Netcapital Inc. (NCPL) Earnings Call Transcript

Greetings, and welcome to the Net Capital Inc. Shareholder Update Call. At this time, all participants are in a listen-only mode. I will now turn the conference over to your host, Todd Violette, the floor is yours.

Thank you, and good afternoon, everyone. I'd like to thank you for taking time to join us today for this shareholder update. I want to begin by expressing my sincere gratitude to our shareholders, partners and team members. Thank you for your patience, your trust and your continued support that will navigate through this transition period in our company's history. Before we dive into the core of today's presentation, I must remind everyone that our discussion today will contain forward-looking statements. These statements are based upon management's current expectations beliefs and assumptions regarding the future of our business, future events and financial trends. Actual results may differ materially from those expressed, implied in these forward statements due to a variety of risks, uncertainty and other factors. We encourage everyone to review our recent SEC filings, including our annual and quarterly reports, and more detailed discussion of risk and variables facing variables facing our business. The company assumes no obligation to update any forward statements made today, except as those required by law. Furthermore, I want to clarify that today's update is not intended to be financial earnings call. Instead, my purpose today is to share a transparent look at where we stand right now, what we've accomplished over the past several months to stabilize our foundation and more importantly, where I believe Netcapital can go over the next 5 years. And I want to start with a topic of shift in our strategy beyond moving from the portal. When I first accepted the role as CEO, I took a step back to analyze our market positioning. I ask myself one foundational question. If I were starting that capital today, knowing what we know about the rapid evolving artificial intelligence, automation and global capital markets, what kind of company would be built? The answer to that question was clear, it would shift our entire strategic horizon. The answer wasn't simply to build a slightly better regulated crowd funding portal. It was something much bigger and more comprehensive. I believe that modern entrepreneurs deserve far more than just the digital marketplace to raise capital. A capital raise is a single moment in time, building the company is a lifetime journey. To succeed over a long term, entrepreneurs need structured education, intelligent, data-driven guidance, rigorous compliance support, seamless access to institution and retail capital, technology that simplifies complex high stakes decision-making. Ultimately, entrepreneurs need a long-term relationship partner, not a onetime transaction platform. Our long-term vision is to build a complete ecosystem that answers all of these needs. The portal is our foundation. Let me be clear, Net capital currently operates a regulated funding dealer. These are valuable regulated assets. However, under our new strategy, roadmap, I no longer view them as isolated stand-alone business units. Instead, I view them as a concrete foundation upon which we can build a much larger interconnected enterprise. Think of our regulated portal as our first spoke in a wheel. On its own, a single spoke carries a limited weight. But as we develop and integrate additional capabilities, each new service becomes another spoke that strengthens the entire wheel. By wrapping education, corporate advisory services, data analytics, capital formation strategies, broker-dealer services around the central hub, we can create an ecosystem which is capable of reinforcing each other. Over time, the more our clients engage with us across this growth journey, the more valuable that we can deliver to them and more defensible our business becomes. A common thread running through our entire ecosystem is technology. It's no secret that artificial intelligence is restructuring major industries. Financial service and capital markets will certainly be no exception. But I want to emphasize that our goal is not to chase the trend of building another generic AI chatbot. Our goal is to build a highly secure, private AI operating environment engineered to do 2 things: help our internal teams serve clients efficiently and empower entrepreneurs to demystify the complexity of capital formation process. Internally, we have been developing a long-term strategy initiative that we've been calling Orion. Project Orion focuses on safely integrating advanced technology in our day-to-day operations and external client experience. The concept is built in a private operating environment that learns from Netcapital's proprietary workflow while strictly adhering to the guardrails of a highly regulated business activities. Our philosophy, we believe technology should enhance human judgment, not replace it. By leveraging automation for repetitive administrative and compliance heavy tasks, we may free up our people to do what they do best, provide high value, personalized advice and human relationship management to our clients. As management continues to execute the strategy, we are actively evaluating expansion opportunities that extend far beyond application software. To truly power a private robust AI operating environment like Orion, you cannot just rely upon third-party application layers that standard commercial cloud space provides. You need access to and control over the underlying infrastructure. For this reason, we are actively evaluating opportunities to acquire data center assets and infrastructure. We believe that owning and directly controlling these physical assets could support the intense computing requirements, strict data sovereignty and massive scalability for our advanced AI application. By bringing data center infrastructure into our broad strategic mix, we are aiming to secure the foundational hardware needed to power our FinTech ecosystem efficiently while potentially creating a highly defensible, asset-based foundation for our company. I want to emphasize that our evaluation of potential infrastructure assets is part of our broad long-term strategy. These opportunities are currently in the evaluation, sourcing and initial development stages. Any future acquisition or structural expansion will remain subject to rigorous due diligence, Board of directors approval, final financing arrangement and relative regulatory process. As these materials developments progress thresholds, we will communicate them transparently through the appropriate public SEC disclosure channel. Why I'm excited about the future of that capital? In the modern economy, companies are increasingly being defined by 3 core pillars: their proprietary data, the specialized technology the strength of the ecosystem they build. Netcapital already possesses the most difficult foundation. We are a public company. We possess regulated platforms and we have an active broker-dealer license. Now our executive team's job is to intellectually connect these pieces in a way that will unlock the value for our clients and by extension, our shareholders. I'm confident that the greatest opportunities for this company still lie ahead. For the past several months have been strictly focused on stabilizing our business, optimizing operations and redefining the strategy, the years ahead will focus on aggressively building on that stability. Our commitment to you is to continue building a highly disciplined operational decision, investing thoughtfully in technology and pursue opportunities that we believe can create sustainable long-term shareholder value. Thank you once again for your continued support and your confidence in Netcapital. We appreciate the opportunity to update you and look forward to reporting our progress through the appropriate public channels. Thank you, and good day. I appreciate your time today.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.