Netcapital (US:NCPL)2025-08-13 14:00Financial Data and Key Metrics Changes - The company reported revenues of approximately $869,460 for fiscal year 2025, a significant decline from approximately $4,900,000 in fiscal year 2024, primarily due to the discontinuation of consulting services [4] - The gross profit for fiscal year 2025 was $8.29 compared to $4,800,000 in fiscal year 2024, indicating a substantial decrease in profitability [4] - The net loss for fiscal year 2025 was approximately $28,300,000, compared to a net loss of approximately $4,900,000 in fiscal year 2024, reflecting a worsening financial position [6] Business Line Data and Key Metrics Changes - The company discontinued its consulting services, which accounted for the largest portion of revenue decline year over year [4] - The funding portal charged a 1% fee payable in securities to issuers, generating $72,000 in fees for fiscal year 2025, down from $97,700 in fiscal year 2024 [4] Market Data and Key Metrics Changes - The company evaluated its equity investments for impairment, resulting in an impairment expense of approximately $19,900,000 due to several investments declining below their carrying amounts [5] Company Strategy and Development Direction - The company is transitioning away from equity-based consulting revenue to focus on building a scalable foundation for future growth [7] - The wholly owned subsidiary, Net Capital Securities, received its broker-dealer license, allowing the company to serve a broader base of issuers and investors [8] - The company aims to integrate blockchain and digital assets with traditional finance, exploring opportunities in the evolving regulatory environment [15][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic headwinds and uncertainty in financial markets but remains committed to strengthening the core business for long-term growth [7] - The company is focused on democratizing access to private capital markets and is exploring ways to enhance liquidity in secondary markets [34] Other Important Information - The company faces high general and administrative expenses, totaling $5,300,000, attributed to the complexities of operating in the fintech space and regulatory challenges [37] - Management expressed frustration over the high legal expenses, which are necessary for educating regulators about their unique business model [38] Q&A Session Summary Question: Can you shed light on your transition and future plans? - Management discussed broadening the platform to help companies raise capital and mentioned securing a broker-dealer license to participate in larger capital raisings [13][14] Question: Is the consulting business the major cost driver leading to losses? - Management clarified that the funding portal is a scalable technology operation, while the consulting business was less scalable and typically compensated in equity, which is hard to value [19][20] Question: What are the plans regarding crypto and blockchain integration? - Management stated they are evaluating long-term value creation opportunities in blockchain and digital assets, focusing on sustainable deals rather than short-term gains [21][23] Question: Why are G&A expenses so high for a small company? - Management acknowledged that high legal expenses are a cost of doing business in the fintech space, particularly due to regulatory complexities [37][38] Question: Are you considering going private due to unsustainable costs? - Management confirmed they are not exploring going private, emphasizing the benefits of being a public company despite the associated costs [41][42]