Netcapital Announces Third Quarter Fiscal 2024 Financial Results

Rhea-AI Summary

Netcapital Inc. (NCPL) announces Q3 fiscal year 2024 financial results with a positive outlook despite market challenges.

• Management to Host Earnings Call on March 19, 2024 at 10:00 a.m. ET

BOSTON--(BUSINESS WIRE)-- 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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Source: Netcapital Inc.

FAQ

What is the ticker symbol for Netcapital Inc.?

The ticker symbol for Netcapital Inc. is NCPL.

When will the earnings call for Netcapital Inc. take place?

The earnings call for Netcapital Inc. will be held on March 19, 2024, at 10:00 a.m. ET.

What type of company is Netcapital Inc.?

Netcapital Inc. is a digital private capital markets ecosystem.

When did the third quarter of fiscal year 2024 end for Netcapital Inc.?

The third quarter of fiscal year 2024 for Netcapital Inc. ended on January 31, 2024.

What financial results were announced by Netcapital Inc. for Q3 fiscal year 2024?

Netcapital Inc. announced select financial results for the third quarter of fiscal year 2024.