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Netcapital | 10-Q: Quarterly report

SEC announcement ·  Mar 18 17:16
Summary by Moomoo AI
Netcapital Inc., a fintech company specializing in online capital raising, reported a decrease in revenue for the quarter ended January 31, 2024. Revenue fell by 54% to $1,042,793 compared to $2,260,414 in the same period last year, primarily due to a decrease in consulting services provided in exchange for equity securities. Costs of services rose by 1,268% to $58,875. The company experienced a net loss of $2,227,542, a significant shift from the net income of $1,696,499 reported in the previous year. This loss was largely due to an unrealized loss of $2,696,135 on equity securities, particularly from a decline in the value of shares in KingCrowd, Inc. Operating expenses saw a mixed trend, with payroll and payroll-related expenses decreasing by 8%, while marketing, rent, and general and administrative expenses increased...Show More
Netcapital Inc., a fintech company specializing in online capital raising, reported a decrease in revenue for the quarter ended January 31, 2024. Revenue fell by 54% to $1,042,793 compared to $2,260,414 in the same period last year, primarily due to a decrease in consulting services provided in exchange for equity securities. Costs of services rose by 1,268% to $58,875. The company experienced a net loss of $2,227,542, a significant shift from the net income of $1,696,499 reported in the previous year. This loss was largely due to an unrealized loss of $2,696,135 on equity securities, particularly from a decline in the value of shares in KingCrowd, Inc. Operating expenses saw a mixed trend, with payroll and payroll-related expenses decreasing by 8%, while marketing, rent, and general and administrative expenses increased. The company's cash position improved, with cash and cash equivalents totaling $2,172,099, up from $569,441 at the end of the last fiscal year. Despite the increase in cash, the company's operating loss and cash used in operations raised substantial doubt about its ability to continue as a going concern. Netcapital Inc. has taken steps to reduce operating expenses and is exploring options to raise additional capital. The company's stock is at risk of being delisted from the Nasdaq Capital Market if it cannot meet the minimum bid price requirement by August 26, 2024. A significant portion of Netcapital's assets are held in equity securities of early-stage companies, which are illiquid and subject to volatility, posing a risk to the company's financial stability.

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