Mr. Evan Gappelberg reports
NEXTECH3D.AI YEAR-END LETTER TO SHAREHOLDERS: POSITIONED FOR GROWTH, PROFITABILITY, AND INNOVATION IN 2025
Nextech3D.AI Corp. has issued a letter to shareholders.
Dear shareholders,
As we reflect on 2024, we are pleased to share that Nextech3D.AI produced and delivered approximately 25,000 3-D models and millions of augmented reality experiences. These milestones demonstrate the growing demand for our solutions and underscore the scalability of our platform.
Recap of year-to-date 2024 financials
In the first quarter of 2024, the company reported revenue of $1,024,000, with a gross profit margin of 51 per cent or $526,212, representing a 70-per-cent improvement over 2023.
In the second quarter of 2024, Nextech3D.AI reported revenue of $1,108,000, with a record gross profit margin of 74 per cent or $820,000, marking a 45-per-cent increase over the first quarter of 2024.
In the third quarter of 2024, the company achieved revenue of $756,476, reflecting a gross profit margin of 71 per cent or $537,503.
Nine months: As of Sept. 30, 2024, Nextech3D.AI reported year-to-date revenue of $2.9-million, with a gross profit of $1.88-million.
Please note that these figures are unaudited and subject to change upon the release of the company's fully audited annual report.
Throughout 2024, we focused on advancing automation within our production process by building and deploying new artificial intelligence tools. In tandem, we took decisive steps to streamline our operations, including reducing head count, to position Nextech3D.AI for long-term sustainability. These efforts are part of our broader goal to achieve cash flow positivity in 2025.
One of our most exciting advancements this year has been our investment in AI Photography, branded as FOTOgpt. Designed as an API plug-in, FOTOgpt is now integrated into Toggle Studio, expanding its functionality and reach. We look forward to sharing more updates, including an investor demo of these integrations, in January, 2025.
In addition, we have been making progress on our mapping software, which encompasses both indoor spatial mapping and indoor event solutions. While our work on spatial mapping is currently on hold due to the capital-intensive nature of this complex technology, we plan to revisit it once we generate sufficient resources for reinvestment. Meanwhile, our indoor event solutions business continues to gain momentum. By adding additional salespeople and enhancing features, we expect this area to experience significant growth in 2025.
To make the platform more robust, we are currently migrating it to AWS, a major initiative that is on track for completion in first quarter 2025. This transition will enhance the scalability, reliability and overall performance of the platform, positioning it for long-term success. Furthermore, we are integrating new AI features into the platform, opening exciting growth opportunities for 2025. We view this business as an evergreen asset, and its potential continues to inspire confidence in our future.
We also continue to utilize our shares-for-services program to manage our expenses, which have decreased dramatically in 2024. These reductions will be fully reflected in our Q1 2025 results as we continued to pay off liabilities in 2024. Currently, we do not have any plans to raise additional capital. With our 2025 growth plan, significantly reduced expenses and increased reliance on AI, we do not anticipate the need to raise capital for general corporate purposes.
Summary of 2024 performance and 2025 outlook
As we close 2024 and look ahead to 2025, Nextech3D.AI continues to expand its 3-D modelling business, both within and beyond the Amazon ecosystem. While the seller central segment progressed slower than anticipated in 2024, leading to a decline in Amazon corporate 3-D modelling revenue, our SME business showed strong growth. This shift highlights the importance of diversification, which has positioned us for significant growth and profitability in our SME 3-D business in 2025 and beyond.
We are well positioned to achieve profitability in our 3-D modelling business in 2025, driven by enhanced AI automation and operational efficiency. Alongside this, we are building strategic new AI technologies that have potential to further the business in the coming year.
Our portfolio companies, Toggle3D.ai and ARway3D.ai, are each strategically placed for expansion and success in 2025. With their innovative solutions and evolving capabilities, these businesses are poised to contribute meaningfully to Nextech3D.AI's overall growth trajectory.
As we look toward 2025, our focus remains on leveraging AI automation, strengthening our SME business and expanding into new opportunities powered by AI-driven innovation. We thank our shareholders for their continued trust and support as we build a brighter future together.
Sincerely,
Evan Gappelberg,
Chief executive officer, Nextech3D.AI
About Nextech3D.AI Corp.
Nextech3D.AI is a versatile augmented reality and AI technology company that utilizes its proprietary artificial intelligence to craft immersive 3-D experiences at scale for e-commerce. The company's primary focus lies in creating high-quality 3-D WebAR photorealistic models for Amazon and various other on-line retailers with patented 2-D-3-D technology. Nextech3D.AI has adopted a unique approach to creating shareholder value beyond its operating business of creating 3-D models.
The company also develops or acquires disruptive AI technologies, which are subsequently spun out to shareholders as stand-alone public companies. This spinout strategy allows Nextech3D.AI to issue stock dividends to its shareholders while maintaining significant ownership in the public spinout, without dilution to the parent company Nextech3D.AI.
Notably, Nextech3D.AI spun out ARway Corp., its spatial computing platform, as a stand-alone public company on Oct. 26, 2022. The company retains a 49-per-cent stake with 13 million shares in ARway while distributing four million shares to Nextech shareholders.
Similarly, Nextech3D.AI accomplished its second spinout launching Toggle3D.ai Corp., an artificial-intelligence-powered 3-D design studio aimed at competing with Adobe. The company retains a 44-per-cent stake with 13 million shares in Toggle3D.ai.
We seek Safe Harbor.
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