Nextech AR Solutions Corp. (CSE:NTAR, OTCQB:NEXCF) has announced that it is moving away from its legacy eCommerce business, with a renewed “laser-focus” on its Web 3.0 software-as-a-service (SaaS) business providing leading-edge 3D/augmented reality solutions.
The company said the transformation will result in its transition to a pure-play Web 3.0 services business as it winds down its legacy eCommerce business, including vacuumcleanermarket.com, trulyfesupplements.com and infinitepetlife.com, effective immediately.
“We are extremely excited about the growth prospects of our 3D modeling and AR business in 2022 and beyond and see this transformation as the next logical step in our stated goal to be the 3D model factory for the metaverse,” Nextech CEO Evan Gappelberg said in a statement. “Nextech continues to gain traction in the 3D technology space by signing new deals and building its MRR (monthly recurring revenue) and ARR (annual recurring revenue).”
READ: Nextech AR announces spin out of its subsidiary ARWAY's assets including Metaverse creator platform ARitize Maps into standalone company
From 2019 to 2022, Nextech explained that it was able to use its eCommerce businesses as a sandbox for learning about the 3D modeling and augmented reality business. Today, however, its 3D modeling business and AR business have matured so that it no longer is needed for this, it added.
In addition, it said severe supply chain issues are preventing the business from restocking its top-selling products, which is hindering eCommerce business growth as seen in the reduction in sales in the last few quarters. In light of the growing 3D modeling business and the difficult climate for gaining inventory due to supply chain issues, the company said it is reorganizing and becoming a pure-play technology company.
Nextech said it expects winding down the legacy eCommerce assets to save the company $8-$10 million in annual expenses based on 2021 annual figures. It anticipates generating an additional $1 million to $2 million in cash from the sale of the inventory in the eCommerce business which will bolster its cash position.
Going forward, it said it will focus solely on generating revenue from its technology services and renewable software licenses business. It is also exploring additional ways to enhance shareholder value through spin-outs as previously announced of ARitize Maps and other activities.
“With this winding down of our eCommerce business we can now focus solely on our fastest growing business which is our 3D technology products becoming a pure-play technology company,” Gappelberg continued. “Our renewable software licences is the fastest-growing segment with over 300% growth year-over-year which we expect to continue. We anticipate continued demand and growth in our 3D and AR technology for the foreseeable future.”
Following the move out of eCommerce, Nextech said its remaining technology services will include ARitize 3D, ARitize CAD, ARitize Swirl, ARitize Social Swirl, ARitize Decorator, ARitize Holograms, Map D, ARitize Labs, ARitize Portals, ARitize Capture and ARitize Play. It will also retain a significant stake in ARitize Maps.
Citing Stasista 2022 data, Nextech noted that the $5.5 trillion global e-commerce market is transitioning to Web 3.0 technologies such as 3D models/AR, bridging the gap between the physical world, and what was once a flat 2D online eCommerce experience.
The company said its Web 3.0 solutions help increase sales, decrease product returns, and improve advertising results, leading to potentially billions of dollars in value, and bottom-line impact for its global brand clients which include Kohl’s, CB2, Crate and Barrel, NAPA Auto Parts and many others.
Nextech said Gappelberg will discuss the spinout of the company’s groundbreaking augmented reality and spatial mapping platform for the Metaverse, ARitize Maps at the “NEXT SUPER STOCK Live!” event hosted by the Wall Street Reporter today, June 16, 2022, at 1.00pm EST. Investors can join the event here: https://www.wallstreetreporter.com/next-superstock-online-investor-conference/
Contact the author at stephen.gunnion@proactiveinvestors.com