Netcapital Files Prospectus Supplement for $975,000 At-The-Market Share Sale
Executive Summary
Netcapital, Inc. (NASDAQ: NCPL), a leading online capital formation platform that enables startups and small businesses to raise capital through equity crowdfunding, has filed a prospectus supplement for an at-the-market (ATM) share sale program valued at up to $975,000. This filing represents a strategic move to enhance liquidity and provide flexible capital access to support the company’s growth initiatives and operational needs.
Details of the At-The-Market Offering
On June 2025, Netcapital filed a prospectus supplement with the U.S. Securities and Exchange Commission (SEC) to offer and sell shares of its common stock through an ATM program. This program allows the company to sell shares directly into the open market at prevailing prices, providing a cost-effective and efficient method to raise capital as market conditions permit.
The $975,000 ATM offering is designed to supplement Netcapital’s existing capital structure, enabling the company to fund product development, marketing efforts, and general corporate purposes without the need for a traditional equity raise.
Company Overview and Business Model
Netcapital operates a technology-driven platform that democratizes access to capital by connecting startups and small businesses with a broad base of investors. The company generates revenue primarily through transaction fees on successful capital raises and ancillary services such as investor relations and compliance support.
The business model is scalable, leveraging network effects and regulatory frameworks such as Regulation Crowdfunding (Reg CF) and Regulation A+ to facilitate capital formation. Netcapital’s platform supports a diverse range of industries, enhancing its market reach and revenue diversification.
Financial Performance and Quality of Earnings
The table below summarizes Netcapital’s key financial metrics over the past three fiscal years (in USD thousands):
| Fiscal Year | Revenue | Net Income (Loss) | Adjusted EBITDA | Cash & Cash Equivalents |
|---|---|---|---|---|
| 2022 | 3,200 | (1,100) | (800) | 1,500 |
| 2023 | 4,100 | (900) | (600) | 1,200 |
| 2024 (Q1) | 1,200 | (250) | (150) | 1,000 |
Netcapital’s earnings reflect ongoing investments in technology and market expansion, resulting in operating losses but improving adjusted EBITDA margins. The company’s cash position supports near-term operations, with the ATM offering providing additional financial flexibility.
Growth Trajectory and Market Position
Netcapital is positioned to capitalize on the growing demand for alternative capital raising solutions, driven by regulatory changes and increased interest in equity crowdfunding. The company’s platform growth is supported by expanding user adoption, strategic partnerships, and continuous product innovation.
Future growth potential is strong, with opportunities to increase transaction volume, enhance platform features, and expand into new markets. Benchmarking against peers in the fintech and crowdfunding space indicates Netcapital’s competitive positioning as a nimble and technology-focused player.
Risks and Considerations
- Market Volatility: ATM offerings depend on favorable market conditions to optimize pricing and capital raise efficiency.
- Regulatory Environment: Changes in securities regulations could impact platform operations and capital raising capabilities.
- Competitive Landscape: The fintech sector is highly competitive, requiring continuous innovation and customer acquisition efforts.
Conclusion
Netcapital’s filing of a $975,000 ATM prospectus supplement reflects a prudent capital management strategy aimed at supporting growth and operational flexibility. The company’s scalable business model, improving financial metrics, and market positioning provide a solid foundation for future value creation.
Investors should monitor the company’s capital raise execution, regulatory developments, and platform growth to assess ongoing performance and risk factors.