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): July 29, 2024
NETCAPITAL
INC.
(Exact name of registrant as specified in charter)
| Utah | 001-41443 | 87-0409951 |
|---|---|---|
| (State or other jurisdiction<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 |
| Warrants exercisable for one share of Common Stock at an exercise price of $5.19 | 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 July 29, 2024, Netcapital Inc. (the “Company”) issued a press release announcing financial results for the year ended April 30, 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 July 29, 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 Kraysler | |
| Title: | Chief Financial Officer | |
| Dated July 29, 2024 |
| -3- |
| --- |
Exhibit99.1
NetcapitalAnnounces Full Year Fiscal 2024 Financial Results
| ● | Management to Host Earnings Call on July 30, 2024 at 11 a.m. ET |
|---|
BOSTON, MA – July 29, 2024 – Netcapital Inc. (Nasdaq: NCPL, NCPLW) (the “Company”), a digital private capital markets ecosystem, today announced select financial results for the full fiscal year 2024 ended April 30, 2024.
“We saw significant growth in key areas despite a challenging economic environment,” said Martin Kay, CEO of Netcapital Inc. “While there were decreases in both top and bottom line, we remain optimistic about the future, particularly with portal fees increasing over 100% during the year.”
FullYear Fiscal 2024 Financial Highlights
| ● | Revenues<br> decreased by approximately 42% year-over-year to $4.9 million, compared to revenue of $8.5<br> million for full fiscal year 2023. |
|---|---|
| ● | Revenue<br> from portal fees increased by approximately 109% year-over-year to $874,368 in the full fiscal<br> year 2024 compared to $418,513 for full fiscal 2023. |
| ● | As<br> of April 30, 2024, the Company had cash and cash equivalents of $863,182. |
| ● | Operating<br> loss of ($3,442,388) for full fiscal year 2024 as compared to operating income of $2,271,876<br> for full fiscal year 2023 |
| ● | Net<br> loss for the full fiscal year 2024 was ($4,986,317) in the full fiscal year 2024, as compared<br> to net income of $2,954,972 for fiscal year 2023 |
| ● | Loss<br> per share of ($0.41) in the full fiscal year 2024, were down compared to earnings per share<br> of $0.63 for the full fiscal year 2023. |
| ● | The<br> Company recorded an impairment loss of $1,048,430 in fiscal year 2024. |
Foradditional disclosure regarding Netcapital’s operating results, please refer to the Annual Report on Form 10-K for the period endedApril 30, 2024, which has been filed with the Securities and Exchange Commission.
ConferenceCall Information
The Company will host an investor conference call on Tuesday, July 30th, 2024, at 11 a.m. ET.
Participant access: 844-985-2012 or 973-528-0138
Conference entry code: 861716
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
Netcapital Inc. Consolidated Statements of Operations
| Year Ended | Year Ended | |||||
|---|---|---|---|---|---|---|
| April<br> 30, 2024 | April<br> 30, 2023 | |||||
| Revenues | $ | 4,951,435 | $ | 8,493,985 | ||
| Costs of services | 108,060 | 85,038 | ||||
| Gross profit | 4,843,375 | 8,408,947 | ||||
| Costs and expenses: | ||||||
| Consulting expense | 610,209 | 589,349 | ||||
| Marketing | 333,771 | 85,482 | ||||
| Rent | 76,117 | 75,052 | ||||
| Payroll and payroll related<br> expenses | 3,838,640 | 3,646,490 | ||||
| General<br> and administrative costs | 3,427,026 | 1,740,698 | ||||
| Total<br> costs and expenses | 8,285,763 | 6,137,071 | ||||
| Operating<br> income (loss) | (3,442,388 | ) | 2,271,876 | |||
| Other income (expense): | ||||||
| Interest expense | (45,990 | ) | (93,842 | ) | ||
| Gain on debt conversion | - | 224,260 | ||||
| Amortization of intangible<br> assets | (93,862 | ) | (96,407 | ) | ||
| Impairment expense | (1,048,430 | ) | - | |||
| Other income | 1,200 | 51,645 | ||||
| Unrealized gain (loss) on<br> equity securities | (2,696,135 | ) | 1,857,500 | |||
| Realized<br> loss on sale of investment | - | (406,060 | ) | |||
| Total<br> other income (expense) | (3,883,217 | ) | 1,537,096 | |||
| Net income<br> (loss) before taxes | (7,325,605 | ) | 3,808,972 | |||
| Income<br> tax expense (benefit) | (2,339,288 | ) | 854,000 | |||
| Net<br> income (loss) | $ | (4,986,317 | ) | $ | 2,954,972 | |
| Basic earnings (loss) per share | $ | (0.41 | ) | $ | 0.63 | |
| Diluted earnings (loss) per share | $ | (0.41 | ) | $ | 0.63 | |
| Weighted average number of common shares outstanding: | ||||||
| Basic | 12,105,577 | 4,677,214 | ||||
| Diluted | 12,105,577 | 4,677,464 |
Netcapital Inc. Consolidated Balance Sheets
| April<br> 30, 2023 | |||
|---|---|---|---|
| Assets: | |||
| Cash<br> and cash equivalents | 863,182 | $ | 569,441 |
| Accounts<br> receivable net | 134,849 | 1,388,500 | |
| Note receivable | 20,000 | - | |
| Interest<br> receivable | 1,200 | - | |
| Prepaid<br> expenses | 23,304 | 583,030 | |
| Total<br> current assets | 1,042,535 | 2,540,971 | |
| Deposits | 6,300 | 6,300 | |
| Notes<br> receivable - related parties | 202,000 | 202,000 | |
| Purchased<br> technology, net | 14,733,005 | 15,875,297 | |
| Investment<br> in affiliate | 240,080 | 240,080 | |
| Equity<br> securities | 25,333,386 | 22,955,445 | |
| Total<br> assets | 41,557,306 | $ | 41,820,093 |
| Liabilities and Stockholders’<br> Equity | |||
| Current liabilities: | |||
| Accounts payable | |||
| Trade | 793,325 | $ | 578,331 |
| Related<br> party | - | 75,204 | |
| Accrued expenses | 310,300 | 285,065 | |
| Stock subscription payable | - | 10,000 | |
| Deferred revenue | 466 | 661 | |
| Interest payable | 92,483 | 98,256 | |
| Current taxes payable | - | 174,000 | |
| Deferred tax liability, net | - | 1,657,000 | |
| Related party debt | - | 15,000 | |
| Secured note payable | - | 350,000 | |
| Current portion of SBA loans | 1,885,800 | 1,885,800 | |
| Loan<br> payable - bank | 34,324 | 34,324 | |
| Total<br> current liabilities | 3,116,698 | 5,163,641 | |
| Long-term liabilities: | |||
| Long-term<br> SBA loans, less current portion | 500,000 | 500,000 | |
| Total<br> liabilities | 3,616,698 | 5,663,641 | |
| Commitments and contingencies | - | - | |
| Stockholders’ equity: | |||
| Common stock, .001 par value;<br> 900,000,000 shares authorized, 22,880,680 and 6,440,527 shares issued and outstanding | 22,880 | 6,441 | |
| Shares to be issued | 122,124 | 183,187 | |
| Capital in excess of par value | 37,316,041 | 30,500,944 | |
| Retained<br> earnings | 479,563 | 5,465,880 | |
| Total<br> stockholders’ equity | 37,940,608 | 36,156,452 | |
| Total<br> liabilities and stockholders’ equity | 41,557,306 | $ | 41,820,093 |
All values are in US Dollars.