UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 2.02. Results of Operations and Financial Condition.
On December 14, 2023, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the period ended October 31, 2023. The text of the press release is furnished as Exhibit 99.1 to this current report.
The information in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press Release dated December 14, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| -2- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Netcapital Inc. (Registrant) | ||
| By: | /s/ Coreen Kraysler | |
| Name: | Coreen Kraysler | |
| Title: | Chief Financial Officer | |
| Dated December 14, 2023 | ||
| -3- |
Exhibit 99.1
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, MA – December 14, 2023 – Netcapital 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.
Investor Contact
800-460-0815
ir@netcapital.com
Netcapital Inc.
Balance Sheets
| October 31, 2023 | April 30, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets: | ||||||||
| 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 | ||||
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 | ||||||||||||
Cover |
Dec. 14, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Dec. 14, 2023 |
| Entity File Number | 001-41443 |
| Entity Registrant Name | NETCAPITAL INC. |
| Entity Central Index Key | 0001414767 |
| Entity Tax Identification Number | 87-0409951 |
| Entity Incorporation, State or Country Code | UT |
| Entity Address, Address Line One | 1 Lincoln Street |
| Entity Address, City or Town | Boston |
| Entity Address, State or Province | MA |
| Entity Address, Postal Zip Code | 02111 |
| City Area Code | 781 |
| Local Phone Number | 925-1700 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, $0.001 par value per share |
| Trading Symbol | NCPL |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |
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