Netcapital Announces Third Quarter Fiscal 2023 Financial Results Including Year-to-Date Revenue Growth of 48%

Conference call to be held on March 17th at 10:00 a.m. ET

Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the third quarter and first nine months of fiscal year 2023 ended January 31, 2023.

“Over the past nine months, Netcapital has generated substantial revenue growth while generating positive operating and net income,” said Martin Kay, CEO of Netcapital Inc. “We have established a number of important strategic partnerships designed to create opportunities for clients and investors, while scaling and advancing our operating platform for continuing growth. Netcapital is executing on the vision for our brand - to break down traditional barriers and offer opportunities for anyone to invest in private companies. Along the way, we are turning customers and communities into owners and brand ambassadors for the businesses they love. We believe this is a powerful symbiotic relationship.”

Third Quarter Fiscal 2023 Financial Highlights

• Revenue growth of 25% year-over-year to $2.3 million
• Positive operating income of $571,000 compared to an operating loss of $135,000 in the year-ago quarter
• Diluted earnings per share of $0.33

First Nine Months of Fiscal 2023 Highlights

• Revenue growth of 48% year-over-year to $5.4 million
• Positive operating income of $912,000 compared to an operating loss of $1.5 million in the first nine months of fiscal year 2022
• Diluted earnings per share of $0.46
• Paid down $1 million in debt, closed a $5 million underwritten public offering, and uplisted to Nasdaq in July 2022

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

Conference Call Information

The Company will host an investor conference call at 10:00 a.m. ET tomorrow, March 17, 2023.

Participant access:

844-985-2012 or 973-528-0138

 

 

Conference entry code:

399662 

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.

CONDENSED CONSOLIDATED BALANCE SHEETS

 


 





 
 


 



January 31, 2023

April 30, 2022
 


 



(Unaudited)

(Audited)
 


 
Assets:
 
 
 
 
 
 


 
  Cash and cash equivalents

 $

       1,771,927

 $

      473,925

 


 
  Accounts receivable net
 
 

 

          2,163,931

 

      2,433,900

 


 
  Related party receivable

 

                   668

 

               668

 


 
  Prepaid expenses
 
 

 

              36,844

 

            5,694

 


 

Total current assets

 

          3,973,370

 

      2,914,187

 


 
 
 
 
 
 
 
 


 
   Deposits

 

                6,300

 

            6,300

 


 
   Notes receivable - related parties
 
 

 

            202,000

 

        202,000

 


 
   Purchased technology, net 

 

        15,903,628

 

    15,536,704

 


 
   Investment in affiliate
 
 

 

            240,080

 

        240,080

 


 
   Equity securities at fair value

 

        19,250,193

 

    12,861,253

 


 
 
Total assets
 

 $

     39,575,571

 $

31,760,524

 


 





 
 


 
Liabilities and Stockholders' Equity
 
 
 
 
 
 


 
Current liabilities:





 


 
Accounts payable
 
 
 
 
 
 


 
   Trade

 $

         634,970

 $

      536,508

 


 
   Related party
 
 

 

              75,204

 

        378,077

 


 
Accrued expenses

 

            246,665

 

        229,867

 


 
Stock subscription payable
 
 

 

              10,000

 

          33,400

 


 
Deferred revenue

 

                   718

 

            2,532

 


 
Interest payable 
 
 

 

              89,491

 

        222,295

 


 
Deferred tax liability, net

 

          1,476,000

 

        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

 

          4,818,172

 

      6,027,590

 


 
 
 
 
 
 
 
 


 
Long-term liabilities:





 


 
Long-term SBA loans, less current portion
 

 

            500,000

 

        495,073

 


 

Total liabilities

 

          5,318,172

 

      6,522,663

 


 
 
 
 
 
 
 
 


 
Commitments and contingencies

 

                     -  

 

                 -  

 


 
 
 
 
 
 
 
 


 
Stockholders' equity:





 


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


 
  authorized, 6,071,777 and 2,934,344 shares issued and outstanding

 

                6,072

 

            2,934

 


 
  Shares to be issued
 
 

 

            183,187

 

        244,250

 


 
  Capital in excess of par value

 

        29,613,118

 

    22,479,769

 


 
  Retained earnings 
 
 

 

          4,455,022

 

      2,510,908

 


 
  
Total stockholders' equity 

 

        34,257,399

 

    25,237,861

 


 
Total liabilities and stockholders' equity 
 

 $

     39,575,571

 $

31,760,524

NETCAPITAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

January 31, 2023

January 31, 2022

January 31, 2023

January 31, 2022

 


Revenues

 $

               2,260,414

 $

           1,811,041

 $

           5,379,960

 $

            3,636,050

Costs of services

 

                         4,305

 

                   39,349

 

                   61,603

 

                    85,429

Gross profit

 

                  2,256,109

 

              1,771,692

 

              5,318,357

 

               3,550,621

 


Costs and expenses:
 
 
 
 
 
 
 


Consulting expense

 

                     130,500

 

                 309,545

 

                 455,892

 

                  675,180

Marketing

 

                       23,549

 

                   23,945

 

                   64,211

 

                    67,771

Rent 

 

                       17,187

 

                   11,869

 

                   51,586

 

                    34,480

Payroll and payroll related expenses

 

                     946,043

 

              1,241,332

 

              2,592,891

 

               3,032,987

General and administrative costs

 

                     568,253

 

                 320,724

 

              1,241,365

 

               1,277,146

               Total costs and expenses

 

                  1,685,532

 

              1,907,415

 

              4,405,945

 

               5,087,564

Operating income (loss)

 

                     570,577

 

               (135,723)

 

                 912,412

 

              (1,536,943)

 
 
 
 
 
 
 
 


Other income (expense):









Interest expense

 

                     (17,632)

 

                 (20,573)

 

                  (76,922)

 

                   (90,844)

Gain on debt conversion

 

                                 -

 

                            -

 

                 224,260

 

                              -

Debt forgiveness

 

                                 -

 

              1,904,302

 

                             -

 

               1,904,302

Amortization of intangible assets

 

                     (25,914)

 

                            -

 

                  (68,076)

 

                              -

Realized loss on sale of investment

 

                                 -

 

                            -

 

                (406,060)

 

                              -

Unrealized gain on equity securities

 

                  1,866,468

 

                            -

 

              1,857,500

 

               3,275,745

Total other income (expense)

 

                  1,822,922

 

              1,883,729

 

              1,530,702

 

               5,089,203

               Net income before taxes

 

                  2,393,499

 

              1,748,006

 

              2,443,114

 

               3,552,260

  Income tax expense (benefit)

 

                     697,000

 

                 (73,000)

 

                 499,000

 

                  548,000

Net income 

 $

               1,696,499

 $

           1,821,006

 $

           1,944,114

 $

            3,004,260

 
 
 
 
 
 
 
 


Basic earnings per share

 $

                        0.33

 $

                    0.64

 $

                    0.46

 $

                     1.16

Diluted earnings per share

 $

                        0.33

 $

                    0.63

 $

                    0.46

 $

                     1.14

 


Weighted average number of common shares outstanding:
 
 
 
 
 
 
 


Basic

 

5,166,299

 

2,842,924

 

4,208,216

 

2,589,142

Diluted

 

5,166,549

 

2,882,825

 

4,208,466

 

2,629,043

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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