Netcapital Funding Portal Revenues Increase by More Than 150%

Total Revenues Increase by 15%

Management to Host Earnings Call on December 15, 2023, 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 select financial results for the second quarter of fiscal year 2024 ended October 31, 2023.


“It was a strong quarter for our funding portal business, which experienced revenue growth of 151%,” said Martin Kay, CEO of Netcapital Inc. “This was driven by a significant increase in investment dollars closed on the Netcapital funding portal platform during the quarter, helped by the success of several large issuers, including Avadain, a graphene technology company, and EarthGrid PBC, a plasma boring technology company.”

Second Quarter Fiscal 2024 Financial Highlights

Revenues grew by approximately 15% year-over year to $2.0 million, compared to revenue of $1.8 million in the second quarter of fiscal year 2023.

Funding portal revenues increased approximately 151% year-over-year to $462,706, compared to $184,095 in the second quarter of fiscal 2023.

Diluted earnings per share of $0.04 in the three months ended October 31, 2023, were flat compared to diluted earnings per share of $0.04 for the same period in the prior year.

For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended October 31, 2023, which has been filed with the Securities and Exchange Commission.

Conference Call Information

The Company will host an investor conference call on Friday, December 15, 2023 at 10:00 a.m. ET.

Participant access:

844-985-2012 or 973-528-0138

Conference entry code:

473254

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.

Netcapital Inc.

Income Statements

(Unaudited)

 

Three Months Ended

Three Months Ended

Six Months Ended

Six Months Ended

October 31, 2023

October 31, 2022

October 31, 2023

October 31, 2022

 

Revenues

$

2,041,658

 

$

1,778,973

 

$

3,561,467

 

$

3,119,546

 

Costs of services

 

20,134

 

 

36,235

 

 

38,187

 

 

57,298

 

Gross profit

 

2,021,524

 

 

1,742,738

 

 

3,523,280

 

 

3,062,248

 

 

Costs and expenses:

Consulting expense

 

204,734

 

 

199,781

 

 

368,676

 

 

325,392

 

Marketing

 

46,731

 

 

32,882

 

 

288,619

 

 

40,662

 

Rent

 

18,379

 

 

17,187

 

 

37,989

 

 

34,399

 

Payroll and payroll related expenses

 

1,050,835

 

 

876,908

 

 

2,087,877

 

 

1,646,848

 

General and administrative costs

 

648,625

 

 

280,815

 

 

1,436,919

 

 

673,112

 

Total costs and expenses

 

1,969,304

 

 

1,407,573

 

 

4,220,080

 

 

2,720,413

 

Operating income (loss)

 

52,220

 

 

335,165

 

 

(696,800

)

 

341,835

 

 

Other income (expense):

Interest expense

 

(10,562

)

 

(22,978

)

 

(23,866

)

 

(59,290

)

Gain on debt conversion

 

 

 

 

 

 

 

224,260

 

Amortization of intangible assets

 

(28,331

)

 

(21,081

)

 

(56,662

)

 

(42,162

)

Unrealized loss on equity securities

 

 

 

(8,968

)

 

 

 

(8,968

)

Realized loss on sale of investment

 

 

 

 

 

 

 

(406,060

)

Total other income (expense)

 

(38,893

)

 

(53,027

)

 

(80,528

)

 

(292,220

)

Net income before taxes

 

13,327

 

 

282,138

 

 

(777,328

)

 

49,615

 

Income tax expense (benefit)

 

(326,289

)

 

99,000

 

 

(625,289

)

 

(198,000

)

Net income (loss)

$

339,616

 

$

183,138

 

$

(152,039

)

$

247,615

 

 

Basic earnings per share

$

0.04

 

$

0.04

 

$

(0.02

)

$

0.07

 

Diluted earnings per share

$

0.04

 

$

0.04

 

$

(0.02

)

$

0.07

 

 

Weighted average number of common shares outstanding:

Basic

 

9,435,491

 

 

4,289,802

 

 

8,453,349

 

 

3,729,174

 

Diluted

 

9,435,741

 

 

4,290,052

 

 

8,453,349

 

 

3,729,424

 

 

 

Netcapital Inc.

Balance Sheets

 

October 31, 2023

April 30, 2023

Assets:
(Unaudited)

(Audited)

Cash and cash equivalents

$

528,827

$

569,441

Accounts receivable net

 

2,899,667

 

1,388,500

Other receivables

 

158,873

 

Note receivable

 

20,000

 

Prepaid expenses

 

313,058

 

583,030

Total current assets

 

3,920,425

 

2,540,971

 

Deposits

 

6,300

 

6,300

Notes receivable – related parties

 

202,000

 

202,000

Purchased technology, net

 

15,818,635

 

15,875,297

Investment in affiliate

 

240,080

 

240,080

Equity securities at fair value

 

24,491,821

 

22,955,445

Total assets

$

44,679,261

$

41,820,093

 

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

Trade

$

812,908

$

578,331

Related party

 

75,204

 

75,204

Accrued expenses

 

415,603

 

285,065

Stock subscription payable

 

10,000

 

10,000

Deferred revenue

 

508

 

661

Interest payable

 

88,353

 

98,256

Current taxes payable

 

 

174,000

Deferred tax liability, net

 

1,714,000

 

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

 

5,051,700

 

5,163,641

 

Long-term liabilities:

Long-term SBA loans, less current portion

 

500,000

 

500,000

Total Liabilities

 

5,551,700

 

5,663,641

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

Common stock, $.001 par value; 900,000,000 shares

authorized, 9,459,132 and 6,440,527 shares issued and outstanding

 

9,459

 

6,441

Shares to be issued

 

122,124

 

183,187

Capital in excess of par value

 

33,682,137

 

30,500,944

Retained earnings

 

5,313,841

 

5,465,880

Total stockholders’ equity

 

39,127,561

 

36,156,452

Total liabilities and stockholders’ equity

$

44,679,261

$

41,820,093

 

 

Contacts

Investor Contact

800-460-0815

ir@netcapital.com