Netcapital Sells Shares, Raises $1.7 Million

Netcapital (Nasdaq: NCPL, NCPLW) announced earlier this week that it had entered into agreements with institutional investors for the purchase and sale of 1,100,000 shares of its common stock at a purchase price of $1.55 per share. The offering closed yesterday, May 25, 2023, raising gross proceeds of approximately $1.7 million before deducting the placement agent’s fees and other offering expenses payable by the Company.

ThinkEquity is acting as the exclusive placement agent for the offering.

Netcapital said it intends to use the proceeds to repay approximately $365,000 of outstanding indebtedness, including accrued interest, and the remainder for working capital and other general corporate purposes.

The announcement hit the share price as Netcapital was trading at around $2.40/share. Today, Netcapital closed at $1.40 a share. The microcap is currently valued at $9.017 million.

Netcapital is a firm that helps private companies to raise capital online while also operating a consulting group Netcapital Advisors, which provides marketing and strategic advice and takes equity positions in target firms.

Netcapital operates a FINRA-regulated Funding Portal, issuing securities under Reg CF.

According to the prospectus filed with the SEC:

“[Netcapital] generated revenues of $ 5,379,960, with costs of service of $61,603, in the nine months ended January 31, 2023 for a gross profit of $5,318,357 in the nine months ended January 31, 2023 as compared to revenues of $3,636,050 with costs of service of $85,429 in the nine months ended January 31, 2022 for a gross profit of $3,550,621 in the nine months ended January 31, 2022.”

Netcapital states it believes that it is the lowest-cost solution for an issuer raising capital online in comparison to its competitors. The platform reports over 100,000 users. Approximately 30 Form-Cs have been filed for issuers using Netcapital in 2023.

 


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