NexTech AR (OTC:NEXCF) reported a strong first quarter but what has happened since then, with the acquisition of Jolokia, is even more exciting and proves the advantages of a small company agile enough to adapt to change and capitalize on current needs. Jolokia’s product, the Inferno platform, is an ideal product for the times with its ability to add features to almost all the popular video conferencing platforms including Zoom. It adds important capabilities such as stability with large numbers of participants (up to 100,000), key word search functions, the ability to upload a prerecorded video, and closed captioning in 64 languages. User can also have live, moderated Q&A sessions. NexTech took this platform and integrated 3d augmented reality and hologram capabilities making it even more useful for certain corporate meetings, school classes and lectures, product demonstrations, and trade show presentations. The pandemic has accelerated the move to remote meetings and the company is having extreme interest from large companies, trade show hosts and even schools and universities. If NexTech can execute, it has the chance to add a large number of users to the platform right now. We believe it is in talks with a number of large customers that are looking to use the platform for things such as product launches, demonstrations, advertising, and training. The inability to travel and host in person meetings has provided a once-in-a-lifetime opportunity for NexTech.
NexTech AR Reports its First Calendar Quarter Ending March 31
On Thursday, NexTech reported its first quarter since changing to calendar year. Revenues for the three months ending March 31, 2020 were $2.5 million versus $901,000 a year ago, up 177%. Sales of products in its eCommerce business continue strong as physical stores shut down and sales switched to online purchasing and NexTech was a beneficiary. Marketing using augmented reality also gathered great interest as businesses focused their attention on that channel.
Gross margins were 54.1% compared to 40.7% in Q1 2019 and 58.6% in the seven months ending Q4 2019. Management expects this percentage to climb as the product mix shifts to higher margin services rather than products and the Jolokia acquisition of April 30, is add into the mix.
Operating expenses were $2.7 million up from $1.7 million a year ago primarily due to the increase in employees. The operating loss, the pretax loss and the net losses were all $1.4 million compared to a loss of $1.3 million a year ago. Primary shares outstanding were 61.4 million for the period up 20% from a year ago, but now stand at 66.4 million.
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