Netcapital Inc (NCPL) 2024 Q1 法說會逐字稿

Good day, and welcome to the Netcapital first-quarter earnings conference call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Coreen Kraysler. The floor is yours.

大家好，歡迎參加 Netcapital 第一季財報電話會議。 （操作員說明）現在我很高興將發言權交給主持人 Coreen Kraysler。地板是你的。

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 31, 2023. This is Coreen Kraysler, 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.

非常感謝你，凱利。大家早安，感謝您參加 Netcapital 的 2024 財年第一季（截至 2023 年 7 月 31 日）財務業績電話會議。我是 Netcapital Inc. 財務長 Coreen Kraysler。我將首先回顧我們的財務業績在在我們開始提問之前，我們的執行長馬丁·凱(Martin Kay) 將發表講話。

Before we begin, I'd like to call your attention to the customary safe harbor disclosure regarding forward-looking information. This 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, 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.

在開始之前，我想提請您注意有關前瞻性資訊的慣例安全港披露。本討論可能包含前瞻性陳述。這些陳述涉及未來事件或未來財務業績，並涉及已知和未知的風險、不確定性和其他因素，這些因素可能導致實際結果與這些陳述所明示或暗示的任何未來結果、活動水平、業績或成就存在重大差異。前瞻性陳述。任何前瞻性陳述均反映管理階層目前對營運、成長策略、流動性和未來事件的看法。 Netcapital 不承擔因任何原因公開更新或修改這些前瞻性陳述的義務，也不承擔更新實際結果可能與這些前瞻性陳述中預期結果存在重大差異的義務，即使將來出現新資訊。

Turning to our financial results for the first quarter, we are excited about the momentum shown by the Netcapital Funding Portal this quarter, as funding portal revenues increased by more than 110% to $375,856 in the three months ended July 31, 2023, compared to $178,500 in the three months ended July 31, 2022. This strength was driven by the success of several large issuers during this 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.

談到我們第一季的財務業績，我們對本季度Netcapital 融資門戶所表現出的勢頭感到興奮，截至2023 年7 月31 日的三個月內，融資門戶收入增長了110% 以上，達到375,856 美元，而同期為178,500 美元截至 2022 年 7 月 31 日的三個月內。這種強勁勢頭是由幾家大型發行人在此期間的成功推動的。公司總營收年增 13%，達到 150 萬美元，而 2023 財年第一季的營收為 130 萬美元。

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 $483,351 in the three months ended July 31, 2023, as compared to $32,953 in the three months ended July 31, 2022.

我們報告的淨虧損約為 492,000 美元，而 2023 財年第一季的淨利潤約為 65,000 美元，攤薄後每股虧損為 0.07 美元，而攤薄後每股收益為 0.02 美元。第一季淨虧損主要是由於行銷和薪資費用的非現金股票補償，截至2023年7月31日的三個月增加至483,351美元，而截至2022年7月31日的三個月為32,953美元。

I'll now turn the call over to our CEO, Martin Kay.

我現在將把電話轉給我們的執行長馬丁凱 (Martin Kay)。

Thank you, Coreen. 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 offering and in Netcapital's ability to drive value creation for investors and entrepreneurs alike.

謝謝你，科林。正如我在 2023 財年業績電話會議上所說，我首先要重申我們對綜合產品的差異化價值主張以及 Netcapital 為投資者和企業家創造價值的能力的信心。

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.

目前，我們的融資入口網站擁有超過 10 萬名用戶，對於尋求融資的公司來說，這是一個相當大的投資者群體。目前有 55 家公司在我們的平台上籌集資金，這些社群、投資者和發行人都將從我們即將推出的二級交易功能中受益，這一直是第一季的關鍵焦點。

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 Netcapital platform are and have always been specifically designed to be tradable as straight common shares, free of transfer restrictions. Unlike other funding portals, Netcapital doesn't allow issuers to sell safe instruments, debt, revenue bonds, tokens, or other hybrid securities. We believe this strategy of only offering common equity coupled with secondary trading makes Netcapital issuers more attractive to investors.

對投資者而言，二級交易的目的當然是透過用戶交易股票的能力為投資者提供潛在的流動性。 Netcapital 平台上發行的證券一直以來都經過專門設計，可以作為普通股進行交易，不受轉讓限制。與其他融資入口網站不同，Netcapital 不允許發行人出售安全工具、債務、收益債券、代幣或其他混合證券。我們相信，這種僅提供普通股並進行二級交易的策略使 Netcapital 發行人對投資者更具吸引力。

From the issuer standpoint, those seeking to raise capital, Netcapital 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 potential for increased company value.

從發行人的角度來看，對於那些尋求籌集資金的人來說，Netcapital 始終具有差異化優勢，因為我們的解決方案成本更低、自動化引導簡便、發行人體驗卓越，這一點已被使用過我們平台和競爭對手平台的發行人的驗證。 。最重要的是，二級交易應該為這些發行人帶來引人注目的額外好處，為增加流動性和增加公司價值的潛力提供另一條途徑。

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 achievement in technology and product development, and ultimately a stronger competitive benefit for the audiences we serve.

新的流動性功能已基本完成，我們上週開始內部測試。下一步，我們預計將向有限數量的投資者推出二級交易功能的測試版，並希望在 12 月底之前全面推出。總而言之，我所討論的努力代表了技術和產品開發的里程碑式成就，並最終為我們服務的受眾帶來了更強的競爭優勢。

As always, thank you for your interest and support of Netcapital, and operator, we are ready for questions.

一如既往，感謝您對 Netcapital 和運營商的關注和支持，我們已準備好回答問題。

(Operator Instructions) Michael Mathison, Singular Research.

（操作員說明）Michael Mathison，Singular Research。

Hi, Michael. Good morning, everyone. Thanks for joining us all.

嗨，邁克爾。大家，早安。感謝您加入我們大家。

Thank you, and thanks for having me. Good quarter, a lot of interesting news. My question really looks at your revenue forecast going forward. Last year, you averaged 55% year-over-year growth. You had four straight quarters of sequential growth. This quarter, you had around 13%, I believe, year-over-year. Should we be looking at that as kind of the new normal, a growth rate that's kind of that magnitude going forward?

謝謝你，也謝謝你邀請我。好季度，有很多有趣的消息。我的問題實際上是針對您未來的收入預測。去年，您的平均年成長率為 55%。您連續四個季度實現連續成長。我相信本季的年成長率約為 13%。我們是否應該將其視為一種新常態，即未來如此大規模的成長率？

So, Michael, great question. Thank you very much for asking that. As you know, we don't provide a lot or any forward-looking guidance. What I would say is that the summer months, which this quarter primarily represents, tend to be the slower months for us. That's why we were especially excited by the more than 110% growth we saw in the funding portal revenues. So, I would focus on the growth that we saw in the funding portal to help you frame what you think about our revenues going forward, because that's really the cash engine of our company.

所以，邁克爾，這是個好問題。非常感謝你這麼問。如您所知，我們不提供太多或任何前瞻性指導。我想說的是，本季主要代表的夏季月份對我們來說往往是速度較慢的月份。這就是為什麼我們對融資門戶收入超過 110% 的成長感到特別興奮。因此，我將重點關注我們在融資入口網站中看到的成長，以幫助您制定對我們未來收入的看法，因為這確實是我們公司的現金引擎。

All right. So, speaking of kind of what's going on the portal, you're very near to launching secondary trading. Congratulations on that.

好的。因此，說到入口網站上正在發生的事情，您已經非常接近啟動二級交易了。對此表示祝賀。

Thank you.

謝謝。

Any forecast of when you'll be live and what that will mean for revenues?

您對何時上線有什麼預測嗎？這對收入意味著什麼？

So, what we have told investors and what we said earlier in our comments is that we are currently testing the secondary trading feature internally, which is a really exciting development for us. The next step for us will be to open up a beta version to a limited number of investors, and then we hope to have the secondary transfer feature live by the end of the calendar year. And we haven't talked about the impact on revenues yet.

因此，我們告訴投資者以及我們之前在評論中所說的是，我們目前正在內部測試二級交易功能，這對我們來說是一個非常令人興奮的發展。我們的下一步將是向有限數量的投資者開放測試版，然後我們希望在今年年底之前推出二次轉帳功能。我們還沒有討論對收入的影響。

Well, good. Thank you for taking my questions.

嗯，很好。感謝您回答我的問題。

Thank you so much.

太感謝了。

Mark Nelson, [Teshy Capital].

馬克·尼爾森，[Teshy Capital]。

Hello. Thank you for taking the call. For your launch in December, do you guys have a sense of how many listings will be available on the secondary market at that launch?

你好。感謝您接聽電話。對於 12 月的上市，你們是否知道上市時二級市場上會有多少房源？

Martin, do you want to jump in here?

馬丁，你想跳到這裡嗎？

Yeah, I can take that, Coreen. Thanks so much for the question. We are -- as I mentioned in my comments, we have specifically designed from the beginning our platform so that all securities issued would be tradable in secondary. That's part of the agreement that issuers sign up for and have always signed up for. And I think we've disclosed elsewhere that we've had more than 200 companies who have successfully raised on our platform.

是的，我可以接受，科林。非常感謝您的提問。正如我在評論中提到的，我們從一開始就專門設計了我們的平台，以便所有發行的證券都可以進行二級交易。這是發行人簽署並一直簽署的協議的一部分。我想我們已經在其他地方透露過，已經有 200 多家公司在我們的平台上成功融資。

So ultimately, that's the goal. We will begin with a smaller number and working with our ATS partner, Templum, who is the alternative trading system platform that we're working with on the secondary. But working with them, we will gradually introduce those securities into the platform. So we haven't been specific about how many we'll be trading by when, but the point is I guess that all of them are ultimately eligible to be traded on the platform and obviously any more going forward.

所以最終，這就是目標。我們將從較小的數量開始，並與我們的 ATS 合作夥伴 Templum 合作，Templum 是我們在二級市場上合作的替代交易系統平台。但我們將與他們合作，逐步將這些證券引入該平台。因此，我們還沒有具體說明我們將在何時進行交易，但重點是我認為所有這些最終都有資格在平台上進行交易，而且顯然未來還會有更多的資格。

Great. Thank you very much.

偉大的。非常感謝。

Does that answer your question, Martin?

這能回答你的問題嗎，馬丁？

Thank you. Yes, it does.

謝謝。是的，它確實。

(Operator Instructions) There are no remaining questions in queue.

（操作員說明）佇列中沒有剩餘問題。

Great. Thank you so much, everyone, for -- Oh, it looks like Michael Mathison might have a follow-up. Is that true?

偉大的。非常感謝大家——哦，看起來邁克爾·馬西森可能會有後續作品。真的嗎？

Yes, he does. Just one moment. I'll place him in. Michael, your line is live.

是的，他確實如此。只是一個瞬間。我會安排他加入。邁克爾，你的線路已上線。

Thank you for permitting one more question. I just wanted to ask you about cash flow. You were in negative operating cash flow last quarter. Can we expect that for the coming quarters, and how would that be financed?

感謝您允許再提出一個問題。我只是想問你關於現金流的問題。上個季度您的經營現金流為負。我們可以預期未來幾季會出現這種情況嗎？如何籌措資金？

Right. What we have said about cash flow and financing is that we are currently in a position of generating negative operating cash flow, and that given that, it would not be unreasonable to expect us to do future common financings from time to time. But one of the things, again, that we are very, very pleased to see is the growth, the very strong growth that we saw in the funding portal this quarter, and the increased activity we're seeing in the portal overall, both in terms of the average investment size and the success of the larger issuers that we're seeing on our platform.

正確的。關於現金流量和融資，我們所說的是，我們目前處於產生負經營現金流的狀態，有鑑於此，期望我們未來不時進行共同融資並不是沒有道理的。但我們非常非常高興看到的一件事是成長，本季我們在融資入口網站中看到的非常強勁的成長，以及我們在門戶中整體上看到的活動的增加，無論是在就平均投資規模以及我們在平台上看到的大型發行人的成功而言。

Okay, good. I just wanted to confirm that expectation. Thank you.

好的。我只是想確認這個期望。謝謝。

Yes. Cool. All right.

是的。涼爽的。好的。

(multiple speakers) any additional questions. Thank you.

（多位發言者）任何其他問題。謝謝。

Thank you. Thank you so much, everyone, for joining us. We really appreciate your interest and support of our stock. We very much are looking forward to seeing investors at a few conferences coming up, specifically the LD Micro Conference, and also the ThinkEquity Conference, both in October. So we look forward to speaking with investors in person at these conferences, and we'll talk to you on the next conference call, if not then. Thank you. Bye-bye.

謝謝。非常感謝大家加入我們。我們非常感謝您對我們股票的興趣和支持。我們非常期待在即將舉行的幾場會議上見到投資者，特別是 LD Micro 會議和 ThinkEquity 會議，這兩場會議都將於 10 月舉行。因此，我們期待在這些會議上與投資者親自交談，如果沒有的話，我們將在下一次電話會議上與您交談。謝謝。再見。

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開電話線，度過美好的一天。感謝您的參與。