BOSTON - Netcapital Inc. (NASDAQ: NCPL, NCPLW), a digital private capital markets ecosystem, is set to propose a reverse stock split to its shareholders, aiming to comply with Nasdaq's minimum bid price rule. The company announced its plan to file a proxy statement on or around May 28, 2024, for a special meeting scheduled on July 24, 2024, to discuss the reverse stock split, which could range from 1-for-2 to 1-for-100 shares.
The proposed reverse stock split is a strategic move to address the non-compliance notice Netcapital received from The Nasdaq Stock Market LLC on September 1, 2023. The notice highlighted the company's failure to maintain the minimum bid price of $1.00 per share over a period of 30 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2).
After an initial 180-day period to regain compliance ended on February 28, 2024, without resolution, Nasdaq granted Netcapital an additional 180 days, until August 26, 2024, to meet the requirement.
Netcapital can achieve compliance if its common stock's closing bid price remains at least $1 for ten consecutive business days within this second compliance period. The company's board will determine the exact ratio for the reverse stock split.
Netcapital, a fintech firm, operates a technology platform that facilitates online capital raising for private companies and offers private equity investment opportunities. Its consulting arm, Netcapital Advisors, provides strategic advice and takes equity positions in select companies. Netcapital Funding Portal Inc., part of the company, is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA).
The information about the proposed reverse stock split and the special meeting of stockholders is based on a press release statement from Netcapital Inc.
InvestingPro Insights
As Netcapital Inc. navigates the complexities of Nasdaq compliance, the company's financial health and market performance provide valuable context for investors considering the implications of the proposed reverse stock split.
According to real-time data from InvestingPro, Netcapital Inc. is currently trading with a strikingly low Price / Book multiple of 0.09. This metric, often used to compare a firm's market value to its book value, suggests that the stock may be undervalued, which aligns with the InvestingPro Tips highlighting that the stock is trading at a low Price / Book multiple.
InvestingPro data also indicates a significant return over the last week, with a 1 Week Price Total Return of 32.93%. This short-term performance, coupled with a strong return over the last month at 20.55%, may offer a silver lining to shareholders amidst the longer-term price decline, as the stock has also experienced a considerable drop of 89.08% over the last year. These metrics underscore the stock's high price volatility, another point emphasized in the InvestingPro Tips.
Despite these challenges, Netcapital's liquid assets exceed its short-term obligations, which is a positive sign of the company's ability to meet its immediate financial liabilities. This information, alongside the additional 11 tips available at InvestingPro, can provide deeper insights into the company's financial position and future prospects. For those interested in gaining full access to these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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