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): September 12, 2022 | ||
| 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) | ||
| (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<br> to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| [<br> ] Soliciting material pursuant to<br> Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| [<br> ] Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| [<br> ] Pre-commencement communications<br> pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name 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 September 12, 2022, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the period ended July 31, 2022. 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 September 12, 2022. |
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. | ||
|---|---|---|
| Date: September 11, 2022 | By: | /s/ Cecilia Lenk |
| Cecilia Lenk | ||
| Chief Executive Officer |
Exhibit99.1
NetcapitalInc. Announces Revenue Growth of 114% for First Quarter of Fiscal 2023
Conferencecall to be held tomorrow, September 13, 2022, at 10:00 a.m. ET
BOSTON, MA – September 12, 2022 – 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.”
FirstQuarter 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
ConferenceCall 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.
Foradditional 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.
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.
NETCAPITALINC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| Assets: | April<br> 30, 2022 (Audited) | ||
|---|---|---|---|
| Cash<br> and cash equivalents | 2,556,170 | $ | 473,925 |
| Related<br> party receivable | 668 | 668 | |
| Accounts<br> receivable, net | 2,154,700 | 2,433,900 | |
| Prepaid<br> expenses | 41,536 | 5,694 | |
| Total<br> current assets | 4,753,074 | 2,914,187 | |
| Deposits | 6,300 | 6,300 | |
| Notes<br> receivable – related parties | 202,000 | 202,000 | |
| Purchased<br> technology, net | 15,515,623 | 15,536,704 | |
| Investment<br> in affiliate | 240,080 | 240,080 | |
| Equity<br> securities at fair value | 13,455,193 | 12,861,253 | |
| Total<br> assets | 34,172,270 | $ | 31,760,524 |
| Liabilities<br> and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts<br> payable | |||
| Trade | 457,826 | $ | 536,508 |
| Related<br> party | 75,204 | 378,077 | |
| Accrued<br> expenses | 173,161 | 229,867 | |
| Stock<br> subscription payable | 33,400 | 33,400 | |
| Deferred<br> revenue | 602 | 2,532 | |
| Interest<br> payable | 247,899 | 222,295 | |
| Deferred<br> tax liability, net | 680,000 | 977,000 | |
| Related<br> party debt | 19,660 | 22,860 | |
| Secured<br> note payable | 400,000 | 1,400,000 | |
| Current<br> portion of SBA loans | 1,893,719 | 1,890,727 | |
| Loan<br> payable - bank | 34,324 | 34,324 | |
| Convertible<br> notes payable | — | 300,000 | |
| Total<br> current liabilities | 4,015,795 | 6,027,590 | |
| Long-term liabilities: | |||
| Long-term<br> SBA loans, less current portion | 492,081 | 495,073 | |
| Total<br> liabilities | 4,507,876 | 6,522,663 | |
| Commitments<br> and contingencies | — | — | |
| Stockholders'<br> equity: | |||
| Common<br> 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<br> to be issued | 244,250 | 244,250 | |
| Capital in excess of par value | 26,840,486 | 22,479,769 | |
| Retained<br> earnings | 2,575,385 | 2,510,908 | |
| Total<br> stockholders' equity | 29,664,394 | 25,237,861 | |
| Total<br> liabilities and stockholders' equity | 34,172,270 | $ | 31,760,524 |
All values are in US Dollars.
| NETCAPITAL INC. | ||||||
|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED<br> STATEMENTS OF OPERATIONS | ||||||
| (UNAUDITED) | ||||||
| Three<br> Months Ended | Three<br> Months Ended | |||||
| July<br> 31, 2022 | July<br> 31, 2021 | |||||
| Revenues | $ | 1,340,573 | $ | 625,187 | ||
| Costs<br> 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<br> expenses | 769,940 | 927,333 | ||||
| General<br> and administrative costs | 392,297 | 395,052 | ||||
| Total<br> costs and expenses | 1,312,840 | 1,672,972 | ||||
| Operating<br> 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<br> assets | (21,081 | ) | — | |||
| Realized loss on sale of<br> investment | (406,060 | ) | — | |||
| Unrealized<br> gain on equity securities | — | 3,275,745 | ||||
| Total<br> other income (expense) | (239,193 | ) | 3,240,500 | |||
| Net<br> income (loss) before taxes | (232,523 | ) | 2,164,410 | |||
| Income<br> tax expense (benefit) | (297,000 | ) | 707,000 | |||
| Net<br> 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<br> of common shares outstanding: | ||||||
| Basic | 3,168,547 | 2,206,118 | ||||
| Diluted | 3,171,397 | 2,241,675 |
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.
InvestorContact
800-460-0815
ir@netcapital.com