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 14, 2023
NETCAPITAL
INC.
(Exact name of registrant as specified in charter)
| Utah | 001-41443 | 87-0409951 |
|---|---|---|
| (State or other 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 of principal executive<br> 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<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant<br> to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications<br> 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 |
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 14, 2023, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the period ended October 31, 2023. 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 14, 2023. |
| 104 | Cover<br> 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 Kraysler | |
| Title: | Chief Financial Officer | |
| Dated December 14, 2023 |
| -3- |
| --- |
Exhibit99.1
NetcapitalFunding Portal Revenues Increase by More Than 150%
TotalRevenues Increase by 15%
Managementto Host Earnings Call on December 15, 2023, at 10:00 a.m. ET
BOSTON, MA – December 14, 2023 – Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced select financial results for the second quarter of fiscal year 2024 ended October 31, 2023.
“It was a strong quarter for our funding portal business, which experienced revenue growth of 151%,” said Martin Kay, CEO of Netcapital Inc. “This was driven by a significant increase in investment dollars closed on the Netcapital funding portal platform during the quarter, helped by the success of several large issuers, including Avadain, a graphene technology company, and EarthGrid PBC, a plasma boring technology company.”
SecondQuarter Fiscal 2024 Financial Highlights
| ● | Revenues<br> grew by approximately 15% year-over year to $2.0 million, compared to revenue of $1.8 million<br> in the second quarter of fiscal year 2023. |
|---|---|
| ● | Funding<br> portal revenues increased approximately 151% year-over-year to $462,706, compared to $184,095<br> in the second quarter of fiscal 2023. |
| ● | Diluted<br> earnings per share of $0.04 in the three months ended October 31, 2023, were flat compared<br> to diluted earnings per share of $0.04 for the same period in the prior year. |
For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended October 31, 2023, which has been filed with the Securities and Exchange Commission.
ConferenceCall Information
The Company will host an investor conference call on Friday, December 15, 2023 at 10:00 a.m. ET.
| Participant<br> access: | 844-985-2012<br> or 973-528-0138 |
|---|---|
| Conference<br> entry code: | 473254 |
For those unable to participate in the live call, a replay will be made available in the Investors section of the Company’s website.
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.
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
Netcapital Inc.
Balance Sheets
| April<br> 30, 2023 | |||
|---|---|---|---|
| (Audited) | |||
| Assets: | |||
| Cash<br> and cash equivalents | 528,827 | $ | 569,441 |
| Accounts<br> receivable net | 2,899,667 | 1,388,500 | |
| Other<br> receivables | 158,873 | - | |
| Note<br> receivable | 20,000 | - | |
| Prepaid<br> expenses | 313,058 | 583,030 | |
| Total<br> current assets | 3,920,425 | 2,540,971 | |
| Deposits | 6,300 | 6,300 | |
| Notes<br> receivable - related parties | 202,000 | 202,000 | |
| Purchased<br> technology, net | 15,818,635 | 15,875,297 | |
| Investment<br> in affiliate | 240,080 | 240,080 | |
| Equity<br> securities at fair value | 24,491,821 | 22,955,445 | |
| Total<br> assets | 44,679,261 | $ | 41,820,093 |
| Liabilities<br> and Stockholders’ Equity | |||
| Current<br> liabilities: | |||
| Accounts<br> payable | |||
| Trade | 812,908 | $ | 578,331 |
| Related<br> party | 75,204 | 75,204 | |
| Accrued<br> expenses | 415,603 | 285,065 | |
| Stock<br> subscription payable | 10,000 | 10,000 | |
| Deferred<br> revenue | 508 | 661 | |
| Interest<br> payable | 88,353 | 98,256 | |
| Current<br> taxes payable | - | 174,000 | |
| Deferred<br> tax liability, net | 1,714,000 | 1,657,000 | |
| Related<br> party debt | 15,000 | 15,000 | |
| Secured<br> note payable | - | 350,000 | |
| Current<br> portion of SBA loans | 1,885,800 | 1,885,800 | |
| Loan<br> payable - bank | 34,324 | 34,324 | |
| Total<br> current liabilities | 5,051,700 | 5,163,641 | |
| Long-term<br> liabilities: | |||
| Long-term<br> SBA loans, less current portion | 500,000 | 500,000 | |
| Total<br> Liabilities | 5,551,700 | 5,663,641 | |
| Commitments<br> and contingencies | - | - | |
| Stockholders’<br> equity: | |||
| Common<br> stock, .001 par value; 900,000,000 shares authorized, 9,459,132 and 6,440,527 shares issued and outstanding | 9,459 | 6,441 | |
| Shares<br> to be issued | 122,124 | 183,187 | |
| Capital<br> in excess of par value | 33,682,137 | 30,500,944 | |
| Retained<br> earnings | 5,313,841 | 5,465,880 | |
| Total<br> stockholders’ equity | 39,127,561 | 36,156,452 | |
| Total<br> liabilities and stockholders’ equity | 44,679,261 | $ | 41,820,093 |
All values are in US Dollars.
Netcapital Inc.
Income Statements
(Unaudited)
| Three Months<br><br> <br>Ended | Three Months<br><br> <br>Ended | Six Months<br><br> <br>Ended | Six Months<br><br> <br>Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October<br> 31, 2023 | October<br> 31, 2022 | October<br> 31, 2023 | October<br> 31, 2022 | |||||||||
| Revenues | $ | 2,041,658 | $ | 1,778,973 | $ | 3,561,467 | $ | 3,119,546 | ||||
| Costs<br> of services | 20,134 | 36,235 | 38,187 | 57,298 | ||||||||
| Gross<br> profit | 2,021,524 | 1,742,738 | 3,523,280 | 3,062,248 | ||||||||
| Costs<br> and expenses: | ||||||||||||
| Consulting<br> expense | 204,734 | 199,781 | 368,676 | 325,392 | ||||||||
| Marketing | 46,731 | 32,882 | 288,619 | 40,662 | ||||||||
| Rent | 18,379 | 17,187 | 37,989 | 34,399 | ||||||||
| Payroll<br> and payroll related expenses | 1,050,835 | 876,908 | 2,087,877 | 1,646,848 | ||||||||
| General<br> and administrative costs | 648,625 | 280,815 | 1,436,919 | 673,112 | ||||||||
| Total costs and expenses | 1,969,304 | 1,407,573 | 4,220,080 | 2,720,413 | ||||||||
| Operating<br> income (loss) | 52,220 | 335,165 | (696,800 | ) | 341,835 | |||||||
| Other<br> income (expense): | ||||||||||||
| Interest<br> expense | (10,562 | ) | (22,978 | ) | (23,866 | ) | (59,290 | ) | ||||
| Gain<br> on debt conversion | - | - | - | 224,260 | ||||||||
| Amortization<br> of intangible assets | (28,331 | ) | (21,081 | ) | (56,662 | ) | (42,162 | ) | ||||
| Unrealized<br> loss on equity securities | - | (8,968 | ) | - | (8,968 | ) | ||||||
| Realized<br> loss on sale of investment | - | - | - | (406,060 | ) | |||||||
| Total<br> other income (expense) | (38,893 | ) | (53,027 | ) | (80,528 | ) | (292,220 | ) | ||||
| Net income before taxes | 13,327 | 282,138 | (777,328 | ) | 49,615 | |||||||
| Income tax expense (benefit) | (326,289 | ) | 99,000 | (625,289 | ) | (198,000 | ) | |||||
| Net<br> income (loss) | $ | 339,616 | $ | 183,138 | $ | (152,039 | ) | $ | 247,615 | |||
| Basic<br> earnings per share | $ | 0.04 | $ | 0.04 | $ | (0.02 | ) | $ | 0.07 | |||
| Diluted<br> earnings per share | $ | 0.04 | $ | 0.04 | $ | (0.02 | ) | $ | 0.07 | |||
| Weighted<br> average number of common shares outstanding: | ||||||||||||
| Basic | 9,435,491 | 4,289,802 | 8,453,349 | 3,729,174 | ||||||||
| Diluted | 9,435,741 | 4,290,052 | 8,453,349 | 3,729,424 |