Educational Materials & Risks

Be sure that this type of investing is right for you. An investment in an early-stage company involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.

There are limits on how much you may invest in a 12-month period among all crowdfunding offerings, not just offerings on Netcapital. The limits are:

In making an investment decision, you must rely on your own examination of the issuer and the terms of the offering, including the merits and risks involved. Any securities on this web site have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this web site.

Furthermore, the U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. Any securities on this web site are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

You acknowledge that the entire amount of your investment may be lost and that you are in a financial condition to bear that loss. You know that it may take years to receive a return on your investment, if ever. You understand that your percentage ownership may be diluted. You recognize that this may limit your voting power. Your voting power may be otherwise limited as mentioned in the offering itself and any other agreements you execute.

You understand that you may cancel your investment commitment and obtain a refund until 48 hours before the deadline of an offering. If there is a material change to the offering, you will receive notification, and you must confirm your commitment within 5 days or it will be automatically withdrawn.

You understand that it may be difficult to resell securities, and you may be restricted from transferring them for one year. These securities may not be transferred by any purchaser during a one-year period beginning when these securities are issued, unless you're transferring the securities to the offering company; or an accredited investor as defined in Rule 501(a) of Regulation D; or as part of an offering registered with the U.S. Securities and Exchange Commission; or to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

The offering company is required to file a report with the Securities and Exchange Commission annually and post the report on its web site, no later than 120 days after the end of each fiscal year covered by the report. This annual report includes most of the information contained in the company's Form C filing, updated to reflect its current activities and operations. The offering company must continue to comply with these ongoing reporting requirements until one of the following events occurs: (1) the company is required to file reports under section 13(a) or section 15(d) of the Securities Exchange Act of 1934; (2) the company has filed, since its most recent sale of securities pursuant to Regulation Crowdfunding (also referred to as Regulation CF), at least one annual report and has fewer than 300 holders of record; (3) the company has filed, since its most recent sale of securities pursuant to Regulation CF, these required annual reports for at least the three most recent years and has total assets that do not exceed $10,000,000; (4) the company or another party repurchases all of the securities issued in reliance on section 4(a)(6) of the Securities Act of 1933, including any payment in full of debt securities or any complete redemption of redeemable securities; or (5) the company liquidates or dissolves its business in accordance with state law. Therefore, under the circumstances detailed above, the offering company may cease to publish annual reports in which case you may not continue to receive updated financial information about the offering company.

After the closing of an offering, there may or may not be an ongoing relationship between the offering company and Netcapital.

Any person who promotes an issuer's offering for compensation, whether past or prospective, or who is a founder or an employee of an issuer that engages in promotional activities on behalf of the issuer on the intermediary's platform, must clearly disclose in all communications on the intermediary's platform, respectively, the receipt of the compensation and that he or she is engaging in promotional activities on behalf of the issuer.

Side-by-Side offerings

Sometimes an offering company (an "Issuer") may present a Side-by-Side offering. A Side-by-Side offering refers to a deal in which an Issuer is raising capital under two offering types. An Issuer frequently uses both Regulation D and Regulation CF to raise money in a Side-by-Side offering when it seeks to raise more than $5,000,000. Under Regulation CF, conducted by Netcapital Funding Portal Inc., an Issuer can raise up to $5,000,000 from non-accredited investors. However, if an Issuer is seeking to raise more than $5,000,000, it also needs to prepare an offering for accredited investors, and that offering is done under a Regulation D offering type, which is conducted by a registered broker dealer. The two offerings are done concurrently, and thus are referred to as a Side-by-Side offering. Any investor should consider all the risk factors disclosed in a Side-by-Side offering, which may differ from the risks associated with an offering that is done solely under Regulation CF.

The types of securities that may be offered on Netcapital and the risks associated with each, including dilution.

Netcapital only allows issuers to offer shares of common stock or membership interest units (the "Securities"). No debt, convertible debt, coins, tokens, revenue bonds, or other types of financial products can be sold on the Netcapital platform.

There is the possibility that the ownership percentage of any Securities holder may be diluted, and the voting power of each Securities holder may be diminished overtime as the company continues to grow and raises additional capital by selling Securities to other investors.

A market for the Securities may never develop. There currently is no public trading market for the Securities, and issuers make no assurances that holders of Securities will be able to sell their Securities at all or at any particular price. There are no assurances an issuer will pursue or complete any action that will result in the creation of a public trading market.

The offering price for Securities does not represent a determination of their fair market value. The offering price for Securities was determined based on a number of assumptions and the application of subjective factors inherent in any valuation of a business, particularly one that has limited prior operating history and financial results, and is not based on perceived market value, book value, or other established criteria. In most instances, no appraisals, pricing analyses or other traditional valuation analyses have been or will be prepared by any outside accounting or independent valuation services firm in connection with establishing the price at which Securities will be sold or valued. Accordingly, the offering price for Securities may not represent the value an investor may be able to receive in the event of a sale of such Securities nor does it represent a determination of the fair market value of the Securities. There is no guarantee that any Securities have or will ever obtain a value equal to or greater than the offering price.

There is no guarantee of any return on an investment in any Securities. Investors may lose their entire investment.