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): September 16, 2024
NETCAPITAL
INC.
(Exact name of registrant as specified in charter)
| Utah | 001-41443 | 87-0409951 |
|---|---|---|
| (State<br> or other jurisdiction 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 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.
Item9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated September 16, 2024. |
| 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<br> Kraysler | |
| Title: | Chief<br> Financial Officer | |
| Dated<br> September 16, 2024 |
| -3- |
| --- |
Exhibit99.1
NetcapitalAnnounces First Quarter Fiscal 2025 Financial Results
| ● | Management to Host Earnings Call on September 17, 2024at 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.”
Theoperation of the Templum ATS remains subject to extensive regulation and oversight. Any regulatory delays or objections will result indelays in our ability to launch the proposed secondary trading platform, if at all.
NetcapitalSecurities Inc.’s application to become a registered broker-dealer remains subject to regulatory approval and/or licensing fromthe Financial Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). No assurance can be given as to when orif such approvals may be granted or when, if at all, Netcapital will be able to expand the services it offers.
FirstQuarter Fiscal 2025 Financial Highlights
| ● | Revenue<br> decreased approximately 91% year-over-year to $142,227, compared to revenue of $1,519,809<br> million in the first quarter of fiscal year 2024. |
|---|---|
| ● | Total<br> funding portal revenues (consisting of portal fees, listing fees and a 1% equity fee) decreased<br> approximately 62% year-over-year to $142,056 compared to $375,856 in the first quarter of<br> fiscal 2024. |
| ● | Operating<br> loss of ($2,508,237) for the first quarter fiscal 2025 as compared to ($749,020) for the<br> first quarter fiscal 2024, an increase of 235% |
| ● | Net<br> loss of ($2,527,170) in the first quarter fiscal 2025, compared to net loss of ($491,655),<br> for the same period in the prior year, an increase of 414% |
| ● | Loss<br> per share of ($5.10) in the first quarter year ended July 31, 2024, increased approximately<br> 11% compared to loss per share of ($4.61) for the same period in the prior year. |
| ● | As<br> of July 31, 2024, the Company had cash and cash equivalents of $855,181. |
| --- | --- |
ConferenceCall 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
Foradditional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the periodended July 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><br> <br>(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 |
All values are in US Dollars.
NETCAPITALINC.
CONDENSEDCONSOLIDATED 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 |