#USA #Class Action #Los Angeles #Securities Fraud #Netcapital Inc.

The Current Situation for Netcapital Inc. Shareholders

The recent decline in the stock price of Netcapital Inc. (NCPL) has sent ripples of concern among its investors. Key developments have unfolded that not only affected share value but also raised serious allegations against the company.

Significance of the Stock Drop

On August 18, 2026, the share price of Netcapital dropped by 28.62%, a staggering decline that followed a succession of unsettling announcements that week. These losses have prompted investors to seek clarity on their legal options in light of a class-action lawsuit initiated by Glancy Prongay Wolke & Rotter LLP in the U.S. District Court of Massachusetts.

Class Action Lawsuit

Filed on October 8, 2026, the lawsuit is centered around allegations that Netcapital misled investors from December 15, 2021, to September 3, 2026. Specifics of the complaint highlight that the company overstated its revenues significantly. Reports indicate that nearly $14 million in revenue had been improperly recognized from non-existent consulting agreements, inflating net revenue by approximately 345%. For those affected by this alleged securities fraud, this lawsuit offers a glimmer of hope for recovery.

Details of the Allegations

The core of the allegations revolves around four main points:
1. Misrepresentation of Revenue: Claims suggest that Netcapital improperly recognized revenue from sham consulting agreements linked to entities controlled by John Fanning, a prominent figure in the company.
2. Backdating and Forgery: The consulting agreements in question were allegedly backdated and, in some cases, forged, indicating a serious breach of trust and corporate governance.
3. Undisclosed Related Party Transactions: Transactions involving these consulting agreements were not disclosed appropriately, raising further legal concerns.
4. False Certifications: The lawsuit also alleges that Netcapital's Sarbanes-Oxley Act certifications were misleading, presenting a false narrative about the company's financial health.

Key Dates for Investors

For shareholders looking to get involved, it's essential to be aware of the upcoming deadlines. The lead plaintiff deadline to file for participation in this class action is set for December 7, 2026. Investors must act promptly to ensure they can pursue potential claims.

What Should Affected Investors Do?

Those who purchased or acquired Netcapital securities during the class action period may be eligible for compensation. If you're considering taking part in the lawsuit:

• - You can submit your loss information, helping establish your claim in this legal proceeding.
• - You do not need to be the lead plaintiff to share in potential recoveries; simply being a class member suffices.
• - Glancy Prongay Wolke & Rotter LLP operates on a contingency fee basis, meaning investors won't bear upfront legal costs—a significant relief for those already facing financial repercussions.

Next Steps in the Legal Process

As the situation evolves, affected shareholders must stay vigilant. Consistent updates about the lawsuit and Netcapital's financial disclosures will be crucial in determining the next actions. Engaging with the law firm or seeking their advice can provide valuable insights into navigating this complex circumstance.

Conclusion

As the landscape surrounding Netcapital Inc. continues to shift, impacted investors are encouraged to evaluate their options carefully. The combination of legal challenges and the quest for accountability presents a critical moment for those holding Netcapital shares. Remaining informed about the progress of the class action can significantly impact recovery chances in the face of this apprehensive journey.