What changed in this filing

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Item 1. Business

2022-08-08 compared with 2021-08-31 · 394 added, 110 removed, 1 unchanged (100% of the section changed)

We are a fintech

company with a scalable technology platform that allows private companies to raise capital online and provides private equity investment

opportunities to investors.

The company's consulting group, Netcapital Advisors, delivers marketing and strategic advice and takes equity

positions in select companies with disruptive technologies.

The Netcapital funding portal is registered with the U.S.

Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

We specialize in

Regulation Crowdfunding (“Reg CF”), under the provisions of Title III of the JOBS Act of 2012.

We believe that new capital

raising techniques, such as Reg CF, democratize capital raising, similar to the way that social networks democratize broadcast mechanisms

that once belonged only to traditional media.

Reg CF is one of three securities exemptions that enable online capital formation.

Reg D 506(c) allows an unlimited amount of money to be raised from accredited investors.

Reg A+ enables an issuer to raise up to $75

million online from anyone.

Reg CF, the smallest of the crowdfunding exemptions, allows issuers to raise up to $5 million from non-accredited

investors every 12 months.

The $5 million limit

was increased on March 15, 2021 by the Securities and Exchange Commission (the "SEC") from the previous level of $1.07 million.

We believe this change has already impacted the number of issuers and users on our website and consequently increased our sales.

website is posting a record number of users and dollars invested in June and July of 2021.

We also see from industry statistics that

investment commitments of Reg CF funding portals increased by $71 million, or 154%, to $117 million for the quarter ended June 30, 2021,

as compared to investment commitments of $46 million for the quarter ended June 30, 2020.

are encouraged by our growth over the past year, as the market share earned by the Netcapital funding portal in the quarter ended June

30, 2021 was 7.0% of the industry investment commitments, as compared to 2.2% of the industry investment commitments in the quarter ended

June 30, 2020.

We believe our increase in revenues and

our gain in market share over the past year is a trend we can continue.

However, 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.

Development of

We were incorporated

in the State of Utah in April 1984 under our previous name, DBS Investments, Inc.

A change of control of our company occurred in December

2003 and we changed our name to ValueSetters, Inc., when we, in conjunction with a plan of reorganization, merged with Valuesetters L.L.C.,

an Arizona limited liability corporation.

In order to take

advantage of the increasing game activities on the Internet, on November 23, 2010, we signed a contract to purchase all the assets of

NetGames.com, a company that owned several websites and operated a small Internet-based chess game known as Chess.net.

As noted above, in

2014, we began our consulting business, and we now own a portion of several companies as a result of our consulting work.

Many of these

businesses operate solely on the Internet and many use the Internet to raise capital.

We believe the value of our ownership interests

in several of these companies may be significant.

In 2016, we began consulting for companies seeking to raise capital via Reg CF.

2020, we purchased Netcapital Funding Portal Inc., a regulated funding portal operating under the provisions of Reg CF.

On November 5,

2020, we changed our name to Netcapital Inc.

to leverage the strength of Netcapital’s well-established brand and unique private

capital markets platform.

We compete with a

number of public and private companies that provide assistance with capital raising, strategy, technology

consulting, and digital marketing.

Most of our competitors have significant financial resources and occupy entrenched positions

in the market with name-brand recognition.

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 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 portals.

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

Company was incorporated in Utah in 1984 as DBS Investments, Inc., or DBS.

DBS merged with ValueSetters L.L.C.

in December 2003

and changed its name to ValueSetters, Inc.

In November 2020, the Company purchased Netcapital Funding Portal Inc.

(the “Funding

Portal”) and changed the name of the Company from ValueSetters, Inc.

to Netcapital Inc.

Company has three operating subsidiaries.

The Funding Portal provides private companies with access to investments from accredited

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

The Funding Portal charges a $5,000 engagement

fee and a 4.9% success fee for capital raised at closing.

In addition, the Funding Portal generates fees for other ancillary services,

such as rolling closes.

Netcapital Advisors Inc.

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

MSG Development Corp.

provides corporate valuation services to businesses and individuals.

Netcapital.com

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

from 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 investment from anyone, including friends, family, customers, employees, etc.

Customer accounts on our platform

will not be permitted to hold digital securities.

addition to access to the funding portal, the Netcapital funding portal provides the following services:

fully automated onboarding process;

filing of required regulatory documents;

● custom-built

offering page on our portal website;

party transfer agent and custodial services;

marketing to our proprietary list of investors;

closes, which provide potential access to liquidity before final close date of offering;

with annual filings;

access to our team for ongoing support.

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.

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;

valuation group, MSG Development Corp.

prepares valuations that are always reviewed by an Accredited Senior Business Appraiser

licensed by the American Society of Appraisers.

valuation services include:

and solvency opinions;

feasibility and valuation;

charitable contributions;

analysis of damages;

● intellectual

property appraisals;

● compensation

noted above, in 2014, we began our consulting business, and we now own a portion of several companies as a result of our consulting

Many of these businesses operate solely on the Internet and many use the Internet to raise capital.

We believe the value

of our ownership interests in several of these companies may be significant.

In 2016, we began consulting for companies seeking

to raise capital via Reg CF.

In 2020, we purchased Netcapital Funding Portal Inc., a regulated funding portal operating under

the provisions of Reg CF.

On November 5, 2020, we changed our name to Netcapital Inc.

to leverage the strength of Netcapital’s

well-established brand and unique private capital markets platform.

compete with a number of public and private companies that provide assistance with capital raising, strategy, technology consulting,

and digital marketing.

Most of our competitors have significant financial resources and occupy entrenched positions in the market

with name-brand recognition.

The majority of our capital raising and digital marketing business is on the Internet.

The barriers to entry

into most Internet markets are relatively low, making them accessible to a large number of entities and individuals.

We believe the principal

competitive factors in our industry that create certain barriers to entry include but are not limited to reputation, technology, financial

stability and resources, proven track record of successful operations, critical mass, and independent oversight and transparency of business

While these barriers will limit those able to enter or compete effectively in the market, it is likely that new competitors

as well as laws and regulations of governmental authority will be established in the future, in addition to our known current competitors.

face significant competition in every aspect of our business, including from companies that facilitate online capital formation and the

sharing of content and information, companies that enable marketers to display advertising, companies that distribute video and other

forms of media content, and companies that provide development platforms for applications developers.

We compete to attract, engage,

and retain customers, to attract and retain marketers, and to attract and retain developers to build compelling applications that integrate

with our products.

Increased competition

from current and future competitors may in the future materially adversely affect our business, revenues, operating results and financial

Industry Regulation

We are subject, both

directly and indirectly, to various laws and regulations relating to our business.

If any of the laws are amended, compliance could become

more expensive and directly affect our income.

We intend to comply with such laws, but new restrictions may arise that could materially

adversely affect our Company.

Specifically, the SEC regulates our funding portal business, and our funding portal is also a member of

FINRA and is regulated by FINRA.

Research and Development

We do not currently

have a budget specifically allocated for research and development purposes.

Major Customers

For the year ended

April 30, 2021, the Company had one customer that constituted 30% of its revenues, a second customer that constituted 15% of its revenues,

a third customer that constituted 14% of its revenues and a fourth customer that accounted for 11% of its revenues.

For the year ended

April 30, 2020, the Company had one customer that constituted 47% of its revenues, a second customer that constituted 31% of its revenues

and a third customer that accounted for 13% of its revenues.

Corporate Information

We maintain a corporate

website with the address http://www.netcapitalinc.com, our funding portal maintains a website with the address http://www.netcapital.com,

and Netcapital Advisors maintains a website at http://www.netcapitaladvisors.com.

We have not incorporated by reference into

this Report on Form 10-K the information on any of our websites and you should not consider any of such information to be a part of this

Our website addresses are included in this document for reference only.

We make available

free of charge through our corporate website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form

8-K, and amendments to these reports through a link to the EDGAR database as soon as reasonably practicable after we electronically file

such material with, or furnish such material to the SEC.

You can also read and copy any materials we file with the SEC at

the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.

You can obtain additional information about the operation

of the Public Reference Room by calling the SEC at 1.800.SEC.0330.

In addition, the SEC maintains a website (www.sec.gov) that contains

reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including all

of our filings.

barriers to entry into most Internet markets are relatively low, making them accessible to a large number of entities and individuals.

We believe the principal competitive factors in our industry that create certain barriers to entry include but are not limited

to reputation, technology, financial stability and resources, proven track record of successful operations, critical mass, and

independent oversight and transparency of business practices.

Obtaining approval from FINRA to operate as a funding portal is

also a barrier to entry due to the significant internal control and capital requirements.

While these barriers will limit those

able to enter or compete effectively in the market, it is likely that new competitors as well as laws and regulations of governmental

authority will be established in the future, in addition to our known current competitors.

face significant competition in every aspect of our business, including from companies that facilitate online capital formation

and the sharing of content and information, companies that enable marketers to display advertising, companies that distribute

video and other forms of media content, and companies that provide development platforms for applications developers.

compete to attract, engage, and retain customers, to attract and retain marketers, and to attract and retain developers to build

compelling applications that integrate with our products.

competition from current and future competitors may in the future materially adversely affect our business, revenues, operating

results and financial condition.

an effort to enhance economic growth and to democratize access to private investment opportunities, Congress finalized the Jumpstart

Our Business Startups Act (JOBS Act) in 2016.

Title III of the JOBS Act enabled early-stage companies to offer and sell securities

to the general public for the first time.

The SEC then adopted Regulation Crowdfunding, or Reg CF, in order to implement the JOBS

Act’s crowdfunding provisions.

CF has several important features that changed the landscape for private capital raising and investment.

For the first time, this

Allowed the general

public to invest in private companies, no longer limiting early-stage investment opportunities to less than 10% of the population;

Enabled private

companies to advertise their securities offerings to the public (general solicitation);

Conditionally exempted

securities sold under Section 4(a)(6) from the registration requirements of the Securities and Exchange Act of 1934.

are subject, both directly and indirectly, to various laws and regulations relating to our business.

If any of the laws are amended,

compliance could become more expensive and directly affect our income.

We intend to comply with such laws, but new restrictions

may arise that could materially adversely affect our Company.

Specifically, the SEC regulates our funding portal business, and

our funding portal is also a member of FINRA and is regulated by FINRA.

We are also subject to the USA Patriot Act of 2001, which

contains anti-money laundering and financial transparency laws and mandates various regulations applicable to financial services

companies, including standards for verifying client identification at account opening, and obligations to monitor client transactions

and report suspicious activities.

Anti-money laundering laws outside of the United States contain some similar provisions.

failure to comply with these requirements as applicable to us could have a material adverse effect on us.

traditional funding model restricts access to capital, investments and liquidity.

According to Harvard Business Review,

VCs invest in fewer than 1% of the companies they consider and only 10% of VC meetings are obtained through cold outreach.

In addition, under 5% of VC funding went to women and minority-owned firms in 2020, according to Forbes.

under the traditional model, the average investor lacked access to early-stage investments.

Prior to the JOBS Act, almost

households were precluded from investing in private deals, per dqydj.com.

Liquidity has also been an issue,

as private investments are generally locked up until IPO or takeout.

JOBS Act helped provide a solution to these issues by establishing the funding portal industry which is currently in its infancy.

Title III of the JOBS Act outlines Reg CF, which traditionally allowed private companies to raise up to $1.07 million from all

In March 2021, regulatory enhancements by the SEC went into effect and increased the limit to $5 million.

These amendments

increased the offering limits for Reg CF, Regulation A and Regulation D Rule 504 offerings as follows;

Reg CF increased to $5

million, Regulation D, Rule 504 increased to $10 million from $5 million;

and Regulation A Tier 2 increased to $75 million from

CF private company investments accounted for approximately $490 million in 2021, according to KingsCrowd, versus $205 million

We believe a significant opportunity exists to disrupt private capital markets via the Netcapital funding portal.

capital markets reached $7.4 trillion at the end of 2020, per Morgan Stanley, and this number is expected to reach $13 trillion

over the next five years.

Within this market, private equity represents the largest share, with assets in excess of $3 trillion

and a 10-year CAGR of 10%.

Since 2000, global PE net asset value has increased almost tenfold, nearly three times faster than

the size of the public equity market.

Both McKinsey and Boston Consulting Group predict that this strong growth will continue,

as investors allocate increasing amounts to private equity, due to historically higher returns and lower volatility than public

In addition, Boston Consulting Group estimates that there are $42 trillion held in retail investment accounts, which

we believe represents a large pool of potential account holders for us.

Netcapital platform is a scalable, real-time, transaction processing engine that runs without human intervention, 24 hours a day,

seven days a week.

For companies raising capital, the technology provides fully automated onboarding with integrated regulatory

Funds are collected from investors and held in escrow until the offering closes.

entrepreneurs, the technology facilitates access to capital at low cost.

For investors, the platform provides access to investments

in private, early-stage companies that were previously unavailable to the general public.

Both entrepreneurs and investors can

track and view their investments through their dashboard on netcapital.com.

The platform currently has almost 100,000 users.

was demonstrated in November 2021, when the platform processed more than 2,000 investments in less than two hours, totaling more

than $2 million.

infrastructure is designed in a way that can horizontally scale to meet our capacity needs.

Docker containers and Amazon ECS, we are able to automate the creation and launch of our production web and API endpoints in order

to replicate them as needed behind Elastic Load Balancers (ELBs).

Additionally,

all of our public facing endpoints live behind CloudFlare to ensure protection from large scale traffic fluctuations (including

DDoS attacks).

main database layer is built on Amazon RDS and features a Multi-AZ deployment that can also be easily scaled up or down as needed.

General queries are cached in our API layer, and we monitor to optimize very complex database queries that are generated by the

Additionally, we cache the most complex queries (such as analytics data) in our NoSQL (Mongo) data store for improved performance.

of our CPU intensive data processing happens asynchronously through a worker/jobs system managed by AWS ElastiCache’s Redis

This component can be easily fine-tuned for any scale necessary.

technology necessary to operate our funding portal is licensed from our affiliate, Netcapital Systems LLC under a license agreement

with our wholly owned subsidiary Netcapital Funding Portal Inc., where we have the exclusive right to use the technology with

respect to our funding portal, for an annual license fee of $380,000 paid in quarterly installments.

believe we provide the lowest cost solution for online capital raising versus our peer group (StartEngine Crowdfunding, Inc.,

Wefunder Inc.and Republic Core LLC.

We also believe that our access and onboarding of new clients are superior due to our facilitated

technology platforms.

Our network is rapidly expanding as a result of our enhanced marketing and broad distribution to reach new

Given the rapid growth in the industry and its potential to disrupt the multi-billion dollar private capital market,

we believe there is sufficient room for multiple players.

major tailwinds are driving accelerated growth in the shift to the use of online funding portals:

(i) the COVID-19 pandemic;

the increase in funding limits under Reg CF;

and (iii) the recent private equity outperformance of public markets.

drove a rapid need to bring as many processes as possible online.

With travel restrictions in place and most people in lockdown,

entrepreneurs were no longer able to fundraise in person and have increasingly turned to online capital raising through funding

are numerous industry drivers and tailwinds that complement investor demand for access to investments in private companies.

capitalize on these, our strategy is to:

Generate New Investor

Growing the number of investor accounts on our platform is a top priority.

Investment dollars continuing to flow

through our platform is a key revenue driver.

When issuers advertise their offerings, they are generating new investor accounts

for us at no cost to Netcapital.

We plan to supplement our issuers’ spend on advertising by increasing our online marketing

spend as well, which may include virtual conferences going forward.

Hire Additional

Business Development Staff.

We seek to hire additional business development staff that is technology and financially passionate

about capital markets to handle our growing backlog of potential customers.

Increase the Number

of Companies on Our Platform via Marketing.

When a new company lists on our platform, they bring their customers, supporters,

and brand ambassadors as new investors to Netcapital.

We plan to increase our marketing budget to help grow our portal and

advisory clients.

Invest in Technology.

Technology is critical to everything that we do.

We plan to invest in developing innovative technologies that enhance our

platform and allow us to pursue additional service offerings.

For example, we plan on developing a dedicated mobile app to

make our platform more accessible.

Incubate and Accelerate

Our Advisory Portfolio Clients.

The advisory portfolio and our equity interests in select advisory clients represent potential

upside for our shareholders.

We seek to grow this model of advisory clients.

Expand Internationally.

We believe there is a significant opportunity to expand into Europe and Asia as an appetite abroad grows for U.S.

Open ATS/Secondary

Transfer Feature.

Lack of liquidity is a key issue for investors in private companies as private markets lack a liquidity

feature in our targeted market.

We plan to open a Secondary Transfer Feature and are exploring various alternatives to provide

potential liquidity for secondary offerings to investors who participate in our primary offerings on the Netcapital platform.

New Verticals Represent

a Compelling Opportunity.

We operate in a regulated market supported by the JOBS Act.

We may pursue expansion to our model

to include Regulation A and Regulation D offerings.

major tailwinds are driving accelerated growth in the shift to digital fundraising:

the COVID-19 pandemic and regulatory enhancements

to the Jobs Act.

The pandemic drove a rapid need to bring as many processes as possible online.

With travel restrictions in place

and most people in lockdown, entrepreneurs were no longer able to fundraise in person and have increasingly turned to online capital

raising through funding portals.

addition, exempt offering regulatory enhancements proposed by the SEC in 2020 went into effect in March 2021.

These amendments

increased the offering limits for Reg CF, Regulation A and Rule 504 of Regulation D offerings as follows:

the Reg CF limit increased

to $5 million from $1.07 million, every twelve months.

Rule 504 of Regulation D moved to $10 million from $5 million and Regulation

A Tier 2 rose to $75 million from $50 million.

by this rule change, Reg CF commitments of $56 million in March 2021 were more than five times higher than in March of the previous

We believe that the recent increase in offering limits in combination with pandemic-driven acceleration in the need for

digital fundraising have been the primary drivers of the increase in Reg CF commitments.-.

We expect these changes to continue

to have a significant, positive impact on demand as they increase the attractiveness of digital fundraising options and pave the

way for larger companies to utilize the exempt framework.

This could also potentially drive higher demand for Netcapital Advisors’

another important regulatory development, the U.S.

Department of Labor, or DOL, recently expressed their support for retail investment

in private equity.

In 2020, the DOL released an information letter backing private equity as an investment option for defined

contribution plans.

As a result, large asset managers are working on adding private investment choices to their retirement products,

according to a study conducted by BCG.

key part of our story involves the potential value creation driven by our portfolio companies.

In our portfolio, we focus on companies

with emerging, disruptive technologies.

A partial list of our investment portfolio is described below:

by over 300,000 investors to vet startup investments, KingsCrowd, Inc.

is a leader in ratings and analytics for online private

The company aggregates, analyzes, and rates companies raising on platforms like Netcapital to help investors make more

informed decisions.

communicators close more deals.

ChipBrain LLC’s emotionally intelligent AI assistant provides real-time emotion, tone, and

facial expression feedback in live conversations across text, voice, and video.

Taking the guesswork out of identifying conversational

cues, the company’s technology enables sales professionals to see at a glance how they are coming across to customers.

Drone Delivery Technology

Drone LLC solves the last mile delivery problem for “brick and mortar” retailers.

The company designs, builds, and

operates drone delivery systems, transforming retail stores into customer fulfillment centers.

Deuce Drone LLC provides a cost-effective,

technology-driven solution for same-day delivery that allows retailers to compete with major e-commerce players.

by famous venture capitalist Tim Draper, napster founder, Shawn Fanning, and co-creator of Guitar Hero, Kai Huang, Zelgor Inc.

is an interactive entertainment company featuring a new species of rambunctious alien characters called The Noobs.

The Noobs are

a unique and original intellectual property introduced to the world through mobile games, multimedia content, and strategic partnerships.

your friends and favorite shows together all in one place.

The Watch Party app makes it easy to find new shows, see what your

friends are watching, and recommend great shows to each other.

The company’s platform delivers targeted show recommendations

based on the television viewing tastes of users’ friends and family.

It’s not a single streaming platform’s

media catalog, but a cross-platform television guide, crowdsourced from your friends and family.

Cancer Immunotherapy

Therapeutics’s proprietary technology, developed at Massachusetts General Hospital and Harvard University, helps the body's

immune system to identify and destroy cancer cells by inhibiting key enzymes that conceal the disease.

This patent pending approach

is designed to improve the efficacy of treating a broad range of cancers.

product is an AI-powered database and CRM hybrid that uses data and emotionally intelligent AI to boost direct one-to-one marketing

It also provides specialized experts who know how to leverage your company’s data.

Media Group Inc.

Media Group, Inc.

is an advanced marketing and technology solutions provider.

Caesar Media Group is designed to leverage its technology

and data to provide lead generation, search engine optimization (SEO) website development, project development, digital marketing,

content management, customer service, and sales management.

Portfolio Company Progress

Inc., a fintech company that provides ratings and analytics for online private markets, grew their subscriber base to 350,000,

generated almost half a million in revenues last year, rated over half a billion dollars in transactions with their proprietary

rating algorithm, and launched a $15 million Reg A+ round at a $45 million pre-money valuation.

Drone recently secured an exclusive contract for food delivery at the BB&T Center, in Mobile, Alabama.

They successfully completed

their first food delivery run:

Operation Smoothie.

The Deuce Drone team was joined by several notable community leaders for the

demo, including Representative Jerry Carl, the chief executive officer of the Mobile Chamber of Commerce, staff from Senator Tommy

Tuberville’s office, and representatives from Innovation Portal, a local incubator that recently invested in the company.

Local Fox 10 News and Alabama.com covered the event.

launched their television show recommendation app in the Apple app store, which has been awarded a 5-star rating by users.

also added acclaimed Hollywood producer and screenwriter Jason Keller to their team.

Keller brings nearly two decades of experience

in the film and entertainment industry to the MustWatch team.

Most recently Keller wrote the Oscar winning film Ford vs.

(starring Christian Bale and Matt Damon) which was nominated for four Academy Awards, including Best Picture.

His other notable

writing credits include Mirror, Mirror (starring Julia Roberts), Escape Plan (starring Arnold Schwarzenegger and Sylvester Stallone)

and Machine Gun Preacher (starring Gerard Butler), as well as an executive producer for the fifth movie in the Die Hard franchise,

A Good Day to Die Hard (starring Bruce Willis).

completed a stability test launch of their first mobile game, Noobs in Space, and generated thousands of downloads in the first

They sold out their recent offering on the Netcapital platform.

which develops emotionally intelligent AI, has built out their core machine learning models and performed pilot programs with

multiple customers.

With the help of Netcapital Advisors, the Company sold out two rounds of financing on Netcapital, and just

closed a venture round at a $20 million pre-money valuation.

with Netcapital Advisors, C-Reveal raised over $1 million on the Netcapital platform, and then closed a $3 million venture round.

the year ended April 30, 2022, the Company had one customer that constituted 22% of its revenues, a second customer that constituted

22% of its revenues, and a third customer that constituted 18% of its revenues.

For the year ended April 30, 2021, the Company

had one customer that constituted 30% of its revenues, a second customer that constituted 15% of its revenues, a third customer

that constituted 14% of its revenues and a fourth customer that accounted for 11% of its revenues.

Uplist Offering

July 15, 2022, we completed an underwritten public offering of 1,205,000 shares of our common stock and warrants to purchase 1,205,000

shares of our 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.

conjunction with this offering, the shares and warrants began trading on The Nasdaq Capital Market on July 13, 2022, under the

ticker symbols “NCPL” and “NCPLW,” respectively.

addition, we granted the underwriter a 45-day option to purchase up to an additional 180,750 shares of common stock and/or up

to 180,750 additional warrants to cover over-allotments, if any.

In connection with the closing of the offering, the underwriter

partially exercised its over-allotment option and purchased an additional 111,300 warrants.

The underwriter retains the right

to exercise the balance of its over-allotment option within the 45-day period.

of Secured Debt

July 21, 2022 the company paid $1 million to its secured lender, Vaxstar LLC, to reduce the principal balance on its debt from

$1,400,000 to $400,000.

Company was incorporated in Utah in 1984 as DBS Investments, Inc., or DBS.

DBS merged with Valuesetters L.L.C.

in December 2003

and changed its name to Valuesetters, Inc.

In November 2020, the Company purchased Netcapital Funding Portal Inc.

from Netcapital

Systems LLC and changed the name of the Company from Valuesetters, Inc.

to Netcapital Inc.

principal executive offices are located at State Street Financial Center, One Lincoln Street, Boston, Massachusetts and our telephone

number is 781-925-1700.

We maintain a website at www.netcapitalinc.com .

Information contained on or accessible through

our website is not, and should not be considered, part of, or incorporated by reference into, this prospectus and you should not

consider any information contained on, or that can be accessed through, our website as part of this prospectus in deciding whether

to purchase our securities.

maintain a corporate website with the address http://www.netcapitalinc.com, our funding portal maintains a website with the address

http://www.netcapital.com, Netcapital Advisors maintains a website at http://www.netcapitaladvisors.com and our valuation business

maintains a website at https://valucorp.com/.

We have not incorporated by reference into this Report on Form 10-K the information

on any of our websites and you should not consider any of such information to be a part of this document.

Our website addresses

are included in this document for reference only.

make available free of charge through our corporate website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and

Current Reports on Form 8-K, and amendments to these reports through a link to the EDGAR database as soon as reasonably practicable

after we electronically file such material with, or furnish such material to the SEC.

You can also read and copy any

materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.

You can obtain additional

information about the operation of the Public Reference Room by calling the SEC at 1.800.SEC.0330.

In addition, the SEC maintains

a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that

file electronically with the SEC, including all of our filings.

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 1. Business