8-K
Netcapital Inc. (NCPL)
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): December 16, 2024
NETCAPITAL
INC.
(Exact name of registrant as specified in charter)
| Utah | 001-41443 | 87-0409951 |
|---|---|---|
| (State or other<br> jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File<br> Number) | (IRS<br> Employer<br><br> <br>Identification<br> No.) |
| 1 Lincoln Street, Boston, Massachusetts | 02111 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> 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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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<br> of each class | Trading<br> symbol(s) | Name<br> 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. ☐
Item2.02. Results of Operations and Financial Condition.
On December 16, 2024, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the period ended October 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.
Item9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated December 16, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| -2- |
| --- |
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.<br><br> <br>(Registrant) | ||
|---|---|---|
| By: | /s/ Coreen Kraysler | |
| Name: | Coreen<br> Kraysler | |
| Title: | Chief<br> Financial Officer | |
| Dated<br> December 16, 2024 |
| -3- |
| --- |
Exhibit99.1
NetcapitalAnnounces Second Quarter Fiscal 2025 Financial Results
| ● | Management to Host Earnings Call on December 17, 2024 at 10:00 a.m. ET |
|---|
BOSTON, MA – December 16, 2024 – Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced financial results for the second quarter of fiscal year 2025 ended October 31, 2024.
“During the quarter ended October 31, 2024, we saw a decrease in revenue, when compared to the quarter ended October 31, 2023, but an increase in revenue when compared to the quarter ended July 31, 2024. The year-over-year decrease was primarily due to a slowdown in consulting revenue, while the sequential increase was driven by our funding portal business. Despite the challenges we faced during a tough quarter, we remain optimistic about the future,” said Martin Kay, CEO of Netcapital Inc. “Recently our wholly-owned subsidiary, Netcapital Securities Inc. received approval from FINRA to become a FINRA-member broker-dealer, which marks a significant achievement for the Company as it begins to open up opportunities for more revenue channels. Looking beyond the second quarter we are focused on leveraging our new broker-dealer license and expanding our capabilities. With NSI as a registered broker-dealer, we can now support companies raising capital under Reg A and Reg D offerings, facilitate and charge fees on larger fundraises, potentially provide a broader range of investment choices for our investor base, and establish fee-sharing agreements with other broker-dealers.”
SecondQuarter Fiscal 2025 Financial Highlights
| ● | Revenues<br> decreased 92% year-over-year to $170,528, compared to revenue of $2,041,658 million in the<br> second quarter of fiscal year 2024. |
|---|---|
| ● | Revenues<br> increased 20% quarter-over-quarter to $170,528, compared to revenue of $142,227 in the first<br> quarter of fiscal year 2025. |
| ● | Operating<br> loss of ($2,202,431) in the second quarter fiscal 2025 as compared to operating income of<br> $52,220 for the second quarter fiscal 2024 |
| ● | Net<br> loss of approximately ($2,220,501) in the second quarter of fiscal 2025, as compared to a<br> net profit of approximately $339,616, for the same period in the prior year |
| ● | Loss<br> per share of ($2.34) for the quarter ended October 31, 2024, compared to earnings per share<br> of $2.52 for the same period in the prior year |
| ● | As<br> of October 31, 2024, the Company had cash and cash equivalents of $1,346,739. |
ConferenceCall Information
The Company will host an investor conference call on Tuesday, December 17, 2024, at 10 a.m. ET.
Participant access: 844-985-2012 or 973-528-0138
Conference entry code: 894026
Foradditional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the periodended October 31, 2024, which has been filed with the Securities and Exchange Commission.
AboutNetcapital 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.
ForwardLooking Statements
Theinformation contained herein includes forward-looking statements. These statements relate to future events or to our future financialperformance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materiallydifferent 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 otherfactors 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 tothese 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 actualresults could differ materially from those anticipated in these forward-looking statements, even if new information becomes availablein the future.
InvestorContact
800-460-0815
ir@netcapital.com
NETCAPITALINC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
| April 30, 2024<br> (Audited) | ||||
|---|---|---|---|---|
| Assets: | ||||
| Cash and cash equivalents | 1,346,739 | $ | 863,182 | |
| Accounts receivable net | 17,151 | 134,849 | ||
| Interest receivable | 2,000 | 1,200 | ||
| Note receivable | 20,000 | 20,000 | ||
| Prepaid expenses | 30,120 | 23,304 | ||
| Total current assets | 1,416,010 | 1,042,535 | ||
| Deposits | 6,300 | 6,300 | ||
| Notes receivable - related parties | 202,000 | 202,000 | ||
| Purchased technology, net | 14,715,267 | 14,733,005 | ||
| Investment in affiliate | 240,080 | 240,080 | ||
| Equity securities | 25,358,261 | 25,333,386 | ||
| Total assets | 41,937,918 | $ | 41,557,306 | |
| Liabilities and Stockholders’ Equity | ||||
| Current liabilities: | ||||
| Accounts payable | 1,815,823 | $ | 793,325 | |
| Accrued expenses | 199,189 | 310,300 | ||
| Deferred revenue | 409 | 466 | ||
| Interest payable | 96,050 | 92,483 | ||
| Current portion of SBA loans | 1,885,800 | 1,885,800 | ||
| Loan payable - bank | 34,324 | 34,324 | ||
| Total current liabilities | 4,031,595 | 3,116,698 | ||
| Long-term liabilities: | ||||
| Long-term SBA loans, less current portion | 500,000 | 500,000 | ||
| Total liabilities | 4,531,595 | 3,616,698 | ||
| Commitments and contingencies | - | - | ||
| Stockholders’ equity: | ||||
| Common stock, .001 par value; 900,000,000 shares authorized,1,841,335 and 326,867 shares issued and outstanding | 1,842 | 327 | ||
| Shares to be issued | 122,124 | 122,124 | ||
| Capital in excess of par value | 41,550,465 | 37,338,594 | ||
| Retained earnings (deficit) | (4,268,108 | ) | 479,563 | |
| Total stockholders’ equity | 37,406,323 | 37,940,608 | ||
| Total liabilities and stockholders’ equity | 41,937,918 | $ | 41,557,306 |
All values are in US Dollars.
NETCAPITALINC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended | Three Months Ended | Six Months<br><br> <br>Ended | Six Months<br><br> <br>Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October 31, 2024 | October 31, 2023 | October 31, 2024 | October 31, 2023 | |||||||||
| Revenues | $ | 170,528 | $ | 2,041,658 | $ | 312,755 | $ | 3,561,467 | ||||
| Costs of services | 19,781 | 20,134 | 30,001 | 38,187 | ||||||||
| Gross profit | 150,747 | 2,021,524 | 282,754 | 3,523,280 | ||||||||
| Costs and expenses: | ||||||||||||
| Consulting expense | 79,645 | 204,734 | 177,026 | 368,676 | ||||||||
| Marketing | 12,208 | 46,731 | 19,106 | 288,619 | ||||||||
| Rent | 19,442 | 18,379 | 38,558 | 37,989 | ||||||||
| Payroll and payroll related expenses | 749,701 | 1,050,835 | 1,886,294 | 2,087,877 | ||||||||
| General and administrative costs | 1,492,182 | 648,625 | 2,872,438 | 1,436,919 | ||||||||
| Total costs and expenses | 2,353,178 | 1,969,304 | 4,993,422 | 4,220,080 | ||||||||
| Operating income (loss) | (2,202,431 | ) | 52,220 | (4,710,668 | ) | (696,800 | ) | |||||
| Other income (expense): | ||||||||||||
| Interest expense | (9,601 | ) | (10,562 | ) | (20,065 | ) | (23,866 | ) | ||||
| Interest income | 400 | - | 800 | - | ||||||||
| Amortization of intangible assets | (8,869 | ) | (28,331 | ) | (17,738 | ) | (56,662 | ) | ||||
| Total other income (expense) | (18,070 | ) | (38,893 | ) | (37,003 | ) | (80,528 | ) | ||||
| Net income (loss) before taxes | (2,220,501 | ) | 13,327 | (4,747,671 | ) | (777,328 | ) | |||||
| Income tax expense (benefit) | - | (326,289 | ) | - | (625,289 | ) | ||||||
| Net income (loss) | $ | (2,220,501 | ) | $ | 339,616 | $ | (4,747,671 | ) | $ | (152,039 | ) | |
| Basic earnings (loss) per share | $ | (2.34 | ) | $ | 2.52 | $ | (6.58 | ) | $ | (1.26 | ) | |
| Diluted earnings (loss) per share | $ | (2.34 | ) | $ | 2.52 | $ | (6.58 | ) | $ | (1.26 | ) | |
| Weighted average number of common shares outstanding: | ||||||||||||
| Basic | 947,459 | 134,793 | 721,389 | 120,762 | ||||||||
| Diluted | 947,459 | 134,796 | 721,389 | 120,762 |