Netcapital (NCPL)2024-12-16 21:30Revenue Performance - Netcapital Inc. generated revenues of $312,755 for the six months ended October 31, 2024, a decrease of approximately 91.2% compared to $3,561,467 for the same period in 2023[141]. - For the three months ended October 31, 2024, revenues decreased by $1,871,130, or approximately 92%, to $170,528 compared to $2,041,658 in the same period in 2023[155]. - Revenues for the six months ended October 31, 2024, decreased by approximately 92% to $312,755 compared to $3,561,467 for the same period in 2023[163]. - Total consulting services revenue was $0 for the six months ended October 31, 2024, compared to $2,626,667 in the same period of 2023[167]. Funding Portal Activity - The total number of offerings closed on the Netcapital funding portal decreased to 63 in fiscal 2024 from 81 in fiscal 2023, with 13 offerings terminating without raising the required minimum amount in 2024[142]. - Funding portal revenues for the three months ended October 31, 2024, were $170,372, down from $462,706 in the same period in 2023, attributed to a decrease in dollars invested in issuers[156]. - Funding portal revenues for the six months ended October 31, 2024, were $312,428, down from $838,562 in the prior year, with investments in funding portal issuers decreasing to $3,023,234 from $10,287,341[165]. Expenses - Payroll and related expenses decreased by $301,134, or approximately 29%, to $749,701 for the three months ended October 31, 2024, due to a reduction in the number of employees[157]. - General and administrative expenses increased by $843,557, or approximately 130%, to $1,492,182 for the three months ended October 31, 2024, primarily due to professional and legal fees related to launching the broker-dealer subsidiary[160]. - General and administrative expenses increased by approximately 100% to $2,872,438 for the six months ended October 31, 2024, primarily due to professional and legal fees related to launching a broker-dealer subsidiary[171]. - Marketing expenses decreased by $34,523, or approximately 74%, to $12,208 for the three months ended October 31, 2024, compared to $46,731 in the same period in 2023[158]. Cash Flow and Financial Position - Cash and cash equivalents as of October 31, 2024, were $1,346,739, with negative working capital of $2,615,585, compared to $863,182 and negative working capital of $2,074,163 as of April 30, 2024[174]. - Net cash used in operating activities amounted to $3,451,087 for the six months ended October 31, 2024, compared to $1,945,814 for the same period in 2023[181]. - Net cash provided by financing activities for the six months ended October 31, 2024, was $3,934,644, consisting of proceeds from the sale of common stock and warrants[184]. Strategic Initiatives - Netcapital Securities Inc. received FINRA approval on November 22, 2024, to operate as a broker-dealer, which is expected to expand revenue opportunities[149]. - The company entered into an At The Market Offering Agreement to sell shares with an aggregate sales price of up to $2,100,000, resulting in gross proceeds of $2,099,667 from the sale of 1,122,693 shares[151]. - The company regained compliance with Nasdaq's continued listing requirements as of August 19, 2024, after maintaining a bid price of $1.00 per share for 10 consecutive business days[152]. - The company plans to continue operating with lower fixed overhead and seeks to raise additional funds through private placements and public offerings due to concerns about meeting working capital requirements[180]. - The company has received FINRA approval to establish a broker-dealer subsidiary effective November 22, 2024, to diversify revenue sources[164].