8-K
Netcapital Inc. (NCPL)
| UNITED STATES | ||
|---|---|---|
| SECURITIES AND EXCHANGE COMMISSION | ||
| Washington, D.C. 20549 | ||
| FORM 8-K | ||
| CURRENT REPORT | ||
| PURSUANT TO SECTION 13 OR 15(d) OF | ||
| THE SECURITIES EXCHANGE ACT OF 1934 | ||
| Date<br> of Report (Date of earliest event reported): July 26, 2023 | ||
| NETCAPITAL INC. | ||
| (Exact<br> name of registrant as specified in its charter) | ||
| Utah | 001-41443 | 87-0409951 |
| (State or<br> other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification<br> No.) |
| State Street Financial Center**, 1 Lincoln Street** , Boston,<br> Massachusetts 02111 | ||
| (Address<br> of principal executive offices) (Zip Code) | ||
| 782****-925-1700 | ||
| (Registrant's<br> telephone number, including area code) | ||
| Not Applicable | ||
| (Former<br> name or former address, if changed since last report) | ||
| Check<br> the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under<br> any of the following provisions: | ||
| [<br> ] Written communications pursuant to Rule 425 under<br> the Securities Act (17 CFR 230.425) | ||
| [<br> ] Soliciting material pursuant to Rule 14a-12 under<br> the Exchange Act (17 CFR 240.14a-12) | ||
| [<br> ] Pre-commencement communications pursuant to Rule<br> 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| [<br> ] Pre-commencement communications pursuant to Rule<br> 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||
| Title<br> of each class | Trading<br> symbol(s) | Name<br> of each exchange on which registered |
| --- | --- | --- |
| Common Stock, $0.001 par value per share | NCPL | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and FinancialCondition.
On July 26, 2023, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the year ended April 30, 2023. The text of the press release is furnished as Exhibit 99.1 to this current report.
The information in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated July 26, 2023. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Netcapital Inc. | ||
|---|---|---|
| (Registrant) | ||
| Date: July 26, 2023 | By: | /s/<br> Coreen Kraysler |
| Coreen Kraysler | ||
| Chief Financial Officer |
Exhibit99.1
NetcapitalAnnounces Revenue Growth of 55% for Fiscal Year 2023
Investorconference call to be held tomorrow, July 27, 2023, at 10:00 a.m. ET
BOSTON, MA – July 26, 2023 – Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for its fourth quarter and fiscal year 2023 ended April 30, 2023.
“Fiscal 2023 marked a year of strong performance, highlighted by revenue growth of 55% and operating income of more than $2 million,” said Martin Kay, CEO of Netcapital Inc. “The value proposition of our business is becoming more evident as we continue to build scale and deliver a superior experience at a lower cost for issuers. We expect to offer secondary trading in private equities later in this year, a liquidity model that we believe will support expansion of both our investor and issuer communities, and generate a potential new revenue stream for Netcapital. As a back-to-back winner of the Fintech Breakthrough Award in 2022 and 2023, our brand is well-recognized for innovation and excellence, and well-positioned for value creation.”
FiscalYear 2023 Highlights
● Revenue growth of 55% year-over-year to $8.5 million as compared to $5.5 million in fiscal 2022
● Operating income of $2.3 million compared to an operating loss of $1.0 million in fiscal year 2022
● Paid down $1 million in debt, closed two underwritten public offering for aggregate gross proceeds of $6.7 million, and uplisted to Nasdaq in July 2022
For additional disclosure regarding operating results, please refer to the Annual Report on Form 10-K for the period ended April 30, 2023, which has been filed with the U.S. Securities and Exchange Commission.
ConferenceCall Information
The Company will host an investor conference call at 10:00 a.m. ET tomorrow, July 27, 2023.
Participant access: 844-985-2012 or 973-528-0138
Conference entry code: 398497
For those unable to participate in the live call, a replay will be made available in the Investors section of the Company’s website.
AboutNetcapital 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.
InvestorContact
800-460-0815
ir@netcapital.com
NETCAPITALINC.
Consolidated Balance Sheets
| Assets: | April<br> 30, 2022 | ||
|---|---|---|---|
| Cash<br> and cash equivalents | 569,441 | $ | 473,925 |
| Related<br> party receivable | — | 668 | |
| Accounts<br> receivable, net | 1,388,500 | 2,433,900 | |
| Prepaid<br> expenses | 583,030 | 5,694 | |
| Total<br> current assets | 2,540,971 | 2,914,187 | |
| Deposits | 6,300 | 6,300 | |
| Note<br> receivable – related parties | 202,000 | 202,000 | |
| Purchased<br> technology | 15,875,297 | 15,536,704 | |
| Investment<br> in affiliate | 240,080 | 240,080 | |
| Equity<br> securities at fair value | 22,955,445 | 12,861,253 | |
| Total<br> assets | 41,820,093 | $ | 31,760,524 |
| Liabilities<br> and Stockholders’ Equity | |||
| Current<br> liabilities: | |||
| Accounts<br> payable | |||
| Trade | 578,331 | $ | 536,508 |
| Related<br> party | 75,204 | 378,077 | |
| Accrued<br> expenses | 285,065 | 229,867 | |
| Stock<br> subscription payable | 10,000 | 33,400 | |
| Deferred<br> revenue | 661 | 2,532 | |
| Interest<br> payable | 98,256 | 222,295 | |
| Income<br> taxes payable | 174,000 | — | |
| Deferred<br> tax liability, net | 1,657,000 | 977,000 | |
| Related<br> party debt | 15,000 | 22,860 | |
| Secured<br> note payable | 350,000 | 1,400,000 | |
| Current<br> portion of SBA loans | 1,885,800 | 1,890,727 | |
| Loan<br> payable - bank | 34,324 | 34,324 | |
| Convertible<br> notes payable | — | 300,000 | |
| Total<br> current liabilities | 5,163,641 | 6,027,590 | |
| Long-term<br> liabilities: | |||
| Long-term<br> SBA loans, less current portion | 500,000 | 495,073 | |
| Total<br> Liabilities | 5,663,641 | 6,552,663 | |
| Commitments<br> and contingencies | — | — | |
| Stockholders’<br> equity: | |||
| Common<br> stock, .001 par value; 900,000,000 shares authorized, 6,440,527 and 2,934,344 shares issued and outstanding | 6,441 | 2,934 | |
| Capital<br> in excess of par value | 30,500,944 | 22,479,769 | |
| Shares<br> to be issued | 183,187 | 244,250 | |
| Retained<br> earnings | 5,465,880 | 2,510,908 | |
| Total<br> stockholders’ equity | 36,156,452 | 25,237,861 | |
| Total<br> liabilities and stockholders’ equity | 41,820,093 | $ | 31,760,524 |
All values are in US Dollars.
NETCAPITALINC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
| Year Ended | Year Ended | |||||
|---|---|---|---|---|---|---|
| April<br> 30, 2023 | April<br> 30, 2022 | |||||
| Revenues | $ | 8,493,985 | $ | 5,480,835 | ||
| Costs<br> of services | 85,038 | 110,115 | ||||
| Gross<br> profit | 8,408,947 | 5,370,720 | ||||
| Costs<br> and expenses: | ||||||
| Consulting<br> expense | 589,349 | 892,567 | ||||
| Marketing | 85,482 | 95,753 | ||||
| Rent | 75,052 | 47,670 | ||||
| Payroll<br> and payroll related expenses | 3,646,490 | 3,763,845 | ||||
| General<br> and administrative costs | 1,740,698 | 1,602,031 | ||||
| Total<br> costs and expenses | 6,137,071 | 6,401,866 | ||||
| Operating<br> income (loss) | 2,271,876 | (1,031,146 | ) | |||
| Other<br> income (expense): | ||||||
| Interest<br> expense | (93,842 | ) | (126,372 | ) | ||
| Debt<br> forgiveness | — | 1,904,296 | ||||
| Gain<br> on debt conversion | 224,260 | — | ||||
| Amortization<br> of intangible assets | (96,407 | ) | — | |||
| Realized<br> loss on sale of investment | (406,060 | ) | — | |||
| Unrealized<br> gain on equity securities | 1,857,500 | 3,275,745 | ||||
| Other<br> income | 51,645 | 25,007 | ||||
| Total<br> other income | 1,537,096 | 5,078,676 | ||||
| Net<br> income before taxes | 3,808,972 | 4,047,530 | ||||
| Income<br> tax expense | 854,000 | 544,000 | ||||
| Net<br> income | $ | 2,954,972 | $ | 3,503,530 | ||
| Basic<br> earnings per share | $ | 0.63 | $ | 1.31 | ||
| Diluted<br> earnings per share | $ | 0.63 | $ | 1.27 | ||
| Weighted<br> average number of common shares outstanding: | ||||||
| Basic | 4,677,214 | 2,666,173 | ||||
| Diluted | 4,677,464 | 2,748,480 |
Theinformation contained herein includes forward-looking statements. These statements relate to future events or to our future financialperformance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materiallydifferent 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 otherfactors 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 tothese 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 actualresults could differ materially from those anticipated in these forward-looking statements, even if new information becomes availablein the future.