Netcapital (NCPL) - 2022 Q4 - Annual Report

Financial Performance - Revenues for fiscal 2022 increased by $759,832, or 16%, to $5,480,835 compared to $4,721,003 in fiscal 2021, driven by a 130% increase in portal fees to $1,206,957[181]. - Costs of revenues decreased by $649,043, or 85%, to $110,115 in fiscal 2022 from $759,158 in fiscal 2021, primarily due to reduced labor costs[181]. - Consulting expenses increased by $205,376, or 30%, to $892,567 in fiscal 2022, attributed to hiring more contractors for back-office support[182]. - General and administrative expenses surged by $1,137,076, or 245%, to $1,602,031 in fiscal 2022, mainly due to legal costs and professional fees[183]. - Interest expense rose by $39,039 to $126,372 in fiscal 2022, despite a decrease in debt balances from $5,328,784 to $4,142,984[184]. - The company recorded an unrealized gain on equity securities of $3,275,745 in fiscal 2022, compared to $2,571,494 in fiscal 2021[185]. Cash Flow and Liquidity - As of April 30, 2022, cash and cash equivalents were $473,925, with negative working capital of $3,113,403, an improvement from $4,666,833 in the prior year[186]. - Net cash used in operating activities was $3,006,667 in fiscal 2022, a decrease from $3,250,868 in fiscal 2021[192]. - The company completed a public offering on July 15, 2022, raising gross proceeds of $5,000,750 from the sale of 1,205,000 shares and warrants[175]. - The company believes existing cash balances and anticipated cash flows will be sufficient for working capital needs over the next 12 months[190]. Asset Management - No impairment loss was recognized in fiscal 2022 and 2021 for long-lived assets[201]. - A valuation allowance for tax assets and loss carryforwards is provided when it is determined that such assets will more likely than not go unused[202]. Risk Management - The company has no off-balance sheet arrangements[203]. - The company is not subject to fluctuations in interest rates, currency exchange rates, or other financial market risks[204]. - The company has not made any sales, purchases, or commitments with foreign entities that would expose it to currency risks[204]. - The company qualifies as a smaller reporting company and is not required to provide additional market risk information[206].