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spk01: Ladies and gentlemen, welcome everyone to the next TechAR Solutions Corp 2021 second quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Instructions 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, 2021. Yesterday, after markets closed, 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 CDAR. 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 risk and uncertainties. Actual 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 CDAR 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 CDAR. 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 Gabelberg, CEO, will discuss the highlights of our first quarter, as well as recent business development, followed by Andrew Chan, CFO, who will review our financial results and outlook. Finally, Evan will make some closing remarks before opening the line for more questions. I'll now turn the call over to Evan Gabelberg, CEO.
spk07: Thank you very much for that intro. Good afternoon, ladies and gentlemen, and welcome, everybody, to Next Tech's Q2 2021 results. I want to thank everybody that's here today. We have Brad Giddings, 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.
spk03: 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.
spk07: 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, In Asia Pacific, I want to thank them for their continued support of our mission and our business. Next Tech's successes in Q2 and really throughout 2021 were made possible through the hard work, the creativity, and dedication of 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 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 in 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 fast-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 you need the spatial mapping platform it's critical to building the metaverse and it really rounds out next tech'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, Baron and Nick, are joining Next Tech's team as we integrate this important functionality into the Next Tech 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 its 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 3DAI'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 our augmented reality businesses, specifically becoming a key driver of revenues. 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 are the critical components of a complete augmented reality offering. Super excited about the metaverse. Let's talk about Q2. which is in the rear view mirror. So in 2020, when you look at the landscape, when we came into 2020 and 2021, even, we had huge tailwinds from our e-comm and virtual events business fueled by the pandemic and a complete lockdown of society, which was a once well, hopefully a once in a business lifetime opportunity. Next Tech will probably never experience 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 variant. We're seeing repeat customers that are now coming back to the table and booking more virtual and hybrid events online. 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 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 in 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 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. 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. Web AR for e-commerce, 3D AR ads, human holograms, all those creator tools, even the Metaverse Solution Studio, our newest addition to the Next Tech 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 re-acceleration in our technology services businesses we see book 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, a northeastern HMO, has just come back and reordered. Kohl's has tripled down on their AR services with us. There's a 300% increase in business from Kohl's, 100% increase in business from Kmart, 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 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 dial-up modems, so the experience was suboptimal. 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 AI for scaling content creation and 3D 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 teleportation 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 the 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 that we're 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 events. fully customized 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 technology 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 advancing 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're 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 live apps. 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 the quarterly financials. Andrew, take it away.
spk05: 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 Emma mentioned earlier, total revenue in the second quarter was up 73% to $6.1 million, as 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 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 grew 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 result of a higher product cost and delivery cost and customer service costs associated with technology services. 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 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 in 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 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 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.
spk07: 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. 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.
spk01: At this time, if you have a question, please press star to the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. And your first question comes from Lisa Thompson with Zags Research.
spk06: Hi, Lisa.
spk01: Good.
spk02: 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?
spk07: So the current strategy... If you were listening, Lisa, is the metaverse.
spk02: No, no. One thing at a time. We'll get to that.
spk07: Yeah. So the e-com business is a business, as you know, that we've been growing since 2019. It continues to grow. And, you know, from Next Tech'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 today. to increase the value and increase the click-through rates.
spk02: OK. Do you have any objective as far as whether it should be cash flow positive or whether you should just grow revenues? Does it really matter?
spk07: I mean, at this point, you know, 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.
spk02: Right. Right. Okay. And then on to the AR business. Can you describe a little bit, first off, is ARWA closed yet or no?
spk07: I believe it's closing on the, I think it's the 18th of August, but, you know, the definitive agreement is signed.
spk02: Okay.
spk07: So, yeah, for all practical purposes, it's on deal.
spk02: And talk a little bit, you said they have an SAAS platform? So how do they get paid? How do they charge people for what they provide?
spk07: 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 AR experiences, and then you pay them a monthly subscription for AR. using their platform, but we're going to restructure the whole payment plan there because we see lots more value. And so, you know, right now it's set up for success, but we're going to take it to the next level, Lisa.
spk02: Okay, and when you integrate all these different tools into your umbrella strategy with a single login, How do you charge people? Like is it all going to be standardized?
spk07: No, you'll have different. Yeah, so the content piece will likely be, you know, over time 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. okay all right that makes sense and how far off is that to being uh that's in that's in motion now so there will be uh likely multiple releases the first release in q4 and then the second and complete release will probably be q1 of 2022. okay sounds good
spk02: And I want to go back to just expenses. I know 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.
spk07: We are aggressively pursuing controlling our expenses, and the goal is 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 goal is 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.
spk02: So to just look at, say, 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 number going to come down?
spk07: I'm going to let you take that offline with Andrew. Yeah, you can talk to Andrew about that.
spk02: Okay. All right. Sounds good. Do you want to talk a little bit more about metaverse and how that fits in with everything? I'm still trying to understand it.
spk07: Yeah, so think of the metaverse, Lisa, as being, you know, like you can either watch a movie, which is the current, you know, state of the augmented reality space, or you could essentially walk into a movie and have it you know, envelop you, where it's, you know, all around you. So imagine, you know, 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 geolocation, 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 or you go to 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 metaverse in a nutshell. So, you know, we now have the technology to scan, which is the key foundational piece with ARWay, create a spatial map. It'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.
spk02: Yeah, no, it is. I'm just trying to envision the poor sales force and how they figure out how to sell what product to whom.
spk07: Well... I don't think it's that hard to sell because, believe it or not, we've already seen use cases. You know, 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, you know, starting. And so from our standpoint... If you approach an enterprise account, imagine, you know, a sporting event. Let's just use that as an example. You go to Yankee Stadium or Shea Stadium if you're a 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 into 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 more immersive experience when they go out and about in the world today.
spk02: All right. Well, that sounds great. Okay. So my last question is, do you have any updated guidance, either revenues or bookings or any way to look at 2021 and 2022?
spk07: We have not talked about 2022. We have come out and kind of revised our 2021 range to 35 to 50 million, which is up over 100% from 2020. And, you know, we see 2022 as a pivotal year where our augmented reality business really starts to take off, where, you know, these SaaS platforms. 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.
spk02: Okay, so just clarify, $35 to $60 million U.S. or Canadian?
spk06: All of our numbers are Canadian. As we're reporting Canadian, we're a Canadian company.
spk02: Right, just checking, just making sure. It's like the last thing we just bought was in U.S. dollars, a million, right? So we have to keep an eye on that.
spk07: Yeah, okay. So that might have been... Yeah, that's possible, but when we report our numbers, they're always Canadian.
spk02: Right, right. Okay, great. Thank you so much.
spk07: Thank you, Lisa.
spk01: Okay, bye-bye. Bye. And again, for any questions, please press star through the number one on your telephone keypad. And your next question comes from Damar Dadachov.
spk08: Yes, hi, Evan.
spk07: Hi there.
spk08: Question, what is the strategy to bring content creators from YouTube that have significant followers, maybe hundreds of thousands or maybe millions of followers, to the LiveX platform? What's the strategy on doing that?
spk07: 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. What we do is when LiveX 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 available today. We're building that out and it'll be available in Q4.
spk08: And one more question. So AR room will be a direct competitor to zoom, but with richer capabilities, correct?
spk07: Um, yeah, it's basically the same, you know, you, you almost can't tell the difference except it's a little prettier. Um, I was kind of pleasantly surprised at how well the design was done on the AR room. And on my next investor call, I think it's about time that I demo it for all the investors, or maybe we make a little video to show you guys what that is, because it is exciting. Yes.
spk08: Also, Hoffman's valuation, you've talked about it before, $5.65 billion. I'm an early investor in Nextech, haven't sold a share, continue to buy more, but how would you explain the gap in the market cap between Nextech's market cap and Hopin's? Is Hopin only bigger because they got an early start in this, or is there more to the story?
spk07: 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, 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 MIT, Harvard, Johnson & Johnson, all these names that I've brought up many, many times. They need white glove service. So in Q4 of this year, when we launch our self-serves, version of LiveX that will attract the YouTubers, 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 Hopin allows you to use their platform for, you know, like $99 a month or a couple hundred dollars a month. because, you know, 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.
spk08: Okay, and if you don't mind me asking one more thing, how is the education part of NextTech moving to universities, AR, or these labs? Is it still building out or is it all kind of built out and now it's time to expand with other universities other than Ryerson?
spk07: So we're building, 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 ed tech 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 will be significant sign-ups from additional universities. Okay.
spk08: Thank you. That's all the questions I had. Appreciate it, Evan. Thanks.
spk07: Thank you very much. Yep. Thank you. Okay.
spk01: Your next question comes from Ken Kamikaze with Mykin Investments.
spk09: Yes, Evan. When do you plan on releasing a hologram-infused dating app?
spk07: You know, that's a very good question. I'm sure you want to use it, as do a lot of people. No, don't answer that. I totally get what you want. We are launching the technology. So we might not launch a hologram dating app. What we're probably going to do is take a little bit of a different approach. 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, you know, 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 an to be undertaking. So the idea is to have the technology working in other people's dating apps where there's already, you know, tens of millions of people using those apps.
spk09: I understand. Another question. Earlier, when you were talking with Lisa, when you were explaining the metaverse to her and you 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?
spk07: A hundred percent, yes. In fact, The movies, as we know it, the industry is changing very, very dramatically where it's no longer, you know, you're going to walk into a movie theater. I mean, the movie theater near me just closed. So the movie theaters have kind of had their run. And so now everything's live streaming on demand. And so if you think of being able to be in a movie or experience something 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... Hollywood's definitely part of the whole metaverse play, to answer your question.
spk09: Well, is NexTech doing anything at the moment to garner that business?
spk07: We just acquired ARWay, and we are 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. It could be shopping malls. So, you know, we're going to go after all those businesses. But, you know, what's going to happen first, what's imminent, is still a question mark.
spk09: And one more question. Has there been any progress with your contact with NASDAQ?
spk07: 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, you know, I know everybody's been super patient. I need a little more time for that.
spk09: Thank you very much.
spk07: Thank you.
spk01: Again, for any questions, please press star to the number one. And your next question comes from David Ellis with Research Capital.
spk04: Hi, Evan. You know, Great to hear the results progressing nicely. Quick question on the, you could use AR Ways as an example, but when you have an acquirer company, I'm just wondering about your valuation metrics and how you pay for it. You've done a pretty good job of keeping the share count down, but just wondering, you've got $15 million in cash, whether you use cash or shares or a combination of both, and also the valuation metrics for, again, AIY would be an example. Sure.
spk07: 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-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 um in the 1 million to 10 million range so um aroa was a 1 million dollar all stock acquisition so it wasn't there was no cash as part of the the acquisition so the founders all now are aligned with shareholders of next tech um so they got you know a million dollars worth of stock so if you you know divide the share price by A million, you know, you kind of get the number of shares, you know. And so, you know, that's the ideal scenario, and that's how we, you know, 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. 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 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 get to share in the success of And that's been our strategy since we founded the company.
spk04: And so how would you value the company, AR in this case, to offer them a million bucks?
spk07: Yeah, we value them at a million dollars.
spk04: You want to know the formula? Yeah, well, just generally. I mean, oftentimes it's a multiple cash flow, but they probably don't have cash flow, I think, at this point.
spk07: Right, right. So the formula is, you know, not something that I could share with you on this call. If you want to send me an email, I could, you know, maybe take you through it.
spk04: Okay. One other quick question. You referenced earlier the use AR is using for quite a number of developers, presumably operating out of their house. Are they paid or how does that work?
spk07: Yeah, no, so they're not actually that. Believe it or not, a lot of the people that have been using ARWay are 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. a major automotive company. And as Barron 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 uh the viewing device so there's actually some really interesting use cases that bosch kind of indicated that by using this metaverse uh technology this this you know spatial mapping tech they believe that it could save them upwards of a billion dollars in cost because these lasers are extremely expensive and you need super high uh highly trained you know, software engineers and specialists to operate it. With ARways tech, you don't need any of that. Anyone can do it. Even I can do it. Even you can do it. So it's really game-changing technology. I would say that, you know, 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.
spk04: Okay, thank you. And those developers, are they being paid at all, or how does that work?
spk07: No, they pay us.
spk04: They pay you?
spk07: Yeah, yeah. They're using the platform, and it's a pay-to-play. So there's some part of it. It's 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.
spk01: at this time there are no further questions all right thank you very much and everybody have a great day that concludes today's conference thank you for your participation you may now disconnect
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