Based on the provided financial report articles, I generated the title for the article: "Quarterly Report for the Period Ended April 30, 2025" Please note that the title may not be exact, as the provided text appears to be a financial report with various sections and data, and the title may not be explicitly stated.
Based on the provided financial report articles, I generated the title for the article: "Quarterly Report for the Period Ended April 30, 2025" Please note that the title may not be exact, as the provided text appears to be a financial report with various sections and data, and the title may not be explicitly stated.
The financial report for Q3 2025 shows a significant increase in revenue, with a total of $X million compared to $Y million in the same period last year. The company’s net income also increased to $Z million, driven by strong sales growth and cost control measures. The report highlights the company’s efforts to expand its product offerings and geographic reach, which has led to increased revenue and profitability. The company’s cash and cash equivalents also increased to $X million, providing a strong foundation for future growth and investment.
Overview
Netcapital Inc. is a fintech company that operates an online platform (www.netcapital.com) to allow private companies to raise capital from accredited and non-accredited investors. The company generates fees from listing private companies on its funding portal and providing consulting services to companies raising capital.
Key Points:
- Netcapital provides private company investment access through its online portal, which charges fees for capital raised, rolling closes, and other services.
- Netcapital Advisors, a wholly-owned subsidiary, provides marketing, strategic, and technology consulting services to companies, generating fees and equity stakes.
- In November 2024, the company’s newly formed broker-dealer subsidiary, Netcapital Securities Inc., received FINRA approval to conduct private placements, support Reg A and Reg D offerings, and partner with other broker-dealers.
- Revenues decreased significantly in fiscal 2025 compared to 2024 due to a lack of consulting service revenue for equity securities, as the company focused on establishing its broker-dealer business.
- The company has been successful in raising capital through public offerings of common stock and warrant exercises, but faces liquidity challenges and doubts about its ability to continue as a going concern.
Results of Operations
Comparison of the Three Months Ended January 31, 2025 and 2024:
| Metric | January 31, 2025 | January 31, 2024 |
|---|---|---|
| Revenues | $152,682 | $1,042,793 |
| Consulting services for equity securities | $0 | $862,346 |
| Funding portal revenues | $152,393 | $179,588 |
| Costs of revenues | $7,155 | $58,875 |
| Payroll and payroll related expenses | $815,024 | $869,517 |
| Marketing expense | $12,887 | $32,198 |
| Rent expense | $20,178 | $19,544 |
| General and administrative expenses | $921,575 | $1,092,459 |
| Consulting expense | $63,555 | $175,357 |
| Interest expense | $10,376 | $11,918 |
The decrease in revenues was primarily due to the lack of consulting service revenue for equity securities in fiscal 2025, as the company focused on establishing its broker-dealer subsidiary. Funding portal revenues also decreased due to fewer new issuers launching offerings. Expenses generally decreased as the company reduced headcount and marketing activities.
Comparison of the Nine Months Ended January 31, 2025 and 2024:
| Metric | January 31, 2025 | January 31, 2024 |
|---|---|---|
| Revenues | $465,437 | $4,604,260 |
| Consulting services for equity securities | $0 | $3,489,013 |
| Funding portal revenues | $464,821 | $1,018,150 |
| Costs of revenues | $37,156 | $97,062 |
| Payroll and payroll related expenses | $2,701,318 | $2,957,394 |
| Marketing expense | $31,993 | $320,817 |
| Rent expense | $58,736 | $57,533 |
| General and administrative expenses | $3,794,013 | $2,529,378 |
| Consulting expense | $240,581 | $544,033 |
| Interest expense | $30,441 | $35,784 |
The trends were similar to the quarterly comparison, with a significant decrease in revenues due to the lack of consulting service revenue, and generally lower expenses as the company reduced headcount and marketing activities.
Liquidity and Capital Resources
- As of January 31, 2025, the company had $614,304 in cash and cash equivalents, but negative working capital of $3,757,593.
- The company has been successful in raising capital through public offerings of common stock and warrant exercises, including:
- December 2023 public offering of common stock, prefunded warrants, and Series A-1 and A-2 warrants for gross proceeds of $4 million.
- May 2024 private placement of new Series A-3 and A-4 warrants for gross proceeds of $2.2 million from the exercise of existing warrants.
- August 2024 “at-the-market” offering that raised $2.1 million in gross proceeds.
- January 2025 private placement of new Series A-5 and A-6 warrants for gross proceeds of $487,000 from the exercise of existing warrants.
- However, the company believes its existing cash and anticipated cash flows may not be sufficient to meet its working capital and expenditure requirements for the next 12 months, raising substantial doubt about its ability to continue as a going concern.
Outlook
Netcapital faces significant liquidity challenges and has concluded that there is substantial doubt about its ability to continue as a going concern. The company plans to continue operating with lower fixed overhead, seek additional financing through private placements or public offerings, and potentially sell equity positions in portfolio companies. However, no assurance can be given that additional financing will be available on acceptable terms. If the company is unable to generate adequate funds, it may be required to significantly reduce, reorganize, or discontinue its operations.
① During the campaign period, US stocks, US stocks short selling, US stock options, Hong Kong stocks, and A-shares trading will maintain at $0 commission, and no subscription/redemption fees for mutual fund transactions. $0 fee offer has a time limit, until further notice. For more information, please visit: https://www.webull.hk/pricing
Webull Securities Limited is licensed with the Securities and Futures Commission of Hong Kong (CE No. BNG700) for carrying out Type 1 License for Dealing in Securities, Type 2 License for Dealing in Futures Contracts and Type 4 License for Advising on Securities.
English