Business
Netcapital Announces Second Quarter Fiscal 2025 Financial Results
Management to Host Earnings Call on December 17, 2024 at 10:00 a.m. ET BOSTON, MA, Dec. 16, 2024 (GLOBE NEWSWIRE) -- Netcapital Inc. (Nasdaq: NCPL, NCPLW)
About this update from Netcapital Inc.
Management to Host Earnings Call on December 17, 2024 at 10:00 a.m. ET BOSTON, MA , Dec. 16, 2024 (GLOBE NEWSWIRE) -- Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the second quarter of fiscal year 2025 ended October 31, 2024 . "During the quarter ended October 31, 2024 , we saw a decrease in revenue, when compared to the quarter ended October 31, 2023 , but an increase in revenue when compared to the quarter ended July 31, 2024 . The year-over-year decrease was primarily due to a slowdown in consulting revenue, while the sequential increase was driven by our funding portal business. Despite the challenges we faced during a tough quarter, we remain optimistic about the future,” said Martin Kay , CEO of Netcapital Inc. “Recently our wholly-owned subsidiary, Netcapital Securities Inc. received approval from FINRA to become a FINRA -member broker-dealer, which marks a significant achievement for the Company as it begins to open up opportunities for more revenue channels. Looking beyond the second quarter we are focused on leveraging our new broker-dealer license and expanding our capabilities. With NSI as a registered broker-dealer, we can now support companies raising capital under Reg A and Reg D offerings, facilitate and charge fees on larger fundraises, potentially provide a broader range of investment choices for our investor base, and establish fee-sharing agreements with other broker-dealers.” Second Quarter Fiscal 2025 Financial Highlights Revenues decreased 92% year-over-year to $170,528 , compared to revenue of $2,041,658 million in the second quarter of fiscal year 2024. Revenues increased 20% quarter-over-quarter to $170,528 , compared to revenue of $142,227 in the first quarter of fiscal year 2025. Operating loss of ( $2,202,431 ) in the second quarter fiscal 2025 as compared to operating income of $52,220 for the second quarter fiscal 2024 Net loss of approximately ( $2,220,501 ) in the second quarter of fiscal 2025, as compared to a net profit of approximately $339,616 , for the same period in the prior year Loss per share of ( $2.34 ) for the quarter ended October 31, 2024 , compared to earnings per share of $2.52 for the same period in the prior year As of October 31, 2024 , the Company had cash and cash equivalents of $1,346,739 . Conference Call Information The Company will host an investor conference call on Tuesday, December 17, 2024 , at 10 a.m. ET . Participant access: 844-985-2012 or 973-528-0138Conference entry code: 894026 For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended October 31, 2024 , which has been filed with the Securities and Exchange Commission . 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. Forward Looking Statements 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. Investor Contact 800-460-0815 [email protected] NETCAPITAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS October 31, 2024 (Unaudited) April 30, 2024 (Audited) Assets: Cash and cash equivalents $ 1,346,739 $ 863,182 Accounts receivable net 17,151 134,849 Interest receivable 2,000 1,200 Note receivable 20,000 20,000 Prepaid expenses 30,120 23,304 Total current assets 1,416,010 1,042,535 Deposits 6,300 6,300 Notes receivable - related parties 202,000 202,000 Purchased technology, net 14,715,267 14,733,005 Investment in affiliate 240,080 240,080 Equity securities 25,358,261 25,333,386 Total assets $ 41,937,918 $ 41,557,306 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,815,823 $ 793,325 Accrued expenses 199,189 310,300 Deferred revenue 409 466 Interest payable 96,050 92,483 Current portion of SBA loans 1,885,800 1,885,800 Loan payable - bank 34,324 34,324 Total current liabilities 4,031,595 3,116,698 Long-term liabilities: Long-term SBA loans, less current portion 500,000 500,000 Total liabilities 4,531,595 3,616,698 Commitments and contingencies - - Stockholders’ equity: Common stock, $.001 par value; 900,000,000 shares authorized,1,841,335 and 326,867 shares issued and outstanding 1,842 327 Shares to be issued 122,124 122,124 Capital in excess of par value 41,550,465 37,338,594 Retained earnings (deficit) (4,268,108 ) 479,563 Total stockholders’ equity 37,406,323 37,940,608 Total liabilities and stockholders’ equity $ 41,937,918 $ 41,557,306 NETCAPITAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Three Months Ended Six Months Ended Six Months Ended October 31, 2024 October 31, 2023 October 31, 2024 October 31, 2023 Revenues $ 170,528 $ 2,041,658 $ 312,755 $ 3,561,467 Costs of services 19,781 20,134 30,001 38,187 Gross profit 150,747 2,021,524 282,754 3,523,280 Costs and expenses: Consulting expense 79,645 204,734 177,026 368,676 Marketing 12,208 46,731 19,106 288,619 Rent 19,442 18,379 38,558 37,989 Payroll and payroll related expenses 749,701 1,050,835 1,886,294 2,087,877 General and administrative costs 1,492,182 648,625 2,872,438 1,436,919 Total costs and expenses 2,353,178 1,969,304 4,993,422 4,220,080 Operating income (loss) (2,202,431 ) 52,220 (4,710,668 ) (696,800 ) Other income (expense): Interest expense (9,601 ) (10,562 ) (20,065 ) (23,866 ) Interest income 400 - 800 - Amortization of intangible assets (8,869 ) (28,331 ) (17,738 ) (56,662 ) Total other income (expense) (18,070 ) (38,893 ) (37,003 ) (80,528 ) Net income (loss) before taxes (2,220,501 ) 13,327 (4,747,671 ) (777,328 ) Income tax expense (benefit) - (326,289 ) - (625,289 ) Net income (loss) $ (2,220,501 ) $ 339,616 $ (4,747,671 ) $ (152,039 ) Basic earnings (loss) per share $ (2.34 ) $ 2.52 $ (6.58 ) $ (1.26 ) Diluted earnings (loss) per share $ (2.34 ) $ 2.52 $ (6.58 ) $ (1.26 ) Weighted average number of common shares outstanding: Basic 947,459 134,793 721,389 120,762 Diluted 947,459 134,796 721,389 120,762 Source: Netcapital Inc.