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: [phone]

 

 

(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).

 

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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

 

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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

[e-mail]

 

 

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

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