Netcapital Announces Revenue Growth of 55% for Fiscal Year 2023

Rhea-AI Summary

Netcapital Inc. (Nasdaq: NCPL, NCPLW) announced its financial results for Q4 and fiscal year 2023. The company experienced revenue growth of 55% and operating income of over $2 million. They plan to offer secondary trading in private equities later this year, which could generate a new revenue stream. Netcapital Inc. paid down $1 million in debt, closed two underwritten public offerings for $6.7 million, and uplisted to Nasdaq in July 2022.

Positive

• Revenue grew by 55% year-over-year to $8.5 million, compared to $5.5 million in fiscal 2022.
• Operating income was $2.3 million, a significant improvement from the operating loss of $1.0 million in fiscal year 2022.
• Netcapital Inc. plans to offer secondary trading in private equities, which could generate a new revenue stream and support the expansion of both investor and issuer communities.
• The company paid down $1 million in debt and closed two underwritten public offerings for aggregate gross proceeds of $6.7 million.
• Netcapital Inc. uplisted to Nasdaq in July 2022.

Negative

• None.

Investor conference call to be held tomorrow, July 27, 2023, at 10:00 a.m. ET

BOSTON--(BUSINESS WIRE)-- Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for its fourth quarter and fiscal year 2023 ended April 30, 2023.

“Fiscal 2023 marked a year of strong performance, highlighted by revenue growth of 55% and operating income of more than $2 million,” said Martin Kay, CEO of Netcapital Inc. “The value proposition of our business is becoming more evident as we continue to build scale and deliver a superior experience at a lower cost for issuers. We expect to offer secondary trading in private equities later in this year, a liquidity model that we believe will support expansion of both our investor and issuer communities, and generate a potential new revenue stream for Netcapital. As a back-to-back winner of the Fintech Breakthrough Award in 2022 and 2023, our brand is well-recognized for innovation and excellence, and well-positioned for value creation.”

Fiscal Year 2023 Highlights

• Revenue growth of 55% year-over-year to $8.5 million as compared to $5.5 million in fiscal 2022
• Operating income of $2.3 million compared to an operating loss of $1.0 million in fiscal year 2022
• Paid down $1 million in debt, closed two underwritten public offering for aggregate gross proceeds of $6.7 million, and uplisted to Nasdaq in July 2022

For additional disclosure regarding operating results, please refer to the Annual Report on Form 10-K for the period ended April 30, 2023, which has been filed with the U.S. Securities and Exchange Commission.

Conference Call Information

The Company will host an investor conference call at 10:00 a.m. ET tomorrow, July 27, 2023.

Participant access: 844-985-2012 or 973-528-0138
Conference entry code: 398497

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 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. CONSOLIDATED BALANCE SHEETS
Assets:						April 30, 2023			April 30, 2022
Cash and cash equivalents						$	569,441		$	473,925
Accounts receivable net							1,388,500			2,433,900
Related party receivable							-			668
Prepaid expenses							583,030			5,694
Total current assets							2,540,971			2,914,187
Deposits							6,300			6,300
Notes receivable - related parties							202,000			202,000
Purchased technology, net							15,875,297			15,536,704
Investment in affiliate							240,080			240,080
Equity securities at fair value							22,955,445			12,861,253
Total assets						$	41,820,093		$	31,760,524
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Trade						$	578,331		$	536,508
Related party							75,204			378,077
Accrued expenses							285,065			229,867
Stock subscription payable							10,000			33,400
Deferred revenue							661			2,532
Interest payable							98,256			222,295
Current taxes payable							174,000			-
Deferred tax liability, net							1,657,000			977,000
Related party debt							15,000			22,860
Convertible notes payable							-			300,000
Secured note payable							350,000			1,400,000
Current portion of SBA loans							1,885,800			1,890,727
Loan payable - bank							34,324			34,324
Total current liabilities							5,163,641			6,027,590
Long-term liabilities:
Long-term SBA loans, less current portion							500,000			495,073
Total Liabilities							5,663,641			6,522,663
Commitments and contingencies							-			-
Stockholders' equity:
Common stock, $.001 par value; 900,000,000 shares
authorized, 6,440,777 and 2,934,344 shares issued and outstanding							6,441			2,934
Shares to be issued							183,187			244,250
Capital in excess of par value							30,500,944			22,479,769
Retained earnings							5,465,880			2,510,908
Total stockholders' equity							36,156,452			25,237,861
Total liabilities and stockholders' equity						$	41,820,093		$	31,760,524

NETCAPITAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS
		Year Ended				Year Ended
		April 30, 2023				April 30, 2022
Revenues		$	8,493,985			$	5,480,835
Costs of services			85,038				110,115
Gross profit			8,408,947				5,370,720
Costs and expenses:
Consulting expense			589,349				892,567
Marketing			85,482				95,753
Rent			75,052				47,670
Payroll and payroll related expenses			3,646,490				3,763,845
General and administrative costs			1,740,698				1,602,031
Total costs and expenses			6,137,071				6,401,866
Operating income (loss)			2,271,876				(1,031,146	)
Other income (expense):
Interest expense			(93,842	)			(126,372	)
Gain on debt conversion			224,260				-
Debt forgiveness			-				1,904,296
Amortization of intangible assets			(96,407	)			-
Other income			51,645				25,007
Realized loss on sale of investment			(406,060	)			-
Unrealized gain on equity securities			1,857,500				3,275,745
Total other income (expense)			1,537,096				5,078,676
Net income before taxes			3,808,972				4,047,530
Income tax expense			854,000				544,000
Net income		$	2,954,972			$	3,503,530
Basic earnings per share		$	0.63			$	1.31
Diluted earnings per share		$	0.63			$	1.27
Weighted average number of common shares outstanding:
Basic			4,677,214				2,666,173
Diluted			4,677,464				2,748,480

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726018455/en/

Investor

800-460-0815

ir@netcapital.com

Source: Netcapital Inc.

FAQ

What is the ticker symbol for Netcapital Inc.?

The ticker symbols for Netcapital Inc. are NCPL and NCPLW.

What were the financial highlights for fiscal year 2023?

The financial highlights for fiscal year 2023 include revenue growth of 55% to $8.5 million and operating income of $2.3 million.

What are Netcapital Inc.'s plans for the future?

Netcapital Inc. plans to offer secondary trading in private equities, which they believe will support the expansion of both investor and issuer communities and generate a new revenue stream.

What recent accomplishments has Netcapital Inc. achieved?

Netcapital Inc. paid down $1 million in debt, closed two underwritten public offerings for aggregate gross proceeds of $6.7 million, and uplisted to Nasdaq in July 2022.

When is the investor conference call?

The investor conference call will be held on July 27, 2023, at 10:00 a.m. ET.