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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230316005734/en/
Contacts
Investor
800-460-0815
ir@netcapital.com
