Q2 2025 Netcapital Inc Earnings Call

In the center. Please hold on operator will be with you momentarily.

[music].

Good morning Conference Center, Matt. Please have your conference entry code.

May I have your name please.

Speaker Change: And May I have your company name please.

Yeah.

Connecting that thank you for holding.

Speaker Change: Total raised under reggae and Reg D as well as enter into fee sharing agreements with other broker dealers.

Speaker Change: Thank you for your continued interest and support of net capital and we look forward to keeping you informed of our progress.

Speaker Change: Operator, we are ready for questions.

Speaker Change: Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.

Speaker Change: We do ask that while posing your question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.

Once again, if you have any questions or comments. Please press star one on your phone.

Speaker Change: Please hold while we poll for questions.

Speaker Change: Thank you. Your first question is coming from Karl <unk> from <unk> capital. Your line is live.

Speaker Change: Hello.

Speaker Change: Hi, Joe go.

Speaker Change: Go ahead, hi, there.

Speaker Change: Hi.

Speaker Change: Okay.

Speaker Change: Do you have yes, Martin K, the CEO and Korean Kris <unk> our CFO.

Speaker Change: Okay, Hey, Martin I'm, an investor and I'm also do a lot of startups and we looked at crowd funding what have you, but more so I'm curious to see what is your capital structure. I know you know online. It says <unk> got limited number of shares but you guys trade Crazy volumes based on what you have can you kind of provide an update.

Speaker Change: What what that structure is.

Speaker Change: Yeah.

Speaker Change: It's it's all common stock I mean, theres nothing really.

Speaker Change: Complex about it.

Speaker Change: We trade on NASDAQ.

Speaker Change: Do we have a pretty diversified shareholder base and not uncommon for that too to trade large volumes.

Periodically.

Speaker Change: How many shares are outstanding now.

Speaker Change: Thank God.

Speaker Change: Our deferred accordion, but I think it's approximately one 1.8 million shares outstanding.

Speaker Change: Okay, and then you have a number of warrants for.

Speaker Change: What are the cheapest warrants that are out there and how many are out.

Speaker Change: I don't know Keith if you have that in front of you.

Speaker Change: I don't have that in front of me.

Speaker Change: Okay, what's your net assets.

Speaker Change: Now I know you have a number of investments in other companies what would you say your net asset value is.

Speaker Change: Well, if youre talking about the portfolio of equity securities and we talked about.

Speaker Change: The business, we had been in of taking.

Speaker Change: Equity and returned for consulting services that portfolio of.

Speaker Change: Of equity positions is I believe.

Speaker Change: The balance sheet, we just disclosed is a little over $25 million with.

Speaker Change: Of net asset value in those equity positions.

Speaker Change: And what's your cash position and payables or liabilities.

Speaker Change: Again cash.

Speaker Change: And cash equivalents at the end of the quarter, a little over $1 3 million.

Speaker Change: Thanks.

Speaker Change: And we're going to have to move onto the next questioner. After this thank you.

Speaker Change: Okay.

Okay.

Speaker Change: Thank you. Your next question is coming from Chris Sakai from singular research Your line is live.

Yes, hi, good morning.

Chris Sakai: Just really wanted to get a sense of an idea of what.

Chris Sakai: <unk> capital Securities from other broker dealer.

Speaker Change: Well, there's a number of things obviously.

Speaker Change: As we talked about the.

Speaker Change: The ability to sell.

Speaker Change: Support Reg a fund raising.

Speaker Change: Through the existing net capital platform.

Speaker Change: Hmm.

Speaker Change: Where we've already built out an ecosystem and a marketplace that brings investors and other issuers together.

Speaker Change: Obviously creates a platform and in an environment.

Speaker Change: That is <unk>.

Speaker Change: Need to the sort of equity crowdfunding.

Industry versus traditional broker dealer activities.

Speaker Change: So in other words, we already book, we have and we've disclosed over 115000 investor accounts.

Speaker Change: And we have.

Robust relationships with digital marketing providers.

Speaker Change: And the team internally that understands how to bring the right investors to the right deal in this in this way and in this model which is.

Speaker Change: Relatively unique.

Speaker Change: Obviously, we have competitors a few competitors in our space, but it's not the traditional broker dealer business.

Speaker Change: Okay. Thanks for that and also.

Does this new registration on if a broker dealer.

Speaker Change: Does that provide any revenue visibility can you can you see any any.

Speaker Change: Revenue streams, new revenue streams from them.

Speaker Change: What about how much.

Speaker Change: Do you think.

Speaker Change: Well, we haven't disclosed specifically.

Speaker Change:

Speaker Change: What that.

Speaker Change: In our forecast, it's not that's not what we do but.

Speaker Change: As we discussed in our remarks.

Speaker Change: It certainly opens up the potential for.

Speaker Change: For new revenue streams for example.

Speaker Change: Reggae as I'm sure you know allow.

Speaker Change: Allows issuers to raise.

Speaker Change: Greater amount up to $75 million in the 12 months period versus $5 million in direct CF exemption.

Speaker Change: That much larger arrays and as a broker dealer we are now able to see.

Speaker Change: Structure of fee arrangement.

Speaker Change: That is likely a percentage of that.

Speaker Change: As opposed to some sort of flat fee. So that obviously is is something that we plan to pursue.

Speaker Change: Do you see any large deals like that coming up.

Speaker Change: Well again, we havent disclosed.

Specifics of deals that we're pursuing but.

Safe to assume that again, we are out in the marketplace talking to issue is all the time and have been we've had almost 300 company successfully raise on our platform.

Speaker Change: Many of those have gone on to raise additional rounds of capital and are obviously candidates also for Reg.

Speaker Change: <unk>.

Speaker Change: So so yeah. We're we're in active discussions and have been for some time with companies who'd like to raise more capital than they can on direct CF exemption.

Speaker Change: Okay, great. Thanks.

Speaker Change: Okay.

Speaker Change: Thank you. Your next question is coming from John Gilliam from point clear strategic capital. Your line is live.

John Gilliam: Good morning.

John Gilliam: Yes last quarter.

John Gilliam: Yeah.

John Gilliam: Indicated that you expected the Tim from Ats.

John Gilliam: Exchange too.

John Gilliam: Open up from the beta to full launch in the.

John Gilliam: The quarter ended this month.

I wanted to just get an update there if it is still expected to launch in 'twenty four.

Speaker Change: Well, what I can say and what we've said.

Speaker Change: I think previously as the technical and product built out build out is complete.

Speaker Change: As you mentioned in partnership with the template Etfs, but.

Speaker Change: I think it's safe to say, we're still working through some details of the regulatory framework governing secondary exchanges.

Speaker Change: And it's really important to us to make sure that we don't.

Rollout or open up to everyone a capability that we you know that we're still we're still wanting to get to be exactly right. So so we're still working on that and again I think it's prudent for us to know.

Speaker Change: Do anything before we feel 100% comfortable that we have the best product experience and that we have.

Speaker Change:

Speaker Change: We're operating within the regulatory framework in a way that that we need to.

So.

Speaker Change: Again, we haven't.

Speaker Change: Really talked Oh disclosed official timeline for launching.

Speaker Change: That secondary transfer functionality, but.

Speaker Change: Uh Huh, that's all I can say at this point will you on the prior call. You had mentioned you thought it would be in just in the year. The calendar year ended 24 are.

Speaker Change: Are you feeling like Thats kind of pushed into.

Speaker Change: Q3, <unk> in the past the end of Q3 into Q4, I think that's right how far out do you think we're looking.

Speaker Change: Again, I don't think I can.

Confidently predict that at this point.

Speaker Change: Okay. Thank you.

Thank you that concludes our Q&A session I will now hand, the conference back to CFO Correne Chrysler for closing remarks. Please go ahead.

Correne Chrysler: Thank you everyone for joining our call today, we really appreciate you as shareholders and potential shareholders. We.

Correne Chrysler: And are excited about the prospects ahead for our new broker dealer subsidiary and wish you all a wonderful holiday season. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.