BOSTON--(BUSINESS WIRE)--Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the first quarter of fiscal year 2023 ended July 31, 2022.
“Our uplisting to Nasdaq in July was a fantastic way to kick off our new fiscal year, and we welcome our new shareholders and appreciate the investor interest we are receiving,” said Dr. Cecilia Lenk, CEO of Netcapital Inc. “We are pleased to deliver strong first quarter results and look forward to a productive year ahead.”
Jason Frishman, CEO of Netcapital Funding Portal Inc., commented, “We kicked off our fiscal year 2023 with strong momentum on our platform, surpassing 100,000 users. We believe the activity on our portal illustrates the key competitive advantages we offer over other online capital raising platforms – a comprehensive suite of services, scalable technology platform, and high-value consulting for issuers, plus the ability of investors to invest from virtually anywhere in the world, at almost any time, with just a few clicks.”
First Quarter Fiscal 2023 Financial Highlights
- Revenue growth of 114% year-over-year to $1.3 million
- Positive operating income compared to operating loss of $1.1 million in the year-ago quarter
- Equity securities at fair value totaled $13.5 million at July 31, 2022, compared to $9.6 million one year ago, an increase of 41%
- Cash and cash equivalents of $2.6 million at July 31, 2022
- Paid down $1 million in debt
- Closed a $5 million underwritten public offering
Conference Call Information
The Company will host an investor conference call tomorrow, September 13, 2022, at 10:00 a.m. ET.
Participant access: 844-985-2012 or 973-528-0138
Entry code: 747753
For those unable to participate in the live call, a replay will be available in the Investor Relations section of the Company’s website.
For additional disclosure regarding operating results, please refer to the Quarterly Report on Form 10-Q for the period ended July 31,2022, 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 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. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
July 31, 2022 |
|
April 30, 2022 |
||||
| Assets: | (Unaudited) |
|
(Audited) |
|||
| Cash and cash equivalents | $ |
2,556,170 |
$ |
473,925 |
||
| Accounts receivable net |
|
2,154,700 |
|
2,433,900 |
||
| Related party receivable |
|
668 |
|
668 |
||
| Prepaid expenses |
|
41,536 |
|
5,694 |
||
| Total current assets |
|
4,753,074 |
|
2,914,187 |
||
| Deposits |
|
6,300 |
|
6,300 |
||
| Notes receivable - related parties |
|
202,000 |
|
202,000 |
||
| Purchased technology, net |
|
15,515,623 |
|
15,536,704 |
||
| Investment in affiliate |
|
240,080 |
|
240,080 |
||
| Equity securities at fair value |
|
13,455,193 |
|
12,861,253 |
||
| Total assets | $ |
34,172,270 |
$ |
31,760,524 |
||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | ||||||
| Trade | $ |
457,826 |
$ |
536,508 |
||
| Related party |
|
75,204 |
|
378,077 |
||
| Accrued expenses |
|
173,161 |
|
229,867 |
||
| Stock subscription payable |
|
33,400 |
|
33,400 |
||
| Deferred revenue |
|
602 |
|
2,532 |
||
| Interest payable |
|
247,899 |
|
222,295 |
||
| Deferred tax liability, net |
|
680,000 |
|
977,000 |
||
| Related party debt |
|
19,660 |
|
22,860 |
||
| Convertible notes payable |
|
- |
|
300,000 |
||
| Secured note payable |
|
400,000 |
|
1,400,000 |
||
| Current portion of SBA loans |
|
1,893,719 |
|
1,890,727 |
||
| Loan payable - bank |
|
34,324 |
|
34,324 |
||
| Total current liabilities |
|
4,015,795 |
|
6,027,590 |
||
| Long-term liabilities: | ||||||
| Long-term SBA loans, less current portion |
|
492,081 |
|
495,073 |
||
| Total Liabilities |
|
4,507,876 |
|
6,522,663 |
||
| Commitments and contingencies |
|
- |
|
- |
||
| Stockholders' equity: | ||||||
| Common stock, $.001 par value; 900,000,000 shares authorized, 4,272,677 and 2,934,344 shares issued and outstanding |
|
4,273 |
|
2,934 |
||
| Shares to be issued |
|
244,250 |
|
244,250 |
||
| Capital in excess of par value |
|
26,840,486 |
|
22,479,769 |
||
| Retained earnings |
|
2,575,385 |
|
2,510,908 |
||
| Total stockholders' equity |
|
29,664,394 |
|
25,237,861 |
||
| Total liabilities and stockholders' equity | $ |
34,172,270 |
$ |
31,760,524 |
||
NETCAPITAL INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(UNAUDITED) |
||||||||
Three
|
|
Three
|
||||||
July 31, 2022 |
|
July 31, 2021 |
||||||
| Revenues | $ |
1,340,573 |
|
$ |
625,187 |
|
||
| Costs of services |
|
21,063 |
|
|
28,305 |
|
||
| Gross profit |
|
1,319,510 |
|
|
596,882 |
|
||
| Costs and expenses: | ||||||||
| Consulting expense |
|
125,611 |
|
|
316,631 |
|
||
| Marketing |
|
7,780 |
|
|
21,826 |
|
||
| Rent |
|
17,212 |
|
|
12,130 |
|
||
| Payroll and payroll related expenses |
|
769,940 |
|
|
927,333 |
|
||
| General and administrative costs |
|
392,297 |
|
|
395,052 |
|
||
| Total costs and expenses |
|
1,312,840 |
|
|
1,672,972 |
|
||
| Operating income (loss) |
|
6,670 |
|
|
(1,076,090 |
) |
||
| Other income (expense): | ||||||||
| Interest expense |
|
(36,312 |
) |
|
(35,245 |
) |
||
| Gain on debt conversion |
|
224,260 |
|
|
- |
|
||
| Amortization of intangible assets |
|
(21,081 |
) |
|
- |
|
||
| Realized loss on sale of investment |
|
(406,060 |
) |
|
- |
|
||
| Unrealized gain on equity securities |
|
- |
|
|
3,275,745 |
|
||
| Total other income (expense) |
|
(239,193 |
) |
|
3,240,500 |
|
||
| Net income before taxes |
|
(232,523 |
) |
|
2,164,410 |
|
||
| Income tax expense (benefit) |
|
(297,000 |
) |
|
707,000 |
|
||
| Net income | $ |
64,477 |
|
$ |
1,457,410 |
|
||
| Basic earnings per share | $ |
0.02 |
|
$ |
0.66 |
|
||
| Diluted earnings per share | $ |
0.02 |
|
$ |
0.65 |
|
||
| Weighted average number of common shares outstanding: | ||||||||
| Basic |
|
3,168,547 |
|
|
2,206,118 |
|
||
| Diluted |
|
3,171,397 |
|
|
2,241,675 |
|
||
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.
