Netcapital (NASDAQ: NCPL, NPCLW), a capital formation company that operates a Funding Portal, has raised $4 million in a share sale, according to a company statement. Netcapital has sold 16 million shares of common stock along with A-1 warrants to purchase an additional 16 million shares and A-2 warrants to purchase another 16 million shares – at a price of $0.25 each. Net proceeds after expenses are approximately $3.37 million.
The Series A-1 Warrants 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 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.
The company states that it will use the additional money for sales and marketing and for general working capital purposes.
According to the S-1 filed with the SEC, Netcapital Funding Portal charges a $5,000 engagement fee and a 4.9% success fee for firms using their crowdfunding services. For Reg A+ issuers, Netcapital charges a monthly flat fee plus some administrative charges.
Netcapital Advisors generates fees and equity stakes from consulting in select portfolio and non-portfolio clients.
Netcapital reported revenues of $3,561,467, with costs of service of $38,187, in the six months ended October 31, 2023, for a gross profit of $3,523,280 (consisting of $2,626,667 in equity securities for payment of services and $934,000 in cash-based revenues, offset by $38,187 for costs of services) This is compared to revenues of $3,119,546 with costs of service of $57,298 in the six months ended October 31, 2022, for a gross profit of $3,062,248 (consisting of $2,425,000 in equity securities for the payment of services and $694,546 in cash-based revenues, offset by $57,298 for costs of services).
Netcapital reported a net loss of approximately $152,000 as of the six months ending October 31, 2023.
In fiscal 2023 and 2022, the average amount raised in an offering on the Netcapital funding portal was $128,170 and $369,478, respectively.
The total number of offerings on the Netcapital funding portal in fiscal 2023 and 2022 that closed was 63 and 81, respectively, of which 13 and 17 offerings hosted on the Netcapital funding platform in fiscal 2023 and 2022, respectively terminated their listings without raising the required minimum dollar amount of capital.
Netcapital owns a minority equity position in 19 portfolio companies that have utilized the funding portal to facilitate their offerings.
Netcapital is planning a secondary trading venue in partnership with Templum.
As of December 14, 2023, Netcapital reported $104,999 in cash and cash equivalents on hand. Netcapital currently has a market cap of $3 million.