8-K: Netcapital Secures Perpetual Blockchain Software License from Horizon Globex, Issues 500,000 Shares

Netcapital Inc. has entered into a definitive agreement with Horizon Globex GmbH to license a blockchain-based platform for U.S. capital-raising and secondary trading services, in exchange for 500,000 shares of Netcapital common stock.

Summary

• Netcapital Inc. entered into a Horizon Software Agreement with Horizon Globex GmbH on June 26, 2025, granting Netcapital a royalty-free, paid-up, non-exclusive, perpetual, irrevocable, unrestricted license to use the Licensed Software in the United States.
• The Licensed Software is a regulatorily compliant blockchain-based platform and smartphone application designed to facilitate security token offerings, real-world asset (RWA) offerings, Reg D and Reg A offerings, token primary offerings, and secondary market token trading and issuance.
• As consideration for the license, Netcapital will issue 500,000 shares of its common stock, with a par value of $0.001 per share, to Horizon or its affiliate.
• Netcapital did not receive any cash proceeds from the issuance of these shares.
• The agreement specifies that the Licensed Software will be branded with Netcapital's image and includes features such as comprehensive KYC/AML services, App Store publication, Ethereum integration, ERC20 smart contracts, SMS, and email integration.
• The agreement outlines conditions for termination, including a 30-day cure period for material defaults and immediate termination for insolvency-related events.
• Intellectual property rights to the Licensed Software remain with Horizon Globex GmbH, with Netcapital receiving a license to use it.
• Future negotiations are planned for an annual support services and maintenance agreement, a source code escrow agreement, and development agreements for any additional bespoke features requested by Netcapital, which would be billed at $500 per day.

Sentiment

Score: 7

Explanation: The agreement provides Netcapital with a key technology for expanding into digital asset capital raising and trading, which is a positive strategic move. However, the issuance of shares without cash proceeds and potential future costs for support and bespoke features introduce some financial considerations.

Positives

• Secured a royalty-free, paid-up, non-exclusive, perpetual, irrevocable, unrestricted license to a blockchain-based platform, ensuring long-term access to critical technology.
• Gains access to a regulatorily compliant platform for capital-raising and secondary trading services in the U.S., aligning with evolving digital asset regulations.
• The platform supports diverse offerings including security token, RWA, Reg D, and Reg A, significantly expanding Netcapital's service capabilities in the digital asset space.
• The agreement includes branding of the platform and app with Netcapital's image, enhancing its market presence and brand recognition.
• The software incorporates comprehensive features like KYC/AML, Ethereum integration, and smart contract capabilities, streamlining operational processes and compliance.

Negatives

• Issued 500,000 shares of common stock as consideration for the license, which will result in shareholder dilution.
• Did not receive any cash proceeds from the issuance of the shares, meaning no direct capital infusion from this transaction.
• Will need to negotiate separate agreements for annual support services, maintenance, and source code escrow, which may incur additional, unspecified costs.
• Additional bespoke features and services requested by Netcapital will be billed at a rate of $500 per day, representing potential future expenses.

Risks

• The agreement may be terminated if a material obligation is not cured within 30 days after receipt of notice.
• Immediate termination is possible if either party files for bankruptcy, has an order for relief undischarged for 60 days, has a receiver appointed, is dissolved or liquidated, ceases business, or makes an assignment for creditors.
• Reliance on Horizon Globex GmbH for the continued operation and support of the Licensed Software, although the intent is to ensure Netcapital can continue its use.
• Potential for additional costs related to future support, maintenance, source code escrow, and bespoke feature development.
• The platform's functionality is subject to testing, and Netcapital is entitled to terminate the agreement with immediate effect if it does not conform to the functionalities and requirements provided in Annex 1.
• Netcapital is not liable for failures resulting from its interface arrangements with third parties introduced by Netcapital.

Future Outlook

Netcapital intends to leverage the newly licensed blockchain platform to provide capital-raising and secondary trading services to its clients in the United States. The parties plan to negotiate future agreements for annual support services, maintenance, and a source code escrow, aiming to ensure Netcapital's continued ability to utilize the Licensed Software effectively.

Management Comments

• Netcapital, directly or through its affiliated entities, is a licensed investment firm ready to use the Platform to facilitate security token offerings, Reg D offerings, Reg A offerings, and/or token primary offerings, as well as a secondary-market for token trading and issuance in the United States.
• It is the intent of the parties to ensure that Netcapital has the ability to continue using the Licensed Software for its currently intended purposes, whether supported by Horizon Globex or a third party, and Horizon Globex shall cooperate with Netcapital in either event.

Industry Context

This agreement positions Netcapital to expand its services within the rapidly evolving digital asset and blockchain-based capital markets. The adoption of a regulatorily compliant platform for security token offerings, real-world assets, and secondary trading aligns with the growing trend of asset tokenization and the increasing demand for efficient, compliant digital fundraising and trading solutions. This strategic move could enhance Netcapital's competitive standing against both traditional financial institutions and emerging fintech platforms in the U.S. market.

Comparison to Industry Standards

• The agreement's emphasis on a 'regulatorily compliant' blockchain platform for Reg D and Reg A offerings, as well as security token and RWA offerings, demonstrates adherence to evolving U.S. securities regulations for digital assets, which is a critical standard in this nascent industry.
• The inclusion of comprehensive KYC+AML API checks, liveness detection, and integration with official tax forms aligns with stringent financial industry standards for anti-money laundering and customer identification, comparable to practices seen in established financial institutions and regulated digital asset exchanges.
• The support for Ethereum blockchain integration and ERC-20 smart contracts is a common and expected technological choice for platforms dealing with security tokens and digital assets, reflecting prevalent industry technology stacks.
• The provision for a source code escrow agreement, if requested, is a recognized best practice in software licensing, offering a level of business continuity and risk mitigation that is often sought for critical software dependencies.
• The specified billing rate of $500 per day for bespoke features is a typical consulting or development rate for specialized software services in the fintech sector, though its competitiveness would depend on the specific expertise and market conditions.

Stakeholder Impact

• Shareholders: Experience dilution due to the issuance of 500,000 new shares. Potential long-term benefit from expanded business capabilities and market reach in digital assets.
• Customers: Will gain access to a new blockchain-based platform for capital-raising and secondary trading services, potentially offering more efficient and compliant options for digital asset transactions.
• Employees: Potential for new roles or expanded responsibilities related to the implementation and operation of the new software platform.

Next Steps

• Netcapital to work with Horizon Globex to configure internal IT systems or third-party APIs.
• Netcapital to provide branding information to Horizon Globex for the Licensed Software.
• Horizon Globex to provide branding guidelines and implement branding for the Licensed Software.
• Horizon Globex to ensure prompt delivery and smooth distribution of the Licensed Software.
• Joint conduct of Acceptance Testing by both parties to ascertain the correct functioning of the Licensed Software.
• Parties to negotiate an annual support services and maintenance agreement.
• Parties to negotiate a source code escrow agreement, if deemed necessary.
• Parties to negotiate development agreements for any additional bespoke features requested by Netcapital.

Key Dates

Recommendation

Keywords

Netcapital, Blockchain, Capital Raising, Secondary Trading, Security Tokens, Reg A, Reg D, Software License, Equity Issuance, SEC Filing, 8-K, Fintech, Digital Assets, Tokenization, Horizon Globex