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Netcapital Inc. Announces Revenue Growth of 114% for First Quarter of Fiscal 2023

Conference call to be held tomorrow, September 13, 2022, at 10:00 a.m. ET

BOSTON, September 12, 2022--(BUSINESS WIRE)--Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the "Company"), a digital private capital markets ecosystem, today announced financial results for the first quarter of fiscal year 2023 ended July 31, 2022.

"Our uplisting to Nasdaq in July was a fantastic way to kick off our new fiscal year, and we welcome our new shareholders and appreciate the investor interest we are receiving," said Dr. Cecilia Lenk, CEO of Netcapital Inc. "We are pleased to deliver strong first quarter results and look forward to a productive year ahead."

Jason Frishman, CEO of Netcapital Funding Portal Inc., commented, "We kicked off our fiscal year 2023 with strong momentum on our platform, surpassing 100,000 users. We believe the activity on our portal illustrates the key competitive advantages we offer over other online capital raising platforms – a comprehensive suite of services, scalable technology platform, and high-value consulting for issuers, plus the ability of investors to invest from virtually anywhere in the world, at almost any time, with just a few clicks."

First Quarter Fiscal 2023 Financial Highlights

  • Revenue growth of 114% year-over-year to $1.3 million

  • Positive operating income compared to operating loss of $1.1 million in the year-ago quarter

  • Equity securities at fair value totaled $13.5 million at July 31, 2022, compared to $9.6 million one year ago, an increase of 41%

  • Cash and cash equivalents of $2.6 million at July 31, 2022

  • Paid down $1 million in debt

  • Closed a $5 million underwritten public offering

Conference Call Information

The Company will host an investor conference call tomorrow, September 13, 2022, at 10:00 a.m. ET.

Participant access: 844-985-2012 or 973-528-0138
Entry code: 747753

For those unable to participate in the live call, a replay will be available in the Investor Relations section of the Company’s website.

For additional disclosure regarding operating results, please refer to the Quarterly Report on Form 10-Q for the period ended July 31,2022, which has been filed with the Securities and Exchange Commission.

About Netcapital Inc.

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors. The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies with disruptive technologies. The Netcapital funding portal is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

NETCAPITAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

July 31, 2022

April 30, 2022

Assets:

(Unaudited)

(Audited)

Cash and cash equivalents

$

2,556,170

$

473,925

Accounts receivable net

2,154,700

2,433,900

Related party receivable

668

668

Prepaid expenses

41,536

5,694

Total current assets

4,753,074

2,914,187

Deposits

6,300

6,300

Notes receivable - related parties

202,000

202,000

Purchased technology, net

15,515,623

15,536,704

Investment in affiliate

240,080

240,080

Equity securities at fair value

13,455,193

12,861,253

Total assets

$

34,172,270

$

31,760,524

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

Trade

$

457,826

$

536,508

Related party

75,204

378,077

Accrued expenses

173,161

229,867

Stock subscription payable

33,400

33,400

Deferred revenue

602

2,532

Interest payable

247,899

222,295

Deferred tax liability, net

680,000

977,000

Related party debt

19,660

22,860

Convertible notes payable

-

300,000

Secured note payable

400,000

1,400,000

Current portion of SBA loans

1,893,719

1,890,727

Loan payable - bank

34,324

34,324

Total current liabilities

4,015,795

6,027,590

Long-term liabilities:

Long-term SBA loans, less current portion

492,081

495,073

Total Liabilities

4,507,876

6,522,663

Commitments and contingencies

-

-

Stockholders' equity:

Common stock, $.001 par value; 900,000,000 shares authorized, 4,272,677 and 2,934,344 shares issued and outstanding

4,273

2,934

Shares to be issued

244,250

244,250

Capital in excess of par value

26,840,486

22,479,769

Retained earnings

2,575,385

2,510,908

Total stockholders' equity

29,664,394

25,237,861

Total liabilities and stockholders' equity

$

34,172,270

$

31,760,524

NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three
Months
Ended

Three
Months
Ended

July 31, 2022

July 31, 2021

Revenues

$

1,340,573

$

625,187

Costs of services

21,063

28,305

Gross profit

1,319,510

596,882

Costs and expenses:

Consulting expense

125,611

316,631

Marketing

7,780

21,826

Rent

17,212

12,130

Payroll and payroll related expenses

769,940

927,333

General and administrative costs

392,297

395,052

Total costs and expenses

1,312,840

1,672,972

Operating income (loss)

6,670

(1,076,090

)

Other income (expense):

Interest expense

(36,312

)

(35,245

)

Gain on debt conversion

224,260

-

Amortization of intangible assets

(21,081

)

-

Realized loss on sale of investment

(406,060

)

-

Unrealized gain on equity securities

-

3,275,745

Total other income (expense)

(239,193

)

3,240,500

Net income before taxes

(232,523

)

2,164,410

Income tax expense (benefit)

(297,000

)

707,000

Net income

$

64,477

$

1,457,410

Basic earnings per share

$

0.02

$

0.66

Diluted earnings per share

$

0.02

$

0.65

Weighted average number of common shares outstanding:

Basic

3,168,547

2,206,118

Diluted

3,171,397

2,241,675

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220912005954/en/

Contacts

Investor Contact

800-460-0815
ir@netcapital.com