Netcapital Announces Closing of $4 Million Public Offering

Rhea-AI Summary

Netcapital Inc. (NASDAQ: NCPL, NPCLW) announced the closing of its public offering of 16,000,000 shares of common stock, along with series A-1 and A-2 warrants, at a combined public offering price of $0.25 per share. The gross proceeds were approximately $4 million, with the intention to use the net proceeds for sales and marketing, and general working capital purposes.

Financial Analyst

The completion of Netcapital Inc.'s public offering and the raising of approximately $4 million in gross proceeds is a strategic financial move. This capital infusion is earmarked for sales and marketing, as well as general working capital, which could potentially enhance the company's market reach and operational efficiency. It's essential to consider the dilutive effect of increasing the number of shares and warrants on existing shareholders. However, if Netcapital deploys the capital effectively, the long-term value creation might outweigh the immediate dilution.

Furthermore, the dual issuance of Series A-1 and Series A-2 warrants with different expiration periods introduces a tiered investment horizon. The shorter-term A-2 warrants may appeal to investors seeking a shorter commitment, whereas the A-1 warrants cater to those with a longer-term outlook. The identical exercise price for both warrants, set at the public offering price, simplifies the investment decision but also reflects a significant confidence by the company in maintaining or increasing its stock value.

Market Research Analyst

The digital private capital markets sector is highly competitive and evolving, with an increasing number of platforms facilitating private investments. Netcapital Inc.'s decision to allocate funds for sales and marketing indicates an aggressive strategy to capture market share. This could potentially lead to increased user acquisition and higher transaction volumes on their platform.

By analyzing the competitive landscape, it's clear that the effectiveness of their marketing campaigns and the user experience of their platform will be critical factors in determining their success. The company's ability to leverage these funds to differentiate itself and attract quality investments will be crucial in a market where investors are spoilt for choice.

Legal Expert

The announcement highlights compliance with SEC regulations, as evidenced by the effective registration statement and the availability of a final prospectus. This adherence to legal frameworks not only legitimizes the offering but also provides transparency to investors. The legal stipulation that the warrants are exercisable pending stockholder approval underscores the importance of corporate governance in such financial maneuvers.

Prospective and current investors should note the legal boundaries within which the offering is conducted, including the restrictions on sales in certain jurisdictions. This regulatory compliance is a safeguard that potentially reduces legal risks associated with the offering, which is an important consideration for risk-averse investors.

BOSTON--(BUSINESS WIRE)-- Netcapital Inc. (the “Company”) (NASDAQ: NCPL, NPCLW), a digital private capital markets ecosystem, today announced the closing of its previously announced public offering of 16,000,000 shares of common stock (or pre-funded warrants in lieu thereof), together with series A-1 warrants (“Series A-1 Warrants”) to purchase up to 16,000,000 shares of common stock and series A-2 warrants (“Series A-2 Warrants”) to purchase up to 16,000,000 shares of common stock at a combined public offering price of $0.25 per share (or pre-funded warrant in lieu thereof) and associated warrants. The Series A-1 Warrants have an exercise price of $0.25 per share, are exercisable beginning on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants and will expire five years thereafter. The Series A-2 Warrants have an exercise price of $0.25 per share, are exercisable beginning on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants and will expire eighteen months thereafter.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The gross proceeds to the Company from the offering were approximately $4 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from this offering for sales and marketing, and for general working capital purposes.

A registration statement on Form S-1 (File No. 333-275210) relating to the securities described above has been filed with the Securities and Exchange Commission, or the SEC, and was declared effective by the SEC on December 21, 2023. The offering was made only by means of a prospectus, which is part of the effective registration statement. A final prospectus relating to the offering has been filed with the SEC. Electronic copies of the final prospectus may be obtained for free on the SEC’s website located at http://www.sec.gov and may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Netcapital Inc.

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors. The Company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies. The Company’s funding portal, Netcapital Funding Portal Inc. is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

Forward Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events, including, but not limited to, statements relating to statements regarding the anticipated use of proceeds from the offering, or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231227204957/en/

Investor Contact

800-460-0815

ir@netcapital.com

Source: Netcapital Inc.

FAQ

What did Netcapital Inc. announce?

Netcapital Inc. announced the closing of its public offering of 16,000,000 shares of common stock, along with series A-1 and A-2 warrants.

What was the public offering price?

The public offering price was $0.25 per share.

What were the gross proceeds from the offering?

The gross proceeds were approximately $4 million.

How does Netcapital Inc. intend to use the net proceeds?

The company intends to use the net proceeds for sales and marketing, and for general working capital purposes.