BOSTON - Netcapital Inc. (NASDAQ: NCPL, NCPLW), a digital private capital markets ecosystem, announced today the reduction of exercise prices for certain Series A-2 warrants and the issuance of new Series A-3 and A-4 warrants. The company anticipates raising approximately $2.2 million in gross proceeds from the immediate exercise of the adjusted warrants, excluding fees and estimated expenses.
The Series A-2 warrants in question, originally issued in December 2023 with an exercise price of $0.25 per share, now have a reduced exercise price of $0.155 per share. This adjustment applies to warrants for up to 14,320,000 shares of common stock. Additionally, all outstanding Series A-2 warrants to purchase 16,000,000 shares of common stock have been adjusted to the new exercise price.
In connection with the warrant exercise, Netcapital is issuing new Series A-3 and A-4 warrants for the same number of shares, both set at the exercise price of $0.155 per share. The Series A-3 warrants will be exercisable upon stockholder approval and valid for five years, while the Series A-4 warrants will be valid for eighteen months following the same approval.
The closing of the offering is expected around May 29, 2024, subject to customary conditions. Netcapital plans to allocate the net proceeds for general working capital.
H.C. Wainwright & Co. is serving as the exclusive placement agent for this offering. The new warrants and the shares of common stock issuable upon their exercise were offered in a private placement under an exemption from registration requirements of the Securities Act of 1933. The company has committed to filing a registration statement with the SEC for the resale of the shares of common stock from the new warrants.
This announcement follows Netcapital's established pattern of leveraging its technology platform to facilitate online capital raising for private companies and providing investment opportunities in private equity.
The information is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
InvestingPro Insights
As Netcapital Inc. embarks on its latest strategic financial maneuver, the market is responding to the company's actions with a notable uptick in stock performance. With a 32.93% return over the last week and a 20.55% return over the last month, investors are showing renewed interest in the company's potential. This is particularly significant given the stock's 89.08% decline over the past year, signaling that the market may be recognizing the value of Netcapital's recent initiatives.
InvestingPro Tips suggest that Netcapital is currently trading at a low Price/Book multiple of 0.09, which can be an indicator to value investors that the stock might be undervalued relative to its assets.
Moreover, the company's liquid assets exceed its short-term obligations, providing a cushion for operational flexibility and financial stability. Still, it is important to note that Netcapital has not been profitable over the last twelve months, which is a critical consideration for investors looking at the company's long-term earnings potential.
For those interested in a deeper dive into Netcapital's financials and performance metrics, there are additional InvestingPro Tips available on their platform. Using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a wealth of insights that could inform their investment decisions. With these tools at their disposal, investors can better assess the impact of Netcapital's recent warrant pricing strategy and the potential for future growth.
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