NCPL Netcapital Inc

Item 1.01. Entry into a Material Definitive Agreement.  

On January 2, 2023, Netcapital Systems LLC (“Systems”), a Utah limited liability company and wholly owned subsidiary of Netcapital Inc. (the “Company”) entered into a software license and services agreement (“Agreement”) with Templum, Inc. (“Templum”), a company that provides capital markets infrastructure for trading private equity securities. The Agreement allows the Company to launch a customized marketplace for the trading of private securities issued under an exemption to the Securities Act of 1933, as amended. Templum Markets LLC is an alternative trading system operating under the provisions of Regulation ATS. The agreement is for an initial term of three (3) years and will automatically renew for consecutive terms of one (1) year unless (i) either party upon at least ninety (90) days prior to the expiration of the initial term or then-current renewal term, provides written notice to the other party of its intention not to renew, in which case this Agreement and the applicable Order and Technology Services and Pricing Outline will expire, as the case may be, at the end of the then current initial term or renewal term; or (ii) either party terminates this Agreement pursuant to and in accordance with the terms and conditions set forth in the Agreement.. Systems paid Templum an implementation fee upon signing of the Agreement.

The license grants Systems a limited, revocable, non-exclusive, non-transferable, and non-sublicensable right and license to use Templum’s software and to provide its users access to the software. Notwithstanding the foregoing, Systems shall be Templum’s exclusive registered crowdfunding platform partner and Templum shall not provide services to any third-party whose primary business is providing services as a registered crowdfunding platform except as noted in the Agreement. System agreed to pay Templum a discounted license fee in year 1, and a standard license fee in years 2 and 3. After conclusion of the initial 3-year term, the annual license fee will increase by the greater of CPI+3% or 5% for each renewal term.