Netcapital (NCPL)2025-03-17 20:00Revenue Performance - Revenues for the nine months ended January 31, 2025, were $465,437, a decrease of approximately 90% compared to $4,604,260 for the same period in 2024[133] - For the three months ended January 31, 2025, revenues decreased by $890,111, or approximately 85%, to $152,682 compared to $1,042,793 in the same period in 2024[144] - Funding portal revenues for the three months ended January 31, 2025, were $152,393, down from $179,588 in the same period in 2024, attributed to a decrease in new issuers launching offerings[145] - Revenues for the nine months ended January 31, 2025, decreased by approximately 90% to $465,437 from $4,604,260 in the same period of 2024[152] - Funding portal revenues decreased to $464,821, down from $1,018,150, attributed to a reduction in investments and new offerings, which dropped from 64 to 32 issuers[153] Expense Management - The company recorded a decrease in payroll expenses by $54,493, or approximately 6%, to $815,024 for the three months ended January 31, 2025, due to a reduction in the number of employees[146] - Marketing expenses decreased by $19,311, or 60%, to $12,887 for the three months ended January 31, 2025, compared to $32,198 in the same period in 2024[147] - General and administrative expenses decreased by $170,884, or approximately 16%, to $921,575 for the three months ended January 31, 2025, primarily due to lower legal fees[149] - Payroll expenses decreased by approximately 9% to $2,701,318 from $2,957,394, reflecting a reduction in the number of employees[155] - Marketing expenses decreased by 90% to $31,993 from $320,817, due to fewer marketing outlets utilized[156] - General and administrative expenses increased by 50% to $3,794,013 from $2,529,378, mainly due to professional and legal fees related to the broker-dealer subsidiary[158] Cash Flow and Financing - As of January 31, 2025, cash and cash equivalents were $614,304, with negative working capital of $3,757,593, compared to $863,182 and negative working capital of $2,074,163 as of April 30, 2024[161] - Net cash used in operating activities was $4,614,630 for the nine months ended January 31, 2025, compared to $3,565,953 in 2024[168] - Net cash provided by financing activities amounted to $4,365,752, consisting of $1,979,000 from the sale of common stock and $2,386,752 from the exercise of warrants[171] - The company raised approximately $487,000 from the exercise of existing warrants at a reduced exercise price of $1.80 per share[166] Regulatory and Compliance - Netcapital Securities Inc. received approval from FINRA to become a FINRA-member broker-dealer on November 22, 2024, which is expected to expand revenue opportunities[139] - The company regained compliance with Nasdaq's continued listing requirements as of August 19, 2024, after the bid price of its common stock closed at or above $1.00 per share for 10 consecutive business days[141] Offerings and Market 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[134] - 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[140] Company Classification - The Company is classified as a "smaller reporting company" and is not required to provide detailed market risk disclosures[175]