What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-08-08 compared with 2021-08-31 · 1377 added, 949 removed, 334 unchanged (87% of the section changed)

and Procedures.

(a) Evaluation

of Disclosure Controls and Procedures

The Company’s management, with the participation

of the Principal Executive Officer (the “PEO”) and Principal Financial Officer (the “PFO”), has evaluated the

effectiveness of the Company’s disclosure controls and procedures (as defined in SEC Rule 13a-15(e)) as of April 30, 2021.

on that evaluation, the PEO and the PFO concluded that, as of April 30, 2021, such controls and procedures were effective.

(b) Management’s

Assessment of Internal Control over Financial Reporting

Management is responsible

for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules

A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles.

Under the supervision

and with the participation of management, including the PEO and the PFO, the Company’s management has evaluated the effectiveness

of its internal control over financial reporting as of April 30, 2021, based on the criteria established in a report entitled “2013

Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission” and the

interpretive guidance issued by the Commission in Release No.

Based on this evaluation, the Company’s management

has evaluated and concluded that the Company’s internal control over financial reporting was effective as of April 30, 2021.

This annual report

does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control

over financial reporting.

The Company’s registered public accounting firm was not required to issue an attestation on

its internal controls over financial reporting pursuant to the rules of the SEC.

The Company will continue to evaluate the

effectiveness of internal controls and procedures on an ongoing basis.

Internal Control over Financial Reporting

There have been no

changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities

Exchange Act) during the quarter ended April 30, 2021 that have materially affected, or are reasonably likely to materially affect, our

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Company’s management, with the participation of the Principal Executive Officer (the “PEO”) and Principal Financial

Officer (the “PFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as

defined in SEC Rule 13a-15(e)) as of April 30, 2022.

Based on that evaluation, the PEO and the PFO concluded that, as of April

30, 2022, such controls and procedures were effective.

Management’s Assessment of Internal Control over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in

the Exchange Act Rules 13a-15(f).

A system of internal control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes in accordance with generally accepted accounting principles.

the supervision and with the participation of management, including the PEO and the PFO, the Company’s management has evaluated

the effectiveness of its internal control over financial reporting as of April 30, 2022, based on the criteria established in

a report entitled “2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the

Treadway Commission” and the interpretive guidance issued by the Commission in Release No.

this evaluation, the Company’s management has evaluated and concluded that the Company’s internal control over financial

reporting was effective as of April 30, 2022.

annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding

internal control over financial reporting.

Executive Officers and Corporate Governance.

Directors and

Executive Officers

The following table

and biographical summaries set forth information, including principal occupation and business experience, about our directors and executive

officers as of August 31, 2021.

Our executive officers

and directors are as follows:

Director Since

Chairman of the Board and Chief

The Company’s registered public accounting firm was not required to

issue an attestation on its internal controls over financial reporting pursuant to the rules of the SEC.

will continue to evaluate the effectiveness of internal controls and procedures on an ongoing basis.

Changes in Internal Control over Financial Reporting

have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f)

under the Securities Exchange Act) during the quarter ended April 30, 2022 that have materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

and Executive Officers

following table and biographical summaries set forth information, including principal occupation and business experience, about

our directors and executive officers as of July 29, 2022.

executive officers and directors are as follows:

of the Board, President and Chief

Executive Officer

Thomas H Carmody

Secretary and Director

Coreen Kraysler

Chief Financial Officer

September 2017

Chief Marketing Officer

Our directors serve

in such capacity until the first annual meeting of our shareholders and until their successors have been elected and qualified.

serve at the discretion of our board of directors, until their death, or until they resign or have been removed from office.

Executive Officers

and Directors

Cecilia Lenk,

Chairman of the Board and Chief Executive Officer

Cecilia Lenk is the

Chairman of the Board and Chief Executive Officer.

She accepted the position on July 28, 2017.

For the previous five years she worked

as a self-employed business consultant and a town councilor in Watertown, MA.

Lenk has specialized

in technology and health care.

Formerly Vice President of Technology and Digital Design at Decision Resources Inc., a global company

serving the biopharmaceutical market, she oversaw the implementation of new technologies, products, and business processes.

joining Decision Resources, Cecilia founded a technology firm that built a patented platform for online research.

She has managed large-scale

technology projects for leading corporations, universities, government agencies, and major non-profit organizations.

Financial Officer

of Netcapital Funding Portal Inc.

directors serve in such capacity until the first annual meeting of our shareholders and until their successors have been elected

and qualified.

Our officers serve at the discretion of our board of directors, until their death, or until they resign or have

been removed from office.

Officers and Directors

Lenk, Chairman of the Board, President and Chief Executive Officer

Lenk has served as our Chairman of the Board and Chief Executive Officer since July 2017 and was appointed President in June 2022.

Prior to that, she worked as a self-employed business consultant and a town councilor in Watertown, MA for five years.

Lenk has specialized in technology and health care.

Formerly Vice President of Technology and Digital Design at Decision Resources

Inc., a global company serving the biopharmaceutical market, she oversaw the implementation of new technologies, products, and

business processes.

Prior to joining Decision Resources, Cecilia founded a technology firm that built a patented platform for

online research.

She has managed large-scale technology projects for leading corporations, universities, government agencies,

and major non-profit organizations.

Lenk has a Ph.D.

1 unchanged sentence

from Johns Hopkins University in Geography and Environmental Engineering.

She has served

on a number of non-profit boards, including Chair of the Johns Hopkins Engineering Alumni.

She is currently on the Alumni Advisory Board

for the Hopkins School of Engineering.

Lenk brings to

our board of directors key leadership experience in high-growth technology companies and possesses a strong mix of strategic, finance,

and operating skills.

Thomas Carmody,

Thomas Carmody has

served as a Director of the Company since August 2010.

He has over 40 years experience as a marketing executive.

For the past five years

he has worked as a self-employed marketing consultant for Summit International LLC.

He currently serves on the Board of Directors of

Continental Materials Corporation, Chicago, Illinois, and serves on that company’s audit committee.

Carmody also served as

the Vice President of U.S.

Operations and Vice President of the sports division at Reebok International Inc.

from 1988 to 1996.

As a long-term marketing

Carmody brings strategic insight and extensive experience with product distribution to our board of directors.

significant experience serving on the board of another public company.

Avi Liss, Director

and Secretary

Avi Liss has served

as a Director and Secretary of the Company since August 2010.

From August 2009 to present, he has served as the President of Liss Law,

LLC, a law firm specializing in real estate conveyances.

Prior to founding Liss Law, he worked as a judicial law clerk for the Honorable

She has served on a number of non-profit boards, including Chair of the Johns Hopkins Engineering Alumni.

She is currently on

the Alumni Advisory Board for the Hopkins School of Engineering.

Lenk brings to our Board key leadership experience in high-growth technology companies and possesses a strong mix of strategic,

finance, and operating skills.

Kay, Director

Kay has served as a Director of the Company since May 2022.

Kay is currently a Managing Director at Accenture Strategy, a

position he has held since October 2015.

Kay holds a BA in physics from Oxford University and an MBA from Stanford University

Graduate School of Business.

Kay is an experienced C-suite advisor and digital media entrepreneur, working at the intersection of business and technology.

His experience includes oversight of our funding portal when he served on the board of managers of Netcapital Systems LLC from

Liss, Director and Secretary

Liss has served as a Director and Secretary of the Company since August 2010.

From August 2009 to present, he has served as the

President of Liss Law, LLC, a law firm specializing in real estate conveyances.

Prior to founding Liss Law, he worked as a judicial

law clerk for the Honorable Stephen S.

Mitchell, a bankruptcy court judge for the Eastern District of Virginia.

qualified to serve as a director of the company due to his knowledge and working experience with legal governance matters.

Steven Geary,

Steven Geary has

served as a Director of the Company since June 2006.

Since 2009, he has served in several management positions at Statera and is currently

the Vice President of Strategy and Business Development.

From 2008 to 2009, he was the Chief Executive Officer of ImproveSmart, Inc.

From April 2006 to June 2008, he served as our President and Chief Operating Officer, and as our Chief Executive Officer from June 2008

to December 2009.

Geary has significant

business development and brand marketing expertise in consumer products and services.

Coreen Kraysler,

CFA, Chief Financial Officer

Liss is well qualified to serve as a director of the company due to his knowledge and working experience with legal governance

Geary, Director

Geary has served as a Director of the Company since June 2006.

Since 2009, he has served in several management positions at Statera

and is currently the Vice President of Strategy and Business Development.

From 2008 to 2009, he was the Chief Executive Officer

of ImproveSmart, Inc.

From April 2006 to June 2008, he served as our President and Chief Operating Officer, and as our Chief Executive

Officer from June 2008 to December 2009.

Geary has significant business development and brand marketing expertise in consumer products and services.

Kraysler, CFA, Chief Financial Officer

Kraysler has served as the Chief Financial Officer of the Company since September 2017.

Kraysler is a Chartered Financial

Analyst, with over 30 years of investment experience.

Formerly a Senior Vice President and Principal at Independence Investments,

she managed several 5-star rated mutual funds as well as institutional accounts and served on the Investment Committee.

worked at Eaton Vance as a Vice President, Equity Analyst on the Large and Midcap Value teams.

A specialist in financial services,

household and consumer products, she guest lectures at local colleges and universities.

She received a B.A.

in Economics and French,

Cum Laude, from Wellesley College and a Master of Science in Management from MIT Sloan.

Carole Murko,

CFA, Chief Marketing Officer

Murko is a Chartered

Financial Analyst who spent nearly 20 years in the financial services industry with her primary focus on marketing complex equity and

fixed income strategies to the institutional marketplace for PCM International, State Street Global Advisors and Independence Investments.

She has an AB in Economics from Smith College and an MA in International Economics from NYU.

principal occupation and employment during the past five years was as Membership Director for The Westmoor Club, a private field club

on Nantucket.

The Westmoor Club is neither a parent, subsidiary or affiliate of the Company.

Director Independence

Our common stock

is currently quoted on the OTCQX market.

To be eligible for the OTCQX market, the Company is required to have a board of directors that

includes at least 2 independent directors, and the Company must have an audit committee, a majority of the members of which are independent

Pursuant to these requirements, Avi Liss, Thomas Carmody, and Steven Geary are independent members of our Board of Directors.

Involvement in Certain Legal Proceedings

Our directors, executive officers and

control persons have not been involved in any of the following events during the past five years:

bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the

time of the bankruptcy or within two years prior to that time;

conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,

permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities

or banking activities;

Being found by a court of competent

jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state

securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Board Meetings

and Committees;

Kraysler is a Chartered Financial Analyst with over 30 years of investment experience.

Formerly a Senior Vice President and Principal

at Independence Investments, she managed several 5-star rated mutual funds as well as institutional accounts and served on the

Investment Committee.

She also worked at Eaton Vance as a Vice President, Equity Analyst on the Large and Midcap Value teams.

A specialist in financial services, household and consumer products, she guest lectures at local colleges and universities.

received a B.A.

in Economics and French, Cum Laude, from Wellesley College and a Master of Science in Management from MIT Sloan.

Frishman, CEO of Netcapital Funding Portal Inc.

Frishman is the founder and CEO of Netcapital Funding Portal Inc.

and serves as a mentor and advisor for early stage companies

in order to help reduce the systemic inefficiencies early-stage companies face in securing capital.

He currently holds advisory

positions at leading organizations in the financial technology ecosystem and has spoken as an external expert at Morgan Stanley,

University of Michigan, YPO, and others.

Jason has a background in the life sciences and previously conducted research in medical

oncology at the Dana Farber Cancer Institute and cognitive neuroscience at the University of Miami, where he graduated summa cum

laude with a B.S.

in Neuroscience.

our directors will hold office until their successors have been elected and qualified or appointed or the earlier of their death,

resignation or removal.

Executive officers are appointed and serve at the discretion of the Board.

Relationships

are no family relationships among our directors or officers.

bylaws provide that the size of our Board will be determined from time to time by resolution of our Board.

Currently, the board

comprises four members, three of whom qualify as “independent” directors under any applicable standard.

bylaws provide that members of our board or directors will be elected by a majority vote of our stockholders.

common stock is currently quoted on the Nasdaq Capital Market.

Nasdaq Rule 5065(b) requires that “[a] majority of the board

of directors must be comprised of Independent Directors as defined in Rule 5605(a)(2).” Pursuant to these requirements,

Avi Liss, Martin Kay, and Steven Geary are independent members of our Board.

between Officers and Directors

as set forth herein, to our knowledge, there is no arrangement or understanding between any of our officers or directors and any

other person pursuant to which the officer or director was selected to serve as an officer or director.

in Certain Legal Proceedings

are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any

matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any

of the items set forth under Item 401(f) of Regulation S-K.

Meetings and Committees;

Management Matters

Our board of directors

took actions on five occasions during the fiscal year ended April 30, 2021.

No fees are paid to directors for attendance at meetings

or for agreeing to a unanimous consent or the board of directors.

Compensation Committee

Our board of directors

does not have a compensation committee.

Nominating Committee

Our board of directors

does not have a nominating committee.

Our entire board of directors is responsible for this function.

relatively small size of our company and the resulting efficiency of a board of directors that is also limited in size, our board of

directors has determined that it is not necessary or appropriate at this time to establish a separate nominating committee.

board of directors intends to review periodically whether such a nominating committee should be established.

Our board of directors

uses a variety of methods for identifying and evaluating nominees for director.

It regularly assesses the appropriate size

of the board of directors and whether any vacancies exist or are expected due to retirement or otherwise.

If vacancies exist, are anticipated

or otherwise arise, our board of directors considers various potential candidates for director.

Candidates may come to their

attention through current members of our board of directors, shareholders or other persons.

These candidates are evaluated

at regular or special meetings of our board of directors and may be considered at any point during the year.

Qualifications for

consideration as a director nominee may vary according to the particular areas of expertise that may be desired in order to complement

the qualifications that already exist among our board of directors.

Among the factors that our directors consider when evaluating

proposed nominees are their independence, financial literacy, business experience, character, judgment and strategic vision.

considerations would be their knowledge of issues affecting our business, their leadership experience and their time available for meetings

and consultation on company matters.

Our directors seek a diverse group of candidates who possess the background skills and

expertise to make a significant contribution to our board of directors, our company and our shareholders.

Audit Committee

Our board of directors

formed an audit committee in 2021 consisting of two independent directors, Thomas Carmody and Avi Liss, and our Chief Executive Officer,

Cecilia Lenk.

The audit committee did not meet until after April 30, 2021.

Section 16(a)

Beneficial Ownership Reporting Compliance

Section 16(a) of

the Exchange Act of 1934, requires our directors and executive officers, and persons who own more than ten percent of a registered class

of our equity securities (“10% Shareholders”), to file with the Commission initial reports of ownership and reports of changes

in ownership of our common stock and other equity securities.

Officers, directors and 10% Shareholders are required by Commission regulation

to furnish us with copies of all Section 16(a) forms they file.

Based solely on our

review of the copies of such reports received by us, we believe that for the fiscal year ended April 30, 2021, that our directors and

10% shareholders did comply with Section 16(a) filing requirements.

Code of Ethics

We have adopted a

code of business conduct and ethics for our directors, officers and employees, including our Chief Executive Officer.

our code is posted on our Internet website at www.netcapitalinc.com.

Compensation.

The following table

sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to Cecilia Lenk, our Chief Executive Officer,

Coreen Kraysler, our Chief Financial Officer and Carole Murko, our Chief Marketing Officer (collectively, the “Named Executives”).

have no other executive officers.

Summary Executive

Compensation Table

in pension value and nonqualified

Company’s Board has three standing Nasdaq compliance committees:

Audit, Compensation, and Nominating and Corporate Governance.

Our audit committee consists of Avi Liss, Martin Kay, and Steven Geary.

Each of the committees operates pursuant to its charter.

The committee charters are reviewed annually by the Nominating and Corporate Governance Committee.

If appropriate, and in consultation

with the chairs of the other committees, the Nominating and Corporate Governance Committee may propose revisions to the charters.

The responsibilities of each committee are described in more detail below.

Our Board took actions by written consent on five occasions during the

fiscal year ended April 30, 2022.

No fees are paid to directors for attendance at meetings or for agreeing to a unanimous consent or

Compensation Committee consists of Avi Liss, Martin Kay, and Steven Geary.

Compensation Committee oversees our compensation policies, plans and programs, and to review and determine the compensation to

be paid to our executive officers and directors.

In addition, the Compensation Committee has the authority to act on behalf of

the Board in fulfilling the Board’s responsibilities with respect to compensation-based and related disclosures in filings

as required by the Securities and Exchange Commission.

This committee had no meetings in fiscal 2022.

and Corporate Governance Committee

Nominating and Governance Committee consists of Avi Liss, Martin Kay, and Steven Geary.

Nominating and Corporate Governance Committee (i) oversees our corporate governance functions on behalf of the Board;

recommendations to the Board regarding corporate governance issues;

(iii) identifies and evaluates candidates to serve as our

directors consistent with the criteria approved by the Board and reviews and evaluates the performance of the Board;

as a focal point for communication between director candidates, non-committee directors and management;

(v) selects or recommends

to the Board for selection candidates to the Board, or, to the extent required below, to serve as nominees for director for the

annual meeting of shareholders;

and (vi) makes other recommendations to the Board regarding affairs relating to our directors.

This committee held no meetings in fiscal 2022.

Audit Committee members consist of Martin Kay, Avi Liss and Steven Geary.

Each of the members of our Audit Committee is an independent

director under the Nasdaq listing rules, satisfies the additional independence criteria for Audit Committee members and satisfies

the requirements for financial literacy under the Nasdaq listing rules and Rule 10A-3 of the Exchange Act, as applicable.

board has also determined that Mr.

Geary qualifies as an Audit Committee financial expert within the meaning of the applicable

rules and regulations of the SEC and satisfies the financial sophistication requirements of the Nasdaq listing rules.

Audit Committee oversees our corporate accounting and financial reporting process and assists our Board in monitoring our financial

systems and our legal and regulatory compliance.

Our Audit Committee also:

the work of our independent auditors;

the hiring, discharging and compensation of our independent auditors;

engagements of the independent auditors to render any audit or permissible non-audit services;

the qualifications, independence and performance of the independent auditors;

our financial statements and our critical accounting policies and estimates;

the adequacy and effectiveness of our internal controls;

our policies with respect to risk assessment and risk management;

and monitors our policies and procedures relating to related person transactions;

and discusses with management and the independent auditors the results of our annual audit, our quarterly financial statements

and our publicly filed reports.

Audit Committee operates under a written charter approved by our Board and that satisfies the applicable rules and regulations

of the SEC and the listing requirements of Nasdaq.

The charter is available on the corporate governance section of our website,

which is located at www.netcapitalinc.com

have adopted a Code of Ethics and Business Conduct applicable to our directors, officers and employees, in accordance with Section

406 of the Sarbanes-Oxley Act, the rules of the SEC promulgated thereunder, and the Nasdaq listing rules.

We have filed a copy

of our form of the Code of Ethics and Business Conduct as an exhibit to the registration statement of which this prospectus is

You will be able to review this document by accessing our public filings at the SEC’s website at www.sec.gov.

addition, a copy of the Code of Ethics and Business Conduct will be provided without charge upon request from us.

See the section

of this prospectus entitled “Where You Can Find Additional Information.” If we make any amendments to our Code of

Ethics and Business Conduct other than technical, administrative or other non-substantive amendments, or grant any waiver, including

any implicit waiver, from a provision of the Code of Ethics and Business Conduct applicable to our principal executive officer,

principal financial officer principal accounting officer or controller or persons performing similar functions requiring disclosure

under applicable SEC or Nasdaq rules, we will disclose the nature of such amendment or waiver in a Current Report on Form 8-K.

We also intend to post any amendments to our Code of Ethics and Business Conduct, or any waivers of its requirements, on our website,

www.netcapitalinc.com.

of liability and indemnification matters

articles of incorporation contain provisions that limit the liability of our directors for monetary damages to the fullest extent

permitted by Utah law.

Consequently, our directors will not be personally liable to us or our stockholders for monetary damages

for any breach of fiduciary duties as directors, unless the director engaged in gross negligence, willful misconduct or intentional

infliction of harm on the corporation or its shareholders, or an intentional violation of criminal law.

have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees

as determined by our Board.

With specified exceptions, these agreements provide for indemnification for related expenses including,

among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any

action or proceeding.

We believe that these provisions in our articles of incorporation and the indemnification agreements are

necessary to attract and retain qualified persons as directors and officers.

limitation of liability and indemnification provisions included in our articles of incorporation may discourage stockholders from

bringing a lawsuit against our directors and officers for breach of their fiduciary duty.

They may also reduce the likelihood

of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders.

Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage.

16(a) Beneficial Ownership Reporting Compliance

16(a) of the Exchange Act of 1934, requires our directors and executive officers, and persons who own more than ten percent of

a registered class of our equity securities (“10% Shareholders”), to file with the Commission initial reports of ownership

and reports of changes in ownership of our common stock and other equity securities.

Officers, directors and 10% Shareholders

are required by Commission regulation to furnish us with copies of all Section 16(a) forms they file.

our knowledge, based solely upon a review of Form 3, 4, and 5 filed with the SEC during the fiscal year ended April 30, 2022,

we believe that, except as set forth below, our directors, executive officers, and greater than 10% Shareholders have complied

with all applicable filing requirements for the fiscal year ended April 30, 2022.

Avi Liss failed to timely report 1 transaction

Avi Liss failed to report his insider status

on time on a Form 3.

Steven Geary failed to report his insider status

on time on a Form 3.

Steven Geary failed to timely report 1 transaction

Martin Kay failed to report his insider status

on time on a Form 3.

EXECUTIVE COMPENSATION.

following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to Cecilia Lenk, our

Chief Executive Officer, Coreen Kraysler, our Chief Financial Officer, Carole Murko, our former Chief Marketing Officer and Jason

Frishman, Chief Executive Officer of our wholly owned subsidiary Netcapital Funding Portal, Inc., or, collectively, the Named

Executive Officers, or NEOs.

Executive Compensation Table

Change in pension value and nonqualified

Kraysler, CFO

(1) Represents the dollar amount of vested

equity awards during the fiscal year.

We have no retirement,

pension, profit sharing, stock option or insurance programs or other similar programs for the benefit of our officers and directors.

Outstanding Equity Awards at Fiscal

Carole Murko received

a grant of 12,500 shares of common stock that vests over a 48-month period.

As of April 30, 2021, 8,855 shares remain unvested.

Stock Option Grants

There were no stock

option grants or exercises in fiscal 2021 for Named Executives.

Compensation of

We currently do not

compensate our directors for their services as directors.

Employment Agreements

We currently have

an employment agreement in place with our Chief Executive Officer and our Chief Financial Officer.

The agreements expire on July 31,

2021 and are incorporated by reference to Exhibit 10.1 and Exhibit 10.2 to our Quarterly Report for the quarterly period ended July 31,

We have an employment agreement in place with our Chief Marketing Officer.

The agreement expires on March 10, 2024 and is incorporated

by reference to Exhibit 10.1 to our Current Report dated January 7, 2021.

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table

sets forth information with respect to the beneficial ownership of shares of our common stock as of August 31, 2021 by:

each person whom we know beneficially

owns more than 5% of any class of equity security;

Murko, former CMO (until January 7, 2022)(2)

Jason Frishman, CEO Netcapital Funding Portal

Represents the dollar amount of vested equity

awards during the fiscal year.

Murko received severance of $7,384.50 and

her 8,885 unvested shares vested upon termination, both pursuant to a separation agreement.

Equity Awards At End Of 2022

following table provides information about outstanding stock options issued by the Company held by each of our NEOs as of April

None of our NEOs held any other equity awards from the Company as of April 30, 2022.

Unexercisable

Coreen Kraysler

Jason Frishman

have not paid any cash compensation to our directors in their capacity as such.

February 9, 2022, we issued to each of our then three independent board members, options to purchase 5,000 shares of common stock

under the 2021 Equity Incentive Plan which will be exercisable at a per share exercise price of $10.50, that is out-of-the-money

at time of issuance and expire ten years after the date of grant.

issued Avi Liss 10,000 shares of our common stock valued at $7.50 per share on November 18, 2021 in consideration of his services

as a director of the Company

in fiscal 2021, we pay each of our Named Executives Officers an annual salary of $96,000 per annum.

Each Named Executive Officer

has also received varying amounts of equity awards for their services.

In addition to base pay, Carole Murko earned commissions

on certain transactions.

currently have employment agreements with Cecilia Lenk, Coreen Kraysler and Jason Frishman as described below.

Prior to the termination

of Carole Murko on January 7, 2022, we had an employment agreement with her as described below:

Agreement with Cecilia Lenk

entered into an employment agreement with Cecilia Lenk on June 23, 2022 pursuant to which we employ Ms.

Lenk as our President

and Chief Executive Officer.

The term of her agreement ends on June 23, 2025.

The Agreement provides for an annual base salary

during the term of the agreement of $96,000, which will be increased to $150,000 upon completion of this offering.

eligible for periodic bonuses or for additional salary in addition to her base salary, as may be determined by our board of directors

or the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Lenk agreed to non-compete and non-solicit

terms under her agreement.

Agreement with Coreen Kraysler

entered into an employment agreement with Coreen Kraysler on June 23, 2022 pursuant to which we employ Ms.

Kraysler as our Chief

Financial Officer.

The term of her agreement ends on June 23, 2025.

The agreement provides for an annual base salary during the

term of the agreement of $96,000, which will be increased to $150,000 upon completion of this offering.

Kraysler is eligible

for periodic bonuses or for additional salary in addition to her base salary, as may be determined by our board of directors or

the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Kraysler agreed to non-compete and

non-solicit terms under her agreement.

Agreement with Jason Frishman

entered into an employment agreement with Jason Frishman on June 23 2022 pursuant to which we employ Mr.

Frishman as Chief Executive

Officer of Netcapital Funding Portal, Inc.

The term of his agreement ends on June 23, 2025.

The Agreement provides for an annual

base salary during the term of the agreement of $96,000, which will be increased to $150,000 upon completion of this offering.

Frishman is eligible for periodic bonuses or for additional salary in addition to his base salary, as may be determined by

our board of directors or the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Frishman agreed to non-compete and

non-solicit terms under his agreement.

Agreement with Carole Murko

entered into an employment agreement with Carole Murko on March 10, 2020 pursuant to which we employed Ms.

Murko as our Director

of Business Development.

The agreement was for an initial term of four years.

The agreement provided for an annual base salary

during the term of the agreement of $1.00 plus a commission of 20% of the cash collected from revenues generated directly by Ms.

Murko plus an unvested grant of stock-based compensation of 12,500 shares (after giving effect to the November 2020 1-for-2000

reverse stock split) of restricted stock.

The stock vested over a 48 month period in equal installments of 260 shares per month.

Murko is eligible for periodic bonuses or for additional salary in addition to her base salary.

agreement also contained the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to up to eight weeks of paid time

entitled to sick leave, sick pay and disability benefits;

entitled to reimbursement for all reasonable and necessary business

Murko was to be terminated for any reason other than “cause” prior to the end of her term, then the

Company will have no claim on the unvested portion of her 12,500 shares.

Murko resigned without “good reason”

or retired before the end of her term, the unvested shares would have been returned to the Company.

Murko agreed to non-compete

and non-solicit terms under her agreement.

Payments Upon Termination Or Change In Control

the event that Ms.

Lenk’s employment is terminated by us for any reason other than “cause” or by Ms.

“good reason,” then we will have no claims to the 10,000 shares of common stock underlying the stock option grant

(and all unvested options under such grant shall immediately and fully vest) issued to Ms.

Lenk in February 2022.

the event that Ms.

Kraysler’s employment is terminated by us for any reason other than “cause” or by Ms.

for “good reason,” then we will have no claims to the 20,000 shares of common stock underlying the stock option grant

(and all unvested options under such grant shall immediately and fully vest) issued to Ms.

Kraysler in February 2022.

the event that Mr.

Frishman’s employment is terminated by us for any reason other than “cause” or by Mr.

for “good reason,” then we will have no claims to the 20,000 shares of common stock underlying the stock option grant

(and all unvested options under such grant shall immediately and fully vest) issued to Mr.

Frishman in February 2022.

following table sets forth quantitative information with respect to potential payments to be made to either Ms.

Frishman upon termination in various circumstances.

The potential payments are based on the terms of each of the employment

agreements discussed above.

For a more detailed description of the employment agreements, see the “Employment Agreements”

section above.

Coreen Kraysler

Jason Frishman

Represents the number

of unvested options at April 30, 2022.

Lenk’s options vest equally over a 48-month period.

At April 30, 2022, there

were 45 months remaining in her vesting schedule.

The potential payment of shares subject to Ms.

Lenk’s unvested options

will reduce every month as her options vest and the value of her unvested options will be based on our market price at such

Represents the number

of unvested options at April 30, 2022.

Kraysler’s options vest equally over a 48-month period.

At April 30, 2022,

there were 45 months remaining in her vesting schedule.

The potential payment of shares subject to Ms.

Kraysler’s unvested

options will reduce every month as her options vest and the value of her unvested options will be based on our market price

at such time.

Represents the number

of unvested options at April 30, 2022.

Frishman’s options vest equally over a 48-month period.

At April 30, 2022,

there were 45 months remaining in his vesting schedule.

The potential payment of shares subject to Mr.

Frishman’s unvested

options will reduce every month as her options vest and the value of his unvested options will be based on our market price

at such time.

Equity Incentive Plan

following table shows information regarding our equity compensation plans as of April 30, 2022.

Equity compensation plans

approved by security holders

Equity compensation plans not approved by security

2021 Equity Incentive Plan .

In November 2021, our Board adopted the 2021 Equity Incentive Plan, or the Plan.

of 300,000 shares of our common stock is reserved for issuance and available for awards under the Plan, including incentive stock

options granted under the Plan.

The Plan administrator may grant awards to any employee, director, consultant or other person

providing services to us or our affiliates.

As of June 23, 2022, we had awarded an aggregate of 271,000 options to purchase shares

of common stock to directors and there remain 29,000 shares for grant under the Plan.

vest over a 48-month period, and the Company has a policy to estimate forfeitures of option awards based upon the requisite service.

The pre-vesting forfeiture rate is applied beginning on the date of an option grant.

The forfeiture estimate impacts the estimated

amount of compensation expense to be recorded over the requisite service period.

Plan is administered by our Board.

The Plan administrator has the authority to determine, within the limits of the express provisions

of the Plan, the individuals to whom awards will be granted, the nature, amount and terms of such awards and the objectives and

conditions for earning such awards.

Our Board may at any time amend or terminate the Plan, provided that no such action may be

taken that adversely affects any rights or obligations with respect to any awards previously made under the Plan without the consent

of the recipient.

No awards may be made under the Plan after the tenth anniversary of its effective date.

under the Plan may include incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”),

restricted shares of common stock, restricted stock units, performance share awards, stock bonuses and other stock-based awards

and cash-based incentive awards.

The Plan administrator may grant to a participant options to purchase our common stock that qualify as incentive

stock options for purposes of Section 422 of the Internal Revenue Code (“incentive stock options”), options that do

not qualify as incentive stock options (“non-qualified stock options”) or a combination thereof.

The terms and conditions

of stock option grants, including the quantity, price, vesting periods, and other conditions on exercise will be determined by

the Plan administrator.

The exercise price for stock options will be determined by the Plan administrator in its discretion, but

non-qualified stock options and incentive stock options may not be less than 100% of the fair market value of one share of our

company’s common stock on the date when the stock option is granted.

Additionally, in the case of incentive stock options

granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the

exercise price may not be less than 110% of the fair market value of one share of common stock on the date the stock option is

Stock options must be exercised within a period fixed by the Plan administrator that may not exceed ten years from the

date of grant, except that in the case of incentive stock options granted to a holder of more than 10% of the total combined voting

power of all classes of our stock on the date of grant, the exercise period may not exceed five years.

At the Plan administrator’s

discretion, payment for shares of common stock on the exercise of stock options may be made in cash, shares of our common stock

held by the participant or in any other form of consideration acceptable to the Plan administrator (including one or more forms

of “cashless” or “net” exercise).

Appreciation Rights .

The Plan administrator may grant to a participant an award of SARs, which entitles the participant to

receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of common stock on the exercise

date over the SAR exercise price, times (ii) the number of shares of common stock with respect to which the SAR is exercised.

The exercise price for a SAR will be determined by the Plan administrator in its discretion;

provided, however, that in no event

shall the exercise price be less than the fair market value of our common stock on the date of grant.

Shares and Restricted Units .

The Plan administrator may award to a participant shares of common stock subject to specified

restrictions (“restricted shares”).

Restricted shares are subject to forfeiture if the participant does not meet certain

conditions such as continued employment over a specified forfeiture period and/or the attainment of specified performance targets

over the forfeiture period.

The Plan administrator also may award to a participant units representing the right to receive shares

of common stock in the future subject to the achievement of one or more goals relating to the completion of service by the participant

and/or the achievement of performance or other objectives (“restricted units”).

The terms and conditions of restricted

share and restricted unit awards are determined by the Plan administrator.

Stock bonuses may be granted as additional compensation for service or performance and may be settled in the form

of common stock, cash or a combination thereof, and may be subject to restrictions, which may vest subject to continued service

and/or the achievement of performance conditions.

The Plan administrator may grant performance awards to participants under such terms and conditions as the Plan administrator

deems appropriate.

A performance award entitles a participant to receive a payment from us, the amount of which is based upon

the attainment of predetermined performance targets over a specified award period.

Performance awards may be paid in cash, shares

of common stock or a combination thereof, as determined by the Plan administrator.

Stock-Based Awards .

The Plan administrator may grant equity-based or equity-related awards, referred to as “other stock-based

awards,” other than options, SARs, restricted shares, restricted units, or performance awards.

The terms and conditions

of each other stock-based award will be determined by the Plan administrator.

Payment under any other stock-based awards will

be made in common stock or cash, as determined by the Plan administrator.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

following table sets forth information with respect to the beneficial ownership of shares of our common stock as of July 29, 2022 by:

each person whom we know

beneficially owns more than 5% of any class of equity security;

each of our directors individually;

1 unchanged sentence

all of our current directors and executive officers

Unless otherwise

indicated, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of common stock.

Shares of common stock that an individual or group has the right to acquire within 60 days of August 31, 2021, pursuant to the exercise

of options or restricted stock are, deemed to be outstanding for the purpose of computing the percentage ownership of such person or

group, but are not deemed outstanding for the purpose of calculating the percentage owned by any other person listed.

have determined beneficial ownership in accordance with the rules of the SEC.

These rules generally attribute beneficial ownership

of securities to persons who possess sole or shared voting or investment power with respect to such securities.

In addition, pursuant

to such rules, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently

exercisable or exercisable within 60 days of July 29, 2022.

We did not deem such shares outstanding, however, for the purpose

of computing the percentage ownership of any other person.

Except as indicated by the footnotes below, we believe, based on the

information furnished to us, that the beneficial owners named in the table below have sole voting and investment power with respect

to all shares of our common stock that they beneficially own, subject to applicable community property laws.

The inclusion in

the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

of Beneficial Owner (1)

of Shares and Nature

Beneficial Owner (1)

Beneficial Ownership

of Beneficial Ownership of Common

of Common Stock*

Systems LLC (2)

and Directors as a group (6 persons)

_________________

Based on 2,717,436 shares of common stock outstanding as of August 31, 2021.

* Based on 4,272,677 shares outstanding as of July 29, 2022.

** Less than 1%

otherwise noted, the business address of each member of our Board of Directors is c/o Netcapital

otherwise noted, the business address of each member of our Board is c/o Netcapital Inc.

1 Lincoln Street, Boston Massachusetts

Liss is our Secretary.

Such individual

is a current member of the Board of Directors.

Includes 521 shares that vest within

60 days of August 31, 2021.

Relationships and Related Transactions, and Director Independence.

The Company’s

majority shareholder, Netcapital Systems LLC, owns 1,671,360 shares of common stock, or 76.7% of the Company as of April 30, 2021.

Company has a demand note payable to Netcapital Systems LLC of $4,600 and a demand note payable to one of its managers of $3,200.

addition, the Company has accrued a payable of $3,817,516 for supplemental consideration owed in conjunction with its purchase of Netcapital

Funding Portal Inc.

In total the Company owed its largest shareholder $3,822,176 as of April 30, 2021.

The company paid its majority

shareholder $100,000 in fiscal 2021 for use of the software that runs the website www.netcapital.com.

Compensation to officers

in the years ended April 30, 2021 and 2020 consisted of common stock valued at $353,907 and $231,131, respectively, and cash compensation

of $332,724 and $72,000, respectively.

Compensation to a

related party consultant in the years ended April 30, 2021 and 2020 consisted of common stock valued at $76,882 and $49,711, respectively,

and cash compensation of $81,431 and $26,200, respectively.

natural person with investment control over the securities held by Netcapital DE LLC is Jason Frishman.

Netcapital Systems LLC

has agreed to vote its shares of common stock to support the resolutions of the Board of Netcapital Inc.

on any matters that are

brought to a shareholder vote.

1,458 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after

July 29, 2022.

2,917 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July

729 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 29,

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

and Procedures for Transactions with Related Parties

Chief Executive Officer or our Chief Financial Officer must review and approve certain transactions between us and Related Parties

(as defined below).

A “Related-Party Transaction” is defined as a transaction, arrangement or relationship (or any

series of similar transactions, arrangements or relationships) in which we (including any of our subsidiaries) were, are or will

be a participant.

the purposes of our Related-Party Transactions, a “Related Party” is defined as:

any person who is, or at any time

since the beginning of our last two fiscal years was, a director or executive officer or a nominee to become a director;

who is known to be the beneficial owner of more than ten percent of our common stock;

any immediate family member of any of the

foregoing persons, including any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,

daughter-in-law, brother-in-law or sister-in-law, and any person (other than a tenant or employee) sharing the household of any

of the foregoing persons;

and any firm, corporation or other entity in which any of the foregoing persons is a general partner

or, for other ownership interests, a limited partner or other owner in which such person has a beneficial ownership interest of

with Related Parties

Company’s majority shareholder, Netcapital Systems LLC, owned 1,671,360 shares of common stock, or 57.7% of the Company

as of April 30, 2022.

The Company has a demand note payable to Netcapital Systems LLC of $4,600 and a demand note payable to one

of its former managers of $3,200.

In addition, as of April 30, 2021, the Company accrued a payable of $3,817,516 for supplemental

consideration owed in conjunction with its purchase of Netcapital Funding Portal Inc., which was reduced to $294,054 as of January

31, 2022, because of the issuance to 361,736 shares of common stock, valued at $3,523,462.

Of the 361,736 shares that were issued,

a total of 32,458 shares, representing a reduction in the payable amount of $346,821, were issued to managers of Netcapital Systems

LLC, and 3,151 shares, representing a reduction in the payable amount of $30,691, were issued to our Chief Executive Officer.

company paid its majority shareholder $357,429 and $200,000 in the years ended April 30, 2022 and 2021, respectively, for use

of the software that runs the website www.netcapital.com.

The Company also had a sale of $15,000 for consulting services to its

majority shareholder during fiscal 2022.

Company received revenues of $39,360 and $660,486 for the years ended April 30, 2022 and 2021, respectively from ChipBrain, Inc.

Our Chief Executive Officer is a member of the board of directors of ChipBrain, Inc.

The Company owns 710,200 shares of ChipBrain,

Inc., valued at $1,704,480.

Chief Executive Officer is a member of the board of directors of KingsCrowd Inc.

The Company owns 3,815,745 shares of KingsCrowd

Inc., valued at $3,815,745.

Chief Executive Officer is a member of the board of directors of Deuce Drone LLC.

The Company owns 2,350,000 membership interest

units of Deuce Drone LLC., valued at $2,350,000.

The Company has notes receivable aggregating $152,000 from Deuce Drone LLC as

of April 30, 2022.

to officers in the years ended April 30, 2022 and 2021 consisted of common stock valued at $190,763 and $353,907, respectively,

cash compensation of $265,688 and $332,724, respectively, and options to purchase common stock valued at $3,147 and $0, respectively.

Compensation to a related party consultant in the

years ended April 30, 2022 and 2021 consisted of common stock valued at $25,908 and $76,882, respectively, and cash compensation of $60,000

and $81,431, respectively.

This consultant is also the controlling shareholder of Zelgor Inc.

Company earned revenues from Zelgor Inc.

of $1,400,000 in the year ended April 30, 2021.

Compensation to two

board members of Netcapital Systems LLC amounted to $162,123 and $0 in the years ended April 30, 2021 and 2020, respectively.

these board members also received stock-based compensation of $76,882 and $49,711 for the years ended April 30, 2021 and 2020, respectively.

We owe Steven Geary,

a director, $31,680 as of April 30, 2021 and 2020.

the Company earned revenues from Zelgor Inc.

of $5,500 and $1,400,000 in the years ended April 30, 2022 and 2021, respectively.

owns 1,400,000 shares of Zelgor Inc., valued at $1,400,000 and holds a note receivable of $50,000 as of April 30, 2022.

to the President of Netcapital Systems LLC amounted to $96,000 and $114,284 in the years ended April 30, 2022 and 2021, respectively.

owe Steven Geary, a director, $31,680 as of April 30, 2022 and 2021.

This obligation is not interest bearing.

$16,680 is recorded as a related party trade

accounts payable and $15,000 as a related party note payable.

We have no signed agreements for the indebtedness to Mr.

The Company made an investment of $122,914 in an affiliate,

6A Aviation Alaska Consortium, Inc., in conjunction with a land lease in an airport in Alaska.

Our Chief Executive Officer is also the

Chief Executive Officer of 6A Aviation Alaska Consortium, Inc.

As of April 30, 2021

and 2020, we owed $9,490 and $0 to a company controlled by one of our directors.

We paid cash compensation of $29,738 and $0 to this

director for the years ended April 30, 2021 and 2020, respectively.

On April 30, 2020, we sold 722 membership interest units (the "Units")

of Netcapital Systems LLC ("Netcapital") to the company controlled by this related party at a price of $91.15 per Unit for

a total of $65,823, which paid off all debt and accrued interest payable to the related party as of that date.

The price per Unit was

similar to an offer to purchase Units directly from Netcapital.

We currently have

no equity compensation plan either approved or not approved by security holders, and there are no securities currently authorized for

issuance under any equity compensation plan.

However, our Board of Directors has previously approved share-based compensation in lieu

of cash compensation to various consultants and employees.

Such share-based compensation is recognized at the time the shares vest.

Principal Accounting

Fees and Services.

Fruci & Associates

II, PLLC is the Company’s independent registered public accounting firm.

The following table

presents fees for professional audit services rendered by our independent registered public accounting firm during the past two fiscal

Audit related

Policy on Audit

Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Consistent with SEC

policies regarding auditor independence, our board of directors has responsibility for appointing, setting compensation and overseeing

the work of the independent auditor.

In recognition of this responsibility, the board of directors has established a policy to pre-approve

all audit and permissible non-audit services provided by the independent auditor.

Prior to engagement

of the independent auditor for the next year's audit, management will submit an aggregate of services expected to be rendered during

that year for each of four categories of services to the board of directors for approval.

$16,680 is recorded

as a related party trade accounts payable and $15,000 as a related party note payable.

We have no signed agreements for the indebtedness

Company made an investment of $240,080 in an affiliate, 6A Aviation Alaska Consortium, Inc., in conjunction with a land lease

in an airport in Alaska.

Our Chief Executive Officer is also the Chief Executive Officer of 6A Aviation Alaska Consortium, Inc.

As a result of the investment, the Company is a 10% owner of 6A Aviation Consortium Inc.

of April 30, 2022 and 2021, we owed $0 and $9,490 to a company controlled by one of our former directors.

We paid cash compensation

of $0 and $29,738 to this former director for the years ended April 30, 2022 and 2021, respectively.

November 2021, we issued a member of our Board 10,000 shares of common stock for his service as a member of our board and audit

committee, valued at $100,000.

February 2, 2022, the Company granted to members of our Board an aggregate of 25,000 options to purchase shares of our common

stock at an exercise price of $10.50 per share.

An option to purchase 10,000 shares of common stock was granted to the Chairman

of the Board and each of the three independent board members received an option to purchase 5,000 shares of common stock.

options vest on a monthly basis over 48 months and expire in 10 years.

Kraysler, our Chief Financial Officer, has personally guaranteed a $500,000 promissory note from the U.S.

Small Business Administration.

note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,594 are scheduled to begin on December

PRINCIPAL ACCOUNTING FEES AND SERVICES.

Fruci & Associates II, PLLC is the Company’s independent registered public accounting firm.

following table presents fees for professional audit services rendered by our independent registered public accounting firm during

the past two fiscal years.

Audit related fees

All other fees

on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

with SEC policies regarding auditor independence, our board of directors has responsibility for appointing, setting compensation

and overseeing the work of the independent auditor.

In recognition of this responsibility, the board of directors has established

a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.

to engagement of the independent auditor for the next year's audit, management will submit an aggregate of services expected to

be rendered during that year for each of four categories of services to the board of directors for approval.

Audit services include audit work performed in the preparation of financial statements, as well as work that generally

1 unchanged sentence

included in our Quarterly Reports on Form 10-Q.

Audit-Related services are for assurance and related services that are traditionally performed by the independent auditor,

including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain

regulatory requirements.

Audit-Related services are for assurance and related services that are traditionally performed by the independent

auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required

to meet certain regulatory requirements.

Tax services include all services performed by the independent auditor's tax personnel except those services specifically

1 unchanged sentence

Other services are those associated with services not captured in the other categories.

We generally do not request such

services from the independent auditor.

FINANCIAL STATEMENTS AND

Purchase Agreement, dated November 23, 2010, between Valuesetters, Inc.

and NetGames.com, incorporated by reference to Exhibit 2.1

to our Form 10/A dated July 25, 2014.

of Incorporation of Valuesetters, Inc.

filed on April 25, 1984, incorporated by reference to Exhibit 3.1 to our Form 10 dated September

to Articles of Incorporation of Valuesetters, Inc.

filed on September 7, 1999, incorporated by reference to Exhibit 3.2 to our Form

10 dated September 3, 2013.

to Articles of Incorporation of Valuesetters, Inc.

filed on December 4, 2003, incorporated by reference to Exhibit 3.3 to our Form

10 dated September 3, 2013.

We generally do not request

such services from the independent auditor.

FINANCIAL STATEMENTS AND EXHIBITS.

Underwriting Agreement, incorporated by reference to Exhibit 1.1 to our Form S-1/A dated June 28, 2022

Asset Purchase Agreement dated November 23, 2010 between ValueSetters, Inc.

and NetGames.com, incorporated by reference to Exhibit 2.1 to our Form 10/A dated July 25, 2014

Agreement and Plan of Merger by and Among Netcapital Funding Portal Inc., ValueSetters Inc.

and Netcapital Acquisition Vehicle Inc., incorporated by reference to our Current Report on Form 8-K dated August 23, 2020

of Incorporation filed on April 25, 1984, incorporated by reference to Exhibit 3.1 to our Form 10 dated September 3, 2013

to Articles of Incorporation filed on September 7, 1999, incorporated by reference to Exhibit 3.2 to our Form 10 dated

September 3, 2013

to Articles of Incorporation filed on December 4, 2003, incorporated by reference to Exhibit 3.2 to our Form 10 dated

September 3, 2013

to Articles of Incorporation filed on April 13, 2015, incorporated by reference to Exhibit 3.1.3 to our Form

S-1 dated February 14, 2022

to Articles of Incorporation filed on September 29, 2020, incorporated by reference to Exhibit 3.1 to our Form 8-K dated November

of ValueSetters, Inc, incorporated by reference to Exhibit 3.4 to our Form 10 dated September 3, 2013

to Articles of Incorporation of Netcapital Inc.

filed on September 29, 2020, incorporated

by reference to Exhibit 3.1 to our Form 8-K dated November 5, 2020.

Specimen stock certificate evidencing shares of common stock, incorporated by reference to Exhibit 4.1 to our Form S-1/A dated April 8, 2022

of Representative’s Warrant (Included in Exhibit 1.1)

Form of Unsecured Convertible Notes, incorporated by reference to Exhibit 4.3 to our Form S-1 dated February 14, 2022

Form of Warrant Agent Agreement incorporated by reference to Exhibit 4.4 to our Form S-1/A dated June 28, 2022

of Warrant (Included in Exhibit 4.4)

Form of Pre-Funded Warrant, incorporated by reference to Exhibit 4.6 to our Form S-1/A dated June 28, 2022

Description of capital stock

Equity Incentive Plan, filed as Exhibit 4.1 to the registrant’s registration statement on Form S-8 on January 27, 2022,

and incorporated herein by reference.

Note dated April 28, 2011, as amended, in the principal amount of $1,000,000 made by the registrant in favor of Vaxstar LLC,

incorporated by reference to Exhibit 2.1 to our Form 10/A filed on July 28, 2014

Secured Lending Agreement between ValueSetters, Inc.

and Vaxstar LLC incorporated by reference to Exhibit 10.1 to our Form 10/A dated

July 25, 2014 and to our Current Report on Form 8-K dated October 31, 2017.

and Plan of Merger by and Among Netcapital Funding Portal Inc., ValueSetters, Inc.

and Netcapital

Acquisition Vehicle Inc.

incorporated by reference to Exhibit 10.1 to our Current Report

on Form 8-K dated August 23, 2020.

and Vaxstar LLC, incorporated by reference to Exhibit 10.1 to our

Form 10/A filed on July 28, 2014.

and Assignment Agreement between ValueSetters, Inc.

and Vaxstar LLC, filed as Exhibit 10.2 to our Current Report on Form 8-K

dated September 30, 2014, and incorporated herein by reference.

Loan and Security Agreement between ValueSetters, Inc.

and Vaxstar LLC dated October 31, 2017, filed as an Exhibit 10.1 to

our Current Report on Form 8-K dated October 31, 2017, and incorporated herein by reference.

Amendment to Revolving Loan and Security Agreement between ValueSetters, Inc.

and Vaxstar LLC dated October 30, 2020.

Amendment to Revolving Loan and Security Agreement between Netcapital Inc.

and Vaxstar LLC dated January 31, 2021.

Amendment to Revolving Loan and Security Agreement dated April 30, 2021 between Netcapital Inc.

and Vaxstar LLC.

to Revolving Loan and Security Agreement dated January 28, 2022 between Netcapital Inc.

and Vaxstar LLC, filed as Exhibit

10.1 to our Current Report on Form 8-K dated January 28, 2022 and incorporated by reference herein.

to Revolving Loan and Security Agreement dated February 3, 2022 between Netcapital Inc.

and Vaxstar LLC, filed as Exhibit

10.2 to our Current Report on Form 8-K dated January 28, 2022 and incorporated by reference herein.

Agreement with Carole Murko, incorporated by reference to Exhibit 10.12 to

our Form S-1 dated February 14, 2022

Agreement with Carole Murko, incorporated by reference to Exhibit 10.13 to

our Form S-1 dated February 14, 2022

of Note Purchase Agreement, incorporated by reference to Exhibit 10.14 to our

Form S-1 dated February 14, 2022

License Agreement between Netcapital Systems LLC, a Delaware limited liability company, and Netcapital Funding Portal Inc., filed as Exhibit 10.1 to our Current Report on Form 8-K dated April 18, 2022 and filed on June 28, 2022 and incorporated by reference herein.

Employment Agreement with Cecilia Lenk, filed as Exhibit 10.2 to our Current Report on Form 8-K dated April 18, 2022 and filed on June 28, 2022 and incorporated by reference herein.

Employment Agreement with Coreen Kraysler, filed as Exhibit 10.3 to our Current Report on Form 8-K dated April 18, 2022 and filed on June 28, 2022 and incorporated by reference herein.

Employment Agreement with Jason Frishman, filed as Exhibit 10.4 to our Current Report on Form 8-K dated April 18, 2022 and filed on June 28, 2022 and incorporated by reference herein.

Code of Ethics, incorporated by reference to Exhibit 14.1 to our Form S-1/A dated April 8, 2022

Consent of Independent Registered Public Accounting Firm

Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

5 unchanged sentences

Filed herewith.

Pursuant to the requirements of Section

12 of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned,

thereunto duly authorized.

Chairman of the

Board and Chief Executive Officer

Indicates a management contract or compensatory plan or arrangement.

to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed

on its behalf by the undersigned, thereunto duly authorized.

August 5, 2022

/s/ Cecilia Lenk

of the Board and Chief Executive Officer

(Principal Executive Officer)

/s/ Coreen Kraysler

Coreen Kraysler

Chief Financial Officer

(Principal Financial Officer)

Secretary and Director

Financial Officer

(Principal Financial and Accounting Officer)

August 5, 2022

Thomas Carmody

August 5, 2022

1 unchanged sentence

the Board of Directors and Stockholders of Netcapital Inc.

(f/k/a Valuesetters, Inc.) and Subsidiaries

and Subsidiaries

on the Financial Statements

2 unchanged sentences

30, 2022, and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the

years then ended, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of April 30, 2021 and 2020, and the results of its

operations and its cash flows for the each of the years in the two-year period ended April 30, 2021, in conformity with accounting principles

generally accepted in the United States of America.

years in the two-year period ended April 30, 2022, and the related notes (collectively referred to as the financial statements).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2022,

and 2021, and the results of its operations and its cash flows for the years in the two-year period ended April 30, 2022, in conformity

with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

35 unchanged sentences

transactions to measure estimated fair value.

Auditing management's analysis includes tests that are complex and highly judgmental due

to the estimation required to determine the fair value of each of the underlying investees.

In particular, fair value estimates are sensitive

to significant assumptions and factors such as expectations about future market and economic conditions, revenue growth rates, strategic

plans, and historical operating results, among others.

Auditing management’s analysis includes tests that are complex and highly judgmental

due to the estimation required to determine the fair value of each of the underlying investees.

In particular, fair value estimates are

sensitive to significant assumptions and factors such as expectations about future market and economic conditions, revenue growth rates,

strategic plans, and historical operating results, among others.

the Critical Audit Matter Was Addressed in the Audit

principal audit procedures to evaluate management’s valuation of investments consisted of the following, among others:

and test management assumptions and analysis.

and review third-party market data, public filings, and funding activities of the investee

management’s key indicators of the investee operations, including analysis of operational

growth, public filings, and future strategic and funding plans.

of Intangibles

of the Critical Audit Matter

discussed in Note 11 to the consolidated financial statements, the Company recognized $14.8 million of intangibles during November 2020,

related to consideration paid for the acquisition of Netcapital Funding Portal Inc.

intangible valuation was complex and highly judgmental due to the significant estimation required to determine the fair value of the

identifiable intangible assets acquired within the underlying business unit.

In particular, the fair value estimate was sensitive to

significant assumptions, such as the Company’s financial forecast, revenue growth rate, and operating costs, which are impacted

by expectations about future market and economic conditions, along with the Company’s historical operating results.

the Critical Audit Matter Was Addressed in the Audit

principal audit procedures to evaluate management’s valuation of intangibles consisted of the following, among others:

and review management’s analysis and projections of future growth rates, including

assessing methodologies and testing significant assumptions underlying the data.

and review data used in management’s analysis from third-party and public sources.

the historical basis for estimates of future operating results, including data based on our

audit results and knowledge of the Company’s historical activity.

the fair value of consideration exchanged and overall valuation of business combination.

Obtain and test management assumptions and analysis.

Obtain and review third-party market data, public filings, and funding activities of the investee entities.

Performed a recalculation of significant inputs used in the valuation for reasonableness.

Assess management’s key indicators of the investee operations, including analysis of operational growth, public filings, and future

strategic and funding plans.

have served as the Company’s auditor since 2017.

Spokane, Washington

& Associates II, PLLC 5525

ENDED APRIL 30, 2022 AND 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’

Consolidated Statements of Cash

Notes to Consolidated Financial

NETCAPITAL INC.

Consolidated Balance

and cash equivalents

Accounts receivable

current assets

Financial Statements

Balance Sheets

Statements of Operations

Statements of Stockholders’ Equity

Statements of Cash Flows

to Consolidated Financial Statements

Balance Sheets

April 30, 2022

April 30, 2021

Cash and cash equivalents

Related party receivable

Accounts receivable net

Prepaid expenses

Total current assets

Note receivable – related parties

Purchased technology

Investment in affiliate

Equity securities at fair value

Liabilities and Stockholders'

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

Related party

Accrued expenses

7 unchanged sentences

Loan payable - bank

notes payable

current liabilities

Convertible notes payable

Total current liabilities

Long-term liabilities:

SBA loans, less current portion

Long-term SBA loans, less current portion

Total Liabilities

Commitments and contingencies

1 unchanged sentence

Common stock, $ .001

900,000,000 shares

authorized, 2,178,766

shares authorized, 2,934,344

and 2,178,766

shares issued and outstanding

Common stock to be issued

Capital in excess of par value

( 2,462,282 )

stockholders' equity

liabilities and stockholders' equity

See Accompanying Notes

to the Financial Statements

Accumulated deficit

Total stockholders' equity

Total liabilities and stockholders' equity

Accompanying Notes to the Financial Statements

Statements of Operations

April 30, 2022

April 30, 2021

Costs of services

Costs and expenses:

Stock-based compensation

Consulting expense

Payroll and payroll related

and administrative closts

Payroll and payroll related expenses

General and administrative costs

costs and expenses

income (loss)

Operating income (loss)

( 1,031,146 )

Other income (expense):

Interest expense

Realized loss on sale of

Debt forgiveness

Unrealized gain on equity securities

other income (expense)

Total other income (expense)

income before taxes

Net income tax (expense)

in deferred tax assets

Income tax (expense) benefit

Basic earnings per

Basic earnings per share

Diluted earnings per share

Weighted average number

of common shares outstanding:

See Accompanying Notes

to the Financial Statements

Weighted average number of common shares outstanding:

Accompanying Notes to the Financial Statements

Statements of Stockholders' Equity

2 unchanged sentences

$ ( 2,462,282 )

$ ( 865,258 )

Q1 stock-based compensation

6 unchanged sentences

( 2,401,389 )

Shares issued to acquire funding portal

Return of shares of common stock

Q3 stock-based compensation

3 unchanged sentences

Q4 stock-based compensation

Net loss, April 30, 2020

Shares issued for debt settlement

Net income, April 30, 2021

Balance, April 30, 2021

( 2,462,282 )

Q1 stock-based compensation

Sale of common stock

Shares issued to settle related party accounts payable

Net income, July 31, 2021

Balance, July 31, 2021

( 2,431,411 )

Q2 stock-based compensation

Net income, October 31,

Net loss, October 31, 2021

Balance, October 31, 2021

( 2,401,389 )

Shares issued to acquire funding

Return of shares of common stock

Q3 stock-based compensation

Purchase of equity interest

Purchase of MSG Development Corp.

Sale of common stock

Net income, January 31, 2022

Balance, January 31, 2022

( 2,358,747 )

Q4 stock-based compensation

Shares issued for debt settlement

Purchase of equity interest

Net income, April 30, 2022

Balance, April 30, 2022

$ ( 992,622 )

See Accompanying Notes

to the Financial Statements

Accompanying Notes to the Financial Statements

Statements of Cash Flows

Adjustment to reconcile net

income (loss) to net cash used in operating activities:

revenue from the receipt of equity

OPERATING ACTIVITIES

Adjustment to reconcile net income (loss) to net cash used in operating

Stock-based compensation

Non-cash revenue from the receipt of equity

( 2,387,500 )

( 2,319,532 )

for bad debts

Allowance for credit losses

Debt forgiveness

( 1,904,302 )

Unrealized gain on equity securities

( 3,275,745 )

in deferred taxes

Changes in non-cash working

capital balances:

( 2,571,494 )

payable and accrued expenses

interest payable

party payable

cash used in operating activities

Changes in deferred taxes

Changes in non-cash working capital balances:

Accounts receivable

( 1,153,598 )

from purchase of funding portal subsidiary

cash provided by investing activities

from SBA loans

from stock subscriptions

on related party note

flow provided by (used in) financing activities

(decrease) in cash

and cash equivalents, beginning of the period

and cash equivalents, end of the period

disclosure of cash flow information:

paid for taxes

paid for interest

Non-Cash Investing and Financing Information:

stock issued as prepaid compensation

stock issued to purchase subsidiary

See Accompanying Notes

to the Financial Statements

NETCAPITAL INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

AS OF AND FOR THE

YEARS ENDED APRIL 30, 2021 AND 2020

( 1,417,257 )

Related party receivable

Prepaid expenses

Accounts payable and accrued expenses

Deferred revenue

Accrued interest payable

Accounts payable – related

Net cash used in operating

( 3,006,667 )

( 3,250,868 )

INVESTING ACTIVITIES

Proceeds from purchase of funding portal subsidiary

Loans to affiliate

Investment in affiliate

Net cash provided by (used

in) investing activities

FINANCING ACTIVITIES

Proceeds from SBA loans

Proceeds from secured lender

Proceeds from stock subscriptions

Proceeds from convertible notes

Cash flow provided by financing

Net increase (decrease) in cash

( 2,000,034 )

Cash and cash equivalents, beginning

of the period

Cash and cash equivalents, end

of the period

Supplemental disclosure of cash flow

Cash paid for taxes

Cash paid for

Supplemental Non-Cash Investing and

Financing Information:

Common stock issued as prepaid

Common stock issued to reduce

related party payable

Common stock issued to purchase

10% interest in Caesar Media Group Inc.

Common stock for purchase of

MSG Development Corp.

Accompanying Notes to the Financial Statements

TO CONSOLIDATED FINANCIAL STATEMENTS

OF AND FOR THE YEARS ENDED APRIL 30, 2022 AND 2021

Description of Business and Summary of Accounting Principles

7 unchanged sentences

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

The consolidated

financial statements are presented in United States dollars and have been prepared in accordance with generally accepted accounting principles

in the United States of America.

consolidated financial statements are presented in United States dollars and have been prepared in accordance with generally accepted

accounting principles in the United States of America.

The Company’s fiscal year end is April 30.

of Consolidation

The consolidated

financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of significant intercompany

balances and transactions.

The wholly owned subsidiaries are Netcapital Funding Portal Inc., an equity-based funding portal registered with the SEC, Netcapital Advisors

Inc., which provides marketing and strategic advice to select companies, and AthenaSoft Corp., which has been inactive for the past two

accounts for income taxes under the asset and liability method in accordance with ASC 740.

Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal

of deferred tax liabilities during the period in which related temporary differences become deductible.

recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained

consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of significant

intercompany balances and transactions.

The wholly owned subsidiaries are Netcapital Funding Portal Inc., an equity-based funding portal

registered with the SEC, Netcapital Advisors Inc., which provides marketing and strategic advice to select companies, and MSG Development

Corp, which was acquired in November 2021.

Company accounts for income taxes under the asset and liability method in accordance with ASC 740.

Deferred tax assets and liabilities

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income

and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained

on examination by the taxing authorities, based on the technical merits of the position.

6 unchanged sentences

Recognition under ASC 606

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

Company recognizes service revenue from its consulting contracts, funding portal and 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.

identifies performance obligations in contracts with customers, which primarily are professional services, listing fees on our funding

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

The transaction price is determined based on the amount the

Company expects to be entitled to receive in exchange for transferring the promised services to the customer.

The transaction price in

the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected

to be received in exchange for satisfying each performance obligation.

Revenue is recognized when performance obligations are satisfied.

The Company usually bills its customers before it provides any services and begins performing services after the first payment is received.

Company identifies performance obligations in contracts with customers, which primarily are professional services, listing fees on our

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

The transaction price is determined based on the

amount the Company expects to be entitled to receive in exchange for transferring the promised services to the customer.

The transaction

price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration

expected to be received in exchange for satisfying each performance obligation.

Revenue is recognized when performance obligations are

The Company usually bills its customers before it provides any services and begins performing services after the first payment

Contracts are typically one year or less.

For larger contracts, in addition to the initial payment, the Company may allow for progress

payments throughout the term of the contract.

For larger contracts, in addition to the initial payment, the Company may allow

for progress payments throughout the term of the contract.

and Estimates

The estimation

of variable consideration for each performance obligation requires the Company to make subjective judgments.

The Company enters into

contracts with customers that regularly include promises to transfer multiple services, such as digital marketing, web-based videos,

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

The Company enters

into contracts with customers that regularly include promises to transfer multiple services, such as digital marketing, web-based videos,

offering statements, and professional services.

8 unchanged sentences

and circumstances of the contract.

When agreements

involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at

the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance obligation.

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

at the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance obligation.

Where the Company

10 unchanged sentences

Professional services revenue is recognized over time as the services are rendered.

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

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

estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current and historical customer

14 unchanged sentences

The benefit period was estimated by taking into consideration the length of customer contracts, technology lifecycle, and other

commissions are recorded as consulting fees within the Company's consolidated statement of operations.

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

Performance Obligations

The Company's

subscription terms are typically less than one year.

All of the Company’s revenues in the years ended April 30, 2021 and 2020,

which amounted to $ 4,721,003

Company's subscription terms are typically less than one year.

All of the Company’s revenues in the years ended April 30, 2022

and 2021, which amounted to $ 5,480,835

and $ 4,721,003 ,

1 unchanged sentence

Contract revenue as of April 30, 2022 and 2021, which has not yet been recognized, amounted

to $ 2,532 and

respectively, and is recorded on the balance sheet as deferred revenue.

1 unchanged sentence

performance obligations over the next 12 months.

Disaggregation

revenue is from U.S.-based companies with no notable geographical concentrations in any area.

A distinction exists in revenue source;

our revenues are either generated online or from personal services.

disaggregated by revenue source consist of the following:

Schedule of Disaggregation

April 30, 2022

April 30, 2021

Consulting services

Fees from online services

Total revenues

of services consist of direct costs that we pay to third parties in order to provide the services that generate revenue.

per share is computed by dividing net income by the weighted-average number of shares outstanding.

The Company has no stock options,

warrants or convertible debt, but has a contingent consideration liability that requires it to issue up to 397,293 shares of common stock,

and is dilutive.

net income per share is computed by dividing net income available to common stockholders by the weighted average number of vested, unrestricted

common shares outstanding during the period.

Diluted net income per share is computed based on the weighted average number of shares

of common stock outstanding plus the effect of dilutive potential common shares outstanding during the period using the if-converted

and Cash Equivalents

considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

did not have any cash equivalents during fiscal 2021 and 2020.

The Company uses three financial institutions for its cash balances and

has maintained cash balances that exceed federally insured limits.

extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining

Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Company did not have any cash equivalents during fiscal 2022 and 2021.

The Company uses three financial institutions for its cash balances

and has maintained cash balances that exceed federally insured limits.

Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining

an allowance for potential credit losses.

3 unchanged sentences

The Company recorded an allowance for doubtful

accounts of $60,325 and $0 as of April 30, 2021 and 2020, respectively.

accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation

which requires all share-based payments to employees, including the vesting of restricted stock grants to employees, to be recognized

in the financial statements based on their fair values.

The fair value of the equity instrument is charged directly to compensation expense

and credited to common stock and capital in excess of par value during the period during which services are rendered.

follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring,

or in Conjunction with Selling Goods and Services,” for common stock issued to consultants and other non-employees.

of common stock are issued as compensation for services provided to the Company and are accounted for based upon the fair market value

of the common stock.

The fair value of the equity instrument is charged directly to compensation expense, or to prepaid expenses in instances

where stock was issued under a contractual arrangement to a consultant who agreed to provide services over a period of time.

accounts of $ 136,955

as of April 30, 2022 and 2021, respectively.

Company lends money to companies in limited instances, performs ongoing credit evaluations of its notes receivable and establishes an

allowance for potential credit losses when appropriate.

assets with defined useful lives are generally measured at cost less straight-line amortization.

The useful life is determined using

the period of the underlying contract or the period of time over which the intangible asset can be expected to be used.

Impairments are

recognized if the recoverable amount of the asset is lower than the carrying amount.

The recoverable amount is the higher of either the

fair value less costs to sell or the value in use.

The value in use is determined on the basis of future cash inflows and outflows, and

the weighted average cost of capital.

Intangible assets with indefinite useful lives, such as trade names and trademarks, that have been

acquired as part of acquisitions are measured at cost and tested for impairment annually, or if there is an indication that their value

has declined.

following table sets forth the major categories of the intangible assts as of April 30, 2022 and 2021

Schedule of intangible assets

April 30, 2022

April 30, 2021

Acquired users

Acquired brand

Professional practice

Literary works and contracts

Total intangible assets

of Long-Lived Assets

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.

The Company did not recognize an impairment loss in fiscal 2022 and 2021.

Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock

Compensation which requires all share-based payments to employees, including the vesting of restricted stock grants to employees, to

be recognized in the financial statements based on their fair values.

The fair value of the equity instrument is charged directly to

compensation expense and credited to common stock and capital in excess of par value during the period during which services are rendered.

and marketing expenses are recorded separately in the Statements of Operations and are expensed as incurred.

All investments in equity securities are

initially measured at cost.

Cost is based upon either the cost of the investment, the fair value of the services provided or the estimated

market value of the investment at the time it was acquired, whichever can be more clearly determined.

If the Company identifies an observable

price change in an orderly transaction for an identical or similar investment of the same issuer, the Company measures the equity security

at fair value as of the date that the observable transaction occurred.

financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions

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

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

The most significant estimate relates to investments,

the allowance for doubtful accounts and the income tax valuation allowance.

On a continual basis, management reviews its estimates, utilizing

currently available information, changes in facts and circumstances, historical experience and reasonable assumptions.

After such reviews,

and if deemed appropriate, those estimates are adjusted accordingly.

investments in equity securities are initially measured at cost.

Cost is based upon either the cost of the investment, the fair value

of the services provided or the estimated market value of the investment at the time it was acquired, whichever can be more clearly determined.

If the Company identifies an observable price change in an orderly transaction for an identical or similar investment of the same issuer,

the Company measures the equity security at fair value as of the date that the observable transaction occurred.

preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates

and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the

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

The most significant

estimate relates to investments, the allowance for doubtful accounts and the calculation of stock-based compensation for the stock options.

On a continual basis, management reviews its estimates, utilizing currently available information, changes in facts and circumstances,

historical experience and reasonable assumptions.

After such reviews, and if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.

Determination

of Fair Value

and cash equivalents, accounts receivable, and accounts payable

carrying amounts approximate fair value because of the short maturity of these instruments.

Revenue represents revenues collected but not earned as of the year end.

The Company renders services, or rights to use its software,

over a specific time period and revenues are recognized as earned as time passes.

30, 2021 and 2020, the Company’s secured and unsecured debt was carried at its face value plus accrued interest.

has no instruments with significant off balance sheet risk.

Accounting Pronouncements

In June 2016, the

FASB issued ASU No.

June 2016, the FASB issued ASU No.

2016-13 Financial Instruments-Credit Losses .

The new guidance provides better representation about

expected credit losses on financial instruments.

This update requires the use of a methodology that reflects expected losses and requires

consideration of a broader range of reasonable and supportive information to inform credit loss estimates.

This ASU is effective

for reporting periods beginning after December 15, 2022, with early adoption permitted.

The company is studying the impact of adopting

the ASU in fiscal year 2023, and what effect it could have.

The Company believes the accounting change would not have a material effect

on the financial statements.

In June 2018, the

FASB issued ASU 2018-07, Improvement to Nonemployee Share-based Payment Accounting, which simplifies the accounting for share-based payments.

The company elected early adoption of this ASU, using the modified retrospective approach, so that all stock compensation to employees

and nonemployees is treated under the same guidance as in ASC 718.

December 2019, the FASB issued Accounting Standard Update No.

2019-12, Income Taxes (Topic 740):

the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes.

This guidance will be effective

for us in the first quarter of fiscal 2022 on a prospective basis, and early adoption is permitted.

We are currently evaluating the impact

of the new guidance on our consolidated financial statements.

Management does not

believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying

The new guidance provides better representation

about expected credit losses on financial instruments.

This update requires the use of a methodology that reflects expected losses and

requires consideration of a broader range of reasonable and supportive information to inform credit loss estimates.

effective for reporting periods beginning after December 15, 2022, with early adoption permitted.

The company is studying the impact

of adopting the ASU in fiscal year 2023, and what effect it could have.

The Company believes the accounting change would not have a material

effect on the financial statements.

does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying

financial statements.

1 unchanged sentence

Concentrations

ended April 30, 2021, the Company had one customer that constituted 30 %

the year ended April 30, 2022, the Company had one customer that constituted 22 %

of its revenues, a second customer that constituted

of its revenues, a third customer that constituted 14 %

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

of its revenues, and a third customer that constituted

of its revenues.

For the year ended April 30, 2020, the Company had one customer that constituted 47 %

For the year ended April 30,

2021, the Company had one customer that constituted 30 %

of its revenues, a second customer that constituted

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

of its revenues, a third customer that constituted

of its revenues and a fourth customer that accounted

of its revenues.

The following table

summarizes components debt as of April 30, 2021 and 2020:

payable – related parties

notes payable

payable – bank

following table summarizes components debt as of April 30, 2022 and 2021:

Schedule of Debt

Interest Rate

Secured lender

Notes payable – related parties

Convertible promissory notes

Loan payable – bank

current portion of long-term debt

long-term debt

As of April 30, 2021

and 2020, the Company owed its principal lender (“Lender”) $ 1,000,000

under a loan and security agreement (“Loan”)

dated April 28, 2011, that was amended on July 26, 2014 and again on October 31, 2017, October 31, 2020, January 31, 2021 and April 30,

The Lender was the largest shareholder of the Company owning 32.6% of the shares issued and outstanding as of April 30, 2020.

with the purchase of Netcapital Funding Portal Inc., the Lender owns less than 10% of the Company and is no longer considered a related

The Loan was amended

on October 31, 2020 to change the maturity date to January 31, 2021, and increase the interest rate from 1.25% to 8% per annum.

has been further amended to change the maturity date to April 30, 2022.

Total long-term debt

of April 30, 2022 and 2021, the Company owed its principal lender (“Lender”) $1,400,000 and $1,000,000, respectively, under

a loan and security agreement (“Loan”) dated April 28, 2011, that was amended on July 26, 2014 and several times thereafter

so that the maturity date is now April 30, 2023.

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

6 unchanged sentences

and first lien on all of the assets of the Company.

As of April 30, 2021

and 2020, the Company’s related-party unsecured notes payable totaled $22,860

and $15,000 ,

respectively.

Demand notes payable totaled $ 0 and

of April 30, 2021 and 2020.

The demand notes totaling $ 7,860

were determined to be related party notes as

of the date of the acquisition of Netcapital Funding Portal Inc.

(“Funding Portal”) because the notes are from a board member

of the Funding Portal and the former parent of the Funding Portal, which is now the Company’s largest shareholder, owning 1,671,360

shares of common stock of the Company, or 76.7%

as of April 30, 2021.

The Company also

as of April 30, 2021 and 2020 to Chase Bank.

For the loan from Chase Bank, the Company pays interest only on a monthly basis, which is calculated at a rate of 5.5% per annum.

On May 6, 2020, the

Company borrowed $1,885,800 (the “May Loan”), on June 17, 2020 the Company borrowed $500,000 (the “June Loan”),

and on February 2, 2021, the Company borrowed $1,885,800 (the “February Loan”) from an SBA loan program.

The May loan bears interest at a

rate of 1% per annum and the SBA has postponed any installment payments until September 6, 2021.

The Company is applying for

forgiveness of the May Loan and believes it will be forgiven in its entirety.

The June Loan requires

installment payments of $2,437 monthly, beginning on June 17, 2021, over a term of thirty years.

However, the SBA has postponed the first

installment payment for 12 months.

February 9, 2022, the Company issued and sold in a private placement $300,000 of unsecured convertible promissory notes (the “February

2022 Notes”).

These notes bear interest at a rate of 8% per annum and have a maturity date of February 9, 2023.

In addition, the

February 2022 Notes will automatically convert simultaneously with the closing of a Qualified Equity Financing (as defined below) into

a number of securities sold in the Qualified Equity Financing equal to the quotient obtained by dividing (a) an amount equal to the amount

of the February 2022 Notes outstanding on the closing date of such Qualified Equity Financing by (b) a conversion price equal to the

lesser of (1) $10.00 and (2) 80% of the price per share paid for securities sold in such Qualified Equity Financing upon the closing

of such Qualified Equity Financing.

A “Qualified Equity Financing” means the offer and sale for cash by us of any of our

equity securities with the principal purpose of raising capital and that results in aggregate gross proceeds to us of at least $5,000,000.

As of April 30, 2022 and 2021, unsecured convertible promissory notes totaled $300,000 and 0, respectively.

of April 30, 2022 and 2021, the Company’s related-party unsecured notes payable totaled $22,860.

Company also owes $34,324 as of April 30, 2022 and 2021 to Chase Bank.

For the loan from Chase Bank, the Company pays interest only on

a monthly basis, which is calculated at a rate of 7.0% per annum.

May 6, 2020, the Company borrowed $1,885,800 (the “May Loan”), on June 17, 2020 the Company borrowed $500,000 (the “June

Loan”), and on February 2, 2021, the Company borrowed $1,885,800 (the “February Loan”) from a U.S.

Small Business Administration

(“SBA”) loan program.

May loan bore interest at a rate of 1% per annum and the SBA postponed any installment payments until September 6, 2021.

2021 the May Loan was forgiven in its entirety, including accrued interest of $18,502.

As a result, the Company recognized debt forgiveness

of $1,904,296 in the year ended April 30, 2022.

June Loan required installment payments of $2,594 monthly, beginning on June 17, 2021, over a term of thirty years.

However, the SBA

has postponed the first installment payment for 18 months.

Interest accrues at a rate of 3.75% per annum.

The Company agreed to grant a continuing security interest

in its assets to secure payment and performance of all debts, liabilities, and obligations to the SBA.

The June Loan was personally guaranteed

by the Company’s Chief Financial Officer.

The February loan

bears interest at a rate of 1% per annum and the due date of the first payment is May 22, 2022.

The Company plans to apply for forgiveness

of the February Loan and believes will be forgiven in its entirety.

In fiscal 2020, the

Company received a $10,000 advance from the U.S.

Small Business Administration (“SBA”) in conjunction with an Economic Injury

Disaster Loan application.

Based upon SBA information regarding the advance payments that were made to U.S.

businesses, the Company considers

the $10,000 received as a grant and recorded the $10,000 as other income.

April 30, 2021 future payments under debt obligations over each of the next five years and thereafter were as

of future payments under short-and long-term debt agreements

months ended April 30:

The Company agreed to grant

a continuing security interest in its assets to secure payment and performance of all debts, liabilities, and obligations to the SBA.

The June Loan was personally guaranteed by the Company’s Chief Financial Officer.

February loan bears interest at a rate of 1% per annum and the due date of the first payment has been postposed by the SBA because the

Company has applied for forgiveness of the February Loan in its entirety.

of April 30, 2022, future payments under debt obligations over each of the next five years and thereafter were as follows:

Schedule of future payments under debt obligations

Twelve months ended April 30:

future payments of principal

Fair Value Measurements

The Company uses

fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures of

financial instruments on a recurring basis.

The Fair Value Measurements

Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques

used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets

or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures

of financial instruments on a recurring basis.

and cash equivalents, accounts receivable, and accounts payable

general, carrying amounts approximate fair value because of the short maturity of these instruments.

Value Hierarchy

Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs

to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets

for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable

inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

4 unchanged sentences

3 inputs are unobservable inputs for the asset or liability.

Financial assets

measured at fair value on a recurring basis are summarized below as of April 30, 2021 and 2020:

of Financial assets measured at fair value on a recurring basis

assets measured at fair value on a recurring basis are summarized below as of April 30, 2022 and 2021:

Schedule of Financial assets measured at fair value on a

recurring basis

April 30, 2022

Equity securities

at fair value

Equity securities at fair value

April 30, 2021

2 unchanged sentences

of Fair Value

Under the Fair Value

Measurements Topic of the FASB Accounting Standards Codification, the Company bases its fair value on the price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair

value measurements, in accordance with the fair value hierarchy.

Fair value measurements for assets and liabilities where there exists

limited or no observable market data and, therefore, are based primarily upon management’s own estimates, are often calculated

the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the Company bases its fair value on the price that would

be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

It is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing

fair value measurements, in accordance with the fair value hierarchy.

Fair value measurements for assets and liabilities where there

exists limited or no observable market data and, therefore, are based primarily upon management’s own estimates, are often calculated

based on current pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such

4 unchanged sentences

or future value.

See Note 1 for a

description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value where it

is practicable to do so for financial instruments not recorded at fair value (disclosures required by the Fair Value Measurements Topic

of the FASB Accounting Standards Codification).

The Tax Cuts and

Jobs Act ("Tax Act") was enacted on December 22, 2017.

Among numerous provisions, the Tax Act reduced the U.S.

federal corporate

tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously

tax deferred, and creates new taxes on certain foreign sourced earnings.

As a result of the Tax Act, the Company re-measured certain

deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.

As of April 30, 2021,

the Company had net operating loss carryforwards for Federal income tax purposes of approximately $ 890,000

in the years of 2022 through 2035 .

Utilization of the

net operating losses may be subject to annual limitations provided by Section 382 of the Internal Revenue Code and similar state provisions.

Deferred income taxes

reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes

and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities as of

April 30, 2021 and 2020 were as follows:

of Income Taxes

Note 1 for a description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value

where it is practicable to do so for financial instruments not recorded at fair value (disclosures required by the Fair Value Measurements

Topic of the FASB Accounting Standards Codification).

of April 30, 2022, the Company had net operating loss carryforwards for Federal income tax purposes of approximately $ 1,108,000

expiring in the years of 2023 through 2042.

of the net operating losses may be subject to annual limitations provided by Section 382 of the Internal Revenue Code and similar state

income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and

liabilities as of April 30, 2022 and 2021 were as follows:

Schedule of Income Taxes

Deferred tax assets, net:

operating loss carryforwards

Net operating loss carryforwards

Bad debt expense

Stock-based compensation

impairment loss

Asset impairment loss

Deferred tax assets

Deferred tax liability

1 unchanged sentence

Total deferred tax liability

net deferred tax assets (liabilities)

Total net deferred tax

assets (liabilities)

$ ( 977,000 )

The valuation allowance is $ 0 as

of April 30, 2021 and April 30, 2020.

Company management believes that historical, current and expected earnings

are sufficient to meet the more likely than not standard to enable the Company to utilize the deferred tax asset.

The Company did not

have any material unrecognized tax benefits as of April 30, 2021 and 2020.

The Company does not expect the unrecognized tax benefits

to significantly increase or decrease within the next twelve months.

The Company recorded no interest and penalties relating to

unrecognized tax benefits as of and during the years ended April 30, 2021 and 2020.

$ ( 433,000 )

fiscal 2022, our income tax expense was $ 544,000 ,

with an effective tax rate of 13 % .

Our effective tax rate and the resulting provision for income taxes were impacted by tax benefits related to a net operating loss carryforward

of $1.1 million and non-taxable debt forgiveness of $1.9 million.

For fiscal 2021, our income tax expense was $ 613,000 ,

with an effective tax rate of 29 % ,

similar to the statutory rate for federal and state taxes.

Company did not have any material unrecognized tax benefits as of April 30, 2022 and 2021.

The Company does not expect the unrecognized

tax benefits to significantly increase or decrease within the next twelve months.

The Company recorded no interest and penalties

relating to unrecognized tax benefits as of and during the years ended April 30, 2022 and 2021.

The Company is subject to U.S.

federal income tax,

as well as taxes by various state jurisdictions.

The Company is currently open to audit under the statute of limitations by the federal

and state jurisdictions for the years ending April 30, 2019 through 2021.

income tax, as well as taxes by various state jurisdictions.

The Company is currently open to audit under the statute of limitations

by the federal and state jurisdictions for the years ending April 30, 2020 through 2022.

Commitments and Contingencies

The Company is subject

to legal proceedings and claims that arise in the ordinary course of its business.

In the opinion of management, the amount of ultimate

liability, if any, is not likely to have a material effect on the financial condition, results of operations or liquidity of the Company.

However, as the outcome of litigation or legal claims is difficult to predict, significant changes in the estimated exposures could occur.

Company is subject to legal proceedings and claims that arise in the ordinary course of its business.

In the opinion of management, the

amount of ultimate liability, if any, is not likely to have a material effect on the financial condition, results of operations or liquidity

of the Company.

However, as the outcome of litigation or legal claims is difficult to predict, significant changes in the estimated exposures

There are no known legal complaints or claims against the Company.

The Company utilizes

office space in Boston, Massachusetts, at a cost of approximately $3,600

per month, one-year membership agreement that

ends on March 31, 2022.

Company utilizes virtual office space in Boston, Massachusetts, at a cost of approximately $5,700 per month under a membership agreement

that ends on September 30, 2023.

The membership agreement includes a deposit of $6,300.

A novel strain of

coronavirus, or COVID-19, has spread throughout the world and has been declared to be a pandemic by the World Health Organization.

of the date this report was issued, our operations have not been significantly impacted by the COVID-19 outbreak.

The number of people

establishing accounts on our website Netcapital.com has more than doubled during the pandemic.

Most of our employees work remotely from

a home office to access our technology, which runs 24 hours a day on the internet.

However, we cannot at this time predict the specific

extent, duration, or full impact that the COVID-19 outbreak will have on our financial condition, operations, and business plans for

fiscal year 2022.

Our operations have adapted social distancing practices, and the next expected milestones of our product may be impacted,

and we may experience delays in anticipated timelines and milestones.

novel strain of coronavirus, or COVID-19, has spread throughout the world and has been declared to be a pandemic by the World Health

Organization.

As of the date this report was issued, our operations have not been significantly impacted by the COVID-19 outbreak.

number of people establishing accounts on our website Netcapital.com more than doubled during the pandemic.

Most of our employees work

remotely from a home office to access our technology, which runs 24 hours a day on the internet.

However, we cannot at this time predict

the specific extent, duration, or full impact that the COVID-19 outbreak will have on our financial condition, operations, and business

plans for fiscal year 2023.

Our operations have adapted social distancing practices, and the next expected milestones of our product

may be impacted, and we may experience delays in anticipated timelines and milestones.

Stockholders’ Equity

Company is authorized to issue 900,000,000 shares of its common stock, par value $0.001.

2,178,766 and 417,059 shares were outstanding

as of April 30, 2021 and 2020, respectively.

In August 2020, the board of directors authorized a reverse split of the common stock on

a 1-for-2,000 basis, whereby the Company issued to each of its stockholders one share of Common Stock for every 2,000 shares of common

stock held by such stockholder.

The reverse split was effective on November 5, 2020.

The financial statements for the year ended April

30, 2020 have been adjusted to give effect to the reverse split.

As of April 30, 2020, the balance sheet accounts for capital in excess

of par value and for common stock were increased and decreased by $830,852, respectively.

In fiscal 2021, 99,270

shares of common stock were issued for stock-based compensation, 1,666,360 shares of common stock were issued to purchase Netcapital

Funding Portal Inc., and 5,000 shares of common stock were returned to the Company in exchange for a 20% ownership of AthenaSoft Corp.

As of April 30, 2022 and 2021, there were 2,934,344

and 2,178,766 shares outstanding, respectively.

fiscal 2022, 57,186 shares of common stock were issued for stock-based compensation, 361,736 shares of common stock were issued to settle

related party liabilities in conjunction with the purchase Netcapital Funding Portal Inc., 199,156 shares of common stock were sold in

a private placement to accredited investors at a price of $9 per share, 50,000 shares of common stock were issued to purchase MSG Development

and 87,500 shares were issued in conjunction with the purchase of a 10% interest in Caesar Media Group Inc.

fiscal 2021, 99,270 shares of common stock were issued for stock-based compensation, 1,666,360 shares of common stock were issued to

purchase Netcapital Funding Portal Inc., and 5,000 shares of common stock were returned to the Company in exchange for a 20% ownership

of AthenaSoft Corp.

that was acquired by the Company during fiscal 2018.

The book value of the AthenaSoft Corp.

shares surrendered by the Company was zero

dollars, as the Company had recognized an impairment loss in a prior year.

The Company also issued 1,077 shares of common stock, valued

at $15,000, to pay a $15,000 liability.

In fiscal 2020, 39,375

shares of common stock were issued for stock-based compensation.

For the years ended

April 30, 2021 and 2020, the Company recorded $ 680,611

and $ 356,252 ,

respectively, in stock-based compensation expense.

As of April 30, 2021 and 2020, there was $ 631,878

and $ 609,010

of prepaid stock-based compensation expense.

below presents the components of stock-based compensation expense for the years ended April 30, 2021 and 2020.

Schedule of stock-based

compensation expense

Executive Officer

Financial Officer

Marketing Officer

party consultant

below presents the shares issued as compensation for the years ended April 30, 2021 and 2020:

Executive Officer

Financial Officer

Marketing Officer

party consultant

below presents the prepaid stock-based compensation expense as of April 30, 2021 and 2020:

Executive Officer

Financial Officer

party consultant

shares surrendered by

the Company was zero dollars, as the Company had recognized an impairment loss in a prior year.

The Company also issued 1,077 shares

of common stock, valued at $15,000, to pay a $15,000 liability.

the years ended April 30, 2022 and 2021, the Company recorded $1,176,058 and $680,611, respectively, in stock-based compensation expense.

As of April 30, 2022 and 2021, there was $0 and $631,878 of prepaid stock-based compensation expense.

table below presents the components of stock-based compensation expense for the years ended April 30, 2022 and 2021.

Schedule of stock-based compensation expense

April 30, 2022

April 30, 2021

Chief Executive Officer

Chief Financial Officer

Chief Marketing Officer

Related party consultant

Marketing consultant

Business consultant

Company secretary and director

Business development manager

Employee stock options

table below presents the number of shares issued as compensation for the years ended April 30, 2022 and 2021:

April 30, 2022

April 30, 2021

Company secretary and director

Business development manager

Chief Marketing Officer

Marketing consultant

table below presents the prepaid stock-based compensation expense as of April 30, 2022 and 2021:

April 30, 2022

April 30, 2021

Chief Executive Officer

Chief Financial Officer

Related party consultant

Business consultant

Marketing consultant

following tables summarize information about stock options outstanding as of April 30, 2022 and 2021:

of stock options outstanding

of April 30, 2022

of November 30, 2021

Schedule of stock options activity

Exercise Price

Outstanding May

Issued during year ended April

Exercised/canceled during

year ended April 30, 2021

Outstanding April 30, 2021

Issued during year ended April

Exercised/canceled during

year ended April 30, 2022

Options outstanding April

Options exercisable, April

Earnings Per Common Share

Earnings per common

share data was computed as follows:

of earnings per share

income (loss)

Weighted average common

shares outstanding

of dilutive securities

average dilutive common shares outstanding

per common share – basic

per common share – diluted

397,293 shares that are issuable to satisfy a supplemental

consideration liability were included for the calculation of earnings per share for the year ended April 30, 2021 because their effect

No dilutive securities existed as of April 30, 2020.

per common share data was computed as follows:

Schedule of earnings per share

Weighted average common shares outstanding

Effect of dilutive securities

Weighted average dilutive common shares outstanding

Earnings per common share – basic

Earnings per common share – diluted

net income per share is computed by dividing net income available to common stockholders by the weighted average number of vested, unrestricted

common shares outstanding during the period.

Diluted net income per share is computed based on the weighted average number of shares

of common stock outstanding plus the effect of dilutive potential common shares outstanding during the period using the if-converted

Dilutive potential common shares include 39,901 and 397,296 shares, for the years ended April 30, 2022 and 2021, respectively,

that are issuable to satisfy a supplemental consideration liability.

In fiscal 2022, the Company also had $300,000 in convertible promissory

notes plus $5,326 in accrued interest payable that could convert, at a price per share of $7.20, into 42,406 shares of common stock.

Outstanding stock options, totaling 271,000 and 0 for the years ended April 30, 2022 and 2021, respectively, were not included in the

calculation of dilutive securities because their effect was anti-dilutive.

Related Party Transactions

The Company’s

majority shareholder, Netcapital Systems LLC, owns 1,671,360 shares of common stock, or 76.7% of the Company as of April 30, 2021.

Company has a demand note payable to Netcapital Systems LLC of $4,600 and a demand note payable to one of its managers of $3,200.

addition, the Company has accrued a payable of $3,817,516 for supplemental consideration owed in conjunction with its purchase of Netcapital

Funding Portal Inc.

See Note 12 for details of an issuance of common stock to pay off $3,461,462 of this liability.

In total the Company

owed its largest shareholder $3,822,116 as of April 30, 2021.

The company paid its majority shareholder $100,000 in fiscal 2021 for use

of the software that runs the website www.netcapital.com.

to officers in the years ended April 30, 2021 and 2020 consisted of common stock valued at $353,907

and $ 231,131 ,

respectively, and cash compensation of $332,724

and $72,000 ,

respectively.

to a related party consultant in the years ended April 30, 2021 and 2020 consisted of common stock valued at $76,882

and $49,711 ,

respectively, and cash compensation of $81,431

and $26,200 ,

respectively.

This consultant is also the controlling shareholder of Zelgor Inc.

and the Company

earned revenues from Zelgor Inc.

of $1,400,000

in the year ended

April 30, 2021.

to two board members of Netcapital Systems LLC amounted to $162,123

in the years ended April 30, 2021 and 2020, respectively.

One of these board members also received stock-based compensation of $76,882

for the years ended April 30, 2021 and 2020,

respectively.

Steven Geary, a director, $31,680

as of April 30, 2021 and 2020.

This obligation

is not interest bearing.

is recorded as a related party trade accounts

payable and $15,000

as a related party note payable.

We have no signed

agreements for the indebtedness to Mr.

made an investment of $122,914 in an affiliate, 6A Aviation Alaska Consortium, Inc., in conjunction with a land lease in an airport in

Company’s majority shareholder, Netcapital Systems LLC, owns 1,671,360 shares of common stock, or 57.7% of the Company as of April

The Company has a demand note payable to Netcapital Systems LLC of $4,600 and a demand note payable to one of its former managers

In addition, as of April 30, 2021, the Company accrued a payable of $3,817,516 for supplemental consideration owed in conjunction

with its purchase of Netcapital Funding Portal Inc., which was reduced to $294,054 as of April 30, 2022, because of the issuance to 361,736

shares of common stock, valued at $3,523,462.

Of the 361,736 shares that were issued, a total of 32,458 shares, representing a reduction

in the payable amount of $346,821, were issued to managers of Netcapital Systems LLC, and 3,151 shares, representing a reduction in the

payable amount of $30,691, were issued to our Chief Executive Officer.

company paid its majority shareholder $357,429 and $200,000 in the years ended April 30, 2022 and 2021, respectively, for use of the

software that runs the website www.netcapital.com.

The Company also had a sale of $15,000 for consulting services to its majority shareholder

during fiscal 2022.

Company received revenues of $39,360 and $660,486 for the years ended April 30, 2022 and 2021, respectively from ChipBrain, Inc.

Chief Executive Officer is a member of the board of directors of ChipBrain, Inc.

The Company owns 710,200 shares of ChipBrain, Inc.,

valued at $1,704,480.

Chief Executive Officer is a member of the board of directors of KingsCrowd Inc.

The Company owns 3,815,745 shares of KingsCrowd Inc.,

valued at $3,815,745.

Chief Executive Officer is a member of the board of directors of Deuce Drone LLC.

The Company owns 2,350,000 membership interest units

of Deuce Drone LLC., valued at $2,350,000.

The Company has notes receivable aggregating $152,000 from Deuce Drone LLC as of April 30,

expense to officers in the years ended April 30, 2022 and 2021 consisted of common stock valued at $190,763 and $353,907, respectively,

cash compensation of $265,688 and $332,724, respectively, and options to purchase common stock valued at $3,147 and $0, respectively.

to a related party consultant in the years ended April 30, 2022 and 2021 consisted of common stock valued at $25,908 and $76,882, respectively,

and cash compensation of $60,000 and $81,431, respectively.

This consultant is also the controlling

shareholder of Zelgor Inc., and the Company earned revenues from Zelgor Inc.

of $5,500 and $1,400,000 in the years ended April 30, 2022

The Company owns 1,400,000 shares of Zelgor Inc., valued at $1,400,000 and holds a note receivable of $50,000 as of April 30,

to the President of Netcapital Systems LLC amounted to $96,000 and $114,284 in the years ended April 30, 2022 and 2021, respectively.

owe Steven Geary, a director, $31,680 as of April 30, 2022 and 2021.

This obligation is not interest bearing.

$16,680 is recorded as

a related party trade accounts payable and $15,000 as a related party note payable.

We have no signed agreements for the indebtedness

Company made an investment of $240,080 in an affiliate, 6A Aviation Alaska Consortium, Inc., in conjunction with a land lease in an airport

Our Chief Executive Officer is also the Chief Executive Officer of 6A Aviation Alaska Consortium, Inc.

As a result of the investment,

the Company is a 10% owner of 6A Aviation Consortium Inc.

April 30, 2021 and 2020, we owed $9,490 and $0 to a company controlled by one of our directors.

As a result of the

investment, the Company is a 19% owner of 6A Aviation Consortium Inc.

of April 30, 2022 and 2021, we owed $0 and $9,490 to a company controlled by one of our former directors.

We paid cash compensation of

to this director for the years ended April 30,

2021 and 2020, respectively.

On April 30, 2020, we sold 722 membership interest units (the "Units") of Netcapital Systems LLC

("Netcapital") to the company controlled by this related party at a price of $91.15 per Unit for a total of $65,823, which paid

off all debt and accrued interest payable to the related party as of that date.

The price per Unit was similar to an offer to purchase

Units directly from Netcapital.

amount of the 722 Units was $659,186, and the sale resulted in a realized loss of $593,363.

Based upon the price of $91.15 per Unit,

for the year ended April 30, 2020, the Company recorded an impairment loss of $185,952, which is not tax deductible, on the remaining

Units in its possession.

2020, the Company entered a consulting contract with Watch Party LLC (“WP”), which allowed the Company to receive up to 110,000

membership interest units of WP in return for consulting services.

The WP units are valued at $2.14 per unit based on a sales price of

$2.14 per unit on an online funding portal, resulting in revenues of $235,400

for the year ended April 30, 2021.

2020, the Company entered a consulting contract with ChipBrain LLC (“ChipBrain”), which allowed the Company to receive up

to 710,200 membership interest units of ChipBrain in return for consulting services.

The ChipBrain units are valued at $0.93 per unit

based on a sales price of $0.93 per unit on an online funding portal, resulting in revenues of $ 660,486

for the year ended April 30, 2021.

subsequently sold identical ChipBrain units for $2.40 per unit on an online funding portal.

2020, the Company entered a consulting contract with a related party, Zelgor Inc.

(“Zelgor”), which allowed the Company to

receive up to 1,400,000 shares of common stock of Zelgor in return for consulting services.

The Company earned 1,050,000 shares in the

quarter ended July 31, 2020 and 350,000 shares in the quarter ending October 31, 2020.

The Zelgor shares are valued at $1.00 per share

based on a sales price of $1.00 per share on an online funding portal, resulting in revenues of $1,400,000 for the year ended April 30,

The $1.00 per share valuation was derived based on a combination of multiple transactions on a secondary trading platform in which

shares were purchased at $1.00 per share, and two private offerings of shares, one at a selling price of $0.50 per share and the other

at $2.00 per share.

2, 2020, the Company entered a consulting contract with Deuce Drone LLC (“Drone”), which allowed the Company to receive up

to 2,350,000 membership interest units of Drone in return for consulting services.

$0 and $29,738 to this former director for the years ended April 30, 2022 and 2021, respectively.

November 2021, we issued a member of our Board 10,000 shares of common stock for his service as a member of our board and audit committee,

valued at $100,000.

February 2, 2022, the Company granted to members of our Board an aggregate of 25,000 options to purchase shares of our common stock at

an exercise price of $10.50 per share.

An option to purchase 10,000 shares of common stock was granted to the Chairman of the Board and

each of the three independent board members received an option to purchase 5,000 shares of common stock.

The options vest on a monthly

basis over 48 months and expire in 10 years.

Kraysler, our Chief Financial Officer, has personally guaranteed a $500,000 promissory note from the U.S.

Small Business Administration.

note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,594 are scheduled to begin on June 17,

Company recorded $19,844 in revenues from a company that Cecilia Lenk, our Chief Executive Officer, serves as a member of the board of

April 2022, the Company received 3,000,000 units of Cust Corp.

as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.40 per unit based on a sales price of $0.40 per unit on an online funding portal.

The receipt of

the units satisfied an accounts receivable balance of $1,200,000.

As of April 30, 2022, the Company owned 3,000,000 units which are valued

at $1,200,000.

January 2022, the Company received 1,700,000 units of ScanHash LLC as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal.

The receipt of

the units satisfied $425,000 of an accounts receivable balance.

As of April 30, 2022, the Company owned 1,700,000 units which are valued

January 2022, the Company received 2,850,000 units of Hiveskill LLC as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal.

The receipt of

the units satisfied an accounts receivable balance of $712,500.

As of April 30, 2022, the Company owned 2,850,000 units which are valued

fiscal 2022, the Company purchased a 10% interest, or 400 shares of common stock, in Caesar Media Group Inc.

(“Caesar”) for

an initial purchase price of 50,000 shares of the Company’s common stock, valued at $500,000.

Caesar is a marketing and technology

solutions provider.

The purchase agreement includes additional contractual requirements for the Company and Caesar, including the issuance

of an additional 150,000 shares of common stock of the Company over a two-year period.

The Company issued 37,500 shares of its common

stock in April 2022 as part of its contractual payment obligations.

As of April 30, 2022, there have been no observable price changes

in the value of the Caesar’s common stock and the Company has valued its ownership in Caesar at cost, which is $900,000.

May 2020, the Company entered a consulting contract with Watch Party LLC (“WP”), which allowed the Company to receive up

to 110,000 membership interest units of WP in return for consulting services.

The WP units are valued at $2.14 per unit based on a sales

price of $2.14 per unit on an online funding portal, resulting in revenues of $235,400 for the year ended April 30, 2021.

30, 2022 and 2021, the Company owned 110,000 WP units, which are valued at $235,400.

May 2020, the Company entered a consulting contract with ChipBrain LLC (“Chip”), which allowed the Company to receive up

to 710,200 membership interest units of Chip in return for consulting services.

The Company earned 500,000 membership interest units

in the quarter ended July 31, 2020 and earned the remaining units in the quarter ending October 31, 2020.

The Chip units were initially

valued at $0.93 per unit based on a sales price of $0.93 per unit on an online funding portal, resulting in revenues of $660,486 for

the year ended April 30, 2021.

Subsequently, ChipBrain sold identical units for $2.40 per unit, and as of April 30, 2022 and 2021, the

units owned by the Company are valued at $1,704,480.

May 2020, the Company entered a consulting contract with a related party, Zelgor Inc.

(“Zelgor”), which allowed the Company

to receive up to 1,400,000 shares of common stock of Zelgor in return for consulting services.

The Company earned 1,050,000 shares in

the quarter ended July 31, 2020 and 350,000 shares in the quarter ending October 31, 2020.

The Zelgor shares are valued at $1.00 per

share based on a sales price of $1.00 per share on an online funding portal, resulting in revenues of $1,400,000 for the year ended April

January 2, 2020, the Company entered a consulting contract with Deuce Drone LLC (“Drone”), which allowed the Company to receive

up to 2,350,000 membership interest units of Drone in return for consulting services.

The Company earned all 2,350,000 membership interest

units in fiscal 2020.

The Drone units are valued at $0.35 per unit based on a sales price of $0.35 per unit when the units were earned,

Drone subsequently sold identical Drone units for $1.00 per unit on an online funding portal.

2019, the Company entered a consulting contract with KingsCrowd LLC (“KingsCrowd”), which allowed the Company to receive

The Drone units were valued at $0.35 per unit based on a sales price of $0.35 per unit when the units were earned,

Drone subsequently sold identical Drone units for $1.00 per unit on an online funding portal and as of April 30, 2022 and

2021, the units owned by the Company are valued at $2,350,000

August 2019, the Company entered a consulting contract with KingsCrowd LLC (“KingsCrowd”), which allowed the Company to receive

300,000 membership interest units of KingsCrowd in return for consulting services.

4 unchanged sentences

KingsCrowd filed a Form 1-A Offering Statement under

the Securities Act of 1933.

In connection with the conversion to a corporation, each membership interest unit converted into 12.71915

shares of common stock.

As of April 30, 2021, the Company owns 3,815,745 shares of KingsCrowd Inc.

The selling price of the stock is

set at $1.00 per share in the preliminary offering circular.

the Securities Act of 1933 and is selling shares at $1.00 per share.

In connection with the conversion to a corporation, each membership

interest unit converted into 12.71915 shares of common stock.

As of April 30, 2022 and 2021, the Company owned 3,815,745 shares of KingsCrowd

Inc., valued at $3,815,745 as of April 30, 2022 and $540,000 as of April 30, 2021.

fiscal 2019, the Company entered a consulting contract with Netcapital Systems LLC (“Netcapital”), which allowed the Company

4 unchanged sentences

of the units in fiscal 2020 at a sales price of $91.15 per unit.

As of April 30, 2021, the Company owns 528 Netcapital units, at a value

20, 2020 the Company entered a consulting agreement with Vymedic, Inc.

As of April 30, 2022 and 2021, the Company owned 528 Netcapital units,

at a value of $48,128.

July 20, 2020 the Company entered a consulting agreement with Vymedic, Inc.

for a $40,000 fee over a 5-month period.

Half the fee is payable

in stock and half is payable in cash.

As of April 30, 2021, the Company earned $20,000 worth of stock.

The following

table summarizes the components of equity securities as of April 30, 2021 and 2020:

of investments

Half the fee was

payable in stock and half is payable in cash.

As of April 30, 2022 and 2021, the Company owned $20,000 worth of stock.

following table summarizes the components of equity securities as of April 30, 2022 and 2021:

Schedule of investments

April 30, 2022

April 30, 2021

Investments at cost

The above investments in equity

securities are within the scope of ASC 321.

The Company monitors the investments for any changes in observable prices from orderly transactions.

Netcapital Systems LLC

Watch Party LLC

ChipBrain LLC

C-Reveal Therapeutics LLC

Deuce Drone LLC

Hiveskill LLC

Caesars Media Group Inc.

Kingscrowd Inc.

above investments in equity securities are within the scope of ASC 321.

The Company monitors the investments for any changes in observable

prices from orderly transactions.

All investments are initially measured at cost and evaluated for impairment.

Impairment expense of $0 and $185,952 was recognized in

the years ended April 30, 2021 and 2020, respectively.

The Company identified that two securities, ChipBrain LLC and Deuce Drone LLC,

that had an observable price change.

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.

No impairment expense

was recognized in the years ended April 30, 2022 and 2021.

In fiscal 2022, the Company identified that Kingscrowd Inc.

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, ChipBrain LLC and Deuce Drone LLC.

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.

Business Acquisition

November 2, 2021, the owners of ValuCorp Inc.

(“ValuCorp”), a business valuation firm, formed a new company MSG Development

(“MSG”) and transferred most of the assets of ValuCorp to MSG.

The Company entered into an exchange agreement (“Agreement”)

whereby the Company received 100% of the outstanding shares of MSG in exchange for 75,000 shares of common stock of the Company.

shares of the Company’s common stock were issued in December 2021 and four annual installments of 6,250 shares are due over the

next four years.

Company finalized the allocation of the purchase price of the assets acquired in the purchase of MSG.

The value assigned to the professional

practice was derived using multi-period excess earnings methods under the income approach.

This approach estimates the excess earnings

generated over the lives of the customers that existed as of the acquisition date and discounts such earnings to present value.

The customers,

the business practice and other intangible assets are deemed to have a useful life of fifteen years and will be amortized on a straight-line

basis over the useful life.

assets were less than 20% of the value of the Company’s assets and the Company’s investment in MSG is less than 20% of the

Company’s market value.

Furthermore, the revenue and operating income of MSG’s predecessor, ValuCorp, for the prior two years,

is less than 20% of the revenue and operating income of the Company.

Upon evaluation of the components of the business combination, including

the relative voting rights in the combined entity, the composition of the governing body and senior management of the combined entity,

the relative size of each entity and the terms of the exchange of equity interests, the Company recorded the transaction in the third

quarter of fiscal 2022 as a purchase.

following table summarizes the value of the consideration for MSG and the amounts of the assets acquired in conjunction with the Agreement.

MSG had no liabilities.

Schedule of Merger agreement

Total consideration:

75,000 shares

of common stock of the Company

Recognized amounts of identifiable assets acquired:

Professional practice intangible

Technology-related intangibles

Marketing-related intangibles

Computer-related intangibles

Customer-related intangibles

Contract-related intangibles

Human capital and artistic-related intangibles

Total identifiable net assets

fair value of the common shares issued as the consideration for MSG was determined by the most recent closing price of the Company’s

common shares at the time the shares were issued.

Seven identifiable intangible assets were valued, as noted in the above table (the

“Intangible Assets”).

The estimated market value of the Intangible Assets on the date of purchase was $1,000,000, and the

value of the 75,000 shares of common stock of the Company, payable as consideration was $9.77 per share, or $732,750.

The value of the

Intangible Assets has been recorded at an aggregate value of $732,750.

of MSG’s revenues and earnings are included in the Company’s consolidated income statements through the day of closing of

November 8, 2021.

The consolidated income statements for the year ended April 30, 2022, include $250,100 in revenues from MSG for the

period November 8, 2021 to April 30, 2022.

MSG was a newly formed company with no operations when it was purchased.

It had intangible

assets that were contributed by its founder (the “Founder”) and no liabilities.

Consequently, there are no supplemental pro

forma revenues and earnings to report.

In conjunction with the purchase of MSG, the Company retained the Founder, who is a valuation

professional, to operate the business.

The parties agreed that Founder shall receive the first $360,000 in gross profits per year as

his compensation, that the Company would receive the next $720,000 per year in gross profits and any gross profits beyond $1,080,000

per year shall be split one-third to the Founder and two-thirds to the Company.

August 23, 2020, the Company entered into an Agreement and Plan of Merger (“Agreement”) whereby Netcapital Systems LLC (“Systems”)

1 unchanged sentence

Pursuant to the requirements of this agreement, the Company filed a definitive information

statement on September 21, 2020 to change the Company’s c orporate

name from ValueSetters, Inc.

to Netcapital Inc and to a mend the Company’s Articles of Incorporation

to effect a stock combination, or reverse stock split, pursuant to which 2,000 shares of the Company’s common stock would be exchanged

for one new share of common stock.

In conjunction with the merger agreement, the Company issued 1,666,360 to Systems on November 5, 2020.

The Agreement

is a tax-free merger of Netcapital Funding Portal Inc.

(“FP”), a wholly owned subsidiary of Systems, with Netcapital Acquisition

Vehicle Inc., an indirect wholly owned subsidiary of the Company, wherein FP was the surviving corporation.

This transaction is designed

to enhance the Company’s revenues and ability to provide services to democratize the private capital markets while helping companies

at all stages to build, grow and fund their businesses with a full range of services from strategic advice to raising capital.

of the transaction, the company is expected to be a leading provider of private capital transactions for entrepreneurs seeking to raise

money under the exemption provided by section 4(a)(6) of the Securities Act of 1933, which allows private companies to raise up to $5

million every 12 months.

ASC 805-10-25-4

statement on Form 14C on September 21, 2020 to change the Company’s corporate name from ValueSetters, Inc.

to Netcapital Inc.

to amend the Company’s Articles of Incorporation to effect a stock combination, or reverse stock split, pursuant to which 2,000

shares of the Company’s common stock would be exchanged for one new share of common stock.

In conjunction with the merger agreement,

the Company issued 1,666,360 shares of common stock to Systems on November 5, 2020.

Agreement was a tax-free merger of Netcapital Funding Portal Inc.

(“FP”), a wholly owned subsidiary of Systems, with Netcapital

Acquisition Vehicle Inc., an indirect wholly owned subsidiary of the Company, wherein FP was the surviving corporation.

This transaction

was designed to enhance the Company’s revenues and ability to provide services to democratize the private capital markets while

helping companies at all stages to build, grow and fund their businesses with a full range of services from strategic advice to raising

As a result of the transaction, the Company is expected to be a leading provider of private capital transactions for entrepreneurs

seeking to raise money under the exemption provided by section 4(a)(6) of the Securities Act of 1933, which allows private companies

to raise up to $5 million every 12 months.

805-10-25-4 requires the identification of one of the combining entities in each business combination as the acquirer.

Upon evaluation of the components

of the business combination, including the relative voting rights in the combined entity, the composition of the governing body and senior

management of the combined entity, the relative size of each entity and the terms of the exchange of equity interests, the Company recorded

the transaction in the third quarter of fiscal 2021 as a purchase.

In conjunction with the purchase, Systems agreed to vote all of its

shares of common stock to support the resolutions of the existing board of directors of the Company.

The following

table summarizes the value of the consideration for FP and the amounts of the assets acquired and liabilities assumed in conjunction

Upon evaluation

of the components of the business combination, including the relative voting rights in the combined entity, the composition of the governing

body and senior management of the combined entity, the relative size of each entity and the terms of the exchange of equity interests,

the Company recorded the transaction in the third quarter of fiscal 2021 as a purchase.

In conjunction with the purchase, Systems agreed

to vote all of its shares of common stock to support the resolutions of the existing board of directors of the Company.

following table summarizes the value of the consideration for FP and the amounts of the assets acquired and liabilities assumed in conjunction

with the Agreement.

of Merger agreement

Schedule of Merger agreement

Consideration:

1,666,360 shares of common stock of the Company

of promissory notes and interest

consideration

Recognized amounts of identifiable

assets acquired and liabilities assumed:

Payment of promissory notes and interest

Total consideration

Recognized amounts of identifiable assets acquired, and liabilities

Current assets

3 unchanged sentences

Platform issuers

identifiable net assets

value of the common shares issued as the consideration for FP was determined by the most recent (the prior day’s) closing price

of the Company’s common shares at the time the shares were issued.

The fair value of the assets and the liabilities of FP equaled

their book value.

Unpatented technology

Total identifiable net assets

fair value of the common shares issued as the consideration for FP was determined by the most recent (the prior day’s) closing

price of the Company’s common shares at the time the shares were issued.

The fair value of the assets and the liabilities of FP

equaled their book value.

Four identifiable intangible assets were valued;

9 unchanged sentences

from comparing the FP Intangible Assets to the values recorded by funding portal offerings of FP’s competitors in public filings

via Regulations CF and Regulation A.

of purchase price over the total identifiable tangible net assets of $344,810 ,

leaves an aggregate value of $14,803,954 to be assigned to the Intangible Assets.

The estimated value of the $27,800,000

of Intangible Assets is allocated on a percentage

basis in the above table to equal $14,803,954 .

FP’s revenues and earnings are included in the Company’s consolidated income statements through the day of closing of November

via Regulation CF and Regulation A.

excess of purchase price over the total identifiable tangible net assets of $344,810, leaves an aggregate value of $14,803,954 to be

assigned to the Intangible Assets.

The estimated value of the $27,800,000 of Intangible Assets is allocated on a percentage basis in

the above table to equal $14,803,954.

of FP’s revenues and earnings are included in the Company’s consolidated income statements through the day of closing of

November 5, 2020.

The consolidated income statements for the year ended April 30, 2021 include $834,981 in revenues from FP.

If the entities had

been combined for the two reporting periods, the supplemental pro forma revenues and earnings are as follows:

of Pro forma revenue and earnings

pro forma for 4/1/20 – 11/04/20

Supplemental pro forma

for 4/1/19 – 11/04/19

If the entities

had been combined for the two reporting periods, the supplemental pro forma revenues and earnings are as follows:

Schedule of Pro forma revenue and earnings

Supplemental pro forma for 4/1/20 – 11/04/20

Supplemental pro forma for 4/1/19 – 11/04/19

in the supplemental pro forma information above is revenue earned by the Company from Netcapital Systems LLC of $ 18,646

2 unchanged sentences

respectively.

quarter the Company reviews events and circumstances to determine if impairment of indefinite-lived intangible assets is indicated.

the years ended April 30, 2022 and 2021, we did not identify any triggering events or circumstances, including impacts due to COVID-19,

which would indicate an impairment of indefinite-lived intangible assets.

Subsequent Events

evaluated subsequent events through the date these financial statements were available to be issued.

2, 2021, the Company loaned $50,000

to a related party.

The unpaid principal balance

on the note is subject to an interest rate of 5 %

per annum and matures on June

30, 2021, the Company loaned $50,000

to a related party.

The unpaid principal balance

on the note is subject to an interest rate of 8 %

per annum and matures on June

Company issued 361,736 shares of its common stock as payment of $3,523,462 of supplemental consideration that was owed to its affiliate,

Netcapital Systems Inc.

The 361,736 shares of common stock include an aggregate of 32,458 shares of common stock, that paid off liabilities

totaling $316,130, that were made to a company controlled by a member of the board of managers of Netcapital Systems LLC and to an individual

2021, the Company completed an offering for gross proceeds of $1,592,400

in conjunction with the sale of restricted shares

of common stock at a price of $9.00

A total of 176,934

shares of common stock were issued.

Company evaluated subsequent events through the date these financial statements were available to be issued.

July 14, 2022, the Company paid in full two outstanding convertible promissory notes and accrued interest payable totaling $310,192 by

the issuance of 93,432 shares of common stock of the Company.

The Company also issued 39,901 shares of common stock to pay off the $294,054

balance of supplemental consideration due to Netcapital Systems LLC.

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

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

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

The warrants have a per share exercise price of $5.19, are exercisable immediately, and expire five years from the date of issuance.

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, the Company 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.

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

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 9A. Controls and Procedures