Q3 2025 Netcapital Inc Earnings Call
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Operator: Thank you for holding. We sincerely appreciate your patience. Please stay on the line and we'll be back in a minute.
Operator: Good morning and welcome to the Netcapital Inc. third quarter fiscal 2025 conference call. At this time, all participants have been placed on a listen only mode. And we will open the floor for your questions and comments after the presentation. Should you wish to join the queue at any time to ask a question, you may press star one on your telephone keypad. Should you wish to remove yourself from queue, you may press star two.
Speaker Change: Good morning, and welcome to the net capital Inc. Third quarter fiscal 2025 conference call. At this time, all participants have been placed on a listen only mode.
And we will open the floor for your questions and comments after the presentation.
Speaker Change: Should you wish to join the queue at any time to ask a question you May press star one on your telephone keypad should you wish to remove yourself from queue. You May press star two.
Operator: It's now my pleasure to turn the floor over to your host.
Speaker Change: It's now my pleasure to turn the floor over to your host.
Coreen Kraysler: Coreen Kraysler, CFO of Netcapital Inc. Coreen, the floor is yours. Thank you, Tom. Good morning, everyone, and thank you for joining NetCapital's third quarter fiscal 2025 financial results conference call. I'm Coreen Kraysler, CFO of Netcapital, Inc., and I'll begin by reviewing our financial results, and then our Chief Executive Officer, Martin Kay, will share his prepared remarks before we open the Q&A portion of our call.
Speaker Change: Corrine Chrysler CFO of net capital link chlorine the floor is yours.
Corrine Chrysler: Thank you Tom.
Speaker Change: Good morning, everyone and thank you for joining that capital's third quarter fiscal 2025 financial results Conference call.
Speaker Change: I'm, Cory and Chrysler CFO of net capital, Inc, and I will begin by reviewing our financial results and then our Chief Executive Officer, Martin K will share his prepared remarks before we open the Q&A portion of our call.
Coreen Kraysler: Before we begin, I'd like to remind everyone of the Safe Harbor Disclosure regarding forward-looking information. Management discussion may include forward-looking statements. These statements relate to future events or future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Any forward-looking statements reflect management's current views with respect to operations, results of operations, growth strategy, liquidity, and future events.
Speaker Change: Before we begin I'd like to remind everyone of the safe Harbor disclosure regarding forward looking information.
Speaker Change: Management's discussion may include forward looking statements.
Speaker Change: These statements relate to future events or future financial performance and involve known and unknown risks uncertainties and other factors that may cause actual results to be materially different from any future results.
Speaker Change: So of activity performance or achievements expressed or implied by these forward looking statements.
Speaker Change: Any forward looking statements.
Speaker Change: Statements reflect management's current views with respect to operations results of operations gross strategy liquidity and future events.
Coreen Kraysler: Netcapital assumes 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.
Speaker Change: Net capital assumes no obligation to publicly update or revise these forward looking statements for any reason.
Speaker Change: Or to update the reasons actual results could differ materially from those anticipated in these forward looking statements.
Speaker Change: Even if new information becomes available in the future.
Coreen Kraysler: With that said, I'd like to now turn to our financial results for the second quarter, fiscal 2025. Revenues for the three months ended January 31, 2025 decreased by $890,111 or approximately 85% to $152,682 as compared to $1,000,042,793 during the three months ended January 31, 2024. The decline in revenue was attributed to the lack of consulting service revenue for equity securities in Q3 2025, as compared to revenue of $862,346 for consulting services for equity securities in Q3 2024. In fiscal 2025, management has focused on establishing our broker-dealer subsidiary to gain additional sources of revenue, and we have not been pursuing the equity-based revenue contract.
Speaker Change: With that said I'd like to now turn to our financial results for the second quarter fiscal 2025.
Revenues for the three months ended January 31, 2025 decreased by $890111.
Speaker Change: Or approximately 85% to $152000 682.
Speaker Change: As compared to $1 million 40 to 793 during the three months ended January 31 2024.
Speaker Change: The decline in revenue was attributed to the lack of consulting service revenue for equity Securities in Q3 2025.
Speaker Change: As compared to revenue of 862346 for consulting services for equity Securities in Q3 2024.
Speaker Change: Since fiscal 2025 management has focused on establishing our broker dealer subsidiary to gain additional sources of revenue.
Speaker Change: And then we have not been pursuing the equity base revenue contracts.
Coreen Kraysler: On November 22nd, 2024, we received FINRA approval for our broker-dealer subsidiary, Netcapital Securities. We reported an operating loss of $1,687,692 for the third quarter fiscal 2025 as compared to an operating loss of $1,205,157 for the third quarter of fiscal 2024. We reported a net loss for the third quarter fiscal 2025 of approximately $3,006,537 as compared to a net loss of approximately $2.2 million for the same period in the prior year. Third quarter results reflect an impairment charge of $1.3 million for one of our portfolio companies. We recorded a net loss per share of $1.57 EPS for the third quarter compared to EPS of a loss of $13.60 a share for the same period in the prior year.
Speaker Change: On November 20 <unk>.
Speaker Change: 2024.
Speaker Change: We received FINRA approval for our broker dealer subsidiary net capital Security thing.
Speaker Change: We reported an operating loss of $1 million $687692.
Speaker Change: For the third fiscal 2023rd quarter fiscal 2025, as compared to an operating loss of $1 million $205157 for the third quarter of fiscal 2024.
Speaker Change: We reported a net loss for the third quarter of fiscal 2025 of approximately $3 million six $5 37, as compared to a net loss of approximately $2 $2 million for the same period in the prior year.
Speaker Change: Third quarter results reflect an impairment charge of $1 $3 million for one of our portfolio companies.
Speaker Change: We recorded a net loss per share.
Speaker Change: <unk> 57.
Speaker Change: For the third quarter.
Speaker Change: Compared to EPS of a loss of $13 60, a share for the same period in the prior year.
Martin Kay: I'll now turn the call over to our CEO, Martin Kay. Thank you, Coreen, and thank you to all our shareholders for being on this call today and for your continued interest and support of the company. As you heard from Coreen, we did face a tough time during the quarter. From a revenue perspective, we had a decrease, which we already touched on.
Martin K.: I'll now turn the call over to our CEO Martin K.
Martin K.: Thank you Corey and thank you to all our shareholders for being on this call today and for your continued interest and support of the company.
Speaker Change: As you heard from Corrine, we did face a tough time during the quarter from a revenue perspective, we had a decrease which we already touched on and while I don't want to diminish. This I do want to look at a major success, we had during the quarter with our wholly owned subsidiary net.
Martin Kay: And while I don't want to diminish this, I do want to look at a major success we had during the quarter with our wholly-owned subsidiary, Netcapital Securities, Inc., or NSI, becoming a broker-dealer. During the year, as a company, we have shifted some focus towards the goal of establishing Netsap Capital Securities as a broker-dealer, and we successfully completed this goal following approval by the Financial Industry Regulatory Authority, or FINRA, in November. NSI is now approved to do three things. First, handle private placements of securities as well as Second, support companies raising equity capital under Reg A and Reg D, enabling larger fundraisers and potentially attracting a broader range of issuers.
Capital Securities, Inc, or MSI, becoming a broker dealer.
Speaker Change: During the year as a company we have shifted some focus towards the goal of establishing net capital securities as a broker dealer and we successfully completed this goal following approval by the financial industry regulatory authority or FINRA in November.
Speaker Change: MSI is now approved to do three things first handle private placements of securities as well as referral business second support companies raising equity capital under Reg E and Reg D, enabling larger fundraisers and potentially attracting a broader range of issuers.
Martin Kay: And thirdly, partnering with other broker-dealers.
Speaker Change: And thirdly, partnering with other broker dealers.
Martin Kay: Looking forward, we're pleased that Algernon Neuroscience Inc. recently engaged Netcapital Securities for one of those planned Regulation A or Reg A offerings and to provide broker-dealer and administrative services. So although the market environment remains uncertain, management remains cautiously optimistic, and we look forward to keeping you updated on our progress. As always, thank you for your interest and support of Netcapital.
Speaker Change: Looking forward, we are pleased that Allergan on Neuroscience, Inc. Recently engaged net capital Securities for one of those planned regulation, a or Reg a offerings and to provide broker dealer and administrative services.
Speaker Change: So although the market environment remains uncertain management remains cautiously optimistic and we look forward to keeping you updated on our progress.
Speaker Change: As always thank you for your interest and support of debt capital and operator, we are ready for questions.
Operator: And operator, we are ready for questions. Certainly. Ladies and gentlemen, the floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star 1 on your telephone keypad. We do ask, if listening on speakerphone this morning, that you pick up your handset while asking your question to provide optimal sound quality. Once again, if you wish to join the queue to ask a question at this time, please press star 1 on your telephone keypad to join the queue. Please hold a moment while we poll for questions.
Speaker Change: Certainly ladies and gentlemen, the floor is now open for questions. If you wish to join the queue to ask a question at this time. Please press star one on your telephone keypad, we do ask if listing on speaker phone. This morning that you pick up your handset while asking your question to provide optimal sound quality.
Speaker Change: Once again, if you wish to join the queue to ask a question at this time. Please press star one on your telephone keypad to join the queue. Please hold a moment, while we poll for questions.
Speaker Change: Okay.
Operator: And once again, as a final reminder, should you wish to join the queue to ask a question, you may press star one at this time to join the queue. Once again, that'll be star one to ask a question. And there are no questions in queue at this time.
Speaker Change: And once again as a final reminder, should you wish to join the queue to ask a question you May press star one at this time to join the queue. Once again that'll be star one to ask a question.
Speaker Change: And there are no questions in queue at this time I would now like to turn the floor back to Martin K for closing comments.
Martin Kay: I would now like to turn the floor back to Martin Kay for closing comments. Okay. Well, thank you, Tom, and thanks, Coreen, our CFO, and thank you all for joining and, again, for your continued interest and support of the company.
Tom: Okay, well, thank you Tom and thanks, Correne, our CFO and thank you all for joining and again for your continued interest and support of the company.
Martin Kay: Take care. Thank you.
Speaker Change: Take care. Thank you.
Speaker Change: Thank you.
Operator: This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.
Speaker Change: Does conclude today's conference call you may disconnect. Your lines at this time and have a wonderful day. Thank you for your participation.