UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 31, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-41443

NETCAPITAL INC.

(Exact name of registrant as specified in its charter)

Utah

87-0409951

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

1 Lincoln Street

Boston MA 02111

(Address of principal executive offices)

(781) 925-1700

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $0.001 per share	NCPL	The Nasdaq Stock Market LLC
Warrants to Purchase Common Stock	NCPLW	The Nasdaq Stock Market LLC

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 22, 2025 the registrant had 4,917,889 shares of its common stock, par value $0.001 per share, issued and outstanding.

TABLE OF CONTENTS

	Page
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.	5

Condensed Consolidated Balance Sheets as of July 31, 2025 (unaudited) and April 30, 2025	5

Condensed Consolidated Statements of Operations for the three months ended July 31, 2025 and 2024 (unaudited)	6

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended July 31, 2025 and 2024 (unaudited)	7

Condensed Consolidated Statements of Cash Flows for the three months ended July 31, 2025 and 2024 (unaudited)	8

Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22

Item 3. Quantitative and Qualitative disclosures about Market Risk.	29

Item 4. Controls and Procedures.	30

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.	31

Item1A. Risk Factors.	31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	33

Item 3. Defaults Upon Senior Securities.	33

Item 4. Mine Safety Disclosures.	33

Item 5. Other Information.	33

Item 6. Exhibits.	34

Signatures.	35

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

●	capital requirements and the availability of capital to fund our growth and to service our existing debt;

●	difficulties executing our growth strategy, including attracting new issuers and investors;

●	our anticipated use of the net proceeds from our recent public offering;

●	all the risks of acquiring one or more complementary businesses, including identifying a suitable target, completing comprehensive due diligence uncovering all information relating to the target, the financial stability of the target, the impact on our financial condition of the debt we may incur in acquiring the target, the ability to integrate the target’s operations with our existing operations, our ability to retain management and key employees of the target, among other factors attendant to acquisitions of small, non-public operating companies;

●	difficulties in increasing revenue per issuer;

●	challenges related to hiring and training fintech employees at competitive wage rates;

●	difficulties in increasing the average number of investments made per investor;

●	shortages or interruptions in the supply of quality issuers;

●	our dependence on a small number of large issuers to generate revenue;

●	negative publicity relating to any one of our issuers;

●	competition from other online capital portals with significantly greater resources than we have;

●	changes in investor tastes and purchasing trends;

●	our inability to manage our growth;

●	our inability to maintain an adequate level of cash flow, or access to capital, to meet growth expectations;

●	changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel;

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●	labor shortages, unionization activities, labor disputes or increased labor costs, including increased labor costs resulting from the demand for qualified employees;

●	our vulnerability to increased costs of running an online portal with any cloud partner;

●	our vulnerability to increasing labor costs;

●	the impact of governmental laws and regulation;

●	failure to obtain or maintain required licenses;

●	changes in economic or regulatory conditions and other unforeseen conditions that prevent or delay the development of a secondary trading market for shares of equity that are sold on our online portal; and

●	inadequately protecting our intellectual property or breaches of security of confidential user information.

You are cautioned that all forward-looking statements involve risks and uncertainties. We undertake no obligation to amend this Form 10-Q or our annual report on Form 10-K or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to applicable federal securities laws) to reflect subsequent events or circumstances.

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data, industry statistics, and forecasts derived from internal company surveys, independent market research, publicly available information, governmental reports, and third-party industry publications. While we believe these sources to be reliable, we have not independently verified the accuracy or completeness of such data, and we cannot guarantee their accuracy. Any estimates or forecasts involve assumptions and are subject to risks and uncertainties.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NETCAPITAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	July 31, 2025 (Unaudited)			April 30, 2025 (Audited)
Assets:
Cash and cash equivalents	$	4,562,491		$	289,428
Accounts receivable, net		20,000			78,649
Prepaid expenses		409,661			31,535
Total current assets		4,992,152			399,612

Deposits		6,300			6,300
Notes receivable - related parties		50,000			50,000
Intangible assets		17,528,660			14,697,529
Equity securities		5,855,190			5,748,050
Total assets	$	28,432,302		$	20,901,491

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,934,537		$	2,941,108
Accrued expenses		235,448			269,971
Short-term promissory notes		600,000			263,437
Deferred revenue		315			330
Interest payable		114,962			100,797
Current portion of SBA loans		1,885,800			1,885,800
Loan payable - bank		34,324			34,324
Total current liabilities		4,805,386			5,495,767

Long-term liabilities:
Long-term SBA loans, less current portion		500,000			500,000
Total liabilities		5,305,386			5,995,767

Commitments and contingencies		-			-

Stockholders’ equity:
Common stock, $.001 par value; 900,000,000 shares authorized, 4,720,066 and 2,192,226 shares issued and outstanding		4,720			2,192
Shares to be issued		-			200,000
Capital in excess of par value		54,586,010			42,525,294
Retained earnings (deficit)		(31,463,814	)		(27,821,762	)
Total stockholders’ equity		23,126,916			14,905,724
Total liabilities and stockholders’ equity	$	28,432,302		$	20,901,491

See Accompanying Notes to the Condensed Consolidated Financial Statements

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NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended			Three Months Ended
	July 31, 2025			July 31, 2024

Revenues	$	190,058		$	142,227
Costs of services		7,409			10,220
Gross profit		182,649			132,007

Costs and expenses:
Consulting expense		72,051			97,381
Marketing		11,438			6,898
Rent		22,852			19,116
Payroll and payroll related expenses		1,793,450			1,136,593
General and administrative costs		1,568,506			1,380,256
Total costs and expenses		3,468,297			2,640,244
Operating loss		(3,285,648	)		(2,508,237	)

Other income (expense):
Interest expense		(36,067	)		(10,464	)
Interest income		-			400
Amortization of intangible assets		(8,869	)		(8,869	)
Unrealized gain (loss) on equity securities		44,945			-
Accretion on short-term notes		(356,413	)		-
Total other income (expense)		(356,404	)		(18,933	)
Net loss before taxes		(3,642,052	)		(2,527,170	)
Income tax expense		-			-
Net loss	$	(3,642,052	)	$	(2,527,170	)

Basic loss per share	$	(1.27	)	$	(5.10	)
Diluted loss per share	$	(1.27	)	$	(5.10	)

Weighted average number of common shares outstanding:
Basic		2,873,379			495,319
Diluted		2,873,379			495,319

See Accompanying Notes to the Condensed Consolidated Financial Statements

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NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three Months Ended July 31, 2025 and 2024 (Unaudited)

								Capital in			Retained
	Common Stock				Shares to			Excess of			Earnings				Total
	Shares		Amount		Be Issued			Par Value			(Deficit)				Equity
Balance April 30, 2024		326,867	$	327	$	122,124		$	37,338,594		$	479,563		$	37,940,608
Vesting of stock options		-		-		-			139,371			-			139,371
Round up of fractional shares		-		-		140			(140	)		-			-
Warrant exercise		252,286		252		-			1,955,392			-			1,955,644
Net loss quarter ended July 31, 2024		-		-		-			-			(2,527,170	)		(2,527,170	)
Balance July 31, 2024		579,153	$	579	$	122,264		$	39,433,217		$	(2,047,607	)	$	37,508,453

Balance April 30, 2025		2,192,226	$	2,192	$	200,000		$	42,525,294		$	(27,821,762	)	$	14,905,724
Balance		2,192,226		2,192		200,000			42,525,294			(27,821,762	)		14,905,724
Sale of common stock		1,704,152		1,704		-			8,505,467			-			8,507,171
Reduction in shares to be issued		54,421		55		(200,000	)		199,945			-			-
Vesting of stock options		-		-		-			516,073			-			516,073
Purchase of software license		500,000		500		-			2,839,500			-			2,840,000
Warrant Exercise		269,267		269		-			(269	)		-			-
Net loss quarter ended July 31, 2025		-		-		-			-			(3,642,052	)		(3,642,052	)
Net loss		-		-		-			-			(3,642,052	)		(3,642,052	)
Balance July 31, 2025		4,720,066	$	4,720	$	-		$	54,586,010		$	(31,463,814	)	$	23,126,916
Balance		4,720,066	$	4,720	$	-		$	54,586,010		$	(31,463,814	)	$	23,126,916

See Accompanying Notes to the Condensed Consolidated Financial Statements

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NETCAPITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended			Three Months Ended
	July 31, 2025			July 31, 2024
OPERATING ACTIVITIES
Net loss	$	(3,642,052	)	$	(2,527,170	)
Adjustment to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		516,073			139,371
Receipt of equity in lieu of cash		(62,195	)		(10,127	)
Unrealized gain on equity securities		(44,945	)		-
Accretion of short-term notes		356,413			-
Amortization of intangible assets		8,869			8,869
Changes in non-cash working capital balances:
Accounts receivable		58,649			134,849
Prepaid expenses		(378,126	)		(24,856	)
Other receivables		-			(400	)
Accounts payable and accrued expenses		(1,041,094	)		313,620
Deferred revenue		(15	)		(21	)
Accrued interest payable		14,165			2,220
Net cash used in operating activities		(4,214,258	)		(1,963,645	)

FINANCING ACTIVITIES
Payment of short-term notes		(319,850	)		-
Proceeds from short-term notes		300,000			-
Proceeds from exercise of warrants		-			1,955,644
Proceeds from sale of common stock		8,507,171			-
Net cash provided by financing activities		8,487,321			1,955,644

Net increase (decrease) in cash		4,273,063			(8,001	)
Cash and cash equivalents, beginning of the period		289,428			863,182
Cash and cash equivalents, end of the period	$	4,562,491		$	855,181

Supplemental disclosure of cash flow information:
Cash paid for taxes	$	-		$	-
Cash paid for interest	$	8,157		$	8,244

Supplemental Non-Cash Financing Information:
Common stock issued for perpetual Horizon software license	$	2,840,000		$	-

See Accompanying Notes to the Condensed Consolidated Financial Statements

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NETCAPITAL INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1– Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements of Netcapital Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended July 31, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ended April 30, 2026. For further information, refer to the audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended April 30, 2025.

Reverse Stock Split

On July 29, 2024, following shareholder approval we filed articles of amendment (the “Articles of Amendment”) to our Articles of Incorporation, as amended, with the Utah Department of Commerce, Division of Corporations and Commercial Code to effectuate a 1-for-70 reverse stock split (the “Reverse Stock Split”) of our issued and outstanding shares of common stock, which Articles of Amendment became effective on August 1, 2024. The Reverse Stock Split became effective at 4:01 pm Eastern Time on August 1, 2024, and our common stock began trading on a split-adjusted basis at the open of trading on The Nasdaq Capital Market on August 2, 2024. Upon effectiveness of the Reverse Stock Split, every seventy (70) shares of our common stock issued and outstanding were automatically reclassified and combined into one share of our common stock, without any change in the par value per share. Additionally, equitable adjustments corresponding to the Reverse Stock Split ratio were made to (i) the exercise prices of and number of shares of common stock underlying the Company’s public and private warrants in accordance with their terms, (ii) the number of shares of common stock underlying the Company’s outstanding equity awards in accordance with their terms, and (iii) the number of shares of common stock issuable under the Company’s equity incentive plan. No fractional shares were issued in connection with the Reverse Stock Split. Any stockholder who would otherwise be entitled to receive a fractional share instead became entitled to receive one whole share of Common Stock in lieu of such fractional share. Following the Reverse Stock Split, we had 718,934 shares of our common stock outstanding, which includes 139,781 shares of our common stock that were issued for rounding up fractional shares resulting from the Reverse Stock Split. All share and per share data in the accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after the elimination of significant intercompany balances and transactions. The wholly owned subsidiaries are Netcapital Funding Portal Inc., an equity-based funding portal registered with the SEC, Netcapital Advisors Inc., which provides marketing and strategic advice to select companies, MSG Development Corp, a business valuation company, which was acquired in November 2021, and Netcapital Securities Inc., which was organized in 2024 and was approved by FINRA to operate as a broker dealer.

Use of Estimates

Preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, accounts receivable, valuation of equity securities, income taxes, and valuation of long-lived assets including intellectual property and purchased technology. These estimates are based on management’s knowledge of current events, interpretation of regulations, and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.

Significant Accounting Policies

There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

Recent Accounting Pronouncements

In March 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses. This ASU requires public companies to provide additional disclosures on the nature and amount of certain expense line items, such as employee compensation, depreciation, and other costs, to improve transparency of operating results. The standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of the standard on its future financial statement disclosures.

In January 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. This ASU includes illustrative examples to clarify when profits interest awards or similar arrangements should be accounted for under ASC 718. The standard is effective for public companies for fiscal years beginning after December 15, 2024. The Company is evaluating the applicability of this guidance to any future equity-based compensation arrangements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires expanded disclosures about a public entity’s reportable segments. The Company adopted ASU 2023-07 for its fiscal 2024 year. The adoption did not have a material impact on the Company’s consolidated financial statements.

The Company operates in a single operating segment, which is the provision of fintech services. This determination is based on the following factors:

	1.	Centralized Decision-Making: The Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), makes strategic and resource allocation decisions across all subsidiaries and entities within the Company. This centralized approach ensures that the operations are managed as a single, cohesive unit.

	2.	Integrated Operational Ecosystem: The Company’s subsidiaries and entities operate within a unified fintech ecosystem, sharing resources, technology, and objectives. This integration reflects a singular operational framework focused on delivering cohesive fintech solutions.

	3.	Uniform Review Process: The performance of all entities and subsidiaries is reviewed as a whole by the CODM. This holistic review process supports the identification of the Company as a single operating segment rather than discrete financial segments.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

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Note 2 – Concentrations

For the three months ended July 31, 2025, the Company had one customer that constituted 73% of revenues. For the three months ended July 31, 2024, the Company had one customer that constituted 15% of revenues.

Note 3 – Revenue Recognition

Revenue Recognition under ASC 606

The Company recognizes service revenue from its consulting contracts, funding portal and game website using the five-step model as prescribed by ASC 606:

●	Identification of the contract, or contracts, with a customer.

●	Identification of the performance obligations in the contract.

●	Determination of the transaction price.

●	Allocation of the transaction price to the performance obligations in the contract; and

●	Recognition of revenue when or as the Company satisfies a performance obligation.

The Company identifies performance obligations in contracts with customers, which primarily are professional services, listing fees on our funding portal, and a portal fee of 4.9% of the money raised on the funding portal. The transaction price is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised services to the customer. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. The Company usually bills its customers before it provides any services and begins performing services after the first payment is received. Contracts are typically one year or less. For larger contracts, in addition to the initial payment, the Company may allow for progress payments throughout the term of the contract.

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Judgments and Estimates

The estimation of variable consideration for each performance obligation requires the Company to make subjective judgments. The Company enters into contracts with customers that may include promises to transfer multiple services, such as digital marketing, web-based videos, offering statements, and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources, and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract.

When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance obligation. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised service separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis.

Service Revenue

Service revenue from subscriptions to the Company’s game website is recognized over time on a ratable basis over the contractual subscription term beginning on the date that the platform is made available to the customer. Payments received in advance of subscription services being rendered are recorded as a deferred revenue. Professional services revenue is recognized over time as the services are rendered.

When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current and historical customer trends, and communications with its customers. These reserves are recorded as operating expenses against the contract assets.

Contract Assets

Contract assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized when the customer receives services. Contract assets are included in other current assets in the consolidated balance sheets and will be recognized during the succeeding twelve-month period.

Deferred Revenue

Deferred revenues represent billings or payments received in advance of revenue recognition and are recognized upon transfer of control. Balances consist primarily of annual plan subscription services and professional services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred revenues in the consolidated balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance sheets.

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Costs to Obtain a Customer Contract

Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized as other current or non-current assets and amortized on a straight-line basis over the life of the contract, which approximates the benefit period. The benefit period was estimated by taking into consideration the length of customer contracts, technology lifecycle, and other factors. All sales commissions are recorded as consulting fees within the Company’s consolidated statement of operations.

Remaining Performance Obligations

The Company’s subscription terms are typically less than one year. All of the Company’s revenues in the three months ended July 31, 2025 and 2024, which amounted to $190,058 and $142,227, respectively, are considered contract revenues. Contract revenue as of July 31, 2025 and April 30, 2025, which has not yet been recognized, amounted to $315 and $330, respectively, and is recorded on the balance sheet as deferred revenue. The Company expects to recognize revenue on all of its remaining performance obligations over the next 12 months.

Disaggregation of Revenue

Revenue is from U.S.-based companies with no notable geographical concentrations in any area. Revenues are disaggregated by revenue source as follows:

Revenues disaggregated by revenue source consist of the following:

Schedule of Disaggregation of Revenue

	Three Months Ended July 31, 2025		Three Months Ended July 31, 2024
Portal fees	$	122,728	$	89,429
Listing fees		5,000		42,500
Portal 1% equity fee		62,195		10,127
Game website revenue		135		171
Total revenues	$	190,058	$	142,227

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Note 4 – Earnings Per Common Share

Net income per common and diluted share were calculated as follows for the three-month periods ended July 31, 2025 and 2024:

Schedule of Earnings Per Share

	Three Months Ended July 31, 2025			Three Months Ended July 31, 2024
Net loss attributable to common stockholders – basic	$	(3,642,052	)	$	(2,527,170	)
Adjustments to net income		—			—
Net loss attributable to common stockholders – diluted	$	(3,642,052	)	$	(2,527,170	)

Weighted average common shares outstanding - basic		2,873,379			495,319
Effect of dilutive securities		—			—
Weighted average common shares outstanding – diluted		2,873,379			495,319

Loss per common share - basic	$	(1.27	)	$	(5.10	)
Loss per common share - diluted	$	(1.27	)	$	(5.10	)

Outstanding vested warrants to purchase 2,158,607 and 885,727 shares of common stock are not included in the calculation of earnings per share for the three months ended July 31, 2025 and 2024, respectively, because their effect is anti-dilutive.

Outstanding vested options to purchase 128,719 and 12,787 shares of common stock are not included in the calculation of earnings per share for the three months ended July 31, 2025 and 2024, respectively, because their effect is anti-dilutive.

-13-

Note 5 – Principal Financing Arrangements

The following table summarizes components debt as of July 31, 2025 and April 30, 2025:

Schedule of Debt

	July 31, 2025		April 30, 2025		Interest Rate

Convertible promissory notes	$	—	$	161,787		12.0	%
Notes payable		600,000		101,650		8.0	%
U.S. SBA loan		500,000		500,000		3.75	%
U.S. SBA loan		1,885,800		1,885,800		1.0	%
Loan payable – bank		34,324		34,324		9.75	%
Total Debt		3,020,124		2,683,561
Less: current portion of long-term debt		2,520,124		2,183,561
Total long-term debt	$	500,000	$	500,000

The Company owes $34,324 as of July 31, 2025 and April 30, 2025 to Chase Bank. For the loan from Chase Bank, the Company pays interest only on a monthly basis, which represents a rate of 9.75% per annum as of July 31, 2025.

On June 17, 2020 the Company borrowed $500,000 (the “June Loan”), and on February 2, 2021, the Company borrowed $1,885,800 (the “February Loan”) from a U.S. Small Business Administration (“SBA”) loan program.

The June Loan required installment payments of $2,437 monthly, beginning on June 17, 2021, over a term of thirty years. However, the SBA postponed the first installment payment for 18 months, and the first payment became due on December 17, 2022. The monthly payments of $2,437 are first applied to accrued interest payable. The monthly payments will not be applied to any of the outstanding principal balance until August 17, 2026. Consequently, the entire loan balance of $500,000 is classified as a long term liability. Interest accrues at a rate of 3.75% per annum. The Company agreed to grant a continuing security interest in its assets to secure payment and performance of all debts, liabilities, and obligations to the SBA. The June Loan was personally guaranteed by the Company’s Chief Financial Officer. Accrued interest payable for the June 2020 Loan as of July 31, 2025 and April 30, 2025 amounted to $17,924 and $20,611, respectively.

The February Loan bears interest at a rate of 1% per annum and the due date of the first payment has been postponed by the SBA because the Company has applied for forgiveness of the February Loan. Accrued interest payable for the February 2021 Loan as of July 31, 2025 and April 30, 2025 amounted to $84,939 and $80,186, respectively.

On March 26, 2025, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC (the “Lender”), pursuant to which the Company issued a promissory note in the principal amount of $181,540 (the “Note”). The Note was issued with an original issue discount (“OID”) of $25,040, and the Company received net proceeds of $150,000 after deducting legal and due diligence fees.

As of April 30, 2025, the unamortized original issue discount was $19,753, and the Note was recorded on the balance sheet at its net carrying amount of $161,787.

The Note included a one-time interest charge of 12% and was scheduled to mature on January 30, 2026. The Note required repayment in five monthly installments beginning on September 30, 2025, for a total contractual repayment amount of $203,324. Under the terms of the Note, the Company had the option to prepay the outstanding balance. On July 8, 2025, the Company exercised this option and paid the Note in full with a remittance of $197,225.

On April 29, 2025, the Company entered into a private financing transaction with a single accredited investor and issued an unsecured, non-convertible promissory note in the principal amount of $200,000. The note was issued at a 50% OID for gross proceeds of $100,000. The note bears interest at 8% per annum, matures on July 31, 2025, and is prepayable at any time without penalty. In the event of default, the interest rate increases to 20% per annum. As of July 31, 2025, the note was recorded at its face value of $200,000 and was in default. As of April 30, 2025, the unamortized OID was $98,350, and the note was recorded on the balance sheet at a net carrying amount of $101,650. Accrued interest payable amounted to $4,033 as of July 31, 2025.

In May 2025, the Company completed the sale of debt pursuant to two separate securities purchase agreements with 1800 Diagonal Lending LLC, a Virginia limited liability company, under which it issued the following convertible promissory notes:

	●	A convertible promissory note in the principal amount of $61,360, for a purchase price of $52,000, reflecting an original issue discount of $9,360. The note carried a one-time interest charge of 12% and is repayable in ten (10) monthly payments of $6,872.30 beginning May 30, 2025. The Company prepaid the note in full on July 8, 2025, with a remittance of $52,779 after having made two of the 10 scheduled monthly payments.
	●	A second convertible bridge note in the principal amount of $64,960, for a purchase price of $56,000, with an original issue discount of $8,960. The note also carried a 12% one-time interest charge and is repayable in five (5) monthly payments beginning October 30, 2025. It shares the same maturity date and default-based conversion rights as the first note. The Company prepaid the note in full on July 8, 2025, with a remittance of $69,845.

On May 1, 2025, the Company completed a private financing transaction with a single accredited investor and issued an unsecured, non-convertible promissory note in the principal amount of $400,000. The note was issued at a 50% OID for gross proceeds of $200,000. The note bears interest at 8% per annum, matures three months from the issuance date, or August 1, 2025, and is prepayable at any time without penalty. In the event of default, the interest rate increases to 20% per annum. It is recorded as a note payable of $400,000 as of July 31, 2025. Accrued interest payable amounted to $8,066 as of July 31, 2025.

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Note 6 – Income Taxes

For the three months ended July 31, 2025, the Company recorded no income tax expense due to the operating loss in the three months ended July 31, 2025. For the three months ended July 31, 2024, the Company recorded no income tax expense due to the operating loss in the three months ended July 31, 2024.

Note 7 – Related Party Transactions

Netcapital Systems LLC (“Systems”), of which Jason Frishman, Founder, owns a 29% interest, owns 24,447 shares of common stock, or less than 1% of the Company’s 4,720,066 outstanding shares as of July 31, 2025. The Company owns 528 membership interest units of Systems, or approximately 1%. The Company paid Systems $285,000 and $95,000 in the three-month periods ended July 31, 2025 and 2024, respectively, for use of the software that runs the website www.netcapital.com. The Company owed Systems $95,000 and $285,000 as of July 31, 2025 and April 30, 2025, respectively.

Cecilia Lenk, the Chief Executive Officer of Netcapital Advisors Inc., (“Advisors”), our wholly owned subsidiary, is a member of the board of directors of KingsCrowd Inc. As of July 31, 2025 and April 30, 2025, the Company owned 3,209,685 shares of KingsCrowd Inc., valued at $577,743.

Compensation to officers in the three-month periods ended July 31, 2025 and 2024 consisted of stock-based compensation valued at $508,269 and $93,896, respectively, and cash salaries of $697,742 and $340,394, respectively.

Compensation to a business development employee, John Fanning Jr., son of our CFO, in the three-month periods ended July 31, 2025 and 2024 consisted of cash wages of $14,100 and $12,778, respectively. This person is also the controlling shareholder of Zelgor Inc. As of July 31, 2025 and April 30, 2025, the Company owned 1,400,000 shares of Zelgor Inc., which are valued at $1,400,000.

On June 8, 2025, the Company granted stock options to purchase an aggregate of 55,000 shares of our common stock to our Chief Executive Officer, Martin Kay, and 55,000 shares to our Chief Financial Officer, Coreen Kraysler. The options have an exercise price of $2.68, are fully vested, and expire on June 8, 2029.

Coreen Kraysler, our Chief Financial Officer, has personally guaranteed a $500,000 promissory note from the U.S. Small Business Administration. The note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,437 began on December 17, 2022.

Mr. John Fanning is an advisor to the Company and is the husband of the Company’s Chief Financial Officer. The Company does not have a formal advisory contract with Mr. Fanning. Further, from time to time, Mr. Fanning provides advice to companies in which the Company either owns an equity position, conducted offerings on the Company’s funding portal, and/or are vendors in the Company’s ecosystem. The Company is also aware of a website that states that John Fanning is working or has been involved in the past with some of the portfolio companies that conducted offerings on the Company’s funding portal, including KingsCrowd and Zelgor. See above for a discussion of the related party interests with respect to each of KingsCrowd and Zelgor.

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Note 8 – Stockholders’ Equity

On March 25, 2025, the Company filed articles of amendment (the “Articles of Amendment”) to our Articles of Incorporation, as amended, with the Utah Department of Commerce, Division of Corporations and Commercial Code to authorize 10,000,000 shares of “blank check” preferred stock. Following the filing of the Articles of Amendment, the Company has the authority to issue 910,000,000 shares of capital stock, such total shares consisting of (i) 900,000,000 shares of common stock and (ii) 10,000,000 shares of preferred stock. There were 4,720,066 and 2,192,226 shares of the Company’s common stock outstanding as of July 31, 2025 and April 30, 2025, respectively. No preferred shares have been issued.

On May 24, 2024, the Company entered into inducement offer letter agreements with certain investors that held certain outstanding Series A-2 warrants to purchase up to an aggregate of 204,572 shares of our common stock with an exercise price of $17.50 per share, originally issued in December 2023 at a reduced exercise price of $10.85 per share (which reduced exercise price was granted to all holders on Series A-2 warrants by the board on May 24, 2024) in partial consideration for the Company’s agreement to issue in a private placement (i) new Series A-3 common stock purchase warrants to purchase up to 253,947 shares of our common stock at an exercise price of $8.74 per share and (ii) new Series A-4 common stock purchase warrants to purchase up to 253,947 shares of our common stock at an exercise price of $8.74 per share for aggregate gross proceeds of approximately $2.2 million from the exercise of the existing warrants, before deducting placement agent fees and other expenses payable by the Company. The Series A-3 Warrants and Series A-4 Warrants are exercisable beginning on the effective dates of stockholder approval of the issuance with such warrants expiring on (i) the five year anniversary of the initial exercise date for the Series A-3 Warrants and (ii) the eighteen month anniversary of the initial exercise date for the Series A-4 Warrants. This transaction closed on May 29, 2024. Wainwright was the exclusive agent for the transaction for which we paid them a cash fee equal to 7.5% from the exercise of the Series A-2 warrant at the reduced exercise price and a management fee equal to 1.0% of such aggregate gross proceeds. The Company also issued warrants to designees of Wainwright to purchase up to 19,048 shares of our common stock at an exercise price of $10.93 per share.

On August 23, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with Wainwright to sell shares of our common stock, par value $0.001 per share, (the “Shares”) having an aggregate sales price of up to $2,100,000, from time to time, through an “at the market offering” program under which Wainwright acted as sales agent. The sales of the Shares made under the ATM Agreement were made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. We paid Wainwright a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of Shares. From August 23, 2024 through October 29, 2024, the Company sold 1,122,693 shares of its common stock through Wainwright pursuant to the ATM Agreement for gross proceeds of $2,099,667 for which it paid Wainwright approximately $70,667 in commissions and other issuance costs of $50,000, resulting in net proceeds to the Company of approximately $1,979,000. No additional Shares will be sold under this ATM Agreement.

On January 9, 2025, the Company entered into inducement offer letter agreements with certain investors that held certain outstanding warrants to purchase up to an aggregate of 270,861 shares of the Company’s common stock, that were originally issued to the warrant holders in December 2023 and May 2024 (the “Existing Warrants”). The Existing Warrants had an exercise price of $10.85 per share. Pursuant to the inducement letter agreements, the warrant holders agreed to exercise for cash the Existing Warrants at a reduced exercise price of $1.80 per share in partial consideration for the Company’s agreement to issue in a private placement (x) new Series A-5 Common Stock purchase warrants (the “Series A-5 Warrants”) to purchase up to 361,148 shares of our common stock and (y) new Series A-6 Common Stock Purchase Warrants (the “Series A-6 Warrants” and, together with the Series A-5 Warrants, the “New Warrants”) to purchase up to 180,574 shares of common stock. The New Warrants are exercisable beginning on July 13, 2025 (the “Initial Exercise Date”), with such warrants expiring on (i) the five year anniversary of the Initial Exercise Date for the Series A-5 Warrants and (ii) the eighteen month anniversary of the Initial Exercise Date for the Series A-6 Warrants.

The closing of the transactions contemplated by the inducement letters agreements occurred on January 13, 2025. The Company received aggregate gross proceeds of approximately $487,000 from the exercise of the Existing Warrants by the warrant holders, before deducting placement agent fees and other expenses payable by the Company. The Company also issued warrants, that expire on July 15, 2030, to designees of Wainwright to purchase up to 20,315 shares of our common stock at an exercise price of $2.25 per share.

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On March 5, 2025, the Company entered into inducement offer letter agreements with certain warrant holders to exercise 79,558 outstanding warrants for cash at a reduced exercise price of $1.80 per share (previously $8.74 per share). In consideration, the Company issued Series A-7 and Series A-8 Common Stock Purchase Warrants to purchase an aggregate of 159,116 shares of common stock at an exercise price of $2.03. The Series A-7 Warrants expire five years from their initial exercise date of September 5, 2025, and the Series A-8 Warrants expire eighteen months from the same date.

The transaction closed on March 6, 2025, generating gross proceeds of approximately $143,000, before deducting fees and expenses.

As of April 30, 2025, the Company owed $200,000 to an investor relations consulting firm for services rendered, which was payable in shares of common stock. The liability was recorded as “shares to be issued” as of April 30, 2025. The related shares were issued on July 21, 2025.

On June 8, 2025, the Company granted 55,000 stock options under the 2023 Omnibus Equity Incentive Plan to each of Martin Kay, Chief Executive Officer, and Coreen Kraysler, Chief Financial Officer. These options have an exercise price of $2.68 per share, vest immediately and expire in 4 years.

On June 9, 2025, the Company granted 100,000 stock options under the Plan to each of Martin Kay, Chief Executive Officer, and Coreen Kraysler, Chief Financial Officer, and 80,000 options to Jason Frishman, Paul Riss, director of Netcapital Funding Portal Inc.

On June 10, 2025, the Company issued an aggregate of 118,750 shares of its common stock at a purchase price of $4.00 per share in a private placement to ten accredited investors, resulting in gross proceeds of $475,000.

The subscription agreements for this private placement contained a price adjustment feature which provided that if the Company issues shares of common stock below $4.00 per share at any time prior February 19, 2026, the investors in the June 10, 2025 private placement would be entitled to receive additional shares to effectively reduce their purchase price to such lower price; provided that the effective price per share could not be adjusted below the Minimum Price, which was $2.68 per share, as defined under Nasdaq Rule 5635(d).

Under its existing “at-the-market” program with H.C. Wainwright, the Company filed a prospectus supplement on June 23, 2025, adding $975,000 to its capacity under the ATM program. From June 23, 2025 to June 25, 2025, we sold 229,404 shares of our common stock through Wainwright at an average price of approximately $4.25 per share, resulting in aggregate gross proceeds of approximately $974,747, for which it paid Wainwright approximately $29,242 in commissions and other issuance costs of $1,438, resulting in net proceeds to the Company of approximately $944,067. No additional shares will be sold under this ATM Agreement unless an additional prospectus supplement is filed.

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On June 26, 2025, we entered into a Horizon Software Agreement (the “Horizon Agreement’) with Horizon Globex GmbH, a company incorporated in Switzerland (“Horizon”) pursuant to which Horizon granted the Company a royalty free, paid-up, non-exclusive, perpetual, irrevocable, unrestricted license to use the Licensed Software (as defined in the Horizon Agreement) with our branding and image, in the United States to provide capital-raising and secondary trading services to its clients in consideration for the issuance of 500,0000 shares (the “Horizon Shares”) of our common stock to Horizon or its affiliate. The Horizon Agreement may be terminated by either party upon a default in the performance of any material obligation under the Agreement is not cured within 30-days after receipt of such notice. In addition, the Horizon Agreement may be terminated immediately by either party in the event the other party files or has filed against it any petition for relief under any bankruptcy statute or similar statute of any jurisdiction, or an order for relief in any bankruptcy or reorganization proceeding is entered against the other party and such order remains undischarged for a period of sixty (60) days; or a receiver is appointed for the other Party; or the other party is dissolved or liquidated, or ceases to carry on its business, or makes an assignment for the benefit of its creditors.

On July 2, 2025, the Company entered into Securities Purchase Agreements with institutional investors to sell 714,286 shares of common stock at a price of $7.00 per share under a registered direct offering. Each share was sold together with a warrant in a concurrent private placement to purchase one share of common stock, with an exercise price of $6.88 per share. The warrants are immediately exercisable upon issuance for a period of 24 months following the effective date of the resale registration statement. The transaction closed on July 7, 2025, generating gross proceeds of approximately $5 million before placement agent fees and expenses.

On July 16, 2025, the Company entered into a Securities Purchase Agreement with institutional investors to sell 641,712 shares of common stock at a price of $4.675 per share under a registered direct offering. Each share was sold together with a warrant to purchase one share of common stock, with an exercise price of $4.55 per share. The warrants are exercisable immediately upon issuance for a period of 24 months following the effective date of the resale registration statement. The transaction closed on July 17, 2025, generating gross proceeds of approximately $3 million before placement agent fees and other offering expenses.

In July 2026, the Company issued an aggregate of 269,257 shares of common stock to warrant holders that exercised warrants to purchase 418,510 shares of common stock on a net exercise basis.

Note 9 – Fair Value

The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

	●	Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date.

	●	Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

	●	Level 3: inputs are unobservable inputs for the asset or liability.

Financial assets measured at fair value on a recurring basis are summarized below as of July 31, 2024 and April 30, 2024:

	Level 1		Level 2		Level 3		Total
July 31, 2025
Equity securities at fair value	$	—	$	5,855,190	$	—	$	5,855,190

April 30, 2025
Equity securities at fair value	$	—	$	5,748,050	$	—	$	5,748,050

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, we base fair value on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and, therefore, are based primarily upon management’s own estimates, are often calculated based on current pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used.

Note 10 – Stock-Based Compensation Plans

In addition to cash payments, the Company enters agreements to issue common stock and records the applicable non-cash expense in accordance with the authoritative guidance of the Financial Accounting Standards Board.

For the three months ended July 31, 2025 and 2024, stock-based compensation expense amounted to $516,073 and $139,371, respectively.

The table below presents the components of compensation expense for the issuance of shares of common stock and stock options to employees and consultants for the three-month periods ended July 31, 2025 and 2024.

Stock-based compensation expense	Three Months Ended July 31, 2025		Three Months Ended July 31, 2024
Chief Executive Officer	$	250,844	$	62,493
Chief Financial Officer		203,265		14,914
Chief Executive Officer, Advisors		1,575		1,575
Founder		14,914		14,914
Employee and consultant options		45,475		45,475
Total stock-based compensation expense	$	516,073	$	139,371

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Note 11 – Deposits and Commitments

The Company utilizes office space at 1 Lincoln Street in Boston, Massachusetts, under an office membership agreement. The Company pays a monthly membership fee of approximately $7,600. The agreement is cancellable by the Company with 60 days’ notice. As of July 31, 2025 and April 30, 2025, the Company had a refundable security deposit of $6,300 related to the agreement.

Note 12 – Intangible Assets

Intangible assets with defined useful lives are measured at cost less accumulated amortization. The useful life is determined based on the period of the underlying contract or the period over which the intangible asset is expected to generate economic benefits. Intangible assets with indefinite useful lives, such as trade names, trademarks, and perpetual software licenses, are recorded at cost and are not amortized but tested for impairment annually, or more frequently if events or circumstances indicate that their carrying amounts may not be recoverable. Impairments are recognized when the recoverable amount of the asset is less than its carrying amount.

On June 26, 2025, the Company entered into a Horizon Software Agreement with Horizon Globex GmbH (“Horizon”), pursuant to which Horizon granted the Company a royalty-free, paid-up, non-exclusive, perpetual, irrevocable, and unrestricted license to use Horizon’s proprietary software with the Company’s branding and image in the United States to provide capital-raising and secondary trading services to its clients. In consideration for this license, the Company issued 500,000 shares of its common stock to Horizon. The license was valued at $2,840,000 and is classified as an indefinite-lived intangible asset.

The following table sets forth the major categories of the intangible assts as of July 31, 2025 and April 30, 2025:

Schedule of Intangible Assets

	July 31, 2025		April 30, 2025

Acquired users	$	14,271,836	$	14,271,836
License agreement		2,840,000		-
Acquired brand		532,118		532,118
Total intangible assets		17,643,954		14,803,954
Less: accumulated amortization		115,294		106,425
Net intangible assets	$	17,528,660	$	14,697,529

As of July 31, 2025, the weighted average remaining useful life for technology, trade names, professional practice, literary works and domains is 11.75 years.

Note 13 – Investments

During the three-month period ended July 31, 2025, the Company received equity securities from 3 issuers that completed securities offerings on the Netcapital Funding Portal. As part of its compensation structure, the Company receives a fee of 1% of the equity securities sold on the funding portal in addition to cash fees. As of July 31, 2025, the Company’s funding portal received equity fee payments from a total of 64 issuers, which have an aggregate value of $276,930, as compared to 61 issuers with an aggregate value of $169,790 as of April 30, 2025. In the three-month periods ending July 31, 2025 and 2024, the Company recorded $62,195 and $10,127 in revenues from the receipt of equity securities. In the three months ending July 31, 2025 the Company also recognized an unrealized gain of $44,945 from changes in observable prices of investment securities owned by the Company, as compared to no unrealized gains or losses in the three months ended July 31, 2024.

In May 2022, the Company received 1,764,706 units of Reper LLC as a payment for services rendered in conjunction with a crowdfunding offering. The units are valued at $0.68 per unit based on a sales price of $0.68 per unit on an online funding portal. The receipt of the units satisfied a receivable balance of $1,200,000. As of July 31, 2025 and April 30, 2025, the Company owned 1,764,706 units which are valued at $1,200,000.

In April 2022, the Company received 3,000,000 units of Cust Corp. as a payment for services rendered in conjunction with a crowdfunding offering. The units are valued at $0.40 per unit based on a sales price of $0.40 per unit on an online funding portal. The receipt of the units satisfied a receivable balance of $1,200,000. As of July 31, 2025 and April 30, 2025, the Company owned 3,000,000 units which are valued at $1,200,000.

In January 2022, the Company received 1,700,000 units of ScanHash LLC as a payment for services rendered in conjunction with a crowdfunding offering. The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal. The receipt of the units satisfied $425,000 of an accounts receivable balance. As of July 31, 2025 and April 30, 2025, the Company owned 1,700,000 units which are valued at $425,000.

In January 2022, the Company received 2,850,000 units of Hiveskill LLC as payment for services rendered in conjunction with a crowdfunding offering. The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal. The receipt of the units satisfied a receivable balance of $712,500. As of July 31, 2025 and April 30, 2024, the Company owned 2,850,000 units which are valued at $712,500.

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In August 2019, the Company entered into a consulting agreement with KingsCrowd LLC, pursuant to which it earned 300,000 membership interest units in exchange for services. These units were valued at $1.80 per unit, totaling $540,000. In December 2020, KingsCrowd converted to a corporation and each membership interest unit converted into 12.71915 shares of common stock, resulting in the Company holding 3,815,745 shares. In June 2022, the Company sold 606,060 shares for proceeds of $200,000 and recognized a realized loss of $406,060. As of July 31, 2025 and April 30, 2025, the Company held 3,209,685 shares.

During fiscal 2024, KingsCrowd disclosed in regulatory filings that it sold shares at $0.16 per share. Based on this observable price change, the Company recorded an unrealized loss of $2,696,135 on its investment for the year ended April 30, 2024. In fiscal 2025, KingsCrowd completed a Regulation CF offering at $0.18 per share, resulting in an unrealized gain of $64,193. No other price changes have been observed. Accordingly, the Company valued its investment in KingsCrowd at $577,743 as of July 31, 2025 and April 30, 2025.

During fiscal 2019, the Company entered a consulting contract with Systems DE, which allowed the Company to receive up to 1,000 membership interest units of Systems DE in return for consulting services. The Company earned all 1,000 Systems DE units but sold 472 units in fiscal 2020. As of July 31, 2025 and April 30, 2024, the Company owned 528 Systems DE units, at a value of $1,985.

In July 2020 the Company entered a consulting agreement with Vymedic, Inc. for a $40,000 fee over a 5-month period. Half the fee was payable in stock and half was payable in cash. As of July 31, 2025 and April 30, 2024, the Company owned 4,000 units, at a value of $11,032.

In August 2020 the Company entered a consulting agreement with C-Reveal Therapeutics LLC (“CRT”). for a $120,000 fee over a 12-month period. $50,000 of the fee was payable in CRT units. As of July 31, 2025 and April 30, 2024, the Company owned 5,000 units, at a value of $50,000.

The following table summarizes the components of investments as of July 31, 2025 and April 30, 2025:

Schedule of Investments

	July 31, 2025		April 30, 2025

Systems DE	$	1,985	$	1,985
Zelgor Inc.		1,400,000		1,400,000
Vymedic Inc.		11,032		11,032
C-Reveal Therapeutics LLC		50,000		50,000
Cust Corp.		1,200,000		1,200,000
Hiveskill LLC		712,500		712,500
ScanHash LLC		425,000		425,000
Kingscrowd Inc.		577,743		577,743
Reper LLC		1,200,000		1,200,000
Issuers that paid a 1% equity fee to the funding portal		276,930		169,790
Total	$	5,855,190	$	5,748,050
Investment owned at cost	$	5,855,190	$	5,748,050

The above investments in equity securities are within the scope of ASC 321. The Company monitors the investments for any changes in observable prices from orderly transactions. All investments are initially measured at cost and evaluated for changes in estimated fair value.

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Note 14 – Going Concern Matters and Realization of Assets

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However, as of July 31, 2025, we had working capital of $186,766 and for the three months ended July 31, 2025, we had an operating loss of $3,285,648 and net cash used in operating activities amounted to $4,214,258.

There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. The Company has recently reduced its operating expenses and has turned its focus to its funding portal business, which generates cash revenues and has seen a growth in revenues on a year-to-year basis. The Company plans to continue operating with lower fixed overhead amounts and seeks to raise money from private placements, public offerings and/or bank financing. The Company’s management has determined, based on its recent history and the negative cash flow from operations, that it is unlikely that its plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. To the extent that funds generated from any private placements, public offerings and/or bank financing, if available, are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the Company’s management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its business network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty.

Note 15 – Subsequent Events

On September 16, 2025, the Company entered into a settlement agreement with the noteholder of a $200,000 note with a 50% original issue discount issued on April 29, 2025 and a maturity date of July 31, 2025 to settle the $209,272 outstanding on the $200,000 note on such date, which amount includes accrued interest of $9,272. Under the terms of the settlement agreement the parties agreed that such $200,000 note was fully paid in complete satisfaction upon the Company paying $104,636 and issuance of $104,636 of the Company’s common stock (46,258 shares at a price equal to2.262 per share (which price represents the “Minimum Price” as defined under Nasdaq Rule 5635(d)) in full satisfaction of the outstanding note.

On September 16, 2025, the Company entered into a settlement agreement with the noteholder of a $400,000 note with a 50% original issue discount issued on May 1, 2025 and a maturity date of August 1, 2025 to settle the $418,148 outstanding on the $400,000 note on such date, which amount includes accrued interest of $18,148. Under the terms of the settlement agreement the parties agreed that the such $400,000 note was fully paid in complete satisfaction upon the Company paying $209,074 and issuance of $209,074 of the Company’s common stock (92,428shares at a price equal to 2.262 per share (which price represents the “Minimum Price” as defined under Nasdaq Rule 5635(d)) in full satisfaction of the outstanding note.

On September 16, 2025, the Company issued 59,147 shares of common stock to the investors in the June 2025 private placement in consideration of the adjustment provision contained in their subscription agreements which provided that if the Company issues shares of common stock below $4.00 per share at any time prior February 19, 2026, the investors in the June 10, 2025 private placement would be entitled to receive additional shares to effectively reduce their purchase price to such lower price; provided that the effective price per share could not be adjusted below the Minimum Price, which was $2.67 per share, as defined under Nasdaq Rule 5635(d).

The Company evaluated subsequent events through the date these financial statements were available to be issued.

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PART I

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This quarterly report on Form 10-Q and other reports filed by Netcapital Inc. (the “Company”) from time to time with the U.S. Securities and Exchange Commission (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Unless the context otherwise requires, references in this prospectus to the “Company,” “we,” “us,” and “our” refer to Netcapital Inc. and its subsidiaries.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Overview

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online from accredited and non-accredited investors. We give virtually all investors the opportunity to access investments in private companies. We believe our model is disruptive to traditional private equity investing and is based on Title III, Regulation Crowdfunding (“Reg CF”) of the Jumpstart Our Business Startups Act (“JOBS Act”). We generate fees from listing private companies on our funding portal located at www.netcapital.com. Our consulting group, Netcapital Advisors Inc. (“Netcapital Advisors”), which is a wholly owned subsidiary, provides marketing and strategic advice to companies in exchange for cash fees and previously also received equity positions in certain select portfolio companies. The Netcapital funding portal is registered with the SEC, is a member of the Financial Industry Regulatory Authority (“FINRA”), a registered national securities association, and provides investors with opportunities to invest in private companies. In addition, we recently expanded our model to include Regulation A (“Reg A”) offerings, which are conducted by our wholly owned subsidiary Netcapital Securities Inc. “(“Netcapital Securities”), which is a licensed broker-dealer with FINRA. Both A and Reg CF offerings are made available to investors via the Company’s website, www.netcapital.com.

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We provide private company investment access to accredited and non-accredited investors through (i) our online portal (www.netcapital.com), which is operated by our wholly owned subsidiaries Netcapital Funding Portal, Inc and (ii) our broker-deal subsidiary, Netcapital Securities. The Netcapital funding portal charges a $5,000 listing fee, a 4.9% portal fee for capital raised at closing, and beginning in fiscal year 2024, a 1% success fee paid for with equity of the funding portal customer. In addition, the portal generates fees for other ancillary services, such as rolling closes. Netcapital Advisors previously generated fees and equity stakes from consulting in select portfolio (“Portfolio Companies”) and non-portfolio clients. With respect to services for Reg A offerings, Netcapital Securities charges a listing fee of $25,000 and a success fee of 4.9% of the capital raised by an issuer under Reg A.

We generated revenues of $190,058, with costs of service of $7,409, in the three months ended July 31, 2025 for a gross profit of $182,649 (consisting of $62,195 in equity securities for payment of services and $127,863 in cash-based revenues, offset by $7,409 for costs of services), as compared to revenues of $142,227, with costs of service of $10,220, in the three months ended July 31, 2024 for a gross profit of $132,007 (consisting of $10,127 in equity securities for payment of services and $132,100 in cash-based revenues, offset by $10,220 for costs of services). The total number of offerings on the Netcapital funding portal in the three months ended July 31, 2025 and 2024 that closed was 3 and 16, respectively, of which 0 and 4 offerings hosted on the Netcapital funding platform in the three months ended July 31, 2025 and 2024, respectively, terminated their listings without raising the required minimum amount of capital.

In fiscal 2025 and 2024, the average amount raised in an offering on the Netcapital funding portal was $215,745 and $280,978, respectively. The total number of offerings on the Netcapital funding portal in fiscal 2025 and 2024 that closed was 70 in each fiscal year, of which 21 and 17 offerings hosted on the Netcapital funding platform in fiscal 2025 and 2024, respectively, terminated their listings without raising the required minimum dollar amount of capital.

Netcapital.com is an SEC-registered funding portal that enables private companies to raise capital online, while investors are able to invest from almost anywhere in the world, at any time, with just a few clicks. Securities offerings on the portal are accessible through individual offering pages, where companies include product or service details, market size, competitive advantages, and financial documents. Companies can accept investments from virtually anyone, including friends, family, customers, and employees. Customer accounts on our platform are not permitted to hold or use digital securities to make an investment.

In addition to access to the funding portal, Netcapital provides the following services:

●	a fully automated onboarding process;
●	automated filing of required regulatory documents;
●	compliance review;
●	a custom-built offering page on our portal website;
●	third party transfer agent and custodial services;
●	email marketing to our proprietary list of investors;
●	rolling closes, which provide potential access to liquidity before final close date of offering;
●	assistance with annual filings; and
●	direct access to our team for ongoing support.

Our consulting group, Netcapital Advisors helps companies at all stages to raise capital. Netcapital Advisors provides strategic advice, technology consulting and digital marketing services to assist with fundraising campaigns on the Netcapital platform. The company also acts as an incubator and accelerator for select disruptive start-ups.

Netcapital Advisors’ services include:

●	investor introductions;
●	online marketing;
●	website design, software and software development;
●	message crafting, including pitch decks, offering pages, and ad creation;
●	strategic advice; and
●	technology consulting.

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Broker-Dealer Business

In November 2024, our wholly owned subsidiary, Netcapital Securities Inc. received approval from FINRA to become a FINRA-member broker dealer. We believe that by having a registered broker-dealer, it may create opportunities to expand the Company’s revenue base by hosting and generating additional fees from Reg A and Reg D offerings on the Netcapital platform, earning additional fees in connection with offerings that may result from the introduction of clients to other FINRA broker-dealers and expanding our distribution capabilities by leveraging strategic partnerships with other broker-dealers to distribute offerings of issuers that utilize the Netcapital platform to a wider range of investors in order to maximize market penetration and optimize capital raising efforts. As of the date of this prospectus, Netcapital Securities has been engaged by one issuer seeking to raise capital via a Regulation A offering.

Our limited operating history and the uncertain nature of our future operations and the markets we address or intend to address make predictions of our future results of operations difficult. Our operations may never generate significant revenues, and we may not consistently achieve profitable operations.

Recent Developments

Seidenberg Settlement Agreement

On September 16, 2025, the Company entered into a settlement agreement with Ivan Seidenberg (the “Seidenberg Settlement Agreement”) to settle the $209,272 outstanding under the April 29, 2025 $200,000 note issued to him (the “Seidenberg Note”) on such date, which amount includes accrued interest of $9,272. Under the terms of the Seidenberg Settlement Agreement the parties agreed that the Seidenberg Note was fully paid in complete satisfaction upon the Company paying $104,636 and issuance of $104,636 of the Company’s common stock (46,258 shares at a price equal to 2.262 per share, which price represents the “Minimum Price” as defined under Nasdaq Rule 5635(d)).

Hesse Settlement Agreement

On September 16, 2025, the Company entered into a settlement agreement with Daniel R. Hesse Revocable Trust (“Hesse”) dated October 12, 2006(the “Hesse Settlement Agreement”) to settle the $418,148 outstanding under the May 1, 2025 $400,000 note issued to Hesse (the “Hesse Note”) on such date, which amount includes accrued interest of $18,148. Under the terms of the Hesse Settlement Agreement the parties agreed that the Hesse Note was fully paid in complete satisfaction upon the Company paying $209,074 and issuance of $209,074 of the Company’s common stock (92,428 shares at a price of equal to 2.262 per share, which price represents the “Minimum Price” as defined under Nasdaq Rule 5635(d)).

July 2025 Warrant Exercises

In July 2025, the Company issued an aggregate of 269,257 shares of its common stock to warrant holders that exercised warrants to purchase 418,510 shares of common stock on a net exercise basis.

July 2025 Registered Direct Offering and Concurrent Private Placement #2

On July 16, 2025, the Company entered into a securities purchase agreement (the “July 2025 Purchase Agreement #2”) with certain institutional investors, pursuant to which the Company agreed to sell 641,712 shares (the “July 2025 Shares #2”) of its common stock, at a purchase price of $7.00 per share (the “July 2025 Offering #2”) for gross proceeds of approximately $3 million, prior to deducting placement agent’s fees and other offering expenses payable by the Company. The Company intends to use approximately $250,000 of the net proceeds from the July 2025 Offering #2 for the repayment of certain outstanding promissory notes the remainder for working capital and other general corporate purposes. The July 2025 Shares #2 were offered pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-267921), which was declared effective by the Securities Exchange Commission on October 26, 2022.

Concurrently with the sale of July 2025 Shares #2 pursuant to the July 2025 Purchase Agreement #2 in a private placement, for each July 2025 Share #2 purchased by the investors, such investors received an unregistered warrant (the “July 2025 Investor Warrants #2”) to purchase one share of Common Stock, or 641,712 shares in the aggregate. The July 2025 Investor Warrants #2 have an exercise price of $4.55 per share and are exercisable immediately upon issuance for a twenty-four month period following the date of effectiveness of resale registration statement providing for a resale of the shares underlying the July 2025 Investor Warrants #2, which resale registration statement is required to be filed within 30-days of the July 2025 Purchase Agreement #2.

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In connection with the July 2025 Offering #2, the Company paid H.C. Wainwright & Co. LLC, as placement agent (“Wainwright”) an aggregate cash fee equal to 7.5% of the gross proceeds from the sale of securities in the July 2025 Offering #2 and a management fee equal to 1.0% of the gross proceeds raised in the July 2025 Offering #2. The Company also issued Wainwright (or its designees) a warrant (the “Placement Agent Warrants #2”) to purchase up to 7.5% of the aggregate number of July 2025 Shares #2 sold in the offering, or warrants to purchase up to 48,128 shares of the Company’s common stock, at an exercise price equal to 125.0% of the offering price per share of the Company’s common stock, or $5.8438 per share. In addition, upon the cash exercise of July 2025 Warrants #2, the Company also agreed to issue Wainwright (or its designees) additional Placement Agent Warrants #2 to purchase an amount of share of Common Stock equal to 7.5% of the aggregate number of July 2025 Investor Warrants Shares #2 issued upon cash exercise of the July 2025 Investor Warrants #2. The Placement Agent Warrants #2 are (or will be) exercisable immediately upon issuance for a period of five years following the commencement of the sales pursuant to the July 2025 Offering #2.

SEC Form 10-Q filed by Netcapital Inc.