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 |
||
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