管理層發言
Thank you, Paul. Good morning, everyone, and thank you for joining Netcapital's Full Year Fiscal 2025 Financial Results Conference Call. I'm Coreen Kraysler, CFO of Netcapital Inc., and I will begin by reviewing our financial results and then our Chief Executive Officer, Martin Kay, 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 safe 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.
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. With that said, I'd like to now turn to our financial results for the full year fiscal 2025. We reported revenues of $869,460 with cost of services of $40,344 or 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 in multiple issuers for impairment in accordance with ASC 321-10-35-3. The fair value of several investments had declined below their carrying 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, Coreen, 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 Coreen, 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 task to strengthen the core of our business and lay the foundation for long-term growth. During fiscal 2025, our wholly-owned subsidiary, Netcapital 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 year. For instance, our portfolio company, Zelgor, 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 Netcapital funding platform. And this was the second largest total amount raised under Reg CF in the consumer packaged goods industry according to KingsCrowd. We're also pleased to share that Avadain, 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 believe and 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.
分析師問答
And there were no questions. Apologies. We just received a question. The first question today is from Jeremy Mink.
I was just wondering if you could discuss your transition and what you are looking forward to in the future, as you mentioned it earlier in the call.
Sure. I'll take a stab at that, Jeremy. Thanks for the question. And if I'm not answering it, please follow back up. But yes, we talked about broadening the platform to do what we do, which is help companies raise capital to build their businesses. We've been in the Reg CF business. As Coreen, I think, mentioned during fiscal 2025, we secured a broker-dealer license for our subsidiary, Netcapital Securities. That allows us to participate more fully in Reg A capital raisings, which are typically larger. So that we hope will allow us to broaden our access to the capital raising fees associated with that. We also have always believed in the integration of blockchain, digital assets and crypto with traditional finance. But obviously, the regulatory environment has been somewhat in flux. Clearly, it's still in flux, but there's certainly some openings, and we have taken several steps to pursue that opportunity as well. So those, I think, are the areas that we're focused on. And as Coreen mentioned, we've moved away from our equity-based consulting business to focus more on those more scalable cash-generating products and services.
To follow up on that, I have two questions that are related. First, was the consulting business the main expense for the company, which contributed to the significant loss this quarter? Secondly, could you provide any insight on your plans regarding cryptocurrency?
I can address the first question and then provide some guidance on the second. Regarding the financial aspects of our business, focusing on the funding portal, which is our technology segment as a fintech company, we operate on a fixed cost platform. We have around 20 employees, which we have disclosed, and the majority of our workforce is engaged in this scalable operation. To achieve profitability and positive cash flow, the key is to continue scaling the business. The consulting or advisory segment is less technology-driven and not as scalable. Small companies often struggle to pay for those services, and while we had grown to a manageable size in that area, we were not aiming to expand it significantly. Additionally, we were often compensated in equity rather than cash, making it difficult to assess value. As for the second question regarding blockchain and digital assets, we are assessing opportunities based on their potential for long-term value creation.
We consistently observe deals in the market that face regulatory scrutiny and can jeopardize a company’s ability to maintain a public listing. Our focus is not on short-term trends. We carefully evaluate all opportunities, seeking those that are beneficial for us and our shareholders, rather than engaging in potentially unfavorable deals. The trend in crypto is why we formed our advisory board — to concentrate on integrating blockchain into capital formation processes. We see this as a promising opportunity that enhances capital access in both primary and secondary trading, especially considering the regulatory challenges we've faced in recent years.
The next question is coming from Louis Navarrete, who's a private investor.
My question was similar to Jeremy's question, so it was essentially answered. However, to be sure, with the recent changes, I'm not from America, so please bear with me a little.
Yes, no problem with it.
So in light of the recent performance, I was just thinking if you are evaluating different possibilities of adopting a new strategy with the recent current trends other companies are adopting.
Yes. I'm not sure exactly what you're referring to there, Louis. But for sure, our long-term mission is pretty clear and hasn't really changed. We're about democratizing access to capital in the private capital markets. And so we'll continue to explore every opportunity to do that in a way that is accretive to shareholders. And so we're expanding across the Reg A. And again, as I mentioned, we're looking for ways to integrate blockchain digital assets and crypto with our more traditional fintech approach.
And the next question is coming from Brandon Enzer. Brandon is a private investor.
I just was thinking the current business model seems to be unsustainable with no credible path to a turnaround. Is a strategic pivot seems to be urgently needed. Can you elaborate on that?
Thank you for your question, Brandon. You've made a strong point, and while I'm not sure how much more I can add, I can definitely respond. We believe our business can continue to create value and be sustainable. However, we are always exploring other opportunities. I'm unclear about what you mean by a strategic pivot; I would argue that fully integrating blockchain into our operations, which we are already beginning to do, is more of an extension rather than a pivot. Our core business does face challenges, and as Coreen pointed out, the current environment hasn't been ideal for us. Nevertheless, we remain committed to our long-term mission and to using any available tools and technologies to navigate between regulatory requirements and user experience. We aim to create and enhance a compelling user experience while complying with the regulatory landscape, which is always evolving. We acknowledge that liquidity in the secondary market is critical for us and has posed challenges for everyone in our industry. New ideas for providing liquidity in private capital markets emerge frequently, but no one has yet successfully balanced user experience and regulatory compliance in the U.S. We are actively exploring these areas and looking to make progress.
And the next question is coming from Emily McClellan. Emily is a private investor.
Martin, I have questions about your general and administrative expenses, particularly the legal costs. Why are they so high for a small company? $5.3 million seems excessive. I would expect legal expenses to be around $1 million at most, and $200,000 for investor relations and proxy should be sufficient. This just doesn't seem correct in the financial records. Can you elaborate?
We are a fintech company in the financial services sector doing something innovative and different, which the regulators do not fully grasp. This has always posed a challenge for us. I completely agree that our legal expenses are higher than they should be, but that’s part of operating as a public company in this field. I could have Coreen, our CFO, provide more details, but generally speaking, it is indeed frustrating. We invest a lot of time, energy, and money into educating regulators about our operations and the rationale behind them. There are not many companies that resemble us. Even if we set aside the new regulations like Reg CF and Reg A, our portfolio essentially consists of a public collection of minority equity investments, which is not something regulators typically have much experience with. So while we spend more than we ideally would like, it's necessary for us.
I think it's clear that this situation isn't sustainable. Are you considering going private? This model just isn't viable for a public company with these figures.
No, I don't want to comment on that specifically, other than to say no. The company has uplisted to NASDAQ, and while there are many advantages to being a public company, there are also significant costs involved, regardless of financial performance. When you consider the financial services sector and the associated regulatory environment, it becomes very expensive. However, we believe that the benefits outweigh the costs and that some of our initiatives will greatly benefit from the visibility of being a public company.
Thank you. And that does conclude today's Q&A session. I will now hand the call back to Martin Kay for closing remarks.
Thanks, Paul. We truly appreciate your interest and support of Netcapital, and I hope you all have a good day. Thank you.
Thank you. This does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.