Netcapital Inc. — financial distress indicators
Financial-health summary
Netcapital Inc.'s reported numbers place it in the 'Weak' financial-health band (distress score 52/100). The main indicators are consecutive annual losses, equity eroded by >20% in a year and massive shareholder dilution. In its favour: high insider/promoter ownership (44%) aligns management with survival.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Net loss in each of the last two years.
Sustained losses at a lender usually mean credit losses are outrunning provisions — a risk-management failure.
Book equity changed -61% YoY.
Fast equity erosion (losses, unrealised bond losses, write-downs) was the signature of the 2023 U.S. regional-bank failures.
Share count up +571% in a year.
Survival financing: repeated equity raises at depressed prices.
Revenue changed -82% YoY.
Shrinking net revenue (interest margin, fees, premiums) weakens the capacity to absorb losses.
Annualised volatility is 213%.
High equity volatility raises the market-implied default probability.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (44%) aligns management with survival.
📰 Recent news scan
- Netcapital Inc. Receives Nasdaq Notice Related to Delayed Quarterly Report on Form 10-QYahoo Finance · 2026-09-25
- Netcapital Inc. Announces Receipt of Nasdaq Notification Regarding Delayed Annual Report on Form 10-KYahoo Finance · 2026-08-28
- Netcapital Inc. Statement from CEOYahoo Finance · 2026-08-12
- Netcapital Inc. Granted Additional 180-Day Nasdaq Compliance Period for Minimum Bid Price RequirementYahoo Finance · 2026-08-10
- Netcapital to Host Investor Conference Call on July 7, 2026Yahoo Finance · 2026-06-10
- Netcapital Signs Non-Binding LOI to Acquire Resmac Mortgage Banking Assets from RezyFiYahoo Finance · 2026-06-04
⚖️ U.S. legal pathway — broker-dealer liquidation
- Stockbrokers and commodity brokers cannot reorganise under Chapter 11 (§109(d)); they liquidate under Chapter 7 (subchapters III/IV) or in a SIPA proceeding.
- SIPC protects customer accounts up to $500,000 (including $250,000 cash) for missing customer property — not market losses.
- Net-capital rule (SEC Rule 15c3-1) breaches are the regulatory early warning.
Frequently asked questions
What do Netcapital Inc.'s financial-health indicators show?
As of 2026-10-08, Netcapital Inc.'s public financial data places it in the 'Weak' band with a distress score of 52/100, driven by consecutive annual losses, equity eroded by >20% in a year and massive shareholder dilution. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Netcapital Inc.'s financial distress score?
52/100 ('Weak').
What works in Netcapital Inc.'s favour?
High insider/promoter ownership (44%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Bank & Finance companies with distress indicators
- CaliberCos Inc. (CWD)Very weak 79/100
- loanDepot, Inc. (LDI)Weak 69/100
- Pineapple Financial Inc. (PAPL)Weak 69/100
- TeraWulf Inc. (WULF)Weak 68/100
- SHF Holdings, Inc. (SHFS)Weak 67/100
- Streamex Corp. (STEX)Weak 67/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.