Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement
On January 28, 2022 and February 3, 2022 Netcapital Inc. renegotiated terms in the Amended Loan and Security Agreement dated July 25, 2014 (“the Loan”) with its secured lender, Vaxstar LLC, as follows:
| · | The maturity date changed from April 30, 2022 to April 30, 2023. |
| · | The interest rate was clarified to be 8% per annum. |
Paragraph 1.(d) (i) of the Loan was amended to be and read as follows:
“Subject to Section 7(b)(ii), the principal amount outstanding under the Loan Advances shall accrue interest from the date of this Amendment until the Maturity Date at the rate of eight percent (8%) per annum. Interest is not due until the Maturity Date. It is understood and agreed that this provision will have retroactive effect and deemed effective as of October 31, 2020.”
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Description of Exhibit |
| 4.1 |
|
| 4.2 | Agreement dated February 3, 2022 to amend the Amended Loan and Security Agreement dated July 25, 2014. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Netcapital Inc. | ||
| (Registrant) | ||
| Date: February 3, 2022 | /s/ Coreen Kraysler | |
| Coreen Kraysler | ||
| Title: Chief Financial Officer |
Exhibit 4.1
AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
This Amendment (the “Amendment”) to the Amended Loan and Security Agreement dated July 25, 2014, as amended subsequent thereto (the "Agreement") is entered into this 28th day of January 2022, by and between Vaxstar LLC, a Delaware limited liability company ("Vaxstar"), and Netcapital Inc. ("Netcapital"), a Utah corporation, with reference to the following:
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READINGS/RECITALS
A. The Agreement, as amended, contains a maturity date of April 30, 2022, and Netcapital and Vaxstar desire to extend the maturity date to a time in the future.
B. Both parties seek to amend the Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Paragraph 9 (k) of the Agreement is amended to read:
“Maturity Date” means April 30, 2023.
COUNTERPARTS: This Amendment may be executed simultaneously in one or more counterparts, each of which when executed and delivered shall be deemed an original, but all of which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the date written above.
Vaxstar LLC
Signature: /s/ Manuel Teixeira
Manuel Teixeira, Manager
Netcapital Inc.
Signature: /s/ Cecilia Lenk
Cecilia Lenk, CEO
Exhibit 4.2
AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
This Amendment (the “Amendment”) to the Revolving Loan and Security Agreement dated April 28, 2011, as previously amended by way of agreements dated July 25, 2014, October 31, 2017, October 31, 2020, January 31, 2021, April 30, 2021 and January 28, 2022 (the "Agreement") is entered into this 3rd day of February 2022, by and between Vaxstar LLC, a Delaware limited liability company ("Vaxstar"), and Netcapital Inc. ("Netcapital"), a Utah corporation, with reference to the following:
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WITNESSETH
WHEREAS, the Agreement, as amended, provides that the Loan Advances accrue interest at a rate of 8% per annum compounding daily; and
WHEREAS, the parties did not intend for the Loan Advances to accrue interest at a rate of 8% per annum compounding daily, but rather that the Loan Advances to accrue interest at a rate of 8% per annum with no daily compounding; and
WHEREAS, the parties now desire to amend Paragraph 1.(d)(i) of the Agreement as hereinafter set forth reflect the parties original intent that the interest on the Loan Advances will accrue at 8% per annum but with no daily compounding, and to further clarify that this amendment will have retroactive effect to October 31, 2020.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agreement is hereby amended as follows:
1. Paragraph 1.(d) (i) of the Agreement is hereby amended to be and read as follows:
“Subject to Section 7(b)(ii), the principal amount outstanding under the Loan Advances shall accrue interest from the date of this Amendment until the Maturity Date at the rate of eight percent (8%) per annum. Interest is not due until the Maturity Date. It is understood and agreed that this provision will have retroactive effect and deemed effective as of October 31, 2020.”
2. (A) This agreement shall be construed and interpreted in accordance with the laws of the State of New York without giving effect to the conflict of laws rules thereof or the actual domiciles of the parties.
(B) Except as amended hereby, the terms and provisions of the Agreement shall remain in full force and effect, and the Agreement is in all respects ratified and confirmed. On and after the date of this agreement, each reference in the Agreement to the "Agreement", "hereinafter", "herein", "hereinafter", "hereunder", "hereof", or words of like import shall mean and be a reference to the Agreement as amended by this agreement.
(C) This agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute a single Amendment.
IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the date written above.
Vaxstar LLC
Signature: /s/ Manuel Teixeira
Manuel Teixeira, Manager
Netcapital Inc.
Signature: /s/ Cecilia Lenk
Cecilia Lenk, CEO