Gold prices tick higher on fresh US tariff threats, Fed rate cut hopes
In a move to expand its capital stock structure, Netcapital Inc. (NASDAQ:NCPL), a finance services company with a market capitalization of $3.86 million, has filed amendments to its Articles of Incorporation to authorize the issuance of "blank check" preferred stock. According to InvestingPro data, the company faces significant financial challenges, with a current ratio of 0.15 indicating potential liquidity concerns. The Utah-based company announced on Monday that it had filed articles of amendment with the state’s Department of Commerce to permit the issuance of up to 10,000,000 shares of preferred stock, par value $0.001 per share.
This strategic amendment elevates the company’s authorized capital to 910,000,000 shares, which now includes 900,000,000 shares of common stock and the newly authorized preferred shares. The decision to authorize preferred stock was previously approved by Netcapital’s board of directors and received the green light from shareholders during the annual meeting held on September 25, 2024. InvestingPro analysis reveals the company has experienced a significant revenue decline of 89.47% in the last twelve months, highlighting the potential need for additional capital raising options.
The preferred stock authorization provides Netcapital with flexible financial instruments that can be used for a variety of corporate purposes, including but not limited to, future financing, strategic partnerships, acquisitions, and other corporate transactions. The specifics of the rights, preferences, privileges, and restrictions granted to or imposed on the preferred stock will be determined by Netcapital’s board of directors at the time of issuance.
The company, formerly known as ValueSetters Inc. before undergoing a name change in 2014, has not disclosed specific plans for the issuance of preferred stock at this time. The Articles of Amendment are detailed in Exhibit 3.1 attached to the company’s Form 8-K.
This development comes as part of Netcapital’s broader efforts to strengthen its financial flexibility and support its growth initiatives. The company’s stock and warrants are traded on The Nasdaq Stock Market under the symbols NCPL and NCPLW, respectively.
Investors and market watchers will be keeping a close eye on how Netcapital utilizes this new component of its capital structure. Trading at a price-to-book ratio of 0.11, the stock appears to be trading at a significant discount to its book value. As always, the company’s strategic decisions are made with the aim to enhance shareholder value and position itself for long-term success in the competitive finance services industry. For a comprehensive analysis of Netcapital’s financial health and growth prospects, investors can access detailed metrics and expert insights through InvestingPro’s extensive research reports, available for over 1,400 US stocks.
The information in this article is based on Netcapital Inc.’s recent SEC filing.
In other recent news, Netcapital Inc. reported a substantial decrease in revenue for Q3 FY2025, with an 85% drop compared to the same period last year, bringing in $152,682. The company experienced a net loss of $3,006,537, with an operating loss of $1,687,692, reflecting ongoing financial challenges. Despite these setbacks, Netcapital has received regulatory approval for its new broker-dealer subsidiary, Net Capital Securities Inc., marking a strategic shift in its operations. The company is now focusing on private securities placements and capital raising through this subsidiary. The net loss per share improved to $1.57 from $13.60 in the previous year. Analysts have noted the company’s pivot towards its broker-dealer activities as a potential growth avenue. Netcapital’s management has expressed cautious optimism about future prospects, with plans to explore opportunities in private placements and capital raising. The company’s forward guidance suggests a revenue forecast of $4.95 million for FY2025 and FY2026.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.