What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-07-29 compared with 2023-07-26 · 549 added, 292 removed, 20 unchanged (98% of the section changed)

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION

AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED

ELSEWHERE IN THIS ANNUAL REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL

THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS,

LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR

ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS.

Netcapital Inc.

is a fintech company with a

scalable technology platform that allows private companies to raise capital online from accredited and non-accredited investors.

virtually all investors the opportunity to access investments in private companies.

Our model is disruptive to traditional private equity

investing and is based on Title III, Reg CF of the JOBS Act.

We generate fees from listing private companies on our portal.

Our consulting

group, Netcapital Advisors, provides marketing and strategic advice in exchange for cash and equity positions.

The Netcapital funding

portal is registered with the SEC, is a member of the Financial Industry Regulatory Authority, or FINRA, a registered national securities

association, and provides investors with opportunities to invest in private companies.

We provide private company investment access

to accredited retail and non-accredited retail investors through our online portal (www.netcapital.com).

The Funding Portal charges a

$5,000 to $10,000 engagement fee, a 4.9% success fee for capital raised at closing and sometimes is paid with equity from the issuer that

has listed on the Funding Portal.

In addition, the Funding Portal generates fees for other ancillary services, such as rolling closes.

Securities offerings on the portal are accessible through individual offering pages, where companies include product or service details,

market size, competitive advantages, and financial documents.

Companies can accept investment from virtually anyone, including friends,

family, customers, employees, etc., at any time, with just a few clicks.

In addition to access to the Funding Portal,

Netcapital provides the following services:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND

RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS ANNUAL REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS

THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE.

THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND

OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY

FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS.

is a fintech company with a scalable technology platform that allows private companies to raise capital online from accredited and

non-accredited investors.

We give investors the opportunity to access investments in private companies.

We believe our model is disruptive

to traditional private equity investing and is based on Title III, Reg CF of the JOBS Act.

In addition, we have recently expanded our

model to include Regulation A (“Reg A”) offerings.

We generate fees from listing private companies on our funding portal

located at www.netcapital.com.

We generate fees from listing private companies on netcapital.com.

We also generate fees from advising

companies with respect to their Reg A offerings posted on www.netcapital.com.

Our consulting group, Netcapital Advisors, Inc.

Advisors), which is a wholly-owned subsidiary, provides marketing and strategic advice in exchange for equity positions and/or cash fees.

The Netcapital funding portal is registered with the SEC, is a member of the Financial Industry Regulatory Authority, or FINRA, a registered

national securities association, and provides investors with opportunities to invest in private companies.

Neither Netcapital Advisors,

nor any Netcapital entity or subsidiary, is a broker- dealer, nor do any of such entities operate as a broker-dealer with respect to

any Reg A offering listed on the www.netcapital.com website.

provide private company investment access to accredited and non-accredited investors through our online portal (www.netcapital.com),

which is operated by our wholly owned subsidiary Netcapital Funding Portal, Inc.

The Netcapital funding portal charges a $5,000 listing

fee, a 4.9% portal fee for capital raised at closing, and beginning in fiscal year 2024, a 1% success fee paid for with equity of the

funding portal customer.

In addition, the portal generates fees for other ancillary services, such as rolling closes.

Netcapital Advisors

generates fees and equity stakes from consulting in select portfolio and non-portfolio clients.

With respect to its services for Reg

A offerings, Netcapital Advisors charges a monthly flat fee for each month the offering is listed on the netcapital.com website as well

as a nominal administrative flat fee for each investor that is processed to cover out-of-pocket costs.

generated revenues of $4,951,435, with costs of service of $108,060, in the year ended April 30, 2024 for a gross profit of $4,843,375

(consisting of $3,537,700 in equity securities for payment of services and $1,413,736 in cash-based revenues, offset by $108,060 for

costs of services) as compared to revenues of $8,493,985 with costs of service of $85,038 in the year ended April 30, 2023 for a gross

profit of $8,408,947 (consisting of $7,105,000 in equity securities for the payment of services and $1,388,985 in cash-based revenues,

offset by $85,038 for costs of services).

Our cash-based gross profits as a percentage of gross profits were approximately 1% and 1%,

respectively, in the years ended April 30, 2024 and 2023, for entities (for which we performed services) in which we own equity during

such periods.

The total number of offerings on the Netcapital funding portal in fiscal 2024 and 2023 that closed was 70 and 63, respectively,

of which 17 and 13 offerings hosted on the Netcapital funding platform in fiscal 2024 and 2023, respectively, terminated their listings

without raising the required minimum dollar amount of capital.

As of the date of this report, we own minority equity positions of greater

than 1% in 20 portfolio companies that have utilized the funding portal to facilitate their offerings, which equity was received as payment

for services.

Netcapital.com

is an SEC-registered funding portal that enables private companies to raise capital online, while investors are able to invest from almost

anywhere in the world, at any time, with just a few clicks.

Securities offerings on the portal are accessible through individual offering

pages, where companies include product or service details, market size, competitive advantages, and financial documents.

Companies can

accept investments from virtually anyone, including friends, family, customers and employees.

Customer accounts on our platform are not

permitted to hold or use digital securities to make an investment.

addition to access to the Funding Portal, Netcapital provides the following services:

a fully automated onboarding process;

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direct access to our team for ongoing support.

Our consulting group, Netcapital Advisors helps

companies at all stages to raise capital.

Netcapital Advisors provides strategic advice, technology consulting and online marketing services

to assist with fundraising campaigns on the Netcapital platform.

The Company also acts as an incubator and accelerator, taking equity

stakes in select disruptive start-ups.

Our limited operating history and the uncertain nature

of our future operations and the markets we address or intend to address make predictions of our future results of operations difficult.

Our operations may never generate significant revenues, and we may not consistently achieve profitable operations.

Recent Developments

May 2023 Registered Direct

On May 23, 2023, we entered

into a securities purchase agreement with certain institutional investors, pursuant to which we agreed to issue and sell to such investors,

in a registered direct offering (the “Offering”), 1,100,000 shares (the “Shares”) of our common stock at a price

of $1.55 per Share, for aggregate gross proceeds of $1,705,000, before deducting the placement agent's fees and other offering expenses

payable by the Company.

The Offering closed on May 25, 2023 and we received aggregate net proceeds of $1,468,700.

The Shares were offered

and issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File 333-267921) filed by the Company with

the SEC under the Securities Act of 1933, as amended (the “Securities Act”), on October 18, 2022 and declared effective on

October 26, 2022.

In connection with the Offering,

on May 23, 2023, we entered into a placement agency agreement with ThinkEquity (the “Placement Agent”), pursuant to which

(i) the Placement Agent agreed to act as placement agent on a “best efforts” basis in connection with the Offering, (ii) we

agreed to pay the Placement Agent an aggregate fee equal to 8.0% of the gross proceeds raised in the Offering, and to reimburse the Placement

Agent for certain expenses, and (iii) we agreed to issue to the Placement Agent warrants to purchase up to 55,000 shares of Common Stock

at an exercise price of $1.94 (the “Placement Agent Warrants”), which were issued on May 25, 2023.

The Placement Agent Warrants

(and the shares of Common Stock issuable upon the exercise of the Placement Agent Warrants) were not registered under the Securities Act,

and were offered pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the

Securities Act and Rule 506(b) promulgated thereunder.

Repayment of Secured Debt

On May 25, 2023 the Company paid $367,167 to its secured

lender, Vaxstar LLC, to pay off the remaining $350,000 principal balance and $17,167 in interest.

Recent Common Stock Issuances.

In April and May 2023, we issued an aggregate of 450,000

shares of common stock to consultants in consideration of services rendered.

In addition, in July 2023, we issued 49,855 shares of common

stock to an unrelated third party, in consideration of a release from such third party related to settlement of an outstanding debt between

such third-party and Netcapital DE LLC.

We did not receive any proceeds from these issuances.

Such shares were issued as restricted securities

and were issued pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

July 2023 Public Offering

On July 24, 2023 the Company completed an underwritten

public offering of 1,725,000 shares of the Company’s common stock, at a price to the public of $0.70 per share for aggregate gross

proceeds of $1,207,500, before deducting underwriting discounts and offering expenses payable by the Company.

In conjunction with this

offering, the Company issued the underwriter and its designees warrants to purchase 86,250 shares of our common stock at an exercise price

Management's Discussion and Analysis of Financial Condition and Results

consulting group, Netcapital Advisors helps companies at all stages to raise capital.

Netcapital Advisors provides strategic advice,

technology consulting and online marketing services to assist with fundraising campaigns on the Netcapital platform.

The Company also

acts as an incubator and accelerator, taking equity stakes in select disruptive start-ups.

Advisors’ services include:

of technology start-ups;

introductions;

design, software and software development;

crafting, including pitch decks, offering pages, and ad creation;

Broker-Dealer Business

newly formed wholly owned subsidiary, Netcapital Securities Inc.

has applied for broker-dealer registration with the Financial Industry

Regulatory Authority (“FINRA”).

We that by having a registered broker-dealer, it will create opportunities to expand revenue

base by hosting and generating additional fees from Reg A+ and Reg D offerings on the Netcapital platform;, earning additional fees in

connection with offerings that may result from the introduction of clients to other FINRA broker-dealers and expanding our distribution

capabilities by leveraging strategic partnerships with other broker-dealers to distribute offerings of issuers that utilize the Netcapital

platform to a wider range of investors in order to maximize market penetration and optimize capital raising efforts.

Netcapital Securities

Inc.’s application to become a registered broker-dealer remains subject to regulatory approval and/or licensing from the Financial

Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

No assurance can be given as to when or if such approvals

may be granted or when, if at all, Netcapital will be able to expand the services it offers.

As of the date of this Annual Report, Netcapital

Securities Inc.

has not conducted any business activities

limited operating history and the uncertain nature of our future operations and the markets we address or intend to address make predictions

of our future results of operations difficult.

Our operations may never generate significant revenues, and we may not consistently achieve

profitable operations.

Alternative Trading (“ATS”) Relationship

believe that lack of liquidity is a key issue for investors in private companies in our targeted market.

We also recognize that secondary

trading of securities in private companies is subject to extensive regulation and oversight.

Such regulation and oversight includes,

but is not limited to, the need to be a registered broker-dealer that is licensed to operate an ATS, or to partner with an entity that

is licensed to do so.

In order to try to address what we believe is a large, unmet need, our wholly-owned subsidiary, Netcapital Systems

LLC, a Utah limited liability company (“Netcapital UT LLC”), entered into a software license and services agreement on January

2, 2023 (the “Templum License Agreement”) with Templum Markets LLC (“Templum”), to provide issuers and investors

on the Netcapital platform with the potential for greater distribution and liquidity.

Templum is a company that provides capital markets

infrastructure for trading private equity securities, and operates an ATS with approval in 53 U.S.

states and territories for the trading

of unregistered or private securities.

We are currently working with Templum to design the software required to allow issuers and investors

on the Netcapital platform to access the Templum ATS in order to engage in secondary trading of securities in a regulatorily compliant

The operation of the Templum ATS, however, remains subject to extensive regulation and oversight.

Accordingly, any regulatory

delays or objections will result in delays in our ability to launch the proposed platform.

While we are currently working with Templum

on the design of the required software to enable the access to secondary trading on the Templum ATS, no assurance can be given as to

when, or if, we will be able to successfully complete this project in order to enable access to a secondary trading feature beta (testing)

version to a closed group of users for testing before any final launch is made to the public, and Templum’s approval.

required to launch the platform include, but are not limited to, plug-in of Templum’s KYC and AML requirements to enable interested

users to directly send to the Templum ATS any KYC/AML information required by Templum for review and approval, as well as the launch

of a beta version to a closed group of users.

In July 2024, we announced the launch of our beta version for this secondary trading platform

and our goal is to offer such secondary trading platform through the Templum ATS to all issuers and investors on the Netcapital funding

portal before the end of 2024 subject to compliance with all regulatory requirements, however, we do not know when, or if, this feature

will be fully completed and launched, as there are many details that remain to be completed.

operation of the Templum ATS is subject to extensive regulation and oversight.

Accordingly, any regulatory delays or objections will

result in delays in our ability to launch the proposed platform.

In addition, because we cannot easily switch between operators of secondary

trading platforms of this nature, any disruption of or interference, whether due to regulatory issues or natural disasters, cyber-attacks,

terrorist attacks, power losses, telecommunications failures, or other similar events, would impact our operations and may adversely

affect the ability of issuers and investors to utilize this platform.

There is no obligation for Templum to renew its agreements with

us on commercially reasonable terms or at all.

Nasdaq Delisting Determination

As previously disclosed on a Current Report on Form 8-K filed by the Company on September 1, 2023, the Company received

a notification from The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum

bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market.

Specifically, Nasdaq

Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A)

provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business

Therefore, in accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until February 28, 2024,

to regain compliance with the Rule.

Subsequently, on February 29, 2024, Nasdaq determined the Company was eligible for an additional 180

calendar days, or until August 26, 2024, to regain compliance with the Rule.

Since then, Nasdaq has determined that as of July 22, 2024,

the Company’s securities had a closing bid price of $0.10 or less for ten consecutive trading days.1 Accordingly, the Company is

subject to the provisions contemplated under Listing Rule 5810(c)(3)(A)(iii) (the “Low Priced Stocks Rule”).

As a result, on July 23, 2024, Nasdaq delivered written notice to the Company under which it advised the Company

that Nasdaq has determined to delist the Company’s securities from The Nasdaq Capital Market (the “Nasdaq Letter”).

The Company may appeal Nasdaq’s determination to a Hearings Panel (the “Panel”), pursuant to the

procedures set forth in the Nasdaq Listing Rule 5800 Series.

A hearing request will stay any further action pending final resolution of

the Hearing Panel or any extension provided by the Panel.

The Company intends to appeal Nasdaq’s determination and will timely submit a plan to a hearing panel to regain

compliance to the Nasdaq Listing Qualifications Department.

Notwithstanding the Company’s intention

to request a hearing, there can be no assurance that the Panel will grant the Company any compliance period or that the Company will

ultimately regain compliance with all applicable requirements for continued listing on The Nasdaq Capital Market.

The Company is monitoring

the closing bid price of its common stock and will consider options to regain compliance with Nasdaq’s minimum bid price requirement,

including effectuating a reverse stock split.

On July 24, 2024, the Company’s stockholders approved the implementation of a reverse

stock split of the Company’s common stock at a ratio between 1-for-2 and 1-for-100, inclusive, with the ultimate ratio to be determined

by the Company’s board of directors in its sole discretion.

On September 25, 2024, our Board approved a reverse split ratio of

1-for-70 for the reverse split of the issued shares of our common stock.

The Company intends to promptly effectuate a reverse split to

regain compliance with Nasdaq Listing Rules related to minimum bid price for its common stock.

2024 Warrant Inducement

May 24, 2024, we entered into inducement offer letter agreements with certain investors that hold certain outstanding Series A-2 warrants

to purchase up to an aggregate of 14,320,000 shares of our common stock, originally issued in December 2023 at a reduced exercise price

of $0.155 per share in partial consideration for the Company’s agreement to issue in a private placement (i) new Series A-3 common

stock purchase warrants to purchase up to 14,320,000 shares of our common stock and (ii) new Series A-4 common stock purchase warrants

to purchase up to 14,320,000 shares of our common stock for aggregate gross proceeds of approximately $2.2 million from the exercise

of the existing warrants, before deducting placement agent fees and other expenses payable by the Company.

The Series A-3 Warrants and

Series A-4 Warrants are exercisable beginning on the effective dates of stockholder approval of the issuance with such warrants expiring

on (i) the five year anniversary of the initial exercise date for the Series A-3 Warrants and (ii) the eighteen month anniversary of

the initial exercise date for the Series A-4 Warrants.

This transaction closed on May 29, 2024.

Wainwright was the exclusive agent

for the transaction for which we paid them a cash fee equal to 7.5% from the exercise of the Series A-2 warrant at the reduced exercise price

and a management fee equal to 1.0% of such aggregate gross proceeds.

We also issued warrants to designees of H.C.

Wainwright to purchase

up to 1,074,000 shares of our common stock at an exercise price of $0.1938 per share.

for Broker-Dealer License

May 2024, we announced that our wholly-owned subsidiary, Netcapital Securities Inc.

applied for broker-dealer registration with the Financial

Industry Regulatory Authority (“FINRA”).

We that by having a registered broker-dealer, it will create opportunities to expand

revenue base by hosting and generating additional fees from Reg A+ and Reg D offerings on the Netcapital platform;, earning additional

fees in connection with offerings that may result from the introduction of clients to other FINRA broker-dealers and expanding our distribution

capabilities by leveraging strategic partnerships with other broker-dealers to distribute offerings of issuers that utilize the Netcapital

platform to a wider range of investors in order to maximize market penetration and optimize capital raising efforts.

Netcapital Securities

Inc.’s application to become a registered broker-dealer remains subject to regulatory approval and/or licensing from the Financial

Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

No assurance can be given as to when or if such approvals

may be granted or when, if at all, Netcapital will be able to expand the services it offers.

Cessation of our Valuation Business

April 2024, we determined to cease activities with respect to our valuation business conducted by our subsidiary MSG Development Corp.

The person who operated MSG Development Corp.

retired in fiscal 2024 due to health reasons and we were unsuccessful in transitioning

the valuation consulting work performed by MSG Development Corp.

to another person.

Consequently, in fiscal 2024, we recorded an impairment

loss for the intangible assets associated with our acquisition of MSG.

We intend to re-start valuation activities through MSG Development

in the future if we can find and hire the necessary personnel although there is no current timeframe for when we could re-start

such activities and we may ultimately never continue such valuation activities.

2024 Common Stock Issuance

April 24, 2024, we issued an aggregate of 681,198 shares of our common stock at a price per share of $0.1324 to Steven Geary, a member

of the Company’s board of directors, and Paul Riss, a member of the board of directors of Netcapital Funding Portal, Inc.

our wholly-owned

subsidiary, in consideration of the cancellation of $90.204 in outstanding indebtedness owed to Mr.

Geary and Mr.

were issued as restricted securities as defined in Rule 144 of the Securities Act of 1933, as amended.

We did not receive any proceeds

from these issuances.

Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this Form 10-K.

This discussion contains forward-looking statements that relate to future events or our future financial performance.

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

of Operations

following discussion of our financial condition and results of operations should be read in conjunction with the financial statements

and related notes to the financial statements included elsewhere in this Form 10-K.

This discussion contains forward-looking statements

that relate to future events or our future financial performance.

These statements involve known and unknown risks, uncertainties and

other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any

future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Results of Operations

Fiscal Year 2023 Compared to Fiscal Year 2022

Our revenues for fiscal 2023 increased by $3,013,150,

or 55%, to $8,493,985 as compared to $5,480,835 reported for fiscal 2022.

The increase in revenues is attributable to increased revenues

from consulting services for equity securities, which recorded an increase in fees of $3,730,000, or 111% to $7,105,000 in fiscal 2023

as compared to $3,375,000 in fiscal 2022.

Year 2024 Compared to Fiscal Year 2023

revenues for fiscal 2024 decreased by $3,542,550, or 42%, to $4,951,435, as compared to $8,493,985 reported for fiscal 2023.

in revenues is attributable to decreased revenues from consulting services for equity securities, which recorded a decrease in fees of

$3,665,000, or 52% to $3,440,000 in fiscal 2024 as compared to $7,105,000 in fiscal 2023.

The components of revenue are as follows:

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Consulting revenue

Other revenue

In fiscal 2023 and 2022, the average dollars raised

in a successful offering on the funding portal amounted to $128,170 and $369,478, respectively, and the number of offerings that closed

successfully amounted to 49 and 64, respectively.

Our costs of revenues decreased by $25,077, or 23%,

to $85,038 in fiscal 2023, from $110,115 in fiscal 2022.

The decrease is attributable to lower costs of sales from our non-funding portal

sources of income.

Consulting expenses decreased by $303,218, or 34%,

to $589,349 for fiscal 2023 from $892,567 reported in the prior fiscal year.

The decrease was primarily attributed to a decrease in overseas

Payroll and payroll related expenses decreased by

$117,355, or 3%, to $3,646,490 in fiscal 2023, as compared to $3,763,845 in fiscal 2022.

The decrease was attributed to a decrease in

staff and wages.

General and administrative expenses increased by $138,667

or 9%, to $1,740,698 for the year ended April 30, 2023, as compared to $1,602,031 for the prior fiscal year.

The primary increase in expenses

is attributable to professional fees.

Interest expense decreased by $32,530 to $93,842 for

the year ended April 30, 2023, as compared to $126,372 for the prior fiscal year.

The decrease in interest expense is attributed to a

reduction in debt owed to our secured lender.

A realized loss of $406,060 was recorded in the year

ended April 30, 2023, as compared to no realized losses in the year ended April 30, 2022.

The Company sold 606,060 shares of KingsCrowd

in June 2022 for proceeds of $200,000 that had been valued at $606,060 and recorded a realized loss on the sale of the investment

Unrealized gains on equity securities for the years

ended April 30, 2023 decreased by $1,418,245, or approximately 43%, to $1,857,500, as compared to $3,275,745 during the year ended April

The decrease in unrealized gains is attributable to the sale of common stock at $1.00 per share in a public offering by Kingscrowd

Inc., which exceeded the carrying value on our books by $3,275,745, during the year ended April 30, 2022, as compared to a net gain of

$1,857,500 from observable price changes in investment securities of three investments held by the Company during the year ended April

Liquidity and Capital Resources

As of April 30, 2023, we had cash and cash equivalents

of $569,441 and negative working capital of $2,622,670 as compared to cash and cash equivalents of $473,925 and negative working capital

of $3,113,403 of April 30, 2022.

We have been successful in raising capital by completing

public offerings of our common stock.

On July 15, 2022, the Company completed an underwritten

public offering of 1,205,000 shares of the Company’s common stock and warrants to purchase 1,205,000 shares of the Company’s

common stock at a combined public offering price of $4.15 per share and warrant.

The gross proceeds from the offering were $5,000,750

prior to deducting underwriting discounts, commissions, and other offering expenses.

The warrants have a per share exercise price of $5.19,

are exercisable immediately, and expire five years from the date of issuance.

With the use of proceeds, we paid $1 million of debt to

our secured lender, to reduce the outstanding principal balance to $400,000.

On December 16, 2022 we completed an underwritten

public offering of 1,247,000 shares of our common stock, at a price to the public of $1.40 per share.

In conjunction with this offering,

we issued the underwriter and its designees warrants to purchase 62,350 shares of our common stock at an exercise price of $1.75.

underwriters exercised their over-allotment option and on January 5, 2023, we issued an additional 187,000 shares of its common stock

at a price of $1.40 per share.

We received net proceeds of $1,621,459 for the issuance of a total of 1,434,000 shares of common stock

in both the initial and over-allotment offering.

In conjunction with the exercise of the over-allotment, the Company issued the underwriter

and its designees warrants to purchase 9,350 shares of our common stock with an exercise price of $1.75.

On May 23, 2023, we entered into a securities purchase

agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors, in a registered

direct offering (the “Offering”), 1,100,000 shares (the “Shares”) of the Company’s common stock, par value

$0.001 per share (the “Common Stock”), at a price of $1.55 per Share, for aggregate gross proceeds of $1,705,000, before deducting

the placement agent's fees and other offering expenses payable by the Company.

Portal 1% equity fee

Game website revenue

aggregate decrease of $3,665,000 in consulting services for equity securities in fiscal 2024 occurred because we provided consulting

services to only 3 companies in fiscal 2024, as compared to 6 companies in fiscal 2023.

We strive to provide more than $1 million worth

of consulting services to this type of client, and the average fee that we earned per client in fiscal 2024 and 2023 amounted to $1,146,667

and $1,184,167, respectively.

These services are provided by our consulting subsidiary, Netcapital Advisors, Inc.

(“Advisors”),

and Advisors did not earn any equity securities from consulting work in the fourth quarter of fiscal 2024 or the first quarter of fiscal

However, our subsidiary Netcapital Funding Portal Inc.

(“Funding Portal”) began charging a fee of 1% of the equity

raised by issuers that engage with the Funding Portal and in fiscal 2024, the Funding Portal earned equity securities from 30 clients,

with an aggregate value of $97,700, as compared to $0 in fiscal 2023.

revenue consists of fees earned by two of our subsidiaries, Advisors and MSG Development Corp.

Revenue generated

by Advisors decreased by $109,320 to $96,200 in fiscal 2024 from $205,520 in fiscal 2023 and revenues generated by MSG decreased to $0

in fiscal 2024 from $249,800 in fiscal 2023.

The person who operated MSG retired in fiscal 2024 due to health reasons and we were unsuccessful

in transitioning the valuation consulting work performed by MSG to another person.

Consequently, in fiscal 2024, we recorded an impairment

loss for the intangible assets associated with our acquisition of MSG.

The decrease in consulting fees from Advisors in fiscal 2024 is

the result of fewer consulting engagements and personnel cuts.

from portal fees increased by $455,855, or 109%, in fiscal 2024 to $874,368, from $418,513 in fiscal 2023.

Revenue from portal fees consists

of a 4.9% fee of the total capital raised by an issuer plus fixed miscellaneous charges for administrative fees, such as a rolling close,

or the filing of an amended offering statement.

The increase in portal fees is attributable to the increase in the amount of capital

raised on the Netcapital funding portal and the increase in the number of issuers that completed an offering.

In fiscal 2024 and 2023,

the average amount raised in an offering on the Netcapital funding portal was $280,978 and $128,170, respectively.

The total number of

issuers on the Netcapital funding portal in fiscal 2024 and 2023 that successfully closed an offering was 53 and 50, respectively

from listing fees decreased by $71,920, or 14%, to $442,040 in fiscal 2024 as compared to $513,960 in fiscal 2023.

are typically $5,000 per issuer, and they are the first form of revenue earned by our Funding Portal when an issuer signs a contract

with us to sell securities on the funding portal.

After the listing contract is signed, an issuer typically takes two months before

it is ready to launch an offering.

Most issuers remain on the funding portal, marketing their offering, for a period of six to nine months.

costs of revenues increased by $23,022 or 27%, to $108,060 in fiscal 2024, from $85,038 in fiscal 2023.

The increase is attributable

to Funding Portal, which experienced an increase in revenues from portal fees of $455,855 in fiscal 2024.

expenses increased by $20,860, or 4%, to $610,209 for fiscal 2024 from $589,349 reported in the prior fiscal year.

The increase is consistent

with inflation costs.

Consulting expenses are payments for services rendered by non-employees.

and payroll related expenses increased by $192,150, or 5%, to $3,838,640 in fiscal 2024, as compared to $3,646,490 in fiscal 2023.

increase was attributed to pay increases to keep up with inflation.

and administrative expenses increased by $1,686,328 or 97%, to $3,427,026 for the year ended April 30, 2024, as compared to $1,740,698

for the prior fiscal year.

The primary increase in expenses is attributable to professional fees, which includes costs of attorneys,

proxy solicitation, investor relations and stock-based compensation, and an increase in our allowance for doubtful accounts.

expense increased by $248,289, or approximately 291%, to $333,771 for the year ended April 30, 2024, as compared to $85,482 in fiscal

The increase was to bring awareness to the funding portal operations and the Company to attract new issuers and investors.

expense increased by $1,065, or approximately 1%, to $76,117 for fiscal 2024, as compared to $75,052 in fiscal 2023.

The increase was

primarily attributed to a new office-space agreement that became effective in the current fiscal year.

expense decreased by $47,852 to $45,990 for the year ended April 30, 2024, as compared to $93,842 for the prior fiscal year.

in interest expense is attributed to a reduction in debt owed to a secured lender that was paid in full during the first quarter of fiscal

realized loss of $406,060 was recorded in the year ended April 30, 2023, as compared to no realized losses in the year ended April 30,

The Company sold 606,060 shares of KingsCrowd Inc.

in June 2022 for proceeds of $200,000 that had been valued at $606,060 and recorded

a realized loss on the sale of the investment of $406,060.

recognized an unrealized loss in the value of our equity securities of $2,696,135 in fiscal 2024, as compared to an unrealized gain of

$1,857,500 in the value of our equity securities in fiscal 2023.

The loss in fiscal 2024 was attributable to a decrease in value to $0.16

per share from $1.00 per share for 3,209,685 shares of common stock that we own of KingsCrowd, Inc.

The gain in fiscal 2023 resulted

from an increase in value of $204,000 for our 110,000 units of MustWatch LLC, from $2.14 per unit to $4.00 per unit, and an increase

in value of $1,661,868 in our 710,200 units of ChipBrain LLC, from $0.93 per unit to $4.74 per unit, less an unrealized loss of $8,968

in the value of the 4,000 shares of Vymedic Inc.

from $5.00 per share to $2.76 per share.

recorded an impairment loss of $1,048,430 and $0 in fiscal 2024 and 2023.

The loss in fiscal 2024 consists of a reduction in value from

$647,264 to $0 for the intangible assets we acquired in the purchase of MSG, and a reduction in value from $401,167 to $0 for the intangible

assets we own that are associated with the website 1on1.fans.

The person who operated MSG retired due to health reasons during fiscal

2024 and we were unsuccessful in transitioning the valuation consulting work performed by MSG to another person.

Consequently, in fiscal

2024, we recorded an impairment loss for the intangible assets associated with our acquisition of MSG.

We may continue providing business

valuation services in the future, but at this point in time we cannot attribute any value to the assets we purchased.

Similarly, the

person who was designated to operate our 1on1.fans website left the Company in May 2024, and without his expertise and connections with

professional hockey players, we determined the value to be $0.

and Capital Resources

of April 30, 2024, we had cash and cash equivalents of $863,182 and negative working capital of $2,074,163 as compared to cash and cash

equivalents of $569,441 and negative working capital of $2,622,670 as of April 30, 2023.

have been successful in raising capital by completing public offerings of our common stock.

May 23, 2023, we entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed

to issue and sell to such investors, in a registered direct offering (the “Offering”), 1,100,000 shares (the “Shares”)

of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price of $1.55 per Share, for

aggregate gross proceeds of $1,705,000, before deducting the placement agent’s fees and other offering expenses payable by the

The Offering closed on May 25, 2023.

The Shares were offered

and issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File 333-267921), filed by the Company with

the Securities and Exchange Commission under the Securities Act of 1933, as amended, on October 18, 2022 and declared effective on October

With the use of proceeds, we paid our secured lender

$350,000 in principal plus accrued interest of $17,167.23 to retire all outstanding obligations to the secured lender.

On July 24, 2023 the Company completed an underwritten

public offering of 1,725,000 shares of the Company’s common stock, at a price to the public of $0.70 per share for aggregate gross

proceeds of $1,207,500, before deducting underwriting discounts and offering expenses payable by the Company.

In conjunction with this

offering, the Company issued the underwriter, and its designees, warrants to purchase 86,250 shares of our common stock at an exercise

price of $0.875.

believe that our existing cash investment balances, our anticipated cash flows from operations and liquidity sources including

o ffering of equity and/or debt securities

and/or the sale of equity positions in certain portfolio companies for which Netcapital Advisors provides marketing and strategic advice

will be sufficient to meet our working capital and expenditure requirements for the next 12 months.

Although we believe we have adequate

sources of liquidity over the next 12 months, the success of our operations, the global economic outlook, and the pace of sustainable

growth in our markets, in each case, in light of the market volatility and uncertainty as a result of the COVID-19 pandemic, among other

factors, could impact our business and liquidity.

Up to this point in time, we believe the pandemic has helped drive people to online

investing, as we see regular monthly increases in users and dollars invested, and an increase in issuers seeking to use online fund-raising

services in lieu of face-to-face meetings.

Year over Year Changes

Net cash used in operating activities amounted to

$4,617,200 in fiscal 2023, as compared to net cash used in operating activities of $3,006,667 in fiscal 2022.

In fiscal 2023, the primary sources of cash were net

income of $2,954,972, changes in deferred taxes of 680,000, a realized loss on the sale of investments of 406,060, a decrease in accounts

receivable of $1,039,957 and stock-based compensation of $269,577.

However, these items were offset by non-cash revenue from the receipt

of equity of $8,110,000, and an unrealized gain on equity securities of $1,857,500.

In fiscal 2022, the primary sources of cash were net

income of $3,503,530 and stock-based compensation of $1,176,058.

However, these items were offset by non-cash revenue from the receipt

of equity of $2,387,500, an unrealized gain on equity securities of $3,275,745 debt forgiveness of $1,904,302 and an increase in accounts

receivable of $1,153,598.

In fiscal 2023, net cash provided by investing activities

amounted to $200,000 from the sale of an investment.

In fiscal 2022, net cash used in investing activities amounted to $319,166, consisting

of loans to affiliates of $202,000 and an investment in an affiliate of $117,166.

In fiscal 2023, net cash provided from financing activities

amounted to $4,512,716, which included proceeds from the sale of common stock of $5,570,576, which was offset by a payment of $7,860 for

a related party note, and payment of $1,050,000 to a secured lender.

In fiscal 2022, net cash provided by financing activities amounted

to $1,325,799.

Cash proceeds were received of $300,000 from the sale of two convertible notes, $400,000 from borrowing from our secured

lender and $625,799 from the sale of stock subscriptions.

In fiscal 2023 and 2022, there were no expenditures

for capital assets.

We do not anticipate any capital expenditures in the next fiscal year.

New Accounting Standards

The new accounting pronouncements in Note 1 to our

financial statements, which are included in this Report, are incorporated herein by reference thereto.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity

with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions

that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial

statements and reported amounts of revenues and expenses during the reporting period.

The Shares were offered and issued and sold pursuant to the Company’s shelf registration

statement on Form S-3 (File 333-267921), filed by the Company with the Securities and Exchange Commission under the Securities Act of

1933, as amended, on October 18, 2022 and declared effective on October 26, 2022.

the use of proceeds, we paid our secured lender $350,000 in principal plus accrued interest of $17,167.23 to retire all outstanding obligations

to the secured lender.

July 24, 2023 we completed an underwritten public offering of 1,725,000 shares of our common stock, at a price to the public of $0.70

per share for aggregate gross proceeds of $1,207,500, before deducting underwriting discounts and offering expenses payable by us.

conjunction with this offering, we issued the underwriter, and its designees, warrants to purchase 86,250 shares of our common stock

at an exercise price of $0.875.

December 27, 2023, we completed a public offering of (i) 4,800,000 shares of our common stock;

(ii) 11,200,000 prefunded warrants to

purchase 11,200,000 shares of our common stock;

(iii) 16,000,000 Series A-1 warrants to purchase 16,000,000 shares of our common and

(iv) 16,000,000 Series A-2 warrants to purchase 16,000,000 shares of our common stock of the Company for gross proceeds of $4 million,

before deducting underwriting discounts and offering expenses payable by us.

The offering price of each common share and accompanying

Series A-1 warrant and Series A-2 warrant was $0.25, and the offering price of each prefunded warrant and accompanying Series A-1 warrant

and Series A-2 warrant was $0.249.

Each Common Warrant has an exercise price of $0.25 per share.

The Series A-1 Common Warrants will

expire on February 23, 2029.

The Series A-2 Common Warrants will expire August 23, 2025 following the date of Shareholder Approval.

received net proceeds of approximately $3.37 million from this offering, after deducting the estimated offering expenses payable by us,

including the placement agent fees.

We also issued warrants to designees of the H.C.

Wainwright, who served as placement agent for this

offering to purchase up to 1,200,000 shares of our common stock, which warrants have substantially the same terms as the Series A-1 warrants

and Series A-2 warrants, except that warrants issued to the designees of the placement agent have an exercise price equal to $0.3125

per share and expire on December 27, 2028.

believe that our existing cash investment balances, our anticipated cash flows from operations and liquidity sources including offering

of equity and/or debt securities and/or the sale of equity positions in certain portfolio companies for which we provide marketing and

strategic advice may not be sufficient to meet our working capital and expenditure requirements for the next 12 months.

Consequently,

beginning in November 2023, we laid off some employees, and took other steps to reduce operating expenses.

We plan to continue operating

with lower fixed overhead amounts and seek to raise money from private placements, public offerings and/or bank financing.

Our management

has determined, based on its recent history and the negative cash flow from operations, that it is unlikely that its plan will sufficiently

alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above.

To the extent that funds generated from

any private placements, public offerings and/or bank financing, if available, are insufficient, we will have to raise additional working

No assurance can be given that additional financing will be available, or if available, will be on acceptable terms.

the Company’s management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern.

There can be no assurance that we will be able to achieve our business plan objectives or be able to achieve or maintain cash-flow-positive

operating results.

If we are unable to generate adequate funds from operations or raise sufficient additional funds, we may not be able

to repay our existing debt, continue to operate our business network, respond to competitive pressures or fund our operations.

we may be required to significantly reduce, reorganize, discontinue or shut down our operations.

over Year Changes

cash used in operating activities amounted to $4,879,838 in fiscal 2024, as compared to net cash used in operating activities of $4,617,200

in fiscal 2023.

fiscal 2024, the principal sources of cash from operating activities were an unrealized loss on equity securities of $2,696,135, an impairment

loss of $1,048,430 and stock-based compensation of $1,324,917.

However, the sources of cash were offset by a net loss of $4,724,817,

a receipt of equity in lieu of cash of $3,427,699, changes in deferred taxes of $1,657,000 and an increase in accounts receivable of

fiscal 2023, the primary sources of cash were net income of $2,954,972, changes in deferred taxes of $680,000, a realized loss on the

sale of investments of $406,060, a decrease in accounts receivable of $1,039,957 and stock-based compensation of $269,577.

However, these

items were offset by non-cash revenue from the receipt of equity of $8,110,000, and an unrealized gain on equity securities of $1,857,500.

cash used in investing activities in fiscal 2024 consisted of a $20,000 note receivable.

Net cash provided by investing activities in

fiscal 2023 consisted of proceeds of $200,000 from the sale of 606,060 shares of an investment in KingsCrowd Inc.

the year ended April 30, 2024, net cash provided by financing activities amounted to $5,193,579, which consisted of proceeds from the

sale of common stock of $5,538,611 and proceeds from warrant exercises of $4,968, which were offset by repayment of $350,000 of principal

to our secured lender.

For the year ended April 30, 2023, net cash provided from financing activities amounted to $4,512,716, which included

proceeds from the sale of common stock of $5,570,576, which was offset by a payment of $7,860 for a related party note, and payment of

$1,050,000 to a secured lender.

fiscal 2024 and 2023, there were no expenditures for capital assets.

We do not anticipate any capital expenditures in the next fiscal

Accounting Standards

new accounting pronouncements in Note 1 to our financial statements, which are included in this Report, are incorporated herein by reference

Accounting Policies and Estimates

preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States

requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent

assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

The most significant estimates include:

revenue recognition and estimating allowance for doubtful

valuation of long-lived assets;

valuation of intangible assets.

We continually evaluate our accounting policies and

the estimates we use to prepare our financial statements.

In general, the estimates are based on historical experience, on information

from third party professionals and on various other sources and assumptions that are believed to be reasonable under the facts and circumstances

at the time such estimates are made.

Management considers an accounting estimate to be critical if:

it requires assumptions

to be made that were uncertain at the time the estimate was made;

recognition and estimating allowance for doubtful accounts;

of long-lived assets;

of intangible assets.

continually evaluate our accounting policies and the estimates we use to prepare our financial statements.

In general, the estimates

are based on historical experience, on information from third party professionals and on various other sources and assumptions that are

believed to be reasonable under the facts and circumstances at the time such estimates are made.

Management considers an accounting estimate

to be critical if:

requires assumptions to be made that were uncertain at the time the estimate was made;

in the estimate, or the use of different estimating methods, could have a material impact on our consolidated results of operations

or financial condition.

Actual results could differ from those estimates.

Significant accounting policies are described in Note 1 to our financial statements, which are included in this Report.

In many cases,

the accounting treatment of a particular transaction is specifically dictated by GAAP.

There are also areas in which management’s

judgment in selecting any available alternative would not produce a materially different result.

Certain of our accounting policies are deemed “critical”,

as they require management's highest degree of judgment, estimates and assumptions.

The following critical accounting policies are not

intended to be a comprehensive list of all of our accounting policies or estimates:

Revenue Recognition

The Company recognizes service revenue

from its consulting contracts and its game website using the five-step model as prescribed by ASC 606:

Identification of the

contract, or contracts, with a customer;

Identification of the

performance obligations in the contract;

Determination of the transaction

Allocation of the transaction

price to the performance obligations in the contract;

Recognition of revenue

when or as, the Company satisfies a performance obligation.

Allowance for Doubtful Accounts

In order to record the Company’s accounts receivable

at their net realizable value, the Company must assess their collectability.

A considerable amount of judgment is required

in order to make this assessment, including an analysis of historical bad debts and other adjustments, a review of the aging of the Company’s

receivables, and the current creditworthiness of the Company’s customers.

Generally, when a customer account reaches

a certain level of delinquency, the Company provides an allowance for the related amount receivable from the customer.

Company writes off the accounts receivable balance from a customer and the related allowance established when it believes it has exhausted

all reasonable collection efforts.

Net accounts receivable of $1,388,500 and $2,433,900 were recorded at April 30, 2023 and 2022, respectively,

and an allowance for doubtful accounts of $91,955 and $136,955 were recorded at April 30, 2023 and 2022, respectively.

Impairment of Long-Lived Assets

Financial Accounting Standards Board (“FASB”)

authoritative guidance requires that certain assets be reviewed for impairment and, if impaired, remeasured at fair value whenever events

or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Impairment loss estimates are primarily

based upon management’s analysis and review of the carrying value of long-lived assets at each balance sheet date, utilizing an

undiscounted future cash flow calculation.

We did not recognize an impairment loss in fiscal 2023 and 2022.

We estimate the degree to which tax assets and loss

carryforwards will result in a benefit based on expected profitability by tax jurisdiction.

A valuation allowance for such tax assets

and loss carryforwards is provided when it is determined that such assets will more likely than not go unused.

If it becomes more likely

than not that a tax asset or loss carry-forward will be used, the related valuation allowance on such assets is reversed.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Information About Market Risk

We are not subject to fluctuations in interest

rates, currency exchange rates or other financial market risks.

We have not made any sales, purchases or commitments with foreign entities

which would expose us to currency risks.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule

12b-2 of the Exchange Act and are not required to provide information under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

Our Consolidated Financial Statements required by

this Item are included herein, commencing on page F-1.

CHANGES IN AND DISAGREEMENTS

WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

results could differ from those estimates.

Significant accounting policies are described in Note 1 to our financial statements, which

are included in this Report.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP.

are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

of our accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimates

and assumptions.

The following critical accounting policies are not intended to be a comprehensive list of all of our accounting policies

or estimates:

The Company recognizes service revenue from its consulting contracts, funding portal and game website using the five-step model as prescribed by ASC

Identification of the contract, or contracts, with a customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations

in the contract;

Recognition of revenue when or as, the Company satisfies a

performance obligation.

The Company identifies performance obligations in contracts with customers, which primarily are professional services,

listing fees on our funding portal, and a portal fee of 4.9% of the money raised on the funding portal.

Beginning in fiscal year 2024,

the funding portal also receives a fee of 1% of the equity sold by an issuer that utilized the funding portal’s services.

The transaction

price is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised services

to the customer.

The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents

the relative amount of consideration expected to be received in exchange for satisfying each performance obligation.

Revenue is recognized

when performance obligations are satisfied.

The Company usually bills its customers before it provides any services and begins performing

services after the first payment is received.

Contracts are typically one year or less.

For larger contracts, in addition to the initial

payment, the Company may allow for progress payments throughout the term of the contract.

Judgments and Estimates

The estimation of variable consideration for each performance obligation requires the Company to make subjective

The Company enters into contracts with customers that regularly include promises to transfer multiple services, such as digital

marketing, web-based videos, offering statements, and professional services.

For arrangements with multiple services, the Company evaluates

whether the individual services qualify as distinct performance obligations.

In its assessment of whether a service is a distinct performance

obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources,

and whether the service is separately identifiable from other services in the contract.

This evaluation requires the Company to assess

the nature of each individual service offering and how the services are provided in the context of the contract, including whether the

services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the

facts and circumstances of the contract.

When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration

to all performance obligations at the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance

Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the

Company sells a promised service separately to a customer, such data is used to establish SSP.

In instances where standalone sales data

is not available for a particular performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs.

The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary

on a prospective basis.

Service Revenue

Service revenue from subscriptions to the Company’s game website is recognized over time on a ratable basis

over the contractual subscription term beginning on the date that the platform is made available to the customer.

Payments received in

advance of subscription services being rendered are recorded as a deferred revenue.

Professional services revenue is recognized over time

as the services are rendered.

When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement

The Company estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current

and historical customer trends, and communications with its customers.

These reserves are recorded as operating expenses against the contract

asset (accounts receivable).

Contract Assets

Contract assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance

obligations are completed.

The revenue is recognized when the customer receives services.

Contract assets are included in other current

assets in the consolidated balance sheets and will be recognized during the succeeding twelve-month period.

Deferred Revenue

Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon

transfer of control.

Balances consist primarily of annual plan subscription services and professional services not yet provided as of

the balance sheet date.

Deferred revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred

revenues in the consolidated balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance

Costs to Obtain a Customer Contract

Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts.

These costs are capitalized as other current or non-current assets and amortized on a straight-line basis over the life of the contract,

which approximates the benefit period.

The benefit period was estimated by taking into consideration the length of customer contracts,

technology lifecycle, and other factors.

All sales commissions are recorded as consulting fees within the Company’s consolidated statement of operations.

Remaining Performance Obligations

The Company’s subscription

terms are typically less than one year.

All of the Company’s revenues in the years ended April 30, 2024 and 2023, which amounted

to $4,951,435 and $8,493,985, respectively, are considered contract revenues.

Contract revenue as of April 30, 2024 and 2023, which has

not yet been recognized, amounted to $466 and $661, respectively, and is recorded on the balance sheet as deferred revenue.

expects to recognize revenue on all of its remaining performance obligations over the next 12 months.

for Doubtful Accounts

order to record the Company’s accounts receivable at their net realizable value, the Company must assess their collectability.

A considerable amount of judgment is required in order to make this assessment, including an analysis of historical bad debts and

other adjustments, a review of the aging of the Company’s receivables, and the current creditworthiness of the Company’s

Generally, when a customer account reaches a certain level of delinquency, the Company provides an allowance for the

related amount receivable from the customer.

The Company writes off the accounts receivable balance from a customer and the related

allowance established when it believes it has exhausted all reasonable collection efforts.

Net accounts receivable of $134,849 and

$1,388,500 were recorded as of April 30, 2024 and 2023, respectively, and an allowance for doubtful accounts of $353,455 and $91,955

was recorded as of April 30, 2023 and 2022, respectively.

of Long-Lived Assets

Accounting Standards Board (“FASB”) authoritative guidance requires that certain assets be reviewed for impairment and, if

impaired, remeasured at fair value whenever events or changes in circumstances indicate that the carrying amount of the asset may not

be recoverable.

Impairment loss estimates are primarily based upon management’s analysis and review of the carrying value of long-lived

assets at each balance sheet date, utilizing an undiscounted future cash flow calculation.

We recorded an impairment loss $1,048,430

in fiscal 2024.

We did not recognize an impairment loss in fiscal 2023.

Investment in Equity Securities

The Company holds investments in equity

securities that are within the scope of ASC 321.

These securities are typically

received as payment for invoices and initially recorded at cost, which represents the fair value of the consideration received at the

time of the transaction.

The Company monitors these investments

for changes in observable prices from orderly transactions for the identical or similar securities.

When observable price changes are

identified or an impairment is recognized, the investments

are remeasured to fair value, with changes recognized in earnings.

estimate the degree to which tax assets and loss carryforwards will result in a benefit based on expected profitability by tax jurisdiction.

A valuation allowance for such tax assets and loss carryforwards is provided when it is determined that such assets will more likely

than not go unused.

If it becomes more likely than not that a tax asset or loss carry-forward will be used, the related valuation allowance

on such assets is reversed.

Sheet Arrangements

have no off-balance sheet arrangements.

About Market Risk

are not subject to fluctuations in interest rates, currency exchange rates or other financial market risks.

We have not made any sales,

purchases or commitments with foreign entities which would expose us to currency risks.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide information under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Consolidated Financial Statements required by this Item are included herein, commencing on page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis