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

Conference call to be held tomorrow, September 13, 2022, at 10:00 a.m. ET

BOSTON–(BUSINESS WIRE)–$NCPL #EarningsNetcapital 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.

Contacts

Investor Contact

800-460-0815

ir@netcapital.com