17:14:01 EDT Mon 19 Aug 2019
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Nextech AR Solutions Corp
Symbol C : NTAR
Shares Issued 42,837,872
Close 2019-01-08 C$ 0.80
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Nextech AR to acquire AR Ecommerce

2019-01-08 07:49 ET - News Release

Mr. Evan Gappelberg reports


Nextech AR Solutions Corp. has entered into an agreement to acquire AR Ecommerce LLC in consideration for two million common shares of Nextech. AR Ecommerce is a leading e-commerce business which generated approximately $2.65-million (U.S.) in revenue (unaudited) and $275,000 (U.S.) in EBITDA (earnings before interest, taxes, depreciation and amortization) for 2018 (unaudited) for the period from Jan. 1, 2018, to Dec. 31, 2018. AR Ecommerce has been in business since 2011 and has served hundreds of thousands of customers over the years. This acquisition brings in house a substantial e-commerce business which Nextech plans on using as a showcase for its augmented reality (AR) and artificial intelligence (AI) technology stack as well as a foundation for additional strategic acquisitions.

This acquisition will:

  • Build a strong financial base for the company's business with key e-commerce partners already in place like Amazon, PayPal, eBay and established relationships with large well-known brands like Miele, Dyson and Electrolux;
  • Accelerate the launch of existing and exciting new AR and AI technologies;
  • Advance and significantly enhance the company's knowledge of the AR customer journey through analyzing real-time data from its xAPI analytics already installed on site;
  • Enable the fast integration of a broad range of AR and AI capabilities onto the site creating a one-of-a-kind e-commerce AR/AI showcase for consumers and prospects.

"This strategic acquisition allows us to jump ahead of the pack in the AR e-commerce space and provides a solid foundation of assets for Nextech to leverage into additional e-commerce acquisitions," comments Evan Gappelberg, chief executive officer of Nextech. He continues: "If we can buy e-commerce companies and increase the velocity of sales with the integration of our AR and AI technology, then we see that as a very big win and an exciting business opportunity. With this acquisition we're not just offering AR as a technology to others but using it ourselves to create the most robust AR/AI technology stack available in the market today."

The company is seeing very positive early results from integration of its Web-enabled AR with just one product. These results include:

  • The first ARitized product on site generated one month worth of sales ($5,000) in just one week.
  • Overall dwell time on page for the ARitized product increased 30 per cent over a four-week span.
  • Before AR the average visitor to that product page was worth around $20.
  • After the integration of the Nextech AR e-commerce solution the value per visitor jumped all the way to $43.06.

Over the next few weeks Nextech will be launching 10 more AR products onto the site. Next month the company expects to advance its e-commerce capabilities as it integrates IBM Watson's machine learning into the site. Owning its own e-commerce site allows the company to test and integrate new technologies creating additional value for its e-commerce business, its AR platform and shareholders.

Reuben Tozman, chief operating officer of Nextech, comments: "What's incredibly exciting here is that we're not even close to optimizing the experience for the VCM business and it's already having a significant impact on sales and dwell times. It's our strong belief that nobody is better to provide solutions for the e-comm industry than e-comm business owners who know how to get results!"

Paul Duffy, president of Nextech, comments: "Our AR, AI and predictive analytics provide a unique force multiplier for e-commerce optimization. With initial efforts validating the up tick in conversions, we are excited to steer our scale from the coming adoption."

According to Statista, global e-commerce sales in 2019 will hit over $3.4-trillion with 55.3 per cent occurring on a desktop computer and 44.7 per cent happening on a mobile device. Nextech's Web-enabled AR e-commerce solution works on every browser including Chrome, Firefox, Safari and others, and on every device including desktops, laptops, iPads and all mobile phones. With a Web-enabled AR solution Nextech has eliminated the need to download an app which was the biggest friction point of AR adoption.

In consideration for the acquisition, Nextech has agreed to issue one million common shares to Reuben Tozman and one million common shares to Mr. Gappelberg, both of whom are directors and officers of Nextech. As a result, the proposed acquisition of AR Ecommerce from Mr. Tozman and Mr. Gappelberg by Nextech constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. Nextech is relying on the exemptions from the formal valuation and minority approval requirements contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, on the basis that the fair market value of the transaction does not exceed 25 per cent of Nextech's market capitalization.

About Nextech AR Solutions Corp.

Nextech is bringing augmented reality (AR) to the masses by creating an AR ecosystem featuring e-commerce solutions for websites, AR learning and education as well as AR live streaming for events. The company has filed a patent around its AR Web-enabled e-commerce platform which has been integrated with Shopify, Wordpress and Magento. The AR can go live on any e-comm site with just a few lines of embed code creating a highly scalable platform. The global e-commerce industry is a $2.8-trillion marketplace and growing.

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