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Item 1A. Risk Factors

2023-07-26 compared with 2022-08-08 · 712 added, 698 removed, 24 unchanged (98% of the section changed)

in our securities involves a high degree of risk.

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

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

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

We cannot assure you that any of the events discussed in

the risk factors below will not occur.

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

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

If any of such

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

you could lose all or part of your investment.

Related to Our Business and Growth Strategy

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

in other companies.

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

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

were incorporated in the State of Utah in April 1984.

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

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

These securities have observable

prices but are not liquid.

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

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

competitive environment in which we will operate.

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

will maintain profitability.

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

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

For the year ended April 30, 2022,

the Company had one customer that constituted 22% of its revenues, a second customer that constituted 22% of its revenues, and

a third customer that constituted 18% of its revenues.

RISK FACTORS.

Certain factors

may have a material adverse effect on our business, financial condition, and results of operations.

You should consider carefully the

risks and uncertainties described below, in addition to other information contained in this Annual Report on Form 10-K, including our

consolidated financial statements and related notes.

The risks and uncertainties described below are not the only ones we face.

risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that

adversely affect our business.

If any of the following risks actually occurs, our business, financial condition, results of operations,

and future prospects could be materially and adversely affected.

In that event, the trading price of our common stock could decline, and

you could lose part or all of your investment.

Risks Related to Our Need for Additional Capital

We will need to raise

additional funding, which may not be available on acceptable terms, or at all.

Failure to obtain this necessary capital when needed may

force us to delay, limit or terminate operations.

Our cash balances at April

30, 2023 and July 25, 2023 were $569,441 and $1,256,200, respectively.

We will need to raise additional capital following the date of

this report through the offering of additional equity and/or debt securities and/or the sale of equity positions in certain portfolio

companies for which Netcapital Advisors provides marketing and strategic advice.

In the event that we are not able to raise additional

working capital through these methods, we do not expect that our cash on hand will be sufficient to fund our current operations for the

next 12 months.

Our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional

funds sooner than planned, through public or private equity or debt financings, government or other third-party funding or a combination

of these approaches.

Raising funds in the current economic environment may present additional challenges.

Even if we believe we have sufficient

funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific

strategic considerations.

Any additional fundraising

efforts may divert our management from their day-to-day activities.

In addition, we cannot guarantee that future financing will be available

in sufficient amounts or on terms acceptable to us, if at all.

Moreover, the terms of any financing may adversely affect the holdings

or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such

issuance, may cause the market price of our shares of common stock to decline.

The sale of additional equity or convertible securities

may dilute our existing stockholders.

The incurrence of indebtedness would result in increased fixed payment obligations, and we may be

required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability

to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct

our business.

We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage

than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise

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

Risks Related to Our Business and Growth Strategy

We have a limited operating history and our

profits have been generated primarily by unrealized gains from equity securities we own in other companies.

Although we have been profitable,

the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently

encountered by a small developing company.

We were incorporated in the State of Utah

in April 1984.

Although we have reported earnings in the years ended April 30, 2023 and 2022, the majority of our earnings came from

unrealized gains in equity securities that we own.

These securities have observable prices but are not liquid.

Furthermore, the likelihood

of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by

a small developing company starting a new business enterprise and the highly competitive environment in which we will operate.

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

We have substantial customer concentration,

with a limited number of customers accounting for a substantial portion of our revenues.

We currently derive a significant

portion of our revenues from a limited number of customers.

For the year ended April 30, 2023, the Company had one customer that constituted

30% of its revenues, a second customer that constituted 15% of its revenues, a third customer that constituted 14% of its revenues

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

There are inherent risks whenever a large percentage of total revenues

are concentrated with a limited number of customers.

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

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

or new customers.

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

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

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

operate in a regulatory environment that is evolving and uncertain.

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

The regulations that govern our operations have

been in existence for a very few years.

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

to changing the regulatory environment.

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

Further, existing

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

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

operate in a highly regulated industry.

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

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

As a funding portal we have to comply with stringent

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

some cases fines.

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

some of our business plans.

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

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

2013 and 2016, respectively.

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

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

platform), or determine alternative methods of financing.

Investors may decide to invest their money elsewhere.

Further, our potential

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

Success will likely be a factor of investing

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

changes in the regulatory environment.

have an evolving business model.

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

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

alternative trading system.

25% of its revenues, and four customers that each constituted 14% of its revenues.

For the year ended April 30, 2022, the Company had

one customer that constituted 22% of its revenues, a second customer that constituted 22% of its revenues, and a third customer that constituted

18% of its revenues.

There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of

It is not possible for us to predict the future level of demand for our services that will be generated by these customers

or new customers, or the future demand for the products and services of these customers or new customers.

If any of these customers

experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we

charge for our products which could have an adverse effect on our margins and financial position and could negatively affect our revenues

and results of operations and/or trading price of our common stock.

We operate in a regulatory environment

that is evolving and uncertain.

The regulatory framework for online capital

formation or crowdfunding is very new.

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

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

New laws and regulations

could be adopted in the United States and abroad.

Further, existing laws and regulations may be interpreted in ways that would impact

our operations, including how we communicate and work with investors and the companies that use our services and the types of securities

that our clients can offer and sell on our platform.

We operate in a highly regulated industry.

We are subject to extensive regulation and failure

to comply with such regulation could have an adverse effect on our business.

Further, our subsidiary Netcapital Funding Portal Inc is

registered as a funding portal.

As a funding portal we have to comply with stringent regulations, and the operation of our funding portal

is frequently subject to examination, constraints on its business, and in some cases fines.

In addition, some of the restrictions and

rules applicable to our subsidiary could adversely affect and limit some of our business plans.

Our funding portal’s service offerings

are relatively new in an industry that is still quickly evolving .

The principal securities regulations that we

work with, Rule 506(c) and Reg CF, have only been in effect in their current form since 2013 and 2016, respectively.

Our ability to continue

to penetrate the market remains uncertain as potential issuer companies may choose to use different platforms or providers (including,

in the case of Rule 506(c) and Regulation A, using their own online platform), or determine alternative methods of financing.

may decide to invest their money elsewhere.

Further, our potential market may not be as large, or our industry may not grow as rapidly

as anticipated.

Success will likely be a factor of investing in the development and implementation of marketing campaigns, repeat business

from both issuer companies and investors, and favorable changes in the regulatory environment.

We have an evolving business model.

Our business model is one of innovation, including

continuously working to expand our product lines and services to our clients.

For example, we are evaluating an expansion into the broker-dealer

space as well as our foray into becoming an alternative trading system.

It is unclear whether these services will be successful.

Further, we continuously try to offer additional

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

From time to time, we may also modify

aspects of our business model relating to our service offerings.

We cannot offer any assurance that these or any other modifications

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

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

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

may be liable for misstatements made by issuers.

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

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

information that could make the statements misleading.

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

such as our subsidiary.

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

would prevail.

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

cause us reputational harm that would negatively impact our business.

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

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

Any involvement we may have, including

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

compliance is focused on U.S.

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

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

We have not researched all the applicable

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

It is possible that we may

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

Any violation of

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

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

cash flow is reliant on one main type of service.

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

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

time to time, we may also modify aspects of our business model relating to our service offerings.

We cannot offer any assurance that these

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

We may not be able to manage growth effectively,

which could damage our reputation, limit our growth, and negatively affect our operating results.

We may be liable for misstatements made by issuers.

Under the Securities Act and the Securities

Exchange Act of 1934 (the “Exchange Act”), issuers making offerings through our funding portal may be liable for inappropriate

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

liability may also extend in Reg CF offerings to funding portals, such as our subsidiary.

Even though due diligence defenses may be available,

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

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

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

Moreover, even if we are not

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

Any involvement

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

Our compliance is focused on U.S.

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

Some of the investment opportunities posted

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

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

set up our structure to be compliant with foreign laws.

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

in fines or penalties as well as reputational harm.

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

in accessing money from those investors, and compliance with those laws and regulations may limit our business operations and plans for

future expansion.

Our cash flow is reliant on one main

type of service.

Most of our cash-flow generating services are variants

on one type of service:

providing a platform for online capital formation.

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

As such, any downturn in the market could have

a material adverse effect of our business and financial condition.

depend on key personnel and face challenges recruiting needed personnel.

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

Funding Portal Inc.

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

Our software engineer team,

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

in a highly regulated industry.

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

needed for our business needs.

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

we require to operate and be innovative.

are vulnerable to hackers and cyber attacks.

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

that utilize our platform.

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

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

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

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

and materially negatively impact our financial condition and business.

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

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

Any change in this

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

This change may cause us delays as well as additional

costs in transitioning our technology.

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

Our revenues are therefore dependent upon the market for online

capital formation.

As such, any downturn in the market could have a material adverse effect of our business and financial condition.

We depend on key personnel and face challenges

recruiting needed personnel.

Our future success depends on the efforts of a small

number of key personnel, including the founder of our subsidiary, Netcapital Funding Portal Inc., our Chief Executive Officer, Chief Financial

Officer, and our compliance, engineering and marketing teams.

Our software engineer team, as well as our compliance team and our marketing

team are critical to continually innovate and improve our products while operating in a highly regulated industry.

In addition, due to

the specialized expertise required, we may not be able to recruit the individuals needed for our business needs.

There can be no assurance

that we will be successful in attracting and retaining the personnel we require to operate and be innovative.

We are vulnerable to hackers and cyber

As an internet-based business, we may be vulnerable

to hackers who may access the data of our investors and the issuer companies that utilize our platform.

Further, any significant disruption

in service on our funding portal platform or in our computer systems could reduce the attractiveness of our platform and result in a loss

of investors and companies interested in using our platform.

Further, we rely on a third-party technology provider to provide some of

our back-up technology as well as act as our escrow agent.

Any disruptions of services or cyber-attacks either on our technology provider,

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

Our funding portal relies on one escrow agent

to hold investment commitments for issuers.

We currently rely on First Citizens Bank to provide

all escrow services related to offerings on our platform.

Any change in this relationship will require us to find another escrow agent

and escrow bank.

This change may cause us delays as well as additional costs in transitioning our technology.

We are not allowed to operate

our funding portal business without a qualified third-party escrow bank.

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

As such, if our relationship with our escrow agent

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

of operations.

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

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

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

wholly owned subsidiary, Netcapital Funding Portal Inc.

has licensed the technology necessary to operate our funding portal from

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

As such, if our relationship with our escrow agent is terminated, we may have difficulty finding a replacement which could have a material

adverse effect on our business and results of operations.

If our wholly owned subsidiary, Netcapital Funding

Portal Inc., fails to comply with its obligations under the license agreement with Netcapital Systems LLC under which the technology to

operate our funding portal is licensed to Netcapital Funding Portal Inc., we could lose rights necessary to operate our funding portal

which are important to our business.

Our wholly owned subsidiary, Netcapital Funding Portal

has licensed the technology necessary to operate our funding portal from our majority stockholder, Netcapital Systems LLC, of which

Frishman owns a 29% interest.

These rights are extremely important

to our business.

These rights are extremely important to our business.

If Netcapital Funding Portal Inc.

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

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

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

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

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

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

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

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

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

In addition, any failure

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

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

results of operations.

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

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

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

Funding Portal Inc.

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

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

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

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

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

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

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

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

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

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

For all of these early-stage companies,

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

our investments in early-stage companies.

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

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

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

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

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

devices eclipse the Internet as a viable channel.

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

for access to the Internet sites that we operate.

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

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

As a result, we may

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

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

are dependent on general economic conditions.

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

Investment dollars are disposable

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

Adverse national and international

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

our ability to continue operations.

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

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

face significant market competition.

facilitate online capital formation.

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

likely new entrants into the market.

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

competitive advantages.

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

some established broker-dealers.

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

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

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

Additionally, some

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

and operations.

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

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

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

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

entrenched positions in the market with name-brand recognition.

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

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

Such companies may be able to attract

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

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

results and financial condition.

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

until the business is capable of making such payments.

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

Our Lender holds a term note bearing

interest at an annual rate of 8%.

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

We have a loan and security

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

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

lien on all of the assets of the Company.

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

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

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

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

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

or make any material capital expenditures.

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

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

Any such action would have

a material adverse effect on our business and prospects.

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

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

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

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

Any failure to comply with the covenants included

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

If we were unable to

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

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

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

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

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

Therefore, we will be dependent upon additional

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

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

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

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

operating performance and investor sentiment.

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

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

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

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

or licensing arrangements.

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

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

other preferences that adversely affect your rights as a stockholder.

Any indebtedness we incur could involve restrictive covenants,

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

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

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

price of our common stock to decline.

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

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

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

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

fails to comply

with any obligations under this license agreement, such license agreement may be subject to termination in whole or in part, which could

severely impact our ability to operate our funding portal which would have a material adverse effect on our business, financial position,

and results of operations.

In addition, disputes may arise regarding the technology

subject to a license agreement, including:

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

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

the ownership

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

Disputes over technology under the license agreement

with Netcapital Systems LLC may prevent or impair our ability to maintain our current license agreement on acceptable terms, and we may

be unable to successfully operate our funding portal.

In addition, any failure of Netcapital Systems LLC to service the technology subject

to the license agreement or to operate its website could result in our inability to operate our funding portal which would have a material

adverse effect on our business, financial condition, and results of operations.

Netcapital Systems LLC relies on third-party

software for the technology subject to the license agreement with Netcapital Funding Portal Inc.

that may be difficult to replace

or which could cause errors or failures of our funding portal.

Netcapital Systems

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

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

Any loss by Netcapital

Systems LLC of the right to use any of this software could significantly increase our expenses and otherwise result in delays in the provisioning

of our funding portal until equivalent technology is either developed by us or Netcapital Systems LLC, or, if available, is identified,

obtained, and integrated, which could harm our business.

Any errors or defects in third-party software could result in errors or a failure

of our funding portal which could harm our business.

Our strategy to purchase a portion of

early-stage companies may provide us with investments that have no liquidity.

It is our strategy to sometimes purchase,

at an affordable price, part or all of early-stage companies and cross pollinate the ideas, technology and expertise within these companies

to enhance the operations, profits and market share of all the entities.

That strategy may result in us diverting management attention

and advisory resources to do work for early-stage companies that pay for the work with equity, which becomes impaired in value or never

becomes a liquid asset.

For all of these early-stage companies, the future liquidity and value of our investments cannot be guaranteed,

and no market may exist for us to generate gains from our investments in early-stage companies.

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

The growth of Internet usage has caused frequent

interruptions and delays in processing and transmitting data over the Internet.

There can be no assurance that the Internet infrastructure

or the Company’s own network systems will continue to be able to support the demands placed on it by the continued growth of the

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

The Internet’s viability could be affected

if the necessary infrastructure is not sufficient, or if other technologies and technological devices eclipse the Internet as a viable

End-users of our software depend on Internet

Service Providers (“ISPs”), online service providers and our system infrastructure for access to the Internet sites that

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

difficulties due to system failures, stability or interruption.

As a result, we may not be able to meet a level of service that we have

promised to our subscribers, and we may be in breach of our contractual commitments, which could materially adversely affect our business,

revenues, operating results and financial condition.

We are dependent on general economic conditions.

Our business model is dependent on investors investing

in the companies presented on our platforms.

Investment dollars are disposable income.

Our business model is thus dependent on national

and international economic conditions.

Adverse national and international economic conditions may reduce the future availability of investment

dollars, which would negatively impact our revenues and possibly our ability to continue operations.

It is not possible to accurately

predict the potential adverse impacts on the Company, if any, of current economic conditions on its financial condition, operating results

and cash flow.

We face significant market competition.

We facilitate online capital formation.

is a new market, we compete against a variety of entrants in the market as well as new entrants into the market.

Some of these follow

a regulatory model that is different from ours and might provide them competitive advantages.

New entrants could include those that may

already have a foothold in the securities industry, including some established broker-dealers.

Further, online capital formation is not

the only way to address helping start-ups raise capital, and the Company has to compete with a number of other approaches, including traditional

venture capital investments, loans and other traditional methods of raising funds and companies conducting crowdfunding raises on their

own websites.

Additionally, some competitors and future competitors may be better capitalized than us, which would give them a significant

advantage in marketing and operations.

Moreover, as we continue to expand our offerings,

we will continue to face headwinds and compete with companies that are more established and/or have more financial resources than we do

and/or new entrants bringing disruptive technologies and/or ideas.

Intense competition could prevent us

from increasing our market share and growing our revenues.

We compete with a number of public and private

companies and most of our competitors have significant financial resources and occupy entrenched positions in the market with name-brand

We also face challenges from new Internet sites that aim to attract subscribers who seek to play interactive games or invest

in public or private securities.

Such companies may be able to attract significantly more subscribers because of new marketing ideas and

user interface concepts.

Increased competition from current and future

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

We may require additional financing in the future

to fund our operations.

We may need additional capital in the future to continue

to execute our business plan.

Therefore, we will be dependent upon additional capital in the form of either debt or equity to continue

our operations.

At the present time, we do not have arrangements to raise all of the needed additional capital, and we will need to identify

potential investors and negotiate appropriate arrangements with them.

Our ability to obtain additional financing will be subject to a

number of factors, including market conditions, our operating performance and investor sentiment.

If we are unable to raise additional

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

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

market ourselves.

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

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

requiring the dedication

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

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

requiring a substantial

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

opportunities;

limiting the ability

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

and other activities;

limiting the flexibility

in planning for, or reacting to, changes in the business and industry in which we operate;

capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue our operations.

Raising additional capital may cause dilution

to our stockholders, restrict our operations or require us to relinquish certain rights.

We may seek additional capital through a combination

of equity offerings, debt financings, strategic collaborations and alliances or licensing arrangements.

To the extent that we raise additional

capital through the sale of equity, convertible debt securities or other equity-based derivative securities, your ownership interest will

be diluted and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

Any indebtedness

we incur could involve restrictive covenants, such as limitations on our ability to incur additional debt, acquire or license intellectual

property rights, declare dividends, make capital expenditures and other operating restrictions that could adversely impact our ability

to conduct our business.

Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such

issuance, may cause the market price of our common stock to decline.

If we raise additional funds through strategic collaborations and

alliances or licensing arrangements with third parties, or otherwise agree to terms unfavorable to us, any of which may have a material

adverse effect on our business, operating results and prospects.

Adequate additional financing may not be available to us on acceptable

terms, or at all.

Our debt level could negatively impact our financial

condition, results of operations and business prospects.

As of April 30, 2023, we had approximately $2,735,800

of principal indebtedness outstanding and we have borrowed money on three occasions from the SBA.

Our level of debt could have significant

consequences to our shareholders, including the following:

requiring the dedication of

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

capital, capital expenditures and other general business activities;

requiring a substantial portion

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

limiting the ability to obtain

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

limiting the flexibility in

planning for, or reacting to, changes in the business and industry in which we operate;

increasing our vulnerability

to both general and industry-specific adverse economic conditions;

putting us at a

competitive disadvantage vs.

putting us at a competitive

disadvantage vs.

less leveraged competitors;

increasing vulnerability

to changes in the prevailing interest rates.

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

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

Our business may not generate sufficient cash flow in the future

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

expand our operations.

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

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

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

We may not be able

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

debt obligations.

may make acquisitions or form joint ventures that are unsuccessful.

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

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

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

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

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

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

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

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

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

services that meet customer demands.

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

of operations and financial condition may be materially adversely affected.

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

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

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

We believe it is important to

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

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

There is a high demand for highly trained and managerial

staff members.

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

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

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

health epidemics or outbreaks could adversely impact our business.

The extent to which the coronavirus impacts our operations

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

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

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

an adverse impact on our business and our financial results.

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

be in the future.

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

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

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

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

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

and future trademarks and patents.

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

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

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

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

increasing vulnerability to

changes in the prevailing interest rates.

Our ability to make payments of principal and interest,

or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors.

Our business may not generate sufficient cash flow in the future to service our debt because of factors beyond our control, including

but not limited to our ability to market our products and expand our operations.

If we are unable to generate sufficient cash flows,

we may be required to adopt one or more alternatives, such as restructuring debt or obtaining additional equity capital on terms that

may be onerous or highly dilutive.

Our ability to refinance our indebtedness will depend on the capital markets and our financial condition

at such time.

We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result

in a default on our debt obligations.

We may make acquisitions or form joint ventures

that are unsuccessful.

Our ability to grow is partially dependent on our

ability to successfully acquire other companies, which creates substantial risk.

In order to pursue a growth by acquisition strategy successfully,

we must identify suitable candidates for these transactions;

however, because of our limited funds, we may not be able to purchase those

companies that we have identified as potential acquisition candidates.

Additionally, we may have difficulty managing post-closing issues

such as the integration into our corporate structure.

Integration issues are complex, time consuming and expensive and, without proper

planning and implementation, could significantly disrupt our business, including, but not limited to, the diversion of management's attention,

the loss of key business and/or personnel from the acquired company, unanticipated events, and legal liabilities.

Our future growth depends on our ability to

develop and retain customers.

Our future growth depends to a large extent on our

ability to effectively anticipate and adapt to customer requirements and offer services that meet customer demands.

If we are unable to

attract new customers and/or retain new customers, our business, results of operations and financial condition may be materially adversely

We will need to attract, train and retain additional

highly qualified senior executives and technical and managerial personnel in the future.

We continue to seek technical and managerial staff

members, although we have limited resources to compensate them until we have raised additional capital or developed a business that generates

consistent cash flow from operations.

We believe it is important to negotiate with potential candidates and, if appropriate, engage them

on a part-time basis or on a project basis and compensate them at least partially, with stock-based compensation, when appropriate.

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

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

on our business.

Major health epidemics, such as the outbreak

caused by the COVID-19 pandemic, and other outbreaks or unforeseen or catastrophic events could continue to disrupt and adversely affect

our operations, financial condition and business.

Public health epidemics or outbreaks could adversely

impact our business.

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

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

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

In particular, the spread and treatment of the coronavirus globally could

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

To date, our business has

not been impacted by COVID-19 but it could be in the future.

We may not be able to protect all of our intellectual

Our profitability may depend in part on our ability to effectively

protect our proprietary rights, including obtaining trademarks for our brand names, protecting our products and websites, maintaining

the secrecy of our internal workings and preserving our trade secrets, as well as our ability to operate without inadvertently infringing

on the proprietary rights of others.

There can be no assurance that we will be able to obtain future protections for our intellectual

property or defend our current trademarks and future trademarks and patents.

Further, policing and protecting our intellectual property

against unauthorized use by third parties is time-consuming and expensive, and certain countries may not even recognize our intellectual

property rights.

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

technologies.

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

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

revenues and profits are subject to fluctuations.

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

Our revenues and profits are subject to fluctuations.

It is difficult to accurately forecast our revenues

and operating results, and these could fluctuate in the future due to a number of factors.

These factors may include adverse changes in:

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

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

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

The Company's operating results may

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

At times, these fluctuations may be significant

and could impact our ability to operate our business.

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

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

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

Our business operations are subject to interruption by natural disasters,

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

Although we maintain crisis management and disaster response

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

for our services.

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

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

portion of the U.S.

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

The extent of the impact of

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

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

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

be predicted.

number of investors and amount of investors’ dollars, the success of world securities markets, general economic conditions, our

ability to market our platform to companies and investors, headcount and other operating costs, and general industry and regulatory conditions

and requirements.

The Company's operating results may fluctuate from year to year due to the factors listed above and others not listed.

At times, these fluctuations may be significant and could impact our ability to operate our business.

Natural disasters and other events beyond our

control could materially adversely affect us.

Natural disasters or other catastrophic events may

cause damage or disruption to our operations, international commerce and the global economy, and thus could have a strong negative effect

Our business operations are subject to interruption by natural disasters, fire, power shortages, pandemics and other events beyond

Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for

us to deliver our services to our customers and could decrease demand for our services.

Since the spring of 2020, large segments of the

and global economies were impacted by COVID-19, a significant portion of the U.S.

population were subject to “stay at home”

or similar requirements.

The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments,

including the duration and spread of the outbreak, impact on our customers (both issuers using our services and investors investing on

our platform) and our sales cycles, impact on our customer, employee or industry events, and effect on our vendors, all of which are uncertain

and cannot be predicted.

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

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

employment numbers, as well as the business prospects

of many small business (our potential clients).

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

the investments made through our platform and services.

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

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

While our business

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

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

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

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

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

entities that are integrated into our operations;

employment numbers, as well as the business prospects of

many small businesses (our potential clients).

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

made through our platform and services.

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

However, to date,

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

While our business has not yet been impacted by COVID-19,

to the extent COVID-19 continues and limits investment capital or personally impacts any of our key employees, it may have a significant

impact on our results and operations.

Acquisitions may have unanticipated

consequences that could harm our business and our financial condition.

Any acquisition that we pursue, whether successfully

completed or not, involves risks, including:

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

that are integrated into our operations;

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

4 unchanged sentences

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

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

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

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

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

to data loss, litigation, liability and reputational damage.

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

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

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

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

If a person were able to circumvent

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

Any security breach

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

publicity could significantly harm our reputation.

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

personal data.

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

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

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

These include, but are not limited

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

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

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

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

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

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

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

The potential risk of security breaches and

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

Further, data privacy is subject

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

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

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

liability or impairment to our reputation in the marketplace.

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

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

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

other interested persons.

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

and accessibility of information dissemination.

Many social media platforms immediately publish the content their subscribers

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

Information posted on such platforms

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

The dissemination of information via social media could

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

Future acquisitions may be accomplished through a

cash purchase transaction, the issuance of our equity securities or a combination of both, could result in potentially dilutive issuances

of our equity securities, the incurrence of debt and contingent liabilities and impairment charges related to goodwill and other intangible

assets, any of which could harm our business and financial condition.

If we do not effectively protect our customers’

credit and debit card data, or other personal information, we could be exposed to data loss, litigation, liability and reputational damage.

In connection with credit and debit card sales, we

transmit confidential credit and debit card information by way of secure online networks.

Although we use private networks, third parties

may have the technology or know-how to breach the security of the customer information transmitted in connection with credit and debit

card sales, and our security measures and those of our technology vendors may not effectively prohibit others from obtaining improper

access to this information.

If a person were able to circumvent these security measures, he or she could destroy or steal valuable information

or disrupt our operations.

Any security breach could expose us to risks of data loss, litigation and liability and could seriously disrupt

our operations and any resulting negative publicity could significantly harm our reputation.

We could be harmed by improper disclosure or

loss of sensitive or confidential Company, employee, associate or customer data, including personal data.

In connection with the operation of our business,

we plan to store, process and transmit data, including personal and payment information, about our employees, customers, associates and

candidates, a portion of which is confidential and/or personally sensitive.

Unauthorized disclosure or loss of sensitive or confidential

data may occur through a variety of methods.

These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation,

or unauthorized access to or through our information systems, whether by our employees or third parties, including a cyberattack by computer

programmers, hackers, members of organized crime and/or state-sponsored organizations, who may develop and deploy viruses, worms or other

malicious software programs.

Such disclosure, loss or breach could harm our reputation

and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential

information, resulting in increased costs or loss of revenues.

It is possible that security controls over sensitive or confidential data

and other practices we and our third-party vendors follow may not prevent the improper access to, disclosure of, or loss of such information.

The potential risk of security breaches and cyberattacks may increase as we introduce new services and offerings, such as mobile technology.

Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions

in which we provide services.

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

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

result in legal liability or impairment to our reputation in the marketplace.

Failure to recognize, respond to and effectively

manage the accelerated impact of social media could adversely impact our business.

In recent years, there has been a marked increase

in the use of social media platforms, including blogs, chat platforms, social media websites, and other forms of Internet based communications

which allow individuals access to a broad audience of consumers and other interested persons.

The rising popularity of social media and

other consumer-oriented technologies has increased the speed and accessibility of information dissemination.

Many social media platforms

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

Information posted on such platforms at any time may be adverse to our interests and/or may be inaccurate.

The dissemination of information

via social media could harm our business, reputation, financial condition, and results of operations, regardless of the information’s

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

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

Failure by us to use social

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

in brand value, customer visits and revenue.

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

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

malicious dissemination of false information.

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

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

of operations.

Related to Receipt of Securities for Services

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

Investment Company Act of 1940, as amended,

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

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

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

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

Among other things, such rules limit or

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

In addition, social media is frequently used to communicate

with our customers and the public in general.

Failure by us to use social media effectively or appropriately, particularly as compared

to our brands’ respective competitors, could lead to a decline in brand value, customer visits and revenue.

Other risks associated

with the use of social media include improper disclosure of proprietary information, negative comments about our brands, exposure of personally

identifiable information, fraud, hoaxes or malicious dissemination of false information.

The inappropriate use of social media by our

customers or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation and

adversely affect our results of operations.

Risks Related to Receipt of Securities for Services

We are not, and do not intend to become, regulated

as an investment company under the U.S.

Investment Company Act of 1940, as amended, or the 40 Act, (and similar legislation in other jurisdictions)

and if we are deemed an “investment company” under the 40 Act applicable restrictions would make it impractical for us to

operate as contemplated.

The 40 Act and the rules thereunder (and similar legislation

in other jurisdictions) provide certain protections to investors and impose certain restrictions on companies that are registered as investment

Among other things, such rules limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and

equity securities and impose certain governance requirements.

We have not been and do not intend to become regulated as an investment

company and we intend to conduct our activities so we will not be deemed to be an investment company under the 40 Act (and similar legislation

in other jurisdictions).

In order to ensure that we are not deemed to be an investment company, we may be required to materially restrict

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

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

Moreover, if anything were to

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

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

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

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

Our consulting and advisory services are primarily

paid for in restricted shares of stock of our customers, which are often private companies with no established trading market for their

For our consulting and advisory services, payment

is often made through equity securities of customers instead of cash.

The securities issued are in private companies with no established

trading market for their securities.

In the absence of a trading market, we may be unable to liquidate our investment, which will result

in the loss of our investment.

Risk Factors Related to our Common Stock

Concentration of ownership

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

As of July 26 2023, Netcapital

Systems LLC, our largest stockholder, beneficially owned, in the aggregate, approximately 18.2% of our outstanding shares of common stock.

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

the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions.

could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval

of certain transactions difficult or impossible without the support of these stockholders.

There can be no assurance that we will be able

to comply with Nasdaq’s continued listing standards, a failure of which could result in a delisting of our common stock and warrants .

Nasdaq requires that the trading price of a company’s

listed stock on Nasdaq remain above one dollar in order for such stock to remain listed.

If a listed stock trades below one dollar for

more than 30 consecutive trading days, then it is subject to delisting from Nasdaq.

In addition, to maintain a listing on Nasdaq, we must

satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and

independent committee requirements, minimum stockholders’ equity, and certain corporate governance requirements.

If we are unable

to satisfy these requirements or standards, we could be subject to delisting, which would have a negative effect on the price of our common

stock and warrants and would impair your ability to sell or purchase our common stock when you wish to do so.

In the event of a delisting,

we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such

action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common

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

requirements.

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

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

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

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

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

Moreover, if anything were to happen

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

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

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

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

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

companies with no established trading market for their securities.

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

The securities

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

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

Factors Related to our Common Stock

Concentration

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

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

outstanding shares of common stock.

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

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

and approval of significant corporate transactions.

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

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

support of these stockholders.

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

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

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

remain listed.

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

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

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

equity, and certain corporate governance requirements.

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

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

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

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

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

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

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

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

could cause the price of our common stock to decline .

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

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

We recently sold a substantial number

of shares of our common stock and warrants to purchase common stock in a public offering, which could cause the price of our common stock

In our May 2023 offering, we sold 1,100,000 shares

of common stock.

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

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

We cannot predict the

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

will have on the market price of our common stock.

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

effect on the price in the market of a warrant.

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

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

the foreseeable future.

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

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

Since we do not pay dividends, and

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

or receive any payment on your investment.

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

investment even if we are successful in our business operations.

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

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

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

pro rata ownership and depress our stock price.

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

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

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

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

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

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

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

Some factors that may cause the market price

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

in this prospectus, are:

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

of our competitors;

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

failure to accelerate user growth or new issuer growth;

failure to meet investor or analyst expectations;

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

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

in the consumer spending environment;

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

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

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

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

stockholders;

dividend policy;

in the market valuations of other fintech companies;

by stockholders;

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

announcements

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

joint ventures or other strategic initiatives;

loss of a key member of management.

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

individual companies.

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

that develops for it.

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

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

changes in expectations about our business,

our creditworthiness or investor confidence generally;

or actions by stockholders and others seeking to influence our business

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

action securities litigation against those companies.

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

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

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

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

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

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

to certain exceptions.

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

(a) that a broker or dealer

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

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

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

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

(a) obtain financial information

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

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

the risks of transactions in penny stocks.

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

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

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

determination;

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

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

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

our common stock.

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

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

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

Finally, monthly statements have

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

penny stocks.

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

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

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

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

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

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

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

As a result, fewer

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

resell shares of our common stock and warrants.

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

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

volume could decline.

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

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

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

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

or warrants would likely decline.

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

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

or trading volume to decline.

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

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

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

our 2021 Equity Incentive Plan.

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

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

compliance with complicated U.S.

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

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

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

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

Act, and, following this offering, Nasdaq rules.

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

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

results of operations and financial condition.

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

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

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

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

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

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

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

and governance practices.

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

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

from business operations to compliance activities.

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

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

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

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

We cannot predict the effect, if any, that

market sales of those shares of common stock or the availability of those shares of common stock for sale will have on the market price

of our common stock.

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

We do not expect to pay dividends and

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

We have not paid any dividends on our common

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

Consequently, you will only

realize an economic gain on your investment in our common stock if the price appreciates.

You should not purchase our common stock expecting

to receive cash dividends.

Since we do not pay dividends, then you may have a limited ability to liquidate or receive any payment on your

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

our business operations.

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

our ability to expand our business operations.

We may conduct future offerings of our

common stock and pay debt obligations with our common stock which may diminish our investors’ pro rata ownership and depress our

We reserve the right to make future offers

and sales, either public or private, of our securities, including shares of our common stock or securities convertible into common stock

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

In the event that any such future sales of securities are affected

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

be reduced to the extent of any such future sales.

The market price of our common stock is highly

volatile and could be subject to volatility related or unrelated to our operations.

You should consider an investment in our securities

to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuations in the market

value of your investment.

Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks

mentioned in this “Risk Factors” section and elsewhere in this prospectus, are:

actual or anticipated fluctuations in quarterly funding portal revenues or operating results, whether in our operations or in those of our competitors;

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

our failure to accelerate user growth or new issuer growth;

any failure to meet investor or analyst expectations;

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

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

changes in the consumer spending environment;

terrorist acts;

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

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

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

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

our dividend policy;

changes in the market valuations of other fintech companies;

actions by stockholders;

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

announcements by us or our competitors of new locations, technological advances, significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives;

a loss of a key member of management.

The stock markets in general have experienced substantial

volatility that has often been unrelated to the operating performance of individual companies.

These broad market fluctuations may adversely

affect the trading price of our common stock in any market that develops for it.

In addition, our stock price may be influenced by trading

activity in our common stock as a result of market commentary (including commentary that may be unreliable or incomplete in some cases);

changes in expectations about our business, our creditworthiness or investor confidence generally;

or actions by stockholders and others

seeking to influence our business strategies.

In the past, following periods of volatility in the

market price of a company’s securities, stockholders have instituted class action securities litigation against those companies.

Such litigation, if instituted, could result in substantial costs and a diversion of management attention and resources, which would significantly

harm our profitability and reputation.

FINRA sales practice requirements may limit

a stockholder’s ability to buy and sell our securities.

In addition to the “penny stock” rules

described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable

grounds for believing that the investment is suitable for that customer.

Prior to recommending speculative, low-priced securities to their

non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status,

tax status, investment objectives and other information.

The FINRA requirements may make it more difficult for broker-dealers to recommend

that their customers buy our common stock or our warrants, which may have the effect of reducing the level of trading activity in our

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

ability to resell shares of our common stock and warrants.

If securities or industry analysts do not publish

or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our securities

adversely, the price of our common stock or warrants and trading volume could decline.

The trading market for our common stock may be influenced

by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors.

any of the analysts who may cover us change their recommendation regarding our securities adversely, or provide more favorable relative

recommendations about our competitors, the price of our common stock or warrants would likely decline.

If any analyst who may cover us

was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which

in turn could cause the price of our common stock or warrants or trading volume to decline.

Our issuance of common stock upon the exercise

of options granted under our 2023 Omnibus Equity Incentive Plan may dilute all other stockholders.

We have issued options to purchase 1,950,000 shares

of common stock under our 2023 Omnibus Equity Incentive Plan and we expect to issue options to purchase the remaining 50,000 shares of

common stock in the future to officers, directors, employees and consultants under our 2023 Omnibus Equity Incentive Plan.

Any such issuances

of common stock underlying stock options may cause stockholders to experience dilution of their ownership interests and the per share

value of our common stock to decline.

Our compliance with complicated U.S.

concerning corporate governance and public disclosure is expensive and diverts management’s attention from our core business, which

could adversely affect our business, results of operations, and financial condition.

As a publicly reporting company, we are faced with

expensive, complicated and evolving disclosure, governance and compliance laws, regulations and standards relating to corporate governance

and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Act, and Nasdaq rules.

As a result of the complexity involved

in complying with the applicable rules and regulations, our management’s attention may be diverted from other business concerns,

which could harm our business, results of operations and financial condition.

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

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

In addition, changing laws, regulations and standards

relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial

compliance costs, and making some activities more time-consuming.

These laws, regulations and standards are subject to varying interpretations,

in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance

is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs

necessitated by ongoing revisions to disclosure and governance practices.

We intend to invest substantial resources to comply with evolving

laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s

time and attention from business operations to compliance activities.

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

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

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

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

cause our financial reports to be inaccurate.

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

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

This assessment includes disclosure of any material weaknesses

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

Although we prepare our financial statements in

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

standards applicable to companies with publicly traded securities.

If we fail to implement any required improvements to our disclosure

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

sanction or investigation.

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

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

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

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

permitted by Utah law.

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

into with our directors and officers provide that:

we will indemnify

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

the fullest extent permitted by Utah law.

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

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

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

we may, in our discretion,

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

we are required

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

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

to indemnification;

we will not be obligated

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

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

to indemnification;

the rights conferred

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

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

we may not retroactively

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

on liability and indemnification matters.

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

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

certain exceptions.

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

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

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

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

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

STAFF COMMENTS

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

Failure to maintain

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

reports to be inaccurate.

We are required pursuant

to Section 404 of the Sarbanes-Oxley Act, or Section 404, to maintain internal control over financial reporting and to assess and report

on the effectiveness of those controls.

This assessment includes disclosure of any material weaknesses identified by our management in

our internal control over financial reporting.

Although we prepare our financial statements in accordance with accounting principles generally

accepted in the United States, our internal accounting controls may not meet all standards applicable to companies with publicly traded

If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to report

control deficiencies in which case, we could become subject to regulatory sanction or investigation.

Further, these outcomes could damage

investor confidence in the accuracy and reliability of our financial statements.

Claims for indemnification by our directors

and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available

Our articles of incorporation and bylaws provide that

we will indemnify our directors and officers, in each case to the fullest extent permitted by Utah law.

In addition, as permitted by the Utah Business Corporation

Act, our bylaws and the indemnification agreements that we have entered into with our directors and officers provide that:

we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Utah law.

Utah law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

we will not be obligated pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors, or Board, or brought to enforce a right to indemnification;

the rights conferred in our bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons;

we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

Limitations on liability and indemnification

As permitted by the corporate laws of the state of

Utah, our articles of incorporation include a provision to eliminate the personal liability of our directors for monetary damages for

breach or alleged breach of their fiduciary duties as directors, subject to certain exceptions.

In addition, our bylaws provide that we

are required to indemnify our officers and directors under certain circumstances, including those circumstances in which indemnification

would otherwise be discretionary, and we will be required to advance expenses to our officers and directors as incurred in connection

with proceedings against them for which they may be indemnified.

If we are required to indemnify, both for the costs of their defense

in any action or to pay monetary damages upon a finding of a court or in any settlement, our business and financial condition could be

materially and adversely affected.

UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by Rule

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

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

What changed 10-K

Item 1A. Risk Factors