OTC:NEXCF
Lisa Thompson: Morning, Evan. Glad to have you here.
Evan Gappelberg: Hi, Lisa. Great to be here.
Lisa Thompson: Okay. You've got a lot of exciting things going on. I think we'll just jump right into them. People that don't know NexTech is evolving shortly into a pure play in augmented reality, but not as some theoretical concept. Something is actually applied to e-commerce that helps advertisers and marketers sell product. So, it's not some nebulous, crazy idea of gaming and cartoon characters walking around rooms. So, it's exciting to see it being put to use as a real application. Anyway, so I think we should go through what's going on at NexTech, the base company that does 3D advertising and marketing, as well as the spinoff of ARway, which was coming shortly the next few weeks. And also talking about toggle 3Ds. So, let's start with your press release of the 7500 models that were just ordered.
Evan Gappelberg: Yeah, thanks Lisa. It really was a watershed moment for NexTech, as you know, following us for three years. We've been beating the bongo drums for three years about the 3D model industry and e-commerce and how it's going to be a big deal. Well, now it is. Amazon has stepped into the 3D modeling market in a big way. We're now supplying them with 3D models at scale. The 7500-piece order is really just the tip of the iceberg. And there's a lot of other e-com players that are also now looking for large quantities of 3D models. And the reason, Lisa, is simple. When I first started, I believed that 3D models were game changer, but I didn't have any actual data because it was all new. And so now, after three years of testing, testing, testing, the numbers have shown up and the ROI is off the charts and that's why everybody's lining up. Shopify has come out and said, "The future of e-commerce is 3D. You get a 93% uptick in click through rates with 3D models up, to a 250% increase in conversions, which is huge if you think about it. And up to a 40% decrease in returns." The ROI is what's driving this. It's cute, like you talked about the games, that's entertainment. This is a return on your dollar. If you're an e-com retailer and you're trying to make money online, you need 3D models because it's just a better way for consumers to shop with more confidence. And ultimately, they don't return the product, which is a big problem, because it's exactly what they saw in 3D or in AR. That's really why the business has taken off. In any new industry you got to go through the test, test, test, test. And if ROI doesn't work, it's almost like a drug in clinical trials. If it doesn't work, it's not going to get FDA approved and it's over.
Lisa Thompson: I'm curious as the people that have been using it now, have they gone through exactly what dollar amount is saving them the most money? Is it how much returns are? Is it just people buying instead of looking?
Evan Gappelberg: So, it's a combo of all those things. Returns are huge in the furniture market, meaning a huge cost. If you had a couch that's the wrong size, you're sending it back, right? I mean, it doesn't fit. That's a big problem. To leave it to me or to you to go to the store and measure, and then come back and try and see, does it fit? It's risky. I've personally had situations where I'll order a product, and it's the wrong color, it wasn't in 3D, it's the wrong size. I call up and I want to return it. They just say to keep it because it costs too much money to return it and they give me a full refund.
Lisa Thompson: Yes. I've had that happen on Amazon, where they said, "Just keep it."
Evan Gappelberg: That speaks volumes. If you think about Amazon, they're a trillion-dollar technology company. A very, very sophisticated company. They have drones, electric vehicles, Ring. They have the home. They just bought iRobot. This is a full on, integrated technology company. They've been testing 3D models, for 10 years they've been working at this. Can you believe that?
Evan Gappelberg: What's going to happen in Q4 of this year, is that they're going to open the floodgates. Right now, it's still just a couple of companies like NexTech, supplying them with 3D models and that's going to change in a big way. When that happens, Lisa, we're told that we will be a preferred partner and that they will be referring us business. So, whatever that Amazon is buying from us, like I said, it's the tip of the iceberg, meaning that they are going to be the smallest player in their ecosystem. The opportunity is just massive. From NexTech's standpoint, our whole goal was to just get in front of the tidal wave, wait for the tidal wave, wait for it to hit, and then ride it for the next decade. And that's exactly what's happening.
Lisa Thompson: So, one thing I'm curious about is, they say they order models and you deliver models. When do we get to the point where they go make their own models on your platform? And you just collect a check?
Evan Gappelberg: That's a good question. I wish it was that simple. I want it to be that simple. They do make their own models, but they can't make enough for them. They can't make them fast enough and so they've outsourced. But ultimately, they don't want to be in the 3D model business. Believe it or not, we even don't necessarily want to be in the 3D model business long term. Long term we want to be a software suite for the 3D model industry, just like Adobe Illustrator is for the design industry. We want to be the 3D model platform for the e-commerce industry, and even manufacturing. As we mentioned, we have the CAD-Poly conversion. And I think we're going to talk about Toggle 3D because that's a big, big deal.
Lisa Thompson: Yeah, if you want to talk about toggle...
Evan Gappelberg: Toggle 3D, which we're about to release and announce. You can go to our website, there's a tab there, you can kind of see how it works. But it's really an end-to-end 3D modeling suite where you can import models from other suppliers. In other words, we don't have to be the ones making you the 3D models. You could buy them on Sketchfab or TurboSquid, or NexTech can make them for you. The idea is you import them into this platform, it could be a CAD file, also, the platform will have pre-loaded colors, and meshes. You can essentially have a model that you buy or make imported in, change the color, change the fabric, change the texture to anything, it could go from wood to metal, or metal to plastic for prototyping.
Evan Gappelberg: It basically allows you to take a single model and make unlimited variations of it. And that's one functionality of it. Then it's a photo studio, so it has virtual photography built in. Then you have a decorator where you could have a picture of your room or stock photo, and you could drag and drop and move around 3D assets to create a space. You can operate as a decorator. It is really this end-to-end suite, it's a SaaS platform.
Lisa Thompson: It's all self-served, right? You do it yourself.
Evan Gappelberg: All self-served.
Lisa Thompson: And you just collect the check.
Evan Gappelberg: You just collect the check, like you said. That's our alternate goal.
Lisa Thompson: I like that one.
Evan Gappelberg: Yeah, I like that one too. That's been my goal, but to get there, we had to build 3D models, right? And so, we have to ultimately eat our own cooking. Remember, we even started out, we were selling vacuum cleaners and that was basically the bridge.
Lisa Thompson: Alright. So, I guess, let's talk about ARway because that's the big thing, that's very near termed.
Evan Gappelberg: It is.
Lisa Thompson: And the record date's going to be what, in the middle of October?
Evan Gappelberg: It will be in the middle of October. I'm getting a word from my council, that we should have everything approved on or around October 20th. So, the trade date will be right around that. So, figure that by the last week in October, ARway will be trading on the CSE. We already have a conditional approval. The symbol is already approved, ARWY. In parallel, I'm now working with OTC markets so that we will be dual listed in the US, as soon as possible. We have to go through a process, there as well.
Lisa Thompson: I saw in the filing; you're going to raise $1.5 million to put into that company?
Evan Gappelberg: Yeah.
Lisa Thompson: And so, after that's raised, you'll have what, 26 million shares?
Evan Gappelberg: 26 million shares. Outstanding, yes.
Lisa Thompson: And then, NexTech will own half that?
Evan Gappelberg: Correct. Around 13 million.
Lisa Thompson: And the shareholders will have?
Evan Gappelberg: Four million, will be dividend in out to NexTech shareholders. If you own shares in NexTech on the record date, you will get free shares that will magically show up in your brokerage account in ARway. Which is a very, very exciting business. We're getting an enormous amount of interest in that business and we have not even spent a penny on marketing yet. It's all just organic. For some reason, don't ask me why, we just happen to be in the right place, at the right time, with indoor navigation, with augmented reality. And all of this actually ends up blending together, Lisa, where the Wayfinding, is really a metaverse experience and all these 3D models can be imported. They're actually, going to be able to be visible, inside the Wayfinding experience. It's just a really nice synergistic ecosystem, that we've created, that is about to kind of get switched on.
Lisa Thompson: It's amazing that the indoors is almost more useful than the outdoor. I was walking around Boston this weekend and I turned on Google Maps, the directional thing with the augmented reality. It’s saying, go straight. I'm like, where am I? Where are the stores? Where's the food? I can't see my screen because there's the sun glaring in it. I was like, “This is perfect. This is like where NexTech needs to be helping me.”
Evan Gappelberg: Exactly. We will be doing malls. We're actually in a test right now with a mall in Dubai. Believe it or not, airports. Travel is huge, just navigating your way around a cruise ship, which are like floating cities. Hospitals are also a big target market. It really is endless. We're actually going to do a pilot on a university campus. We have a call with a major museum tomorrow. There's a tremendous amount of demand for this. We're setting the stage for marketing blitz, which is going to be happening in October, as we are getting closer to going public. We have actually enhanced the technology. When we first started, it was point Cloud based. Now, it's QR Code triggered. There's no point Cloud. Which means you walk into the mall, there'll be a kiosk sign, you scan the QR Code and the map will open up. You'll have an augmented reality overlay of arrows on your phone. You'll be able to have a menu. Where do you want to go? You just point and click. I want to go to Sephora, or wherever, and the arrows start telling you how to find your way. It's really that simple. And then, if the mall chooses to, they can insert advertising in augmented reality and on and on.
Lisa Thompson: Sounds good. Well, I just want to make one comment, because you're complaining about my valuation of NexTech and a lot of it, also hinges on the valuation of ARway.
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Evan Gappelberg: Yeah. We do have a business model, luckily, with ARway. There’re companies out there that use beacon technology for indoor Wayfinding, so we know what the business model is. Our tech, we believe, just kind of leapfrogs over them, because A, it's augmented reality, so it's more immersive. But B, there's no cutbacks.
Evan Gappelberg: And I agree with you, Lisa. I do think, we're undervalued. And I do think, the part of the reason or the main driver of the spin off, the main driver, is to unlock the value that's trapped inside NexTech with ARway. So that it's a pure place, so that an analyst like yourself can look at it as a company similar to Waze and say like, "Okay, this is a singular technology, a singular business model. It's not like NexTech, who makes 3D models, plus they do Wayfinding, plus they have this whole event business.” That's a lot harder for you. I would think, to come up with an evaluation on, am I right?
Lisa Thompson: Yep. Definitely, the simpler, the better, people like to know what they're investing in.
Lisa Thompson: Thank you so much, for coming and talking about all the near-term things, that are making everything super exciting over there.
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