Nextech Ar Solutions ($NTAR ): Setting Up for the Future

INNO
ARitize mobile app as advertised on Nextech's website

Intro

A long time ago, I owned shares in Future Farms ($FFT).  Future Farms divested its AR segment, leaving shareholders with shares of Nextech ($NTAR).  Eventually, Nextech left my portfolio and I never looked back.  I’ve since been curious what has been driving Nextech’s significant stock price moves.  In this article, we review Nextech’s highlights of the last 6 months, following a promising Q1 report.

Being one of the first publicly traded “pureplay” AR companies, Nextech describes itself as:

a leading provider of Augmented Reality (“AR”) solutions that incorporate Artificial Intelligence (“AI”) in the three dimensional (3D) spatial computing industry. NexTech represents a first-mover opportunity in the augmented reality space with the creation of a transformational patent-pending AR/AI eCommerce solution to help businesses drive greater online growth. a leading provider of Augmented Reality solutions

MD&A, For the Three Months Ended March 31, 2020, Dated May 14, 2020

The AR industry is estimated to hit $120 billion by 2022, according to Statista. Nextech’s strategies for growth include acquisitions, e-commerce, and growth of its omni-channel AR SaaS ARitize. Consequently, the company expects to see significant growth in revenues across its verticals.

Verticals

  1. ARitize for e-Commerce
    • Allows Nextech to participate in a $2.8 trillion global eCommerce market
    • Integrated with Shopify, WordPress, and Magento
    • Allows e-commerce sites to easily integrate AR into the shopping experience
    • No need for developer or special programming skills
    • Announced on January 22 preparation to launch VRitize
      • A virtual reality platform compatible with existing VR headsets on the market
      • Provides consumers with a VR retail experience
      • Provides businesses with valuable customer metrics
    • Includes a proprietary Augmented Reality analytics dashboard to track Augmented Reality product interactions and conversions to sales for e-commerce
  2. Nextech University
    • Aimed at both companies and educational institutions
    • Allows overlay of immersive 3D-AR experiences on top of 2D assets such as multimedia and PDF documents to create a more interactive experience that drives productivity
  3. Nextech Studios
    • Creation of branded entertainment and immersive 360 experiences
    • Allows users to experience events as if they were there
  4. Nextech 3D-AR Advertising Platform
    • Planned launch early 2020 (still in development)
    • Will allow companies to create immersive 3D/AR ad content.
    • Targeting ad spending estimated at $725 billion, this vertical
    • Analytics have shown 100%-400% increase in add-to-cart activity from WebAR experience, leading Nextech to believe adoption of the technology will grow quickly
  5. ARitize360
    • Launched Sept 24, 2019 initially under the name CaptureAR
    • World’s first self-serve 3D AR publishing platform
    • Allows users to have the power to create their own 3D scans using their mobile device and to then integrate the scans into Nextech’s ARitize e-commerce platform for a monthly fee per item
    • Significantly reduces the cost and time to produce 3D scans of products, which to date has been the major barrier of mass AR adoption
    • limited release to date – still in continued development
    • A demo of the product can be experienced here

Customers

Nextech boasts an ever-growing customer base, one that is quite impressive for an early-stage company:

  • AR deal announced with Tufner Weighing Systems
  • WebAR adopted by major firearms distributor Davidson’s Inc for both B2B and B2C business
    • Walther Arms will fund adoption by top 25 dealers
  • Sterilis Solutions signed on for Nextech’s WebAR and AR University
  • Announced a customer relationship with Weby
    • An omni-channel e-commerce dealer for outdoor recreation and sporting goods
    • Listed on Inc. 5000 as one of the fastest-growing companies in America 6 years in a row. 
    • Goal is to integrate with Nextech’s AR e-commerce platform to enhance customer-product engagement and increase sales for its brands
  • Romios Gold Resources has contracted Nextech’s services to provide AR mock-ups of core samples to potential investors
    • Marks Nextech’s entry to the mining sector
  • 4 new AR customers announced on February 27:
    • Wallkicks
    • SpenceUp
    • Dhana Inc
    • Lotuk
  • Other customers mentioned on Nextech’s website:
Nextech customers AR growth potential

Other Highlights

  • On Dec 20, Nextech announced they’ve integrated with Facebook Messenger, which:
    • Boasts 70M daily users and 1.3B users monthly
    • Will allow same interaction with customers only with added benefit of integrating 3D/AR assets
  • Nextech acquired two e-commerce businesses in 2019: Vacuum Cleaner Market and Infinite Pet
    • These will act as test beds for its AR
    • Both sites are now cash flow positive and scaling
    • Due to recent COVID-19-induced work-from-home and shop-from-home paradigm shifts, sales are expected to increase further.
    • Further details about the Infinite Pet acquisition can be found here
  • On April 1, Nextech announced their acquisition of Jolokia, a company engaged in online video conferencing. Jolokia provides solutions for:
    • Virtual events
    • Remote video training
    • Other live streaming requirements
  • Jolokia’s signature product is the Inferno platform. Management believes that the combination of Nextech’s technology with Jolokia’s Inferno platform sets them up to be dominant leaders in virtual learning and event management.  Furthemore, management understands that with the advent of VR glasses, the next generation of learning platforms must incorporate these technologies. Recently, Nextech has announced some interested updates, following this acquisition.
  • On March 24, Nextech integrated Zoom into the InfernoAR Virtual Events platform. This allows:
    • The Zoom platform to be used by 100,00 users without glitches
    • Prerecorded Zoom meetings to be keyword searchable with closed captioning in 64 languages
  • On may 12, Nextech integrated Teams and Skype into the InfernoAR platform. The combined 384 million daily users can now pick their preferred platform and join a conference. Other features include:
    • Live moderated questions
    • Simple registration
    • Real-time moderated interactivity
  • As the news release says:

“With the Global Coronavirus pandemic disrupting all large gatherings, demand for remote training and virtual events is surging which will undoubtedly drive awareness and adoption of the company’s video conferencing, live streaming and remote training platform with integrated AR features.”

NexTech Integrates Microsoft Teams and Skype into its InfernoAR Virtual Events platform, May 12, 2020

Cautions

Investors should refer themselves to this report which provides damning allegations of insider dealings, vaporware, and a non-existent customer base.

CEO Evan Gappelberg responded to the report via Youtube, responding to each point made in the report.

It is up to investors to decide, after considering both sides, which version they choose to believe.

Additionally, news was released today that Nextech refiled the MD&A for the year ended December 31, 2020 after a disclosure review by the BCSC. This comes days after Nextech was halted pending an amendment to their earlier NR regarding a new contract. Investors are encouraged to consult the updated filing.

Conclusion

Nextech is still in its early stages. Further development of their assets is required, particularly its ARitize360 technology as well as their advertising platform.  However, investors seeking a way to capitalize on our current societal shift will want to consider this early stage tech venture. COVID-19 is promising to change our world for the foreseeable future.  Consequently, we are shifting ever more toward a stay-at-home paradigm. With this shift comes more use of online platforms, to carry out work, shop, and even learn, as universities have now shifted most coursework to online platforms.  Nextech’s product portfolio is being developed to check off all these boxes. 

DISCLAIMER: I do not hold any position in NTAR

 

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