Netcapital issues $182,120 convertible promissory note to Vanquish Funding for $157,000 proceeds
What's the deal? NetcapitalDealroom has a profile for this one. Try Dealroom → Inc., an online investment platform, has issued a $182,120 promissory note to Vanquish Funding Group Inc. in exchange for $157,000 in gross proceeds. The deal, disclosed in an 8-K filing dated June 5, 2026, netted Netcapital $150,000 after reimbursing $7,000 in the buyer's legal and due diligence expenses. The company said it will use the funds for general working capital.
The note carries a 13% interest rate, matures on March 30, 2027, and requires five scheduled payments totalling $205,795. It also includes conversion rights, allowing the holder to convert the debt into equity at 65% of the lowest 20-day trading price, with a floor of $1.00 per share during the first six months.
Why now? The deal structure — a convertible note with a steep original issue discount of $25,120 — suggests Netcapital needed quick access to cash. For small public companies, this type of financing is often a last resort when traditional lending or equity raises aren't feasible.
What could go wrong? The terms are punishing if things go sideways. Default interest jumps to 22% annually. If Netcapital defaults, the outstanding principal becomes immediately due at 150% — and that figure climbs to 200% if it also fails to meet conversion obligations.
The conversion mechanism poses dilution risk for existing shareholders. A 35% discount to market price means Vanquish could convert and sell shares at a significant profit, pushing the stock price down further in a vicious cycle common with this type of financing.
Asset-sale restrictions also limit Netcapital's flexibility, with exceptions only for activity related to its Resmac transaction.
The signal: Netcapital is classified as a "mature" company on Dealroom, yet the punishing terms of this convertible note — a 35% conversion discount, 13% interest, and steep default penalties — paint a picture more consistent with a micro-cap struggling for liquidity than a platform that has reached steady state. For the broader online investment platform space, where trust and financial stability are core to the product, this kind of financing structure raises questions about whether the company can sustainably compete while servicing increasingly expensive debt.
Read more: blogarama.com
