What Does Netcapital Inc.'s 28.62% Stock Drop Mean for Investors? The Law Offices of Howard G. Smith Outlines Securities Fraud Class Action Lead Plaintiff Deadline

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Oct 23, 2026, 13:50 ET

Suit alleges Netcapital Inc. failed to disclose key facts to investors from December 15, 2021 through September 3, 2026; lead plaintiff deadline is December 7, 2026

BENSALEM TOWNSHIP, Pa., Oct. 23, 2026 /PRNewswire/ -- The Law Offices of Howard G. Smith today reported that a securities class action lawsuit is pending against Netcapital Inc. ("Netcapital" or the "Company") (NASDAQ: NCPL) on behalf of investors who acquired its securities from December 15, 2021 through September 3, 2026. The Netcapital Inc. case, Chance v. Netcapital Inc. et al., was filed on October 8, 2026 in the U.S. District Court District of Massachusetts (Case No. 1:26-cv-14584).

Investors with losses on Netcapital Inc. securities can contact the Law Offices of Howard G. Smith about the Netcapital Inc. lawsuit before the December 7, 2026 lead plaintiff deadline.

Key deadlines and dates for Netcapital Inc. investors

Lead plaintiff deadline: December 7, 2026
Class period: December 15, 2021 through September 3, 2026
Complaint filed: October 8, 2026

What happened?

On August 10, 2026, the SEC filed a complaint against Netcapital and certain senior executives alleging, among other things, that Netcapital was involved in a fraudulent scheme to overstate the revenue of Netcapital. Specifically, from approximately October 2021 through January 2024, Netcapital improperly recorded nearly $14 million in revenue from sham consulting agreements which produced no real revenue for Netcapital. The recognition of this revenue inflated Netcapital's total revenue by approximately 345%. During this period, investors in Netcapital's public and private securities offerings invested over $25.6 million.

On this news, Netcapital stock fell $0.05 or 12.82%, to close at $0.35 on August 11, 2026, thereby injuring investors.

Then on August 17, 2026, the Netcapital disclosed that its independent registered public accounting firm, Fruci & Associates II, PLLC, had resigned.

On this news, Netcapital stock fell $0.09 or 28.62%, to close at $0.23 on August 18, 2026, thereby further injuring investors.

Finally on September 3, 2026, after market close, Netcapital disclosed that on Avi Liss had resigned as a member of the Board of Directors, and from all committees of the Board, including the Audit Committee, effective immediately. In his resignation letter, Liss stated that he was resigning "in light of the serious allegations recently asserted against the Company and certain current and former officers, directors, and other individuals" in the SEC Complaint.

On this news, Netcapital stock fell $0.05 per share, or 8.15%, to close at $0.58 per share on September 4, 2026. The following trading day, Netcapital stock fell a further $0.08 per share, or 13.15%, to close at $0.50 per share on September 8, 2026, thereby further injuring investors.

What is the Netcapital Inc. lawsuit about?

The Netcapital Inc. securities lawsuit alleges that, between December 15, 2021 and September 3, 2026, defendants made materially false and/or misleading statements and failed to disclose material adverse facts about Netcapital Inc.'s business, operations, and prospects. Specifically, the complaint alleges defendants failed to disclose that: (1) Over the Class Period, Netcapital improperly recognized material revenues from what were, in reality, sham consulting agreements with entities controlled by Defendant John Fanning; (2) The consulting agreements were backdated and in some cases forged, and Netcapital Advisors provided little if any meaningful consulting services; (3) The Portfolio Company transactions were improperly undisclosed related-party transactions involving John Fanning; (4) Netcapital's certifications pursuant to the Sarbanes-Oxley Act of 2002 were false; and (5) as a result, defendants' positive statements about Netcapital Inc.'s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

"The lawsuit against Netcapital Inc. alleges that, among other things, the Company failed to tell investors that Over the Class Period, Netcapital improperly recognized material revenues from what were, in reality, sham consulting agreements with entities controlled by Defendant John Fanning. Netcapital Inc. investors who bought during the class period may be able to pursue their losses, and the December 7, 2026 deadline is where that process begins," said Howard G. Smith of The Law Offices of Howard G. Smith.

Next steps for Netcapital Inc. investors

Netcapital Inc. investors who suffered losses may contact The Law Offices of Howard G. Smith to learn about pursuing their claims.

Lead plaintiff motions in the Netcapital Inc. class action are due to the Court by December 7, 2026. For more information, visit the firm's website, email [email protected], or call (215) 638-4847.

If you purchased Netcapital Inc. securities during the class period, you may retain counsel of your choice, or you may take no action and remain an absent class member. No class has been certified in the Netcapital Inc. case so far.

Common questions from Netcapital Inc. investors

Who is eligible? Investors who acquired Netcapital Inc. securities from December 15, 2021 through September 3, 2026 and suffered losses may qualify for the class in the Netcapital Inc. shareholder lawsuit.

What is the deadline? Lead plaintiff motions in the Netcapital Inc. case are due by December 7, 2026.

Can I recover without being lead plaintiff? Yes, Netcapital Inc. investors may take no action and remain absent class members.

Does it cost anything? The Law Offices of Howard G. Smith works on contingency, so investors pay no attorneys' fees unless there is a recovery, and any fees require court approval.

About The Law Offices of Howard G. Smith

The Law Offices of Howard G. Smith has helped injured investors recover their money for more than 15 years. The firm prosecutes securities fraud, takeover, and derivative litigation against public companies and their officers, directors, and advisors in federal and state courts nationwide, and has helped clients recover hundreds of millions of dollars in losses. Clients speak directly with a lawyer, who will promptly answer any question.

Prior results do not guarantee a similar outcome.

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Contact

Howard G. Smith

The Law Offices of Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Email: [email protected]

Telephone: (215) 638-4847

www.howardsmithlaw.com

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

SOURCE Law Offices of Howard G. Smith