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Nextech AR Solutions Corp
Symbol C : NTAR
Shares Issued 42,837,872
Close 2019-01-14 C$ 0.76
Recent Sedar Documents

Nextech AR closes e-commerce acquisition

2019-01-15 08:27 ET - News Release

Mr. Evan Gappelberg reports

NEXTECH CLOSES ON ECOMMERCE ACQUISITION GENERATING $2,650,000 USD IN REVENUE AND $275,000 IN EBITDA

Nextech AR Solutions Corp. has closed on its acquisition announced Jan. 8, 2019. The VCM business owned by AR Ecommerce is a now a division of Nextech which generated approximately $2.65-million (U.S.) in revenue and $275,000 (U.S.) in EBITDA (earnings before interest, taxes, depreciation and amortization) for the calendar year 2018. The revenue for the month of January to date is $115,000 (U.S.). Nextech has already started to integrate its patent-pending Web-enabled AR with very positive results to date. This acquisition brings in house an established e-commerce operating business which Nextech will use 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 augmented reality and artificial intelligence 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 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;
  • Revenue per user was up 100 per cent.

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.

Nextech is also pleased to announce that its shares are now DTC eligible for trading within the United States marketplace. The Depository Trust Company (DTC) is a subsidiary of the Depository Trust & Clearing Corp., and manages the electronic clearing and settlement of publicly traded companies. Securities that are eligible to be electronically cleared and settled through the DTC are considered DTC eligible. This electronic method of clearing securities speeds up the receipt of stock and cash, and thus accelerates the settlement process for investors.

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-commerce 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.

Early warning

Pursuant to an agreement dated Jan. 7, 2019, between Nextech AR Solutions, Evan Gappelberg and Reuben Tozman, Mr. Gappelberg received one million common shares of the company (at a deemed price of 81 cents per share) as part of the aggregate consideration for the company's acquisition of 100 per cent of the membership interests of AR Ecommerce LLC from the vendors. Mr. Gappelberg, concurrently with closing of the transactions contemplated under the agreement, also transferred 225,000 common shares to other persons. As a result of the foregoing combined transactions happening, Mr. Gappelberg (349 Carlaw Ave., Suite 304, Toronto, Ont., M4M 2T1) now owns an additional 775,000 common shares of the company.

Immediately prior to the aforementioned transactions, Mr. Gappelberg owned and/or had control or direction over 4.5 million common shares of the company representing approximately 9.39 per cent of the issued and outstanding shares of the company at such time, on an undiluted basis.

As a result of the transactions, Mr. Gappelberg now owns and/or has control or direction over 5,275,000 common shares of the company representing approximately 10.57 per cent of the issued and outstanding common shares of the company, on an undiluted basis. This represents an approximate 1.18-per-cent change in Mr. Gappelberg's ownership of common shares of the company.

Mr. Gappelberg also owns and/or has control over a total of 60,000 stock options and one million warrants to purchase common shares of the company. If Mr. Gappelberg were to exercise all of his stock options and warrants, he would then own and/or have control over 6,335,000 common shares of the company representing approximately 12.43 per cent of the issued and outstanding common shares of the company, assuming that no further common shares of the company have been issued.

Mr. Gappelberg holds the securities for investment purposes, and has no present intention to acquire or dispose of further securities of the company. Mr. Gappelberg may in the future participate in financings and/or acquire or dispose of securities of the company in the market, privately or otherwise, as circumstances or market conditions warrant.

The disclosure respecting Mr. Gappelberg's shareholdings contained in this press release is made pursuant to Multilateral Instrument 62-104 and a report respecting the above acquisition will be filed with the applicable securities commissions using the SEDAR and will be available for viewing at the SEDAR website.

MI 61-101

Mr. Tozman and Mr. Gappelberg are each an insider of the company. The transaction with each insider constitutes a related party transaction for purposes of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The disinterested directors of the company, acting in good faith, considered and approved the transaction. The company is relying on the exemptions from the formal valuation and minority approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation on the basis that the fair market value of the transaction does not exceed 25 per cent of the company's market capitalization. The company will file a material change report providing disclosure in relation to each related party transaction on SEDAR under the company's profile at SEDAR. The company did not file the material change report more than 21 days prior to the closing of the transaction due to the timing of the announcement and closing occurring in less than 21 days.

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