Nextech3D.AI Corporation (NEXCF) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. Welcome, everyone, to the NexTech AR Solutions Corp. 2022 First Quarter Results Conference Call. [Operator Instructions] I'd like to remind everyone that this call is being recorded today, Monday, May 16, 2022. I would now like to turn the conference over to Ms. Julia Viola at NexTech AR Solutions Corp. Please go ahead, ma'am.

Hello, and welcome to the NexTech Q1 2022 Earnings Call. With me on the call are Evan Gappelberg, Chief Executive Officer; and Andrew Chan, Chief Financial Officer. Today, after markets closed, NexTech AR Solutions Corp. released its financial results for the first quarter ended March 31, 2022. A copy of the earnings disclosure is available on our website and on SEDAR. Some of the information discussed on this call is based on information as of today, May 16, 2022, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release as well as in our SEDAR filings. During this call, we will discuss IFRS results and key performance indicators. A detailed description of our key performance indicators is available in our MD&A, which can be found on SEDAR. Neither this call nor the webcast archive may be recorded or otherwise reproduced or distributed without prior written permission from NexTech. To begin our call, Evan Gappelberg, CEO, will discuss 2022 Q1 highlights as well as recent business developments, followed by Andrew Chan, CFO, who will review our financial results and outlook. Finally, Evan will make closing remarks before opening up the line for a question-and-answer period. I'll now turn the call over to NexTech AR Solutions' CEO and Founder, Evan Gappelberg.

Thank you, Julia. Hello, everyone, and thank you for joining us. As usual, I want to thank all of our NexTech employees located throughout the globe for their dedication and hard work. NexTech's success to this point and into the future is only made possible through their continued commitment and their striving for excellence. In 2021 and into Q1 2022, we have emphasized the accelerating adoption and global demand of our augmented reality and 3D model solutions for the metaverse. This is our key growth driver. This is the main business as we move forward in 2022 and beyond. This has been reinforced over and over again through the multitude of new deals that we have announced during Q1 of 2022. Our AR for e-commerce is winning. We are signing up 3D model deals regularly across various industries and various product categories, the most prominent being furniture, sports equipment, artwork, appliances, lighting, auto parts and more. Basically, all the e-commerce ecosystem is signing up with 3D models. These deals that we're signing, the pace that we're signing deals has never been experienced before by NexTech. And we believe that this is representative of a rapidly increasing demand globally for 3D models and ultimately augmented reality. We believe strongly that this will accelerate throughout 2022 and beyond. And as mentioned on our last earnings call, our company's mission is to build the first vertically-integrated artificially intelligence powered 3D model factory for the metaverse. Throughout 2022 and the next several years, we're going to strive to accomplish this highly ambitious goal but attainable goal. As we transition our company into a SaaS business and a 3D modeling factory for the metaverse, the demand for 3D models is what's driving our business. We are experiencing a tremendous amount of demand in the marketplace. And it's evidenced not just by NexTech, but by other investments that are happening in the ecosystem. We are not alone in our beliefs that 3D models and the metaverse is the future of technology. Last year, in the fourth quarter, it was a tidal wave of investment from venture capital into the VR and AR space. Nearly $1.9 billion of venture capital rolled into start-ups in the virtual and augmented reality software and hardware space, more than any other quarter before. And last year was about almost $4 billion going into the BC space. BC Money has accelerated their investing is the point in the future and that's what they invest in. They invest in the future. They don't invest in things that are yesterday's technology. They invest in tomorrow. The future is the metaverse, and we are a metaverse company. 7 of the top 10 rounds last year occurred in the fourth quarter. The fundamental tech trend is here for virtual worlds. If you look at the hundreds of billions of dollars of investors' capital, they're positioning themselves now, either by investing in big tech or by snapping up smaller start-ups, Snap bought Vertebrae; Epic Games bought Sketchfab; Getty Images bought TurboSquid; Niantic bought 8th Wall; Qualcomm bought Wikitude. These are all smaller players, similar in size and scale to NexTech that are getting picked off one by one by one. The on-ramp to the metaverse 3.0 is 3D models. And I believe that we are in the midst of the fourth industrial revolution, which is now being hailed as the metaverse. The metaverse is being led by AR, VR, AI, NFT, 3D models, e-commerce and, of course, the 5G network. And it's all converging and becoming increasingly ubiquitous for e-commerce, advertising and entertainment. We're seeing this play out in the real world every day. The convergence that we're seeing is stimulating a rapid market adoption environment similar to the rapid market adoption of the Internet in the 1990s, and it drove the creation of trillion dollar industries almost overnight. The metaverse market is what NexTech, what I've been waiting for, for 4 years to emerge and it is a market that we are uniquely positioned to capitalize on. The adoption is already underway, but it's still very early, which is the opportunity. It's very early, and that is the opportunity. It's not as early as it was in 2018 when there was no adoption underway. The adoption is happening, We're in the first inning. My belief is 3D models is the gateway to the metaverse. We, NexTech, are now entering a new phase of major growth opportunity. We, at NexTech, are benefiting from the paradigm shift in the way people shop, work, travel, meet, learn and/or entertain. That paradigm shift is shifting to our business. It's shifting to the products that we sell, the products that we're positioned for. Again, this is just the first inning of a megatrend. And I've never been as excited about any opportunity in my lifetime. And my feeling is that by the time the masses wake up to this idea, it's going to already be too late. We're tapping into this trillion dollar opportunity by being the 3D model supplier for the metaverse, essentially the gateway product. We're not competing with Facebook, we're not competing with Microsoft, we're not competing with Google, we're not competing with Amazon. We're enabling them to be even more successful. And they love us for it. E-commerce is an enormous industry. Globally, it's a $5 trillion industry. And again, we are the 3.0 3D model factory. If you look at 3D models, they're now ranking higher than 2D images on Google Search, which is creating even more demand and even putting more wind at our backs. Shopify has mentioned many times and publicly declared the future of e-commerce is 3D. Make no mistake, we will take full advantage of this opportunity, of this paradigm shift. And we feel extremely confident with the way our business is aligned and the rapid growth that we're experiencing today. Changing gears to one of our portfolio companies, we do have a portfolio of companies. If you look at our hybrid events platform, we own a company called Map Dynamics. And in 2022, we are seeing a healthy uptick in our live event business. Map Dynamics' revenue is increasing by 47% since Q4 and the average Map Dynamics' order was up over 20% compared to Q4 in the previous year. In December, we announced the signing of a multiyear hybrid event and marketplace contract worth over $600,000. That's a big number for NexTech. We're proud to say that last week, we executed on the first part of this contract, delivering as the event platform for the 2022 Restaurants Canada show and the launch of a 365 metaverse marketplace. So we're taking this opportunity with this event platform and we're turning it into a metaverse marketplace, which is quite a big deal because then we're doing the pioneering work. The RC show, the Restaurants Canada show is, I think, the largest food service and hospitality show. It was, I think, the biggest -- one of the biggest events of the year that happens up in Canada, and our technology was on full display. We had a major booth at the show right when you walked in. I think we were the first booth that you saw. We had our Map Dynamics event platform on full display. The show floor experiences included augmented reality navigation, which is AR wayfinding. We had human holograms, we had 3D models, all of that was on display for the public at the largest trade show in Canada for the food service and hospitality. It was really a tremendous, tremendous showing for NexTech, and it was a major success because we were able to show in the real world how our technology worked and we ended up picking up a substantial amount of interest from new customers in our technology. So we believe the 365 Marketplace launch opens up a large new opportunity for NexTech to expand the same business model into other industries beyond hospitality. And at the RC show, again, we received a tremendous amount of interest from other associations for a metaverse marketplace, and we're excited to see how that unfolds in 2022 and beyond. When we look at our 3D and AR revenue, again, everything is rapidly accelerating. The demand for 3D and AR models for e-commerce has increased and that's because of the positive ROI. In 2022, we are seeing new accounts sign up for ARitize 3D and ARitize CAD in many different industries, and we do not see that slowing down anytime soon. In fact, we're seeing reorders. We're seeing signing of new deals from small to medium-sized businesses as well as large. We've signed dozens of POCs. Those are essentially test orders with the e-commerce businesses that have massive potential to grow. So we're in this testing phase in the first inning. All the orders, all the business that we're currently closing are the smallest orders. This is just the test. And so our clients have indicated that as the test goes well and it's already happened, some of them have already stepped up to the plate and ordered significant amounts of additional models. As they all step up in reorder, it represents thousands of additional SKUs and significant potential for future monthly recurring revenue and annual recurring revenue. We're seeing an uptick in new customers, which, again, is resulting in our annual recurring revenue continuing to grow in 2022. It's a huge validation of our efforts. This business did not exist in 2021 at the same time. We are now what we believe is we're disrupting the emerging multibillion-dollar 3D model market because we have the highest quality, we have the lowest cost and we have the most scalable 3D model solution in the world. All signs indicate that 2022 will be a breakout year for everything 3D. As previously indicated 3D models for e-commerce, 3D models represent annual recurring revenue, and it's going to be the area of our business that we believe can scale quite quickly and should be where our investors keep their eye on to measure the health of the company and our growth potential. I would highly recommend our investors steer their attention away from top line revenue growth because that's essentially our legacy e-com business and focus on what's happening inside the company, which is our 3D model business starting to scale. In Q1 2022, we saw a substantial uptick in customer adoption either signing 12 months contracts or annual repeat contracts totaling over $1.3 million, which is from 0, and we're just getting started. So Q2 is even better. In the first 6 weeks of Q2, we exceeded all contracts signed in Q1 for 3D models, which points to the acceleration we keep talking about actually happening. If you look at our solutions, we have an end-to-end metaverse suite as we've previously demoed for investors. We've launched a tremendous amount of technology in Q1 and rolling into Q2. Just a recap of some of our announced launches, ARitize 3D, which is our 3D model and WebAR for e-commerce platform. Launched ARitize Maps, which is the spatial mapping metaverse platform. Launched ARitize Holograms, human hologram creator app. Launched ARitize 3D Shopify integration. Launched ARitize Swirl, ARitize Social Swirl. Launched -- I mean all of this indicates a very healthy technology company that you're invested in, that we are continuing to hit our milestones. In 2022, we announced ARitize metaverse suite, launched ARitize 3D for big commerce, launched -- very shortly, we will be able to announce that we've integrated with WooCommerce, which is a significant platform similar to Shopify, that will be happening in Q2. We're also going to be integrating with Magento, another significant platform. We're also going to be announcing the Android version of our human hologram creator apps, ARitize Holograms. And we're also going to announce later this year, our CAD to POLY SaaS business will be launched. SaaS integration with our product line does have significant implications for the scalability of our products and NexTech's revenue growth. With our continued rollout of our SaaS platforms, NexTech continues to move away from the managed solutions. We've almost completely moved away from managed solutions, and we're now focusing on annual recurring revenue and monthly recurring revenue, which is low touch. We are just beginning to see the revenue and business emerge as we move full force into 3D model making, augmented reality and metaverse solutions with our new SaaS products, which I just announced we've launched. The massive opportunity for making 3D models for e-commerce is estimated to be worth over $200 billion. We're just breaking the million-dollar level. So we haven't even scratched the surface. This is the tip of the iceberg. And it's only a matter of time, in my view, before our competitors lose their ability to compete and NexTech becomes the 800-pound gorilla in this space. If you look at the number of models that we've served, we currently have 4.5 million total 3D AR models served. That means this 4.5 million experiences, 3D and AR experiences that shoppers, consumers have experienced on our platform. 870,000 3D models served in Q1 alone. That speaks volumes. That speaks volumes. If you divide 870,000 by 90 days, going to do the math right now, that's almost 10,000 views per day, which is incredible. Incredible. So the average for the last year was much, much lower. Our increase in average downloads is growing very, very rapidly, and it will continue to grow. So in closing, 2021 was a transformative year for NexTech and 2022 is shaping up to be a breakout year, a substantial year of growth for our key growth driver, which is 3D models and AR. Again, it's critical that investors focus on the main event, which is not our legacy e-com business, which is shrinking, and just focuses on our fast-growing 3D model metaverse business. We're focused on obtaining greater industry leadership and being the top provider of augmented reality and 3D model solutions for the metaverse. We have unique position as one of the only end-to-end metaverse solutions providing spatial mapping, augmented reality, 3D models for the metaverse, which creates unique immersive experiences that people are willing to pay us for. If you look at the potential, we believe the total addressable market is $0.25 trillion. We believe that the SaaS market is just massive. Our AR products and our 3D models are very sticky and have significant implications for continuing monthly recurring revenue and annual recurring revenue, which we believe will accelerate with the adoption and stickiness of our entire augmented reality suite of products and services. I expect 2022 to be a year for hyper growth of all things, augmented reality, 3D and the metaverse. I said it over and over again that this will be a multi-decade, multi-trillion-dollar megatrend. I started saying that in 2018. It's now actually being pirated by many analysts on The Street. I'm very excited for what the future holds. I feel the company to realizing its dream, and this is just the beginning, just the beginning, the tip of the iceberg. I have confidence in our company's direction, belief in our executive leadership team and in every employee working to build the vision of the metaverse. Before I turn it over to Andrew Chan, our CFO, I'm just going to say a few more things. We delisted from the NEO last week. We announced the delisting, our voluntary delisting. I decided to delist. Nobody asked us to delist. I just made the decision to delist. The common shares were delisted as of Thursday, May 12. This was done to reduce the associated costs of being listed on multiple exchanges in Canada because we were duplicating the expense because we were listed on the CSE. I would also like to note that the shares have had 2 positive trading days since we delisted and that I don't believe in coincidences. So Thursday and Friday were both -- Thursday -- actually Friday and today were both positive trading days. I believe that on the NEO, the shares were being targeted, but now we are no longer on the NEO, and we are much less likely to be targeted. I don't have any evidence to back this up. So time will tell. But I do believe that getting off the NEO Exchange was positive for shareholders, not just for the company in saving money, but also the way the stock trades. The company's shares will remain listed on the Canadian Securities Exchange and on OTCQB. Just talking for a minute about market conditions. I want everybody to put things into perspective as critical. As we all know, the current market conditions are rough, to say the least, for small cap stocks. 50% of the NASDAQ is down 50%. 50% of the stocks are down 50%. That's a huge, huge drop. 22% are down 75%. 22% of all the publicly-listed companies on NASDAQ are down 75% and 5% are down about 90%. Medium stocks got crushed down about 80%. Cryptos getting crushed. The decline in 2022 is the second worst decline in history, second only to 1932. Now 1932 was what 90 years ago. I don't think any of us on this call were alive 90 years ago. So if that's true, then this is the worst decline of our lifetime, certainly of my lifetime. But we will survive and we will thrive. In fact, NexTech is in the right place at the right time with what we are selling. My point is that our stock is not going down because of solvency issues. It's going down because the entire market is going down. And as the largest shareholder of NexTech, I can empathize with all of your frustrations. I'm sure you are frustrated with the share price decline as I am. And I've been as affected, I would even argue, more affected than anybody else with these declines in NexTech. The company and I are doing everything we can to bring shareholder value, and it will emerge over time as the market recovers and realizes the value of NexTech's groundbreaking technologies and solutions. It's important to think long term, 12, 24, 36 months. And remember that this is the beginning of a long journey where patients will be rewarded. As mentioned previously, I am working night and day, day and night to unlock the value of our many assets and businesses that we own as a diversified technology company. We are very close to signing a deal for a possible spin-off of our metaverse builder platform, ARitize Maps, which was on full display, as mentioned earlier, at the Restaurants Canada show last week in Toronto. If this happens, it's an if, it's not a guarantee, if it happens, it will result in a pre-stock dividend to shareholders of record. That means if you own the shares, you will get additional shares in the spinout. If you don't own the shares, you won't. And the goal here is to increase shareholder value. We're very close, not a guarantee, but stay tuned. With that, I'm going to turn the call over to NexTech's CFO, Andrew Chan, to provide further commentary on the quarterly financials. Take away, Andrew.

Thank you, Evan, and good evening, everybody. As a reminder, unless otherwise noted, all figures reported on today's call are in Canadian dollars under IFRS. An all the proceeding financial information is now available on our website and have been filed on SEDAR at close of market today for your reference. Total revenue in the first quarter was $3.5 million, down from $7.7 million for the same quarter last year. These revenues continue to reflect the shift in our business from virtual events to 3D and AR and the metaverse. Our product sales revenue for the quarter was $3 million, down from $6 million from the same quarter last year and down from $4.2 million in the immediate preceding quarter, reflecting the continued impact of COVID-19 on the supply chain and the ability to obtain desired inventory products for sales on our e-commerce platform. These macroeconomic effects were felt across all e-commerce platforms this quarter in their respective post -- in their effective -- in their respective published results as well. We do not anticipate large volumes of virtual events this quarter as revenues due to the shift in our focus from 3D AR revenue-generating products and away from technology services, as Evan mentioned, and virtual events. During the quarter, we had gross revenues of $127,000 related to technology services and virtual events and after taking charges for credits and refunds, net revenues were $37,000. Renewable license revenues were up 25% to $460,000 this quarter compared to the same quarter last year, and we saw a 14% increase in 3D-recognized subscriptions revenue and a 47% increase in revenues related to our hybrid events Map D platform compared to Q4 2021. This is a result of revenue recognized from our 62% growth of ARR to $771,000 in the latest quarter. As a result of our lower revenues, gross profit also came in lower at $1.5 million compared to $3.3 million for the same period last year, while maintaining a 43% gross profit margin. Product sales gross margin saw an improvement from the immediate preceding quarter of Q4 2021, an increase of 42% from 36% as we focus more on profitable items that were limited products that were available due to COVID-19-related issues, as we mentioned previously. Technology services gross profit margins increased to 49%, up 26% from Q1 2021 and up 17% from the immediate preceding quarter of Q4 2021 as the focus now has shifted to more profitable 3D AR products. We anticipate gross profit margins to increase even more as we continue to scale the business related to these products. Operating expenses for Q1 was $7.5 million, down from $2.7 million in the same period last year and down $1.1 million from Q4 2021. The decrease in operating expenses in the quarter continues to be from sales and marketing and research and development expenses. Similar to the immediate preceding quarters, this is a continuation of our effort to shift our growth related to our 3D AR business. During the past few quarters, we have now restructured our sales force and marketing spend to be a more cost-effective model for the results -- for the new pursuits in AR sales and with the intention of lowering overall sales cost as a percentage of revenue over the upcoming quarters. The decrease in research and development cost continues to be the result of shifting our development focus to AR products resulting in overall lower headcount in this area. General and administrative costs remained consistent. However, there was a onetime $650,000 charge of noncash compensation to specific management team members. Excluding such charge, general and administrative costs would have been reduced by 20% in relation to the average spend compared to the immediate preceding quarter in this area. We continue to actively monitor and reduce our expenses where necessary, to be aligned with anticipated revenues and growth. We had a net loss in Q1 of $7.7 million compared to a loss of $9.1 million in Q1 last year and a loss of $9.3 million in Q4 2021, a reduction of over $1.5 million, mainly from the contribution of the reduced expenditures as mentioned above. As of March 31, 2022, we had a cash balance of $10.8 million, inventory of $2.5 million and a positive working capital of $12.5 million. Based on our current projections of sales and cost reductions, we feel this is sufficient capital to finance our business over the next 12 months. With that, I turn the call back over to Evan.

Thank you, Andrew. On behalf of NexTech, I'd like to thank everyone for taking the time to join us on this call. I thank our employees, shareholders, partners. We thank everybody. We're now ready for the question-and-answer portion of this call.

[Operator Instructions] We'll hear first today from Scott Buck with H.C. Wainwright.

I think the first question is, obviously, a nice sequential step-up here in ARR. What of that is new customers versus expansion with current customers?

Well, most of our growth is coming from new customers, but we are getting repeat orders from some of our bigger accounts. Kohl's just doubled down and gave us a 6-figure 12-month contract, but a lot of the growth, Scott, is being driven by new customer wins, and we see that continuing through 2022.

That's helpful. And do you know or have you guys done the work, if you weren't to add another customer this year, what the potential opportunity is just within the current customer footprint? I mean is it multiples of where you are today?

It is. It's funny you asked that question. We did an hour-long session this morning to flesh that out. Exactly what's the growth potential of our existing book of business, it is substantial. I don't have an exact number. But yes, it is multiples of the existing business because as mentioned over and over, these are test orders. These are the smallest orders that we're getting in Q4, Q1 for 2022.

Yes. No, that's helpful. And then I just want to check in, like cost reduction. Where are you in that process? I mean are you there at this point in terms of where you want to be on an OpEx -- from an OpEx point or there's still more to go?

Yes. We look at this as a continuing balancing act to offset our burn and increase our revenue. So I would expect another $1 million to $2 million in cost savings in the next quarter that we're still trimming any fat and continuing to grow our revenues.

We'll hear next today from Lisa Thompson with Zacks Investment Research.

I was wondering since revenue probably is not the way to look at things. Are there any metrics or what do we focus on to figure out how progress is going and where you're meeting your goals?

Yes. So I would say revenue is a thing. It's just not the e-commerce legacy revenue that I would be focusing on. So that revenue is shrinking. But if you look inside the company, you'll see that our annual recurring revenue, the revenue tied to the 3D model business is growing quite rapidly. We announced a 62% sequential growth in that revenue.

Okay. So is there any metrics you're going to give out about how many models made or how many customers or anything that we can look at?

Yes. I would say that we are planning on bringing that forward. I don't know if -- we haven't actually brought it forward in Q, I guess, in -- we haven't brought it forward yet, but it is something we are going to bring forward. I don't know if Andrew has any opinion on that, but we are planning on bringing forward the number of models, number of customers. We just don't want to confuse the market because it's so early in that. If you look at, for instance, our average order value going up 100% quarter-over-quarter, I would have never have guessed that could have happened, but it happened. And so if you were looking at, let's say, our average order value last -- not this quarter, but last quarter and done a 12-month projection, it would have been way off. You look at this quarter's -- so it's like everything is just still pretty fluid. But we're trying to get a real understanding of what we could project, what we could project out with confidence and then we're going to certainly give that to you.

Do you have an idea of how much of the revenue is kind of a per model thing? And how much is recurring revenues that are monthly?

Yes. I think we broke it out where it was like $770,000-something was per model and then the rest was some of our other recurring revenue business.

Okay. And do you think that per model business is going to be seasonal?

No.

Okay. So it's just going to build from here, doesn't matter what quarter it is.

Yes, it's just going to build. I don't see -- we're seeing -- we saw demand in Q4. We're seeing continuing demand in Q1. Q2, we're seeing an even larger uptick in demand. I think what's driving demand is big tech kind of forcing the hands and by putting 3D models higher up in search by Shopify essentially telling their e-commerce sites to go get 3D models. And then, of course, the ROI, once they do get a 3D model on their site, they come back for more.

I think to Evan's earlier point, yes, I mean, ARR, we're relatively early in the process for seasonality. I mean to all the industries that Evan had talked about earlier, there -- the beginning customers of those industries seeking 3D models. So any kind of sense of seasonality and whatnot, I think it's just really too early at this point.

All right. And are you still constrained by just getting enough people to crank out models? Is that where we're at still?

No, no, not at all.

Not at all.

Great. That's great. All right. And just one last thing just to help us poor analysts. How do we think about e-commerce this year given supply chain and everything else? Do you feel like it's going to be down 50% for the year or is it going to be kind of flat to potentially going out? How does that...

So it's a tough call, Lisa, because we don't control supply chain, right? So we place orders. And if we get a delivery, we sell through it. If we don't -- if they say no, we can't -- even though if we can't. So I'm being told that we had a couple of orders that were not delivered. And so obviously, we couldn't sell. And so now we're getting -- some of those orders are now flowing in and going out. So we're going to sell. But it's impossible to predict what '22 looks like. I mean I wouldn't use this quarter as, let's say, the metric to measure things by. I would say that this is impossible. I don't have a visibility. Do you, Andrew?

No. I mean I think you would have seen other kind of e-commerce platforms come up with their quarterly results, and they weren't good either and there wasn't quite a definitive answer to any of those questions. It's just right now, we're kind of in a holding pattern similar to what Evan has said, and we're just -- like you said, once we get product, we sell through it. But right now, it's a matter of kind of getting products.

So if you had to just guess for this quarter, is it going to be up or sideways or any directions?

My guess would be, it'd be up from kind of this quarter. But are we going to get to kind of where we were before, that's still kind of TBD.

All right. Great. I'm glad we had this conversation because it's been hard to try to figure things out. All right.

[Operator Instructions] We'll hear next today from [ Randy Osage ], a private investor.

You mentioned on a podcast, I think it was Wall Street Reporter about -- to be cash flow positive. You would need like 100,000 models. I was wondering how many paying models you have done at the present.

We've announced that we've done over 10,000, but we haven't put an actual number on it. It's between 10,000 and 15,000. But yes, it's -- I mean, it's growing every day. So -- and I don't remember exactly -- yes, I don't remember, [ Randy ], saying that we need 100,000 models to be cash flow positive. But if I did say that, let's just also keep in mind that I might have said that if we were using, let's say, $10 per model per month, which was our expectation, but we're actually getting more money than we anticipated. As mentioned earlier, our average order value is going up, and a lot of that is because we're getting $20 per model per month and, in some cases, $25 per model per month. So we're $15 per model per month. So it's still early, it's still a moving target as far as when we get to cash flow positive. That's really all about that.

We'll hear next from Peter Levine with Ameriprise Financial.

Very much looking forward to NexTech's future. I had a quick question on your cash burn. What do you anticipate it will be for this year in total?

I'm not sure about the total. But I can tell you that we're getting it down to sub-$1 million per month. So I'm not sure, you could figure somewhere between $10 million and $15 million. Does that sound reasonable to you, Andrew?

Yes, that's on our technology services side.

Okay. So do you expect it to go to the market again as you did this past quarter? Or do a private placement, I guess?

No, we do not. As we announced, we raised a bunch of money in January, and we believe we have enough money for the next 12 months. So that means all of 2022.

Okay. And this is a question that you were getting sick of hearing from, but -- given the safe status of the markets and everything else, but I'll throw it out there. NASDAQ listing, timing, not even a thought anymore. What is -- where are we on that?

No, it's definitely still a thought, and it's definitely something that we want to do, but it has moved down the ladder. As the share price has come down, there's a lot of other things that are more pressing. It doesn't really seem to be as important today as it was in the past. And so it is still -- definitely, let's say, nothing's changed. Our application is still active. And we are still engaged, but it's less of a focus. My focus is building the business and running the business. And so NASDAQ, while important -- less important in a down-market environment, much more important in the full market.

Yes. Well, sure. So I don't want to stick you to a date or anything else like that, but it sounds to me like it's 2023 possibility than nowhere in 2022, if anything?

You could make that assumption, I didn't say that.

I know -- I didn't. I know you didn't. I'm just saying that's what -- it sounds like that's what it is. And of course, institutional investors need to have it on a major listing. And I love your story. But that is -- it's like a chicken and the egg type of question here when it comes to that.

Let me add here. Institutional investors buying small cap stocks today or are they selling, dumping? So again, I'm not saying we don't want to be listed, but you don't want to get listed in the middle of a storm, right? So timing is everything. Be patient. We will get listed. Today, it's not really a topic that I think is relevant to any of our investors. So any other questions?

No, I just -- just on the cash burn and the NASDAQ deal and that's really what I'm seeing here. And I'm glad the pivot that you're making to the 3D models and wish you guys have a lot of luck.

Thank you very much.

We'll hear next from [ Richard Reiter ], a private investor.

Just some news. I was listening to the -- on the website to your call, and I signed in at 5:00 and it went dead. And so anybody on that -- and I called the company Q4, and they just said they were working on it. And so I don't know how many people tried to listen on that network. But I heard about 30 seconds of you. And then I finally was able to find the number from Q4. They gave me your numbers so I called in. Now I've been listening, but I lost the first half hour of the whole thing. So...

So I have good news for you, [ Richard ]. This is recorded, and you will be able to listen to the replay, didn't miss a thing.

Okay. All right. Let me ask a question though. Why do you want to spin off something, the Map?

Because yes, I'll explain. So again, just to reiterate, I spent 30 years on Wall Street. And what I've recognized is that often times, companies have undervalued assets, especially small cap companies like NexTech. I do not believe that our ARitize Maps is getting any valuation at all from investors. I do not believe that, that asset is being valued properly. And the spinout allows that business to stand on its own and not be kind of almost hidden inside of NexTech. And so the spinout allows investors, you, me and everyone else on this call, to participate in the unlocking of that value. So we will be able to issue a dividend, stock dividend to our shareholders. So if you own NexTech, you will get free shares in this new company. So instead of owning just NexTech shares, you will own shares in NexTech plus the spinout. And as that spinout increases in value, which obviously we believe it will, your portfolio increases in value and we help to build our shareholder value, and that's really my goal. That's the reason why we spin it out.

How much business are they doing now?

It's a start-up. It's just the start-up. They're literally just starting. So it's not going to affect our revenue at all. We don't lose anything. We only gain.

Okay. I don't know if it's proper to say this, but I'm going to go ahead and listen to the replay when it's available, and I might call you back, right? You could put my name on the side because I've been waiting a long time to hear this call. I was quite disappointed when it stopped. So I want to digest the material on the call and I might call the company and say hello. So I hope you don't mind with that.

No. No problem. We're here for you, [ Richard ]. Thank you for tuning in.

Yes. I mean I've listened to all your Wall Street Reporter stuff. I've been listening for a couple of years now, so -- and have quite a few shares. So I am interested.

Yes. Thank you, Richard. All right. We'll take another couple -- another call. Another question.

We'll hear next today from [ John Reynolds ], also a private investor.

I'd like to clean up along with this NASDAQ business for some of our valued shareholders who are continuously hitting you to do that. Just I had a company, a private company I invested in that went public and they wanted to go on NASDAQ and did so. But people who aren't buying stock because just because you're on NASDAQ. We've had 4 reverse stock splits just to meet the $2 share minimum thing. And it's -- I am not doing too well with reverse stock split. So I think people need to realize that institutions aren't going to buy stocks just because they have a share price of $2 and they're on the NASDAQ. So I think people need to be patient with you, and let's just move through this because I don't think anybody here wants to have a reverse stock split.

Yes. I appreciate that. And I think more to your point, there is no nirvana, there's no magic silver bullet. NASDAQ is certainly not a silver bullet as [ Richard ] mentioned. Plenty of companies that struggle on NASDAQ. I guess my mistake was I thought we were going to get listed on NASDAQ. So I told our investors and they seem to remember that, and they don't want to let it go. It's kind of like something that they've become a bit obsessed with. But thank you, Richard, for sharing that story. Did you have any questions for me?

This is [ John ], by the way, not [ Richard ].

Sorry. Sorry.

That was pretty much -- I just -- people are hammering the NASDAQ thing, and I just think that they need to be more patient and let's keep moving forward the way you are by growing the company and in proper time, we'll get on NASDAQ, I'm sure.

Thank you, [ John ]. I sincerely appreciate your support. And I think investors should listen to what [ John ] is saying because what he's saying is the truth. And again, there is nirvana. There's countless companies on NASDAQ that don't go up, it's not guaranteed. Now having said that, when the timing is right and our business is growing quite rapidly, I do believe we belong on NASDAQ, I do believe that the institutions will buy our stock. And I do believe that it will be a big benefit to NexTech. But as mentioned earlier, the timing of it is critically important. So I don't believe that right now is the time to go pedal to the metal on that. So let's just leave the NASDAQ conversation. We could have a whole -- we could pontificate about NASDAQ for a whole hour here. So...

So I'd rather see you go and get to say that, forget the NASDAQ.

Exactly. Thank you, [ John ]. I appreciate your input, and have a great evening.

And that is all the time we have for questions today. I'd like to turn things back to you all for any closing remarks.

Yes. I will just thank our investors. It is turbulent times. My focus is on increasing shareholder value. I don't believe you'll find another CEO as heavily invested as I am. And with that, I will end today's call. Thank you for participating, everybody. And everyone have a pleasant evening. Good night.

And again, that does conclude today's conference. Thank you all for joining us. You may now disconnect.