Netcapital Inc. Announces Revenue Growth of 114% for First Quarter of Fiscal 2023

Rhea-AI Summary

Netcapital Inc. (Nasdaq: NCPL, NCPLW) reported impressive financial results for Q1 FY2023, ending July 31, 2022. Revenue surged by 114% year-over-year to $1.3 million, with a positive operating income compared to a loss of $1.1 million in the previous year. Equity securities increased by 41% to $13.5 million, while cash and cash equivalents reached $2.6 million. The company also successfully paid down $1 million in debt and closed a $5 million public offering. A conference call is scheduled for September 13, 2022, at 10:00 a.m. ET.

Positive

• Revenue growth of 114% year-over-year to $1.3 million
• Positive operating income versus a $1.1 million operating loss in Q1 FY2022
• Equity securities at fair value increased by 41% to $13.5 million
• Cash and cash equivalents of $2.6 million
• Paid down $1 million in debt
• Closed a $5 million underwritten public offering

Negative

• None.

Conference call to be held tomorrow, September 13, 2022, 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 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
		Three Months Ended				Three Months Ended
		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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220912005954/en/

Investor Contact

800-460-0815

ir@netcapital.com

Source: Netcapital Inc.

FAQ

What were Netcapital's financial results for Q1 FY2023?

Netcapital reported a revenue increase of 114% year-over-year, totaling $1.3 million, with positive operating income.

When is the next conference call for Netcapital?

The conference call is scheduled for September 13, 2022, at 10:00 a.m. ET.

What is the current cash position of Netcapital as of July 31, 2022?

Netcapital has $2.6 million in cash and cash equivalents as of July 31, 2022.

How much did Netcapital pay down in debt?

Netcapital paid down $1 million in debt.

What is the status of equity securities at fair value for Netcapital?

As of July 31, 2022, equity securities at fair value totaled $13.5 million, up 41% from the previous year.