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NETCLASS TECHNOLOGY INC Announces Updated Earnings Results for the First Half of Fiscal Year 2025

1. NTCL's revenues fell by 3% to $3.7 million in H1 2025. 2. Gross profit decreased by 47.7%, now at $305,390. 3. Operating expenses surged 94.7% to $5.5 million, driven by marketing. 4. Net loss increased by 140% to approximately $4.95 million. 5. Financial results are unaudited, raising concerns over accuracy.

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Why Very Bearish?

The significant increase in net loss and gross margin contraction are alarming. Historical examples show that such unfavorable financial results lead to stock price declines, as seen with other tech firms facing operating losses.

How important is it?

The report outlines troubling loss figures that will likely concern investors and analysts. Increased operational losses can drive share prices down quickly.

Why Short Term?

The need for immediate market confidence is critical following these results. Previous incidents in the tech sector demonstrate that such financial disclosures can significantly perturb investor sentiment YTD.

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TLRDEDUCHRB
SINGAPORE and HONG KONG, Oct. 16, 2025 (GLOBE NEWSWIRE) -- NETCLASS TECHNOLOGY INC (Nasdaq: NTCL; the “Company” or “NetClass”), a leading B2B smart education IT solutions provider with offices in Shanghai, Hong Kong, Singapore and Tokyo, today corrected its unaudited condensed consolidated financial results previously announced on September 30, 2025. The financial results have not been reviewed by an independent certified public accountant for the six months ended March 31, 2025. Financial Highlights for the First Half of Fiscal Year 2025         %   2025 2024 Change Change Revenues  3,654,410  3,766,192  (111,782) (3.0)%Cost of revenues  3,349,020  3,182,743  166,277 5.2%Gross profit  305,390  583,449  (278,059) (47.7)%Total operating expenses  5,483,660  2,818,410  2,665,250 94.7%Loss from operations  (5,178,270)  (2,234,961)  (2,943,309) 94.6%Loss before income taxes  (5,054,300)  (2,244,424)  (2,809,876) 125.2%Net loss  (4,955,643)  (2,065,011)  (2,890,632) 140.0%Comprehensive loss attributable to shareholders $(4,971,612) $(2,028,488) $(2,943,124) 145.1%  Financial Results for the First Half of Fiscal Year 2025 Revenue For the six months ended March 31, 2025, our total revenue was approximately $3.7 million compared to approximately $3.8 million for the six months ended March 31, 2024. The Company’s total revenue decreased by approximately $0.1 million, or 3.0%. The overall decrease in total revenue was attributable to approximately $0.2 million decrease in revenue from subscription services offset by $0.1 million increase in revenue from application development services. Gross Profit Our gross profit decreased by approximately $0.3 million or 47.7% from approximately $0.6 million for the six months ended March 31, 2024, to approximately $0.3 million for the six months ended March 31, 2025. Profit margin as a percent of overall revenue for the six months ended March 31, 2025 and 2024, was approximately 8.4% and 15.5%, respectively. The decrease in profit margin was due to the need to keep competitive price for customers despite cost increases. Operating Expenses Our operating expenses increased by approximately $2.7 million or 94.7% from approximately $2.8 million for the six months ended March 31, 2024, to approximately $5.5 million for the six months ended March 31, 2025. The increase in operating expenses is mainly due to an increase of marketing expenses, to promote of the Company’s brands and an increase of costs in technology upgrading and strategy consulting and business consulting after the Company’s initial public offering (“IPO”). Net loss As a result of the foregoing, our net loss increased by approximately $2.9 million, or 140.0%, from approximately $2.1 million net loss for the six months ended March 31, 2024, to approximately $5.0 million net loss for the six months ended March 31, 2025. The increase of net loss is mainly attributed to approximately $2.7 million increase in operating expenses and $0.3 million decrease of gross profit, offset by $0.1 million increase in net other income. About NETCLASS TECHNOLOGY INC NETCLASS TECHNOLOGY INC is a leading B2B smart education specialist with offices in Shanghai, Hong Kong, Singapore, and Tokyo, providing innovative IT solutions to schools, training institutions, corporations, public agencies, and other organizations. Our services include SaaS subscription services and application software development, with solutions spanning teaching and campus management, online teaching, examinations, epidemic prevention, data storage, EDC (Education Credit) blockchain systems, and lecturer evaluation services. Our mission is to deliver reliable, high-quality products that drive sustainable growth for our customers. For more information, please visit the Company’s website: https://ir.netclasstech.com Safe Harbor Statement This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantee of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict and many of which are beyond the control of Netclass. Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties, as well as other risk factors that are included in the Company’s filings with the U.S. Securities and Exchange Commission. Although Netclass believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by Netclass or any other person that their objectives or plans will be achieved. Netclass does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For investor and media inquiries, please contact:NETCLASS TECHNOLOGY INCInvestor RelationsEmail: ir@netclasstech.com Jackson LinLambert by LLYCPhone: +1 (646) 717-4593Email: jian.lin@llyc.global NETCLASS TECHNOLOGY INCCONDENSED CONSOLIDATED BALANCE SHEETS(Expressed in U.S. dollar, except for the number of shares)   March 31, September 30,  2025 2024   unaudited  auditedASSETS      CURRENT ASSETS:      Cash $1,805,463 $410,716Restricted cash  504,058  4,564Accounts receivable, net  4,654,356  5,298,006Inventories, net  199,869  70,681Advances to vendors  1,645,537  1,124,030Prepayments and other current assets  441,534  40,990Deferred issuance costs  -  138,463TOTAL CURRENT ASSETS  9,250,817  7,087,450       Property and equipment, net  32,764  39,707Long-term prepaid expenses, net  437,500  -Intangible assets, net  327,071  -Operating lease right of use assets  1,153,272  13,122Deferred tax assets, net  114,208  88,445TOTAL NONCURRENT ASSETS  2,064,815  141,274TOTAL ASSETS $11,315,632 $7,228,724       LIABILITIES AND EQUITY      CURRENT LIABILITIES:      Accounts payable $1,766,033 $2,860,703Advance from customers  1,612,363  425,116Accrued expenses and other liabilities  393,648  297,360Due to related parties  157,114  228,951Taxes payable  310,233  341,217Operating lease liabilities, current portion  1,272  13,122TOTAL CURRENT LIABILITIES  4,240,663  4,166,469       Long-term bank loan  372,070  -Operating lease liabilities, non-current portion  -  12,706TOTAL NON-CURRENT LIABILITIES  372,070  12,706       TOTAL LIABILITIES  4,612,733  2,097,344       COMMITMENTS AND CONTINGENCIES  -  -       SHAREHOLDERS’ EQUITY:      Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share      Class A Ordinary shares, 15,830,000 and 13,760,000 ordinary shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively  3,958  3,440Class B Ordinary shares, 2,000,000 ordinary shares issued and outstanding  500  500Additional paid in capital  13,285,824  4,821,992Statutory reserves  35,448  35,448Accumulated deficit  (6,588,434)  (1,704,065)Accumulated other comprehensive loss  (202,103)  (186,134)TOTAL SHAREHOLDERS’ EQUITY  6,535,193  2,971,181Non-controlling interest  167,706  91,074TOTAL EQUITY  6,702,899  3,062,255       TOTAL LIABILITIES AND EQUITY $11,315,632 $7,228,724  NETCLASS TECHNOLOGY INCUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in U.S. dollar, except for the number of shares)   For the Six Months EndedMarch 31,  2025  2024      Revenues $3,654,410 $3,766,192Cost of revenues  (3,349,020)  (3,182,743)Gross profit  305,390  583,449       Operating expenses:      Selling and marketing  (468,864)  (207,160)General and administrative  (3,975,268)  (397,873)Research and development  (1,039,528)  (2,213,377)Total operating expenses  (5,483,660)  (2,818,410)Loss from operations  (5,178,270)  (2,234,961)       Other (expense) income:      Interest income (expense), net  (2,939)  210Gain on acquisition of a subsidiary  139,724  -Other (expense) income, net  (12,815)  (9,673)Total other (expense) income, net  123,970  (9,463)       Loss before income taxes  (5,054,300)  (2,244,424)       Income tax benefit  98,657  179,413Net loss  (4,955,643)  (2,065,011)       Other comprehensive income      Foreign currency translation adjustments  (15,969)  36,523Comprehensive loss  (4,971,612)  (2,028,488)Less: Comprehensive loss attributable to non-controlling interests  71,274  - Comprehensive loss attributable to shareholders  $(4,900,338) $(2,028,488)       Loss per share      Basic and diluted $(0.29) $(0.13)       Weighted average number of shares outstanding      Basic and diluted  16,927,527  15,760,000

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