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): December 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 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.

Item 9.01 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. (Registrant)

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

Dated December 16, 2024

-3-

Exhibit 99.1

Netcapital Announces 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.”

Second Quarter Fiscal 2025 Financial Highlights

	●	Revenues decreased 92% year-over-year to $170,528, compared to revenue of $2,041,658 million in the second quarter of fiscal year 2024.
	●	Revenues increased 20% quarter-over-quarter to $170,528, compared to revenue of $142,227 in the first quarter of fiscal year 2025.
	●	Operating loss of ($2,202,431) in the second quarter fiscal 2025 as compared to operating income of $52,220 for the second quarter fiscal 2024
	●	Net loss of approximately ($2,220,501) in the second quarter of fiscal 2025, as compared to a net profit of approximately $339,616, for the same period in the prior year
	●	Loss per share of ($2.34) for the quarter ended October 31, 2024, compared to earnings per share of $2.52 for the same period in the prior year
	●	As of October 31, 2024, the Company had cash and cash equivalents of $1,346,739.

Conference Call 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

For additional disclosure regarding Netcapital’s operating results, please refer to the Quarterly Report on Form 10-Q for the period ended October 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

	October 31, 2024 (Unaudited)			April 30, 2024 (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

NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months 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

Cover	Dec. 16, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 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