Netcapital Inc.

Good day, ladies and gentlemen, and welcome to the NetCapital, Inc. quarterly 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. It is now my pleasure to turn the floor over to your host, Corrine Kressler. Ma'am, the floor is yours.

Thank you, Matthew. Hello, everyone, and welcome to NetCapital, Inc.' 's fiscal 2022 third quarter earnings conference call. Thank you for joining us this afternoon. This is Corrine Kreisler, CFO of NetCapital, Inc., and with me today are Cecilia Link, CEO of NetCapital, Inc., and Jason Frischmann, CEO of NetCapital Funding Portal, Inc. In today's presentation, we'll review NetCapital, Inc.' 's performance for the quarter ending January 31, 2022. A recording of this call will be made available on our website shortly after its conclusion. After today's remarks, the operator will open up the line for questions. NetCapital, Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online from both accredited and non-accredited investors. We give all investors the opportunity to access investments in private companies through our online portal, netcapital.com. Our model is disruptive to traditional private equity investing and is based on Title III Reg CF of the Jobs Act. We generate fees from listing private companies on our portal. Our consulting group, NetCapital Advisors, provides marketing and strategic advice in exchange for equity positions and cash fees. The NetCapital funding portal is registered with the SEC and is a member of the Financial Industry Regulatory Authority, or FINRA, a registered national securities association. The NetCapital funding portal charges a $5,000 engagement fee and a 4.9% success fee for capital raised at closing. In addition, the portal generates fees for other ancillary services, such as rolling closes. NetCapital advisors generate fees and equity stakes from consulting or select portfolio and non-portfolio clients. Our revenues for the three months ended January 31, 2022 increased by 42% to 1.8 million as compared to 1.3 million reported for the three months ended January 31, 2021. The increase in revenues is attributable to an increase of almost 370,000 or 44% in non-cash revenue from the receipt of equity and an increase of almost 95,000 or 38% in portal fee revenue from our funding portal. The company reported 1.8 million in net income for the quarter versus 42.6 thousand in the same quarter of last year. Debt forgiveness of 1.9 million was included in the net income figure for the most recent quarter. Diluted EPS was 63 cents versus 2 cents in the previous quarter, while equity securities at fair value increased to 11.3 million versus 6.3 million at April 30th, 2021. And now I'll turn the call over to Jason Frischman, CEO of NetCapital Funding Portal Inc. Jason, the floor is yours.

Thank you, Corrine. We are pleased to share with you that NetCapital was named Best Crowdfunding Platform at the 2022 FinTech Breakthrough Awards, a premier awards program founded to recognize FinTech innovators, leaders, and visionaries from around the world. The 2022 FinTech Breakthrough Award program attracted nearly 4 000 nominations across a range of categories it's an honor to be recognized as the best crowdfunding platform and our mission is to make it seamless for entrepreneurs to raise capital so they can concentrate on what they do best building their businesses for growth and value by leveraging the power of the community for funding we make it easy for companies to gain exposure and build brand loyalty it's rewarding to be selected for this award in the company of some of the most impressive fintech leaders in the market both well-known names and innovative startups. The FinTech Breakthrough Award nominations were evaluated by an independent panel of experts within the financial services and technology industries, with the winning products and companies selected based on a variety of criteria, including most innovative and technologically advanced products and services. Part of Tech Breakthrough, a leading market intelligence and recognition platform for global technology innovation and leadership, The FinTech Breakthrough Awards program is devoted to honoring excellence in financial technologies and services, companies, and products. The FinTech Breakthrough Awards provide public recognition for the achievements of FinTech companies and products and categories, including payments, personal finance, wealth management, fraud protection, banking, lending, reg tech, insure tech, and more. For more information, you can visit FinTechBreakthrough.com. And now I will hand the call over to Cecilia Lenk, CEO of NetCapital, Inc. Cecilia?

Thank you so much, Jason. This was a strong quarter for our company, as the purchase of the Net Capital Funding Portal placed us at the forefront of emerging technology in digital capital markets. With a significant increase in Reg CF offering limits from $1 million to $5 million, the outlook for the industry remains bright. As always, I couldn't be more proud of our team, and I want to thank everyone at NetCapital for all of their hard work and dedication. Lastly, I want to remind everyone that NetCapital is a mission-driven company. We're passionate about empowering entrepreneurs to succeed and democratizing access to capital and to investment opportunities in private companies. We're successful when our clients are successful. We're truly grateful for the opportunity to partner with so many talented entrepreneurs and investors. The entire NetCapital team looks forward to continuing our good work together and looks to the future with optimism. And now we will open the phone for questions. Operator?

Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset, if you're listening on speakerphone, to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Please hold while we poll for questions. Your first question is coming from John Fanning from Aid Stage. Your line is live.

I have a question for Jason Frischman. I had the pleasure of listening to your TED Talk It was really impressive, and I was just wondering how, if at all, the core values that you talked about in your TED Talk might be reflected at NetCapital in your culture there.

Thank you, John. That's a good question, and thank you for listening. Well, I think those core values drive us at NetCapital. As Cecilia said, we are a mission-driven company. we care a lot about democratizing access to the capital markets and making the private markets work for real people. We've always been driven by that dream, and we think that it's becoming more and more attainable every year. We've seen a great growth in the space and great support, not only from the industry, but also from the regulators. And so we're very confident that we're doing the right thing at the right time and that the market is starting to catch up with bringing the private capital markets online and bringing access to innovative opportunities to real people much earlier than they typically would have access during a typical IPO. So I believe that that vision and that mission drives all of us at NetCapital. That's the feeling that I got, too. Thanks.

Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star 1 on your phone at this time. There are no further questions in the queue at this time.

Great. Thank you, Matthew. Thank you, everyone, for joining. We were really pleased to be recognized as Best Crowdfunding Platform as part of this year's FinTech Breakthrough Awards. We believe it's a testament to all of the hard work that the entire team has been putting in over the past year. Thank you so much for joining the call, and we look forward to speaking with you again after you're on results. Bye, everyone.

Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.