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

All right. Welcome, everybody, to Wall Street Reporter's NEXT SUPER STOCK Livestream. We are back earlier than expected with NexTech, of course, our favorite Next Super Stock. For anybody that's brand-new to our program, our goal is to bring those stocks which have 10x to 100x upside potential. The company is going after massive market opportunities at a key inflection point right now with multiple upside catalysts in place. I don't know what exemplifies those categories better than NexTech that's already been at 10-Baggers. It looks like it's on track to get 10-Bagger again. Evan, welcome back.

Thanks. It's great to be back. Another day, another spin-off.

Yes. Evan, I think you were at the last week, we weren't expecting you back. I thought -- everybody thought that this was going to be the final livestream of the year before you come back. And sure enough, this is -- again, I talk about this -- look, the mark of the 100-Bagger CEO is always keeping the market on the toes, always delivering upside surprises. And nobody was expecting this. Last night, you called us, hey, we've got -- sounds like, wow, this is -- I was not expecting -- I don't think anybody was expecting this, and here we are. Another baby unicorn had spin-out.

Yes. I mean, Toggle3D is continuing to develop its AI. And as the AI continues to develop, the product gets stronger and stronger. And so, it seemed to make sense to announce the spin-out now. And obviously, we still have work to do in-house to affect the spin-out, but shareholders of NexTech have something to look forward to in 2023 and beyond because Toggle3D is going to be the definitive 3D design studio for CAD designers, but not just for CAD designers, this is really a 3D design studio for you and I as well, Jack, and all of our shareholders. They can use the Toggle3D, its point-and-click technology. That's what makes it so unique.

We had a demo. We had a demo like a few weeks -- last month, you did a demo with...

Yes. And we'll do more demos as we get closer to the spin-out so everybody knows about the technology and what's getting spun out. But the bottom line for NexTech shareholders is that, this is another example of NexTech creating shareholder value. Our way was a great way to create shareholder value. That spin-out worked tremendously well. And really, Jack, what we're creating is pure-play technology public companies. NexTech has made 10 acquisitions in the last 4 years. We've incubated a number of them, and now we're spinning them off as their own pure-play public companies. We retain ownership in these pure-play public companies, but we also dividend stock out to our shareholders, it's win-win for all our investors. It also allows us to raise nondilutive capital, meaning NexTech doesn't have to go to the market to raise capital to continue to build these businesses. These individual companies are able to raise capital independent of NexTech. And again, it's just win-win for NexTech shareholders. And Jack, I will even go so far as to say that in 2023, we will have 3 3D augmented reality public companies that will all have -- you call them unicorns, I just call them $1billion potential written all over them.

So -- it's amazing. We're just talking before the live show, and I think you brought up something interesting. We're all waiting for now the Apple AR glasses, which we know is happening. The insider is Jason Calacanis, everybody, they say, it's going to be coming up probably in the next couple of months, probably in Q1. And we know this is going to be a game changer, this is going to be the hottest thing. The AR glasses, first of all, it's going to completely drive demand for what you're doing with 3D models and everything else. But I think in the market in terms of tech investors, this is going to be the new thing. It's kind of going to be like the iPhone, it's going to be one of those new categories and it's going to be -- we talked about it before -- an investor frenzy for pure-play AR stocks that are really doing something. NexTech is really obviously one of them, right? And now you're quitting the universe, you're actually quitting your own sector.

Yes.

Investors are going to be like, where do I find the pure play? And there's going to be 3 of them, maybe 4, right? I mean, I don't know, you're going to -- it could be 4, it's going to be the whole NexTech universe. And we've seen this playbook before in the past. It's a spectacular way of really creating shareholder value, because there's a lot of stuff.

It is. And Jack, it is interesting that you're saying that we're creating a sector, the 3D augmented reality pure-play tech sector. We're not talking about the Microsofts and the Metas of the world. We're talking about small-cap stocks with alpha, with low floats that can go parabolic. And so, from my history, my track record, if you go back, let's just roll back the tape to 2019. What did I do? Well, 3D wasn't ready yet. Augmented reality wasn't ready yet. So, the sector that we jumped in augmented reality not being ready, we jumped in e-commerce. And then we jumped into what? Virtual events. And then what happened? The market -- the demand for e-comm companies and virtual event companies goes through the roof, our stock goes through the roof. We hit $10 a share. Everybody knows this story. Well, I'm now positioning NexTech, and again, my background is the stock market, right? My background is taking companies public. I took -- take 2 public back in the '90s. So, this is not foreign to me. This is actually by design. There is a master plan here. And I think we're just first to market, first to recognize. Again, we were early 4 years ago. Today, we're on time. And now, I'm extremely excited, but I'm also motivated and also I feel like pressure to get these public companies listed so that when the tidal wave of demand hits, Toggle3D is public, ARway is public, NexTech obviously is public. And like you said, Jack, there's this whole sector of 3D augmented reality.

Because where you are the sector -- if you look at it right now, [indiscernible].

But [ Speedo ] all of our shareholders are the sector. If you own your shares in NexTech and hold them, if you own your shares in Toggle and [indiscernible] own your shares, my prediction is that they're going to go parabolic, that they're going to be worth a lot more after today's pre-Apple glasses. 2023, the Apple glasses come out, everybody goes, what puts on the glasses, the world changes forever and everybody is thinking, I need to see something in 3D. Well, Toggle3D -- Toggle3D, ARway, NexTech AR Solutions, all 3D. And so, our stocks are -- and look, this isn't about just hype. This is -- our business is going to be in high demand. Meaning, what we're selling augmented reality wayfinding is going to be something you're going to want to see in Apple glasses, every mall, every hospital, everyone that walks in with the glasses, they're going to be able to see without lifting up their phone, they're just going to be able to see the wayfinding. The same thing with augmented reality and 3D models for shopping. You're going to be able to just click on your glasses and the 3D models in your space. It's frictionless, the same thing with Toggle3D. And so, all these businesses, I believe, are going to see a surge in demand. We're already seeing a lot of demand, but I think there's going to be a surge. It's just like when high-speed Internet happened, Jack. YouTube could not exist when it was like dial-up modems or whatever, there was no chance for YouTube, there was no chance for Instagram, there was no chance for Facebook. And those businesses couldn't exist. You had to have high-speed Internet. And with our technology, we needed 5G. We needed high-speed Internet, but we also needed 5G. 5G is here. Now, the AR glasses, the hardware is going to start supporting this whole 3D ecosystem that we've been building for the past 4 years. And that's why I keep buying shares in the open market, I might buy more. And that's why I'm thinking now Toggle3D [indiscernible].

But here is the crazy thing. Here is the thing which you got to reiterate. At the core of it, the core business of NexTech building 3D models for Amazon, which is a [ $607 million ] order that they gave you a few months ago, weeks basically, the core business is growing by triple digits. You got the sequential growth quarter-over-quarter in this 3D model business. I mean that is the definition of a company that's at an inflection point. I mean, I want to quote my book here. [indiscernible].

Let's take it one step further because I was having this conversation in-house a little bit with my team. And the question always comes up, what -- would we sell, let's just say, would NexTech, would we ever allow ourselves to be acquired? And my answer is always the same. Well, what are they acquiring? What is it -- if somebody wanted to acquire our 3D modeling business, they're not interested in Toggle3D or they're not interested in ARway, they just want our events business. They just want 3D modeling and vice versa. They want our spatial computing platform. They don't want to buy our 3D modeling business. And so, right -- so if you think about this, all these spin-outs have the potential for a bigger company to buy them out. When they're inside NexTech, that's never going to happen. I'm telling you guys, it won't happen. Now, once NexTech is a pure-play 3D modeling company, well, then all of a sudden, potentially an Amazon would be interested in buying us. Maybe, yes, it could be Amazon, it could be a Walmart or whatever. If you think of ARway, who would want to buy ARway? ARway, maybe it's a Google, right, because they do wayfinding. Maybe it's Apple, they want it for their glasses. Maybe it's an Apple competitor like Microsoft, right, but they would want the wayfinding solution. And if you think of Toggle3D, who would want to buy that? Well, Adobe, they have...

They just paid $40 billion for Sigma, right?

For Sigma, yes. You've mentioned that a few times, but they have this platform called Adobe Substance, and it's basically a 3D version like Adobe Illustrator. And so, look, there is a plan. This isn't just random. If people think that this is me waking up one day and just popping out a bed and going, we're going to spin-off ARway, you're completely mistaken, completely wrong. There's years of mediating, meditation, years of thinking about how to increase shareholder value, and I continue to meditate on that. How do I increase shareholder value? How do we turn these products into businesses that are worth billions. How do we do this? And so, that's my challenge, right? That's my problem that I'm solving for. And at the end of the day, I'm firmly in the camp that spinning out these -- essentially their commercialized technologies as their own stand-alone public companies on a venture exchange, a venture capital exchange like the CSE is the perfect way. It's the perfect route to creating shareholder value. And to be honest, we couldn't really do this so easily in the U.S. on, let's say, NASDAQ, because NASDAQ has basically shut down a lot of these kind of start-up IPOs, like there's no brokerage firms in the U.S. any more that are left, they don't exist anymore. And so, unless you're a big cap company worth hundreds of millions or billions, you're not really getting public in the U.S. So to me, this is the perfect scenario for our investors. And I just wanted to come on your show, Jack, to let everybody know that 2023 is going to be a magical year for NexTech investors.

Yes. Really, I think people are starting to see, this is like you're playing like 4D chess, maybe even 5D chess because not only are you creating this whole sector for AR, an AR sector, basically you're going to dominate the sector. It's going to be all NexTech or NexTech parent company. NexTech and the parent and spilled companies, these baby unicorns are running around wild, running rampant. But each of these baby unicorns, only could they potentially be bought out by a bigger company like Adobe, whatever, but they can use their currency to make other acquisitions, maybe they could become the so there could be a whole ecosystem, a whole universe that's coming out. And here is the crazy thing. I'm not that good with math, but I think the NexTech dividends, these baby unicorns are something like -- it's coming out to be like a 30% yield or something if you do the math. In other words, if somebody owns like $1,000 worth of NexTech in October, the ARway spin-off, including the increase in value, because that became a 10-Bagger, I mean, that would be like 10%, 15%. And then, with this new spin-out of Toggle, that might be -- I mean, again, we don't know, whatever, but that could be another 10.

Here is the bottom line.

[ It's 12% ] yield. I mean, you are into super high-yield stock.

It doesn't matter what the yield is. The reality is, I think we're the only small cap company with any yield, forget yield like -- look at any [indiscernible]. Look at anything, like as a small cap company.

No, no. [indiscernible]

Jack, I mean, you've had -- I don't know what, dozens of companies come on your show in the past couple of years?

Yes, yes.

Any of them offer any yield?

So, I've never -- I actually don't recall in like ever. I mean, I rule it, in 20 years plus, I don't recall any microcap giving ever. But here's the crazy thing.

I mean, there's an incident like...

You're giving yield, you're also -- the company, not only are these micro caps not giving you dividends, they're actually giving investors losses, most of them are down 75%, 90%. NexTech has been delivering alpha over the 2022, the stock is basically where it was at the start of the year. Most of those stocks are down 75%, 90%. Look at Facebook, look at -- so this is an incredible thing.

Yes, it is. It is. And again, we're finding -- look, I don't want to pat myself because it's always a team effort, right? But we're swimming upstream. I am going hard, right? I am now putting everything into turning this into a juggernaut, where these spin-outs are key pieces, but look, we've discussed 2023 triple-digit growth. We're in the end, the tail end of Q4. Q4 is looking like another super strong quarter for NexTech and our 3D modeling business. And then Q1, Q2, it's going to start ramping up exponentially in 2023. And so, that gives me an incredibly satisfying sense of our business and what's to come in terms of our shareholders and the return for our shareholders. I feel really good about just that piece of our business. ARway, we just announced [ scan ] the 400,000-square foot mall. There's a whole bunch of exciting things happening at ARway. ARway is on the path to success. Toggle3D, we will come back on your show again, Jack, and we'll talk and demo Toggle3D. But Toggle3D really is the brainchild of my CTO, Nima, an Apple computer vision expert, a tenured professor, PhD. And so, this is his brainchild. He believes everybody has their favorite that this is going to be the $1 billion -- multibillion-dollar potential public company, right? That's what his belief is.

Toggle3D?

Toggle3D, yes. And it's the unicorn. And the guy left Apple computer, he was making 7 figures -- yes, he left Apple Computer in 2018 to crack the code on creating 3D models using AI. And then, NexTech happened to bump into him in 2021, and we acquired his business in the summer of 2021. He was the only AI company, the only 3D modeling company that we've acquired. We acquired a whole bunch of other businesses, but we waited on the hunt looking, looking, looking, looking for this AI piece because I know that -- I knew in 2019 that we needed AI, but I didn't have that expertise in-house. 2021, it took 2 years of researching in the desert. It's biblical, right? I'm out there for 40 days, 40 nights, 2 years, 4 years and then...

Well, it's not been in the desert for the last 18 months. Now it's coming out. Now it's also a promised land, a 10-Bagger promise land. I'm a 10-Bagger. Maybe the 100-Bagger.

Earlier, as you mentioned the promise land. I'm going to the promise land actually next week.

All right. All right. So when you come back, there will be an extra blessing for a 100-bagger stock. This will be very auspicious.

It's going to be very spiritual. Look, the whole thing is, timing is everything in the market. Investors, if you haven't figured that out by now, you're missing a big piece. You can have the right stock at the wrong time and it doesn't really matter or you can have the wrong stock at the right time and you could make money off of that. In my estimation, what I'm predicting for 2023 is that the bear market ends, the war in Ukraine ends, Apple drops the glasses and the world gets extremely excited and goes all in on 3D. And Toggle3D, NexTech and ARway become stocks that make some kind of a historic move. That's it. I'm done, Jack.

Let's take some questions. Can we take some questions? We've got some good questions. By the way, I'm going to do a quick plug for my book. I got plugged it.

You can't help yourself. Look, here's a thing. You're shameless. I haven't suggested. Is the book out? Is it out?

It's an Amazon preorder, the paper back is going to be available.

Not out. I don't -- how can you put something that's not even out yet?

Just don't want to build demand, but it's amazing. In the book, I talk about 2 things. It's something called -- if you want to find a 100-bagger stock, you've got to look for the 100-bagger CEO. What are the qualities? And the quality is -- anybody watching this video right now, they can see it's delivering surprises, focus on shareholder value. I mean, you remind me of another guy we had on -- [ Bruce Litten ], 100-bagger guy, Canopy growth. It's the same thing, focus on delivering value. And also we talked about the 10-bagger window, which is the NexTech, you're talking about right now. Everything is happening. So, let's get to the questions. There we go. Questions, questions. We get some good questions today. Okay. Questions. Okay. Will Toggle3D sales be more incremental or do you expect large clients like Amazon to sign up?

So, Toggle3D sales, it's hard for me to predict other than to say that there is a line lining up at the door for Toggle3D. And look, NexTech is going to be using Toggle3D's technology. NexTech will probably have licensing deals with Toggle3D, maybe with ARway. And so, there's a lot of demand for what Toggle3D's offering. It could go viral. Some people think that Toggle3D's technology, it's pure SaaS, will just go viral. If it goes viral, sales go -- it just goes like straight up. So it's hard for me to tell whether it's incremental and then viral at some point, it's got to go viral. At some point, it's got to really explode.

Great question. What expedited the spin-out? Nobody was expecting this announcement. I mean, I definitely was not expecting this till like February.

So what expedited the spin-out is a breakthrough in the AI capabilities on Toggle3D. I was shown a demo where Toggle -- you could bring essentially -- so if you think of Toggle, you have these blank 3D models that essentially CAD files that come in, they're white just boxes, let's say. And if you think about Toggle, you point and click on colors and textures to create that 3D model in full color and then you export it onto the web, right? That's the whole 3D model magic in Toggle3D. So, we just created the AI that allows you to take a screenshot of, let's say, the fabric. So, a screenshot of a piece of leather, you give it 10 seconds. All of a sudden, it recreates that texture, point on it, click on it, boom. It's now a leather couch. It's that simple. It's hard for me to convey how powerful this is. These are things that would take hours, hours, 4 hours, they're now being done in 10 seconds, Quantum Leap -- that's why it's like, okay, like the tech got so much better that it needed to get spun out so that the team can really focus -- we're going to raise probably $1.5 million outside of NexTech just for Toggle3D. If any investor is a long-term investor that wants to invest, you could send me your information. And there's a possibility that our long-term shareholders can buy pre-spin-out shares in a private placement, but it's going to be extremely selective. I can just tell you that. And obviously, I'm going to subscribe and other insiders will participate in this as we participate in all spin-outs.

Okay. Okay. Next question. Have you abandoned the MRR model -- what's MRR?

No, Jack, the monthly recurring revenue. We never -- we have not abandoned the MRR model. Let's keep things in perspective, Jack, because clearly, I don't like the word abandon because it sounds negative. So, you have the MRR business, which is growing incrementally. What does that mean? If we bring in $100,000 a month in new customers on to the MRR platform, we only are able to report incrementally, what was at 8,000-some-odd dollars per month, right, because it's a 12-month $100,000 divided by 12. So it's like $8,000. So, our MRR continues to grow, but it's not growing as fast as, let's say, Amazon where they just say like, hey, make us x millions of dollars' worth of models. So, no, the MRR business is continuing. We love that business. We have not abandoned that business and we see that long-term as being something very valuable. But in 2020 -- in the shorter term, it's going to be these bigger boys, the Amazons, the Targets and the Walmarts.

[ Mark ], do you see the spin-outs, the baby unicorns that was being acquisition plays in the future? I guess -- you talked about this early. Okay. Question. The spin-out is -- I guess it's a question. So will the spin-out be profitable within the first 4 quarters? And are they being spun out with any debt or without debt, crazy salaries.

Yes. No debt, no crazy salaries. Look, we don't do anything crazy here. We're not crazy. We're not crazy. We're crazy about creating shareholder value. That's it. So we're not talking about creating profitable companies in the first year. We are going to land customers and we're going to see exponential growth, yes, in the first year, profitability. I can't guarantee that, but these businesses are going to be viable. They're going to be exciting, and they're going to be revenue generating for sure.

Yes, this question. So, no, from what we're hearing is the Apple AR, I keep calling the glasses. It actually may not be glass, maybe some sort of other form, which is going to be some magical thing. But apparently, they already have, this is a check at a goal on YouTube, this guy Jason Calacanis look at Apple AR. Basically these guys were developers that have told him that Apple is bringing developers into their -- the big UFO that they have in Silicon Valley. They're putting them in these lock rooms where they're showing them the thing and say, hey, you can work the product here, you can't leave. It's all very cost. But it's coming out like now. In other words, they wouldn't be having these guys there, unless it was already like, could be a -- it's going to be this year.

Yes. Just keep in time, again, I've mentioned this many, many times, my CTO used to work at Apple Computer. He still has relationships with Apple Computer. The bottom line is, the computer glasses are going to be just like the first iPhone that came out, it will have some limited use and then it gets better and better and better. There's going to be computer glass, the first version, second. So, the first version, from what I understand is a hybrid, it will be basically AR/VR, where you'll be able to flip between AR mode or VR mode and there'll be something like -- looks like ski goggles kind of thing.

Okay. Good question. If the sector winds up being too nascent to support ARway Toggle as independent. This guy was...

[ Levi ], you're thinking way too hard my friend.

Find them back if it's too early.

[ Levi ], do you know how long I've been doing this?

Long time, okay?

Since I'm 20 years old. So I think at the end of the day, you have to believe in the CEO and the founder. You have to believe that they actually have a clue. And this idea that these companies are going to be spun out only to be bought back would mean I'm clueless. I mean like what -- I mean, look, anything is possible, but that's very, very unlikely.

What will next -- very good question. What will [ Mexico ] look like after all spin-off? I will be the main business if everybody is using us to build their own models.

So, the main business is going to be that we are going to be 3D model central. Let's be clear, as mentioned earlier, we will likely have some kind of licensing deals. So the Toggle3D tech will be NexTech's tech. We will be able to use it. It's not like we can't use it. This is very friendly, right? This is our company. So, all these spin-outs create value for shareholders, these independent public companies, but NexTech is going to create 3D models for Amazon, Target, Walmart, Home Depot, Lowe's, Kohl's, CV2, CB2, we are going to be the dominant 3D model supplier. That has been our stated goal. It's going to be on the back of AI. AI is going to drive our ability to create lots and lots, massive quantities of 3D models at a lower price than any competitor. And that's going to allow us to have a dominant position in the market for 3D models, which we estimate to be north of -- worth north of $100 billion over a decade. It's not like in a year, but everything that's going to be made in the future is going to have a 3D digital twin, everything that's on the market today is getting a 3D digital twin, and RAI is going to get smarter and smarter and smarter, and we're going to be unstoppable. You will not be able to catch us. And that's why there is a likelihood that somebody is going to want to buy us, because that AI is just going to be worth a ton of money.

Let's wrap up, 3 last questions. I know you've got other stuff lined up here today. Can U.S. investors -- can investors in the U.S. be allowed to purchase the Toggle3D? I guess, the...

Yes. So, yes. So it takes a couple of months for it to get listed on the OTC QB, but it did get listed on the pink sheets like within a week. As far as buying it, like the first day, there are some brokerage firms that will buy shares in Canada. I think Canaccord is one of them. So, you got to do your own due diligence and your own homework, but it is possible to buy it, yes.

Eric is asking me, will the ARway spin-out be the template for Toggle3D and future spin-outs in terms of shares, dividend. So, it's going to follow the same playbook?

It will. I mean, it was successful. You don't mess with success.

Interesting comment. So, Toggle3D will possibly become the Canva of 3D model?

Finally, somebody gets it. Yes, the history book review, that is exactly what my CTO and the team keeps talking about, Canva, Canva, yes.

$40 billion valuation, Canva $40 billion valuation?

Yes, I don't talk about private companies that much. But yes is the answer to this question definitively, yes.

Okay. Actually, that makes sense because I've come across your side. Yes, you can do like...

Super simple. Anyone can do it. That's exactly the point of Toggle3D. Yes.

Okay. Okay. Last question. This is the last question. Okay. Home Depot, Lowe's, you have in conversation with big box retailers in addition to Walmart, what's going on, just a wrap-up on NexTech?

Yes. We are going after every big box retailer, including Home Depot, Lowe's, Best Buy, Walmart, Target, there's no one we're not going to be pursuing. I mean, why wouldn't we? I mean, this is our job, right? This is what we do. So we're going after all the big boys, everybody at the top of the mountain as I like to call them is who we're going for. So, yes, it's game on for NexTech, ARway and soon-to-be public Toggle3D.

Okay. Evan, thank you for the update. Thank you, everybody, for joining us. We'll see you in the next Livestream probably in January. I don't think there's going to be any more surprises.

This is it. Thanks, everyone. Happy New Year. Happy holidays.