Netcapital Inc. Reports 85% Revenue Decline and Increased Net Loss for Quarter Ended January 31, 2025

Netcapital Inc. reported significant declines in its financial performance for the three and nine months ended January 31, 2025, as detailed in its latest 10-Q filing. The company generated revenues of $152,682 for the quarter, a decrease of approximately 85% from $1,042,793 in the same period last year. For the nine-month period, revenues fell by about 90% to $465,437, down from $4,604,260. The sharp decline in revenue was primarily attributed to the absence of consulting service revenue related to equity securities, which had previously contributed significantly to the company's income.

In terms of profitability, Netcapital reported a net loss of $3,006,537 for the three months ended January 31, 2025, compared to a loss of $2,227,542 in the same quarter of the previous year. For the nine-month period, the net loss increased to $7,754,208 from $2,379,581. The company’s operating loss for the quarter was $1,687,692, reflecting ongoing challenges in maintaining revenue streams and managing costs effectively.

Operationally, Netcapital has seen a reduction in the number of new issuers launching offerings on its funding portal, with only six issuers in the latest quarter compared to 27 in the prior year. This decline has impacted the company's revenue from portal fees, which totaled $100,074 in the latest quarter, up from $84,548 a year earlier, but overall funding portal revenues decreased. The company has also focused on establishing a broker-dealer subsidiary, which received FINRA approval in November 2024, aiming to diversify its revenue sources.

As of January 31, 2025, Netcapital's total assets were valued at $39.9 million, down from $41.6 million at the end of the previous fiscal year. The company reported cash and cash equivalents of $614,304, a decrease from $863,182. The liabilities increased to $4.9 million, up from $3.6 million, primarily due to rising accounts payable. The company’s management has expressed concerns regarding its ability to continue as a going concern, citing negative working capital of $3,757,593 and ongoing operating losses. Looking ahead, Netcapital plans to focus on its funding portal business and seek additional financing through public offerings and private placements to support its operations.