Netcapital Inc.

Good day and welcome to the NetCapital Inc. earnings call. At this time, all participants have been placed on risk-money mode. The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Corrine Krasler. Ma'am, the floor is yours.

Thank you, Paul. Good morning, everyone, and thank you for joining NetCapital's full-year fiscal 2025 financial results conference call. I'm Corrine Krasler, CFO of NetCapital Inc., and I'll begin by reviewing our financial results, and then our Chief Executive Officer, Martin Kaye, 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 State 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, 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. MedCapital 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. With that said, I'd like to now turn to our financial results for the full year fiscal 2025. We reported revenues of $869,450 with cost of services of $40,344 for a gross profit of $829,116 in fiscal year 2025. This compares to revenues of approximately $4.9 million with cost of services of approximately $108,000 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 discontinued our consulting services to 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. The dollar value of that fee amounted to $72,090 and $97,700 for the years ended April 30, 2025 and 2024, respectively. In fiscal 2025, we evaluated our equity investments and multiple issuers for impairment in accordance with ASD 321-10-35-3. The fair value of several investments had declined below their fairing amounts, which were other than temporary. Qualitative indicators included the resignation of key personnel, discontinuation of business operations, termination of fundraising efforts, and other adverse developments. As a result, 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 year 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 Kay.

Thank you, Corrine, and 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 Corey, 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. While this realignment brought some near-term volatility, and despite the challenges of macroeconomic headwinds and uncertainty in the financial markets, We remained on path to strengthen the core of our business and lay the foundation 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. I think it's also important to highlight platform success stories for our clients during the past years. For instance, our portfolio company, Zellgore, acquired Spellbook Studio, creators of the Infinite Black and the Infinite Black 2. MagFast, a 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 Kingsprout. We're also pleased to share that Aberdeen, a graphene licensing technology company, raised more than $1.275 million within the first 24 hours of launching its third offering on the NetCapital Funding Portal platform. 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 continue to believe strongly in our mission to democratize access to private capital markets and remain committed to disciplined execution, product innovation, and long-term value creation. As always, thank you for your interest and support of NetCapital and Operator. We're ready for questions.