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Netcapital (NCPL) - 2026 Q1 - Quarterly Results
Netcapital Netcapital (US:NCPL)2025-09-22 21:26

Announcement and Business Context Fiscal Year 2025 Financial Results Announcement Netcapital Inc. announced full fiscal year 2025 financial results for the period ended April 30, 2025, on August 12, 2025 - Netcapital Inc. announced full fiscal year 2025 financial results on August 12, 20251 - The fiscal year ended April 30, 20251 Management Commentary and Strategic Direction CEO Martin Kay highlighted a strategic shift in 2025 to build a stronger, scalable foundation, emphasizing the secured broker-dealer license to broaden service and a commitment to disciplined execution and long-term value creation - In 2025, Netcapital Inc. made an important shift in strategy to focus on building a stronger, more scalable foundation for the future2 - The secured broker-dealer license positions the company to serve a broader base of issuers and investors and deepen its impact on democratizing access to private markets2 - Management remains committed to disciplined execution, product innovation, and long-term value creation2 Conference Call Information The company will host an investor conference call on August 13, 2025, at 9 a.m. ET, providing participant access details and a conference entry code - An investor conference call is scheduled for August 13, 2025, at 9 a.m. ET3 - Participant access: 844-985-2012 or 973-528-0138, Conference entry code: 3106373 About Netcapital Inc. Netcapital Inc. is a fintech company providing a scalable platform for private capital raising and investment, operating Netcapital Advisors and two SEC/FINRA registered entities - Netcapital Inc. is a fintech company providing a scalable technology platform for private capital raising and private equity investment opportunities4 - The company's consulting group, Netcapital Advisors, offers marketing and strategic advice and takes equity positions4 - Netcapital Funding Portal Inc. and Netcapital Securities Inc. (broker-dealer) are registered with the U.S. SEC and are members of FINRA4 Forward Looking Statements The report contains forward-looking statements subject to known and unknown risks and uncertainties, with no obligation for public updates or revisions - The information includes forward-looking statements related to future events or financial performance5 - These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different5 - The company assumes no obligation to publicly update or revise these forward-looking statements5 Fiscal Year 2025 Financial Performance Key Financial Highlights For fiscal year 2025, Netcapital Inc. reported significantly decreased revenues, a larger operating loss, substantial impairment, and a reduced net loss per share Key Financial Highlights Table | Metric | FY2025 | FY2024 | Change (YoY) (%) | | :----------------------- | :------------- | :------------- | :---------------- | | Revenues ($) | $869,460 | $4,951,435 | -82.4 | | Operating loss ($) | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment loss ($) | $19,900,000 | N/A | N/A | | Net loss per share ($) | ($20.39) | ($28.83) | +29.3 (less negative) | - Revenues decreased primarily due to a reduction in consulting services6 Consolidated Balance Sheets As of April 30, 2025, total assets significantly decreased to $20.9 million from $41.6 million, driven by reduced equity securities, while liabilities increased and equity decreased Consolidated Balance Sheets Table | Balance Sheet Item | April 30, 2025 ($) | April 30, 2024 ($) | Change (YoY) (%) | | :-------------------------- | :------------- | :------------- | :---------------- | | Cash and cash equivalents | $289,428 | $863,182 | -66.5 | | Total current assets | $399,612 | $1,042,535 | -61.7 | | Equity securities | $5,748,050 | $25,333,386 | -77.3 | | Total assets | $20,901,491 | $41,557,306 | -49.7 | | Total current liabilities | $5,495,767 | $3,116,698 | +76.3 | | Total liabilities | $5,995,767 | $3,616,698 | +65.8 | | Total stockholders' equity | $14,905,724 | $37,940,608 | -60.7 | - The significant decrease in total assets was largely due to a reduction in equity securities from $25.3 million to $5.7 million8 - Retained earnings shifted from positive $479,563 in FY2024 to a deficit of ($27,821,762) in FY20258 Consolidated Statements of Operations For FY2025, Netcapital Inc. experienced substantial declines in revenues and gross profit, leading to increased operating and net losses, exacerbated by impairment expense and negative unrealized gain/loss Consolidated Statements of Operations Table | Income Statement Item | FY2025 ($) | FY2024 ($) | Change (YoY) (%) | | :-------------------------------- | :------------- | :------------- | :---------------- | | Revenues | $869,460 | $4,951,435 | -82.4 | | Gross profit | $829,116 | $4,843,375 | -82.8 | | Total costs and expenses | $9,150,433 | $8,285,763 | +10.4 | | Operating loss | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment expense | ($19,915,556) | ($1,048,430) | -1799.5 | | Unrealized gain (loss) on equity securities | $18,050 | ($2,696,135) | +100.7 (less negative) | | Net loss | ($28,301,325) | ($4,986,317) | -467.6 | | Basic loss per share | ($20.39) | ($28.83) | +29.3 (less negative) | - The significant increase in net loss was primarily driven by a substantial impairment expense of $19.9 million in FY2025, compared to $1.0 million in FY202410 - General and administrative costs increased from $3.4 million in FY2024 to $5.2 million in FY202510 - Despite a higher net loss, basic loss per share decreased due to a significant increase in the weighted average number of common shares outstanding (from 172,937 to 1,387,666)10