Netcapital Inc. Files 8-K on Equity Sales and Security Holder Rights

TL;DR

Netcapital filed an 8-K detailing unregistered equity sales and changes to security holder rights.

AI Summary

On January 9, 2025, Netcapital Inc. entered into a material definitive agreement related to unregistered sales of equity securities. The filing also notes material modifications to the rights of security holders and includes financial statements and exhibits. The company, formerly known as ValueSetters Inc., is incorporated in Utah and headquartered in Boston, MA.

Why It Matters

This filing indicates potential dilution or changes in the rights of existing shareholders due to unregistered equity sales and modifications, which could impact the company's stock value.

Risk Assessment

Risk Level: medium — Unregistered equity sales and modifications to security holder rights can introduce uncertainty and potential dilution, impacting existing shareholder value.

Key Players & Entities

• Netcapital Inc. (company) — Registrant
• January 9, 2025 (date) — Date of earliest event reported
• ValueSetters Inc. (company) — Former company name
• Utah (jurisdiction) — State of incorporation
• Boston, MA (location) — Business address city and state

FAQ

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share NCPL The Nasdaq
• $10.85 — sting Warrants had an exercise price of $10.85 per share. Pursuant to the Inducement
• $1.80 — Warrants at a reduced exercise price of $1.80 per share in partial consideration for
• $487,000 — gregate gross proceeds of approximately $487,000 from the exercise of the Existing Warra
• $4,876 — aid H.C. Wainwright a management fee of $4,876, and (ii) reimbursed H.C. Wainwright fo
• $15,000 — n-accountable expenses in the amount of $15,000. The Company also issued to H.C. Wainwr
• $2.25 — arrants have an exercise price equal to $2.25 per share and expire on July 15, 2030.
• $2.07 — Warrant has an exercise price equal to $2.07 per share. The Placement Agent Warrants

Filing Documents

• form8-k.htm (8-K) — 67KB
• ex4-1.htm (EX-4.1) — 137KB
• ex4-2.htm (EX-4.2) — 137KB
• ex4-3.htm (EX-4.3) — 137KB
• ex10-1.htm (EX-10.1) — 61KB
• ex99-1.htm (EX-99.1) — 12KB
• 0001493152-25-002270.txt ( ) — 876KB
• ncpl-20250109.xsd (EX-101.SCH) — 4KB
• ncpl-20250109_def.xml (EX-101.DEF) — 29KB
• ncpl-20250109_lab.xml (EX-101.LAB) — 36KB
• ncpl-20250109_pre.xml (EX-101.PRE) — 26KB
• form8-k_htm.xml (XML) — 5KB

01

Item 1.01 Entry into a Material Definitive Agreement. On January 9, 2025, Netcapital, Inc. (the " Company ") entered into inducement offer letter agreements (the " Inducement Letters ") with certain investors (the " Participating Holders ") that hold certain outstanding warrants to purchase up to an aggregate of 270,861 shares of the Company's common stock, par value $0.001 per share (the " Common Stock "), originally issued to the Participating Holders in December 2023 and May 2024 (the " Existing Warrants "). The Existing Warrants had an exercise price of $10.85 per share. Pursuant to the Inducement Letters, the Participating Holders agreed to exercise for cash the Existing Warrants at a reduced exercise price of $1.80 per share in partial consideration for the Company's agreement to issue in a private placement (x) new Series A-5 Common Stock purchase warrants (the " New Series A-5 Warrants ") to purchase up to 361,148 shares of Common Stock (the " New Series A-5 Warrant Shares ") and (y) new Series A-6 Common Stock Purchase Warrants (the " New Series A-6 Warrants " and, together with the New Series A-5 Warrants, the " New Warrants ") to purchase up to 180,574 shares of Common Stock (the " New Series A-5 Warrant Shares " and, together with the New Series A-6 Warrant Shares, the " New Warrant Shares "). The New Warrants are exercisable beginning on July 13, 2025 (the " Initial Exercise Date ") with such warrants expiring on (i) the five year anniversary of the Initial Exercise Date for the Series A-5 Warrants and (ii) the eighteen month anniversary of the Initial Exercise Date for the Series A-6 Warrants. The closing of the transactions contemplated pursuant to the Inducement Letters occurred on January 13, 2025 (the " Closing Date "). The Company received aggregate gross proceeds of approximately $487,000 from the exercise of the Existing Warrants by the Holders, before deducting placement agent fees and other expenses payable by the Company. The Company i

02

Item 3.02 Unregistered Sales of Equity Securities The offer and sale of the New Warrants, the Placement Agent Warrants, the New Warrant Shares and the Placement Agent Warrant Shares have not been registered under the Securities Act and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act. The descriptions of the New Warrants and Placement Agent Warrants under Item 1.01 of this Form 8-K is incorporated by reference herein.

03

Item 3.03 Material Modifications of Rights to Security Holders On January 9, 2025, the board of the directors of the Company agreed to reduce the exercise price for the Existing Warrants to $1.80 per share. Item 9.01

Financial Statements and Exhibits

Financial Statements and Exhibits (d) Exhibits. Exhibit No. Description 4.1 Form of New Series A-5 Warrant 4.2 Form of New Series A-6 Warrant 4.3 Form of Placement Agent Warrant 10.1 Form of Inducement Letter 99.1 Press Release dated January 10, 2025. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). -4-

SIGNATURES

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) January 15, 2025 By: /s/ Martin Kay Name: Martin Kay Title: Chief Executive Officer -5-

View Full Filing

View this 8-K filing on SEC EDGAR