What changed in this filing

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Item 1A. Risk Factors

2022-08-08 compared with 2021-08-31 · 708 added, 275 removed, 14 unchanged (99% of the section changed)

An investment in

our common stock involves a high degree of risk.

You should carefully consider the risks described below and the other information in

this Form 10-K before investing in our common stock.

If any of the following risks occur, our business, operating results and financial

condition could be seriously harmed.

We have a limited

operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses,

difficulties, complications and delays frequently encountered by a small developing company.

We were incorporated

in the State of Utah in April 1984.

The likelihood of our success must be considered in light of the problems, expenses, difficulties,

complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive

environment in which we will operate.

Since we have a limited operating history, we cannot assure you that our business will maintain

profitability.

Major health epidemics,

such as the outbreak caused by a coronavirus (COVID-19), and other outbreaks or unforeseen or catastrophic events could continue to disrupt

and adversely affect our operations, financial condition, and business.

Public health epidemics

or outbreaks could adversely impact our business.

In July 2021, the global tally of confirmed cases of the coronavirus-borne illness

COVID-19 exceeded 180 million.

The extent to which the coronavirus impacts our operations will depend on future developments, which are

highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning

the severity of the coronavirus and the emergence of variants, among others.

In particular, the spread and treatment of the coronavirus

globally could adversely impact our operations and could have an adverse impact on our business and our financial results.

The requirements

of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain

executive management and qualified board members.

As a public company,

we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley

Act, the Dodd-Frank Act, and other applicable securities rules and regulations.

Compliance with these rules and regulations increases

our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly and increases demand on our

systems and resources.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect

to our business and operating results.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls

and procedures and internal control over financial reporting.

In order to maintain and, if required, improve our disclosure controls

and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may

As a result, management’s attention may be diverted from other business concerns, and such attention could adversely

affect our business and operating results.

We may need to hire more employees in the future or engage outside consultants who will increase

our costs and expenses.

In addition, changing

laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies,

increasing legal and financial compliance costs and making some activities more time consuming.

These laws, regulations and standards

are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice

may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding

compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We intend to invest resources

to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses

and a diversion of management’s time and attention from revenue-generating activities to compliance activities.

If our efforts

to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities

related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely

We also expect that

being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability

insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

These factors could

also make it more difficult for us to attract and retain qualified members of our board of directors.

We may need to raise

additional funds through public or private debt or sale of equity to pay for the costs we incur as a public company.

Such financing may

not be available when needed.

Even if such financing is available, it may be on terms that are materially adverse to your interests with

respect to dilution of book value, dividend preferences, liquidation preferences, or other terms.

No assurance can be given that such

funds will be available or, if available, will be on commercially reasonable terms satisfactory to us.

There can be no assurance that

we will be able to obtain financing if and when it is needed on terms we deem acceptable.

If we are unable to obtain financing on reasonable

terms, we could be forced to discontinue our public reporting.

As a result of disclosure

of information in this report and in future filings required of a public company, our business and financial condition will become more

visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.

If such claims

are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or

are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management

and adversely affect our business and operating results.

We operate in

a regulatory environment that is evolving and uncertain.

The regulatory framework

for online capital formation or crowdfunding is very new.

The regulations that govern our operations have been in existence for a very

Further, there are constant discussions among legislators and regulators with respect to changing the regulatory environment.

in our securities involves a high degree of risk.

You should carefully consider the risks described below, together with the other

information contained in this prospectus, including our financial statements and the related notes appearing at the end of this

prospectus, before making your decision to invest in our securities.

We cannot assure you that any of the events discussed in

the risk factors below will not occur.

These risks could have a material and adverse impact on our business, results of operations,

financial condition and cash flows and, if so, our prospects would likely be materially and adversely affected.

If any of such

events were to happen, the trading price of our securities in any market that may develop for our securities could decline and

you could lose all or part of your investment.

Related to Our Business and Growth Strategy

have a limited operating history and our profits have been generated primarily by unrealized gains from equity securities we own

in other companies.

Although we have been profitable, the likelihood of our success must be considered in light of the problems,

expenses, difficulties, complications and delays frequently encountered by a small developing company.

were incorporated in the State of Utah in April 1984.

Although we have reported earnings in the years ended April 30, 2022 and

2021, the majority of our earnings came from unrealized gains in equity securities that we own.

These securities have observable

prices but are not liquid.

Furthermore, the likelihood of our success must be considered in light of the problems, expenses, difficulties,

complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly

competitive environment in which we will operate.

Since we have a limited operating history, we cannot assure you that our business

will maintain profitability.

have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our revenues.

currently derive a significant portion of our revenues from a limited number of customers.

For 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.

There are inherent risks whenever a large percentage of total revenues

are concentrated with a limited number of customers.

It is not possible for us to predict the future level of demand for our services

that will be generated by these customers or new customers, or the future demand for the products and services of these customers

or new customers.

If any of these customers experience declining or delayed sales due to market, economic or competitive

conditions, we could be pressured to reduce the prices we charge for our products which could have an adverse effect on our margins

and financial position and could negatively affect our revenues and results of operations and/or trading price of our common stock.

operate in a regulatory environment that is evolving and uncertain.

regulatory framework for online capital formation or crowdfunding is very new.

The regulations that govern our operations have

been in existence for a very few years.

Further, there are constant discussions among legislators and regulators with respect

to changing the regulatory environment.

New laws and regulations could be adopted in the United States and abroad.

Further, existing laws and regulations may be interpreted

in ways that would impact our operations, including how we communicate and work with investors and the companies that use our services

and the types of securities that our clients can offer and sell on our platform.

We may be liable

for misstatements made by issuers.

Under the Securities

Act of 1933 and the Exchange Act of 1934, issuers making offerings through our funding portal may be liable for inappropriate disclosures,

including untrue statements of material facts or for omitting information that could make the statements misleading.

This liability may

also extend in Regulation Crowdfunding offerings to funding portals, such as our subsidiary.

Even though due diligence defenses may be

available, there can be no assurance that if we were sued, we would prevail.

Further, even if we do succeed, lawsuits are time consuming

and expensive, and being a party to such actions may cause us reputational harm that would negatively impact our business.

even if we are not liable or a party to a lawsuit or enforcement action, some of our clients have been and will be subject to such proceedings.

Any involvement we may have, including responding to document production requests, may be time-consuming and expensive as well.

Our compliance

is focused on U.S.

laws and we have not analyzed foreign laws regarding the participation of non-U.S.

Some of the investment

opportunities posted on our platform are open to non-U.S.

We have not researched all the applicable foreign laws and regulations,

and we have not set up our structure to be compliant with foreign laws.

It is possible that we may be deemed in violation of those laws,

which could result in fines or penalties as well as reputational harm.

Any violation of foreign laws may limit our ability in the future

to assist companies in accessing money from those investors, and compliance with those laws and regulations may limit our business operations

and plans for future expansion.

Netcapital Funding

Portal’s product offerings are relatively new in an industry that is still quickly evolving .

The principal securities

regulations that we work with, Rule 506(c) and Regulation Crowdfunding, have only been in effect in their current form since 2013

Further, existing

laws and regulations may be interpreted in ways that would impact our operations, including how we communicate and work with investors

and the companies that use our services and the types of securities that our clients can offer and sell on our platform.

operate in a highly regulated industry.

are subject to extensive regulation and failure to comply with such regulation could have an adverse effect on our business.

our subsidiary Netcapital Funding Portal Inc is registered as a funding portal.

As a funding portal we have to comply with stringent

regulations, and the operation of our funding portal is frequently subject to examination, constraints on its business, and in

some cases fines.

In addition, some of the restrictions and rules applicable to our subsidiary could adversely affect and limit

some of our business plans.

funding portal’s service offerings are relatively new in an industry that is still quickly evolving .

principal securities regulations that we work with, Rule 506(c) and Reg CF, have only been in effect in their current form since

2013 and 2016, respectively.

Our ability to continue to penetrate the market remains uncertain as potential issuer companies may choose to

use different platforms or providers (including, in the case of Rule 506(c) and Regulation A, using their own online platform),

or determine alternative methods of financing.

Our ability to continue to penetrate the market remains uncertain as potential issuer companies may

choose to use different platforms or providers (including, in the case of Rule 506(c) and Regulation A, using their own online

platform), or determine alternative methods of financing.

Investors may decide to invest their money elsewhere.

Further, our potential market may

not be as large, or our industry may not grow as rapidly as anticipated.

Success will likely be a factor of investing in the development

and implementation of marketing campaigns, repeat business from both issuer companies and investors, and favorable changes in the regulatory

We are vulnerable

to hackers and cyber attacks.

As an internet-based

business, we may be vulnerable to hackers who may access the data of our investors and the issuer companies that utilize our platform.

Further, any significant disruption in service on our funding portal platform or in our computer systems could reduce the attractiveness

of our platform and result in a loss of investors and companies interested in using our platform.

Further, we rely on a third-party technology

provider to provide some of our back-up technology as well as act as our escrow agent.

Any disruptions of services or cyber-attacks either

on our technology provider, escrow agent, or on us could harm our reputation and materially negatively impact our financial condition

and business.

Our strategy to

purchase a portion of early-stage companies may provide us with investments that have no liquidity.

is our strategy to sometimes purchase, at an affordable price, part or all of early-stage companies and cross pollinate the ideas, technology

and expertise within these companies to enhance the operations, profits and market share of all the entities.

That strategy may result

in us diverting management attention and advisory resources to do work for early-stage companies that pay for the work with equity, which

becomes impaired in value or never becomes a liquid asset.

For all of these early-stage companies, the future liquidity and value of

our investments cannot be guaranteed, and no market may exist for us to generate gains from our investments in early-stage companies.

Our business depends

on the reliability of the infrastructure that supports the Internet and the viability of the Internet.

The growth of Internet

usage has caused frequent interruptions and delays in processing and transmitting data over the Internet.

There can be no assurance that

the Internet infrastructure or the Company’s own network systems will continue to be able to support the demands placed on it by

the continued growth of the Internet, the overall online securities industry or that of our customers.

The Internet’s

viability could be affected if the necessary infrastructure is not sufficient, or if other technologies and technological devices eclipse

the Internet as a viable channel.

End-users of our

software depend on Internet Service Providers (“ISPs”), online service providers and our system infrastructure for access

to the Internet sites that we operate.

Many of these services have experienced service outages in the past and could experience service

outages, delays and other difficulties due to system failures, stability or interruption.

As a result, we may not be able to meet a level

of service that we have promised to our subscribers, and we may be in breach of our contractual commitments, which could materially adversely

affect our business, revenues, operating results and financial condition.

Intense competition

could prevent us from increasing our market share and growing our revenues.

We compete with a

number of public and private companies and most of our competitors have significant financial resources and occupy entrenched positions

in the market with name-brand recognition.

We also face challenges from new Internet sites that aim to attract subscribers who seek to

play interactive games or invest in public or private securities.

Such companies may be able to attract significantly more subscribers

because of new marketing ideas and user interface concepts.

Increased competition

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

Our debt level

could negatively impact our financial condition, results of operations and business prospects.

As of April 30, 2021,

we continue to owe $1,000,000 in secured debt and we have borrowed money on three occasions from the U.S.

Small Business Administration.

Our level of debt could have significant consequences to our shareholders, including the following:

requiring the

dedication of a substantial portion of cash flow from operations to make payments on debt, thereby reducing the availability of cash

Further, our potential

market may not be as large, or our industry may not grow as rapidly as anticipated.

Success will likely be a factor of investing

in the development and implementation of marketing campaigns, repeat business from both issuer companies and investors, and favorable

changes in the regulatory environment.

have an evolving business model.

business model is one of innovation, including continuously working to expand our product lines and services to our clients.

example, we are evaluating an expansion into the transfer agent and broker-dealer space as well as our foray into becoming an

alternative trading system.

It is unclear whether these services will be successful.

Further, we continuously try to offer additional

types of services, and we cannot offer any assurance that any of them will be successful.

From time to time, we may also modify

aspects of our business model relating to our service offerings.

We cannot offer any assurance that these or any other modifications

will be successful or will not result in harm to the business.

We may not be able to manage growth effectively, which could damage

our reputation, limit our growth, and negatively affect our operating results.

may be liable for misstatements made by issuers.

the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”), issuers making offerings through

our funding portal may be liable for inappropriate disclosures, including untrue statements of material facts or for omitting

information that could make the statements misleading.

This liability may also extend in Reg CF offerings to funding portals,

such as our subsidiary.

Even though due diligence defenses may be available, there can be no assurance that if we were sued, we

would prevail.

Further, even if we do succeed, lawsuits are time consuming and expensive, and being a party to such actions may

cause us reputational harm that would negatively impact our business.

Moreover, even if we are not liable or a party to a lawsuit

or enforcement action, some of our clients have been and will be subject to such proceedings.

Any involvement we may have, including

responding to document production requests, may be time-consuming and expensive as well.

compliance is focused on U.S.

laws and we have not analyzed foreign laws regarding the participation of non-U.S.

of the investment opportunities posted on our platform are open to non-U.S.

We have not researched all the applicable

foreign laws and regulations, and we have not set up our structure to be compliant with foreign laws.

It is possible that we may

be deemed in violation of those laws, which could result in fines or penalties as well as reputational harm.

Any violation of

foreign laws may limit our ability in the future to assist companies in accessing money from those investors, and compliance with

those laws and regulations may limit our business operations and plans for future expansion.

cash flow is reliant on one main type of service.

of our cash-flow generating services are variants on one type of service:

providing a platform for online capital formation.

revenues are therefore dependent upon the market for online capital formation.

As such, any downturn in the market could have

a material adverse effect of our business and financial condition.

depend on key personnel and face challenges recruiting needed personnel.

future success depends on the efforts of a small number of key personnel, including the founder of our subsidiary, Netcapital

Funding Portal Inc.

and Chief Executive Officer, and our compliance, engineering and marketing teams.

Our software engineer team,

as well as our compliance team and our marketing team are critical to continually innovate and improve our products while operating

in a highly regulated industry.

In addition, due to the specialized expertise required, we may not be able to recruit the individuals

needed for our business needs.

There can be no assurance that we will be successful in attracting and retaining the personnel

we require to operate and be innovative.

are vulnerable to hackers and cyber attacks.

an internet-based business, we may be vulnerable to hackers who may access the data of our investors and the issuer companies

that utilize our platform.

Further, any significant disruption in service on our funding portal platform or in our computer systems

could reduce the attractiveness of our platform and result in a loss of investors and companies interested in using our platform.

Further, we rely on a third-party technology provider to provide some of our back-up technology as well as act as our escrow agent.

Any disruptions of services or cyber-attacks either on our technology provider, escrow agent, or on us could harm our reputation

and materially negatively impact our financial condition and business.

funding portal relies on one escrow agent to hold investment commitments for issuers.

currently rely on Silicon Valley Bank to provide all escrow services related to offerings on our platform.

Any change in this

relationship will require us to find another escrow agent and escrow bank.

This change may cause us delays as well as additional

costs in transitioning our technology.

We are not allowed to operate our funding portal business without a qualified third-party

There are a limited number of banks that provide this service.

As such, if our relationship with our escrow agent

is terminated, we may have difficulty finding a replacement which could have a material adverse effect on our business and results

of operations.

our wholly-owned subsidiary, Netcapital Funding Portal Inc., fails to comply with its obligations under the license agreement

with Netcapital Systems LLC under which the technology to operate our funding portal is licensed to Netcapital Funding Portal

Inc., we could lose rights necessary to operate our funding portal which are important to our business.

wholly owned subsidiary, Netcapital Funding Portal Inc.

has licensed the technology necessary to operate our funding portal from

our majority stockholder, Netcapital Systems LLC, of which Mr.

Frishman owns a 29% interest.

These rights are extremely important

to our business.

If Netcapital Funding Portal Inc.

fails to comply with any obligations under this license agreement, such license

agreement may be subject to termination in whole or in part, which could severely impact our ability to operate our funding portal

which would have a material adverse effect on our business, financial position, and results of operations.

addition, disputes may arise regarding the technology subject to a license agreement, including:

scope of rights granted under the license agreement and other interpretation-related issues;

extent to which our processes infringe on the technology of Netcapital Systems LLC that is not subject to the license agreement;

ownership of inventions and know-how resulting from the joint creation or use of technology by Netcapital Systems LLC

over technology under the license agreement with Netcapital Systems LLC may prevent or impair our ability to maintain our current

license agreement on acceptable terms, and we may be unable to successfully operate our funding portal.

In addition, any failure

of Netcapital Systems LLC to service the technology subject to the license agreement or to operate its website could result in

our inability to operate our funding portal which would have a material adverse effect on our business, financial condition, and

results of operations.

Systems LLC relies on third-party software for the technology subject to the license agreement with Netcapital Funding Portal

that may be difficult to replace or which could cause errors or failures of our funding portal.

Systems LLC relies on software licensed from third parties for the technology subject to the license agreement with Netcapital

Funding Portal Inc.

This software may not continue to be available at reasonable prices or on commercially reasonable terms, or

Any loss by Netcapital Systems LLC of the right to use any of this software could significantly increase our expenses

and otherwise result in delays in the provisioning of our funding portal until equivalent technology is either developed by us

or Netcapital Systems LLC, or, if available, is identified, obtained, and integrated, which could harm our business.

or defects in third-party software could result in errors or a failure of our funding portal which could harm our business.

strategy to purchase a portion of early-stage companies may provide us with investments that have no liquidity.

is our strategy to sometimes purchase, at an affordable price, part or all of early-stage companies and cross pollinate the ideas,

technology and expertise within these companies to enhance the operations, profits and market share of all the entities.

strategy may result in us diverting management attention and advisory resources to do work for early-stage companies that pay

for the work with equity, which becomes impaired in value or never becomes a liquid asset.

For all of these early-stage companies,

the future liquidity and value of our investments cannot be guaranteed, and no market may exist for us to generate gains from

our investments in early-stage companies.

business depends on the reliability of the infrastructure that supports the Internet and the viability of the Internet.

growth of Internet usage has caused frequent interruptions and delays in processing and transmitting data over the Internet.

can be no assurance that the Internet infrastructure or the Company’s own network systems will continue to be able to support

the demands placed on it by the continued growth of the Internet, the overall online securities industry or that of our customers.

Internet’s viability could be affected if the necessary infrastructure is not sufficient, or if other technologies and technological

devices eclipse the Internet as a viable channel.

of our software depend on Internet Service Providers (“ISPs”), online service providers and our system infrastructure

for access to the Internet sites that we operate.

Many of these services have experienced service outages in the past and could

experience service outages, delays and other difficulties due to system failures, stability or interruption.

As a result, we may

not be able to meet a level of service that we have promised to our subscribers, and we may be in breach of our contractual commitments,

which could materially adversely affect our business, revenues, operating results and financial condition.

are dependent on general economic conditions.

business model is dependent on investors investing in the companies presented on our platforms.

Investment dollars are disposable

Our business model is thus dependent on national and international economic conditions.

Adverse national and international

economic conditions may reduce the future availability of investment dollars, which would negatively impact our revenues and possibly

our ability to continue operations.

It is not possible to accurately predict the potential adverse impacts on the Company, if

any, of current economic conditions on its financial condition, operating results and cash flow.

face significant market competition.

facilitate online capital formation.

Though this is a new market, we compete against a variety of entrants in the market as well

likely new entrants into the market.

Some of these follow a regulatory model that is different from ours and might provide them

competitive advantages.

New entrants could include those that may already have a foothold in the securities industry, including

some established broker-dealers.

Further, online capital formation is not the only way to address helping start-ups raise capital,

and the Company has to compete with a number of other approaches, including traditional venture capital investments, loans and

other traditional methods of raising funds and companies conducting crowdfunding raises on their own websites.

Additionally, some

competitors and future competitors may be better capitalized than us, which would give them a significant advantage in marketing

and operations.

as we continue to expand our offerings, we will continue to face headwinds and compete with companies that are more established

and/or have more financial resources than we do and/or new entrants bringing disruptive technologies and/or ideas.

competition could prevent us from increasing our market share and growing our revenues.

compete with a number of public and private companies and most of our competitors have significant financial resources and occupy

entrenched positions in the market with name-brand recognition.

We also face challenges from new Internet sites that aim to attract

subscribers who seek to play interactive games or invest in public or private securities.

Such companies may be able to attract

significantly more subscribers because of new marketing ideas and user interface concepts.

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

results and financial condition.

will require our secured lender to cooperate with us and, among other things, not demand repayments of principal and interest

until the business is capable of making such payments.

owe our secured lender, or the Lender, $400,000 in principal as of the date of this Report.

Our Lender holds a term note bearing

interest at an annual rate of 8%.

We have not paid interest on the note and it accrues each month.

We have a loan and security

agreement, or the Loan, with the Lender with a maturity date of April 30, 2023.

secure the payment of all obligations to the Lender, the Company granted to the Lender a continuing security interest and first

lien on all of the assets of the Company.

connection with the Loan, the Company has agreed to certain restrictive covenants, including, among others, that the Company may

not convey, sell lease, transfer or otherwise dispose of any part of its business or property, except as permitted in the agreement,

dissolve, liquidate or merge with any other party unless, in the case of a merger, the Company is the surviving entity, incur

any indebtedness except as defined in the agreement, create or allow a lien on any of its assets or collateral that has been pledged

to the Lender, make any loans to any person, except for prepaid items or deposits incurred in the ordinary course of business,

or make any material capital expenditures.

If we default on our loan obligations with the Lender, it could exercise their

rights and remedies under the applicable agreements, which could include seizing all of our assets.

Any such action would have

a material adverse effect on our business and prospects.

Loan contains numerous restrictive covenants which limit management’s discretion to operate our business.

order to obtain the Loan, we agreed to certain covenants that place significant restrictions on, among other things, our ability

to incur additional indebtedness, to create liens or other encumbrances, to make certain payments and investments, and to sell

or otherwise dispose of assets and merge or consolidate with other entities.

Any failure to comply with the covenants included

in the Loan could result in an event of default, which could trigger an acceleration of the related debt.

If we were unable to

repay the debt upon any such acceleration, the Lender could seek to foreclose on our assets in an effort to seek repayment under

If the Lender was successful, we would be unable to conduct our business as it is presently conducted and our

ability to generate revenues and fund our ongoing operations would be materially adversely affected.

may require additional financing in the future to fund our operations.

may need additional capital in the future to continue to execute our business plan.

Therefore, we will be dependent upon additional

capital in the form of either debt or equity to continue our operations.

At the present time, we do not have arrangements to raise

all of the needed additional capital, and we will need to identify potential investors and negotiate appropriate arrangements

Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our

operating performance and investor sentiment.

If we are unable to raise additional capital when required or on acceptable terms,

we may have to significantly delay, scale back or discontinue our operations.

additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish certain rights.

may seek additional capital through a combination of equity offerings, debt financings, strategic collaborations and alliances

or licensing arrangements.

To the extent that we raise additional capital through the sale of equity, convertible debt securities

or other equity-based derivative securities, your ownership interest will be diluted and the terms may include liquidation or

other preferences that adversely affect your rights as a stockholder.

Any indebtedness we incur could involve restrictive covenants,

such as limitations on our ability to incur additional debt, acquire or license intellectual property rights, declare dividends,

make capital expenditures and other operating restrictions that could adversely impact our ability to conduct our business.

the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market

price of our common stock to decline.

If we raise additional funds through strategic collaborations and alliances or licensing

arrangements with third parties, we may have to relinquish valuable rights to future therapeutic candidates or otherwise agree

to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

Adequate additional financing may not be available to us on acceptable terms, or at all.

If we are unable to raise additional

funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization

efforts or grant rights to develop and market our future therapeutic candidates that we would otherwise prefer to develop and

market ourselves.

debt level could negatively impact our financial condition, results of operations and business prospects.

level of debt could have significant consequences to our shareholders, including the following:

requiring the dedication

of a substantial portion of cash flow from operations to make payments on debt, thereby reducing the availability of cash

flow for working capital, capital expenditures and other general business activities;

requiring a substantial

portion of our corporate cash reserves to be held as a reserve for debt service, limiting our ability to invest in new growth opportunities;

limiting the ability to

obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate and other

portion of our corporate cash reserves to be held as a reserve for debt service, limiting our ability to invest in new growth

opportunities;

limiting the ability

to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate

and other activities;

limiting the flexibility

2 unchanged sentences

to both general and industry-specific adverse economic conditions;

putting us at a competitive

disadvantage vs.

putting us at a

competitive disadvantage vs.

less leveraged competitors;

1 unchanged sentence

to changes in the prevailing interest rates.

Our ability to make

payments of principal and interest, or to refinance our indebtedness, depends on our future performance, which is subject to economic,

financial, competitive and other factors.

Our business may not generate sufficient cash flow in the future to service our debt because

of factors beyond our control, including but not limited to our ability to market our products and expand our operations.

If we are unable

to generate sufficient cash flows, we may be required to adopt one or more alternatives, such as restructuring debt or obtaining additional

equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance our indebtedness will depend on the capital

markets and our financial condition at such time.

We may not be able to engage in any of these activities or engage in these activities

on desirable terms, which could result in a default on our debt obligations.

We will require

our secured lender to cooperate with us and, among other things, not demand repayments of principal and interest until the business is

capable of making such payments.

We owe our secured

lender $1,000,000 at April 30, 2021.

Our lender holds a term note bearing interest at an annual rate of 8%.

We have not paid interest

on the note and it accrues each month.

We have a loan and security agreement (the “Loan”) with the lender for a maximum amount

of $1,250,000.

The maturity date of our loan from the lender is April 30, 2022.

To secure the payment

of all obligations to the lender, the Company granted to the lender a continuing security interest and first lien on all of the assets

of the Company.

In connection with

the Loan, the Company has agreed to certain restrictive covenants, including, among others, that the Company may not convey, sell lease,

transfer or otherwise dispose of any part of its business or property, except as permitted in the agreement, dissolve, liquidate or merge

with any other party unless, in the case of a merger, the Company is the surviving entity, incur any indebtedness except as defined in

the agreement, create or allow a lien on any of its assets or collateral that has been pledged to the lender, make any loans to any person,

except for prepaid items or deposits incurred in the ordinary course of business, or make any material capital expenditures.

We may make acquisitions

or form joint ventures that are unsuccessful.

ability to make payments of principal and interest, or to refinance our indebtedness, depends on our future performance, which

is subject to economic, financial, competitive and other factors.

Our business may not generate sufficient cash flow in the future

to service our debt because of factors beyond our control, including but not limited to our ability to market our products and

expand our operations.

If we are unable to generate sufficient cash flows, we may be required to adopt one or more alternatives,

such as restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

to refinance our indebtedness will depend on the capital markets and our financial condition at such time.

We may not be able

to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our

debt obligations.

may make acquisitions or form joint ventures that are unsuccessful.

ability to grow is partially dependent on our ability to successfully acquire other companies, which creates substantial risk.

to pursue a growth by acquisition strategy successfully, we must identify suitable candidates for these transactions;

however, because

of our limited funds, we may not be able to purchase those companies that we have identified as potential acquisition candidates.

Additionally,

we may have difficulty managing post-closing issues such as the integration into our corporate structure.

Integration issues are complex,

time consuming and expensive and, without proper planning and implementation, could significantly disrupt our business, including, but

not limited to, the diversion of management's attention, the loss of key business and/or personnel from the acquired company, unanticipated

events, and legal liabilities.

We do not expect

to pay dividends and investors should not buy our common stock expecting to receive dividends.

We have not paid

any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in the foreseeable future.

Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates.

You should not

purchase our common stock expecting to receive cash dividends.

Since we do not pay dividends, and if we are not successful in having

our shares listed or quoted on an exchange, then you may have a limited ability to liquidate or receive any payment on your investment.

Therefore our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our business

In addition, because we do not pay dividends we may have trouble raising additional funds, which could affect our ability

to expand our business operations.

Our future growth

depends on our ability to develop and retain customers.

Our future growth

depends to a large extent on our ability to effectively anticipate and adapt to customer requirements and offer services that meet customer

If we are unable to attract new customers and/or retain new customers, our business, results of operations and financial condition

may be materially adversely affected.

We will need to

attract, train and retain additional highly qualified senior executives and technical and managerial personnel in the future.

We continue to seek

technical and managerial staff members, although we have limited resources to compensate them until we have raised additional capital

or developed a business that generates consistent cash flow from operations.

We believe it is important to negotiate with potential candidates

and, if appropriate, engage them on a part-time basis or on a project basis and compensate them at least partially, with stock-based

compensation, when appropriate.

There is a high demand for highly trained and managerial staff members.

If we are not able to fill these

positions, it may have an adverse effect on our business.

We may conduct

future offerings of our common stock and pay debt obligations with our common and preferred stock which may diminish our investors’

In order to pursue a growth by acquisition strategy successfully, we must identify suitable candidates for these transactions;

however, because of our limited funds, we may not be able to purchase those companies that we have identified as potential acquisition

Additionally, we may have difficulty managing post-closing issues such as the integration into our corporate structure.

Integration issues are complex, time consuming and expensive and, without proper planning and implementation, could significantly

disrupt our business, including, but not limited to, the diversion of management's attention, the loss of key business and/or

personnel from the acquired company, unanticipated events, and legal liabilities.

future growth depends on our ability to develop and retain customers.

future growth depends to a large extent on our ability to effectively anticipate and adapt to customer requirements and offer

services that meet customer demands.

If we are unable to attract new customers and/or retain new customers, our business, results

of operations and financial condition may be materially adversely affected.

will need to attract, train and retain additional highly qualified senior executives and technical and managerial personnel in

continue to seek technical and managerial staff members, although we have limited resources to compensate them until we have raised

additional capital or developed a business that generates consistent cash flow from operations.

We believe it is important to

negotiate with potential candidates and, if appropriate, engage them on a part-time basis or on a project basis and compensate

them at least partially, with stock-based compensation, when appropriate.

There is a high demand for highly trained and managerial

staff members.

If we are not able to fill these positions, it may have an adverse effect on our business.

health epidemics, such as the outbreak caused by the COVID-19 pandemic, and other outbreaks or unforeseen or catastrophic events

could continue to disrupt and adversely affect our operations, financial condition and business.

health epidemics or outbreaks could adversely impact our business.

The extent to which the coronavirus impacts our operations

will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration

of the outbreak, new information which may emerge concerning the severity of the coronavirus and the emergence of variants, among

In particular, the spread and treatment of the coronavirus globally could adversely impact our operations and could have

an adverse impact on our business and our financial results.

To date, our business has not been impacted by COVID-19 but it could

be in the future.

may not be able to protect all of our intellectual property.

profitability may depend in part on our ability to effectively protect our proprietary rights, including obtaining trademarks

for our brand names, protecting our products and websites, maintaining the secrecy of our internal workings and preserving our

trade secrets, as well as our ability to operate without inadvertently infringing on the proprietary rights of others.

be no assurance that we will be able to obtain future protections for our intellectual property or defend our current trademarks

and future trademarks and patents.

Further, policing and protecting our intellectual property against unauthorized use by third

parties is time-consuming and expensive, and certain countries may not even recognize our intellectual property rights.

can also be no assurance that a third party will not assert infringement claims with respect to our products or technologies.

Any litigation for both protecting our intellectual property or defending our use of certain technologies could have material

adverse effect on our business, operating results and financial condition, regardless of the outcome of such litigation.

revenues and profits are subject to fluctuations.

is difficult to accurately forecast our revenues and operating results, and these could fluctuate in the future due to a number

These factors may include adverse changes in:

number of investors and amount of investors’ dollars, the success

of world securities markets, general economic conditions, our ability to market our platform to companies and investors, headcount

and other operating costs, and general industry and regulatory conditions and requirements.

The Company's operating results may

fluctuate from year to year due to the factors listed above and others not listed.

At times, these fluctuations may be significant

and could impact our ability to operate our business.

disasters and other events beyond our control could materially adversely affect us.

disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global

economy, and thus could have a strong negative effect on us.

Our business operations are subject to interruption by natural disasters,

fire, power shortages, pandemics and other events beyond our control.

Although we maintain crisis management and disaster response

plans, such events could make it difficult or impossible for us to deliver our services to our customers and could decrease demand

for our services.

Since the spring of 2020, large segments of the U.S.

and global economies were impacted by COVID-19, a significant

portion of the U.S.

population were subject to “stay at home” or similar requirements.

The extent of the impact of

COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of

the outbreak, impact on our customers (both issuers using our services and investors investing on our platform) and our sales

cycles, impact on our customer, employee or industry events, and effect on our vendors, all of which are uncertain and cannot

be predicted.

At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain.

To date, the COVID-19 outbreak, has significantly impacted global markets, U.S.

employment numbers, as well as the business prospects

of many small business (our potential clients).

A significant part of our business model is based on receiving a percentage of

the investments made through our platform and services.

Further, we are dependent on investments in our offerings to fund our

However, to date, other than working remotely, COVID-19 has not had a negative impact on the Company.

While our business

has not yet been impacted by COVID-19, to the extent COVID-19 continues and limits investment capital or personally impacts any

of our key employees, it may have significant impact on our results and operations.

may have unanticipated consequences that could harm our business and our financial condition.

acquisition that we pursue, whether successfully completed or not, involves risks, including:

adverse effects on our operating results, particularly in the fiscal quarters immediately following the acquisition of acquired

entities that are integrated into our operations;

associated with entering into markets or conducting operations where we have no or limited prior experience;

retaining key personnel;

impairment of tangible and intangible assets and goodwill acquired in the acquisition;

unknown liabilities;

of integration and failure to realize anticipated synergies;

of our ongoing business, including diversion of management’s attention from other business concerns.

acquisitions may be accomplished through a cash purchase transaction, the issuance of our equity securities or a combination of

both, could result in potentially dilutive issuances of our equity securities, the incurrence of debt and contingent liabilities

and impairment charges related to goodwill and other intangible assets, any of which could harm our business and financial condition.

we do not effectively protect our customers’ credit and debit card data, or other personal information, we could be exposed

to data loss, litigation, liability and reputational damage.

connection with credit and debit card sales, we transmit confidential credit and debit card information by way of secure online

Although we use private networks, third parties may have the technology or know-how to breach the security of the customer

information transmitted in connection with credit and debit card sales, and our security measures and those of our technology

vendors may not effectively prohibit others from obtaining improper access to this information.

If a person were able to circumvent

these security measures, he or she could destroy or steal valuable information or disrupt our operations.

Any security breach

could expose us to risks of data loss, litigation and liability and could seriously disrupt our operations and any resulting negative

publicity could significantly harm our reputation.

could be harmed by improper disclosure or loss of sensitive or confidential Company, employee, associate or customer data, including

personal data.

connection with the operation of our business, we plan to store, process and transmit data, including personal and payment information,

about our employees, customers, associates and candidates, a portion of which is confidential and/or personally sensitive.

disclosure or loss of sensitive or confidential data may occur through a variety of methods.

These include, but are not limited

to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through our information systems,

whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime

and/or state-sponsored organizations, who may develop and deploy viruses, worms or other malicious software programs.

disclosure, loss or breach could harm our reputation and subject us to government sanctions and liability under our contracts

and laws that protect sensitive or personal data and confidential information, resulting in increased costs or loss of revenues.

It is possible that security controls over sensitive or confidential data and other practices we and our third-party vendors follow

may not prevent the improper access to, disclosure of, or loss of such information.

The potential risk of security breaches and

cyberattacks may increase as we introduce new services and offerings, such as mobile technology.

Further, data privacy is subject

to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions in which we provide services.

Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personal information or

other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal

liability or impairment to our reputation in the marketplace.

to recognize, respond to and effectively manage the accelerated impact of social media could adversely impact our business.

recent years, there has been a marked increase in the use of social media platforms, including blogs, chat platforms, social media

websites, and other forms of Internet based communications which allow individuals access to a broad audience of consumers and

other interested persons.

The rising popularity of social media and other consumer-oriented technologies has increased the speed

and accessibility of information dissemination.

Many social media platforms immediately publish the content their subscribers

and participants post, often without filters or checks on accuracy of the content posted.

Information posted on such platforms

at any time may be adverse to our interests and/or may be inaccurate.

The dissemination of information via social media could

harm our business, reputation, financial condition, and results of operations, regardless of the information’s accuracy.

The damage may be immediate without affording us an opportunity for redress or correction.

addition, social media is frequently used to communicate with our customers and the public in general.

Failure by us to use social

media effectively or appropriately, particularly as compared to our brands’ respective competitors, could lead to a decline

in brand value, customer visits and revenue.

Other risks associated with the use of social media include improper disclosure of

proprietary information, negative comments about our brands, exposure of personally identifiable information, fraud, hoaxes or

malicious dissemination of false information.

The inappropriate use of social media by our customers or employees could increase

our costs, lead to litigation or result in negative publicity that could damage our reputation and adversely affect our results

of operations.

Related to Receipt of Securities for Services

are not, and do not intend to become, regulated as an investment company under the U.S.

Investment Company Act of 1940, as amended,

or the 40 Act, (and similar legislation in other jurisdictions) and if we are deemed an “investment company” under

the 40 Act applicable restrictions would make it impractical for us to operate as contemplated.

40 Act and the rules thereunder (and similar legislation in other jurisdictions) provide certain protections to investors and

impose certain restrictions on companies that are registered as investment companies.

Among other things, such rules limit or

prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities and impose certain governance

requirements.

We have not been and do not intend to become regulated as an investment company and we intend to conduct our activities

so we will not be deemed to be an investment company under the 40 Act (and similar legislation in other jurisdictions).

to ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of

our operations or plans related to us, we will be limited in the types of acquisitions that we may make and we may need to modify

our organizational structure or dispose of assets that we would not otherwise dispose of.

Moreover, if anything were to happen

which would potentially cause us to be deemed an investment company under the 40 Act, it would be impractical for us to operate

as intended pursuant to our platform and our business, financial condition and results of operations would be materially adversely

Accordingly, we would be required to take extraordinary steps to address the situation, such as the modification and

restructuring of our platform, which would materially adversely affect our ability to derive revenue.

consulting and advisory services are primarily paid for in restricted shares of stock of our customers, which are often private

companies with no established trading market for their securities.

our consulting and advisory services, payment is often made through equity securities of customers instead of cash.

The securities

issued are in private companies with no established trading market for their securities In the absence of a trading market, we

may be unable to liquidate our investment, which will result in the loss of our investment.

Factors Related to our Common Stock

Concentration

of ownership among our majority stockholders may prevent new investors from influencing significant corporate decisions.

of July 29 2022, Netcapital Systems LLC, our largest stockholder, beneficially owned, in the aggregate, approximately 40% of our

outstanding shares of common stock.

As a result, this stockholder will be able to exercise a significant level of control over

all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation

and approval of significant corporate transactions.

This control could have the effect of delaying or preventing a change of control

of our company or changes in management and will make the approval of certain transactions difficult or impossible without the

support of these stockholders.

can be no assurance that we will be able to comply with Nasdaq’s continued listing standards, a failure of which could result

in a de-listing of our common stock and warrants .

requires that the trading price of a company’s listed stock on Nasdaq remain above one dollar in order for such stock to

remain listed.

If a listed stock trades below one dollar for more than 30 consecutive trading days, then it is subject to delisting

In addition, to maintain a listing on Nasdaq, we must satisfy minimum financial and other continued listing requirements

and standards, including those regarding director independence and independent committee requirements, minimum stockholders’

equity, and certain corporate governance requirements.

If we are unable to satisfy these requirements or standards, we could be

subject to delisting, which would have a negative effect on the price of our common stock and warrants and would impair your ability

to sell or purchase our common stock when you wish to do so.

In the event of a delisting, we would expect to take actions to restore

our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our

common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common

stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

recently sold a substantial number of shares of our common stock and warrants to purchase common stock in a public offering, which

could cause the price of our common stock to decline .

a recent offering, we sold 1,205,000 shares of common stock.

Additionally, we sold an equal number of warrants to purchase shares

of common stock.

The existence of the potential additional shares of our common stock in the public market, or the perception

that such additional shares may be in the market, could adversely affect the price of our common stock.

We cannot predict the

effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale

will have on the market price of our common stock.

Any decline in the price of a share of common stock will also have a negative

effect on the price in the market of a warrant.

do not expect to pay dividends and investors should not buy our common stock expecting to receive dividends.

have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in

the foreseeable future.

Consequently, you will only realize an economic gain on your investment in our common stock if the price

You should not purchase our common stock expecting to receive cash dividends.

Since we do not pay dividends, and

if we are not successful in having our shares listed or quoted on an exchange, then you may have a limited ability to liquidate

or receive any payment on your investment.

Therefore, our failure to pay dividends may cause you to not see any return on your

investment even if we are successful in our business operations.

In addition, because we do not pay dividends we may have trouble

raising additional funds, which could affect our ability to expand our business operations.

may conduct future offerings of our common stock and pay debt obligations with our common stock which may diminish our investors’

pro rata ownership and depress our stock price.

We reserve the right

to make future offers and sales, either public or private, of our securities, including shares of our common stock or securities convertible

into common stock at prices differing from the price of the common stock previously issued.

In the event that any such future sales of

securities are affected or we use our common stock to pay principal or interest on our debt obligations, an investor’s pro rata

ownership interest may be reduced to the extent of any such future sales.

UNRESOLVED STAFF COMMENTS

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.

reserve the right to make future offers and sales, either public or private, of our securities, including shares of our common

stock or securities convertible into common stock at prices differing from the price of the common stock previously issued.

the event that any such future sales of securities are affected or we use our common stock to pay principal or interest on our

debt obligations, an investor’s pro rata ownership interest may be reduced to the extent of any such future sales.

market price of our common stock is highly volatile and could be subject to volatility related or unrelated to our operations.

should consider an investment in our securities to be risky, and you should invest in our securities only if you can withstand

a significant loss and wide fluctuations in the market value of your investment.

Some factors that may cause the market price

of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere

in this prospectus, are:

or anticipated fluctuations in quarterly funding portal revenues or operating results, whether in our operations or in those

of our competitors;

in financial estimates or opinions by research analysts, either with respect to us or other fintech companies;

failure to accelerate user growth or new issuer growth;

failure to meet investor or analyst expectations;

public’s reaction to our press releases, other public announcements and our filings with the SEC;

or anticipated changes in domestic or worldwide economic, political or market conditions, such as recessions;

in the consumer spending environment;

in laws or regulations, or new interpretations or applications of laws and regulations, that are applicable to our business;

in accounting standards, policies, guidance, interpretations or principles;

sales, hedging and other derivative transactions in the shares of our common stock;

sales or issuances of our common stock, including sales or issuances by us, our directors or executive officers and our significant

stockholders;

dividend policy;

in the market valuations of other fintech companies;

by stockholders;

market factors or perceived market factors, including rumors, involving us, our vendors and clients, whether accurate or not;

announcements

by us or our competitors of new locations, technological advances, significant acquisitions, strategic partnerships, divestitures,

joint ventures or other strategic initiatives;

loss of a key member of management.

stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of

individual companies.

These broad market fluctuations may adversely affect the trading price of our common stock in any market

that develops for it.

In addition, our stock price may be influenced by trading activity in our common stock as a result of market

commentary (including commentary that may be unreliable or incomplete in some cases);

changes in expectations about our business,

our creditworthiness or investor confidence generally;

or actions by stockholders and others seeking to influence our business

the past, following periods of volatility in the market price of a company’s securities, stockholders have instituted class

action securities litigation against those companies.

Such litigation, if instituted, could result in substantial costs and a

diversion of management attention and resources, which would significantly harm our profitability and reputation.

common stock may be subject to the “penny stock” rules of the SEC and the trading market in the securities is limited,

which could make transactions in the stock cumbersome and may reduce the value of an investment in the stock.

15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any

equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject

to certain exceptions.

For any transaction involving a penny stock, unless exempt, the rules require:

(a) that a broker or dealer

approve a person’s account for transactions in penny stocks;

and (b) the broker or dealer receive from the investor a written

agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

(a) obtain financial information

and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks

are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating

the risks of transactions in penny stocks.

broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating

to the penny stock market, which, in highlight form:

(a) sets forth the basis on which the broker or dealer made the suitability

determination;

and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock”

This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of

our common stock.

also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the

commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and

the rights and remedies available to an investor in cases of fraud in penny stock transactions.

Finally, monthly statements have

to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in

penny stocks.

sales practice requirements may limit a stockholder’s ability to buy and sell our securities.

addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an

investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that

Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make

reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other

The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our common

stock or our warrants, which may have the effect of reducing the level of trading activity in our securities.

As a result, fewer

broker-dealers may be willing to make a market in our common stock or our warrants, reducing a stockholder’s ability to

resell shares of our common stock and warrants.

securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or

if they change their recommendations regarding our securities adversely, the price of our common stock or warrants and trading

volume could decline.

trading market for our common stock may be influenced by the research and reports that securities or industry analysts may publish

about us, our business, our market or our competitors.

If any of the analysts who may cover us change their recommendation regarding

our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock

or warrants would likely decline.

If any analyst who may cover us was to cease coverage of our company or fail to regularly publish

reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or warrants

or trading volume to decline.

issuance of common stock upon the exercise of options granted under our 2021 Equity Incentive Plan may dilute all other stockholders.

have issued options to purchase 271,000 shares of common stock under our 2021 Equity Incentive Plan and we expect to issue options

to purchase the remaining 29,000 shares of common stock in the future to officers, directors, employees and consultants under

our 2021 Equity Incentive Plan.

Any such issuances of common stock underlying stock options may cause stockholders to experience

dilution of their ownership interests and the per share value of our common stock to decline.

compliance with complicated U.S.

regulations concerning corporate governance and public disclosure is expensive and diverts management’s

attention from our core business, which could adversely affect our business, results of operations, and financial condition.

a publicly reporting company, we are faced with expensive, complicated and evolving disclosure, governance and compliance laws,

regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank

Act, and, following this offering, Nasdaq rules.

As a result of the complexity involved in complying with the applicable rules

and regulations, our management’s attention may be diverted from other business concerns, which could harm our business,

results of operations and financial condition.

We may need to hire more personnel in the future or engage outside consultants,

which will increase our operating expenses, to assist us in complying with these requirements.

addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty

for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming.

regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result,

their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure

and governance practices.

We intend to invest substantial resources to comply with evolving laws, regulations and standards, and

this investment may result in increased general and administrative expenses and a diversion of management’s time and attention

from business operations to compliance activities.

If our efforts to comply with new laws, regulations and standards differ from

the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory

authorities may initiate legal proceedings against us, and our business may be harmed.

to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could

cause our financial reports to be inaccurate.

are required pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, to maintain internal control over financial reporting

and to assess and report on the effectiveness of those controls.

This assessment includes disclosure of any material weaknesses

identified by our management in our internal control over financial reporting.

Although we prepare our financial statements in

accordance with accounting principles generally accepted in the United States, our internal accounting controls may not meet all

standards applicable to companies with publicly traded securities.

If we fail to implement any required improvements to our disclosure

controls and procedures, we may be obligated to report control deficiencies in which case, we could become subject to regulatory

sanction or investigation.

Further, these outcomes could damage investor confidence in the accuracy and reliability of our financial

for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against

us and may reduce the amount of money available to us.

articles of incorporation and bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent

permitted by Utah law.

addition, as permitted by the Utah Business Corporation Act, our bylaws and the indemnification agreements that we have entered

into with our directors and officers provide that:

we will indemnify

our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to

the fullest extent permitted by Utah law.

Utah law provides that a corporation may indemnify such person if such person acted

in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant

and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

we may, in our discretion,

indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

we are required

to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such

directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled

to indemnification;

we will not be obligated

pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other

indemnitees, except with respect to proceedings authorized by our board of directors, or Board, or brought to enforce a right

to indemnification;

the rights conferred

in our bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers,

employees and agents and to obtain insurance to indemnify such persons;

we may not retroactively

amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

on liability and indemnification matters.

permitted by the corporate laws of the state of Utah, our articles of incorporation include a provision to eliminate the personal

liability of our directors for monetary damages for breach or alleged breach of their fiduciary duties as directors, subject to

certain exceptions.

In addition, our bylaws provide that we are required to indemnify our officers and directors under certain

circumstances, including those circumstances in which indemnification would otherwise be discretionary, and we will be required

to advance expenses to our officers and directors as incurred in connection with proceedings against them for which they may be

If we are required to indemnify, both for the costs of their defense in any action or to pay monetary damages upon

a finding of a court or in any settlement, our business and financial condition could be materially and adversely affected.

STAFF COMMENTS

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

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 1A. Risk Factors