Netcapital (NCPL) Registration Filing summary

Company overview and business model

• Operates a fintech platform enabling private companies to raise capital online from both accredited and non-accredited investors, leveraging Regulation Crowdfunding (Reg CF) and Regulation A (Reg A) under the JOBS Act.

• Generates revenue through listing fees, portal fees, and success fees, with additional income from consulting and broker-dealer activities.

• Platform is SEC-registered, FINRA-member, and has over 100,000 users, offering automated onboarding, compliance, and investor marketing.

• Expanded into broker-dealer services in 2024, enabling Reg A and Reg D offerings and broader distribution through partnerships.

• Exploring secondary trading features for private securities via a partnership with Templum Markets LLC, though development is currently paused.

Financial performance and metrics

• Recognized impairments totaling $19.9 million for the fiscal year ended April 30, 2025, primarily from portfolio company investments.

• Previously profitable, but has suffered losses in recent years; current financial situation raises doubt about ability to continue as a going concern.

• Holds significant assets in illiquid equity securities of early-stage companies, subject to volatility.

Use of proceeds and capital allocation

• Proceeds from securities sales will be used for general corporate purposes, product development, R&D, administrative expenses, technology acquisitions, working capital, and potential investments or acquisitions.

• Management retains broad discretion over allocation of net proceeds.