Netcapital (US:NCPL)2026-03-19 21:25Revenue Performance - Revenue for the nine months ended January 31, 2026, decreased by $129,956, or approximately 28%, to $335,481, compared to $465,437 for the same period in 2025[152]. - For the three months ended January 31, 2026, revenue decreased by $58,335, or approximately 38%, to $94,347, compared to $152,682 for the same period in 2025[142]. - Funding portal revenue decreased to $335,481 for the nine months ended January 31, 2026, down 28% from $465,437 in the same period of 2025, primarily due to a reduction in the number of issuers raising capital[153]. - For the three months ended January 31, 2026, funding portal revenue was $84,137, consisting of portal fees of $34,582, listing fees of $45,809, and equity fees of $3,746, compared to $152,406 in the same period of 2025[143]. - The number of issuers launching new offerings dropped to 18 in the nine months ended January 31, 2026, compared to 64 in the prior year[153]. Expenses - Payroll and payroll-related expenses increased by $282,974, or approximately 35%, to $1,097,998 for the three months ended January 31, 2026, due to hiring and salary increases[145]. - Payroll expenses increased by $1,046,563, or approximately 35%, to $3,747,881 for the nine months ended January 31, 2026, due to hiring and salary increases[155]. - Consulting expenses increased by $204,477, or approximately 322%, to $268,032 for the three months ended January 31, 2026, attributed to hiring a new consultant for tokenization[148]. - General and administrative expenses decreased by $147,091, or approximately 4%, to $3,646,761, attributed to lower professional fees[157]. - Legal costs rose to approximately $2,161,000 for the nine months ended January 31, 2026, with 91% related to ongoing SEC and FINRA investigations[157]. Cash Flow and Liquidity - Net cash used in operating activities was $7,661,306 for the nine months ended January 31, 2026, compared to $4,614,630 in the prior year[171]. - Net cash provided by financing activities increased to $8,187,321 for the nine months ended January 31, 2026, up from $4,365,752 in the same period of 2025[174]. - The company recorded $500,000 in insurance recovery proceeds for the nine months ended January 31, 2026, compared to none in the prior year[162]. - As of January 31, 2026, cash and cash equivalents were $715,443, with negative working capital of $2,922,843, an improvement from negative working capital of $5,096,155 as of April 30, 2025[164]. - The company anticipates that existing cash and liquidity sources may not be sufficient to meet working capital needs for the next 12 months, raising substantial doubt about its ability to continue as a going concern[170]. Acquisitions - The company purchased substantially all of Rivetz Corp.'s assets related to its "Rivetz Network" for 950,000 shares of common stock on December 3, 2025[137]. - The company acquired substantially all assets from Iverson Design in January 2026, issuing 980,000 shares of common stock as consideration[141]. Impairment and Legal Matters - The company recorded no impairment expense during the three months ended January 31, 2026, compared to $1,300,000 in the same period of 2025[150]. - The company anticipates an increase in legal fees in future periods due to ongoing investigations by the SEC and FINRA[147].