Netcapital Inc. (NCPL) tightens note terms, gets extra time on Nasdaq $1 bid rule
Rhea-AI Filing Summary
Netcapital Inc. amended three outstanding convertible notes with Vanquish Funding Group, with original principal of $51,750, $92,800, and $182,120. The notes remain convertible only upon an event of default, but now include a 19.99% cap on issuances absent stockholder approval under Nasdaq Listing Rule 5635(d), a minimum conversion price of $0.10 per share during the first six months, and a non-waivable 4.99% beneficial ownership cap for the holder and its affiliates. Following a default, the conversion price is 65% of the lowest trading price over the prior 20 trading days, subject to these limits.
The company also received a Nasdaq notice granting an additional 180-day period, until February 1, 2027, to regain compliance with the $1.00 Minimum Bid Price Requirement. Compliance can be regained if the closing bid equals or exceeds $1.00 for at least ten consecutive business days, and the company has indicated it may implement a reverse stock split if needed. Failure to regain compliance by that date could result in a delisting determination, which the company could appeal, though any hearing would not automatically stay a trading suspension.
Positive
- Stricter note conversion limits reduce immediate dilution risk, including a 19.99% issuance cap without stockholder approval, a $0.10 floor price for six months, and a non-waivable 4.99% beneficial ownership cap for the noteholder.
Negative
- Ongoing Nasdaq bid-price deficiency with delisting risk: Netcapital has until February 1, 2027 to restore a $1.00 bid; failure could trigger a delisting determination despite a potential reverse stock split plan.
Filing Explained
The filing separately states that shares issuable on conversion of the three amended notes have been and will be offered and sold under private-offering exemptions rather than registration, so resale in the United States requires registration or another exemption.
8-K Event Classification
Key Figures
Key Terms
Minimum Bid Price Requirement market
reverse stock split financial
convertible promissory note financial
beneficially own financial
Regulation D regulatory
Nasdaq Listing Rule 5635(d) regulatory
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FAQ
What note amendments did Netcapital Inc. (NCPL) enter into on August 6, 2026?
How is the conversion price on Netcapital’s (NCPL) notes now determined after default?
What Nasdaq compliance extension did Netcapital Inc. (NCPL) receive?
How can Netcapital Inc. (NCPL) regain Nasdaq minimum bid-price compliance?
What happens if Netcapital Inc. (NCPL) does not meet the bid-price requirement by February 1, 2027?
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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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Item 1.01 Entry into a Material Definitive Agreement.
On August 6, 2026, Netcapital Inc. (the “Company”) entered into three separate amendments (each, an “Amendment” and, collectively, the “Amendments”) with Vanquish Funding Group Inc. (the “Holder”), amending each of the following convertible notes previously issued by the Company to the Holder pursuant to separate securities purchase agreements between the Company and the Holder: (i) the convertible promissory note in the original principal amount of $51,750 issued on April 24, 2026 (the “April Convertible Note”); (ii) the convertible bridge note in the original principal amount of $92,800 issued on April 24, 2026 (the “April Convertible Bridge Note”); and (iii) the convertible promissory note in the original principal amount of $182,120 issued on June 4, 2026 (the “June Convertible Note” and, together with the April Convertible Note and the April Convertible Bridge Note, the “Notes”). Each Note is convertible into shares of the Company’s common stock only following the occurrence of an event of default under such Note.
Each Amendment amends and restates the conversion provisions of the applicable Note to provide, among other things, that: (i) unless and until the Company obtains stockholder approval in accordance with the applicable rules and regulations of The Nasdaq Stock Market LLC, the Company shall not issue shares of common stock under such Note that, when aggregated with all other securities required to be aggregated for purposes of Nasdaq Listing Rule 5635(d), would exceed 19.99% of the shares of common stock outstanding as of the date of the definitive agreement with respect to the first of such aggregated transactions; (ii) the conversion price for any conversions during the initial six months of the term of such Note may not be less than $0.10 per share; and (iii) the Holder may not convert any portion of such Note to the extent that, after giving effect to such conversion, the Holder, together with its affiliates, would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock, which limitation may not be waived by the Holder. Following the occurrence of an event of default, each Note, as amended, is convertible at a conversion price equal to 65% of the lowest trading price of the Company’s common stock during the twenty trading day period ending on the latest complete trading day prior to the applicable conversion date, subject to the floor price and the limitations described above.
The foregoing description of the Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendments, copies of which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and are incorporated herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On August 7, 2026, the Company received a letter (the “Letter”) from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, although the Company has not regained compliance with the minimum $1.00 per share closing bid price requirement for continued listing on The Nasdaq Capital Market set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), the Staff has determined that the Company is eligible for an additional 180 calendar day compliance period, or until February 1, 2027, to regain compliance with the Minimum Bid Price Requirement, in accordance with Nasdaq Listing Rule 5810(c)(3)(A).
As previously disclosed, on February 4, 2026, the Company received a letter from the Staff notifying the Company that, based upon the closing bid price of the Company’s common stock for the previous 30 consecutive business days, the Company no longer satisfied the Minimum Bid Price Requirement, and the Company was provided an initial compliance period of 180 calendar days, or until August 3, 2026, to regain compliance. The Company did not regain compliance with the Minimum Bid Price Requirement during the initial compliance period.
The Staff’s determination to grant the additional 180-day compliance period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
If at any time during the additional compliance period the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of ten consecutive business days, the Staff will provide the Company with written confirmation of compliance and the matter will be closed. The Staff may, however, in its discretion, require the Company to maintain a closing bid price of at least $1.00 per share for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to February 1, 2027 in order to timely regain compliance.
If the Company does not regain compliance with the Minimum Bid Price Requirement by February 1, 2027, the Staff will provide written notification to the Company that its securities will be subject to delisting. At that time, the Company may appeal the Staff’s delisting determination to a Nasdaq Hearings Panel (the “Panel”). If the Company appeals, it will be asked to provide the Panel with a plan to regain compliance, and a timely request for a hearing would not stay the suspension of the Company’s securities from trading. The second compliance period relates exclusively to the bid price deficiency, and the Company may be delisted during the second compliance period for failure to maintain compliance with any other listing requirement for which it is currently on notice or which occurs during such period.
The Letter has no immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “NCPL,” subject to the Company’s compliance with the other applicable continued listing requirements. An indicator will continue to be broadcast over Nasdaq’s market data dissemination network noting the Company’s non-compliance, and the Company will continue to be included on the list of non-compliant Nasdaq companies posted on the Nasdaq Listing Center. There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement during the additional compliance period, or that the Company will otherwise maintain compliance with the other Nasdaq continued listing requirements.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02 to the extent required. Any shares of common stock issuable upon conversion of the Notes, as amended, have been and will be offered and sold in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder, in transactions not involving a public offering and without general solicitation. Such securities have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Item 7.01 Regulation FD Disclosure.
On August 10, 2026, the Company issued a press release announcing its receipt of the Letter. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
The information contained in this Item 7.01, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the Company’s intention and ability to regain compliance with the Minimum Bid Price Requirement; the potential implementation, timing, approval, and effectiveness of a reverse stock split; and the Company’s ability to maintain compliance with other applicable Nasdaq continued listing requirements. These forward-looking statements are based on the Company’s current expectations, estimates, and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, among others, market conditions and volatility in the trading price of the Company’s common stock; the Company’s ability to obtain any required corporate or stockholder approvals; the timing and outcome of Nasdaq determinations; the terms, potential conversion, and dilutive effect of the Company’s outstanding convertible notes, as amended; and the other risks described in the Company’s filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Amendment No. 1 to Bridge Note, dated August 6, 2026, by and between Netcapital Inc. and Vanquish Funding Group Inc. (amending the Convertible Bridge Note dated April 24, 2026) | |
| 10.2 | Amendment No. 1 to Promissory Note, dated August 6, 2026, by and between Netcapital Inc. and Vanquish Funding Group Inc. (amending the Convertible Promissory Note dated April 24, 2026) | |
| 10.3 | Amendment No. 1 to Promissory Note, dated August 6, 2026, by and between Netcapital Inc. and Vanquish Funding Group Inc. (amending the Convertible Promissory Note dated June 4, 2026) | |
| 99.1 | Press release issued by Netcapital Inc., dated August 10, 2026 | |
| 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/ Todd Violette | |
| Name: | Todd Violette | |
| Title: | Chief Executive Officer | |
| Dated August 10, 2026 | ||
Exhibit 99.1
Netcapital Inc. Granted Additional 180-Day Nasdaq Compliance Period for Minimum Bid Price Requirement
BOSTON, MA, August 10, 2026 – Netcapital Inc. (Nasdaq: NCPL) (the “Company”) Today announced that it has received written notification from the Nasdaq Listing Qualifications Staff (“Nasdaq Staff”) granting the Company an additional 180 calendar days, until February 1, 2027, to regain compliance with Nasdaq’s minimum $1.00 bid price requirement under Nasdaq Listing Rule 5550(a)(2). The notification has no immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol ‘NCPL.’
As previously disclosed, on February 4, 2026, the Company received notice from Nasdaq Staff that its common stock no longer complied with the minimum bid price requirement because the closing bid price of the Company’s common stock had been below $1.00 per share for the preceding 30 consecutive business days. The Company was initially provided 180 calendar days, through August 3, 2026, to regain compliance. The Company did not regain compliance during that initial period.
Nasdaq Staff granted the additional compliance period because the Company meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, other than the minimum bid price requirement, and because the Company has provided written notice of its intention to cure the bid-price deficiency during the additional compliance period, including through a reverse stock split if necessary.
The Company may regain compliance if the closing bid price of its common stock is at least $1.00 per share for at least 10 consecutive business days during the additional compliance period. Nasdaq Staff may, in its discretion, require the Company to maintain a closing bid price of at least $1.00 per share for a longer period, generally not exceeding 20 consecutive business days, before determining that the Company has demonstrated sustained compliance.
If the Company does not regain compliance by February 1, 2027, Nasdaq Staff is expected to issue a delisting determination. The Company has the right to request a hearing before a Nasdaq Hearings Panel. Under Nasdaq Listing Rule 5815(a)(1)(B), because the Company has been afforded a second 180-day compliance period, a timely request for a hearing would not stay the suspension of the Company’s securities from trading pending the Hearings Panel’s decision. There can be no assurance that any hearing request would be successful or that the Company would receive additional time to regain compliance.
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 and Exchange Commission and is a member of the Financial Industry Regulatory Authority. The Company’s broker-dealer, Netcapital Securities Inc., is also registered with the SEC and is a member of FINRA.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the Company’s ability and intention to regain compliance with Nasdaq’s minimum bid-price requirement; the potential use, timing, approval, implementation, and effectiveness of a reverse stock split; the anticipated timing of the filing of the Company’s Annual Report on Form 10-K; the Company’s ability to satisfy Nasdaq continued listing standards; the potential outcome of any Nasdaq process or hearing; and the Company’s ability to address operational, regulatory, reporting, and listing-related matters.
These forward-looking statements are based on the Company’s current expectations, estimates, assumptions, and projections and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, among others, the Company’s ability to maintain a closing bid price of at least $1.00 per share for the period required by Nasdaq; market conditions and volatility in the trading price of the Company’s common stock; the Company’s ability to obtain any required corporate or stockholder approvals; the timing and effectiveness of any reverse stock split; the Company’s ability to complete required financial reporting and audit procedures; the timing and outcome of Nasdaq determinations; the Company’s ability to meet other Nasdaq continued listing requirements; its ability to raise capital; and general economic, market, regulatory, and business conditions.
Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update or revise any forward-looking statements except as required by applicable law.
Investor Contact
800-460-0815
ir@netcapital.com