Netcapital Inc. reported a significant decline in financial performance for the fiscal year ending April 30, 2025, with revenues dropping to $869,460, a decrease of 82.4% from $4,951,435 in the previous fiscal year. The company attributed this decline primarily to the cessation of consulting services for equity securities, which had previously generated $3.4 million in revenue. The funding portal's revenue from portal fees also fell by 33% to $589,074, reflecting a 29% decrease in total dollars invested through the portal, which dropped from $14.8 million in fiscal 2024 to $10.6 million in fiscal 2025. Listing fees decreased by 53% to $207,500, correlating with a 54% reduction in the number of offerings launched.
In terms of operational changes, Netcapital did not provide consulting services in exchange for equity in fiscal 2025, a shift from the previous year when it had engaged with three companies. The total number of issuers that successfully closed offerings on the funding portal decreased slightly from 53 to 49. The company also reported a substantial impairment expense of $19.9 million related to its equity investments, which significantly impacted its financial condition and raised concerns about its ability to continue as a going concern.
Strategically, Netcapital has made efforts to expand its service offerings, including the launch of Regulation A offerings through its broker-dealer subsidiary, Netcapital Securities Inc., which received FINRA approval in November 2024. The company is also exploring a secondary trading platform in partnership with Templum Markets LLC, although development has been paused as it reassesses market conditions and customer expectations. The company aims to enhance its revenue base by leveraging its broker-dealer status to facilitate additional capital raises.
As of April 30, 2025, Netcapital had approximately 20 full-time employees and reported negative working capital of $5.2 million, compared to $2.1 million the previous year. The company has been actively raising capital through public offerings and private placements, including a recent agreement to sell shares for gross proceeds of approximately $3 million and $5 million in July 2025. However, management has expressed uncertainty about its ability to meet working capital needs in the coming year, indicating that additional financing may be necessary to sustain operations. The outlook remains cautious, with management acknowledging the challenges posed by market conditions and the need for strategic adjustments to achieve profitability.
About Netcapital Inc.
Netcapital Inc. is a fintech company providing an online platform for private companies to raise capital from accredited and non-accredited investors via Regulation Crowdfunding and Regulation A offerings. It offers automated onboarding, regulatory compliance, and secondary trading solutions. The company operates a registered funding portal, a broker-dealer subsidiary, and owns investments in disruptive startups, aiming to democratize access to private markets and enhance liquidity.
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