NCPL Netcapital Inc

Investor conference call to be held tomorrow, July 27, 2023, at 10:00 a.m. ET

Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for its fourth quarter and fiscal year 2023 ended April 30, 2023.

“Fiscal 2023 marked a year of strong performance, highlighted by revenue growth of 55% and operating income of more than $2 million,” said Martin Kay, CEO of Netcapital Inc. “The value proposition of our business is becoming more evident as we continue to build scale and deliver a superior experience at a lower cost for issuers. We expect to offer secondary trading in private equities later in this year, a liquidity model that we believe will support expansion of both our investor and issuer communities, and generate a potential new revenue stream for Netcapital. As a back-to-back winner of the Fintech Breakthrough Award in 2022 and 2023, our brand is well-recognized for innovation and excellence, and well-positioned for value creation.”

Fiscal Year 2023 Highlights

• Revenue growth of 55% year-over-year to $8.5 million as compared to $5.5 million in fiscal 2022
• Operating income of $2.3 million compared to an operating loss of $1.0 million in fiscal year 2022
• Paid down $1 million in debt, closed two underwritten public offering for aggregate gross proceeds of $6.7 million, and uplisted to Nasdaq in July 2022

For additional disclosure regarding operating results, please refer to the Annual Report on Form 10-K for the period ended April 30, 2023, which has been filed with the U.S. Securities and Exchange Commission.

Conference Call Information

The Company will host an investor conference call at 10:00 a.m. ET tomorrow, July 27, 2023.

Participant access: 844-985-2012 or 973-528-0138 Conference entry code: 398497

For those unable to participate in the live call, a replay will be made available in the Investors section of the Company’s website.

About Netcapital Inc.

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors. The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies with disruptive technologies. The Netcapital funding portal is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

 

NETCAPITAL INC.

CONSOLIDATED BALANCE SHEETS

  Assets:

April 30, 2023

April 30, 2022

Cash and cash equivalents

$

569,441

$

473,925

Accounts receivable net

 

1,388,500

 

2,433,900

Related party receivable

 

-

 

668

Prepaid expenses

 

583,030

 

5,694

Total current assets

 

2,540,971

 

2,914,187

  Deposits

 

6,300

 

6,300

Notes receivable - related parties

 

202,000

 

202,000

Purchased technology, net

 

15,875,297

 

15,536,704

Investment in affiliate

 

240,080

 

240,080

Equity securities at fair value

 

22,955,445

 

12,861,253

Total assets

$

41,820,093

$

31,760,524

  Liabilities and Stockholders' Equity Current liabilities: Accounts payable Trade

$

578,331

$

536,508

Related party

 

75,204

 

378,077

Accrued expenses

 

285,065

 

229,867

Stock subscription payable

 

10,000

 

33,400

Deferred revenue

 

661

 

2,532

Interest payable

 

98,256

 

222,295

Current taxes payable

 

174,000

 

-

Deferred tax liability, net

 

1,657,000

 

977,000

Related party debt

 

15,000

 

22,860

Convertible notes payable

 

-

 

300,000

Secured note payable

 

350,000

 

1,400,000

Current portion of SBA loans

 

1,885,800

 

1,890,727

Loan payable - bank

 

34,324

 

34,324

Total current liabilities

 

5,163,641

 

6,027,590

  Long-term liabilities: Long-term SBA loans, less current portion

 

500,000

 

495,073

Total Liabilities

 

5,663,641

 

6,522,663

  Commitments and contingencies

 

-

 

-

  Stockholders' equity: Common stock, $.001 par value; 900,000,000 shares authorized, 6,440,777 and 2,934,344 shares issued and outstanding

 

6,441

 

2,934

Shares to be issued

 

183,187

 

244,250

Capital in excess of par value

 

30,500,944

 

22,479,769

Retained earnings

 

5,465,880

 

2,510,908

Total stockholders' equity

 

36,156,452

 

25,237,861

Total liabilities and stockholders' equity

$

41,820,093

$

31,760,524

NETCAPITAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Year Ended

Year Ended

April 30, 2023

April 30, 2022

  Revenues

$

8,493,985

 

$

5,480,835

 

Costs of services

 

85,038

 

 

110,115

 

Gross profit

 

8,408,947

 

 

5,370,720

 

  Costs and expenses: Consulting expense

 

589,349

 

 

892,567

 

Marketing

 

85,482

 

 

95,753

 

Rent

 

75,052

 

 

47,670

 

Payroll and payroll related expenses

 

3,646,490

 

 

3,763,845

 

General and administrative costs

 

1,740,698

 

 

1,602,031

 

Total costs and expenses

 

6,137,071

 

 

6,401,866

 

Operating income (loss)

 

2,271,876

 

 

(1,031,146

)

  Other income (expense): Interest expense

 

(93,842

)

 

(126,372

)

Gain on debt conversion

 

224,260

 

 

-

 

Debt forgiveness

 

-

 

 

1,904,296

 

Amortization of intangible assets

 

(96,407

)

 

-

 

Other income

 

51,645

 

 

25,007

 

Realized loss on sale of investment

 

(406,060

)

 

-

 

Unrealized gain on equity securities

 

1,857,500

 

 

3,275,745

 

Total other income (expense)

 

1,537,096

 

 

5,078,676

 

Net income before taxes

 

3,808,972

 

 

4,047,530

 

Income tax expense

 

854,000

 

 

544,000

 

Net income

$

2,954,972

 

$

3,503,530

 

  Basic earnings per share

$

0.63

 

$

1.31

 

Diluted earnings per share

$

0.63

 

$

1.27

 

  Weighted average number of common shares outstanding: Basic

 

4,677,214

 

 

2,666,173

 

Diluted

 

4,677,464

 

 

2,748,480

 

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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Investor 800-460-0815 ir@netcapital.com