Netcapital Announces Third Quarter Fiscal 2023 Financial Results Including Year-to-Date Revenue Growth of 48%

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

"Over the past nine months, Netcapital has generated substantial revenue growth while generating positive operating and net income," said Martin Kay, CEO of Netcapital Inc. "We have established a number of important strategic partnerships designed to create opportunities for clients and investors, while scaling and advancing our operating platform for continuing growth. Netcapital is executing on the vision for our brand - to break down traditional barriers and offer opportunities for anyone to invest in private companies. Along the way, we are turning customers and communities into owners and brand ambassadors for the businesses they love. We believe this is a powerful symbiotic relationship."

Third Quarter Fiscal 2023 Financial Highlights

• Revenue growth of 25% year-over-year to $2.3 million
• Positive operating income of $571,000 compared to an operating loss of $135,000 in the year-ago quarter
• Diluted earnings per share of $0.33

First Nine Months of Fiscal 2023 Highlights

• Revenue growth of 48% year-over-year to $5.4 million
• Positive operating income of $912,000 compared to an operating loss of $1.5 million in the first nine months of fiscal year 2022
• Diluted earnings per share of $0.46
• Paid down $1 million in debt, closed a $5 million underwritten public offering, and uplisted to Nasdaq in July 2022

For additional disclosure regarding Netcapital's operating results, please refer to the Quarterly Report on Form 10-Q for the period ended January 31, 2023, which has been filed with the Securities and Exchange Commission.

Conference Call Information

The Company will host an investor conference call at 10:00 a.m. ET tomorrow, March 17, 2023.

Participant access:			844-985-2012 or 973-528-0138
Conference entry code:			399662

For those unable to participate in the live call, a replay will be made available in the Investors section of the Company's website.

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
				January 31, 2023			April 30, 2022
				(Unaudited)			(Audited)
	Assets:
	Cash and cash equivalents			$	1,771,927		$	473,925
	Accounts receivable net				2,163,931			2,433,900
	Related party receivable				668			668
	Prepaid expenses				36,844			5,694
		Total current assets			3,973,370			2,914,187
	Deposits				6,300			6,300
	Notes receivable - related parties				202,000			202,000
	Purchased technology, net				15,903,628			15,536,704
	Investment in affiliate				240,080			240,080
	Equity securities at fair value				19,250,193			12,861,253
		Total assets		$	39,575,571		$	31,760,524
	Liabilities and Stockholders' Equity
	Current liabilities:
	Accounts payable
	Trade			$	634,970		$	536,508
	Related party				75,204			378,077
	Accrued expenses				246,665			229,867
	Stock subscription payable				10,000			33,400
	Deferred revenue				718			2,532
	Interest payable				89,491			222,295
	Deferred tax liability, net				1,476,000			977,000
	Related party debt				15,000			22,860
	Convertible notes payable				-			300,000
	Secured note payable				350,000			1,400,000
	Current portion of SBA loans				1,885,800			1,890,727
	Loan payable - bank				34,324			34,324
		Total current liabilities			4,818,172			6,027,590
	Long-term liabilities:
	Long-term SBA loans, less current portion				500,000			495,073
		Total liabilities			5,318,172			6,522,663
	Commitments and contingencies				-			-
	Stockholders' equity:
	Common stock, $.001 par value; 900,000,000 shares
	authorized, 6,071,777 and 2,934,344 shares issued and outstanding				6,072			2,934
	Shares to be issued				183,187			244,250
	Capital in excess of par value				29,613,118			22,479,769
	Retained earnings				4,455,022			2,510,908
		Total stockholders' equity			34,257,399			25,237,861
	Total liabilities and stockholders' equity			$	39,575,571		$	31,760,524

NETCAPITAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	January 31, 2023			January 31, 2022			January 31, 2023			January 31, 2022
Revenues	$	2,260,414		$	1,811,041		$	5,379,960		$	3,636,050
Costs of services		4,305			39,349			61,603			85,429
Gross profit		2,256,109			1,771,692			5,318,357			3,550,621
Costs and expenses:
Consulting expense		130,500			309,545			455,892			675,180
Marketing		23,549			23,945			64,211			67,771
Rent		17,187			11,869			51,586			34,480
Payroll and payroll related expenses		946,043			1,241,332			2,592,891			3,032,987
General and administrative costs		568,253			320,724			1,241,365			1,277,146
Total costs and expenses		1,685,532			1,907,415			4,405,945			5,087,564
Operating income (loss)		570,577			(135,723)			912,412			(1,536,943)
Other income (expense):
Interest expense		(17,632)			(20,573)			(76,922)			(90,844)
Gain on debt conversion		-			-			224,260			-
Debt forgiveness		-			1,904,302			-			1,904,302
Amortization of intangible assets		(25,914)			-			(68,076)			-
Realized loss on sale of investment		-			-			(406,060)			-
Unrealized gain on equity securities		1,866,468			-			1,857,500			3,275,745
Total other income (expense)		1,822,922			1,883,729			1,530,702			5,089,203
Net income before taxes		2,393,499			1,748,006			2,443,114			3,552,260
Income tax expense (benefit)		697,000			(73,000)			499,000			548,000
Net income	$	1,696,499		$	1,821,006		$	1,944,114		$	3,004,260
Basic earnings per share	$	0.33		$	0.64		$	0.46		$	1.16
Diluted earnings per share	$	0.33		$	0.63		$	0.46		$	1.14
Weighted average number of common shares outstanding:
Basic		5,166,299			2,842,924			4,208,216			2,589,142
Diluted		5,166,549			2,882,825			4,208,466			2,629,043

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.

Contacts

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