Business Context and Reporting Period
Company: Netcapital Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 22, 2026
Event: Entry into a Material Definitive Agreement to acquire assets related to the NetNudge AI Agent Platform from Codesharp Corporation.
Key Financial Metrics and Transaction Details
This filing reports a strategic acquisition rather than periodic financial performance. Key transaction metrics include:
- Consideration (Initial): 600,000 shares of Series A Convertible Preferred Stock.
- Consideration (Potential): Up to an additional 600,000 shares of Series A Convertible Preferred Stock contingent on revenue milestones.
- Stated Value: $1.50 per share of Series A Convertible Preferred Stock.
- Total Initial Stated Value: $900,000.
- Maximum Total Stated Value: $1,800,000.
- Revenue Milestone: Cumulative GAAP revenue of $3,000,000 from acquired assets between June 1, 2026, and May 31, 2029.
Note: The filing does not provide current revenue, profit, cash flow, margins, debt, or liquidity figures for Netcapital Inc.
Material Changes and Transaction Structure
The Company acquired substantially all assets related to the NetNudge AI Agent Platform, an early-stage AI infrastructure provider. Material aspects of the change include:
- Assets Acquired: Intellectual property, software source code, datasets, APIs, and operational intelligence systems.
- Exclusions: The Company did not acquire existing customer or supplier contracts, established relationships, or the Seller's pre-closing liabilities and indebtedness.
- Related Party Disclosure: Mr. John Fanning, Sr., husband of the Company's CFO, served as an advisor to the Company and previously advised NetNudge. He received no separate consideration and is not a party to the agreement.
Guidance, Outlook, and Security Rights
Outlook and Milestones: Future equity issuance is tied to the acquired assets generating $3 million in revenue over a three-year period. The platform is described as early-stage with no existing customer base at the time of acquisition.
Security Rights (Series A Convertible Preferred Stock):
- Voting Rights: Initial 600,000 shares carry 2.5 votes per share; milestone shares are non-voting.
- Conversion: Convertible into common stock on a one-for-one basis at the Company's election only.
- Liquidation Preference: Senior to common stock; holders receive $1.50 per share before common stockholders.
- Dividends: Non-cumulative; participation on an as-converted basis if dividends are declared on common stock.
Investor Verification Checklist
- Verify the exact terms of the Asset Purchase Agreement (Exhibit 2.1) regarding assumed post-closing obligations.
- Confirm the dilution impact of the initial 600,000 preferred shares and the potential 600,000 additional shares on existing common stockholders.
- Monitor the Company's audited financial statements to track progress toward the $3 million revenue milestone for the acquired assets.
- Review the Certificate of Designations (Exhibit 3.1) for full details on the rights and preferences of the Series A Convertible Preferred Stock.
- Assess the integration risks associated with an early-stage platform that lacks existing customer contracts.