.
He was cash or shares or a combination of both and also the valuation metrics for again.
There are ways Europe would be an example, sure.
Sure so.
Well, we like to do in terms of acquisitions as we we don't like to bet. The farm are we like to acquire up and comers.
Smaller companies that.
Don't have the same access to capital and the resources that we do as a public company and so we generally buy companies and the 1 million to 10 million range. So a our way was a 1 million dollar all stock acquisition.
So it wasn't there was no cash as part of the acquisition.
The founders all now are aligned with shareholders of next tech.
So they got you.
You know a $1 billion worth of stock. So if you divide the share price by.
A million you know you kind of get the number of shares.
And so.
That's the ideal scenario and that's how we you know it's very hard to value are.
These startups using the traditional yardsticks because in general they are not fully developed right. These companies have not fully.
Develop their technology develop their value prop.
They have some amazing technology, and some amazing potential, but it's not fully developed and so the idea is as we acquire them we bring our.
<unk> team to the table, we bring our marketing machine to the table, we bring our capital and resources to the table and we take them to the next level and then we all we all get to share in the success.
And that's been our strategy.
Since we founded the company.
And so how would you evaluate the company a or in this case.
Two well, we throw off we have a million bucks.
Yeah, we value them at a $1 billion you you want to know the formula.
Well, just generally I mean oftentimes it's the multiple.
Cash flow, but they probably don't have cash flow I think at this point.
Right right so the formula.
Is.
You know not something that.
I can share with you on this call. If you want to send me an email I could.
I could you know maybe take you through it.
Okay.
One other clarification you referenced earlier the use air is using us for credit.
Quite a number of developers presumably operating over house.
They paid or how does that work.
Yeah, no so they're not actually that they believe it or not a lot of these are a lot of the people that have been using a our way our agencies that.
That have customers that are kind of experimenting with the meta versus so some of them are out of the house, but a lot of them are actually businesses. For instance, they are way was working with Bosch a major automotive company.
A company and as barren was just explaining to a next tech employees. This morning that Bosch uses lasers very expensive lasers for precision work that they do.
But they were using the E R way spatial mapping as an inexpensive solution and they were using holo lens as the viewing device. So there's actually some really interesting use cases at Bosch kind of indicated that by using this meta.
Verse technology. This this spatial mapping tech they believe that it could save the upwards of a billion dollars in cost because these lasers are extremely expensive and you need Super high highly trained software engine.
Years and specialists to operate it with a our ways Tech you don't need any of that anyone can do it even I can do it even you could do it so.
It's it's really game changing technology and I I would say that you know stay tuned for what we bring to market because its going to be super Super exciting as we bring the use cases.
To market.
Okay. Thank you and those developers are they being paid at all or how does that work.
No they pay us.
Good for you.
Yeah, they're they're using the platform and it's a pay to play.
So there's some part of it is a freemium model. So you can sign up for free limited usage for free past a certain point you start paying.
Very good thanks very much.
Thank you.
At this time there are no further questions.
Alright, Thank you very much and everybody have a great day.
That concludes today's conference. Thank you for your participation you may now disconnect.
Yeah.