Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 16, 2024

NETCAPITAL INC.

(Exact name of registrant as specified in charter)

Utah

001-41443

87-0409951

(State or other jurisdiction of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

1 Lincoln Street, Boston, Massachusetts		02111
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (781) 925-1700

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	NCPL	The Nasdaq Stock Market LLC
Warrants to Purchase Common Stock	NCPLW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company ☐.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On September 16, 2024, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the period ended July 31, 2024. The text of the press release is furnished as Exhibit 99.1 to this current report.

The information in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.		Description

99.1		Press Release dated September 16, 2024.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Netcapital Inc. (Registrant)

	By:	/s/ Coreen Kraysler
	Name:	Coreen Kraysler
	Title:	Chief Financial Officer

Dated September 16, 2024

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Exhibit 99.1

Netcapital Announces First Quarter Fiscal 2025 Financial Results

●

Management to Host Earnings Call on September 17, 2024 at 11:00 a.m. ET

BOSTON, MA – September 16, 2024 – Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the first quarter of fiscal year 2025 ended July 31, 2024.

“This was a challenging quarter for us, driven primarily by a decrease in revenues for services that we provide in exchange for equity securities,” said Martin Kay, CEO of Netcapital Inc. “However, we have taken what we believe are important steps to lay the groundwork for future opportunities. In May 2024, for example, we announced that our wholly-owned subsidiary, Netcapital Securities Inc. applied for broker-dealer registration with the Financial Industry Regulatory Authority (“FINRA”). We believe that by having a registered broker-dealer, it could create opportunities to expand our revenue base by hosting and generating additional fees from Reg A+ and Reg D offerings on the Netcapital platform. In addition, in July 2024, we announced the launch of our beta version of a secondary trading platform through the Templum ATS to a closed group of users. This secondary trading platform has been designed to provide investors who purchase stock through the Netcapital funding portal with the potential for secondary trading through access to the Templum ATS.”

The operation of the Templum ATS remains subject to extensive regulation and oversight. Any regulatory delays or objections will result in delays in our ability to launch the proposed secondary trading platform, if at all.

Netcapital Securities Inc.’s application to become a registered broker-dealer remains subject to regulatory approval and/or licensing from the Financial Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). No assurance can be given as to when or if such approvals may be granted or when, if at all, Netcapital will be able to expand the services it offers.

First Quarter Fiscal 2025 Financial Highlights

	●	Revenue decreased approximately 91% year-over-year to $142,227, compared to revenue of $1,519,809 million in the first quarter of fiscal year 2024.

	●	Total funding portal revenues (consisting of portal fees, listing fees and a 1% equity fee) decreased approximately 62% year-over-year to $142,056 compared to $375,856 in the first quarter of fiscal 2024.

	●	Operating loss of ($2,508,237) for the first quarter fiscal 2025 as compared to ($749,020) for the first quarter fiscal 2024, an increase of 235%

	●	Net loss of ($2,527,170) in the first quarter fiscal 2025, compared to net loss of ($491,655), for the same period in the prior year, an increase of 414%

	●	Loss per share of ($5.10) in the first quarter year ended July 31, 2024, increased approximately 11% compared to loss per share of ($4.61) for the same period in the prior year.

●

As of July 31, 2024, the Company had cash and cash equivalents of $855,181.

Conference Call Information

The Company will host an investor conference call on Tuesday, September 17, 2024, at 11:00 a.m. ET.

Participant access: 844-985-2012 or 973-528-0138

Conference entry code: 844301

For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended July 31, 2024, which has been filed with the Securities and Exchange Commission.

About Netcapital Inc.

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors. The Company’s consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies. The Company’s funding portal, Netcapital Funding Portal, Inc. is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

Forward Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume 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.

Investor Contact

800-460-0815

ir@netcapital.com

NETCAPITAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	July 31, 2024 (Unaudited)			April 30, 2024 (Audited)
Assets:
Cash and cash equivalents	$	855,181		$	863,182
Accounts receivable net		-			134,849
Note receivable		20,000			20,000
Interest receivable		1,600			1,200
Prepaid expenses		48,160			23,304
Total current assets		924,941			1,042,535

Deposits		6,300			6,300
Notes receivable - related parties		202,000			202,000
Purchased technology, net		14,724,136			14,733,005
Investment in affiliate		240,080			240,080
Equity securities		25,343,513			25,333,386
Total assets	$	41,440,970		$	41,557,306

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,180,487		$	793,325
Accrued expenses		236,758			310,300
Deferred revenue		445			466
Interest payable		94,703			92,483
Current portion of SBA loans		1,885,800			1,885,800
Loan payable - bank		34,324			34,324
Total current liabilities		3,432,517			3,116,698

Long-term liabilities:
Long-term SBA loans, less current portion		500,000			500,000
Total liabilities		3,932,517			3,616,698

Commitments and contingencies		-			-

Stockholders’ equity:
Common stock, $.001 par value; 900,000,000 shares authorized, 579,153 and 326,867 shares issued and outstanding		579			327
Shares to be issued		122,264			122,124
Capital in excess of par value		39,433,217			37,338,594
Retained earnings (deficit)		(2,047,607	)		479,563
Total stockholders’ equity		37,508,453			37,940,608
Total liabilities and stockholders’ equity	$	41,440,970		$	41,557,306

NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended			Three Months Ended
	July 31, 2024			July 31, 2023

Revenues	$	142,227		$	1,519,809
Costs of services		10,220			18,053
Gross profit		132,007			1,501,756

Costs and expenses:
Consulting expense		97,381			163,942
Marketing		6,898			241,888
Rent		19,116			19,610
Payroll and payroll related expenses		1,136,593			1,037,042
General and administrative costs		1,380,256			788,294
Total costs and expenses		2,640,244			2,250,776
Operating loss		(2,508,237	)		(749,020	)

Other income (expense):
Interest expense		(10,464	)		(13,304	)
Amortization of intangible assets		(8,869	)		(28,331	)
Other income		400			-
Total other income (expense)		(18,933	)		(41,635	)
Net loss before taxes		(2,527,170	)		(790,655	)
Income tax expense (benefit)		-			(299,000	)
Net loss	$	(2,527,170	)	$	(491,655	)

Basic loss per share	$	(5.10	)	$	(4.61	)
Diluted loss per share	$	(5.10	)	$	(4.61	)

Weighted average number of common shares outstanding:
Basic		495,319			106,732
Diluted		495,319			106,732

Cover	Sep. 16, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 16, 2024
Entity File Number	001-41443
Entity Registrant Name	NETCAPITAL INC.
Entity Central Index Key	0001414767
Entity Tax Identification Number	87-0409951
Entity Incorporation, State or Country Code	UT
Entity Address, Address Line One	1 Lincoln Street
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02111
City Area Code	(781)
Local Phone Number	925-1700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock, $0.001 par value per share
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	NCPL
Security Exchange Name	NASDAQ
Warrants to Purchase Common Stock
Title of 12(b) Security	Warrants to Purchase Common Stock
Trading Symbol	NCPLW
Security Exchange Name	NASDAQ