Netcapital Inc. announced the resignation of director Avi Liss, effective August 27, 2026. The resignation was submitted in writing and included his departure from all Board committees, including the Audit Committee.
The filing states that Mr. Liss resigned in response to a civil action filed by the U.S. Securities and Exchange Commission on August 10, 2026. The SEC lawsuit, captioned Securities and Exchange Commission v. John Fanning, et al. (Civil Action No. 1:26-cv-13665), alleges misconduct by the Company and certain officers and directors. Mr. Liss indicated that he did not wish to continue his association with the Company due to the nature of these allegations and stated that he was not involved in, participated in, or received financial benefits from the conduct alleged by the SEC.
To fill the vacancy on the Board, Netcapital elected Cesar Herrera as a director effective August 30, 2026. Mr. Herrera will serve until the next annual meeting of shareholders or until his successor is elected. He was appointed to the Audit Committee immediately. The Audit Committee now consists of Steven Geary (Chair), Arnold Scott, and Cesar Herrera. The Compensation Committee includes Arnold Scott (Chair), Steven Geary, and Cesar Herrera.
The Board determined that Mr. Herrera qualifies as an independent director under Nasdaq Listing Rules and satisfies the independence requirements for audit and compensation committee members. Mr. Herrera has served as the CEO and director of KRTL Holding Group Inc. since December 2021 and has held a California real estate broker license since 2006. The Board did not designate him as an audit committee financial expert. Following his election, the Board consists of three independent directors. Mr. Herrera will receive compensation on the same terms as other non-employee directors, prorated for partial service, and will be covered under the Company's directors' and officers' liability insurance policy.
