Nextech AR Announces Details of Generative AI IPO Spin-out Toggle3D

Toggle3D is a SaaS Web based Studio Uses AI to Turn CAD files into Web3D Models at Scale, Disrupting the $11 Billion CAD Market

TORONTO, ON, Canada  - Nextech AR Solutions Corp. (“Nextech” or the “Company”) (OTCQB: NEXCF) (CSE: NTAR) (FSE: EP2) is pleased to announce today that after further consideration, it has determined to pursue a direct spinout of its generative AI powered Toggle3D platform through a wholly-owned subsidiary of the Company (“Subco”). The transaction is currently anticipated to proceed by way of plan of arrangement (the “Arrangement”) pursuant to which the Toggle3D platform and associated assets will be spun out into a new Subco, but will be subject to final tax and legal structuring considerations.

Evan Gappelberg, CEO of Nextech AR commented, “The spin-out of  ARway Corporation (CSE: ARWY), (OTC: ARWYF) (FSE: E65)  on October 26th, 2022 has proven to be a tremendously successful method to unlock value for Nextech shareholders. As of February 1, 2023, ARway is trading at $1.25 with 26.5 million shares issued, which is worth $33.1 million. Nextech still retains ownership of 13 million shares which are worth $16 million dollars from essentially zero prior to the spin out. Now we are announcing that we are going to do the same thing with Toggle3D. We believe there is a tremendous amount of shareholder value currently trapped inside Nextech and these spin-outs are aimed at unlocking that value by listing pure-play technology companies. We believe that Toggle3D is now commercially ready to disrupt the $11billion CAD market and once it's spun out, we believe that just like ARway, it will create value for Nextech shareholders. This Toggle3D spin-out and the possibility of additional future spin-outs are intended to unlock the value of the technology that we have been heavily investing in, incubating and building inside Nextech for the last 4 years.” He continued, “Times are changing… for 16 years we all have been walking around with a smartphone in our pockets. The next generation of devices is about to emerge in the form of computer glasses. Once launched, computer glasses will become the device of choice in 2023 and beyond, causing everything AR/3D to go up in value seemingly overnight. We believe that an AR/3D spatially aware world is the next evolution of our computer driven world. We expect a major shift in the focus of investors in 2023 when Apple Computer releases a pair of computer glasses which perfectly positions Nextech, ARway, and now Toggle3D for significant valuation adjustments to the upside.”

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The Arrangement, if completed, is anticipated to result in, among other things, (i) Nextech retaining approximately 65% of the issued and outstanding shares of Subco (“Subco Shares”) upon completion of the transaction, (ii) approximately 20% of the Subco Shares being distributed directly to Nextech shareholders on a pro rata basis; and (iii) approximately 15% of the Subco Shares being distributed to certain service providers of Nextech in consideration of past services, as calculated prior to completion of the Private Placement (as further detailed below) following which the above percentages will be adjusted on a pro rata basis. In connection with the Arrangement, Nextech intends to seek a direct listing of the Subco Shares on the Canadian Securities Exchange ("CSE").

Private Placement

In connection with the Arrangement, Subco or a special purpose financing vehicle shall complete a private placement of a minimum of u subscription receipts (“Subscription Receipts”) at a price of C$0.25 per Subscription Receipt to raise aggregate gross proceeds of a minimum of C$1.5mill (the “Private Placement”). Each Subscription Receipt will automatically convert upon the satisfaction or waiver of all conditions precedent to the Arrangement and certain other ancillary conditions (the “Release Conditions”) into units (“Units”) at no additional cost to, and without further action by, the holder of such Subscription Receipt, with each Unit ultimately being comprised of one (1) Subco Share and one share purchase warrant (each such share purchase warrant, a “Warrant”), with each Warrant being exercisable to acquire one (1) additional Subco Share at an exercise price of C$1.0 for a period of [three] years from the date of issuance, provided that in the event that the closing price of the Subco Shares is equal to or exceeds $1.00 for a period of at least 10 trading days on the principal stock exchange on which such shares trade, Subco may disseminate a press release announcing the acceleration of such expiry date to a date that is 30 days following the date of such press release. The gross proceeds from the Private Placement will be held in escrow pending the satisfaction of the Release Conditions, whereupon the Units underlying the Subscription Receipts will be issued to the purchasers and the gross proceeds of the Private Placement will be released to the issuer. Alternatively, each Subscription Receipt will terminate on the earlier of: (i) the failure to satisfy the Release Conditions prior to 5:00 p.m. (Toronto time) on a scheduled date to be determined (the “Release Deadline”); or (ii) public announcement by Nextech prior to the Release Deadline, that (A) it does not intend to satisfy any of the Release Conditions or (B) the Release Conditions are incapable of being satisfied by the Release Deadline. On termination of the Subscription Receipts in any of these circumstances, the gross proceeds of the Private Placement shall be returned to the purchasers pro rata without any deduction or interest and the Subscription Receipts shall be automatically cancelled. It is intended that the proceeds raised pursuant to the Private Placement will be used for further development and promotion of Toggle3D and for general corporate purposes. The Private Placement is anticipated to close prior to [date], 2023.

Further Details of the Arrangement

The directors and officers of Subco on closing of the Arrangement are anticipated to be as follows:

Evan Gappelberg – Director and Chief Executive Officer.
Mr. Gappelberg is an accomplished entrepreneur with an expertise in creating, funding and running start-ups, and he has extensive experience both as a hands-on operating executive and well as a public markets professional. He is founder and currently serves as the Chief Executive Officer and a director of Nextech, and as Chief Executive Officer of Arway Corporation ("Arway"). He was also co-founder and CEO of an app development company which created, published and owns over 500 successful apps for both Apple's iTunes store and the Google Play store. Prior to being a successful entrepreneur, Mr. Gappelberg worked on Wall Street and has more than 25 years of extensive experience as both a hedge fund manager and Senior Vice President of Finance. He has extensive capital markets relationships, know-how and experience in all operational facets of managing a public company.

Belinda Tyldesley – Director and Corporate Secretary.
Mrs. Tyldesley is the President of Closing Bell Services, a consulting company that provides corporate secretarial services. Mrs. Tyldesley has extensive experience across all sectors of the economy with regulatory compliance in all Canadian jurisdictions and reporting issuers listed on the Toronto Stock Exchange (TSX), the TSX Venture Exchange (TSX-V), Canadian Securities Exchange (CSE) and the NEO Exchange (NEO), as well as providing legal assistance and secretarial services. Mrs. Tyldesley holds an Associate Diploma in Business Legal Practice from Holmesglen College in Melbourne, Australia. She currently serves as the Corporate Secretary and a director of Nextech and Arway.

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Andrew Chan – Chief Financial Officer.
Mr. Chan has over 20 years of experience across finance, accounting, business analytics, and strategy, focusing on the technology and financial services sectors with half of his career serving high-growth, public technology companies. After over a decade in public accounting (including 9 years at Ernst & Young), Andrew moved into senior finance positions with Real Matters Inc. (TSX: REAL) and goeasy ltd. (TSX: GSY) – both offering technology solutions for the financial services industry – where he was involved in several financings, transactions and acquisitions with an aggregate value of well over a billion dollars. Mr. Chan has successfully integrated and led finance-related functional groups including treasury and banking, corporate reporting and budgeting and was instrumental in forging strong relationships with business unit leaders to enable successful revenue forecasting and delivery. He currently serves as the Chief Financial Officer of Nextech and Arway. Mr.

Chan is a Chartered Public Accountant (CPA,CA) and also holds a Bachelor of Commerce degree specializing in accounting and finance from the University of Toronto.

Jeff Dawley – Director.
Mr. Dawley is President and Co-Founder of Cybersecurity Compliance Corp., a cybersecurity company, and previously served as the Principal and Chief Financial Officer of BridgePoint Financial Group, a litigation finance group of companies. Mr. Dawley currently serves as a director of each of Nextech and Arway.

The Arrangement is subject to court and shareholder approval of the Arrangement, and standard closing conditions. The Arrangement cannot close until the required shareholder and court approval is obtained. There can be no assurance that the Arrangement will be completed as proposed, or at all. Further details about the proposed Arrangement will be provided in a disclosure document to be prepared and filed in connection therewith. Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Arrangement, any information released or received with respect to the foregoing matters may not be accurate or complete and should not be relied upon.

Nextech issued an aggregate of 575,000 common shares to SRAX, Inc. in settlement of indebtedness at a deemed price of Cdn $0.79 per share.