0001493152-26-011686
SEC filingNetcapital Inc. (NCPL) reported Q3 FY2026 results with revenue of $94K, down 38% YoY from $153K, driven by lower fees from online platform services including Regulation CF, A, and 506(c) offerings. Gross profit was $93K, or 98% margin, improved from 95% YoY amid minimal cost of revenue at $2K. Operating expenses totaled $2.3M, up from $1.8M YoY, led by payroll and related expenses of $1.1M and general/administrative costs of $875K, yielding an operating loss of -$2.2M versus -$1.7M prior year. Other income of $361K, including $500K insurance recovery offsetting amortization, impairment, and unrealized losses, resulted in net loss of -$1.8M, a 40% improvement from -$3.0M YoY. Basic EPS was -$0.32 versus -$1.57, with weighted average shares of 5.6M versus 1.9M. Balance sheet grew to $26.1M total assets (up 25% from $20.9M at FY2025 end), with cash at $715K (up from $289K), supported by $8.5M proceeds from common stock sales and warrant exercises over nine months. Nine-month net loss was -$7.6M, operating cash use -$7.7M offset by $8.2M financing inflows. Negative working capital and cash burn raise going concern doubts, with focus on funding portal growth.
Netcapital Inc. posted Q3 FY2026 revenue of $94,347, down 38% YoY from $152,682, with gross profit of $92,524 (98.1% margin) versus $145,527 (95.3%). Total costs and expenses reached $2,266,859 from $1,833,219, driven by payroll expenses of $1,097,998 and G&A of $874,545, leading to operating loss of $2,174,335 (worse than $1,687,692 YoY). Other income/expense netted $361,491 positively, aided by $500,000 insurance recovery, versus -$1,318,845 prior year, yielding net loss of $1,812,844 (improved from $3,006,537). EPS was -$0.32 (basic/diluted) on 5,612,356 shares, versus -$1.57 on 1,915,367 shares. Nine months revenue $335,481 (down from $465,437), net loss $7,584,385 (slightly better than $7,754,208). Balance sheet: assets $26,059,855 (up from $20,901,491), equity $21,602,648 (up from $14,905,724).
Revenue solely from fees on online services ($94,347 Q3, $335,481 nine months), including funding portal listing fees (4.9% of raises) and professional services. No geographic concentrations beyond U.S.-based customers. Q3 customer concentration: one at 22%, second 15%, third 14%; nine months one at 43%. Prior year Q3: top customer 17%. All revenue considered contract revenue under ASC 606; deferred revenue $270 (to be recognized next 12 months). Equity received in lieu of cash: $67K nine months.
Gross margin expanded to 98.1% from 95.3% YoY on lower cost of revenue ($1,823 vs $7,155). Operating margin deteriorated to -2305% from -1105% due to expense growth outpacing revenue decline. Key costs: consulting $268K (up from $64K), payroll $1.1M (up from $815K), G&A $875K (down slightly from $922K). Stock-based compensation $369K Q3, $1.0M nine months. No tax expense due to losses.
Nine months operating cash use $7,661,306 (vs $4,614,630 prior), adjusted for $1.0M stock comp, $356K note accretion, $282K prepaid increase, $1.3M AP/accrued decrease. Investing outflow $100K (Rivetz acquisition). Financing inflow $8,187,321 from $8.5M stock sales, $300K notes net of $620K paydown. Net cash increase $426K; ending cash $715,443 (from $289,428). Current liabilities $4.0M (down from $5.5M), total debt ~$2.4M (SBA loans $2.4M, bank $34K). Working capital negative $2.9M. Equity securities $5.8M, purchased technology $19.2M.
Single fintech segment with centralized operations. Focus on funding portal growth after FY2025 quarter-over-quarter revenue increases, but FY2026 decline noted. Substantial doubt on going concern due to negative working capital -$2.9M, nine-month operating loss $7.6M, cash use $7.7M; reliant on equity raises. Ongoing SEC/FINRA investigations; $500K insurance recovery received, but further costs expected. Subsequent Wells Notice (Mar 4, 2026) on potential enforcement for reporting/securities violations. No guidance provided; seeks additional financing.