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

Well, good morning or good afternoon, depending on where you are. I'm Steve Darling with Proactive welcoming you to another live stream event, this time as we take a tour through 2023 from a number of different aspects of Nextech3D.ai, we'll talk about ARway, we'll talk about Map D and we'll talk about, obviously, the 3D modeling business as well. It's going to be a very busy 45 minutes to an hour, and we're glad you're with us.

Again, if you'd like to partake in any of this, you're welcome to include your questions in the chat feature. We'll make sure we pass those along to our guests. We're going to be joined by a number of different people throughout the day, including Evan Gappelberg, the CEO of Nextech3D.ai. Also joining our conversation as well will be Hareesh Achi, who, of course, is joining the company as the Executive Vice President of Operations; also joining us is Shadnam Khan, he is the head of product at ARway.ai; and Rob Christie is the Vice President of Product Innovation for Map D. All 3 of those will be along with us as well. But first, let's welcome in the man of the hour, we're talking about Evan Gappelberg. He is the CEO of Nextech3D.ai, and Evan, as always, it's great to see you, my friend. How are you?

I'm good, I'm good. Great to see you, Steve.

Yes. I thought it would be a great opportunity for this live stream event to really go through 2023. And I know it's been an extremely busy year for you and the company, you've had some recent news that we'll talk about in just a second. But Evan, let's begin with just an overall thought on 2023 for the company.

So I've been thinking about what we've accomplished in 2023, and it is quite staggering actually how much we've accomplished. The year has gone by pretty quickly, but we've delivered to date about 70,000 3D models globally, which is quite an accomplishment from where we started going all the way back to 2018. In 2023 we're going to clock in with around $5 million in revenue. That's up about 100% over 2022 revenue, which is not insignificant to grow our business by 100%. I feel good about that. Obviously, we always want to be at 150% or 250%, but 100% is still quite significant. We did, earlier this summer, actually spin out our Toggle 3D.ai business, and we raised $2.1 million; we were able to issue a shareholder -- a dividend of stock to our shareholders, rather, so that was actually a positive for shareholders as well. When you look at our AI capabilities, we have dramatically increased that. If you look at Toggle, that's part of our AI capabilities. But beyond that, we've created algorithms for search and we're going to have some really cool demos for you in just a few minutes from Hareesh showing some of our search capabilities now that uses AI to search our 3D model library for meshes, 3D meshes. So again, that's adding value to our business and allowing us to be able to scale and increase our cash flow. Speaking of scale and increasing cash flow, we moved our entire operations to Hyderabad, India. That was not insignificant, that actually was a big deal. That sets us up to save as much as $4 million in 2024. So that's going to have a dramatically positive impact on our bottom line, but it allows us to continue to scale our technical capabilities without really increasing our overhead expenses. Previously, every time we wanted to scale our business with North American talent, it was quite expensive. And we had to constantly spend money, invest and then raise money. Now we are situated in a much better position where, yes, we have to spend money, but it's like 10% or 15% as much as we were spending previously. So it's a dramatic, dramatic improvement in our operations, the fact that we were able to move to Hyderabad. And again, Hareesh Achi is the one who is really spearheading that. We also got a patent issued for CAD to 3D conversion. We launched our AI ad network, Steve, which was quite a big deal. We integrated ARway's SDK into our Map D event app, which, again, sets us up for a fantastic 2024 expansion of that business. And last but not least, we just announced that we secured up to $12.75 million in capital by selling as much as up to 51% of our 3D modeling business to VCI Global. And I just want to touch on that for a minute because we really didn't spend any time with our shareholders, and they should understand the structure of that deal. It's an earn-in type of deal, Steve.

Yes. And I'll just mention really quickly, because we're getting -- there's a lot of comments on the chat about that because, as you mentioned, you hadn't had a chance to talk publicly about it. So maybe just -- as you're doing, I can tell you're going through that. So let's take us through that deal.

Yes. So the first part of the transaction actually was consummated today, where VCI Global is buying $637,000 worth of a private placement in Nextech. That is the first and only stock sale that we're making to VCI Global in Nextech shares, so there won't be any further stock sales. And so when you look at this transaction, VCI is basically going to pay us another $637,000 by January 31. That's a cash transaction, we're not trading our stock for that. There will be shares in new a spinco that they're buying into, but that's not Nextech selling our shares on the market, on the CSC or the OTC. In April they're going to put in another $1.18 million, in June another $1.66 million, in July another $2.4 million, in August another $2.6 million, in September another $3.5 million. This is serious money that positions us for the future. And that's really what this is about for our shareholders. It's about navigating a tough market in 2023, where there's no question there was a lot of carnage. We suffered a lot of, let's just say, difficulties in terms of raising capital in 2023 that we haven't really encountered before. A lot of that's because of all these interest rate hikes and so that's created a very, very difficult environment for small caps and we're no different than the other small caps. So going to market, raising money, was very, very difficult, and it really created a cascading type of event for our stock and shareholders. Now we are on the mend, we are coming back, the bull market, I think, is now in full swing, and 2024 is going to be the opposite, where I believe, without us having to go to market to raise capital, which has been the primary reason why our stock has come down, we should see our stock start to go back up in quite a significant fashion. So between now and September 30, 2024, VCI Global is going to invest in our 3D modeling business, and when they're done we'll have $12.75 million from them and they will own a 51% stake. We will still own a 49% stake in that business, so we're not exiting that business by any stretch of the imagination. So from our standpoint, having that money solidifies our investors' future in not just the 3D modeling business but in all of our businesses because, remember, we are a diversified technology company. We are continuing to invest in our 3D modeling business and in generative AI; we are scaling our Map D business with our AI ad network, which we previously announced, we see massive growth opportunities there; we are scaling our ARway business; we are scaling our AI technologies in general, and we're looking at AI technology start-ups for potential acquisitions and investments. And then, of course, we still do need to fix Toggle. We haven't forgotten about Toggle, the problem child. But Toggle is fixable, we will fix it, and with this capital we have the ability to do all these things for our shareholders who have been loyal, and we think that the future is very, very bright, Steve.

Okay. Obviously there's a lot of questions coming in. So I want to address some of them, because I think it's important because they're all legitimate questions and they want -- somebody is actually asking if you're actually AI-generated, but I can tell you he is not, so put that one aside. First off, okay, a couple of questions coming in here. You mentioned Toggle a minute ago and the problems with Toggle, and someone had said, what's going on with Toggle? Can you elaborate a bit more on that?

I'll elaborate. So it's really simple. We launched Toggle, we got over 20,000 downloads, but we did not get the conversion rate, meaning people that wanted to pay for the Toggle platform, that we were anticipating. And so we've decided to throttle back, really retrench and retool and rethink what that product is and how much we could charge for it. I will say that Toggle is making great strides with creating 3D models, putting the texture on 3D models for Nextech and for some of our clients. And so Toggle is actually very valuable, we just haven't figured out exactly how to maximize that value. I'm not sure it's a SaaS platform in its current state, and again, we needed a minute to kind of retool and rethink about how we're going to launch Toggle. It does have the CAD capabilities, which we just got a patent for. So there's a lot of value in the Toggle business and platform. We just need to monetize it.

Okay. All right. Let's go back to the news release that you were talking about earlier, there's a lot of questions here about why go allow them to go 51%. Why not keep 51% for the company itself? And how does moving that business out of Nextech as a company change the company as Nextech?

Yes. So the deal would not have gotten done unless we were willing to give up 51%. Let's just be clear, right? So it was either do the deal and get cashed up or not. I chose to do the deal. I think it's best for our shareholders. I do think that we're going to still play a major role with that business, in that business. We are not out of that business. It is still a big part of our future road map with a 49% stake, and also we have lots of experience and knowledge in that industry. So as we continue to develop more and more technology, who knows? Maybe down the road, we'll have more tech that we can sell. If you think about selling 51% of the 3D modeling business, I want you to think about replacing VCI's name with Microsoft. Microsoft buys 51% of Nextech's 3D modeling business for $12.75 million. Would anybody question that? I don't think so. I think VCI Global, nobody's heard of, and that's why people are questioning it. But at the end of the day, the business was valued at $25 million. We're selling 51%. That gives us 49%. In the future if the business gets valued at $100 million, $200 million, $500 million, whatever that number is, we'll own 49% of that. So the shareholders should feel really good about the fact that we don't need to continue to raise capital. And again, I'm going to reiterate, the reason why our stock is down is because we had to go to market and raise capital in 2023. We owned 100% of our 3D modeling business in 2023. Did that stop the stock from coming down to $0.12? No, it did not. In 2024, we're going to own 49%. But guess what, we're not going to need to go to market and raise capital. Is that going to make our stock go up? Yes, it will, in my opinion, because everything is based on supply and demand. If we're constantly bringing more supply of our stock to the market and there aren't enough buyers, it's going to go down. If you look at 2024, as 3D modeling becomes a bigger deal, we still own, by the way, as much as 90 -- well, if you look at the way that VCI Global is going to buy into our business, it's in tranches. So all the way through the first 9 months of 2024, Nextech will continue to control and own the majority of that business. It's only after we've gotten paid $12.75 million do they get 51%. So we get the lion's share of that business for the first 9 months of 2024. And that's actually not a bad thing. So I think all in all, it's the best case scenario for investors in this climate where -- it was very difficult to raise money. We went to market, if everyone remembers, to try and raise $3.6 million, and we only were able to raise $1.1 million. If you look around at all the companies that have gone bankrupt in 2023, you look around at all the companies that have had to raise capital at extremely discounted prices in 2023, there's a boatload of them. So tough market requires us to look at our business and analyze the best path forward. And for me, the best path forward is to do this deal with VCI. So I feel good about it.

Okay. Just a couple of quick questions on VCI. Did they come to you? Did you come to them? Who are they? What's the connection -- they're based out of Malaysia, I believe. So tell us a bit more about them and who they are and that.

Sure. So it's super simple. When I started -- when I was marketing our private placement at $0.12 a share, just a couple of weeks ago, I was introduced to the CEO of VCI, and he said, "Why are you so cheap? Why is your stock down here?" He couldn't understand it. And he was actually interested in buying the whole company. And I said no. So we negotiated over a period of weeks and landed on this 51%. So you had someone who recognized the value and I looked at his company -- by the way, he is a NASDAQ public company. So in the end, 51% of Nextech is going to sit inside of a NASDAQ public company, VCI Global, which is quite interesting twist of events. But the bottom line is that he's a great partner out of Malaysia, sees the value, and is going to grow the business with us.

Okay. So I'm going to end it there because I know there's a lot of questions that I think are related to certain shareholders or things like that. So people can always reach out to you -- in general, is that right?

Sure. Yes.

Okay. So if you want more questions [ answered ] about that -- because we do have other guests that I want to get through, but I thought it was important just to talk about this and the move that was made. And if there's more questions, then Evan certainly will be available for you to reach out to and ask that. But we do have other things we want to get to, and more importantly, we only have a short amount of time. So I want to bring in Hareesh Achi, who's going to join us now. And as you've talked about in the past, Hareesh obviously is a super important person to the company because he is one that will definitely be leading the charge as far as India is concerned. And just really quickly about India, I remind everyone how important that move the India was for the company in general. And there's a lot of other companies that are there as well, right?

Absolutely. Hyderabad, India is considered the Silicon Valley of India. And actually, all the big tech companies, the Magnificent 7 have offices right near us in Hyderabad. And I think, Hareesh, did you grow up in Hyderabad or do you have relatives there or something?

Yes. I'm originally from Hyderabad, India, so yes. And yes, so I think, Steve, yes, it's definitely, as I think Evan put it well, Magnificent 7 are there in Hyderabad and our neighbors in Hyderabad of our Nextech office over there. So yes, it's talent wise, cost-wise, resources wise and everything, it's the best position to be in.

Yes. How has the office setup been going? Take us through what you've been doing over the last couple of months.

Yes. So office has been -- I think, overall, we have established the operations there. We got everything set up. The office, as I said, it's running now, humming, the Indian operations engine from our India office is running very well. And as Evan has alluded to some of the bullet points there is, obviously, it has enabled us in reducing our operational cost significantly, which we are already seeing in effect these last couple of months since we have been operating over there fully and in office operations there. So that's -- basically, that's to me, when I look at it, I look -- I am assessing and building the business from top line, bottom line perspective, right? When I look at it, these costs that, as Evan touched a little earlier, is obviously helping us in our bottom line, reducing our operating expenses and while also increasing and keeping up the productivity, right? So which is what enables us in our top line growth as well over there.

Yes. And I think, Hareesh, we're going to have as many as 100 head count in the office as we roll into January, right? I mean this is a serious operation.

It is a serious operation, yes. I think we are going to go up to 100 staff by the end of January, and that's our plan right now. We already have about 60 right now in Hyderabad itself, just in Hyderabad. Across India, we have even more remote and other areas outside of Hyderabad, but just within Hyderabad we have 60 [ resources ] already in place.

Yes. Hareesh, you've been working with our AI team, right, on this whole parts-based library, the search engine. Do we have something that we can demo or show?

Yes, definitely. So we will [indiscernible] show, I think, a couple of context setting in terms of like, yes, I think we -- the way we are looking at the business, the way we are trying to manage the business and operate the business is making sure that we are able to operate efficiently, and that's where it's about how do we increase productivity, drive more production out of the teams, and while enabling them with technology. And that is where the AI technology comes in, how we are building our technology. Evan has alluded to the patent that we received on CAD to 3D that we talked about. Again, those are some of those technology investments that we are doing in how we can streamline and make it more efficient for our operations. So with that, let me quickly show one quick demo, which will show how we are planning to think of -- how we are thinking and gives you a view into the way we are operating or where we are investing in technology from our perspective. So what are you seeing here, again, this is a demo screen that I'm showing to you. So -- because I think we have our internally within the portal and what we implement this one, but I'm picking up just to give an insight into how it works kind of thing. So when you think of it, like obviously 3D is creation about taking some pictures and creating a 3D model out of it. What you are seeing here is, on the left-hand side, is a 2D image of any, let's say, TV here that we got on the image. And then what our AI does is it, as Evan alluded, with the vast database of all the 3D meshes, what we call them, 2D or 3D objects are called as meshes we have inside our database, we are able to go and look quickly with this picture and say, what are the top 4 matches for this 3D that we already have in our system. So that's where these 4 options on the right-hand side it shows up, it's like, oh, we have a mesh for these 4 in our system already. So that enables our team to go in quickly, pull them, and quickly turn around this and say, "Okay, maybe the brand is different. Color is different a little bit, size is a little bit different, so resizing it," makes it very faster for us to get the model out. What, why faster or time to make what we call as time to make internally in our metric is makes it faster is how is it productive for us is because it helps us to churn out and make more models from a resource or in a given week or a given month. More models means more revenue, so that's where I think these technologies help us. So I'll show another image. Since this is a 2D image on the left side, and it gives us -- these are the meshes that we already have in our database. So it tells like, okay, it's a similar structure, though the legs are different. The artist can pick up and say, "Okay, I'll pick this one. I got the top piece is done, sides are done, legs we have to tweak a little bit." Now instead of doing it everything from scratch, you got to do it just the 4 legs and done with it, right? Or I can pick the legs in the second image, top from the first image, you can mix and match as well, and make it quickly and still while meeting the quality, because these are already approved -- quality-approved meshes that we already have in our system. So it already meets the quality criteria. So there is less time spending in quality review, less time making the model. So that's our time to make reduces and we are able to move faster in our production of the 3D. So seeing even complex images, I have multiple examples here that shows more than -- not just one single piece of simple things, but this is -- this table is cluttered with a lot of information but we are able to pull out, is it the monitor? Is it the iPad there? Or is it the table itself? We can even do all that kind of breakdown of the image and able to get the 3Ds out of them. So that's our overall AI technology. And there are more, right? Not just this one. So a couple of other things that I'll touch base quickly as well. Complexity, right? Like you saw the image which has multiple cluster images that we get, then we try to assess is it complex, is it simple, is it medium complex? Because we have different skill sets of team members in our organization. So if it is a complex, we give it to quickly to a senior team member and say, "Hey, let's get it done," versus a simple one, we can give it to a junior team member. So that also is done automatically, allocation in our system happens automatic. So it's not that someone is looking at it and figuring out who to do it and all those things, the allocation happens automatically as well. And categorization is another one that probably do it as well.

I would also add that with this technology, we're estimating as much as a 50% increase in productivity. So if you think about that, if a person could typically do, let's say, 2 models per day, now they could do 3 models per day if they're able to use the AI. So that's really what it means when you're talking about AI, increasing productivity.

Exactly. Yes. That's where -- it's increasing productivity, and it's applying those kind of design principles, which as famously Elon Musk calls out about first design principles. Breaking down the problem. That's where, right? It's not -- it's about using our technology to say, how can I do quick mesh search, because we have built so many meshes now -- so the products repeat or some of the parts, so we can do that quickly. How we even are going into parts as well, right? So like I was showing you, legs may be different, but hand, armrest of the chair would be different but we store them in our database, such as its parts-based so we can even pull just quick parts into it. So it's all about -- our investments in technology is all about how can we fast-track it, make it fast, improve productivity, increase more than 50% that Evan is talking about earlier.

All right. Makes a lot of sense. Someone has got a question on here talking about can they subscribe to the company for a year and use the technology and sell it through you? Or do you just use -- you sell it through a third party, like how does that work?

When I say kind of subscribe to a company's technologies, yes, there are, obviously, like Evan was talking earlier, Toggle is one of our tools that we -- even in our production, we use Toggle as well to a certain degree. Subscribing is basically that's where I think it's that's where the asked question is going for is all of this technology AI that we've built in will be eventually available through the platform. That's what we are assessing, which platform, how we want to implement it. We are obviously using it internally right now. So eventually, yes, that could be a possibility.

Yes. But basically, Steve, we don't sell the tech individually right now, we sell 3D models. So we use the tech to make the 3D models. Nobody can just say, "Hey, we'll give you $10,000, can we just use all your tech?" No.

Got it. Okay. I got it. Hareesh, anything else or so -- we're going to move along here. Is that good?

That's good. If any questions...

Well, good to see you again and continued success in India, in your hometown, you're a hometown hero, and there you go.

Thank you, Steve.

Thanks Hareesh, we'll see you soon. That's Hareesh Achi, Head of Product Operations, obviously, for Nextech, and we thank him very much for his contribution. All right, let's move on and bring in our next guest as we move along in sort of this year of 2023 review and bring in Shadnam Khan, who joins us. So of course, he's the Head of Product ARway, and Shadnam, great to see you as well. How are you?

I'm doing great. Thanks for having me again, Steve.

Yes. I know it's been a pretty busy time for you over the last little while. Do you want to just give us a quick thoughts on 2023? A lot of fun stuff that you've been able to do with the team?

For sure, Steve. I'll share more on a presentation with some of the more details, but it's been a hectic end to the year with a few more pilots going live and 2 more new versions of ARway being released with direct feedback from those pilots. Overall, this year has been that foundational year for ARway where we set ourselves up for scale. We built world-class technology, and we acquired some of the largest customers in the world in the markets that we're in. And we're really well positioned to scale the deployment as well as build new use cases hand-in-hand with our customers.

Okay. Yes, you were going to say you had something to show us?

Yes. Steve, I'm trying to share my -- I think I'm sharing my screen here. Okay. There we go. I'll jump straight into it, folks. It's not going to be a long presentation, but I want to highlight some of the key accomplishments we have had this year. This year, we have achieved product/market fit. As we launched end of 2022, 2023 has been that breakthrough year where we have done tons of deployments, we've got really good feedback from the market on what the most important features are for their use cases as well as for ours, and we have scaled the deployment of those features. You're seeing 3 specific successful use cases out there, but the early product/market fit has been achieved with large multipurpose venues where indoor navigation is a problem, where place -- in places where GPS signals don't work or you need to retrofit expensive hardware like beacons and RFID and ultra-wideband Wi-Fi technologies to do navigation. So these are in shopping malls, events, trade shows, airports, hospitals, museums, stadiums and more. If you can see some of the use cases below here, these are pure navigation use cases sprinkled with immersive experiences for advertisement, visitor engagement, attendee engagement, as well as monetization through offers and advertisements. So these are all live. These deployments are live. These are things that our customers are constantly gathering more data around to monetize on their additional customer data set. A little bit more into the growth in terms of numbers, laying strong foundations for scale in 2023. We have 3,740 active users with more than 4,000 maps created. Our go-to-market motions for our SaaS program with developer subscriptions is up and running. We have 41 developers actively building on top of the ARway SDK for their specific use cases. We have 7 paid partners that is bringing ARway into their specific markets, again, with their own use cases and localization features. There is about 43 pilots that we ran in 2023. That's a massive growth since we started the year. And that's just -- if you look below, it's the who's who of brand names, and there's a lot more that I cannot fit into a slide that we're running early trials and pilots with. But the key to this is our productivity and the advancements in artificial intelligence required to run ARway. We have achieved large-scale floor plan alignment. We can create 3D scenes at a scale that you'll need satellites of Google to do, and we do that just with floor plans. We use generative AI to do our image search mechanisms, the key QR code technology we use AI on. We have filed 2 non-provisional patents and are making strides into making them provisional patents moving forward so that they're permanent for the next 20 years, because this technology is rock solid, and we have achieved that product/market fit. If I look at the global installed base -- this is something I'm sharing for the first time publicly -- we have almost -- we're present in almost all across the world with the deployments and the user bases as we have. Like the lighter areas on the left side of the graph, you can see, we have really big presence in North America, South America, Russia is dominating the map. We're in some parts of Africa, there is a huge and growing user base and deployments in South Africa as well as Australia. We're in all parts of Europe. And one of the key statistics I do want to share with folks over here is that the average engagement time on an ARway experience is gradually increasing. And this is the reason we keep on doing more releases, we keep on building more new features. We keep asking our developers and partners to localize the technology so that they get more engagement. 7 minutes is the average time of a session when someone is navigating or playing a game or purely just checking out the vicinity of their property in augmented reality. Over time, like as I mentioned, 3,700 active users, cumulatively on average, have spent almost 40 minutes on ARway [indiscernible]. I'm going to go through a few more use cases because it's important. Where is -- what are we trying to do with ARway over with 2023 and looking forward? The reason we do these releases, and I'm showing you version 2.5 in June, I'm showing you our September release, 2.6, our most recent release, along with the Map D App integration with augmented reality games and sponsorship along with the pilot deployment. As a product leader and as a business, we want the next customer to look as similar as the previous one, and we keep on stacking it, and that gives us room for growth and scale. Every time we're doing a release, we're essentially diving deep down into that ideal customer persona. We're really answering the questions that they probably had from their first deployment, doing a second deployment and giving a solid base and derisking the technology and the [ platform ]. We're diving deep into their pain points. We're showing key metrics where this technology benefits them in their operations and their user experience and their customer experience. And we're giving them monetary value [ of ] these deployments. Some of our partners have essentially started businesses by selling ad space, by selling navigation, using the platform. It's a profit-generating tool for them. So we're going to continue in that same vein and derisk the platform, derisk the investments and make sure it's rock solid so that we can scale appropriately. In 2024, it is going to be a breakout year where you're going to be starting to see AR navigation and immersive experiences in more and more properties and experiences in and around you. One of the key releases we've made is the ARway kit software development kit, and it has huge advantages to developers and our partners. Time to market; the device agnosticity we've added with the Apple Vision Pro, which is going to get launched in 2024; we're compatible with Microsoft HoloLens and the APIs on Magic Leap. So getting the SDK out into the market and having partners and developers create experiences that are congruent and compatible with the devices of tomorrow has been a key focus for us. We have achieved cross-platform stability on the mobile apps across the world in Android, Kotlin, Java, Unity, React Native, and we're continuing to scale and fast track the deployment of ARway kit SDK on as many app frameworks as possible. One of the core reasons why developers choose ARway is for the no-code templates that come out of the box with the SDK. If you're choosing another AR SDK, you have to build these features from the ground up, which means you need to design it, you need to get customer validation, you need to develop it, you need to test it and you need to deploy it. We have done this over the last 2.5 years at ARway, since we acquired ARway, and we've made them into code-free, no-code templates that anyone can deploy. And this is a true testament to the strength of our engineering capabilities as well as the talent we have on stack. So any developer, any property can pick up the SDK and deploy ARway and have these amazing experiences right at their doorstep. We started 2022 with a clear focus on the global indoor positioning and navigation market. And that's where we have planted a flagpole. With the SDK, we have essentially increased our market reach. We're stealing market share from incumbents, incumbent AR platform players, which were more like one-to-one AR experiences. For example, you scan one QR code and you see an AR experience in front of you. And it's really good for certain use cases like e-commerce. A lot of these customers are coming to ARway now because of the scale of the AR experience that ARway provides. With one QR code, the entire world becomes an oyster for AR experiences, it provides a canvas. And that market is massive. $44 billion global indoor positioning market, and we have the key features to compete and we're winning share -- market share there. We're also entering this $137 billion global augmented reality software market, which includes SDKs, content management systems, 3D engines and a lot more. And we do this in an end-to-end platform. So clearly, what -- like what the validation I'm getting from customers as well as the overall market is we're creating this new category in and of itself, where AR software is being deployed as indoor positioning solutions. That's a very defensible technical mode that we have developed, and we strive to continue to do that. And overall, in 2024, we'll [indiscernible] deployments with the more customers we start acquiring -- the more developers we start acquiring, and the more deployments and releases we make, we're furthering our position over and above the competition. We've figured out the secret sauce in winning through fast deployments through the requirement of no hardware and also giving users the ability to monetize the AR space around this. A lot of our investors might have seen, Google AR/VR have entered the market with GPS-based locations. But a lot of our customers are blatantly telling us, hey, we don't want Google to get into our AR space. This is why they choose ARway. They can build their private systems and they can control the user experience in their properties that they have invested so much on, right? So we're moving farther and farther away from the pack with every release but we're also seeing a lot of competitors enter the market. And 2024 is when we essentially start owning it. We already have an advantage, and the goal is to build on that and keep on making these deployments as we have been doing. Steve, that's as far as I had for my presentation. Evan, any questions or I'll take any questions right now.

I was just going to say, no, that was a good summary of what we've done. I think when you look at 2024, you're thinking -- everyone needs to start thinking about scale, that 2023 was the year of proving the product market/fit, demoing, alliances, et cetera. And so now we're in a position to really scale this platform, which is exciting for our shareholders.

Okay. Shadnam, thank you so much. Good to see you again, and we will talk in the future, okay?

Thank you for having me again, Steve.

All right. There is Shadnam Khan. He, of course, is the Vice President of Product for ARway. We appreciate him from helping us out. And let's bring in our final guest today, and that's Rob Christie, who's been waiting patiently, enjoying the conversation from everyone, and good to see you again, Rob, how are you?

Good to see you again, Steve. I'm well, thank you.

He's the Senior Vice President of Innovation at Map D, which is one that's really seen some success in 2023, Rob. So I'll let you take it from there. I know you've got a bit of a presentation as well, so we'll get to that right away, okay?

Sure thing. Yes, probably going to be doing mostly demos, but just as a year-end review, like this year has been focused on providing our personalized customer service as we've always done and keep our churn rates low, so retaining the customers that we presently have. And in part, it's been a strategic pivot, putting more and more focus on our mobile app product. So just to give you a demonstration of that, this is kind of as the year began what our mobile app looked like. It's very simple, very kind of basic, and through the year, we've kind of enhanced it with additional customizations and the ability to brand this more closely to the show and fit the theme, as well as added a number of different functional upgrades that make it more desirable for both attendees and our client, the trade show organizers. So just to go through those somewhat quickly, we've added gamification. So as attendees use the app at the show, various different things that they do will award them points. And these point systems will give them a fun little kind of leaderboard that they can look through, they can place on and be competitive with. There are a number of challenges. These are kind of the out-of-the-box challenges that come with the app. Basically, anything you do, you can get points for. These are all negotiable, so a particular show might have an interest in focusing people toward the floor plan or focusing people toward the exhibitors or toward the sponsors, and those things are all possible based on adjusting the number of points that are awarded for those types of activities. And then, of course, with a game, you need prizes. So we've got a little section here where in any particular show, there can be a set of prizes based on the place -- the rank of the various different attendees. However, it can also be based on a total number of points or however the show manager decides to go about awarding that. So that's kind of feature #1 that was added. It's a really exciting and long-awaited feature, and it's been well received by our customer base. As well, we have now the ability to apply to attendees connections. So you can build sort of a little LinkedIn network of people at the show, add them to your network. Once they're in your network and you approve that kind of connection, you can start sort of conversing with these individuals within the app. This is kind of a slightly newer kind of way to do things. It prevents any kind of abuse of the platform, but it's also being sort of well received from the user base and more so keeps people in the app, and that has been somewhat of our focus for the year. As well, we've -- as Shadnam mentioned, there is an integration within our mobile app with ARway. So now we can provide exhibitors and shows with the ability to navigate directly using that AR wayfinding tool set directly to a booth from anywhere within an expo and navigate to various different places within the show. This has been a long-awaited piece, and it's a really exciting addition to the total app mix feature set as well. All of these features are really designed to position us, as part of this strategic pivot, to be a best-in-class top-of-market app so that we can run our Boost program, which is these kind of placements, these ad placements that you see around our app. These ad placements are something that we are promoting. So we've kind of changed our business model ever so slightly to provide the app at no cost to our show managers of many, many shows, and it gives us the opportunity to collect revenue based on positioning these ad placements. Now these placements generally just they're the exhibitors of the show. So it's a very contained audience. It's a very high-value promotion, and these ads will drive traffic within the app to the specific exhibitors' just -- description panel. So that's kind of -- that's been our focus, and it's going really well. Early results are that there's a potentially very high revenue opportunity here that we also share back to our show managers to entice them to promote this as well. Along with these upgrades to the app, we also have been doing some upgrades to our event manager, which is our back-end platform, not as fun to look at as the app, but we have not ignored this very important part. It's feature-packed, each one of these panels kind of leads to a new section of features. We have management controls for everything to do with trade shows, so exhibitors, sponsors, speakers, attendees and of course our kind of bread and butter, which is our registration and ordering system. This system allows the show manager to set up their map using our easy-to-use map editing software. Basically, they can draw booths, they can set up their trade show expo floor space. And then once they're done with that, they can create an automated dynamic e-com solution to sell that space to their exhibitors. We've got visitor tracking statistics and things like that. And some of the upgrades that have gone through here have been based on a lot of customer feedback. A lot of things that we kind of know about the industry and changes the expectations of a platform. And we're basically positioning and targeting to dominate in having a great feature set that attracts a lot of customers and then pushing our kind of class-dominating mobile app so that we can capture that Boost sales program revenue. And that, my dears, is all we got.

Yes. Thanks, Rob. I just want to underline that -- to our investors, because I think they're missing a huge part of what Rob just presented, which is a highly scalable software platform that allows us to generate significant revenue with very high margins, unlike our 3D modeling business, which is a very complex beast of a business, which requires a massive amount of human power as well as technological power. If you think about the 3D modeling business, all the big tech companies have tried and been unable to scale the production of 3D models, which is why we're trying to do it. As a small startup, it does require a lot of money and a lot of time, energy and effort to do that. And we're still not there yet. We're on the path, but we're still not there. Now if you look at other platforms like Meta's Facebook or LinkedIn or even Instagram, those are businesses that have scaled massively based off of an ad network and software, just like the Map D platform that everybody is missing. Everybody is extremely focused on the 3D modeling business, which I totally get because that's been the primary business going back to 2018. But today, when we look at our 3D modeling business, we've done a little under $3 million in revenue in 2023, and we expect to do more in 2024. But I want to just frame this for our investors. For us to generate in profits -- let's use the $12 million that we're getting from VCI Global -- we would have to produce 500,000 3D models. I'm not saying that's not possible, but what I'm saying is that's 10x what we did in 2023. So from my standpoint, we're in a fabulous position where we get to scale our Map D event business, which is a platform that's got high margin, high scalability, very low friction. We are building a self-serve component to it, as Rob was demoing. A lot of the stuff that we do on that platform is self-serve, but a lot of it isn't. In Q1 2024 we're going to be launching a fully automated self-serve ad network so that the event exhibitors can go in, just like they go -- just like you would go into a Facebook account or LinkedIn account, and run ads at their event. And on that business, our profit margins are 80-plus percent, which is quite significant. It's highly scalable, and it's a low friction business. So that is a big part of our growth strategy for 2024. And I don't want our investors to miss that boat, because that is a business that, again, highly scalable, high margin. And if you look around at the businesses that have been quite successful in technology, a lot of them are built on an ad network. Google, Microsoft, if you look at Facebook, now Meta, these companies have become juggernauts, again, because of advertising. And if you look at what Nextech's building, we're not just building a 3D -- an ad network, rather -- we're also building a 3D augmented reality ad network on top of the regular ad network with our ARway platform. So lots of upside, lots of profits to be had within that Map D platform. And within that is the ARway SDK and integration. So I just want to make sure that our investors understand that they're keeping their eye on the ball. We haven't spent a lot of time talking about it, but that is, in my view, the biggest growth opportunity for our revenue and our profitability in 2024 for sure.

Yes. makes a lot of sense. And Rob, I know that there's just the amount of trade shows that are going around the world and as the years go on, they increase, increase, increase, increase. So as you mentioned in the presentation, the opportunity is quite massive.

It is. The addressable market is huge. And the -- us being able to position ourselves with this app as a leader, as a zero cost option in order to capture that, as Evan was pointing out, that high-margin revenue on the other side is just going to put us in a great position as we move into 2024 and into the future. And then, of course, automating everything so that the experience is quite the same as using a Facebook ad marketplace or a Google ad marketplace. It's drag and drop, it's click, select what you want, pay here and off it goes. I think that's going to add another layer to just increase the scale. Just remember, each one of these shows is between 50 and 500 exhibitors. That's each one of those exhibitors is our customer now in this world. So this world gives us a significant amount of opportunity to move a great scale of product.

Absolutely. Ease of use is always important, as they say. Rob, good to see you again. Thanks very much, friend, and we'll talk soon, okay?

Absolutely. Thank you.

All right, the Senior Vice President of innovation, there's Rob Christie from Map D and we sure appreciate his time as well. And Evan, as always, our time has been used up, and we're coming to an end now. I just thought I'd give you an opportunity to get some final thoughts about 2023 and heading into 2024.

Sure. So I just want to speak to our shareholders really quickly. In general, we're going to follow this up with a separate live stream. I have to talk with Steve about scheduling, but I'm going to try and do this as soon as he's available so that we can answer all your questions about VCI Global. But the bottom line is this -- I'm going to summarize this for our investors: we are a diversified technology company. We are sitting here today owning 100% of our 3D modeling business, 100% of our Map D Events business, 49% of ARway, which you just saw, and 45% of Toggle. If we get $12.75 million over the next 9 months from VCI Global, we will then own 100% of the Map D event business, which I see nothing but massive growth opportunities. And we have already signed up multiple shows for the ad network. So it is already in flight, in motion. We're already generating lots and lots of interest, and it's the holiday season, so a lot of people out of office. But we think we're going to have a big 2024 breakout year on the back of that business, nothing to do with the 3D modeling business. Although for the first 9 months of 2024, the 3D modeling business is going to be mostly owned and operated by Nextech. If we get $12.75 million from VCI Global, then they will own 51%. We will still own 49% and operate the business. And the revenue, the profit all gets split based on ownership, 49% after we get $12.75 million will go to Nextech. And we'll still own 49% of ARway and 45% of Toggle. So if you think about it, we've invested over the past number of years into multiple technologies, AI technology, spatial computing technology, events platforms, 3D modeling business. And out of all of that, we end up with a diversified technology company that has lots of revenue potential, lots of earnings potential, but we will never achieve any of that without capital. We need capital. I don't know if our investors understand this, because they're not sitting in my seat, but without capital the whole train stops. All of our portfolio of investments become high risk in terms of being able to deliver if we don't have capital. So as I mentioned earlier, capital is the driver. It's the growth driver for all of these businesses because they're all start-ups. And at the end of the day, they all need capital to get over the hump where they become cash flow positive and successful long-term businesses. And in my 5 years of running Nextech, it's taken a lot of capital to build any of our businesses. We did have one moment in time when the world got sick with the virus, the COVID, and all of our businesses exploded simultaneously because we happened to be in the right businesses at the right time. But that's not normal, that is an anomaly, that is not the norm. And what we've seen in 2022 and 2023 was a massive correction and shake out and the weak companies have gone away. They've gone the way of the dodo bird. And there's been a lot of them. I mean you could see -- WeWork is kind of the poster child for that, but there's a whole bunch of companies that have gone under over the last few years because interest rates have gone up, the market has corrected, risk capital has completely left the building and disappeared. And so I've been left to fend for us as the CEO. That's my job to go out and raise capital and make sure that we have enough to keep going. I've done that, this last capital raise, we were only able to bring in $1 million instead of $3.6 million, do the math, not enough capital. We're doing this deal with VCI Global to alleviate this ongoing capital need. It's really the solution, the cure to having to go back to market and sell shares to continue to feed these growth businesses that we're in. With this capital, with this $12.75 million, we will not need to go to market and raise -- sell shares in Nextech to raise capital. That's the story here, ladies and gentlemen. At the end of it all, you will own a portfolio of high-growth businesses, including ARway, including Map D, which we'll own 100% of, including 49% of the 3D modeling business and Toggle. So that's what you own. And my job is to increase shareholder value by maximizing the growth and profitability of those businesses, which is what this $12.75 million is going to allow me to do. And I'm going to end it there, Steve.

All right. We'll leave it there. Evan, thank you so much. I appreciate your time, and we'll talk soon, Okay?

Thank you.

All right. There's Evan Gappelberg, the CEO of Nextech3D.ai. I'm sure lots more questions for Evan, and he'll find a platform in the near future where you can ask those questions to him directly as well. As for my part, I'm Steve Darling here at Proactive, at the worldwide broadcast center in Vancouver, BC, Canada. Thanks very much for everything. Good to see you, and we'll talk again down the road.