- Management to Host Earnings Call on March 19, 2024 at 10:00
a.m. ET
Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital
private capital markets ecosystem, today announced select financial
results for the third quarter of fiscal year 2024 ended January 31,
2024.
"Despite the challenges faced by businesses seeking capital in
the current market climate, we remain optimistic about our future
prospects and the strength of our funding portal,” said Martin Kay,
CEO of Netcapital Inc. "While we experienced a decline in the
number of issuers listing on our platform this quarter, funding
portal revenues increased by more than 70% on a year-to-date basis,
and we continue to focus on the opportunities ahead. Most notably,
we closed a $4 million public offering in December which adds to
working capital, strengthens our financial position, and which we
believe positions us for future success. ”
Third Quarter Fiscal 2024 Financial Highlights
- Revenues decreased by approximately 54% year-over-year to $1.0
million, compared to revenue of $2.3 million in the third quarter
of fiscal year 2023.
- Funding portal revenues decreased approximately 23%
year-over-year to $179,588 compared to $231,833 in the third
quarter of fiscal 2023.
- Diluted earnings per share of ($0.19) in the three months ended
January 31, 2024, were down compared to diluted earnings per share
of $0.33 for the same period in the prior year.
- As of January 31, 2024, the Company had cash and cash
equivalents of $2,172,099.
First Nine Months of Fiscal 2024 Financial Highlights
- Revenues decreased by approximately 14% year-over-year to $4.6
million, compared to revenue of $5.4 million in the first nine
months of fiscal year 2023.
- Funding portal revenues increased driven by higher portal fees
of approximately 152% year-over-year to $375,683 and an increase in
listing fees of $48,040, or 14% compared to the first nine months
of fiscal 2023.
- Diluted earnings per share of ($0.25) in the nine months ended
January 31, 2024, were down compared to diluted earnings per share
of $0.46 for the same period in the prior year.
- In December 2023, the Company closed a $4 million underwritten
public offering.
For additional disclosure regarding Netcapital’s operating
results, please refer to the Quarterly Report on Form 10-Q for the
period ended January 31, 2024, which has been filed with the
Securities and Exchange Commission.
Netcapital Inc
Condensed Consolidated Statements
of Operations
(Unaudited)
Three Months Ended Three Months Ended Nine Months
Ended Nine Months Ended January 31, 2024 January 31, 2023 January
31, 2024 January 31, 2023 Revenues
$
1,042,793
$
2,260,414
$
4,604,260
$
5,379,960
Costs of services
58,875
4,305
97,062
61,603
Gross profit
983,918
2,256,109
4,507,198
5,318,357
Costs and expenses: Consulting expense
175,357
130,500
544,033
455,892
Marketing
32,198
23,549
320,817
64,211
Rent
19,544
17,187
57,533
51,586
Payroll and payroll related expenses
869,517
946,043
2,957,394
2,592,891
General and administrative costs
1,092,459
568,253
2,529,378
1,241,365
Total costs and expenses
2,189,075
1,685,532
6,409,155
4,405,945
Operating income (loss)
(1,205,157
)
570,577
(1,901,957
)
912,412
Other income (expense): Interest expense
(11,918
)
(17,632
)
(35,784
)
(76,922
)
Gain on debt conversion
-
-
-
224,260
Amortization of intangible assets
(28,331
)
(25,914
)
(84,993
)
(68,076
)
Unrealized gain (loss) on equity securities
(2,696,135
)
1,866,468
(2,696,135
)
1,857,500
Realized loss on sale of investment
-
-
-
(406,060
)
Total other income (expense)
(2,736,384
)
1,822,922
(2,816,912
)
1,530,702
Net income (loss) before taxes
(3,941,541
)
2,393,499
(4,718,869
)
2,443,114
Income tax expense (benefit)
(1,713,999
)
697,000
(2,339,288
)
499,000
Net income (loss)
$
(2,227,542
)
$
1,696,499
$
(2,379,581
)
$
1,944,114
Basic earnings per share
$
(0.19
)
$
0.33
$
(0.25
)
$
0.46
Diluted earnings per share
$
(0.19
)
$
0.33
$
(0.25
)
$
0.46
Weighted average number of common shares outstanding: Basic
11,466,523
5,166,299
9,457,740
4,208,216
Diluted
11,466,523
5,166,549
9,457,740
4,208,466
Netcapital Inc. Balance Sheets Assets: January 31,
2024 April 30, 2023 Cash and cash equivalents
$
2,172,099
$
569,441
Accounts receivable net
3,701,501
1,388,500
Note receivable
20,000
-
Prepaid expenses
158,465
583,030
Total current assets
6,052,065
2,540,971
Deposits
6,300
6,300
Notes receivable - related parties
202,000
202,000
Purchased technology, net
15,790,304
15,875,297
Investment in affiliate
240,080
240,080
Equity securities at fair value
21,844,698
22,955,445
Total assets
$
44,135,447
$
41,820,093
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable Trade
$
828,836
$
578,331
Related party
75,204
75,204
Accrued expenses
394,911
285,065
Stock subscription payable
10,000
10,000
Deferred revenue
487
661
Interest payable
88,084
98,256
Current taxes payable
-
174,000
Deferred tax liability, net
-
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
3,332,646
5,163,641
Long-term liabilities: Long-term SBA loans, less current
portion
500,000
500,000
Total Liabilities
3,832,646
5,663,641
Commitments and contingencies
-
-
Stockholders' equity: Common stock, $.001 par value;
900,000,000 shares authorized, 17,231,132 and 6,440,527
shares issued and outstanding
17,231
6,441
Shares to be issued
122,124
183,187
Capital in excess of par value
37,077,147
30,500,944
Retained earnings
3,086,299
5,465,880
Total stockholders' equity
40,302,801
36,156,452
Total liabilities and stockholders' equity
$
44,135,447
$
41,820,093
Conference Call Information
The Company will host an investor conference call on Tuesday,
March 19, 2024 at 10:00 a.m. ET. Participant access: 844-985-2012
or 973-528-0138 Conference entry code: 926076
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240318134239/en/
Investors 800-460-0815 ir@netcapital.com
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