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Netcapital Inc. (NCPL-6.21%) has submitted its 10-Q filing for the quarterly period ended January 31, 2025.
The filing includes financial statements for the quarter, showing a decrease in revenues to $152,682 from $1,042,793 in the same quarter the previous year. The decrease is attributed to a lack of consulting service revenue for equity securities.
Costs of services for the quarter were $7,155, compared to $58,875 in the same quarter of the previous year. This decrease is due to lower revenues.
The company reported a gross profit of $145,527 for the quarter, compared to $983,918 in the previous year, with the decline attributed to reduced consulting service revenue.
Netcapital's operating expenses included consulting expenses of $63,555, down from $175,357, and marketing expenses of $12,887, down from $32,198, primarily due to reduced marketing activities.
General and administrative expenses decreased to $921,575 from $1,092,459, primarily due to a reduction in legal fees.
The company reported a net loss of $3,006,537 for the quarter, compared to a loss of $2,227,542 in the previous year. The increase in loss is attributed to lower revenues.
Cash used in operating activities was $4,614,630, while cash provided by financing activities was $4,365,752, primarily from the sale of common stock and exercise of warrants.
Netcapital had cash and cash equivalents of $614,304 as of January 31, 2025. The company acknowledges its dependence on raising additional capital to meet future obligations.
The filing also discusses the company's focus on establishing a broker-dealer subsidiary to expand its revenue base and support larger fundraises.
Netcapital does not anticipate cash dividend payments to common stockholders in the near future.
The company identified a material weakness in its internal controls over financial reporting due to a lack of resources with SEC financial reporting experience.
Netcapital continues to focus on expanding its funding portal business and highlights its dependence on a small number of large issuers to generate revenue.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Netcapital Inc. quarterly 10-Q report dated March 17, 2025. To report an error, please email earnings@qz.com.