[Announcement and Business Context](index=1&type=section&id=Announcement%20and%20Business%20Context) [Fiscal Year 2025 Financial Results Announcement](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Results%20Announcement) Netcapital Inc. announced full fiscal year 2025 financial results for the period ended April 30, 2025, on August 12, 2025 - Netcapital Inc. announced full fiscal year 2025 financial results on August 12, 2025[1](index=1&type=chunk) - The fiscal year ended April 30, 2025[1](index=1&type=chunk) [Management Commentary and Strategic Direction](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Direction) CEO Martin Kay highlighted a strategic shift in 2025 to build a stronger, scalable foundation, emphasizing the secured broker-dealer license to broaden service and a commitment to disciplined execution and long-term value creation - In 2025, Netcapital Inc. made an important shift in strategy to focus on building a stronger, more scalable foundation for the future[2](index=2&type=chunk) - The secured broker-dealer license positions the company to serve a broader base of issuers and investors and deepen its impact on democratizing access to private markets[2](index=2&type=chunk) - Management remains committed to disciplined execution, product innovation, and long-term value creation[2](index=2&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) The company will host an investor conference call on August 13, 2025, at 9 a.m. ET, providing participant access details and a conference entry code - An investor conference call is scheduled for August 13, 2025, at 9 a.m. ET[3](index=3&type=chunk) - Participant access: **844-985-2012** or **973-528-0138**, Conference entry code: **310637**[3](index=3&type=chunk) [About Netcapital Inc.](index=1&type=section&id=About%20Netcapital%20Inc.) Netcapital Inc. is a fintech company providing a scalable platform for private capital raising and investment, operating Netcapital Advisors and two SEC/FINRA registered entities - Netcapital Inc. is a fintech company providing a scalable technology platform for private capital raising and private equity investment opportunities[4](index=4&type=chunk) - The company's consulting group, Netcapital Advisors, offers marketing and strategic advice and takes equity positions[4](index=4&type=chunk) - Netcapital Funding Portal Inc. and Netcapital Securities Inc. (broker-dealer) are registered with the U.S. SEC and are members of FINRA[4](index=4&type=chunk) [Forward Looking Statements](index=1&type=section&id=Forward%20Looking%20Statements) The report contains forward-looking statements subject to known and unknown risks and uncertainties, with no obligation for public updates or revisions - The information includes forward-looking statements related to future events or financial performance[5](index=5&type=chunk) - These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different[5](index=5&type=chunk) - The company assumes no obligation to publicly update or revise these forward-looking statements[5](index=5&type=chunk) [Fiscal Year 2025 Financial Performance](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Performance) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) For fiscal year 2025, Netcapital Inc. reported significantly decreased revenues, a larger operating loss, substantial impairment, and a reduced net loss per share Key Financial Highlights Table | Metric | FY2025 | FY2024 | Change (YoY) (%) | | :----------------------- | :------------- | :------------- | :---------------- | | Revenues ($) | $869,460 | $4,951,435 | -82.4 | | Operating loss ($) | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment loss ($) | $19,900,000 | N/A | N/A | | Net loss per share ($) | ($20.39) | ($28.83) | +29.3 (less negative) | - Revenues decreased primarily due to a reduction in consulting services[6](index=6&type=chunk) [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) As of April 30, 2025, total assets significantly decreased to **$20.9 million** from **$41.6 million**, driven by reduced equity securities, while liabilities increased and equity decreased Consolidated Balance Sheets Table | Balance Sheet Item | April 30, 2025 ($) | April 30, 2024 ($) | Change (YoY) (%) | | :-------------------------- | :------------- | :------------- | :---------------- | | Cash and cash equivalents | $289,428 | $863,182 | -66.5 | | Total current assets | $399,612 | $1,042,535 | -61.7 | | Equity securities | $5,748,050 | $25,333,386 | -77.3 | | Total assets | $20,901,491 | $41,557,306 | -49.7 | | Total current liabilities | $5,495,767 | $3,116,698 | +76.3 | | Total liabilities | $5,995,767 | $3,616,698 | +65.8 | | Total stockholders' equity | $14,905,724 | $37,940,608 | -60.7 | - The significant decrease in total assets was largely due to a reduction in equity securities from **$25.3 million** to **$5.7 million**[8](index=8&type=chunk) - Retained earnings shifted from positive **$479,563** in FY2024 to a deficit of **($27,821,762)** in FY2025[8](index=8&type=chunk) [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) For FY2025, Netcapital Inc. experienced substantial declines in revenues and gross profit, leading to increased operating and net losses, exacerbated by impairment expense and negative unrealized gain/loss Consolidated Statements of Operations Table | Income Statement Item | FY2025 ($) | FY2024 ($) | Change (YoY) (%) | | :-------------------------------- | :------------- | :------------- | :---------------- | | Revenues | $869,460 | $4,951,435 | -82.4 | | Gross profit | $829,116 | $4,843,375 | -82.8 | | Total costs and expenses | $9,150,433 | $8,285,763 | +10.4 | | Operating loss | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment expense | ($19,915,556) | ($1,048,430) | -1799.5 | | Unrealized gain (loss) on equity securities | $18,050 | ($2,696,135) | +100.7 (less negative) | | Net loss | ($28,301,325) | ($4,986,317) | -467.6 | | Basic loss per share | ($20.39) | ($28.83) | +29.3 (less negative) | - The significant increase in net loss was primarily driven by a substantial impairment expense of **$19.9 million** in FY2025, compared to **$1.0 million** in FY2024[10](index=10&type=chunk) - General and administrative costs increased from **$3.4 million** in FY2024 to **$5.2 million** in FY2025[10](index=10&type=chunk) - Despite a higher net loss, basic loss per share decreased due to a significant increase in the weighted average number of common shares outstanding (from **172,937** to **1,387,666**)[10](index=10&type=chunk)

Core Viewpoint - Netcapital Inc. reported a revenue growth of over 30% in the first quarter of fiscal year 2026, indicating a successful shift in strategy towards building a scalable business model [2][3]. Financial Performance - Revenue increased approximately 34% year-over-year to $190,058 compared to $142,227 in the first quarter of fiscal year 2025 [7]. - The company posted an operating loss of ($3,285,648), which is an increase from the operating loss of ($2,508,237) for the same period last year [7]. - Loss per share improved to ($1.27) from ($5.10) in the first quarter of fiscal year 2025 [7]. - As of July 31, 2025, the company had cash and cash equivalents of $4,562,491, a significant increase from $289,428 as of April 30, 2025 [9]. Strategic Initiatives - The establishment of a Crypto Advisory Board aims to integrate blockchain and digital assets with traditional finance, positioning the company to explore opportunities in decentralized finance (DeFi) [3][5]. - The company’s consulting group, Netcapital Advisors, provides marketing and strategic advice while taking equity positions in select companies, enhancing its role in the fintech ecosystem [5]. Balance Sheet Overview - Total assets as of July 31, 2025, were $28,432,302, up from $20,901,491 as of April 30, 2025 [9]. - Total liabilities decreased to $5,305,386 from $5,995,767, indicating improved financial health [9]. - Stockholders' equity increased to $23,126,916 from $14,905,724, reflecting a stronger capital position [9].

```markdown [PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents Netcapital Inc.'s unaudited condensed consolidated financial statements and related disclosures for the period ended July 31, 2025 [Item 1. Financial Statements.](index=6&type=section&id=Item%201.%20Financial%20Statements.) This section presents Netcapital Inc.'s unaudited condensed consolidated financial statements for the period ended July 31, 2025, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, financing arrangements, related party transactions, and other financial disclosures [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of Netcapital Inc.'s financial position, detailing assets, liabilities, and equity as of July 31, 2025, and April 30, 2025 | | July 31, 2025 | April 30, 2025 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $4,562,491 | $289,428 | | Total current assets | $4,992,152 | $399,612 | | Intangible assets | $17,528,660 | $14,697,529 | | Equity securities | $5,855,190 | $5,748,050 | | Total assets | $28,432,302 | $20,901,491 | | **Liabilities and Stockholders' Equity:** | | | | Total current liabilities | $4,805,386 | $5,495,767 | | Total liabilities | $5,305,386 | $5,995,767 | | Total stockholders' equity | $23,126,916 | $14,905,724 | | Total liabilities and stockholders' equity | $28,432,302 | $20,901,491 | - Cash and cash equivalents significantly increased from **$289,428** on April 30, 2025, to **$4,562,491** on July 31, 2025, reflecting improved liquidity[16](index=16&type=chunk) - Total assets grew by approximately **36%** from **$20.9 million** to **$28.4 million**, driven by increases in cash and intangible assets[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details Netcapital Inc.'s revenues, expenses, and net loss for the three months ended July 31, 2025, and 2024 | | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Revenues | $190,058 | $142,227 | | Costs of services | $7,409 | $10,220 | | Gross profit | $182,649 | $132,007 | | Total costs and expenses | $3,468,297 | $2,640,244 | | Operating loss | $(3,285,648) | $(2,508,237) | | Net loss | $(3,642,052) | $(2,527,170) | | Basic loss per share | $(1.27) | $(5.10) | | Diluted loss per share | $(1.27) | $(5.10) | - Revenues increased by **33.6%** year-over-year, from **$142,227** in Q1 2024 to **$190,058** in Q1 2025[18](index=18&type=chunk) - Net loss widened to **$(3,642,052)** in Q1 2025 from **$(2,527,170)** in Q1 2024, primarily due to increased operating expenses[18](index=18&type=chunk) - Basic and diluted loss per share improved from **$(5.10)** to **$(1.27)** despite a larger net loss, due to a significant increase in weighted average common shares outstanding[18](index=18&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in Netcapital Inc.'s stockholders' equity, including common stock issuances and net loss, for the three months ended July 31, 2025 | | Balance April 30, 2025 | Sale of common stock | Purchase of software license | Net loss quarter ended July 31, 2025 | Balance July 31, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 2,192,226 | 1,704,152 | 500,000 | - | 4,720,066 | | Common Stock (Amount) | $2,192 | $1,704 | $500 | - | $4,720 | | Capital in Excess of Par Value | $42,525,294 | $8,505,467 | $2,839,500 | - | $54,586,010 | | Retained Earnings (Deficit) | $(27,821,762) | - | - | $(3,642,052) | $(31,463,814) | | Total Equity | $14,905,724 | $8,507,171 | $2,840,000 | $(3,642,052) | $23,126,916 | - Total stockholders' equity increased from **$14.9 million** to **$23.1 million**, primarily driven by the sale of common stock (**$8.5 million**) and the issuance of common stock for a software license (**$2.84 million**)[19](index=19&type=chunk) - The number of common shares issued and outstanding nearly doubled from 2,192,226 to 4,720,066 during the quarter[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes Netcapital Inc.'s cash inflows and outflows from operating, investing, and financing activities for the three months ended July 31, 2025, and 2024 | | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,214,258) | $(1,963,645) | | Net cash provided by financing activities | $8,487,321 | $1,955,644 | | Net increase (decrease) in cash | $4,273,063 | $(8,001) | | Cash and cash equivalents, end of the period | $4,562,491 | $855,181 | - Net cash used in operating activities increased significantly from **$(1,963,645)** in Q1 2024 to **$(4,214,258)** in Q1 2025[23](index=23&type=chunk) - Net cash provided by financing activities surged to **$8,487,321** in Q1 2025, primarily from the sale of common stock, leading to a substantial net increase in cash[23](index=23&type=chunk) - Cash and cash equivalents at the end of the period rose to **$4,562,491**, a significant increase from **$855,181** in the prior year period[23](index=23&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Netcapital Inc.'s unaudited condensed consolidated financial statements for the period ended July 31, 2025, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, financing arrangements, related party transactions, and other financial disclosures [Note 1– Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the fundamental accounting principles and methods used in preparing Netcapital Inc.'s financial statements - The financial statements are prepared in accordance with GAAP for interim information and SEC rules for Form 10-Q, with all adjustments considered necessary for fair presentation[24](index=24&type=chunk) - A 1-for-70 reverse stock split was effective August 1, 2024, retroactively adjusted in all financial statements[25](index=25&type=chunk) - The Company operates as a single operating segment providing fintech services, based on centralized decision-making, an integrated operational ecosystem, and a uniform review process by the CODM[31](index=31&type=chunk)[33](index=33&type=chunk) [Note 2 – Concentrations](index=12&type=section&id=Note%202%20%E2%80%93%20Concentrations) This note discloses significant concentrations of risk, particularly regarding customer revenue dependency - Customer concentration increased significantly, with one customer accounting for **73%** of revenues for the three months ended July 31, 2025, up from **15%** in the prior year period[34](index=34&type=chunk) [Note 3 – Revenue Recognition](index=12&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) This note details Netcapital Inc.'s policies and methods for recognizing revenue from various sources - Revenue is recognized using the five-step model under ASC 606, primarily from professional services, funding portal listing fees, and a **4.9%** portal fee on capital raised, plus a **1%** equity fee[35](index=35&type=chunk)[36](index=36&type=chunk) Revenues Disaggregated by Source | Revenue Source | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Portal fees | $122,728 | $89,429 | | Listing fees | $5,000 | $42,500 | | Portal 1% equity fee | $62,195 | $10,127 | | Game website revenue | $135 | $171 | | Total revenues | $190,058 | $142,227 | - Deferred revenue as of July 31, 2025, and April 30, 2025, was **$315** and **$330**, respectively, with all remaining performance obligations expected to be recognized within 12 months[44](index=44&type=chunk) [Note 4 – Earnings Per Common Share](index=15&type=section&id=Note%204%20%E2%80%93%20Earnings%20Per%20Common%20Share) This note provides the calculation of basic and diluted earnings per common share for Netcapital Inc. Earnings Per Common Share | | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(3,642,052) | $(2,527,170) | | Weighted average common shares outstanding - basic | 2,873,379 | 495,319 | | Loss per common share - basic | $(1.27) | $(5.10) | | Loss per common share - diluted | $(1.27) | $(5.10) | - Outstanding warrants and options were anti-dilutive and thus excluded from EPS calculations for both periods[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 5 – Principal Financing Arrangements](index=16&type=section&id=Note%205%20%E2%80%93%20Principal%20Financing%20Arrangements) This note describes Netcapital Inc.'s debt instruments, including promissory notes and loans, and their terms Debt Summary | Debt Type | July 31, 2025 | April 30, 2025 | Interest Rate | | :--- | :--- | :--- | :--- | | Convertible promissory notes | $— | $161,787 | 12.0% | | Notes payable | $600,000 | $101,650 | 8.0% | | U.S. SBA loan | $500,000 | $500,000 | 3.75% | | U.S. SBA loan | $1,885,800 | $1,885,800 | 1.0% | | Loan payable – bank | $34,324 | $34,324 | 9.75% | | Total Debt | $3,020,124 | $2,683,561 | | - Total debt increased to **$3,020,124** as of July 31, 2025, from **$2,683,561** as of April 30, 2025, primarily due to new notes payable[49](index=49&type=chunk) - The Company prepaid several convertible promissory notes in July 2025, including a **$181,540** note and two convertible bridge notes totaling **$126,320**[55](index=55&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Two unsecured, non-convertible promissory notes totaling **$600,000** (principal) were issued in April and May 2025, both with **50%** OID and **8%** interest, increasing to **20%** upon default[56](index=56&type=chunk)[59](index=59&type=chunk) [Note 6 – Income Taxes](index=18&type=section&id=Note%206%20%E2%80%93%20Income%20Taxes) This note explains Netcapital Inc.'s income tax position, including deferred taxes and tax expense - No income tax expense was recorded for the three months ended July 31, 2025, and 2024, due to operating losses in both periods[60](index=60&type=chunk) [Note 7 – Related Party Transactions](index=18&type=section&id=Note%207%20%E2%80%93%20Related%20Party%20Transactions) This note discloses transactions between Netcapital Inc. and its related parties, including officers and affiliated entities - The Company paid Netcapital Systems LLC (**29%** owned by Founder Jason Frishman) **$285,000** for software use in Q1 2025, up from **$95,000** in Q1 2024[61](index=61&type=chunk) - Compensation to officers in Q1 2025 included **$508,269** in stock-based compensation and **$697,742** in cash salaries, significantly higher than Q1 2024[62](index=62&type=chunk) - The CFO, Coreen Kraysler, personally guaranteed a **$500,000** SBA loan[65](index=65&type=chunk) [Note 8 – Stockholders' Equity](index=19&type=section&id=Note%208%20%E2%80%93%20Stockholders'%20Equity) This note details changes in Netcapital Inc.'s stockholders' equity, including stock issuances, warrants, and capital raises - The Company authorized 10,000,000 shares of 'blank check' preferred stock on March 25, 2025, increasing total authorized capital stock to 910,000,000 shares[68](index=68&type=chunk) - Various warrant inducement offers and private placements occurred, including a May 2024 transaction generating **$2.2 million** gross proceeds and a January 2025 transaction generating **$487,000** gross proceeds[69](index=69&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - In June and July 2025, the Company conducted multiple equity offerings, including an ATM program increase (**$975,000** gross proceeds) and two registered direct offerings (**$5 million** and **$3 million** gross proceeds respectively), often coupled with warrants[78](index=78&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - On June 26, 2025, the Company issued 500,000 shares of common stock for a perpetual, royalty-free license to Horizon's software for capital-raising and secondary trading services[80](index=80&type=chunk) [Note 9 – Fair Value](index=21&type=section&id=Note%209%20%E2%80%93%20Fair%20Value) This note describes Netcapital Inc.'s fair value measurements for financial instruments, particularly equity securities Equity Securities at Fair Value (Level 2) | | July 31, 2025 | April 30, 2025 | | :--- | :--- | :--- | | Equity securities at fair value | $5,855,190 | $5,748,050 | - All equity securities measured at fair value are classified as Level 2, indicating observable inputs other than quoted prices in active markets[85](index=85&type=chunk)[87](index=87&type=chunk) [Note 10 – Stock-Based Compensation Plans](index=21&type=section&id=Note%2010%20%E2%80%93%20Stock-Based%20Compensation%20Plans) This note outlines Netcapital Inc.'s stock-based compensation arrangements and related expenses - Stock-based compensation expense increased significantly to **$516,073** for the three months ended July 31, 2025, from **$139,371** in the prior year period[88](index=88&type=chunk) Stock-Based Compensation Expense by Recipient | Recipient | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Chief Executive Officer | $250,844 | $62,493 | | Chief Financial Officer | $203,265 | $14,914 | | Founder | $14,914 | $14,914 | | Total stock-based compensation expense | $516,073 | $139,371 | [Note 11 – Deposits and Commitments](index=23&type=section&id=Note%2011%20%E2%80%93%20Deposits%20and%20Commitments) This note discloses Netcapital Inc.'s significant deposits and contractual commitments - The Company maintains an office space with a monthly membership fee of approximately **$7,600** and a refundable security deposit of **$6,300**[91](index=91&type=chunk) [Note 12 – Intangible Assets](index=23&type=section&id=Note%2012%20%E2%80%93%20Intangible%20Assets) This note provides details on Netcapital Inc.'s intangible assets, including their acquisition and valuation - Intangible assets increased significantly due to the acquisition of a perpetual software license from Horizon Globex GmbH, valued at **$2,840,000**, in exchange for 500,000 shares of common stock[93](index=93&type=chunk) Intangible Assets Categories | Category | July 31, 2025 | April 30, 2025 | | :--- | :--- | :--- | | Acquired users | $14,271,836 | $14,271,836 | | License agreement | $2,840,000 | $— | | Acquired brand | $532,118 | $532,118 | | Total intangible assets | $17,643,954 | $14,803,954 | | Net intangible assets | $17,528,660 | $14,697,529 | [Note 13 – Investments](index=23&type=section&id=Note%2013%20%E2%80%93%20Investments) This note describes Netcapital Inc.'s equity investments and the recognition of related gains or losses - The Company received equity securities from 3 issuers in Q1 2025 as part of its **1%** equity fee compensation, totaling **$62,195** in revenue, compared to **$10,127** in Q1 2024[95](index=95&type=chunk) - An unrealized gain of **$44,945** was recognized in Q1 2025 from changes in observable prices of investment securities, specifically from a funding portal issuer whose shares increased from **$5.00** to **$10.00**[95](index=95&type=chunk)[162](index=162&type=chunk) Summary of Investments in Equity Securities | Investment | July 31, 2025 | April 30, 2025 | | :--- | :--- | :--- | | Systems DE | $1,985 | $1,985 | | Zelgor Inc. | $1,400,000 | $1,400,000 | | Vymedic Inc. | $11,032 | $11,032 | | C-Reveal Therapeutics LLC | $50,000 | $50,000 | | Cust Corp. | $1,200,000 | $1,200,000 | | Hiveskill LLC | $712,500 | $712,500 | | ScanHash LLC | $425,000 | $425,000 | | Kingscrowd Inc. | $577,743 | $577,743 | | Reper LLC | $1,200,000 | $1,200,000 | | Issuers that paid a 1% equity fee to the funding portal | $276,930 | $169,790 | | Total | $5,855,190 | $5,748,050 | [Note 14 – Going Concern Matters and Realization of Assets](index=26&type=section&id=Note%2014%20%E2%80%93%20Going%20Concern%20Matters%20and%20Realization%20of%20Assets) This note addresses Netcapital Inc.'s ability to continue as a going concern and management's plans to mitigate associated risks - The Company's operating loss of **$3,285,648** and net cash used in operating activities of **$4,214,258** for the three months ended July 31, 2025, raise substantial doubt about its ability to continue as a going concern[108](index=108&type=chunk)[109](index=109&type=chunk) - Management plans to focus on its growing funding portal business, expand broker-dealer operations, and seek additional financing, but acknowledges these plans may not sufficiently mitigate the going concern risk[109](index=109&type=chunk) [Note 15 – Subsequent Events](index=26&type=section&id=Note%2015%20%E2%80%93%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On September 16, 2025, the Company settled two defaulted promissory notes (Seidenberg Note for **$209,272** and Hesse Note for **$418,148**) by paying half in cash and issuing common stock for the other half at **$2.262** per share[110](index=110&type=chunk)[111](index=111&type=chunk) - On September 16, 2025, 59,147 shares of common stock were issued to June 2025 private placement investors due to a price adjustment provision, as the Company issued shares below **$4.00** per share[112](index=112&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on Netcapital Inc.'s financial condition and operational results for the three months ended July 31, 2025, compared to the prior year. It covers the Company's business overview, recent developments, detailed analysis of revenue and expense changes, liquidity, and capital resources, highlighting the Company's fintech platform, broker-dealer expansion, and ongoing efforts to address its going concern status [Overview](index=27&type=section&id=Overview) This section provides an overview of Netcapital Inc.'s fintech platform, revenue streams, and recent operational performance - Netcapital Inc. operates a fintech platform enabling private companies to raise capital online from accredited and non-accredited investors via Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) offerings[118](index=118&type=chunk) - Revenue streams include a **$5,000** listing fee, a **4.9%** portal fee on capital raised, and a **1%** success fee paid in equity for Reg CF offerings, with Reg A offerings charging a **$25,000** listing fee and a **4.9%** success fee[119](index=119&type=chunk) Revenue and Gross Profit Comparison | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Revenues | $190,058 | $142,227 | | Costs of service | $7,409 | $10,220 | | Gross profit | $182,649 | $132,007 | - The average amount raised per offering on the Netcapital funding portal decreased from **$280,978** in fiscal 2024 to **$215,745** in fiscal 2025[121](index=121&type=chunk) [Broker-Dealer Business](index=29&type=section&id=Broker-Dealer%20Business) This section describes the expansion of Netcapital Securities Inc.'s broker-dealer operations and its strategic objectives - Netcapital Securities Inc., a wholly-owned subsidiary, received FINRA approval in November 2024 to operate as a broker-dealer, aiming to expand revenue through Reg A and Reg D offerings[125](index=125&type=chunk) - The broker-dealer business is expected to leverage strategic partnerships and introduce clients to other FINRA broker-dealers to broaden distribution capabilities[125](index=125&type=chunk) [Recent Developments](index=29&type=section&id=Recent%20Developments) This section highlights key corporate events and financial transactions that occurred recently, impacting the company's financial position - On September 16, 2025, the Company settled two outstanding promissory notes (Seidenberg and Hesse Notes) totaling **$627,420** by paying half in cash and issuing common stock for the remainder[127](index=127&type=chunk)[128](index=128&type=chunk) - In July 2025, the Company issued 269,257 shares of common stock to warrant holders who exercised warrants on a net exercise basis[129](index=129&type=chunk) - The Company completed two registered direct offerings in July 2025, raising approximately **$3 million** and **$5 million** gross proceeds, respectively, with concurrent private placements of warrants[130](index=130&type=chunk)[134](index=134&type=chunk) - On June 26, 2025, the Company acquired a perpetual, royalty-free license to Horizon Globex GmbH's software for capital-raising and secondary trading services in exchange for 500,000 shares of common stock[138](index=138&type=chunk) - The Board of Directors approved the formation of Crypto and Game Advisory Boards on June 6, 2025, issuing 783,722 non-qualified stock options to advisors, subject to stockholder approval[144](index=144&type=chunk)[145](index=145&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes Netcapital Inc.'s revenue and expense trends, explaining the drivers behind changes in financial performance - Revenues increased by **$47,831** (**34%**) to **$190,058** for the three months ended July 31, 2025, primarily due to higher portal fees and equity-based service revenues, largely driven by one major customer[148](index=148&type=chunk) Revenue Components (YoY Change) | Revenue Component | July 31, 2025 | July 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Portal fees | $122,728 | $89,429 | $33,299 | 37% | | Listing fees | $5,000 | $42,500 | $(37,500) | -88% | | Portal 1% equity fee | $62,195 | $10,127 | $52,068 | 514% | | Total | $190,058 | $142,227 | $47,831 | 34% | - Payroll and payroll-related expenses increased by **$656,857** (**58%**) to **$1,793,450**, attributed to salary increases and bonuses for employee retention[155](index=155&type=chunk) - General and administrative expenses rose by **$188,250** (**14%**) to **$1,568,506**, mainly due to increased legal costs, with approximately **60%** related to regulatory matters[158](index=158&type=chunk) - Interest expense increased by **$25,603** (**245%**) to **$36,067** due to increased debt from notes sold in March, April, and May 2025[160](index=160&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses Netcapital Inc.'s ability to meet its short-term and long-term obligations, detailing cash position and financing activities - As of July 31, 2025, cash and cash equivalents were **$4,562,491**, and working capital was **$186,766**, a significant improvement from negative working capital of **$5,096,155** as of April 30, 2025[163](index=163&type=chunk) - The Company successfully raised capital through public offerings of common stock, including two July 2025 registered direct offerings totaling approximately **$8 million** gross proceeds and an ATM program increase of **$975,000**[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - Despite recent capital raises, management believes existing cash and anticipated cash flows may not be sufficient for the next 12 months, raising substantial doubt about the Company's ability to continue as a going concern[170](index=170&type=chunk) Cash Flow Summary (YoY Change) | Activity | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,214,258) | $(1,963,645) | | Net cash provided by financing activities | $8,487,321 | $1,955,644 | | Net increase (decrease) in cash | $4,273,063 | $(8,001) | [Critical Accounting Policies and Significant Judgments and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section discusses the key accounting policies and estimates that significantly impact Netcapital Inc.'s financial reporting - The Company's financial statements rely on estimates and judgments in areas like revenue recognition, accounts receivable, equity securities valuation, income taxes, and long-lived assets[176](index=176&type=chunk) - No material changes to critical accounting estimates were disclosed from the Annual Report on Form 10-K for the year ended April 30, 2025[176](index=176&type=chunk) [Recently Issued Accounting Standards Not Yet Effective or Adopted](index=36&type=section&id=Recently%20Issued%20Accounting%20Standards%20Not%20Yet%20Effective%20or%20Adopted) This section addresses the potential impact of new accounting pronouncements on Netcapital Inc.'s financial statements - Management does not anticipate any recently issued, but not yet effective, accounting pronouncements to have a material impact on the unaudited condensed consolidated financial statements[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative disclosures about Market Risk.](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20disclosures%20about%20Market%20Risk.) As a 'smaller reporting company,' Netcapital Inc. is not required to provide quantitative and qualitative disclosures about market risk in this quarterly report - The Company is exempt from providing market risk disclosures as it qualifies as a 'smaller reporting company' under Exchange Act Rule 12b-2[178](index=178&type=chunk) [Item 4. Controls and Procedures.](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section details the evaluation of Netcapital Inc.'s disclosure controls and procedures, concluding they were not effective as of July 31, 2025, due to identified material weaknesses and significant deficiencies. Management is actively implementing remediation efforts, but these are not yet complete [Evaluation of Disclosure Controls and Procedures](index=37&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section provides an overview of Evaluation of Disclosure Controls and Procedures for the reporting period - The principal executive and financial officers concluded that disclosure controls and procedures were not effective as of July 31, 2025[180](index=180&type=chunk) - Identified weaknesses include a material weakness related to over-accrual of legal expenses and a significant deficiency in evaluating orderly transactions and impairment indicators for equity investments[184](index=184&type=chunk) [Changes in Internal Control Over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section provides an overview of Changes in Internal Control Over Financial Reporting for the reporting period - There were no changes in internal control over financial reporting during the quarter ended July 31, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[181](index=181&type=chunk) [Remediation Efforts](index=37&type=section&id=Remediation%20Efforts) This section provides an overview of Remediation Efforts for the reporting period - Remediation efforts include enhanced period-end closing procedures for accrued expenses and updated investment valuation policies[185](index=185&type=chunk) - Remediation efforts are ongoing, and management cannot yet conclude on the effectiveness of the updated controls[182](index=182&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=37&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section provides an overview of Limitations on Effectiveness of Controls and Procedures for the reporting period - Management acknowledges that controls and procedures, regardless of design, cannot provide absolute assurance and involve judgment in balancing benefits against costs[183](index=183&type=chunk) [PART II—OTHER INFORMATION](index=38&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings.](index=38&type=section&id=Item%201.%20Legal%20Proceedings.) Netcapital Inc. is not currently a party to any material legal proceedings but is subject to extensive regulatory oversight from bodies like the SEC, FINRA, and Nasdaq. The Company routinely faces regulatory inquiries and examinations, which can incur significant legal and compliance costs and divert management resources, with uncertain outcomes - The Company is not currently involved in any material legal proceedings[186](index=186&type=chunk) - The Company is subject to extensive regulation by the SEC, FINRA, and Nasdaq, leading to frequent regulatory inquiries and examinations[186](index=186&type=chunk) - Responding to regulatory matters can incur significant legal fees and divert management resources, with outcomes inherently uncertain and potentially adverse to the business[186](index=186&type=chunk) [Item 1A. Risk Factors.](index=38&type=section&id=Item%201A.%20Risk%20Factors.) This section updates the risk factors from the Annual Report on Form 10-K, emphasizing the substantial doubt about Netcapital Inc.'s ability to continue as a going concern due to operating losses and negative cash flows. It also highlights risks related to securities litigation, shareholder activism, regulatory uncertainties, and significant customer concentration - The Company's financial situation, including an operating loss of **$3,285,648** and net cash used in operating activities of **$4,214,258** for the three months ended July 31, 2025, raises substantial doubt about its ability to continue as a going concern[188](index=188&type=chunk) - The Company faces risks from potential securities litigation or shareholder activism, which could lead to significant expenses, divert management attention, and negatively impact stock price[189](index=189&type=chunk) - Regulatory and legal uncertainties, including increased scrutiny of financial institutions and potential fines, pose ongoing risks to the business[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - A significant customer concentration exists, with one customer accounting for **73%** of revenues for the three months ended July 31, 2025, posing a risk if demand from this customer declines[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details several unregistered sales and issuances of equity securities by Netcapital Inc. in July and September 2025, including shares issued for consulting services, settlement of promissory notes, and price adjustments for private placement investors, all relying on Section 4(a)(2) and/or Rule 506 exemptions - On July 21, 2025, 54,421 shares of common stock were issued to an investor relations consulting firm for services rendered, with no proceeds received[194](index=194&type=chunk) - On September 16, 2025, shares were issued as part of settlement agreements for the Seidenberg and Hesse Notes[195](index=195&type=chunk)[196](index=196&type=chunk) - On September 16, 2025, 59,147 Adjustment Shares were issued to June 2025 private placement investors due to a price adjustment provision, as the Company issued common stock below **$4.00** per share[197](index=197&type=chunk) - All these issuances relied on exemptions from registration under Section 4(a)(2) and/or Rule 506 of the Securities Act[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) Netcapital Inc. reported no defaults upon senior securities during the period - There were no defaults upon senior securities reported[199](index=199&type=chunk) [Item 4. Mine Safety Disclosures.](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to Netcapital Inc.'s operations - Mine safety disclosures are not applicable to the Company[200](index=200&type=chunk) [Item 5. Other Information.](index=40&type=section&id=Item%205.%20Other%20Information.) This section provides additional information, including details on the settlement of two defaulted promissory notes and confirmation that no Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers during the quarter - On September 16, 2025, the Company settled a **$200,000** promissory note (Seidenberg Note) that had defaulted, by paying **$104,636** in cash and issuing 46,258 shares of common stock[201](index=201&type=chunk) - On September 16, 2025, the Company settled a **$400,000** promissory note (Hesse Note) that had defaulted, by paying **$209,074** in cash and issuing 92,428 shares of common stock[202](index=202&type=chunk) - No Rule 10b5-1 trading plans were adopted or terminated by the Company's directors or executive officers during the fiscal quarter ended July 31, 2025[203](index=203&type=chunk) [Item 6. Exhibits.](index=41&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including various convertible and non-convertible promissory notes, warrant forms, securities purchase agreements, advisory agreements, the Horizon Software Agreement, and certifications - The exhibits include various financing agreements such as convertible promissory notes, forms of warrants, and securities purchase agreements[203](index=203&type=chunk) - Key operational agreements like the Horizon Software Agreement and Form of Advisory Agreement are also listed[203](index=203&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer, as required by the Sarbanes-Oxley Act, are included[203](index=203&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) The report is duly signed on behalf of Netcapital Inc. by Martin Kay, Chairman of the Board and Chief Executive Officer, and Coreen Kraysler, Chief Financial Officer, on September 22, 2025 - The report was signed by Martin Kay, Chairman and CEO, and Coreen Kraysler, CFO, on September 22, 2025[207](index=207&type=chunk)[208](index=208&type=chunk) ```

As filed with the U.S. Securities and Exchange Commission on August 19, 2025 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 NETCAPITAL INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Utah 6199 87-0409951 (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 1 Lincoln Street Boston, ...

Financial Data and Key Metrics Changes - The company reported revenues of approximately $869,460 for fiscal year 2025, a significant decline from approximately $4,900,000 in fiscal year 2024, primarily due to the discontinuation of consulting services [4] - The gross profit for fiscal year 2025 was $8.29 compared to $4,800,000 in fiscal year 2024, indicating a substantial decrease in profitability [4] - The net loss for fiscal year 2025 was approximately $28,300,000, compared to a net loss of approximately $4,900,000 in fiscal year 2024, reflecting a worsening financial position [6] Business Line Data and Key Metrics Changes - The company discontinued its consulting services, which accounted for the largest portion of revenue decline year over year [4] - The funding portal charged a 1% fee payable in securities to issuers, generating $72,000 in fees for fiscal year 2025, down from $97,700 in fiscal year 2024 [4] Market Data and Key Metrics Changes - The company evaluated its equity investments for impairment, resulting in an impairment expense of approximately $19,900,000 due to several investments declining below their carrying amounts [5] Company Strategy and Development Direction - The company is transitioning away from equity-based consulting revenue to focus on building a scalable foundation for future growth [7] - The wholly owned subsidiary, Net Capital Securities, received its broker-dealer license, allowing the company to serve a broader base of issuers and investors [8] - The company aims to integrate blockchain and digital assets with traditional finance, exploring opportunities in the evolving regulatory environment [15][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic headwinds and uncertainty in financial markets but remains committed to strengthening the core business for long-term growth [7] - The company is focused on democratizing access to private capital markets and is exploring ways to enhance liquidity in secondary markets [34] Other Important Information - The company faces high general and administrative expenses, totaling $5,300,000, attributed to the complexities of operating in the fintech space and regulatory challenges [37] - Management expressed frustration over the high legal expenses, which are necessary for educating regulators about their unique business model [38] Q&A Session Summary Question: Can you shed light on your transition and future plans? - Management discussed broadening the platform to help companies raise capital and mentioned securing a broker-dealer license to participate in larger capital raisings [13][14] Question: Is the consulting business the major cost driver leading to losses? - Management clarified that the funding portal is a scalable technology operation, while the consulting business was less scalable and typically compensated in equity, which is hard to value [19][20] Question: What are the plans regarding crypto and blockchain integration? - Management stated they are evaluating long-term value creation opportunities in blockchain and digital assets, focusing on sustainable deals rather than short-term gains [21][23] Question: Why are G&A expenses so high for a small company? - Management acknowledged that high legal expenses are a cost of doing business in the fintech space, particularly due to regulatory complexities [37][38] Question: Are you considering going private due to unsustainable costs? - Management confirmed they are not exploring going private, emphasizing the benefits of being a public company despite the associated costs [41][42]

Core Viewpoint - Netcapital Inc. has shifted its strategy to build a scalable foundation for future growth, focusing on democratizing access to private markets and enhancing its service offerings with a secured broker-dealer license [2]. Financial Performance - Reported revenues for fiscal year 2025 were $869,460, a significant decrease from $4,951,435 in fiscal year 2024, primarily due to a decline in consulting services [6]. - The company experienced an operating loss of $8,321,317 compared to a loss of $3,442,388 in fiscal year 2024 [6]. - An impairment loss of $19.9 million was recorded in fiscal year 2025 [6]. - The net loss per share was $20.39, an improvement from $28.83 in fiscal year 2024 [6]. Balance Sheet Overview - As of April 30, 2025, total assets were $20,901,491, down from $41,557,306 in the previous year [8]. - Cash and cash equivalents decreased to $289,428 from $863,182 [8]. - Total current liabilities increased to $5,495,767 from $3,116,698 [8]. - Total stockholders' equity fell to $14,905,724 from $37,940,608 [8]. Operational Insights - The company’s consulting group, Netcapital Advisors, provides marketing and strategic advice while taking equity positions in select companies [4]. - The funding portal, Netcapital Funding Portal Inc., is registered with the SEC and a member of FINRA, enhancing its credibility in the market [4].

Core Viewpoint - Netcapital Inc. has shifted its strategy to focus on building a scalable foundation for future growth, emphasizing its broker-dealer license to enhance access to private markets for issuers and investors [2] Financial Performance - Reported revenues for fiscal year 2025 were $869,460, a significant decrease from $4,951,435 in fiscal year 2024, primarily due to a decline in consulting services [6] - The company experienced an operating loss of $8,321,317 compared to a loss of $3,442,388 in fiscal year 2024 [6] - An impairment loss of $19.9 million was recorded in fiscal year 2025 [6] - The net loss per share was $20.39, an improvement from a loss of $28.83 in fiscal year 2024 [6] Balance Sheet Overview - Total assets decreased to $20,901,491 as of April 30, 2025, down from $41,557,306 in the previous year [8] - Cash and cash equivalents fell to $289,428 from $863,182 [8] - Total current liabilities increased to $5,495,767 from $3,116,698 [8] - Total stockholders' equity decreased to $14,905,724 from $37,940,608 [8] Operational Insights - The company is positioned as a fintech entity that facilitates capital raising for private companies and offers private equity investment opportunities [4] - Netcapital Advisors, the consulting group, provides strategic advice and takes equity positions in select companies [4]

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section clarifies that the Form 10-K contains predictions, not guarantees, subject to various risks - The Form 10-K contains forward-looking statements, which are predictions and not guarantees of future performance, based on current expectations and subject to various risks and uncertainties[13](index=13&type=chunk) - Key factors that could cause actual results to differ materially include capital requirements, difficulties in executing growth strategy, economic uncertainties (e.g., COVID-19), challenges in acquisitions, increasing revenue per issuer, hiring fintech employees, increasing investments per investor, supply shortages, dependence on large issuers, negative publicity, competition, inability to manage growth, and maintaining adequate cash flow[13](index=13&type=chunk) [Risk Factor Summary](index=5&type=section&id=RISK%20FACTOR%20SUMMARY) The company's business faces significant risks, making investment speculative, as detailed in the 'Risk Factors' section - The Company's business is subject to significant risks and uncertainties, making an investment speculative. Principal risk factors are summarized, but investors should review the full 'Risk Factors' section[16](index=16&type=chunk) - Key risks include financial position concerns (going concern doubt, SBA loan security, significant impairment losses on investments, limited operating history with recent losses), business and growth strategy challenges (management changes, labor issues, increased cloud costs, regulatory impact, license failures, IP protection, secondary trading market delays), and specific risks related to receiving securities for services, proposed secondary trading platform, broker-dealer activities, and common stock volatility[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) PART I [Item 1. Business.](index=4&type=section&id=Item%201.%20Business.) Netcapital Inc. is a fintech company enabling private companies to raise capital online from diverse investors - Netcapital Inc. operates a fintech platform for private companies to raise capital online from accredited and non-accredited investors, leveraging Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) offerings[24](index=24&type=chunk) Revenue Breakdown and Changes (Fiscal Year Ended April 30) | Revenue Source | FY2025 Revenue ($) | FY2024 Revenue ($) | Change (YoY) ($) | % Change (YoY) | | :----------------------------- | :------------- | :------------- | :----------- | :------------- | | Total Revenues | $869,460 | $4,951,435 | $(4,081,975) | -82.4% | | Consulting services for equity securities | $0 | $3,440,000 | $(3,440,000) | -100% | | Consulting revenue | $0 | $96,200 | $(96,200) | -100% | | Portal fees | $589,074 | $874,368 | $(285,294) | -33% | | Listing fees | $207,500 | $442,040 | $(234,540) | -53% | | Portal 1% equity fee | $72,090 | $97,700 | $(25,610) | -26.2% | | Game website revenue | $796 | $1,127 | $(331) | -29.4% | - The significant revenue decline in fiscal 2025 is primarily due to the cessation of consulting services in exchange for equity, which accounted for approximately **$3.5 million** in fiscal 2024[26](index=26&type=chunk) - Portal fees decreased by **33%** due to a **29% decrease** in total capital invested through the portal, from **$14.8 million** in fiscal 2024 to **$10.6 million** in fiscal 2025. Listing fees decreased by **53%** due to a **54% decrease** in new offerings launched[27](index=27&type=chunk)[28](index=28&type=chunk) [Overview](index=7&type=section&id=Overview) Netcapital Inc. is a fintech company offering a scalable platform for private companies to raise capital online - Netcapital Inc. is a fintech company providing a scalable technology platform for private companies to raise capital online from accredited and non-accredited investors, based on Reg CF of the JOBS Act[24](index=24&type=chunk) - The company generates fees from its funding portal (www.netcapital.com) and has expanded to include Regulation A (Reg A) offerings through its licensed broker-dealer subsidiary, Netcapital Securities Inc[24](index=24&type=chunk) [Our Business](index=7&type=section&id=Our%20Business) Netcapital generates revenue through listing and portal fees from its funding portal and broker-dealer subsidiary - Netcapital provides private company investment access via its online portal (Netcapital Funding Portal, Inc.) and broker-dealer subsidiary (Netcapital Securities)[25](index=25&type=chunk) - The funding portal charges a **$5,000** listing fee, a **4.9%** portal fee for capital raised, and a **1%** success fee paid in equity (starting FY2025). Netcapital Securities charges a **$25,000** listing fee and a **4.9%** success fee for Reg A offerings[25](index=25&type=chunk) Revenue Comparison (FY2025 vs. FY2024) | Metric | FY2025 ($) | FY2024 ($) | | :-------------------------------- | :------- | :------- | | Total Revenues | $869,460 | $4,951,435 | | Costs of Service | $40,344 | $108,060 | | Gross Profit | $829,116 | $4,843,375 | | Equity Securities for Services | $0 | $3,537,700 | | Cash-based Revenues | N/A | $1,413,736 | | Portal Fees | $589,074 | $874,368 | | Listing Fees | $207,500 | $442,040 | | Portal 1% Equity Fee | $72,090 | $97,700 | - Revenue from portal fees decreased by **33%** in fiscal 2025 due to a **29% decrease** in total dollars invested through the portal (**$10.6 million** in FY2025 vs. **$14.8 million** in FY2024)[27](index=27&type=chunk) - Listing fees decreased by **53%** in fiscal 2025, directly linked to a **54% drop** in new offerings launched (38 in FY2025 vs. 82 in FY2024)[28](index=28&type=chunk) [Funding Portal](index=8&type=section&id=Funding%20Portal) Netcapital.com is an SEC-registered funding portal enabling private companies to raise capital online - Netcapital.com is an SEC-registered funding portal allowing private companies to raise capital online from global investors. It provides individual offering pages with company details and financial documents[30](index=30&type=chunk) - Services include automated onboarding, regulatory document filing, compliance review, custom offering pages, third-party transfer agent/custodial services, email marketing, rolling closes, annual filing assistance, and direct team support[33](index=33&type=chunk) [Consulting Business](index=8&type=section&id=Consulting%20Business) Netcapital Advisors historically offered strategic advice and took equity stakes, now significantly decreased - Netcapital Advisors, a wholly-owned subsidiary, offers strategic advice, technology consulting, and online marketing for fundraising campaigns. Historically, it also acted as an incubator/accelerator, taking equity stakes in select startups, holding positions in ten portfolio companies valued at approximately **$6 million**[31](index=31&type=chunk) - The company has written off investments in twelve Portfolio Companies, resulting in a non-cash loss of over **$19.9 million** from failed entities[31](index=31&type=chunk) - Netcapital Advisors' services include investor introductions, online marketing, website design/software development, message crafting (pitch decks, offering pages, ads), strategic advice, and technology consulting[34](index=34&type=chunk) [Broker-Dealer Business](index=8&type=section&id=Broker-Dealer%20Business) Netcapital Securities Inc. received FINRA approval to expand revenue via Reg A and Reg D offerings - In November 2024, Netcapital Securities Inc., a wholly-owned subsidiary, received FINRA approval to operate as a broker-dealer[32](index=32&type=chunk) - This approval is expected to expand revenue opportunities by hosting Reg A and Reg D offerings, earning fees from client introductions to other FINRA broker-dealers, and leveraging strategic partnerships for wider distribution[32](index=32&type=chunk) - As of the report date, Netcapital Securities has engaged with one issuer for a Regulation A offering[32](index=32&type=chunk) [Competition](index=9&type=section&id=Competition) Netcapital competes with numerous companies in capital raising, facing well-resourced market players - Netcapital competes with numerous public and private companies in capital raising, strategy, technology consulting, and digital marketing, many of which have significant financial resources and established market positions[35](index=35&type=chunk) - Key competitive factors and barriers to entry include reputation, technology, financial stability, track record, critical mass, independent oversight, transparency, and FINRA approval for funding portals[36](index=36&type=chunk) - Increased competition could materially adversely affect the company's business, revenues, operating results, and financial condition[38](index=38&type=chunk) [Industry Regulation](index=9&type=section&id=Industry%20Regulation) The company operates in a highly regulated industry under the JOBS Act, subject to SEC and FINRA - The company operates in a highly regulated industry, primarily under Title III, Regulation Crowdfunding (Reg CF) of the JOBS Act, which democratized access to private investment opportunities[39](index=39&type=chunk) - Reg CF allows the general public to invest in private companies, permits public advertising of securities offerings, and conditionally exempts Section 4(a)(6) securities from registration[40](index=40&type=chunk)[41](index=41&type=chunk) - The SEC also expanded Reg A into Tier 1 (up to **$20 million**) and Tier 2 (up to **$75 million**) offerings[41](index=41&type=chunk) - The company is subject to SEC and FINRA regulation, including the USA Patriot Act (anti-money laundering) and Rule 15c3-1 (Uniform Net Capital Rule) for broker-dealers, with non-compliance potentially leading to material adverse effects[40](index=40&type=chunk) [Our Market](index=10&type=section&id=Our%20Market) The JOBS Act established the funding portal industry, with regulatory enhancements increasing offering limits - The traditional funding model restricts capital access, investments, and liquidity, with venture capital firms investing in less than **1%** of considered companies and limited funding for women- and black-owned firms[42](index=42&type=chunk) - The JOBS Act addressed these issues by establishing the funding portal industry, with regulatory enhancements in March 2021 increasing offering limits for Reg CF to **$5 million**, Regulation D Rule 504 to **$10 million**, and Reg A Tier 2 to **$75 million**[44](index=44&type=chunk) Reg CF and Reg A+ Funding Trends | Metric | 2024 ($M) | 2021 Peak ($M) | 2018 ($M) | | :-------------------------------- | :----- | :-------- | :----- | | Reg CF Funding | $343.6 | $496.1 | $74.8 | | Reg CF Funding Growth (2018-2024) | N/A | N/A | 360% | | Reg CF Raises (Number) | 569 | N/A | N/A | | Average Reg CF Investment Size ($) | $1,500 | N/A | N/A | | Reg A+ Offerings Closed (Number) | 61 | N/A | N/A | | Reg A+ New Offerings Launched (Number) | 34 | N/A | N/A | | Median Reg A+ Raise ($M) | $2 | N/A | N/A | | Average Reg A+ Raise ($M) | $7.7 | N/A | N/A | [Our Technology](index=10&type=section&id=Our%20Technology) The Netcapital platform is a scalable, real-time transaction-processing engine built on AWS - The Netcapital platform is a scalable, real-time, 24/7 transaction-processing engine, offering automated onboarding and integrated regulatory filings for companies, and access to private investments for over **100,000 users**[48](index=48&type=chunk)[49](index=49&type=chunk) - Its infrastructure uses Docker containers, Amazon Elastic Container Service (ECS), Elastic Load Balancers (ELBs), CloudFlare for DDoS protection, Amazon RDS for the main database (Multi-AZ deployment), and AWS ElastiCache's Redis for asynchronous CPU-intensive data processing[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The technology for the funding portal is licensed from Netcapital Systems LLC, with payments of **$95,000** in FY2025 and **$195,000** in FY2024[55](index=55&type=chunk) [Proposed Alternative Trading ("ATS") Relationship](index=11&type=section&id=Proposed%20Alternative%20Trading%20%28%22ATS%22%29%20Relationship) Netcapital is exploring a secondary trading feature with Templum Markets LLC, though development is paused - Netcapital aims to address the lack of liquidity for private company investors by exploring a secondary trading feature, having entered into a software license and services agreement with Templum Markets LLC in January 2023[56](index=56&type=chunk) - Templum operates an ATS approved in 53 U.S. states and territories for trading unregistered or private securities. However, further development and roll-out of this platform have been paused to reevaluate market conditions and customer expectations[56](index=56&type=chunk)[65](index=65&type=chunk) - Risks associated with the proposed ATS include lack of public filings for private companies, illiquidity of securities, transfer restrictions, and potential transaction settlement failures[58](index=58&type=chunk) - The estimated development cost for this platform is under **$1.0 million**, mostly incurred, with no current revenue model associated with securities sales on the proposed ATS[60](index=60&type=chunk) [Competitive Advantages](index=12&type=section&id=Competitive%20Advantages) Netcapital offers a low-cost online capital raising solution, emphasizing technology, support, and onboarding - Netcapital believes it offers the lowest cost solution for online capital raising compared to peers like StartEngine, Wefunder, and Republic Core LLC[63](index=63&type=chunk) - The company highlights its facilitated technology platforms, strong customer support, and efficient client onboarding as superior advantages[63](index=63&type=chunk) - Its network is rapidly expanding due to enhanced marketing and broad distribution to new investors[63](index=63&type=chunk) [Our Strategy](index=13&type=section&id=Our%20Strategy) Netcapital's strategy focuses on investor acquisition, platform expansion, technology, and new offerings - Netcapital's strategy focuses on generating new investor accounts, hiring business development staff, increasing companies on the platform via marketing, investing in technology, accelerating advisory portfolio clients, expanding internationally, providing a secondary trading feature (currently paused), and exploring new verticals like Regulation A and Regulation D offerings[65](index=65&type=chunk) - The company received FINRA approval in November 2024 for its broker-dealer subsidiary, Netcapital Securities Inc., to expand revenue opportunities through Reg A and Reg D offerings and strategic partnerships[65](index=65&type=chunk) [Investment Portfolio](index=14&type=section&id=Investment%20Portfolio) Netcapital's investment portfolio targets disruptive technology companies in Fintech, Mobile Games, and AI - Netcapital's investment portfolio focuses on companies with emerging, disruptive technologies, including KingsCrowd (Fintech), Zelgor (Mobile Games), and Hiveskill LLC (AI)[66](index=66&type=chunk)[67](index=67&type=chunk)[71](index=71&type=chunk) Investment Portfolio Summary (April 30, 2025 vs. 2024) | Investment | April 30, 2025 ($) | April 30, 2024 ($) | | :------------------------------------------ | :------------- | :------------- | | Netcapital DE LLC | $1,985 | $48,128 | | MustWatch LLC | - | $440,000 | | Zelgor Inc. | $1,400,000 | $1,400,000 | | ChipBrain LLC | - | $3,366,348 | | Vymedic Inc. | $11,032 | $11,032 | | C-Reveal Therapeutics LLC | $50,000 | $50,000 | | Deuce Drone LLC | - | $2,350,000 | | Hiveskill LLC | $712,500 | $712,500 | | ScanHash LLC | $425,000 | $425,000 | | Caesar Media Group Inc. | - | $1,999,128 | | Cust Corp. | $1,200,000 | $1,200,000 | | Reper LLC | $1,200,000 | $1,200,000 | | Dark LLC | - | $2,100,000 | | Netwire LLC | - | $1,300,000 | | CountSharp LLC | - | $1,170,000 | | CupCrew LLC | - | $1,170,000 | | HeadFarm LLC | - | $1,170,000 | | AceHedge LLC | - | $1,110,000 | | Fantize LLC | - | $1,110,000 | | StockText LLC | - | $1,220,000 | | 1% equity fee received - 61 issuers (2025), 30 issuers (2024) | $169,790 | $97,700 | | KingsCrowd Inc. | $577,743 | $513,550 | | **Total Investments at fair value** | **$5,748,050** | **$25,333,386**| [Major Customers](index=16&type=section&id=Major%20Customers) The company exhibits customer concentration, with a few major customers contributing significant revenues Major Customer Revenue Concentration | Fiscal Year | Customer 1 (%) | Customer 2 (%) | Customer 3 (%) | | :------------ | :--------- | :--------- | :--------- | | April 30, 2025 | 20% | 11% | N/A | | April 30, 2024 | 25% | 22% | 22% | [Recent Developments](index=16&type=section&id=Recent%20Developments) Recent activities include equity offerings, debt financings, a software license, and equity plan amendments - In July 2025, the company issued **269,257** common shares from warrant exercises and completed two registered direct offerings, raising approximately **$3 million** and **$5 million** respectively, with concurrent private placements of warrants[74](index=74&type=chunk)[75](index=75&type=chunk)[79](index=79&type=chunk) - Net proceeds from these offerings were primarily allocated to repaying outstanding promissory notes and for working capital and general corporate purposes[75](index=75&type=chunk)[79](index=79&type=chunk) - In June 2025, the company entered a Horizon Software Agreement for a royalty-free, perpetual license to use capital-raising and secondary trading software in the US, in exchange for **500,000 shares** of common stock[83](index=83&type=chunk) - An At-The-Market (ATM) offering in June 2025 sold **229,404 shares** for gross proceeds of approximately **$974,747**, yielding net proceeds of **$944,067** after commissions and costs[84](index=84&type=chunk) - A June 2025 private placement raised **$475,000** by issuing **118,750** common shares to accredited investors, with a price adjustment provision tied to future share issuances[85](index=85&type=chunk) - The board approved amendments to the 2023 Omnibus Equity Incentive Plan to increase authorized shares to **1,547,556** and the evergreen limit from **5% to 10%** of outstanding shares, subject to stockholder approval[86](index=86&type=chunk) - Two strategic advisory boards (Crypto and Game) were formed in June 2025, with advisors receiving **783,722** non-qualified stock options under the amended Plan, exercisable upon stockholder approval[87](index=87&type=chunk)[88](index=88&type=chunk) - In May 2025, the company completed several debt financings, including a **$400,000** unsecured non-convertible promissory note (**50% OID**, **8% interest**) and two convertible promissory notes totaling **$126,320** principal (**$108,000** net proceeds), both of which were prepaid in July 2025[89](index=89&type=chunk)[90](index=90&type=chunk) [Employees](index=19&type=section&id=Employees) As of April 30, 2025, Netcapital Inc. had three senior personnel and approximately 20 full-time employees - As of April 30, 2025, Netcapital Inc. had three senior corporate personnel and approximately **20** full-time employees, none of whom are unionized. Employee relations are considered good[91](index=91&type=chunk) [Corporate History and Information](index=19&type=section&id=Corporate%20History%20and%20Information) The company, incorporated in 1984, has undergone name changes and acquisitions, with offices in Boston - The company was incorporated in Utah in 1984 as DBS Investments, Inc., underwent several name changes and acquisitions, including ValueSetters, Inc. (2003), NetGames.com (2010), Netcapital Funding Portal Inc. (2020), and MSG Development Corp. (2021). The parent company was renamed Netcapital Inc. in November 2020, and Netcapital Securities Inc. was formed in 2024[92](index=92&type=chunk) - Its principal executive offices are in Boston, Massachusetts, and it maintains corporate and funding portal websites[93](index=93&type=chunk) [Item 1A. Risk Factors.](index=19&type=section&id=Item%201A.%20Risk%20Factors.) Netcapital Inc. faces substantial risks across its financial position, operations, growth, and common stock - The company's financial situation raises substantial doubt about its ability to continue as a going concern, with negative working capital of **$5,096,163**, an operating loss of **$8,321,317**, and net cash used in operating activities of **$5,339,211** for the year ended April 30, 2025[96](index=96&type=chunk) - Netcapital recognized impairment losses totaling **$17.9 million** on portfolio company investments in FY2025, which materially reduced total assets and shareholders' equity, and further impairments are possible[100](index=100&type=chunk)[102](index=102&type=chunk) - The company has a limited operating history and has suffered losses in recent years, with no guarantee of future profitability, as past profits were primarily from unrealized gains on illiquid equity securities[104](index=104&type=chunk)[105](index=105&type=chunk) - Netcapital is highly dependent on a limited number of customers, with one customer accounting for **20%** and another for **11%** of FY2025 revenues, posing risks if these customers experience declining demand[106](index=106&type=chunk) - The company's proposed secondary trading platform, dependent on a third-party (Templum), has paused development and roll-out, and its failure to launch could perpetuate a lack of liquidity for investors, adversely affecting business[156](index=156&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk) - The market price of Netcapital's common stock is highly volatile and subject to fluctuations from various factors, including financial results, analyst expectations, economic conditions, and future equity issuances, which could dilute ownership and depress stock price[171](index=171&type=chunk)[172](index=172&type=chunk) [Risks Related to our Financial Position](index=19&type=section&id=Risks%20Related%20to%20our%20Financial%20Position) The company's negative working capital and operating losses raise substantial doubt about its going concern - The company's financial situation, including negative working capital, operating losses, and negative cash flow from operations, creates substantial doubt about its ability to continue as a going concern[96](index=96&type=chunk) - Obligations to the U.S. Small Business Administration (SBA) are secured by company assets; a default could lead to foreclosure and cessation of operations[98](index=98&type=chunk) - The company recognized **$17.9 million** in impairment losses on portfolio company investments in FY2025, which reduced total assets and shareholders' equity and may impact future capital raising and stock value[100](index=100&type=chunk)[102](index=102&type=chunk) - Despite prior profitability from unrealized gains, the company has suffered losses in recent years, including a **$28,301,325** net loss in FY2025, with no guarantee of returning to profitability[105](index=105&type=chunk) [Risks Related to Our Business and Growth Strategy](index=21&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Growth%20Strategy) Operational risks include customer concentration, regulatory non-compliance, cyber-attacks, and illiquid investments - The company has substantial customer concentration, with two customers accounting for **31%** of FY2025 revenues, posing a risk if their demand declines[106](index=106&type=chunk) - Operating in a highly regulated and evolving industry, non-compliance with SEC, FINRA, and other regulations could lead to fines, sanctions, or business limitations[109](index=109&type=chunk) - The funding portal's service offerings are relatively new, and market penetration remains uncertain as issuers and investors may choose alternative platforms or financing methods[110](index=110&type=chunk) - The company is vulnerable to hackers and cyber-attacks, which could disrupt services, lead to data loss, litigation, and reputational damage, especially given its reliance on third-party technology providers and escrow agents[118](index=118&type=chunk)[119](index=119&type=chunk) - Failure to comply with the license agreement for its funding portal technology with Netcapital Systems LLC could result in termination of rights, severely impacting operations[120](index=120&type=chunk) - The company's strategy of acquiring equity in early-stage companies may result in illiquid investments with uncertain future value, as evidenced by **$19.9 million** in write-downs in FY2025[125](index=125&type=chunk) [Risks Related to Receipt of Securities for Services](index=30&type=section&id=Risks%20Related%20to%20Receipt%20of%20Securities%20for%20Services) A significant portion of assets are illiquid equity securities, subject to volatility and holding periods - A significant portion of total assets (**$5.7 million** as of April 30, 2025) are illiquid equity securities of early-stage companies, subject to volatility and legal holding periods, with no established trading market[149](index=149&type=chunk) - The company is not regulated as an investment company under the 1940 Act and intends to avoid this designation, as applicable restrictions would make its current operations impractical[150](index=150&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - The company's investment securities did not exceed the **40%** threshold for investment company status as of April 30, 2025, following **$19.9 million** in impairment losses[152](index=152&type=chunk) [Risks Related to Operation of our Proposed Secondary Trading Platform](index=31&type=section&id=Risks%20Related%20to%20Operation%20of%20our%20Proposed%20Secondary%20Trading%20Platform) The proposed secondary trading platform's dependence on a third-party and paused development poses liquidity risks - The proposed secondary trading platform is dependent on a third-party provider (Templum), and any disruption in services or failure to officially launch could materially adversely affect the business[156](index=156&type=chunk)[158](index=158&type=chunk) - Investors on the proposed platform face significant risks, including limited information on private companies, illiquid securities, transfer restrictions, and potential transaction settlement failures[159](index=159&type=chunk)[162](index=162&type=chunk) - Failure to launch the secondary trading platform could perpetuate a lack of liquidity for investors in the target market, potentially reducing investor interest and client engagement with Netcapital's platform[160](index=160&type=chunk) [Risks Related to our Proposed Broker-Dealer Activities](index=32&type=section&id=Risks%20Related%20to%20our%20Proposed%20Broker-Dealer%20Activities) The broker-dealer business is heavily regulated, requiring specific net capital, with non-compliance risking sanctions - The securities business is heavily regulated by bodies like the SEC, FINRA, and Nasdaq, with non-compliance potentially leading to sanctions, fines, and reputational harm[161](index=161&type=chunk) - Netcapital Securities Inc., as a licensed broker-dealer, must maintain specific net capital levels; failure to do so could result in suspension, revocation of registration, or liquidation[164](index=164&type=chunk) [Risk Factors Related to Our Common Stock](index=33&type=section&id=Risk%20Factors%20Related%20to%20Our%20Common%20Stock) Common stock faces volatility, potential Nasdaq delisting, and dilution from future equity issuances - The company's ability to maintain its Nasdaq Capital Market listing is subject to meeting criteria like minimum stock price and public float; failure could lead to delisting and reduced liquidity[165](index=165&type=chunk)[166](index=166&type=chunk) - The market price of common stock is highly volatile, influenced by operational fluctuations, analyst opinions, economic conditions, and future equity issuances, which could dilute ownership[171](index=171&type=chunk)[172](index=172&type=chunk) - The company does not intend to pay cash dividends, meaning investor returns will be limited to stock value appreciation, and a lack of dividends could hinder future fundraising[169](index=169&type=chunk) - Issuance of common stock upon exercise of options under equity incentive plans may dilute existing stockholders' ownership interests[178](index=178&type=chunk) [Item 1B. Unresolved Staff Comments.](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) As a smaller reporting company, Netcapital Inc. is not required to provide information under this item - Netcapital Inc. is a smaller reporting company and is not required to provide information regarding unresolved staff comments[185](index=185&type=chunk) [Item 1C. Cybersecurity](index=35&type=section&id=Item%201C.%20Cybersecurity) The Board oversees cybersecurity risk management, internal frameworks, and third-party evaluations - Cybersecurity is critical for Netcapital as a fintech company, facing threats like ransomware and denial-of-service attacks, which could materially adversely affect operations[186](index=186&type=chunk) - The Board of Directors oversees cybersecurity risk management, receiving regular briefings from a cybersecurity consultant and being apprised of incidents with moderate or higher business impact[187](index=187&type=chunk) - The company has implemented governance structures, internal frameworks, and engages third-party services for security control evaluations (penetration testing, independent audits, consulting)[188](index=188&type=chunk) - Subcontractors are required to report cybersecurity incidents, and while cybersecurity insurance is maintained, it may not fully cover all related costs or disruptions[189](index=189&type=chunk) [Item 2. Properties.](index=38&type=section&id=Item%202.%20Properties.) Netcapital Inc. leases an office space in Boston, Massachusetts, deemed suitable for its near-term needs - Netcapital Inc. leases an office at 1 Lincoln Street, Boston, MA, paying approximately **$6,600** monthly for **400 square feet**[190](index=190&type=chunk) - The office membership agreement is cancellable with **60-day notice**, and most employees work remotely[190](index=190&type=chunk) - The current office space is considered suitable and adequate for its intended purposes and near-term expansion plans[190](index=190&type=chunk) [Item 3. Legal Proceedings.](index=38&type=section&id=Item%203.%20Legal%20Proceedings.) The company may face litigation and regulatory proceedings in its highly regulated industry, increasing compliance costs - The company may face litigation or regulatory proceedings in the ordinary course of business, especially in the highly regulated securities industry, which has seen an increasing incidence of class action suits[191](index=191&type=chunk) - Increased regulatory scrutiny of financial institutions has led to higher compliance costs for Netcapital[192](index=192&type=chunk) - The company receives many regulatory inquiries annually, primarily concerning anti-money laundering, compliance, registration, and record-keeping, though most do not result in fines[193](index=193&type=chunk) - Procedures are in place to evaluate the probability and estimability of potential regulatory fines and to update contingency reserves accordingly[193](index=193&type=chunk) [Item 4. Mine Safety Disclosures.](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to Netcapital Inc - Item 4. Mine Safety Disclosures is not applicable to Netcapital Inc[194](index=194&type=chunk) PART II [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=40&type=section&id=Item%205.%20Market%20For%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Netcapital's common stock and warrants trade on Nasdaq, with no dividends paid, and amended equity plans - Netcapital's common stock and warrants trade on the Nasdaq Capital Market under symbols 'NCPL' and 'NCPLW' since July 13, 2022[197](index=197&type=chunk) - As of August 12, 2025, there were **281** shareholders of record and **4,720,056** shares of common equity outstanding[6](index=6&type=chunk)[198](index=198&type=chunk) - The company has never paid dividends on its common stock and does not expect to do so in the foreseeable future[200](index=200&type=chunk) - The 2023 Omnibus Equity Incentive Plan was amended in June 2025 to increase authorized shares to **1,547,556** and the evergreen limit from **5% to 10%** of outstanding shares, and further amended in July 2025 to increase authorized shares to **3,500,000**[207](index=207&type=chunk)[208](index=208&type=chunk) - No repurchase of equity securities were made during the 2025 fiscal year[209](index=209&type=chunk) [Market Information](index=40&type=section&id=Market%20Information) Netcapital's common stock and warrants have traded on the Nasdaq Capital Market since July 2022 - Netcapital's common stock was quoted on the OTCQX marketplace under 'NCPL' before listing on Nasdaq in July 2022[196](index=196&type=chunk) - Common stock and warrants currently trade on the Nasdaq Capital Market under symbols 'NCPL' and 'NCPLW' respectively, since July 13, 2022[197](index=197&type=chunk) [Recent Issuances of Unregistered Securities](index=40&type=section&id=Recent%20Issuances%20of%20Unregistered%20Securities) There were no recent issuances of unregistered securities - There were no recent issuances of unregistered securities[198](index=198&type=chunk) [Holders](index=40&type=section&id=Holders) As of August 12, 2025, the company had 281 shareholders of record for its common stock - As of August 12, 2025, there were **281** shareholders of record of the company's common stock[198](index=198&type=chunk) [Transfer Agent and Registrar](index=40&type=section&id=Transfer%20Agent%20and%20Registrar) Equity Stock Transfer LLC serves as the transfer agent and registrar for Netcapital's common stock - Equity Stock Transfer LLC serves as the transfer agent and registrar for Netcapital's common stock[199](index=199&type=chunk) [Dividends](index=40&type=section&id=Dividends) The company has never paid dividends on its common stock and does not anticipate doing so - The company has never paid dividends on its common stock and does not anticipate doing so in the foreseeable future[200](index=200&type=chunk) [Securities Authorized for Issuance under Equity Compensation Plans](index=40&type=section&id=Securities%20Authorized%20for%20Issuance%20under%20Equity%20Compensation%20Plans) Equity incentive plans have been amended to increase authorized shares and evergreen limits - The 2021 Equity Incentive Plan reserved **4,286 shares** for awards, with **2,459 options** outstanding and **1,827 shares** remaining for grant as of August 12, 2025[201](index=201&type=chunk) - The 2023 Omnibus Equity Incentive Plan initially authorized **28,571 shares**, with an annual increase provision. As of April 30, 2025, **25,951** option grants were outstanding[204](index=204&type=chunk) - Amendments in June and July 2025 increased authorized shares under the 2023 Plan to **1,547,556** and then to **3,500,000**, respectively, and increased the evergreen limit from **5% to 10%** of outstanding shares[207](index=207&type=chunk)[208](index=208&type=chunk) [Purchase of Equity Securities](index=41&type=section&id=Purchase%20of%20Equity%20Securities) No equity securities were repurchased during the 2025 fiscal year - No equity securities were repurchased during the 2025 fiscal year[209](index=209&type=chunk) [Item 6. Selected Financial Data.](index=37&type=section&id=Item%206.%20Selected%20Financial%20Data.) This item is reserved, as Netcapital Inc. is a smaller reporting company and not required to provide this data - Item 6. Selected Financial Data is reserved, as the registrant is a smaller reporting company and not required to provide this information[210](index=210&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=38&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Netcapital experienced significant revenue decline and losses in fiscal 2025, raising going concern doubts Revenue and Gross Profit Comparison (FY2025 vs. FY2024) | Metric | FY2025 ($) | FY2024 ($) | Change (YoY) ($) | % Change (YoY) | | :---------------- | :------- | :------- | :----------- | :------------- | | Revenues | $869,460 | $4,951,435 | $(4,081,975) | -82.4% | | Costs of services | $40,344 | $108,060 | $(67,716) | -62.7% | | Gross profit | $829,116 | $4,843,375 | $(4,014,259) | -82.9% | - The decrease in revenues is primarily attributable to a **$3.44 million** reduction in consulting services for equity securities, which ceased in fiscal 2025[214](index=214&type=chunk)[243](index=243&type=chunk) Key Financial Performance Indicators (FY2025 vs. FY2024) | Metric | FY2025 ($) | FY2024 ($) | Change (YoY) ($) | | :-------------------------------- | :----------- | :----------- | :----------- | | Operating Loss | $(8,321,317) | $(3,442,388) | $(4,878,929) | | Net Loss | $(28,301,325)| $(4,986,317) | $(23,315,008)| | Net Cash Used in Operating Activities | $(5,339,211) | $(4,879,838) | $(459,373) | | Impairment Expense | $(19,915,556)| $(1,048,430) | $(18,867,126)| | Unrealized Gain (Loss) on Equity Securities | $18,050 | $(2,696,135) | $2,714,185 | - As of April 30, 2025, the company had negative working capital of **$5,204,109** and cash and cash equivalents of **$289,428**, down from **$863,182** in FY2024, raising substantial doubt about its ability to continue as a going concern[254](index=254&type=chunk)[267](index=267&type=chunk) - Subsequent to year-end, the company raised significant capital through public offerings and private placements, including **$8 million** from two registered direct offerings in July 2025 and **$944,067** net proceeds from an ATM offering in June 2025[255](index=255&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) [Overview](index=42&type=section&id=Overview) Netcapital is a fintech company providing an online platform for private companies to raise capital - Netcapital Inc. is a fintech company that provides a scalable technology platform for private companies to raise capital online from accredited and non-accredited investors, primarily through Reg CF and Reg A offerings[212](index=212&type=chunk) - The company's revenue model includes listing fees (**$5,000**), a **4.9%** portal fee for capital raised, and a **1%** equity success fee (starting FY2025) for its funding portal, and **$25,000** listing fee plus **4.9%** success fee for Reg A offerings via its broker-dealer subsidiary[213](index=213&type=chunk) Revenue and Gross Profit (FY2025 vs. FY2024) | Metric | FY2025 ($) | FY2024 ($) | | :---------------- | :------- | :------- | | Revenues | $869,460 | $4,951,435 | | Costs of services | $40,344 | $108,060 | | Gross profit | $829,116 | $4,843,375 | - The significant revenue decline in FY2025 is largely due to not providing consulting services for equity, which contributed approximately **$3.5 million** in FY2024[214](index=214&type=chunk) - Portal fees decreased by **33%** to **$589,074** in FY2025 from **$874,368** in FY2024, driven by a **29% decrease** in total capital invested through the portal (**$10.6 million** in FY2025 vs. **$14.8 million** in FY2024)[215](index=215&type=chunk) - Listing fees decreased by **53%** to **$207,500** in FY2025 from **$442,040** in FY2024, due to a **54% decrease** in offerings launched (38 in FY2025 vs. 82 in FY2024)[217](index=217&type=chunk) - The average amount raised per offering on the funding portal decreased from **$280,978** in FY2024 to **$215,745** in FY2025[218](index=218&type=chunk) - Netcapital Securities Inc. received FINRA approval in November 2024 to operate as a broker-dealer, aiming to expand revenue through Reg A and Reg D offerings[222](index=222&type=chunk) - Development and roll-out of the proposed secondary trading platform with Templum Markets LLC have been paused to reevaluate market conditions[224](index=224&type=chunk) [Recent Developments](index=44&type=section&id=Recent%20Developments) Recent activities include equity offerings, debt financings, a software license, and equity plan amendments - In July 2025, the company issued **269,257** common shares from warrant exercises and completed two registered direct offerings, raising approximately **$3 million** and **$5 million** respectively, with concurrent private placements of warrants[226](index=226&type=chunk)[227](index=227&type=chunk)[231](index=231&type=chunk) - Net proceeds from these offerings were primarily allocated to repaying outstanding promissory notes and for working capital and general corporate purposes[227](index=227&type=chunk)[231](index=231&type=chunk) - In June 2025, the company entered a Horizon Software Agreement for a royalty-free, perpetual license to use capital-raising and secondary trading software in the US, in exchange for **500,000 shares** of common stock[235](index=235&type=chunk) - An At-The-Market (ATM) offering in June 2025 sold **229,404 shares** for gross proceeds of approximately **$974,747**, yielding net proceeds of **$944,067** after commissions and costs[236](index=236&type=chunk) - A June 2025 private placement raised **$475,000** by issuing **118,750** common shares to accredited investors, with a price adjustment provision tied to future share issuances[237](index=237&type=chunk) - The board approved amendments to the 2023 Omnibus Equity Incentive Plan to increase authorized shares to **1,547,556** and the evergreen limit from **5% to 10%** of outstanding shares, subject to stockholder approval[238](index=238&type=chunk) - Two strategic advisory boards (Crypto and Game) were formed in June 2025, with advisors receiving **783,722** non-qualified stock options under the amended Plan, exercisable upon stockholder approval[239](index=239&type=chunk) - In May 2025, the company completed several debt financings, including a **$400,000** unsecured non-convertible promissory note (**50% OID**, **8% interest**) and two convertible promissory notes totaling **$126,320** principal (**$108,000** net proceeds), both of which were prepaid in July 2025[240](index=240&type=chunk)[242](index=242&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Total revenues decreased significantly in fiscal 2025 due to the absence of consulting services for equity Revenue Components (FY2025 vs. FY2024) | Revenue Source | April 30, 2025 ($) | April 30, 2024 ($) | | :----------------------------- | :------------- | :------------- | | Consulting services for equity securities | $0 | $3,440,000 | | Consulting revenue | $0 | $96,200 | | Portal fees | $589,074 | $874,368 | | Listing fees | $207,500 | $442,040 | | Portal 1% equity fee | $72,090 | $97,700 | | Game website revenue | $796 | $1,127 | | **Total** | **$869,460** | **$4,951,435** | - Total revenues decreased by **$4,081,975** (**82.4%**) in fiscal 2025, primarily due to the absence of consulting services for equity securities[243](index=243&type=chunk) - Costs of revenues decreased by **$67,716** (**63%**) to **$40,344** in fiscal 2025, aligning with the overall revenue decline[247](index=247&type=chunk) Operating Expenses (FY2025 vs. FY2024) | Expense Category | FY2025 ($) | FY2024 ($) | Change (YoY) ($) | % Change (YoY) | | :----------------------- | :------- | :------- | :----------- | :------------- | | Consulting expense | $314,947 | $610,209 | $(295,262) | -48% | | Marketing | $37,699 | $333,771 | $(296,072) | -89% | | Rent | $79,568 | $76,117 | $3,451 | +5% | | Payroll & related expenses | $3,502,166 | $3,838,640 | $(336,474) | -9% | | General & administrative | $5,224,007 | $3,427,026 | $1,796,981 | +52% | - General and administrative expenses increased significantly by **52%** due to higher professional fees (attorneys, proxy solicitation, investor relations)[249](index=249&type=chunk) - The company recorded an impairment expense of **$19,915,556** in fiscal 2025, a substantial increase from **$1,048,430** in fiscal 2024, due to write-offs of thirteen equity investments[252](index=252&type=chunk) - An unrealized gain of **$18,050** on equity securities was recognized in fiscal 2025, contrasting with an unrealized loss of **$2,696,135** in fiscal 2024[251](index=251&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's negative working capital and cash flow raise going concern doubts, despite recent capital raises Liquidity Position (April 30, 2025 vs. 2024) | Metric | April 30, 2025 ($) | April 30, 2024 ($) | | :-------------------- | :------------- | :------------- | | Cash and cash equivalents | $289,428 | $863,182 | | Negative working capital | $5,204,109 | $2,074,163 | - The company's negative working capital and cash flow from operations raise substantial doubt about its ability to continue as a going concern[267](index=267&type=chunk) - Subsequent to April 30, 2025, the company raised significant capital through public offerings and private placements, including **$8 million** from two registered direct offerings in July 2025, **$944,067** net from an ATM offering in June 2025, and **$475,000** from a June 2025 private placement[255](index=255&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - Net cash used in operating activities increased to **$5,339,211** in fiscal 2025 from **$4,879,838** in fiscal 2024[268](index=268&type=chunk) - Net cash provided by financing activities amounted to **$4,765,457** in fiscal 2025, primarily from common stock sales (**$1,979,000**) and warrant exercises (**$2,529,957**)[271](index=271&type=chunk) [New Accounting Standards](index=52&type=section&id=New%20Accounting%20Standards) The company is evaluating the impact of new FASB ASUs on income statement disclosures and stock compensation - The FASB issued ASU 2024-03 (Income Statement—Reporting Comprehensive Income) in March 2024, requiring public companies to provide additional disclosures on expense line items, effective for fiscal years beginning after December 15, 2026[388](index=388&type=chunk) - ASU 2024-01 (Compensation—Stock Compensation) was issued in January 2024, clarifying scope application for profits interest awards, effective for public companies for fiscal years beginning after December 15, 2024[389](index=389&type=chunk) - The company is currently evaluating the impact of these new standards on its future financial statement disclosures and equity-based compensation arrangements[388](index=388&type=chunk)[389](index=389&type=chunk) [Critical Accounting Policies and Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant management judgment in revenue recognition and asset valuation - Critical accounting policies involve significant management judgment, estimates, and assumptions, particularly in revenue recognition, valuation of long-lived assets, and valuation of intangible assets[274](index=274&type=chunk)[275](index=275&type=chunk) - Revenue recognition follows a five-step model (ASC 606), identifying performance obligations, determining transaction price, allocating price, and recognizing revenue as obligations are satisfied[275](index=275&type=chunk)[277](index=277&type=chunk) - The company uses the measurement alternative for equity securities without readily determinable fair values, initially at cost, and remeasuring to fair value upon observable price changes or impairment[289](index=289&type=chunk)[290](index=290&type=chunk) - Impairment losses of **$19,915,556** and **$1,048,430** were recorded in fiscal 2025 and 2024, respectively, for long-lived assets and equity investments[288](index=288&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Netcapital Inc. is not required to provide market risk disclosures - Netcapital Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[294](index=294&type=chunk) - The company is not subject to fluctuations in interest rates, currency exchange rates, or other financial market risks, and has no foreign sales, purchases, or commitments that would expose it to currency risks[293](index=293&type=chunk) [Item 8. Financial Statements.](index=51&type=section&id=Item%208.%20Financial%20Statements.) The Consolidated Financial Statements for Netcapital Inc. are included in this report, commencing on page F-1 - The Consolidated Financial Statements are included in this report, starting on page F-1 (page 64 of the document)[295](index=295&type=chunk) [Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.](index=51&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) This item is not applicable to Netcapital Inc - Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure is not applicable to Netcapital Inc[296](index=296&type=chunk) [Item 9A. Controls and Procedures.](index=51&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and internal control over financial reporting were ineffective - As of April 30, 2025, the company's disclosure controls and procedures were not effective[297](index=297&type=chunk) - Management concluded that internal control over financial reporting was not effective as of April 30, 2025, identifying a material weakness related to the over-accrual of legal expenses[299](index=299&type=chunk) - A significant deficiency was identified in the process for identifying and evaluating impairment indicators for equity investments without readily determinable fair values, particularly for related party investees[300](index=300&type=chunk) - Remediation efforts include enhanced period-end closing procedures for accrued expenses and updating investment valuation policies to require recent financial information from investees[301](index=301&type=chunk)[302](index=302&type=chunk) - As a smaller reporting company, the report does not include an attestation report from the registered public accounting firm regarding internal control over financial reporting[304](index=304&type=chunk) [Item 9B. Other Information.](index=51&type=section&id=Item%209B.%20Other%20Information.) There is no other information to report under this item - There is no other information to report under this item[306](index=306&type=chunk) [Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections.](index=51&type=section&id=Item%209C.%20Disclosures%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) This item is not applicable to Netcapital Inc - Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections is not applicable to Netcapital Inc[307](index=307&type=chunk) PART III [Items 10-14. Directors, Executive Officers and Corporate Governance, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships, Related Person Transactions and Director Independence, Principal Accountant Fees and Services.](index=57&type=section&id=Items%2010-14.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance%2C%20Executive%20Compensation%2C%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters%2C%20Certain%20Relationships%2C%20Related%20Person%20Transactions%20and%20Director%20Independence%2C%20Principal%20Accountant%20Fees%20and%20Services.) Information for these items is omitted from this Form 10-K and will be incorporated by reference from the Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is omitted from this Form 10-K and will be incorporated by reference from the company's definitive Proxy Statement, to be filed within **120 days** after the fiscal year-end[11](index=11&type=chunk)[308](index=308&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) - The company has adopted a code of business conduct and ethics and an insider trading policy, available on its corporate website[309](index=309&type=chunk)[310](index=310&type=chunk) PART IV [Item 15. Exhibits, Financial Statements Schedules.](index=58&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statements%20Schedules.) Item 15 lists all exhibits and financial statement schedules filed as part of this Annual Report on Form 10-K - Item 15 provides a comprehensive list of exhibits and financial statement schedules included in the Form 10-K[11](index=11&type=chunk)[316](index=316&type=chunk) - Exhibits cover a wide range of corporate and financial documents, including underwriting agreements, articles of incorporation, bylaws, various warrant forms, equity incentive plans, employment agreements, and the Templum Software License and Services Agreement[316](index=316&type=chunk)[317](index=317&type=chunk)[319](index=319&type=chunk)[322](index=322&type=chunk) [Item 16. Form 10-K Summary](index=56&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to Netcapital Inc - Item 16. Form 10-K Summary is not applicable to Netcapital Inc[321](index=321&type=chunk) [SIGNATURES](index=57&type=section&id=SIGNATURES) The Annual Report on Form 10-K is duly signed by Netcapital Inc.'s CEO, CFO, and Directors - The report is signed by Martin Kay, Chief Executive Officer and Director (Principal Executive Officer), and other directors and the Chief Financial Officer, Coreen Kraysler, as of August 12, 2025[324](index=324&type=chunk)[326](index=326&type=chunk) [Consolidated Financial Statements](index=64&type=section&id=Consolidated%20Financial%20Statements) This section presents Netcapital Inc.'s audited financial statements, including balance sheets, operations, cash flows, and notes [Report of Independent Registered Public Accounting Firm](index=65&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditors issued an unqualified opinion but highlighted a 'Going Concern' matter and investment valuation as a critical audit matter - Fruci & Associates II, PLLC issued an unqualified opinion on the consolidated financial statements for the years ended April 30, 2025 and 2024[330](index=330&type=chunk) - The auditors noted a 'Going Concern' issue due to negative working capital, operating losses, and negative cash flows, which raises substantial doubt about the company's ability to continue[331](index=331&type=chunk) - Valuation of investments was identified as a critical audit matter due to the complex and highly judgmental estimation required for fair value, which is sensitive to assumptions about market conditions, revenue growth, and strategic plans[336](index=336&type=chunk)[337](index=337&type=chunk) [Consolidated Balance Sheets](index=67&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a significant decrease in total assets and stockholders' equity due to net losses Consolidated Balance Sheet Summary (April 30, 2025 vs. 2024) | Metric | April 30, 2025 ($) | April 30, 2024 ($) | | :-------------------------- | :------------- | :------------- | | **Assets:** | | | | Cash and cash equivalents | $289,428 | $863,182 | | Total current assets | $399,612 | $1,042,535 | | Purchased technology, net | $14,697,529 | $14,733,005 | | Equity securities | $5,748,050 | $25,333,386 | | **Total assets** | **$20,901,491**| **$41,557,306**| | **Liabilities:** | | | | Total current liabilities | $5,495,767 | $3,116,698 | | Total liabilities | $5,995,767 | $3,616,698 | | **Stockholders' Equity:** | | | | Retained earnings | $(27,821,762) | $479,563 | | **Total stockholders' equity**| **$14,905,724**| **$37,940,608**| - Total assets decreased by approximately **49.8%** year-over-year, primarily due to a significant reduction in the value of equity securities[341](index=341&type=chunk) - Total liabilities increased by **65.8%** year-over-year, driven by higher accounts payable and short-term promissory notes[341](index=341&type=chunk) - Retained earnings shifted from a positive balance of **$479,563** in April 2024 to a deficit of **$(27,821,762)** in April 2025, reflecting substantial net losses[341](index=341&type=chunk) [Consolidated Statements of Operations](index=68&type=section&id=Consolidated%20Statements%20of%20Operations) Netcapital reported a substantial net loss in fiscal 2025, driven by decreased revenues and massive impairment expense Consolidated Statements of Operations Summary (FY2025 vs. FY2024) | Metric | Year Ended April 30, 2025 ($) | Year Ended April 30, 2024 ($) | | :-------------------------------- | :------------------------ | :------------------------ | | Revenues | $869,460 | $4,951,435 | | Gross profit | $829,116 | $4,843,375 | | Total costs and expenses | $9,150,433 | $8,285,763 | | Operating loss | $(8,321,317) | $(3,442,388) | | Impairment expense | $(19,915,556) | $(1,048,430) | | Unrealized gain (loss) on equity securities | $18,050 | $(2,696,135) | | Net loss | $(28,301,325) | $(4,986,317) | | Basic loss per share | $(20.39) | $(28.83) | | Diluted loss per share | $(20.39) | $(28.83) | | Weighted average common shares outstanding (Basic) (Number) | 1,387,666 | 172,937 | - Revenues decreased by **82.4%** year-over-year, leading to a significant drop in gross profit[343](index=343&type=chunk) - Total costs and expenses increased by **10.4%** in FY2025, contributing to a wider operating loss[343](index=343&type=chunk) - Impairment expense surged from **$(1,048,430)** in FY2024 to **$(19,915,556)** in FY2025, representing a major factor in the increased net loss[343](index=343&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=69&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total stockholders' equity significantly decreased in fiscal 2025 due to net losses, partially offset by capital raises Consolidated Statements of Changes in Stockholders' Equity Summary (April 30, 2025 vs. 2024) | Metric | April 30, 2025 (Number) | April 30, 2024 (Number) | | :-------------------------------- | :------------- | :------------- | | Common Stock Shares Outstanding | 2,192,226 | 326,867 | | Common Stock Amount ($) | $2,192 | $327 | | Capital in Excess of Par Value ($)| $42,525,294 | $37,338,594 | | Retained Earnings ($) | $(27,821,762) | $479,563 | | **Total Stockholders' Equity ($)**| **$14,905,724**| **$37,940,608**| - The net loss of **$(28,301,325)** in FY2025 was the primary driver for the substantial decrease in total stockholders' equity[344](index=344&type=chunk) - Sales of common stock contributed **$1,979,000** and warrant exercises contributed **$2,529,957** to capital in excess of par value in FY2025[344](index=344&type=chunk) - The number of common shares outstanding increased significantly from **326,867** in FY2024 to **2,192,226** in FY2025[344](index=344&type=chunk) [Consolidated Statements of Cash Flows](index=70&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased, while cash provided by financing activities decreased, reducing overall cash Consolidated Statements of Cash Flows Summary (FY2025 vs. FY2024) | Activity | Year Ended April 30, 2025 ($) | Year Ended April 30, 2024 ($) | | :-------------------------------- | :------------------------ | :------------------------ | | Net cash used in operating activities | $(5,339,211) | $(4,879,838) | | Net cash used in investing activities | $0 | $(20,000) | | Net cash provided by financing activities | $4,765,457 | $5,193,579 | | Net increase (decrease) in cash | $(573,754) | $293,741 | | Cash and cash equivalents, end of period | $289,428 | $863,182 | - The primary sources of cash from operating activities in FY2025 included an impairment loss of **$19,915,556** and an increase in accounts payable of **$2,107,454**, offset by a net loss of **$(38,301,317)**[268](index=268&type=chunk) - Financing activities in FY2025 included proceeds from common stock sales (**$1,979,000**), warrant exercises (**$2,529,957**), and short-term notes (**$256,500**)[271](index=271&type=chunk) - There were no investing activities in fiscal 2025, compared to **$20,000** used in fiscal 2024 for a note receivable[270](index=270&type=chunk) [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on business, accounting policies, financial performance, and significant events - Netcapital Inc. is a fintech company providing online capital raising and private equity investment opportunities through its funding portal and broker-dealer subsidiary[348](index=348&type=chunk) - A **1-for-70** reverse stock split became effec

Group 1 - The company, Netcapital Inc., closed a registered direct offering, selling 641,712 shares of common stock at a price of $4.675 per share, generating approximately $3 million in gross proceeds [1][3] - In a concurrent private placement, the company issued unregistered short-term warrants to purchase an additional 641,712 shares at an exercise price of $4.55 per share, potentially adding up to $2.9 million in gross proceeds if fully exercised [1][3] - The net proceeds from the offering will be used for repaying certain outstanding promissory notes and for general working capital purposes [3] Group 2 - H.C. Wainwright & Co. acted as the exclusive placement agent for the offering [2] - The common stock was offered under a "shelf" registration statement declared effective by the SEC on October 26, 2022, and the offering was made only by means of a prospectus [4] - The unregistered short-term warrants were offered in a private placement under Section 4(a)(2) of the Securities Act and have not been registered under the Securities Act or applicable state securities laws [5] Group 3 - Netcapital Inc. is a fintech company that provides a scalable technology platform for private companies to raise capital online and offers private equity investment opportunities to investors [7] - The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies [7] - The company's funding portal and broker-dealer are both registered with the SEC and are members of FINRA [7]

Group 1 - Netcapital Inc. has entered into agreements for the purchase and sale of 641,712 shares of common stock at a price of $4.675 per share in a registered direct offering [1][3] - The offering is expected to generate approximately $3 million in gross proceeds, with an additional potential of $2.9 million from unregistered short-term warrants if fully exercised [3][4] - The company intends to use the net proceeds for the repayment of certain outstanding promissory notes and for general working capital purposes [3] Group 2 - H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering [2] - The common stock is being offered under a "shelf" registration statement that was declared effective by the SEC on October 26, 2022 [4] - The unregistered short-term warrants are being offered in a private placement under Section 4(a)(2) of the Securities Act and have not been registered under the Securities Act or applicable state securities laws [5] Group 3 - Netcapital Inc. is a fintech company that provides a platform for private companies to raise capital online and offers private equity investment opportunities to investors [7] - The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies [7] - The company's funding portal and broker-dealer are both registered with the SEC and are members of FINRA [7]