UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
On July 2, 2025, Netcapital Inc., a Utah corporation (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to sell to such investors 714,286 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $7.00 per Share (the “Offering”). The Shares were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-267921), which was declared effective by the Securities and Exchange Commission on October 26, 2022.
Concurrently with the sale of the Shares, pursuant to the Purchase Agreement in a concurrent private placement, for each Share purchased by the investors, such investors received from the Company an unregistered warrant (the “Warrant”) to purchase one share of Common Stock (the “Warrant Shares”). The Warrants have an exercise price of $6.88 per share, and are exercisable immediately upon issuance for a twenty-four month period following the date of effectiveness of the Resale Registration Statement (as defined below).
The closing of the sales of these securities under the Purchase Agreement took place on July 7, 2025.
The gross proceeds from the offering were approximately $5 million, prior to deducting placement agent’s fees and other offering expenses payable by the Company. The Company intends to use approximately $320,000 of the net proceeds from the Offering for the repayment of certain outstanding promissory notes and the remainder for general working capital purposes.
The representations, warranties and covenants contained in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the transaction, and not to provide investors with any other factual information regarding the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.
On November 7, 2024, the Company entered into an engagement agreement with H.C. Wainwright & Co., LLC, as exclusive placement agent (the “Placement Agent”), as amended on each of January 21, 2025, April 2, 2025, April 9, 2025 and July 2, 2025, pursuant to which the Placement Agent agreed to act as placement agent on a reasonable “best efforts” basis in connection with the Offering. The Company agreed to pay the Placement Agent an aggregate cash fee equal to 7.5% of the gross proceeds from the sale of securities in the Offering and a management fee equal to 1.0% of the gross proceeds raised in the Offering. The Company also agreed to issue the Placement Agent (or its designees) a warrant (the “Placement Agent Warrant”) to purchase up to 7.5% of the aggregate number of shares of Common Stock sold in the offering, or warrants to purchase up to 53,571 shares of Common Stock, at an exercise price equal to 125.0% of the offering price per share of Common Stock, or $8.75 per share. In addition, upon the cash exercise of Warrants, the Company also agreed to issue Wainwright (or its designees) additional Placement Agent Warrants to purchase an amount of share of Common Stock equal to 7.5% of the aggregate number of Warrants Shares issued upon cash exercise of the Warrants. The Placement Agent Warrants are (or will be) exercisable immediately upon issuance for a period of five years following the commencement of the sales pursuant to the Offering. In addition, the Company agreed to pay the Placement Agent $25,000 for non-accountable expenses, and $50,000 for legal expenses and other out-of-pocket expenses.
Pursuant to the terms of the Purchase Agreement and subject to certain exceptions as set forth in the Purchase Agreement, from the date of the Purchase Agreement until five (5) trading days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.
The Company has agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale of the Warrant Shares (the “Resale Registration Statement”) within 30 calendar days of the date of the Purchase Agreement (the “Filing Date”), and to use commercially reasonable efforts to cause the Resale Registration Statement to be declared effective by the SEC within 60 calendar days following the date of the Filing Date and to keep the Resale Registration Statement effective at all times until the Holders no longer own any Common Warrants or Common Warrant Shares.
The foregoing descriptions of the Warrant, Placement Agent Warrant and Purchase Agreement are not complete and are qualified in their entirety by reference to the full text of the form of Warrant, form of Placement Agent Warrant, and form of Purchase Agreement, copies of which are filed as Exhibits 4.1, 4.2, and 10.1, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
The legal opinion and consent of Parr Brown Gee & Loveless, P.C. relating to the validity of the securities issued in the Offering is filed herewith as Exhibit 5.1.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure under Item 1.01 above which is hereby incorporated in this Item 3.02 by reference.
The Warrants and the Placement Agent Warrants and the shares issuable upon exercise of the Warrants and Placement Agent Warrants have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and are being offered and sold in reliance on the exemption from registration under the Securities Act, afforded by Section 4(a)(2) and/or Rule 506 promulgated thereunder.
Item 8.01 Other Events.
On July 3, 2025, the Company issued a press release announcing the pricing of the Offering. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
On July 7, 2025, the Company issued a press release announcing the closing of the Offering. A copy of the press release is furnished as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 4.1 | Form of Warrant | |
| 4.2 | Form of Placement Agent Warrant | |
| 5.1 | Opinion of Parr Brown Gee & Loveless, P.C. | |
| 10.1 | Form of Securities Purchase Agreement | |
| 23.1 | Consent of Parr Brown Gee & Loveless (included in Exhibit 5.1) | |
| 99.1 | Press release of Netcapital Inc. dated July 3, 2025 | |
| 99.2 | Press release of Netcapital Inc. dated July 7, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Netcapital Inc. (Registrant) | ||
| By: | /s/ Martin Kay | |
| Name: | Martin Kay | |
| Title: | Chief Executive Officer | |
| Dated July 7, 2025 | ||