NEXCF Q2 2021 Earnings Call

Operator: Good afternoon, ladies and gentlemen. Welcome everyone to the NexTech AR Solutions Corp 2021 Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I’d like to remind everyone that this call is being recorded, today Thursday, August 12, 2021. Yesterday after markets close NexTech AR Solutions Corp released its financial results for the second quarter ending June 30, 2021. 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 12, 2021 and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For 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 IFRS results and non-IFRS financial measures, a reconciliation between IFRS results and non-IFRS financial measures is available in our MD&A, which can be found on SEDAR. Neither this call nor the webcast archives may be re-recorded or otherwise reproduced or distributed without prior written permission from NexTech. To begin our call, Evan Gappelberg, CEO, will discuss the highlights of our first quarter as well as recent business developments, followed by Andrew Chan, CFO, who will review our financial results and outlook. Finally, Evan will make some closing remarks before opening up the line for more questions. I’ll now turn the call over to Evan Gappelberg, CEO.

Evan Gappelberg: Thank you very much for that intro. Good afternoon, ladies and gentlemen. And welcome everybody to NexTech’s Q2 2021 results. I want to thank everybody that’s here today. We have Brad Giddings [ph], who’s going to be managing our investor relations for NexTech. Brad, if you’re with us, I think there’s a piece here for you to interact with our investor base.

Unidentified Company Representative: Thank you for the introduction, 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.

Evan Gappelberg: You’re welcome, Brad. So to begin, I want to thank everybody for joining us. All of our employees from all over the world, including Canada, United States, Europe, and Asia Pacific, I want to thank them for their continued support of our mission in our business. NexTech’s successes in Q2 and really throughout 2021 were made possible through the hard work and creativity and dedication of our talented and valued employees, our culture of organizational learning, 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 Q2, Q2 was fueled by the combination of all of our businesses, not just one. We’re unique, 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 announcement of ARway, NexTech signed a definitive agreement to acquire ARway which will expand its augmented reality solutions to include metaverse solutions. ARway is a UK-based spatial computing company. And this acquisition of ARway gives us an augmented reality SDK or Software Development Kit, providing us with spatial mapping, which is key to the metaverse, you need the spatial mapping platform. It’s critical to building the metaverse and it really rounds out NexTech’s offering with what we believe is an essential building block of a complete augmented reality suite of products. We are pleased that ARway’s founders Baran and Nik are joining NexTech’s team as we integrate this important functionality into the NexTech offerings. ARway already is in market today and brings an impressive list of clients including British Telecom, London Guildhall, Westfield Mall in London, Bosch and many others. Most importantly, ARway has already developed a ecosystem. They have over 1,000 developers that develop augmented reality experiences in its metaverse platform, on its platform that uses its scanning technology. And this is without any budget, or any ad spending completely bootstrapped. With NexTech 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 2021 and beyond. When paired with our existing AR content creation tools including 3D AI’s, product creation tools, and HoloX people, holographic human creation tools. We believe that we can create tremendous value throughout our technology stack and be first to market with a metaverse 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 metaverse announcement is just the beginning and in the coming weeks, NexTech 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 the critical components of a complete augmented reality offering. Super excited about the metaverse. Let’s talk about Q2, which is in the rearview mirror. So in 2020, when you look at the landscape when we came into 2020, and 2021, even, we had huge tail winds from our e-com and virtual events business fueled by the pandemic and a complete lockdown of society, which was a once – will hopefully a once in a business lifetime opportunity NexTech will probably never experienced that again. And so with the rollout of vaccines in 2021, things have now normalized. However, we are seeing a sharp pickup again, in our virtual events business because of the Delta variance. We’re seeing repeat customers that are now coming back to the table and booking more virtual and hybrid events than they were prior to delta. So there was a bit of a bump, I’d say in demand in Q2, that’s now starting to turn up in Q3, and Q4. So, while Q2 2021 is a down quarter over Q1 2021. Year-over-a year, we are up 73% and for the first six months of 2021 our revenue is up 130% over 2020, which is no small feat for a small public company. However, 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 and our events business switching from 100% virtual in 2020 to 100% 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 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. 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, get a dashboard with a selection of all our augmented reality solutions from a single login, where they are for e-commerce, 3D/AR ads, Human Holograms, all those creator tools. Even the metaverse solution studio, our newest addition to the NexTech family will be 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 AR 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 $150,000 in augmented reality lab orders, Northwell Health, Northeastern HMO has just come back and reordered. Kohl’s has tripled down on their AR services with us, says a 300% increase in business from Kohl’s, 100% increase in business from K-mart. So as we go into the second half of 2021, I feel we are positioned better than ever to take advantage of a multi decade multi trillion dollar mega trend in augmented reality that is just getting started. It reminds me and it’s very similar to the birth of the internet back in 1995. Nobody really understood it. You had dial up modems, 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 CNN or Yahoo or wherever it’s just part of everything we do. And we take it for granted. Augmented reality will be the same way. And we are a first mover with an incredibly valuable technology stack, allowing us to create mini-metaverses and populate these mini-metaverses with our augmented reality solutions. So just to recap, in just the first half of 2021, we’ve started turning our AR solutions into self serve low-touch, no-touch businesses that could grow exponentially. We’ve laid a solid foundation with the transformative acquisition of 3D/AR for scaling content creation and 3 D products for e-commerce. And it simultaneously created a solution for scaling the creation of Human Holograms in AR by leveraging artificial intelligence technology to bring to market what we believe is very valuable technology, which is Human Holoportation on-demand. We call that HoloX, all of that, in one word is HoloX. We’ve just acquired ARway, which puts us in the metaverse, puts us at the forefront of augmented reality technology with the ability to create 3D spatial maps and then populate it with our AR providing an unrivaled AR solution for use of the metaverse which we believe, which Mark Zuckerberg the CEO of Facebook believes, which is CEO of Microsoft believes, the CEO of Unity believes 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 HoloX, we’ve announced they were integrating with HoloLens for an AR experience like none other. Of course, the global event market even without a pandemic is still a $30 billion a year industry. And so LiveX is our product offering for that industry. It’s our showcase platform for enterprise customers to host fully customize large scale events globally as hybrid events. We have live chat, live streaming. And we do have our newly launched AR room, which our investors have patiently been waiting for. It is live and it is launched. We have a full broadcast suite, polling, gamification, and of course, a full suite of augmented reality experiences. LiveX is a platform that’s being used by some of the biggest and best companies in the world, including Schneider Electric, MIT, Harvard, the UN 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 AR solutions and offerings. In conclusion, NexTech is focused on its key strategic priority of maintaining financial strength and liquidity. Since inception, the company has been advanced efforts and 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 AR companies both large and small. In our Q2 2021 results, once again, we were reinforcing the importance of our three foundational pillars. We’re a leader in augmented reality technology underpinned by enabling digital transformation and growing our key verticals like education, entertainment, events, retail, medical and marketplaces, on LiveX. We are full steam ahead, I had 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 the quarterly financials. Andrew, take it away.

Andrew Chan: Thank you, Evan, and good afternoon, everybody. As a reminder, unless otherwise stated, all figures reported on today’s call are in Canadian dollars and under IFRS. As I mentioned earlier, 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 a 130% to $13.8 million. Products sales grew 43% to $4.4 million for the quarter, and grew 88% to $10.4 million during what during the first half of 2021. Due to the expanded product offerings, adding additional sales channels and increased capacity to facilitate the fulfillment of sales. Our technology services produce 632% to $1.4 million for the quarter and 1,066% to $2.7 million for the first half of 2021. 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 – this was the result of a higher product cost and delivery cost and customer service costs associated with technology services, as we cope with higher demands for our products and services during this period. Total bookings for technology services was steady at $1.7 million this quarter was $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 30, 2021, 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 continue 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, skills and capabilities across all functions organically as well as through our acquisitions. We believe that these investments will continue to support our growth strategy. As of June 30, 2021, we had cash for $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 of banned fault. With that, I’ll turn the call back over to Evan.

Evan Gappelberg: Thank you, Andrew. In closing, I’d like to thank our employees, our loyal shareholders, and our partners for their continued support as remain focused on preserving and increasing the long-term value of our company. In closing, I’d like to thank our employees, our loyal shareholders, and our partners for their continued support as remain focused on preserving and increasing the long term value of our company. On behalf of NexTech, 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.

Operator: [Operator Instructions] And your first question comes from Lisa Thompson with Zacks Research.

Evan Gappelberg: Hi, Lisa?

Lisa Thompson: Good. Hi, Evan. Hi, Andrew. So, let’s just start like on the big picture of what’s going on. I know that you have a lot of discretion as to how you want to treat the e-commerce business? What is the current strategy now?

Evan Gappelberg: So the current strategy, if you were listening, Lisa, is the metaverse.

Lisa Thompson: No, one thing at a time, we’ll get to that.

Evan Gappelberg: Yes. So the e-comm business is a business as you know that we’ve been growing since 2019, it continues to grow. And from NexTech’s perspective, we continue to use it as a sandbox, we’ve just taken all of our augmented reality, experiences that we created on those websites and converted them into much better experiences by using the 3D AI technology that we just acquired. So, we’re upgrading, updating and enhancing those sites to increase the value and increase the click through rates.

Lisa Thompson: Okay. Do you have any objective as far as, whether it should be cash flow positive, or whether you should just grow revenues? But does it really matter?

Evan Gappelberg: I mean, at this point, we’re just coming out of 2020, 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.

Lisa Thompson: Right. Okay. And then on to the AR business, can you describe a little bit? First off is ARway close yet or not?

Evan Gappelberg: I believe it’s closing on the – I think it’s the 18th of August. But the definitive agreement is signed.

Lisa Thompson: Okay.

Evan Gappelberg: So, yes, for all practical purposes, it’s a done deal.

Lisa Thompson: And talk a little bit, you said they have an SaaS platform. So, how did you get paid? How did they charge people for what they provide?

Evan Gappelberg: Well, today, 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 AR experiences. And then you pay them a monthly subscription for using their platform, but we’re going to restructure the whole payment plan there, because we see lots more value. And so, right now, it’s set up for success. But we’re going to take it to the next level, Lisa.

Lisa Thompson: Okay. And when you integrate all these different tools into your umbrella strategy with a single login?

Evan Gappelberg: Yes.

Lisa Thompson: How do you charge people? Like, is it all going to be standardized? Or?

Evan Gappelberg: No, you’ll have different – yes. So the content piece will likely be, overtime, that becomes more of a commodity the 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.

Lisa Thompson: Okay. All right, that makes sense. And how far off is that to being one?

Evan Gappelberg: That’s in motion now. So there will be likely multiple releases the first release in Q4, and then the second and complete release will probably be Q1 of 2022.

Lisa Thompson: Okay. And let’s – I want to go back to just expenses. Now, you took a big initiative to streamline a lot of things. Last quarter, I was wondering where we are, as far as a baseline operating expense level.

Evan Gappelberg: We are aggressively pursuing controlling our expenses. And the goal is to bring, the burn down to in the range of a million a month. So, we’re working very, very hard internally, to bring the burn down. And ultimately, the goals to get the cash flow positive, which, that’s what we’re focused on. So, we’re in the process of executing on that as we speak.

Lisa Thompson: So, let’s just look at the Q3 versus Q2. If you take whatever you spent in Q3 minus the $1.5 million gain on contingent consideration, is that the dollar amount we should look for or is that going to come down?

Evan Gappelberg: I’m going to let you take that offline with Andrew. Yes, you could talk to Andrew about that.

Lisa Thompson: Okay. All right. All sounds good. I want to talk a little bit more about metaverse, and how that fits in with everything. So, I think I’m still trying to understand it.

Evan Gappelberg: Yes, so think of the metaverse Lisa, as being 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 and interact with it. Imagine, you don’t have to scan a QR code, imagine you’re in your room, and you’re able to just visualize an 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 in your living room at a geo location. And it’s always on, always present, always there. And so you could imagine, in your living room, maybe it’s not that as exciting. But imagine, you go to museums or you go to places where it would be more exciting, even a theme park, and you have experiences that are always on. So that’s kind of the metaverse in a nutshell. And so we now have the technology scan, which is the key foundational piece with ARway, create a spatial map. That’s a 3D map with geolocation, pins inside that map, and then drop in an AR experience that lives in that map forever. Is that clearer? I’m trying Lisa?

Lisa Thompson: Yes, it is. I’m just trying to envision the poor Salesforce and how they figure out, how to sell what product to whom?

Evan Gappelberg: Well, I don’t think it’s that hard to sale, because believe it or not, we’ve already seen use case. There was just this Ariana Grande metaverse concert that just happened the other day through Epic Games, I believe. And so the metaverse is already started, and so from our standpoint, if you approach enterprise accounts, imagine a sporting event, let’s just use that as an example. You go to Yankee Stadium or Shea Stadium if you’re in New Yorker, and you walk in and there’s a metaverse experience there, where you have Wayfinding, where you could find your seat. And there’s arrows that are literally directing you, where there’s holograms, of either past players or current players that are popping in to your experience as you’re walking around. It’s this full on immersive world of holograms. And that’s, something that’s, I think, pretty easy to understand. And for our sales guys, they couldn’t be more excited. They want to start selling this yesterday. So, I think it’s actually going to be a relatively easy sale because everybody’s looking for a more immersive experience, when they go out and about in the world today.

Lisa Thompson: All right, well, that sounds great. Okay, so my last question is – have any updated guidance, either revenues or bookings or any way to look at 2021 and 2022?

Evan Gappelberg: We have not talked about 2022. We have come out and kind of revised our 2021 range to $35 million to $50 million this is up over 100% from 2020. And, we see 2022 as a pivotal year where our augmented reality, business really starts to take off with the SaaS platform. So this year is 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.

Lisa Thompson: Okay, so just clarify – $35 million to $60 million, U.S. or Canadian?

Evan Gappelberg: All of our numbers are Canadian as we’re – we’ve reported Canadian, we’re Canadian company.

Lisa Thompson: Right. Just checking. Just making sure. Is it like last thing because this stock was in U.S. dollars million. Right. So…

Evan Gappelberg: Yes. Okay. So that might have been the – yes, that’s possible. But when we work, our numbers, they’re always Canadian.

Lisa Thompson: Right, right. Okay, great. Thank you so much.

Evan Gappelberg: Thank you, Lisa.

Lisa Thompson: Thanks. Bye-bye.

Evan Gappelberg: Bye.

Operator: [Operator Instructions] And your next question comes from [indiscernible].

Unidentified Analyst: Yes. Hi, Evan.

Evan Gappelberg: Hi there.

Unidentified Analyst: Question, what is the strategy to bring content creators from YouTube that have significant followers, maybe hundreds of thousands of maybe millions of followers to the LiveX platform was the strategy on doing that?

Evan Gappelberg: So, we currently are not pursuing a strategy of bringing the YouTubers to LiveX right now LiveX today is primarily being used for enterprise customers, when LiveX becomes 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/marketplace. So that’s not available today. We’re building that out. And it’ll be available in Q4.

Unidentified Analyst: One more question. So AR room will be a direct competitor to Zoom, but with richer capabilities correct?

Evan Gappelberg: Yes, it basically the same, you almost can’t tell the difference, except it’s a little prettier. I was kind of pleasantly surprised that how well, the design was done on AR room. And on my next investor call. I think it’s about time that I demo it for all investors. Or maybe we make a little video to show you guys what that is, because it is exciting. Yes.

Unidentified Analyst: It also Hopin's valuation you’ve talked about it before $5 billion, $5.65 billion. I’m an early investor of NexTech, and continue to buy more, but what – how would you explain the gap in the market between NexTech’s market cap and Hopin’s, it Hopin only bigger, because they got an early start in this was more to the story.

Evan Gappelberg: No, there’s a little more to the story. So your first question, actually, is the key to unlocking the value that Hopin has achieved. So Hopin is a self-serve platform that, is not for enterprise or it’s not white glove, our platform is white glove, which is why we land, big enterprise customers like MIT, Harvard, Johnson and Johnson, all these names that I brought up many, many times, they need white glove service. So in Q4, of this year, when we launch our self-serve version of LiveX that will attract the YouTuber’s, it will be head to head competitive with Hopin, and when that happens, the valuation should start to show up in NexTech, as we start to sign up, more and more people, because basically Hopinallows you to use their platform for it’s like $99 a month or a couple $100 a month. Because there’s – it’s self-serve. So 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 2021.

Unidentified Analyst: Okay. And if you don’t mind me asking one more thing, how is the education part in NexTech moving to the universities, AR of the labs is still building out? Or is it all kind of built out and now it’s time to expand with other universities other than Ryerson.

Evan Gappelberg: So, we’re building it, I’d say, maybe 90% build out. So Ryerson obviously, is our biggest and best university customer. And as I mentioned, they just reordered another $150,000 worth of augmented reality labs, Microsoft is our edtech partner that now is introducing us to their customers. So there’s a list of about 18 new 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 edtech, that we believe is going to be very, very well received and very valuable. But it is just getting started meaning Ryerson, like you said is the first, we believe there’ll be significant signups from additional universities.

Unidentified Analyst: Okay, thank you. That’s all the questions I had. Appreciate Evan. Thanks.

Evan Gappelberg: Thank you very much.

Unidentified Analyst: Thank you.

Evan Gappelberg: Okay.

Operator: Your next question comes from Ken [indiscernible] with Mike and Investments.

Unidentified Analyst: Yes, Evan, when do you plan on releasing a hologram infused dating app?

Evan Gappelberg: That’s a very good question. I’m sure you want to use it as do a lot of people. Don’t answer that. So, I totally get what you want. We are launching the technology. So, we might not launch a date, a hologram dating app. What we – we’re probably going to do is take a little bit of a different approach where we will be the technology provider for match for Tinder, for 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 can do today. I don’t know that we’re going to launch our own dating app, because that’s a big undertaking. So the idea is to have the technology working in other people’s dating apps with is already tens of millions of people using those apps.

Unidentified Analyst: I understand. Another question. Earlier, when you were talking with Lisa, you mentioned – when you were explaining the metaverse or a new pic use described it as a movie, and 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 TV using glasses and using your technology become part of the movie?

Evan Gappelberg: 100% yes. In fact, the movies as we know it, the industry is changing very, very dramatically. Where it’s no longer you’re going to walk into a movie theater. I mean, a movie theater near me just closed. So, the movie theaters have kind of had their run. And so now everything’s live streaming in on demand. And so if you think of being able to be in a movie, or experience a movie as part of the metaverse, that’s kind of the future I think of entertainment, where movies will be different, it’ll be a different format than what we’re used to. And so yeah, I mean, it’ll be – it’s Hollywood’s definitely part of the whole metaverse play to answer your question.

Unidentified Analyst: Well, NexTech, doing anything at the moment to garner that business?

Evan Gappelberg: We just acquired ARway. And we’re looking at all the different opportunities that are in front of us. And we’re going to initially try to bring to market a solution that 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 sports arenas. It could be corporate offices could be shopping malls. So, we’re going to go after all those businesses. But what’s going to happen first, what’s imminent is still a question mark.

Unidentified Analyst: And one more question, has there been any progress with your contact with NASDAQ?

Evan Gappelberg: There is progress. Although I cannot detail it on this call, I do plan in the near term future to come out with a press release that will explain NASDAQ to all of our shareholders, and all interested parties. So just, I know everybody’s been super patient, I need a little more time for that.

Unidentified Analyst: Thank you very much.

Evan Gappelberg: Thank you.

Operator: [Operator Instructions] And your next question comes from David Ellis with Research Capital.

David Ellis: Hi Evan, great to hear the results, it’s progressing nicely. Quick question on the use ARway's as an example, but when you have an acquirer company, just wondering about your valuation metrics, and how you pay for it, you’ve pretty good job or keeping the share count down. But just wondering, even $15 million in cash, whether you use cash or shares or combination of both, and also the valuation metrics for again, ARway would be an example.

Evan Gappelberg: Sure, sure. So what we like to do in terms of acquisitions is, we don’t like to bet the farm. We like to acquire up incomers, smaller companies that don’t have the same access to the capital and the resources that we do as a public company. And so we generally buy companies in the $1 million to $10 million range. So ARway was a $1 million all stock acquisitions. So it wasn’t, there was no cash as part of the acquisition. So the founders all now are aligned with shareholders of NexTech. So they got, $1 million worth of stock. So if you divide the share price by a million, you kind of get the number of shares. And so that’s the ideal scenario. And that’s how we – it’s very hard to value these startups using the traditional yardsticks, because in general, they’re not fully developed. Right? These companies have not fully developed 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, is we acquire them, we bring our 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.

David Ellis: And so how would you value the company AR in this case – to offer a $1 million bucks?

Evan Gappelberg: Yes, we valued them at a $1 million. You want to know the formula?

David Ellis: Yes, well, just generally, I mean, love, oftentimes is multiple cash flow, but they probably don’t have cash flow I think at this point.

Evan Gappelberg: Right. Right. So the formula is, not something that I could share with you on this call. If you want to send me an e-mail, I could maybe take you through it.

David Ellis: Okay. One other quick question you referenced earlier, the use – AR is using for quite a number of developers presumably operating other host [indiscernible]

Evan Gappelberg: Yes, no. So they’re not actually that, believe it or not, a lot of these are – a lot of the people that have been using ARway as agencies that have customers that are kind of experimenting with the metaverse, so some of them are out of the house, but a lot of them are actually businesses. For instance, ARway was working with Bosch major automotive company, and as Baran was just explaining to NexTech employees this morning, that Bosch uses lasers, very expensive lasers for precision work that they do. But they were using the ARway spatial mapping as an inexpensive solution. And they were using HoloLens as the viewing device. So there’s actually some really interesting use cases. And Bosch kind of indicated that by using this metaverse technology, this, spatial mapping tech, they believe that it can save them upwards of a $1 billion in cost, because these lasers are extremely expensive, and you need super high, highly trained, software engineers and specialists to operate it with ARway’s 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 really game changing technology. I would say that, stay tuned for what we bring to market, because it’s going to be super, super exciting as we bring the use cases to market.

David Ellis: Okay, thank you. And those developers are – they being paid at all or how’s that work?

Evan Gappelberg: No, they pay us.

David Ellis: They pay you?

Evan Gappelberg: Yes, yes, they’re using the platform and it’s a pay to play, so there’s some part of that – it’s a premium model. So, you can sign up for free, limited usage for free, pass a certain point you start paying.

David Ellis: Very good. Thanks very much.

Evan Gappelberg: Thank you.

Operator: At this time, there are no further questions.

Evan Gappelberg: All right, thank you very much, and everybody have a great day.

Operator: That concludes today’s conference. Thank you for your participation. You may now disconnect.