Q4 2025 NetCapital Inc Earnings Call

August 13, 2025

It is now my pleasure to turn the floor over to Craig.

My pleasure to turn the floor over to Craig.

Ma'am the floor is yours.

Thank you Paul.

Good morning, everyone and thank you for joining that capital to full year fiscal 2025 financial results Conference call.

Morning, everyone and thank you for joining that capital to full year fiscal 2025 financial results Conference call.

I'm Korean Chrysler CFO of <unk> 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.

I'll 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.

Before we begin I'd like to remind everyone of the safe Harbor disclosure regarding forward looking information.

Management's discussion may include forward looking statements.

These statements relate to future events or future financial performance and involve known and unknown risks uncertainties.

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.

The 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.

Okay.

Yeah.

Any forward looking statements reflect management's current views with respect to operations.

Thoughts of operations growth strategy liquidity and future events.

Net capital 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.

Even if new information becomes available in the future.

With that said I'd like to now turn to our financial results for the full year of fiscal 2020 five.

With that said I'd like to now turn to our financial results for the full year fiscal 2025.

We reported revenues of $869460 with cost of services of $40003 44 for a gross profit of 829 116 in fiscal year 2025.

We reported revenues of $869460 with cost of services of $40003 44 for a gross profit of 829 one.

<unk> in fiscal year 2025.

This compares to revenues of approximately $4 9 million with cost of services of approximately 108000 in gross profit of approximately $4 8 million in fiscal year 2024.

This compares to revenues of approximately $4 9 million with cost of services of approximately 108000 and gross profit of approximately $4 8 million in fiscal year 2024.

In line with our shift in business strategy in fiscal year 2025.

We just can see discontinued our consulting services portfolio companies in exchange for equity, which accounted for the largest portion of our revenue decline year over year.

However, our funding portal did charge, a 1% fee payable in securities to every issuer that closed an offering.

However, our funding portal they charge a 1% fee payable in securities to every issuer that closed an offering.

The dollar value of that fee amounted to 72000, 090 and 97700 for the years ended April 32025, and 2024, respectively.

In fiscal 2025, we evaluated our equity investments in multiple issuers foreign government in accordance with ASC 321, gosh $10 $35 three.

The fair value of several investments have declined below their carrying amounts which were other than temporary.

Qualitative indicators included the resignation of key personnel discontinuation of business operations termination of fundraising efforts and other a first development adverse development.

As a result.

We had we wrote off several investments, resulting in an impairment expense of approximately $19 9 million.

We reported an operating loss of approximately $8 3 million for full year fiscal 2025 as compared to an operating loss of approximately $3 4 million for full year fiscal 2024.

The net loss for full for full year fiscal 2025 was approximately $28 3 million as compared to approximately $4 9 million for fiscal 2024.

The net loss for full first full year of fiscal 2025 was approximately $28 3 million as compared to approximately $4 9 million for fiscal 2024.

We reported a loss per share of $20.39 as compared to a loss per share of $28 83 for fiscal year 2024.

I will now turn the call over to our CEO Martin K.

Thank you Corey.

Thank you to all our shareholders for being on this call today and for your continued support and interest in the company.

As you heard from Korea revenues did decline, but fiscal 2025 marked a pivotal shift in our strategy as we transitioned away from equity based consulting revenue to focus on building a stronger more scalable.

As you heard from Korean revenues did decline, but fiscal 2025 marked a pivotal shift in our strategy as we transitioned away from equity based consulting revenue to focus on building a stronger more scalable foundation for future growth.

<unk> foundation for future growth.

While this realignment brought some near term volatility.

And despite the challenges of macroeconomic headwinds and uncertainty in the financial markets. We remained on task to strengthen the core of our business and lay the foundation patients for long term growth.

During fiscal 2025, our wholly owned subsidiary net capital Securities received its broker dealer license as a result, we believe that we are positioned to serve a broader base of issuers and investors and have the ability to deepen our impact on democratizing access to private markets.

Yeah.

I think it's also important to highlight platform success stories for our clients during the past year for instance, our portfolio companies Al Gore acquired Spellbook studio creators of the infinite black and the infinite black too.

Mac fast charging device company raised more than $10 million through multiple offerings on the net capital funding platform.

<unk> fast charging device company raised more than $10 million through multiple offerings on the net capital funding platform.

And this was the second largest total amount raised under Reg CF in the consumer packaged goods industry. According to <unk> crowd.

This was the second largest total amount raised under Reg CF in the consumer packaged goods industry. According to <unk> crowd.

We're also pleased to share that Aberdeen graphene licensing technology company raised more than one point to $75 million within the first 24 hours of launching its food offering on the net capital funding portal platform.

We're also pleased to share that Aberdeen graphene licensing technology company raised more than one point to $75 million within the first 24 hours of launching its third offering on the net capital funding portal platform.

Yeah.

So we're proud of the tangible results our platform continues to deliver which underscore the power of our ecosystem to help innovative companies scale.

We believe continue to believe strongly in our mission to democratize access to private capital markets and remain committed committed to disciplined execution product innovation innovation and long term value creation.

As always thank you for your interest and support of that capital and operator, we're ready for questions.

Thank you at this time, we will be conducting a question and answer session.

Thank you at this time, we will be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.

Have any questions or comments. Please press star one on your phone at this time.

In the interest of time, we ask that participants limit themselves to one question and one follow up on today's call.

We got about posing your question you. Please pick up your handset if listening on speaker phone to provide optimum sound quality.

While upholding your question you. Please pick up your handset if listening on speaker phone to provide optimum sound quality.

Once again that is star one if you wish to ask a question on today's call I'm.

Once again that is star one if you wish to ask a question on today's call.

Please hold while we poll for questions.

Yeah.

And once again that will be a star one on your phone if you wish to ask a question on today's call.

And there were no questions.

Apologies, we just didn't get a question.

The first question today is coming from Jeremy link from Natgas, Jeremy Your line is live.

The first question today is coming from Jeremy link from lap guess, Jeremy Your line is live.

Hi, I was just wondering could you shed light on your transition.

Sure.

What you're.

Looking forward to doing in the future.

You had mentioned that.

On the call. So I was just wondering if you could shed light on that thank you.

Sure I'll take a stab at that Jeremy Thanks for the question and if im not answering it please.

[laughter], followed followed back up but yeah, we talked about.

Followed followed back up but yeah, we talked about.

Broadening the platform to do what we do which is help companies raise raise capital to build their businesses we've been in the <unk> business.

As Korean I think mentioned during fiscal 2025, we secured a broker dealer license for our subsidiary net capital Securities that allows us to participate more fully in Reg.

As Corrine I think mentioned during fiscal 2025, we secured a broker dealer license for our subsidiary net capital Securities that allows us to participate more fully in Reg.

Capital Raisings, which are typically larger so that we hope will allow us to broaden.

Our access to cash.

Capital raising.

Fees associated with that.

We also.

Have always believed in the integration.

Of block chain digital assets and crypto with traditional finance, but obviously the regulatory environment has been somewhat in flux.

Of blockchain digital assets and crypto with traditional finance, but obviously the regulatory environment has been somewhat in flux.

Clearly this is still in flux, but theres certainly some openings.

Clearly there is it's still influx, but theres certainly some openings.

We have taken several steps to.

Pursue that opportunity as well so those I think would be the areas that we're focused on and as Corey mentioned.

Pursue that opportunity as well so those I think the areas that we're focused on and as Corey mentioned.

We've moved away from our equity based consulting business to focus more on those more scalable cash generating products and services.

Uh-huh to piggyback on that I, just had two follow ups.

Uh-huh to piggyback off of that.

You got to do follow up.

Yes.

Sort of tied together so.

Tied together so.

Your.

Sure.

The consulting business.

Well first of all what's the consulting business the major costs.

Running.

Company and that's why you guys have such a high.

Company and that's why.

Hi.

That's a large loss this quarter.

Large losses this quarter.

This year excuse me and then.

Could you shed light on that crypto.

You know what Youre planning on doing with crypto.

Possible. Please.

I can answer the first question and then and then offer some guidance on the second the first question around.

The financial dynamics of our business.

The funding portal itself, so leave aside the consulting or advisory practice. The funding portal is is technology, where a fintech company and so as typical in that in that sort of situation theres a fixed cost platform. So if you looked at we have approximately 20 employee.

Funding portal itself, so leave aside the consulting or advisory practice. The funding portal is is technology, where a fintech company and so as typical in that in that sort of situation theres a fixed cost platform. So if you looked at.

Approximately 20 employees is what we've disclosed and if you look at if you look across our employee base, that's where you would see most of our employees working and Thats, a very scalable operation. So the key obviously to getting to profitability and cash flow positive is is scaling and continuing to scale the business.

As we've disclosed and if you look at if you look across our employee base, that's where you would see most of our employees working and Thats, a very scalable operation. So the key obviously to getting to profitability and cash flow positive is is scaling and continuing to scale the business.

The consulting business or the advisory business, obviously is not necessarily so much technology based obviously, we leverage technology, there, but it's not as scalable.

The consulting business or the advisory business, obviously is not necessarily so much technology based obviously, we leveraged technology, there, but it's not as scalable.

And we found that.

And typically small companies struggle to pay cash for those services.

So where we were in a business that was.

Yes.

Yeah.

<unk> scaled fine to the level that we were at but it wasn't kind of obviously scale forever. We didn't we weren't really looking to build out a giant consulting company.

Had scaled fine to the level that we were at but it wasn't kind of obviously scale forever. We didn't we weren't really looking to build out a giant consulting company.

And also where we would typically being paid in equity which is hard to value.

Versus cash so so that's kind of the way the current business looks which I think was the first part of your question second part with respect to.

Versus cash so so that's kind of the way the current business looks which I think was the first part of your question second part with respect to you know.

Blockchain and digital assets in general we were evaluating opportunities against the potential for.

Long term value creation everyday we see deals.

Long term value creation every day, we see deals I feel getting done.

Getting done.

That.

That <unk>.

Trade down in the market through regulatory and exchange scrutiny.

Slightly threaten the company's viability and public listing so we're not.

Ultimately threaten the company's viability and public listing so we're not in.

Never have been focused on the short term fads, we evaluate every opportunity that comes our way and we're out looking for opportunities.

But we're not looking to jump on.

Something that's going to be not a good deal for the company for our shareholders.

Something thats going to be not a good deal for the company for our shareholders.

And you see some of that happening out in the market the underlying trend with respect to crypto and the reason we put our advisory board together was to focus on the real integration of blockchain into the capital formation process that we're part of and we thank you for I believe that's a very exciting opportunity for us.

And you see some of that happening out in the market the underlying trend with respect to crypto and the reason we put our advisory board together was to focus on the real integration of blockchain into the capital formation process that we're part of and we think Hubert I believe that's a very exciting opportunity for us.

Which opens up.

Access to capital basically both in primary and secondary trading.

Ways and with user experiences.

Ways and with user experiences that.

Have not been.

Possible given the regulatory environment, primarily over the last few years.

Okay.

Thank you. The next question is coming from Lewis <unk> Who's a private Investor Lewis Your line is live.

Hello morning.

My question was similar to Jeremy.

A question. So it was originally being answered but.

Question. So it was originally being answered but.

To be confidence.

So with recent.

So with the recent.

I'd, just say I'm not from America, So bear with me a little.

How do you say I'm not from America, So it's Barry.

Yes, no problem.

Yeah no problem.

So in light of the recent performance I was just.

So in that over the recent performance I was just.

Thinking you are evaluating different.

Thinking if you are evaluating different.

Yeah.

Possibilities of adopting a new strategy with a recent current trends all other companies are adopting.

Possibilities of adopting a new strategy with a recent current trends or other companies are adopting.

Yeah, I'm not I'm not sure exactly what you're referring to there but.

Yeah, I'm not I'm not sure exactly what you're referring to there but for.

Sure.

For sure.

Our long term mission is pretty clear and it hasn't really.

Our long term mission is pretty clear and it hasnt really.

Changed where we're we're about democratizing access to capital.

The private capital markets and so we will continue to explore every opportunity to do that in a way that is.

In the private capital markets and so we'll continue to explore every opportunity to do that in a way that is.

Accretive to shareholders.

And.

So that's where we're expanding across the reggae and again as I mentioned, we're looking for ways to.

So we're expanding across the reggae and again as I mentioned, we're looking for ways to you know.

Two to integrate blockchain digital assets and crypto them with a more traditional fintech approach.

Okay, Yeah, that's what I wanted to thank you.

Okay.

That's what I wanted to thank you.

Youre welcome.

Thank you.

And the next question is coming from Brandon the answer.

And the next question is coming from Brendan answer Brendan.

<unk> is a private investor.

Brandon This is a private investor from their last five.

Hi.

Hi, I just.

Was.

Thinking the DRAM business model seems to be unsustainable with no credible path to a turnaround.

Thinking the business model seems to be unsustainable with no credible path to a turnaround.

Our strategic pivot.

The strategic pivot.

It seems to be urgently needed.

Right on that.

Well thanks for the question Brandon, but I think you made the statement.

So I don't know how I can elaborate on that necessarily but yeah I can comment on what you said, we we do believe that our business.

Our business there is a path to.

To continue creating value and two for the business to be sustainable that's not to say we're not.

Creating value into for the business to be sustainable that's not to say, we're not always and haven't always been looking at other opportunities, but I'm not sure. What you mean by a strategic pivot I mean, I would I would argue that incorporating.

Always and haven't always been looking at other opportunities, but I'm not sure. What you mean by a strategic pivot I mean, I would I would argue that incorporating.

Blockchain into what we do more fully and we've taken a few steps in that direction already and obviously you're exploring others.

Blockchain into what we do more fully and we've taken a few steps in that direction already and obviously you're exploring others is.

Is the most obvious extension I would say I don't think it's a strategic pivot.

I think it's an extension and no question you know our core business.

I think it's an extension.

And no question.

Core business faces faces challenges I mean, we need to scale and as Corrine mentioned the environment has has not been.

Faces faces challenges I mean, we need to scale and as Corrine mentioned the environment has has not been.

Wonderful.

For what we do but.

We're still very committed to that long term mission and we're committed to using whatever.

<unk> and technologies become available.

So that we can our business is all about.

Kind of threading, the needle between the regulatory environment and the user experience.

We're trying to create.

And continue to create involve something that is a compelling user experience.

And continue to create and evolve something that is a compelling user experience.

But also you know.

Works within the regulatory environment, which we operate and those those things are constantly changing so yes, we're constantly evolving.

Works within the regulatory environment, which we operate and those those things constantly changing so yes, we're constantly evolving.

I think we've made no secret that the you know one of the most important things for US is liquidity in the secondary market and that's been a challenge for everyone in our space and you see new new ideas.

I think we've made no secret that the.

One of the most important things for US is liquidity in the secondary market and that's been a challenge for everyone in our space and you see new new ideas for.

For provide.

Providing liquidity in private capital markets, you see new ideas every day and I don't believe anybody has cracked that intersection of the user experience and the regulatory environment at least in the U S. But again those are things that we're actively exploring.

Sure.

Where.

We're looking to.

We're looking to you know to.

To move forward on that on that front.

Okay. Thank you.

And the next question is coming from Emily Mclaughlin Emily is a private investor Your line is live.

And the next question is coming from Emily Mcclellan Emily is a private investor Your line is live.

Hi, Martin I had questions regarding your G&A legal or your G&A expenses.

Why are they so small company I mean, $5 3 million I mean $1 million you'd be at legal Atmos 200 page at IR and proxies sufficient.

Why are they so small company I mean, $5 3 million I mean 1 million should be at legal Atmos 200, Hayden IR and proxies sufficient.

That doesn't look right on the box can you elaborate.

Look I mean, we're a we're a fintech company in the financial services space doing something that is very new and very different than frankly, the regulators don't understand very well and this is we've always had a challenge with this.

Look I mean, we're we're in a Fintech company in the financial services space doing something that is very new and very different that I frankly, the regulators don't understand very well and this is we've always had a challenge with this.

And.

So I couldnt agree more with you our legal expenses are much more than they should be but that's the cost of doing business at this point as a public company in the Fintech space financial services, let Carina CFO comment more specifically, but that's the that's.

So I couldn't agree more with you our legal expenses are much more than they should be but that's the cost of doing business at this point as a public company in the Fintech space financial services like Carina CFO comment more specifically, but that's the that's.

That's the general and it is a frustration we spend a lot of time and energy and money frankly, educating the regulators on what we do and why we do it and you know who.

That's the general and it is a frustration we spend a lot of time and energy and money frankly, educating the regulators on what we do.

Why we do it and you know well.

So just you know there aren't a lot of companies that look like us even leave aside the <unk> CF and <unk>.

There just aren't a lot of companies that look like us even leave aside the rec CF in the rent and the radio which is obviously all new in the Grand scheme of things.

Yeah, which is obviously all new.

In the Grand scheme of things.

Hum.

You know where were in our portfolio companies are essentially operating as a public.

You know we were full.

Portfolio companies are essentially operating as a public.

No.

Collection of minority equity investments, which is again not something that the regulators typically have much experience in our understanding of.

Yes, we spend more than we should but it's not more than we need to.

Okay, I guess just to piggyback off that I don't think it takes.

Some of them are too high and they want to know that that's just not sustainable would you guys.

So I'm gonna to high end and a lot to know that that's just not sustainable would you guys.

Are you guys exploring going private.

And this is it.

Sustainable parent public company with these numbers.

Yeah.

No we don't.

Yeah.

I don't want I don't want to comment on that necessarily.

I don't want I don't want to comment on that necessarily we other than to say no. I mean, we you know.

Other than to say no I mean, we you know.

The company uplifted to NASDAQ there are many benefits to being a public company, but there's obviously no secret that there are also lots of costs irrespective of whether your financial you layer on the top financial financial services and the regulatory environment. There. It just becomes very very expensive but.

The company uplifted to NASDAQ there are many benefits to being a public company, but there's obviously no secret that there are also lots of costs irrespective of whether your financial you know you layer on top financial financial services, and the regulatory environment, there and it just becomes very very expensive but.

You know, we've we've found and continue to believe that the trade off is worth it and some of the things that we're exploring will will certainly benefit from the exposure of being a public company.

You know, we've we've found and continue to believe that the trade off is worth it and some of the things that we were exploring will will certainly benefit from the exposure of being a public company.

Thank you and that does conclude today's Q&A session I will now hand, the call back to Martin <unk> for closing remarks.

Thank you and that does conclude today's Q&A session I will now hand, the call back to Martin Kaye for closing remarks.

Hey, Thanks, Paul well as always you know thank you for your interest and support of that capital.

Hey, Thanks, Paul well as always thank you for your interest and support of that capital.

We really.

We really appreciate that and I hope you all have a good day. Thank you.

I really appreciate that and I hope you all have a good day. Thank you.

Yeah.

Thank you. 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.

Q4 2025 NetCapital Inc Earnings Call

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