Netcapital Inc.

Good day, and welcome to the NetCapital first quarter earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Corrine Krasler. The floor is yours.

Thank you so much, Kelly. Good morning, everyone, and thank you for joining NetCapital's financial results conference call. for our first quarter of fiscal year 2024, ended July 31st, 2023. This is Corrine Kreisler, CFO of NetCapital, Inc. I will begin with a review of our financial results, and our CEO, Martin Kay, will follow with his remarks before we open up the call for questions. Before we begin, I'd like to call your attention to the customary safe harbor disclosure regarding forward-looking information. Management's discussion may include forward-looking statements. These statements relate to future events or to 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. 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. turning to our financial results for the first quarter. We are excited about the momentum shown by the net capital funding portal this quarter, as funding portal revenues increased by more than 110% to $375,856 in the three months ended July 31st, 2023, compared to $178,500 in the three months ended July 31st, 2022. This strength was driven by the success of several large issuers during the period. Total company revenues grew 13% year-over-year to $1.5 million, compared to revenue of $1.3 million in the first quarter of fiscal year 2023. We reported a net loss of approximately $492,000 compared to net income of approximately $65,000 in the first quarter of fiscal 2023, and the diluted loss per share was $0.07, compared to diluted earnings per share of $0.02. The first quarter net loss was driven primarily by non-cash stock-based compensation for marketing and salary expenses that increased to $483,000 $351 in the three months ended July 31, 2023, as compared to $32,953 in the three months ended July 31, 2022. I'll now turn the call over to our CEO, Martin Kay. Thank you, Corrine. As I stated in our fiscal year 2023 results conference call, I'd like to begin by reasserting our confidence

in the differentiated value proposition of our integrated offerings, and in net capital's ability to drive value creation for investors and entrepreneurs alike. Right now, we have more than 100,000 users of our funding portal, which is a sizable pool of investors for companies seeking funding. There are currently 55 companies raising capital on our platform. And both of these communities, investors and issuers, stand to benefit from our forthcoming launch of secondary trading functionality, which has been a key focal point in the first quarter. On the investor side, the purpose of secondary trading is, of course, to provide potential liquidity for investors from the ability of users to trade shares. Securities issued on the net capital platform are and have always been specifically designed to be tradable as straight common shares, free of transfer restrictions. Unlike other funding portals, net capital doesn't allow issuers to sell safe instruments, debts, revenue bonds, tokens, or other hybrid securities. We believe this strategy of only offering common equity coupled with secondary trading makes net capital issuers more attractive to investors. From the issuer standpoint, those seeking to raise capital, net capital is differentiated and has always been by our lower cost solutions, ease of automated onboarding, and superior issuer experience, as verified by issuers who've used both our platform and those of our competitors. On top of that, secondary trading should be a compelling added benefit for those issuers, providing another pathway for increased liquidity and the potential for increased company value. The new liquidity feature is essentially complete, and we began internal testing last week. As a next step, we expect to launch a beta version of the secondary trading feature to a limited number of investors, and we hope for a full rollout by the end of December. So in summary, the endeavors I've discussed represent milestone achievements in technology and product development, and ultimately a stronger competitive benefit for the audiences we serve. As always, thank you for your interest in support of NetCapital and Operator. We are ready for questions.