Related Party Transactions |
9 Months Ended |
|---|---|
Jan. 31, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 7 – Related Party Transactions
The Company’s largest shareholder, Netcapital Systems LLC (“Systems”), of which Jason Frishman, Founder, owns a 29% interest, owns shares of common stock, or % of the Company’s outstanding shares as of January 31, 2024. The company paid Systems $95,000 and $100,000 in the three- and nine-month periods ended January 31, 2024, and $100,000 and $300,000 in the three- and nine month periods ended January 31, 2023, respectively, for use of the software that runs the website www.netcapital.com.
Cecilia Lenk, the Chief Executive Officer of Netcapital Advisors Inc., (“Advisors”), our wholly owned subsidiary, is a member of the board of directors of KingsCrowd Inc. The Company sold shares of KingsCrowd in June 2022 for proceeds of $200,000 and recorded a realized loss on the sale of the investment of $406,060 during the nine months ended January 31, 2023. As of January 31, 2024 and April 30, 2023, the Company owned shares of KingsCrowd Inc., valued at $513,550 and $3,209,685, respectively.
Cecilia Lenk, the Chief Executive Officer of Advisors is a member of the board of directors of Deuce Drone LLC. As of January 31, 2024 and April 30, 2023, the Company owns membership interest units of Deuce Drone LLC., valued at $2,350,000. The Company has notes receivable aggregating to $152,000 from Deuce Drone LLC as of January 31, 2024 and April 30, 2023.
Compensation to officers in the three- and nine-month periods ended January 31, 2024 consisted of stock-based compensation valued at $ and $, respectively, and cash salary of $218,471 and $751,488, respectively.
Compensation to a related party consultant, John Fanning Jr., son of our CFO, in the three- and nine-month periods ended January 31, 2024 consisted of cash wages of $14,624 and $44,641, respectively, and for the three- and nine-month periods ended January 31, 2023 consisted of cash wages of $15,000 and $45,000, respectively This consultant is also the controlling shareholder of Zelgor Inc. and $0 and $33,000 of the Company’s revenues in the three- and nine-month periods ended January 31, 2024, respectively, and $16,500 and $44,000 of the Company’s revenues in the three- and nine-month periods ended January 31, 2023, respectively, were from Zelgor Inc. As of January 31, 2024 and April 30, 2023, the Company owned shares which are valued at $1,400,000.
As of January 31, 2024 and April 30, 2023, the Company has invested $240,080 in an affiliate, 6A Aviation Alaska Consortium, Inc., in conjunction with a land lease in an airport in Alaska. Cecilia Lenk, the Chief Executive Officer of Advisors is also the Chief Executive Officer of 6A Aviation Alaska Consortium, Inc.
We owe Steven Geary, a director, $31,680 as of January 31, 2024 and April 30, 2023. This obligation is not interest bearing. $16,680 is recorded as a related party trade accounts payable and $15,000 as a related party note payable. We have no signed agreements for the indebtedness to Mr. Geary and accordingly such obligations are not deemed in default. We owe Paul Riss, a director of our Netcapital Funding Portal Inc., $58,524, which is recorded as a related party trade accounts payable, and along with the $16,680 amount due to Mr. Geary, accounts for the total related party trade accounts payable amount of $75,204. The related party trade accounts payable obligations are not interest bearing and are not deemed in default.
During the nine months ended January 31, 2023, we paid $12,019 to a related party to retire a note payable of $3,200 and expenses payable of $8,819.
In January 2023 we granted stock options to purchase an aggregate of shares of our common stock to four related parties as follows: our Chief Executive Officer, Martin Kay, shares; our Chief Financial Officer, Coreen Kraysler shares; our Founder, Jason Frishman, shares; and a director of Netcapital Funding Portal, Inc., Paul Riss, shares. The options have an exercise price of $, vest monthly on a straight-line basis over a -year period and expire in years.
On April 25, 2023, the Company also granted an aggregate of options, or options each to the following board members: Cecilia Lenk, Avi Liss, Steven Geary and Arnold Scott, to purchase shares of our common stock at an exercise price of $ per share. The options vest monthly on a straight-line basis over a -year period and expire in years.
Coreen Kraysler, our Chief Financial Officer, has personally guaranteed a $500,000 promissory note from the U.S. Small Business Administration. The note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,437 began on December 17, 2022.
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