Item 1.01Item 1.01 - Entry into Material Agreement
Item
1.01 Entry into a Material Definitive Agreement.
On
July 2, 2026, Netcapital Inc. (the “Company”) closed the transactions contemplated by an Equity Purchase Agreement, dated
as of June 29, 2026 (the “Purchase Agreement”), by and between the Company and Hudson Global Ventures, LLC, a Nevada limited
liability company (the “Investor”). The closing occurred concurrently with the financing transaction previously disclosed
by the Company in its Current Report on Form 8-K filed with the Securities and Exchange Commission on July 8, 2026, and the two transactions
were negotiated together.
Pursuant
to the Purchase Agreement, upon the terms and subject to the conditions set forth therein, the Company has the right, but not the obligation,
to sell to the Investor, from time to time during the commitment period, shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”), having an aggregate purchase price of up to $15,000,000. The Company may require the Investor
to purchase shares of Common Stock by delivering put notices from time to time, subject to the satisfaction of the conditions set forth
in the Purchase Agreement.
Under
the Purchase Agreement, each put notice must be for a minimum amount of $25,000, calculated using the initial purchase price, and may
not exceed the lesser of $2,000,000, calculated using the initial purchase price, or 200% of the average daily trading value, as more
fully described in the Purchase Agreement. The purchase price for shares sold pursuant to a put notice will be the lesser of (i) 92%
of the average of the three lowest traded prices of the Common Stock on the principal market during the ten trading days immediately
preceding the applicable put date and (ii) 92% of the lowest traded price of the Common Stock on the principal market during the valuation
period, subject to the terms and conditions of the Purchase Agreement.
The
Company is not permitted to issue or sell shares under the Purchase Agreement in excess of 1,568,795 shares of Common Stock, subject
to adjustment as provided in the Purchase Agreement (the “Exchange Cap”), unless shareholder approval is obtained in accordance
with Nasdaq Rule 5635(d). The Investor’s obligation to purchase shares is also subject to additional conditions, including, among
others, the effectiveness of a registration statement covering the resale of the shares, continued listing and trading of the Common
Stock, DWAC eligibility, no DTC chill, compliance with SEC reporting requirements, the Common Stock not being deemed a “penny stock,”
and applicable beneficial ownership limitations.
In
connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement, dated as of June 29, 2026, with
the Investor (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to
file, within 90 calendar days from the date of the Registration Rights Agreement, an initial registration statement covering the resale
by the Investor of the maximum number of registrable securities permitted to be included thereon under applicable SEC rules, regulations
and interpretations, beginning with the shares issuable upon exercise of the Warrant described below.
In
connection with the Purchase Agreement, the Company issued to the Investor a Common Stock Purchase Warrant, dated June 29, 2026 (the
“Warrant”), to purchase up to 1,000,000 shares of Common Stock, subject to adjustment as provided in the Warrant. The Warrant
has an exercise price of $0.50 per share, is exercisable beginning on June 29, 2026, and terminates at 5:00 p.m. New York City time on
June 29, 2029. The Warrant may be exercised on a cashless basis if, at the time of exercise, there is no effective registration statement
registering, or no available prospectus for, the resale of the shares issuable upon exercise of the Warrant. The Warrant also provides
that it will no longer be exercisable into Common Stock upon the first occurrence, on or after the issue date, of the Common Stock being
deemed a “penny stock” as defined in SEC Rule 240.3a51-1. The Warrant is subject to a 4.99% beneficial ownership limitation,
which may be increased or decreased upon notice to the Company, provided that the limitation may not exceed 9.99%, and any increase will
not become effective until the 61st day after notice is delivered to the Company. Issuances under the Warrant are also subject to the
Exchange Cap unless shareholder approval is obtained.
The
foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement, and the Warrant do not purport to be complete and
are qualified in their entirety by reference to the full text of the Purchase Agreement, the Registration Rights Agreement, and the Warrant,
copies of which are filed as Exhibits 10.1, 10.2, and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein
by reference.