NCPL Netcapital Inc

Total Revenues Increase by 13%

Internal Testing of Secondary Transfer Feature Begins

Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the first quarter of fiscal year 2024 ended July 31, 2023.

“We are delighted to announce a very strong quarter for our funding portal, delivering a more than doubling of revenue,” said Martin Kay, CEO of Netcapital Inc. “In addition, we maintained our strategic focus on the build-out of the software required to enable issuers and investors on the Netcapital platform the ability to access a registered alternative trading system (ATS) in order to engage in secondary trading of securities. We commenced internal testing of the secondary trading platform features this week, and we are excited about the potential for this liquidity model to support the continued growth of both our investor and issuer communities.”

First Quarter Fiscal 2024 Financial Highlights

• Revenue growth of 13% year-over-year to $1.5 million, compared to revenue of $1.3 million in the first quarter of fiscal year 2023.
• Year-over-year increase of 110% in revenue from our funding portal services, which increased by $197,356 to $375,856 in the three months ended July 31, 2023, compared to $178,500 in the three months ended July 31, 2022.
• Net loss of approximately $492,000 in the three months ended July 31, 2023, compared to net income of approximately $65,000 in the three months ended July 31, 2022.
• Diluted loss per share of $0.07 in the three months ended July 31, 2023, compared to diluted earnings per share of $0.02 in the three months ended July 31, 2022.
• First quarter net loss was driven primarily by higher marketing spend and increased payroll expenses that included $483,351 in stock-based compensation in the three months ended July 31, 2023, as compared to $32,953 in the three months ended July 31, 2002.

For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended July 31, 2023, which has been filed with the Securities and Exchange Commission.

Conference Call Information

The Company will host an investor conference call at 10:00 a.m. ET on Friday, September 15, 2023.

Participant access:

844-985-2012 or 973-528-0138

Conference entry code:

580133

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. The Company’s funding portal, Netcapital Funding Portal, Inc. 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.

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.

Balance Sheet   Assets: July 31, 2023 April 30, 2023 Cash and cash equivalents

$

1,030,618

$

569,441

Accounts receivable net

 

1,355,000

 

1,388,500

Prepaid expenses

 

444,837

 

583,030

Total current assets

 

2,830,455

 

2,540,971

  Deposits

 

6,300

 

6,300

Notes receivable - related parties

 

202,000

 

202,000

Purchased technology, net

 

15,846,966

 

15,875,297

Investment in affiliate

 

240,080

 

240,080

Equity securities at fair value

 

24,308,633

 

22,955,445

Total assets

$

43,434,434

$

41,820,093

  Liabilities and Stockholders' Equity Current liabilities: Accounts payable Trade

$

586,981

$

578,331

Related party

 

75,204

 

75,204

Accrued expenses

 

242,955

 

285,065

Stock subscription payable

 

10,000

 

10,000

Deferred revenue

 

600

 

661

Interest payable

 

86,185

 

98,256

Current taxes payable

 

-

 

174,000

Deferred tax liability, net

 

1,532,000

 

1,657,000

Related party debt

 

15,000

 

15,000

Secured note payable

 

-

 

350,000

Current portion of SBA loans

 

1,885,800

 

1,885,800

Loan payable - bank

 

34,324

 

34,324

Total current liabilities

 

4,469,049

 

5,163,641

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

 

500,000

 

500,000

Total Liabilities

 

4,969,049

 

5,663,641

  Commitments and contingencies

 

-

 

-

  Stockholders' equity: Common stock, $.001 par value; 900,000,000 shares authorized, 9,434,132 and 6,440,777 shares issued and outstanding

 

9,434

 

6,441

Shares to be issued

 

183,187

 

183,187

Capital in excess of par value

 

33,298,539

 

30,500,944

Retained earnings

 

4,974,225

 

5,465,880

Total stockholders' equity

 

38,465,385

 

36,156,452

Total liabilities and stockholders' equity

$

43,434,434

$

41,820,093

Income Statement   Three Months Ended Three Months Ended July 31, 2023 July 31, 2022   Revenues

$

1,519,809

$

1,340,573

Costs of services

 

18,053

 

21,063

Gross profit

 

1,501,756

 

1,319,510

  Costs and expenses: Consulting expense

 

163,942

 

125,611

Marketing

 

241,888

 

7,780

Rent

 

19,610

 

17,212

Payroll and payroll related expenses

 

1,037,042

 

769,940

General and administrative costs

 

788,294

 

392,297

Total costs and expenses

 

2,250,776

 

1,312,840

Operating income (loss)

 

(749,020)

 

6,670

  Other income (expense): Interest expense

 

(13,304)

 

(36,312)

Debt forgiveness

 

-

 

224,260

Amortization of intangible assets

 

(28,331)

 

(21,081)

Realized loss on sale of investment

 

-

 

(406,060)

Total other income (expense)

 

(41,635)

 

(239,193)

Net loss before taxes

 

(790,655)

 

(232,523)

Income tax expense

 

(299,000)

 

(297,000)

Net income (loss)

$

(491,655)

$

64,477

  Basic earnings (loss) per share

$

(0.07)

$

0.02

Diluted earnings (loss) per share

$

(0.07)

$

0.02

  Weighted average number of common shares outstanding: Basic

 

7,471,207

 

3,168,547

Diluted

 

7,471,457

 

3,171,397

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230914928407/en/

Investor Contact

800-460-0815 ir@netcapital.com