What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-08-08 compared with 2021-08-31 · 217 added, 207 removed, 16 unchanged (96% of the section changed)

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

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

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

THIS DISCUSSION CONTAINS FORWARD-LOOKING

STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE.

THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN

RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE

MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING

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 portal.

Our consulting group, Netcapital Advisors, provides marketing and strategic advice in exchange for equity

positions and cash fees.

The Netcapital funding portal is registered with the SEC, is a member of FINRA and provides investors

with opportunities to invest in private companies.

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

The Netcapital funding portal charges a $5,000 engagement fee and a 4.9% success fee for capital raised at closing.

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

Netcapital Advisors generates fees and equity

stakes from consulting in select portfolio and non-portfolio clients.

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.

addition to access to the funding portal, Netcapital 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.

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

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

predictions of our future results of operations difficult.

Our operations may never generate significant revenues, and we may

not consistently achieve profitable operations.

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.

Discussion and Analysis of Financial Condition and Results of Operations

THE FOLLOWING DISCUSSION

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

FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS ANNUAL REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE

EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE.

THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS

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

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

We are a fintech

company that enables private companies to raise capital online and provides private equity investment opportunities to investors.

consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies that we

believe possess disruptive technologies.

Our funding portal, Netcapital Funding Portal Inc., is registered with the SEC and is a member

of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.

We sometimes take

equity stakes in promising technology start-ups.

We play an active role in growing these companies by providing strategic advice, technology

consulting, and help with capital raising.

We specialize in

Reg CF offerings, 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.

We purchased Netcapital Funding Portal Inc., a registered Reg CF funding portal, effective November 5, 2020,

and we changed the name of our company to Netcapital Inc.

to reflect our commitment to help companies raise capital on the internet.

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

Reg CF allows issuers to raise up to $5 million from

accredited or non-accredited investors every 12 months.

Our limited operating

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

results of operations difficult.

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

Management's Discussion and Analysis

of Financial Condition and Results of Operations

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

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that relate to future events or our future financial performance.

These statements involve known and unknown risks, uncertainties and

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

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

Results of Operations

Fiscal Year 2021

Compared to Fiscal Year 2020

Our revenues for

fiscal 2021 increased by $2,967,445, or 169%, to $4,721,003 as compared to $1,753,558 reported for fiscal 2020.

The increase in revenues

is primarily attributable to our consulting services.

We expanded our consulting business, which concentrates on providing assistance

with capital raising, strategy, technology consulting and marketing.

We also received additional revenues in fiscal 2021 from our funding

portal, which we did not have in fiscal 2020.

Our costs of revenues

increased by $748,053, or 6,736%, to $759,158 in fiscal 2021, from $11,105 in fiscal 2020.

The increase is primarily attributable to

our increased revenues and the change in our strategy of how we accelerate the product development for the companies we invest in.

Stock-based compensation

increased by $324,359, or 91%, to $680,611 for fiscal 2021 from $356,252 reported in the prior fiscal year.

The increase is primarily

attributable to higher values of the price per share of our common stock in fiscal 2021, as compared to fiscal 2020.

In addition, two

new marketing consultants were hired in fiscal 2021that accounted for $147,654 in stock-based compensation.

Consulting expense

decreased by $96,020, or 94%, to $6,580 for fiscal 2021 from $102,600 reported in the prior fiscal year.

The decrease is attributed to

our increase in wages in fiscal 2021.

Payroll and payroll

related expenses increased to $3,117,075 in fiscal 2021.

In fiscal 2020 compensation was paid through the issuance of common stock grants

and cash payments to consultants.

Payroll expense also increased in fiscal 2021 due to the acquisition of Netcapital Funding Portal Inc.,

which had approximately 20 employees.

These statements involve known and unknown risks, uncertainties

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

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

of Operations

Year 2022 Compared to Fiscal Year 2021

revenues for fiscal 2022 increased by $759,832, or 16%, to $5,480,835 as compared to $4,721,003 reported for fiscal 2021.

increase in revenues is primarily attributable to increased revenues from our funding portal, which recorded an increase of portal

fees of $681,966, or 130% to $1,206,957 in fiscal 2022 as compared to $524,991 in fiscal 2021, in addition to an increase in listing

fees of $92,500, or 31%, to $394,490 is fiscal 2022, as compared to $301,990 in fiscal 2021.

The components of revenue are as

April 30, 2022

April 30, 2021

Consulting services for equity securities

Consulting revenue

Other revenue

costs of revenues decreased by $649,043, or 85%, to $110,115 in fiscal 2022, from $759,158 in fiscal 2021.

The decrease is primarily

attributable to labor costs that were incurred for revenue-generating projects in fiscal 2021 that were not required for our customers

in fiscal 2022.

expense increased by $205,376, or 30%, to $892,567 for fiscal 2022 from $687,191 reported in the prior fiscal year.

is attributed to an increase in contractors in fiscal 2022 for back-office support.

and payroll related expenses increased by $646,770, or 21%, to $3,763,845 in fiscal 2022, as compared to $3,117,075 in fiscal

Additional payroll expenses are attributable to the need for more personnel to support the increased issuers, investors

and users in fiscal 2022.

General and administrative expenses increased by $1,137,076,

1 unchanged sentence

The primary increase in expenses

is attributable to legal costs of approximately $224,000 and software usage fees of $100,000.

Interest expense

increased by $68,454 to $87,333 for the year ended April 30, 2021, as compared to $18,879 for the prior fiscal year.

Our debt balances

increased significantly slightly in fiscal 2021 due to $4,271,600 in new borrowings during the year and an increase in the interest rate

on our $1,000,000 secured loan, effective October 31, 2020, from 1.25% to 8%.

In fiscal 2020 we

incurred a loss on the sale of investments of $527,540.

We sold equity we had earned in one of our consulting engagements primarily to

take advantage of a realized loss for tax purposes.

No realized gains or losses were recognized in fiscal 2021.

In fiscal 2020 we

incurred an impairment loss of $185,952, whereas no impairment losses were recognized in fiscal 2021.

We monitor all our assets for any

changes in observable prices from orderly transactions and we record an impairment expense when appropriate.

Liquidity and

Capital Resources

As of April 30, 2021, we had cash

and cash equivalents of $2,473,959 and negative working capital of $4,666,833 as compared to cash and cash equivalents of $11,206

and negative working capital of $1,057,581 as of April 30, 2020.

We have been successful

in raising capital by selling restricted common stock in private placements and by borrowing funds from the U.S.

Small Business Administration.

The negative working capital balance as of April 30, 2021 has been eliminated by converting approximately $5 million in current liabilities

into shares of common stock at a price range of $9.00 to $9.74 per share.

In addition to the settlement of $5 million in current liabilities,

we anticipate a $1.8 million SBA loan will be forgiven this summer and we raised an additional $300,000 from the sale of shares of common

stock in May 2021.

believe that our existing cash investment balances, and our anticipated cash flows from operations will be sufficient to meet our working

capital and expenditure requirements for the next 12 months.

Although we believe we have adequate sources of liquidity over the next

12 months, the success of our operations, the global economic outlook, and the pace of sustainable growth in our markets, in each case,

in light of the market volatility and uncertainty as a result of the COVID-19 pandemic, among other factors, could impact our business

and liquidity.

Up to this point in time, we believe the pandemic has helped drive people to online investing, as we see regular monthly

increases in users and dollars invested, and an increase in issuers seeking to use online fund-raising services in lieu of face-to-face

Year over Year Changes

Net cash used in operating activities amounted to

$3,250,868 in fiscal 2021, as compared to net cash used in operating activities of $3,604 in fiscal 2020.

In fiscal 2021, the primary

uses of cash were an unrealized gain on equity securities of $2,571,494, non-cash revenue from the receipt of equity of $2,319,532 and

an increase in accounts receivable of $1,417,257.

These uses of cash were partially offset by net income of $1,469,660, stock-based compensation

of $680,611, a change in deferred taxes of $613,000 and an increase in accounts payable and accrued expenses of $172,204.

In fiscal 2020, the

principal source of cash from operating activities was net income of $604,851, adjusted by stock-based compensation of $356,252, a loss

on the sale of investments of $527,540 and asset impairment of $185,952.

These sources of cash from operating activities were offset

by investments of $1,538,980 because of non-cash contract revenue with major customers.

In fiscal 2021, net

cash provided by investing activities amounted to $242,025.

Proceeds from the purchase of a subsidiary provided cash of $364,939, which

was offset by a use of cash of $122,914 as an investment in an affiliate.

There was no investing activity in fiscal 2019.

Net cash provided

by financing activities totaled $5,471,596.

Proceeds from loans amounted to $4,271,600 and proceeds from stock subscriptions totaled

Net cash used in financial activities in fiscal 2020 consisted of principal payments on a related party note totaling $4,300.

In fiscal 2021 and

2020, there were no expenditures for capital assets.

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

New Accounting

The new accounting

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

Critical Accounting

Policies and Estimates

The preparation of financial statements in conformity

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

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

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

is attributable to legal costs, professional fees and software usage fees.

expense increased by $39,039 to $126,372 for the year ended April 30, 2022, as compared to $87,333 for the prior fiscal year.

Although our debt balances decreased from $5,328,784 as of April 30, 2021 to $4,142,984 as of April 30, 2022 due to the forgiveness

of an SBA loan of $1,904,296, bearing interest at an annual rate of 1%, we increased our borrowings in fiscal 2022 by $700,000

with new borrowings that carried an annual interest rate of 8%.

Debt forgiveness was $0 in fiscal 2021.

fiscal 2022, we identified that one of our equity holdings had an observable price change.

The result of the price change was

an increase in the fair value of the equity securities totaling $3,275,745 in the fiscal year ended April 30, 2022, which was

recorded in the income statement as an unrealized gain on equity securities.

In fiscal 2021, there were observable price changes

in two securities.

The result of these price changes was an increase in the fair value of the equity securities totaling $2,571,494

in the fiscal year ended April 30, 2021, which was recorded in the income statement as an unrealized gain on equity securities.

and Capital Resources

As of April 30, 2022, we had cash and cash equivalents

of $473,925 and negative working capital of $3,113,403 as compared to cash and cash equivalents of $2,473,959 and negative working capital

of $4,666,833 as of April 30, 2021.

have been successful in raising capital by selling restricted common stock and by completing a public offering of our common stock.

July 15, 2022, the Company completed an underwritten public offering of 1,205,000 shares of the Company’s common stock and

warrants to purchase 1,205,000 shares of the Company’s common stock at a combined public offering price of $4.15 per share

The gross proceeds from the offering were $5,000,750 prior to deducting underwriting discounts, commissions, and

other offering expenses.

The warrants have a per share exercise price of $5.19, are exercisable immediately, and expire five years

from the date of issuance.

With the use of proceeds, we paid $1 million of debt to our secured lender, to reduce the outstanding

principal balance to $400,000.

believe that our existing cash investment balances, and our anticipated cash flows from operations will be sufficient to meet

our working capital and expenditure requirements for the next 12 months.

Although we believe we have adequate sources of liquidity

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

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

could impact our business and liquidity.

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

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

services in lieu of face-to-face meetings.

over Year Changes

cash used in operating activities amounted to $3,006,667 in fiscal 2022, as compared to net cash used in operating activities

of $3,250,868 in fiscal 2021.

fiscal 2022, the primary sources of cash were net income of $3,503,530 and stock-based compensation of $1,176,058.

However, these

items were offset by non-cash revenue from the receipt of equity of $2,387,500, an unrealized gain on equity securities of $3,275,745

debt forgiveness of $1,904,302 and an increase in accounts receivable of $1,153,598.

In fiscal 2021, the primary sources of cash

were net income of $1,469,660 and stock-based compensation of $680,611.

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

the receipt of equity of $2,319,532, an unrealized gain on equity securities of $2,571,494 and an increase in accounts receivable

of $1,417,257.

fiscal 2022, net cash used in investing activities amounted to $319,166, consisting of loans to affiliates of $202,000 and an

investment in an affiliate of $117,166.

In fiscal 2021, net cash provided by investing activities amounted to $242,025.

from the purchase of a subsidiary provided cash of $364,939, which was offset by a use of cash of $122,914 as an investment in

an affiliate.

fiscal 2022, net cash provided by financing activities amounted to $1,325,799.

Cash proceeds were received of $300,000 from the

sale of two convertible notes, $400,000 from borrowing from our secured lender and $625,799 from the sale of stock subscriptions.

In fiscal 2021, net cash provided by financing activities totaled $5,471,596.

Proceeds from loans amounted to $4,271,600 and proceeds

from stock subscriptions totaled $1,199,996.

fiscal 2022 and 2021, there were no expenditures for capital assets.

We do not anticipate any capital expenditures in the next

Accounting Standards

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

by reference thereto.

Accounting Policies and Estimates

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

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

of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during

the reporting period.

The most significant estimates include:

revenue recognition and estimating allowance for doubtful accounts;

valuation of long-lived and indefinite-lived assets;

valuation of investments and identification of observable price changes.

We continually evaluate

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

In general, the estimates are based on historical

experience, on information from third party professionals and on various other sources and assumptions that are believed to be reasonable

under the facts and circumstances at the time such estimates are made.

Management considers an accounting estimate to be critical if:

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

in the estimate, or the use of different estimating methods, could have a material impact

on our consolidated results of operations or financial condition.

Actual results could

differ from those estimates.

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

in this Report.

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

There are also

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

Certain of our accounting

policies are deemed “critical”, as they require management's highest degree of judgment, estimates and assumptions.

The following

critical accounting policies are not intended to be a comprehensive list of all of our accounting policies or estimates:

Revenue Recognition

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

revenue recognition and estimating allowance

for doubtful accounts;

valuation of long-lived assets;

income tax valuation allowance.

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

In general, the estimates

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

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

Management considers

an accounting estimate to be critical if:

it requires assumptions

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

changes in the

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

or financial condition.

results could differ from those estimates.

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

which are included in this Report.

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

There are also areas in which management’s judgment in selecting any available alternative would not produce a

materially different result.

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

and assumptions.

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

policies or estimates:

Company recognizes service revenue from its consulting contracts and its game website using the five-step model as prescribed

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

3 unchanged sentences

Recognition of revenue when or as, the Company satisfies a performance obligation.

Allowance for Doubtful

In order to record

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

A considerable

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

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

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

the customer.

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

when it believes it has exhausted all reasonable collection efforts.

Accounts receivable of $1,356,932 and $0 were recorded at April

30, 2021 and 2020, respectively, and an allowance for doubtful accounts of $60,325 and $0 were recorded at April 30, 2021 and 2020, respectively.

Impairment of Long-Lived

Financial Accounting

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

remeasured at fair value whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

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

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

We recognized an impairment loss of $0 and $185,952

in fiscal 2021 and 2020, respectively, as we concluded the carrying amount of the equity that we owned in an early-stage company was

not recoverable and we wrote down the value of our investment.

We estimate the degree to which tax

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

A valuation allowance

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

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

assets is reversed.

Based upon several profitable quarters over the past two years, and our ability to generate operating income of

$1,147,222 and $624,433 in fiscal 2020 and 2019, respectively, and taxable income in both fiscal years, we reversed the valuation

allowance from April 30, 2019 and recorded a current deferred tax asset as of April 30, 2020, and a deferred tax liability as of

April 30, 2021.

for Doubtful Accounts

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

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

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

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

for the related amount receivable from the customer.

The Company writes off the accounts receivable balance from a

customer and the related allowance established when it believes it has exhausted all reasonable collection efforts.

receivable of $2,433,900 and $1,356,932 were recorded at April 30, 2022 and 2021, respectively, and an allowance for doubtful

accounts of $136,955 and $60,325 were recorded at April 30, 2022 and 2021, respectively.

of Long-Lived Assets

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

and, if impaired, remeasured at fair value whenever events or changes in circumstances indicate that the carrying amount of the

asset may not be recoverable.

Impairment loss estimates are primarily based upon management’s analysis and review of the

carrying value of long-lived assets at each balance sheet date, utilizing an undiscounted future cash flow calculation.

not recognize an impairment loss in fiscal 2022 and 2021.

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

jurisdiction.

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

will more likely than not go unused.

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

related valuation allowance on such assets is reversed.

Sheet Arrangements

We have no off-balance sheet arrangements.

have no off-balance sheet arrangements.

About Market Risk

subject to fluctuations in interest rates, currency exchange rates or other financial market risks.

We have not made any sales, purchases

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

and Qualitative Disclosures about Market Risk.

We are a smaller

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

Statements and Supplementary Data.

Our Consolidated

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

in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

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

We have not made any

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

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

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

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

What changed 10-K

Item 7. Management’s Discussion and Analysis