Netcapital Inc. 8-K

What Happened
Netcapital Inc. announced on its Form 8-K that it entered into a non‑binding letter of intent (LOI) dated May 30, 2026 (executed May 31, 2026) with RezyFi, Inc. to acquire substantially all assets and assumed liabilities of Resmac, Inc. through a newly formed, wholly owned South Dakota subsidiary (“SD Holdco”). The proposed asset purchase would be valued at $5,000,000 and paid solely by issuing 2,500,000 shares of SD Holdco Series A Convertible Preferred Stock (stated value $2.00/share); the LOI is non‑binding except for specified provisions (exclusivity, confidentiality, disclosure, expenses, governing law, no broker and related provisions).

Key Details

• LOI parties/dates: LOI dated May 30, 2026 and executed May 31, 2026 between Netcapital and RezyFi (Resmac is a RezyFi subsidiary).
• Consideration: $5,000,000 total value paid as 2,500,000 shares of SD Holdco Series A Convertible Preferred Stock (no cash and no Netcapital common stock issued).
• Preferred terms: 6% annual cumulative dividend (payable in kind only if declared), convertible only into SD Holdco common, voting as‑converted, liquidation preference = stated value + accrued dividends, 18‑month lock‑up after spinout/conversion.
• Earnout / additional equity: up to 1,000,000 additional preferred shares if Resmac unit achieves $10M cumulative GAAP revenue within 24 months; up to 500,000 additional preferred shares if SD Holdco completes an S‑1 raising ≥ $10M.
• Intended corporate plan: Netcapital and SD Holdco would use commercially reasonable efforts to file a Form S‑1 to register SD Holdco equity and Netcapital contemplates distributing its SD Holdco interest to shareholders as a dividend spinout (no assurance this will occur).
• Closing conditions: HUD approval for change of control of Resmac’s HUD Title II non‑supervised direct endorsement mortgagee approval; termination/clearance of a preexisting RezyFi share exchange agreement with ECGI Holdings; warehouse lender consents; state license transfers; 45‑day confirmatory due diligence; board approvals; definitive agreements; other customary conditions.
• Exclusivity & remedies: 90‑day exclusivity for RezyFi/Resmac; $250,000 liquidated damages payable to Netcapital if RezyFi breaches exclusivity (e.g., re‑engages ECGI or another buyer).
• Required disclosure: the LOI requires Netcapital to disclose a pre‑existing personal/professional relationship between Netcapital CEO Todd Violette and RezyFi CEO John Vu and a roughly $250,000 investment by VUVU Ventures (affiliated with Netcapital’s CEO) in ECGI Holdings.

Why It Matters
This LOI signals Netcapital’s plan to expand into mortgage banking by acquiring Resmac’s origination, servicing, licenses and FHA approvals through a separately capitalized subsidiary (SD Holdco). The deal would not dilute Netcapital common shareholders directly (consideration is SD Holdco preferred) and contemplates a future S‑1 and dividend spinout that could create a separate public mortgage company—however, the LOI is non‑binding on the acquisition itself and lists numerous regulatory, lender, and board approvals required before closing. Key milestones (HUD change‑of‑control approval, warehouse lender consents, and successful due diligence) and the 90‑day exclusivity requirement are material near‑term items investors should watch; there is no assurance the transaction, S‑1, financing, or spinout will occur.