Netcapital Inc. Auditor Resigns Citing SEC Litigation Notice

What Happened
Netcapital Inc. announced that its independent registered public accounting firm, Fruci & Associates II, PLLC, resigned effective August 12, 2026. Fruci said it could no longer serve as the Company’s auditor in light of Securities and Exchange Commission Litigation Release No. 26607 and a related civil complaint filed against the Company and certain affiliated individuals. Fruci had not issued an audit report for the fiscal year ended April 30, 2026 before resigning.

Key Details

• Auditor: Fruci & Associates II, PLLC resigned effective August 12, 2026; resignation was initiated by Fruci, not the Audit Committee.
• Prior audits: Fruci’s audit reports for fiscal years ended April 30, 2025 and April 30, 2024 were unqualified (no adverse opinion or disclaimer) but included a “Going Concern” paragraph stating substantial doubt about the Company’s ability to continue as a going concern.
• No disagreements: During fiscal years ended April 30, 2025 and April 30, 2026 and through August 12, 2026, there were no disagreements between the Company and Fruci on accounting, disclosure, or auditing scope/procedure.
• Documentation: Fruci provided a letter dated August 17, 2026 (filed as Exhibit 16.1) addressing these matters with the SEC.

Why It Matters
An auditor resignation tied to an SEC litigation release and related complaint is material for investors because it may affect confidence in the company’s financial reporting and could delay issuance or filing of audited financial statements for the fiscal year ended April 30, 2026. The prior-year audit reports included going concern language, which already signaled financial uncertainty. Netcapital will need to engage a new independent auditor and address any auditor or SEC-related issues before completing its audited filings.