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Item 9A. Controls and Procedures

2023-07-26 compared with 2022-08-08 · 1914 added, 1402 removed, 309 unchanged (91% of the section changed)

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

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

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

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

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

30, 2022, such controls and procedures were effective.

Management’s Assessment of Internal Control over Financial Reporting

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

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

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

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

purposes in accordance with generally accepted accounting principles.

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

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

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

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

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

reporting was effective as of April 30, 2022.

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

internal control over financial reporting.

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

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

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

Changes in Internal Control over Financial Reporting

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

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

to materially affect, our internal control over financial reporting.

(a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation

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

effectiveness of the Company’s disclosure controls and procedures (as defined in SEC Rule 13a-15(e)) as of April 30, 2023.

on that evaluation, the PEO and the PFO concluded that, as of April 30, 2023, such controls and procedures were effective.

(b) Management’s Assessment of Internal Control

over Financial Reporting

Management is responsible for establishing and maintaining

adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f).

internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of

management, including the PEO and the PFO, the Company’s management has evaluated the effectiveness of its internal control over

financial reporting as of April 30, 2023, based on the criteria established in a report entitled “2013 Internal Control - Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission” and the interpretive guidance issued by

the Commission in Release No.

Based on this evaluation, the Company’s management has evaluated and concluded

that the Company’s internal control over financial reporting was effective as of April 30, 2023.

This annual report does not include an attestation

report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

Company’s registered public accounting firm was not required to issue an attestation on its internal controls over financial reporting

pursuant to the rules of the SEC.

The Company will continue to evaluate the effectiveness of internal controls and procedures

on an ongoing basis.

There have been no changes in our internal controls

over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the quarter

ended April 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial

OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

and Executive Officers

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

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

executive officers and directors are as follows:

of the Board, President and Chief

Executive Officer

Financial Officer

of Netcapital Funding Portal Inc.

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

and qualified.

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

been removed from office.

Officers and Directors

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

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

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

Lenk has specialized in technology and health care.

Formerly Vice President of Technology and Digital Design at Decision Resources

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

business processes.

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

online research.

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

and major non-profit organizations.

DISCLOSURE REGARDING FOREIGN

JURISDICTIONS THAT PREVENT INSPECTIONS.

Not Applicable.

DIRECTORS, EXECUTIVE OFFICERS

AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The following table and biographical summaries set

forth information, including principal occupation and business experience, about our directors and executive officers as of July 26, 2023.

Our executive officers and directors are as follows:

Director Since

President and Chief

Executive Officer, Director

Director, CEO of Netcapital Advisors Inc.

Secretary and Director

November 2022

Coreen Kraysler

Chief Financial Officer

September 2017

Jason Frishman

Founder of Netcapital Funding Portal Inc.

November 2020

Our directors serve in such capacity until the first

annual meeting of our shareholders and until their successors have been elected and qualified.

Our officers serve at the discretion of

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

Executive Officers and Directors

Martin Kay, Director and Chief Executive Officer

Martin Kay has served as a Director of the

Company since May 2022 and as our Chief Executive Officer since January 2023.

He was formerly a Managing Director at Accenture Strategy,

a position he held from October 2015 until December 2022 and holds a BA in physics from Oxford University and an MBA from Stanford University

Graduate School of Business.

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

business and technology.

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

Systems LLC from 2017 – 2021.

Cecilia Lenk, Director and CEO of Netcapital Advisors

Cecilia Lenk has served as a director since July 2017.

She served as our Chief Executive Officer from July 2017 to January 2023 and currently serves as the Chief Executive Officer of our wholly

owned subsidiary, Netcapital Advisors Inc.

Prior to that, she worked as a self-employed business consultant and a town councilor in Watertown,

MA for five years.

Lenk has specialized in technology and health

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

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

Prior to joining Decision Resources, Cecilia

founded a technology firm that built a patented platform for online research.

She has managed large-scale technology projects for leading

corporations, universities, government agencies, and major non-profit organizations.

Lenk has a Ph.D.

in Biology from Harvard University and a B.A.

in Biology from Harvard University

from Johns Hopkins University in Geography and Environmental Engineering.

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

She is currently on

the Alumni Advisory Board for the Hopkins School of Engineering.

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

finance, and operating skills.

Kay, Director

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

Kay is currently a Managing Director at Accenture Strategy, a

position he has held since October 2015.

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

Graduate School of Business.

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

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

Liss, Director and Secretary

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

From August 2009 to present, he has served as the

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

Prior to founding Liss Law, he worked as a judicial

law clerk for the Honorable Stephen S.

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

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

Geary, Director

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

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

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

From 2008 to 2009, he was the Chief Executive Officer

of ImproveSmart, Inc.

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

Officer from June 2008 to December 2009.

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

Kraysler, CFA, Chief Financial Officer

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

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

Formerly a Senior Vice President and Principal

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

Investment Committee.

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

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

received a B.A.

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

Frishman, CEO of Netcapital Funding Portal Inc.

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

and serves as a mentor and advisor for early stage companies

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

He currently holds advisory

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

University of Michigan, YPO, and others.

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

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

laude with a B.S.

She has served on a number of non-profit boards,

including Chair of the Johns Hopkins Engineering Alumni.

She is currently on the Alumni Advisory Board for the Hopkins School of Engineering.

Lenk brings to our Board key leadership experience

in high-growth technology companies and possesses a strong mix of strategic, finance, and operating skills.

Avi Liss, Director and Secretary

Avi Liss has served as a Director and Secretary of

the Company since August 2010.

From August 2009 to present, he has served as the President of Liss Law, LLC, a law firm specializing in

real estate conveyances.

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

Mitchell, a bankruptcy

court judge for the Eastern District of Virginia.

Liss is well qualified to serve as a director

of the company due to his knowledge and working experience with legal governance matters.

Steven Geary, Director

Steven Geary has served as a Director of the Company

since June 2006.

Since 2009, he has served in several management positions at Statera and is currently the Vice President of Strategy

and Business Development.

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

From April 2006 to June 2008, he

served as our President and Chief Operating Officer, and as our Chief Executive Officer from June 2008 to December 2009.

Geary has significant business development and

brand marketing expertise in consumer products and services.

Arnold Scott, Director

Arnold Scott has served as a Director of the

Company since December 2022.

In addition, Mr.

Scott currently serves as a founding member of the Boston Chapter of the Private Directors

Association, a position he has held since 2020.

Previously, he served as a director of ChipBrain, a position he held from 2021 -

2022, a director and Vice Chairman of First Commons Bank from 2008-2017, as a director of Perillon Software from 2015-2019 and as a manager

on the board of managers of Netcapital Systems LLC from 2017 - 2020, an affiliate and shareholder of Netcapital Inc.

he previously has served as a member of the board of trustees of Alderson Broaddus University from 2013 to 2020.

He has also served on

several advisory boards including Vestmark, Successimo, ai Resources, and The Capital Network.

Coreen Kraysler, CFA, Chief Financial Officer

Coreen Kraysler has served as the Chief Financial Officer of the Company

since September 2017.

Kraysler is a CFA Charterholder with over 30 years

of investment experience.

Formerly a Senior Vice President and Principal at Independence Investments, she managed several 5-star rated

mutual funds as well as institutional accounts and served on the Investment Committee.

She also worked at Eaton Vance as a Vice President,

Equity Analyst on the Large and Midcap Value teams.

A specialist in financial services, household and consumer products, she guest lectures

at local colleges and universities.

She received a B.A.

in Economics and French, cum laude, from Wellesley College and a Master of Science

in Management from MIT Sloan.

Jason Frishman, Founder of Netcapital Funding Portal

Jason Frishman is the Founder and former Chief

Executive Officer of our funding portal subsidiary, Netcapital Funding Portal Inc.

Frishman founded Netcapital Funding Portal Inc.

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

He currently holds advisory positions at leading

organizations in the financial technology ecosystem and has spoken as an external expert at Morgan Stanley, University of Michigan,

YPO, and others.

Frishman has a background in the life sciences and previously conducted research in medical oncology at the Dana

Farber Cancer Institute and cognitive neuroscience at the University of Miami, where he graduated summa cum laude with a B.S.

in Neuroscience.

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

resignation or removal.

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

Relationships

are no family relationships among our directors or officers.

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

Currently, the board

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

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

common stock is currently quoted on the Nasdaq Capital Market.

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

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

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

between Officers and Directors

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

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

in Certain Legal Proceedings

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

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

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

Meetings and Committees;

Term of Office

All our directors will hold office until their successors

have been elected and qualified or appointed or the earlier of their death, resignation or removal.

Executive officers are appointed and

serve at the discretion of the Board.

Family Relationships

There are no family relationships among our directors

Board Composition

Our bylaws provide that the size of our Board will

be determined from time to time by resolution of our Board.

Currently, the Board comprises five members, three of whom qualify as “independent”

directors under any applicable standard.

Election of Directors

Our bylaws provide that members of our board or directors

will be elected by a majority vote of our stockholders.

Director Independence

Our common stock is currently quoted on the

Nasdaq Capital Market.

Nasdaq Rule 5065(b) requires that “[a] majority of the board of directors must be comprised of Independent

Directors as defined in Rule 5605(a)(2).” Pursuant to these requirements, Avi Liss, Arnold Scott, and Steven Geary are independent

members of our Board.

Arrangements between Officers and Directors

Except as set forth herein, to our knowledge,

there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which the officer or

director was selected to serve as an officer or director.

Involvement in Certain Legal Proceedings

We are not aware of any of our directors or

officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings

(other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation S-K.

Board Meetings and Committees;

Management Matters

Company’s Board has three standing Nasdaq compliance committees:

Board Committees

The Company’s Board has three standing Nasdaq

compliance committees:

Audit, Compensation, and Nominating and Corporate Governance.

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

Our audit committee consists of Avi Liss, Arnold

Scott, and Steven Geary.

Each of the committees operates pursuant to its charter.

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

If appropriate, and in consultation

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

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

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

fiscal year ended April 30, 2022.

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

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

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

be paid to our executive officers and directors.

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

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

as required by the Securities and Exchange Commission.

This committee had no meetings in fiscal 2022.

and Corporate Governance Committee

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

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

recommendations to the Board regarding corporate governance issues;

(iii) identifies and evaluates candidates to serve as our

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

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

(v) selects or recommends

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

annual meeting of shareholders;

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

This committee held no meetings in fiscal 2022.

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

Each of the members of our Audit Committee is an independent

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

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

board has also determined that Mr.

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

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

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

systems and our legal and regulatory compliance.

Our Audit Committee also:

the work of our independent auditors;

the hiring, discharging and compensation of our independent auditors;

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

the qualifications, independence and performance of the independent auditors;

our financial statements and our critical accounting policies and estimates;

the adequacy and effectiveness of our internal controls;

our policies with respect to risk assessment and risk management;

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

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

and our publicly filed reports.

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

of the SEC and the listing requirements of Nasdaq.

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

which is located at www.netcapitalinc.com

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

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

We have filed a copy

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

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

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

See the section

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

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

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

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

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

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

www.netcapitalinc.com.

of liability and indemnification matters

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

permitted by Utah law.

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

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

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

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

as determined by our Board.

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

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

action or proceeding.

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

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

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

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

They may also reduce the likelihood

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

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

16(a) Beneficial Ownership Reporting Compliance

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

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

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

Officers, directors and 10% Shareholders

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

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

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

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

Avi Liss failed to timely report 1 transaction

Avi Liss failed to report his insider status

on time on a Form 3.

Steven Geary failed to report his insider status

on time on a Form 3.

Steven Geary failed to timely report 1 transaction

Martin Kay failed to report his insider status

on time on a Form 3.

The committee charters are reviewed annually by the

Nominating and Corporate Governance Committee.

If appropriate, and in consultation with the chairs of the other committees, the Nominating

and Corporate Governance Committee may propose revisions to the charters.

The responsibilities of each committee are described in more

detail below.

Our Board committees took actions by written consent on three occasions

during the fiscal year ended April 30, 2023.

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

or the Board.

Compensation Committee

Our Compensation Committee consists of Avi Liss, Arnold

Scott, and Steven Geary.

The Compensation Committee oversees our compensation

policies, plans and programs, and to review and determine the compensation to be paid to our executive officers and directors.

the Compensation Committee has the authority to act on behalf of the Board in fulfilling the Board’s responsibilities with respect

to compensation-based and related disclosures in filings as required by the Securities and Exchange Commission.

This committee took action

by written consent on two occasions during the fiscal year ended April 30, 2023.

Nominating and Corporate Governance Committee

Our Nominating and Governance Committee consists of

Avi Liss, Arnold Scott, and Steven Geary.

The Nominating and Corporate Governance Committee

(i) oversees our corporate governance functions on behalf of the Board;

(ii) makes recommendations to the Board regarding corporate governance

(iii) identifies and evaluates candidates to serve as our directors consistent with the criteria approved by the Board and reviews

and evaluates the performance of the Board;

(iv) serves as a focal point for communication between director candidates, non-committee

directors and management;

(v) selects or recommends to the Board for selection candidates to the Board, or, to the extent required below,

to serve as nominees for director for the annual meeting of shareholders;

and (vi) makes other recommendations to the Board regarding

affairs relating to our directors.

This committee took actions by written consent on fifteen occasions during the fiscal year ended April

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

Audit Committee

Our Audit Committee members consist of Arnold Scott,

Avi Liss and Steven Geary.

Each of the members of our Audit Committee is an independent director under the Nasdaq listing rules, satisfies

the additional independence criteria for Audit Committee members and satisfies the requirements for financial literacy under the Nasdaq

listing rules and Rule 10A-3 of the Exchange Act, as applicable.

Our board has also determined that Mr.

Geary qualifies

as an Audit Committee financial expert within the meaning of the applicable rules and regulations of the SEC and satisfies the financial

sophistication requirements of the Nasdaq listing rules.

Our Audit Committee oversees our corporate accounting

and financial reporting process and assists our Board in monitoring our financial systems and our legal and regulatory compliance.

Audit Committee also:

work of our independent auditors;

hiring, discharging and compensation of our independent auditors;

approves engagements

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

qualifications, independence and performance of the independent auditors;

financial statements and our critical accounting policies and estimates;

adequacy and effectiveness of our internal controls;

policies with respect to risk assessment and risk management;

monitors our policies and procedures relating to related person transactions;

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

publicly filed reports.

Our Audit Committee operates under a written charter

approved by our Board and that satisfies the applicable rules and regulations of the SEC and the listing requirements of Nasdaq.

is available on the corporate governance section of our website, which is located at www.netcapitalinc.com

Code of Ethics

We have adopted a Code of Ethics and Business Conduct

applicable to our directors, officers and employees, in accordance with Section 406 of the Sarbanes-Oxley Act, the rules of the SEC promulgated

thereunder, and the Nasdaq listing rules.

We have filed a copy of our form of the Code of Ethics and Business Conduct as an exhibit to

the registration statement on Form S-1/A filed on April 8, 2022.

You will be able to review this document by accessing our public filings

at the SEC’s website at www.sec.gov.

In addition, a copy of the Code of Ethics and Business Conduct will be provided without charge

upon request from us.

If we make any amendments to our Code of Ethics and Business Conduct other than technical, administrative or other

non-substantive amendments, or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics and Business Conduct

applicable to our principal executive officer, principal financial officer principal accounting officer or controller or persons performing

similar functions requiring disclosure under applicable SEC or Nasdaq rules, we will disclose the nature of such amendment or waiver in

a Current Report on Form 8-K.

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

requirements, on our website, www.netcapitalinc.com.

Limitation of liability and indemnification matters

Our articles of incorporation contain provisions that

limit the liability of our directors for monetary damages to the fullest extent permitted by Utah law.

Consequently, our directors will

not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, unless the director

engaged in gross negligence, willful misconduct or intentional infliction of harm on the corporation or its shareholders, or an intentional

violation of criminal law.

We have entered and expect to continue to enter into

agreements to indemnify our directors, executive officers and other employees as determined by our Board.

With specified exceptions, these

agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and

settlement amounts incurred by any of these individuals in any action or proceeding.

We believe that these provisions in our articles

of incorporation and the indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

The limitation of liability and indemnification provisions

included in our articles of incorporation may discourage stockholders from bringing a lawsuit against our directors and officers for breach

of their fiduciary duty.

They may also reduce the likelihood of derivative litigation against our directors and officers, even though

an action, if successful, might benefit us and our stockholders.

Further, a stockholder’s investment may be adversely affected to

the extent that we pay the costs of settlement and damage.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act of 1934, requires

our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities (“10%

Shareholders”), to file with the Commission initial reports of ownership and reports of changes in ownership of our common stock

and other equity securities.

Officers, directors and 10% Shareholders are required by Commission regulation to furnish us with copies

of all Section 16(a) forms they file.

To our knowledge, based solely upon a review of Form

3, 4, and 5 filed with the SEC during the fiscal year ended April 30, 2023, we believe that, except as set forth below, our directors,

executive officers, and greater than 10% Shareholders have complied with all applicable filing requirements for the fiscal year ended

April 30, 2023.

Avi Liss failed to timely report one transaction on a Form 4, which report has now been filed.

Steven Geary failed to timely report two transactions on a Form 4, which reports have now been filed.

Arnold Scott failed to timely report one transaction on a Form 4, which report has now been filed.

Cecilia Lenk failed to timely report one transaction on a Form 4, which report has now been filed.

EXECUTIVE COMPENSATION.

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

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

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

Summary Compensation Table

The following table sets forth, for the fiscal years

indicated, all compensation awarded to, earned by or paid to Martin Kay, our CEO (since January 3, 2023), Cecilia Lenk, our former chief

executive officer (until January 3, 2023), Coreen Kraysler, our CFO, Carole Murko, our former Chief Marketing Officer and Jason Frishman,

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

Executive Officers, or NEOs.

Executive Compensation Table

We have no other executive officers.

Summary Executive Compensation Table

Change in pension value and nonqualified

Martin Kay, CEO ( Since January 3, 2023 )

Cecilia Lenk CEO ( until January 3, 2023 and CEO of Netcapital Advisors since January 3, 2023 )

Kraysler, CFO

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

Jason Frishman, CEO Netcapital Funding Portal

Represents the dollar amount of vested equity

awards during the fiscal year.

Murko received severance of $7,384.50 and

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

Equity Awards At End Of 2022

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

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

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

Jason Frishman,

Founder, (and former CEO of Netcapital Funding Portal, until February 9, 2023)

Represents the dollar amount of

vested equity awards during the fiscal year.

Murko received

severance of $7,384.50 and her 8,885 unvested shares vested upon termination, both pursuant to a separation agreement.

Outstanding Equity Awards At End Of 2023

The following table provides information about outstanding

stock options issued by the Company held by each of our NEOs as of April 30, 2023.

None of our NEOs held any other equity awards from

the Company as of April 30, 2023.

Option Awards

Unexercisable

Number of Shares of Stock That Has Not Yet Vested

Market Value of Stock that has not Yet Vested

Coreen Kraysler

Jason Frishman

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

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

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

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

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

as a director of the Company

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

Each Named Executive Officer

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

In addition to base pay, Carole Murko earned commissions

on certain transactions.

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

Prior to the termination

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

Agreement with Cecilia Lenk

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

Lenk as our President

and Chief Executive Officer.

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

The Agreement provides for an annual base salary

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

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

or the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Lenk agreed to non-compete and non-solicit

terms under her agreement.

Agreement with Coreen Kraysler

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

Kraysler as our Chief

Financial Officer.

Director Compensation

We have not paid any cash compensation to our directors

in their capacity as such.

On February 9, 2022, we issued to each of our then

three independent board members, options to purchase 5,000 shares of common stock under the 2021 Equity Incentive Plan which will be exercisable

at a per share exercise price of $10.50, that was out-of-the-money at time of issuance and expires ten years after the date of grant.

On April 25, 2023, we granted to each of our three

current independent board members, options to purchase 20,000 shares of common stock under the 2023 Omnibus Equity Incentive Plan which

will be exercisable at a per share exercise price of $1.40, that was out-of-the-money at time of issuance and expires ten years after

the date of grant.

We issued Avi Liss 10,000 shares of our common stock

valued at $7.50 per share on November 18, 2021 in consideration of his services as a director of the Company.

Officer Compensation

We pay each of our Named Executives Officers a combination

of a cash salary and equity awards for their services.

Employment Agreements

We currently have employment agreements with Martin

Kay and Coreen Kraysler.

Prior to the resignations of Cecilia Lenk on January 3, 2023 and Jason Frishman on February 9, 2023, we and our

Netcapital Funding Portal subsidiary had employment agreements with each of them, respectively.

Cecilia Lenk is currently the Chief Executive

Officer of our wholly owned subsidiary and Jason Frishman holds the position of Founder of Netcapital Inc.

The former employment agreements

of Cecilia Lenk and Jason Frishman are described below.

Prior to the termination of Carole Murko on January 7, 2022, we had an employment

agreement with her as described below:

Employment Agreement with Martin Kay

We entered into an employment agreement with Martin

Kay on January 3, 2023, pursuant to which we employ Mr.

Kay as our Chief Executive Officer.

Under the Employment Agreement, Mr.

eligible to (a) receive an annual base salary of $300,000;

(b) receive an option grant to purchase 100,000 fully vested shares of the

Company pursuant to the 2023 Plan and an option grant to purchase 1,000,000 shares of the Company, which vest monthly over four (4) years

pursuant to an option award agreement, described below, and in each case subject to the 2023 Plan;

salary in the discretion of the Board or compensation committee;

(d) receive .005 times the gross revenue paid in cash annually so long

as the Company reports positive earnings after the bonus is paid;

(d) participate in the Company’s fringe benefits, health and welfare

plans, and pension and/ or profit sharing plans provided to executives;

(e) receive reimbursement for all reasonable business expenses;

and f) receive sick leave, sick pay, and disability benefits in accordance with Company policy.

Kay’s employment agreement,

which has a three-year term, may be terminated upon the occurrence of the death of Mr.

Kay, at any time by Mr.

Kay, by the Company due

to disability, by the Company for “cause”, and by Mr.

Kay for “good reason”.

Kay’s employment agreement

also contains provisions regarding, among other things, a six (6)-month non-competition provision, confidential information, governing

law, and covenants governing Mr.

Kay’s conduct.

Employment Agreement with Cecilia Lenk

We entered into an employment agreement with Cecilia

Lenk on June 23, 2022 pursuant to which we employed Ms.

Lenk as CEO of our wholly owned subsidiary.

The term of her agreement ends on

June 23, 2025.

The agreement provided for an annual base salary during the term of the agreement of $96,000, which was increased to $150,000

upon completion of a public offering in July 2022.

Lenk was eligible for periodic bonuses or for additional salary in addition to

her base salary, as may be determined by our board of directors or the compensation committee.

The agreement also contained the following material

eligible to participate in all employee fringe benefits and any pension and/or profit share plans;

eligible to participate

in any medical and health plans;

entitled to sick leave, sick pay and disability benefits;

entitled to reimbursement for all reasonable

and necessary business expenses.

Lenk agreed to non-compete and non-solicit terms under her agreement.

Employment Agreement with Coreen Kraysler

We entered into an employment agreement with Coreen

Kraysler on June 23, 2022 pursuant to which we employ Ms.

Kraysler as our Chief Financial Officer.

The term of her agreement ends on June

The agreement provides for an annual base salary during the

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

Kraysler is eligible

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

the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Kraysler agreed to non-compete and

non-solicit terms under her agreement.

Agreement with Jason Frishman

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

Frishman as Chief Executive

Officer of Netcapital Funding Portal, Inc.

The agreement provides for an annual base salary during the term of the agreement of $96,000, which was increased to $150,000

upon completion of a public offering in July 2022, and increased to $225,000 in January 2023.

Kraysler is eligible for periodic bonuses

or for additional salary in addition to her base salary, as may be determined by our board of directors or the compensation committee.

The agreement also contains the following material

eligible to participate in all employee fringe benefits and any pension and/or profit share plans;

eligible to participate

in any medical and health plans;

entitled to sick leave, sick pay and disability benefits;

entitled to reimbursement for all reasonable

and necessary business expenses.

Kraysler agreed to non-compete and non-solicit terms under her agreement.

Employment Agreement with Jason Frishman

We entered into an employment agreement with Jason

Frishman on June 23 2022 pursuant to which we employed Mr.

Frishman, our Founder, as Chief Executive Officer of Netcapital Funding Portal,

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

The Agreement provides for an annual

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

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

our board of directors or the compensation committee.

agreement also contains the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to sick leave, sick pay and disability

entitled to reimbursement for all reasonable and necessary business expenses.

Frishman agreed to non-compete and

non-solicit terms under his agreement.

Agreement with Carole Murko

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

Murko as our Director

of Business Development.

The agreement was for an initial term of four years.

The agreement provided for an annual base salary

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

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

reverse stock split) of restricted stock.

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

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

agreement also contained the following material provisions:

eligible to participate in all employee fringe benefits and any pension

and/or profit share plans;

eligible to participate in any medical and health plans;

entitled to up to eight weeks of paid time

The Agreement provided for an annual base salary during the term of the agreement

of $96,000, which was increased to $150,000 upon completion of a public offering in July 2022, and increased to $225,000 in January 2023.

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

of directors or the compensation committee.

The agreement also contained the following material

eligible to participate in all employee fringe benefits and any pension and/or profit share plans;

eligible to participate

in any medical and health plans;

entitled to sick leave, sick pay and disability benefits;

entitled to reimbursement for all reasonable and necessary business

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

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

Murko resigned without “good reason”

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

Murko agreed to non-compete

and non-solicit terms under her agreement.

Payments Upon Termination Or Change In Control

the event that Ms.

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

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

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

Lenk in February 2022.

the event that Ms.

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

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

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

Kraysler in February 2022.

the event that Mr.

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

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

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

Frishman in February 2022.

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

Frishman upon termination in various circumstances.

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

agreements discussed above.

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

section above.

entitled to reimbursement for all reasonable

and necessary business expenses.

Frishman agreed to non-compete and non-solicit terms under his agreement.

Employment Agreement with Carole Murko

We entered into an employment agreement with Carole

Murko on March 10, 2020 pursuant to which we employed Ms.

Murko as our Director of Business Development.

The agreement was for an initial

term of four years.

The agreement provided for an annual base salary during the term of the agreement of $1.00 plus a commission of 20%

of the cash collected from revenues generated directly by Ms.

Murko plus an unvested grant of stock-based compensation of 12,500 shares

(after giving effect to the November 2020 1-for-2000 reverse stock split) of restricted stock.

The stock vested over a 48 month period

in equal installments of 260 shares per month.

Murko was eligible for periodic bonuses or for additional salary in addition to her

The agreement also contained the following material

eligible to participate in all employee fringe benefits and any pension and/or profit share plans;

eligible to participate

in any medical and health plans;

entitled to up to eight weeks of paid time off;

entitled to sick leave, sick pay and disability benefits;

entitled to reimbursement for all reasonable and necessary business expenses.

Murko was to be terminated for any reason other than

“cause” prior to the end of her term, then the Company will have no claim on the unvested portion of her 12,500 shares.

Murko resigned without “good reason” or retired before the end of her term, the unvested shares would have been returned

to the Company.

Murko agreed to non-compete and non-solicit terms under her agreement.

Potential Payments Upon Termination Or Change In

In the event that Ms.

Kraysler’s employment

is terminated by us for any reason other than “cause” or by Ms.

Kraysler for “good reason,” then we will have

no claims to the 20,000 and 200,000 shares of common stock underlying the stock option grant (and all unvested options under such grant

shall immediately and fully vest) issued to Ms.

Kraysler in February 2022 and January 2023, respectively.

The following table sets forth quantitative information

with respect to potential payments to be made to Ms.

Kraysler upon termination in various circumstances.

The potential payments are based

on the terms of each of the employment agreements discussed above.

For a more detailed description of Ms.

Kraysler’s employment

agreement, see the “Employment Agreements” section above.

Potential Payment

Upon Termination

Option Awards (#)

Coreen Kraysler

Jason Frishman

Represents the number

of unvested options at April 30, 2022.

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

At April 30, 2022, there

were 45 months remaining in her vesting schedule.

The potential payment of shares subject to Ms.

Lenk’s unvested options

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

Represents the number

of unvested options at April 30, 2022.

Represents the number of unvested options at April 30, 2023.

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

At April 30, 2022,

there were 45 months remaining in her vesting schedule.

At April 30, 2023, there were 33 months remaining in her vesting schedule for the options granted in February 2022 and 44 months remaining in her vesting schedule for the options granted in January 2023.

The potential payment of shares subject to Ms.

Kraysler’s unvested

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

at such time.

Represents the number

of unvested options at April 30, 2022.

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

At April 30, 2022,

there were 45 months remaining in his vesting schedule.

The potential payment of shares subject to Mr.

Frishman’s unvested

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

at such time.

Equity Incentive Plan

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

Equity compensation plans

approved by security holders

Equity compensation plans not approved by security

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

Pay Versus Performance

As required by Section 953(a)

of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(v) of Regulation S-K, we are providing the following

information about the relationship between executive compensation and certain financial performance metrics.

The disclosure included in

this section is prescribed by SEC rules and does not necessarily align with how we or the compensation committee view the link between

financial performance and the compensation actually received or realized by our named executive officers.

All information provided above

under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company

under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any

general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.

The table below presents

information on the compensation of CEO and other named executive officers in comparison to certain performance metrics for 2023 and 2022.

Martin Kay has been our CEO since January 3, 2023 and Cecilia Lenk was CEO for all of 2022 and through January 3, 2023.

These metrics

are not those that the compensation committee uses when setting executive compensation.

The use of the term Compensation Actually

Paid (CAP) is required by the rules and regulations of the SEC, and under such rules, CAP was calculated by adjusting the Summary

Compensation Table, or SCT.

Total values for the applicable year as described in the footnotes to the table.

Summary Compensation Table Total for First PEO (Cecilia Lenk) (1)

Summary Compensation Table Total for Second PEO (Martin Kay) (1)

Compensation Actually Paid to First PEO (1)

Compensation Actually Paid to Second PEO (1)

Average Summary Compensation Table Total for Non-PEO Name Executive Officers (1)(2)

Average Compensation Actually Paid to Non-PEO Name Executive Officers (3)

Value of Initial Fixed $100 Investment Based on Total Shareholder Return

The Principal Executive Officer (“PEO”) information reflected in columns (a) and (b) relates to our CEO, Cecilia Lenk (until January 3, 2023), or First PEO, and Martin Kay (from January 3.

2023 until April 30, 2023), or Second PEO.

The non-Principal Executive Officer (“non-PEO”) NEOs information reflected in columns (c) and (d) above relates to our CFO Coreen Kraysler and founder of our Netcapital Funding Portal Subsidiary, Jason Frishman.

The amounts shown in this column are the average total compensation reported for the non-PEO NEOs, as applicable, for each corresponding year in the “Total” column of the Summary Compensation.

Please refer to “Executive Compensation—Compensation Tables—Summary Compensation Table.”

The amounts shown have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually realized or received by the Company’s PEO and non-PEO NEOs.

In accordance with the requirements of Item 402(v) of Regulation S-K, adjustments were made to Ms.

Lenk’s and Mr.

Kay’s total compensation, as applicable, or the average total compensation of the non-PEO NEOs, as applicable, as described in the tables below.

First PEO (Cecilia Lenk) SCT Total to CAP Reconciliation

Summary Compensation Total

Less Stock Awards

Less Option Awards

Fair Value Adjustments to SCT Total

Second PEO (Martin Kay) SCT Total to CAP Reconciliation

Summary Compensation Total

Less Stock Awards

Less Option Awards

Fair Value Adjustments to SCT Total

Average Non-PEO NEOs SCT Total to CAP Reconciliation

Summary Compensation Total

Less Stock Awards

Less Option Awards

Fair Value Adjustments to SCT Total

First PEO (Cecilia Lenk) Equity Component of

Value of Current Year Equity Awards at December 31,

in Fair Value of Prior Years’ Awards Unvested at December 31,

in Fair Value of Prior Years’ Awards Vested through the Year Ended December 31,

in Fair Value of Prior Years’ Awards Failed to Vest through the Year Ended

Value Included in CAP

= (a)+(b)+(c)+(d)

Second PEO (Martin Kay) Equity Component of

(a)+(b)+(c)+(d)

Average Non-PEO NEOs Equity Component of CAP

Value of Current Year Equity Awards at December 31,

in Fair Value of Prior Years’ Awards Unvested at December 31,

in Fair Value of Prior Years’ Awards Vested through the Year Ended December 31,

in Fair Value of Prior Years’ Awards Failed to Vest through the Year Ended

Value Included in CAP

= (a)+(b)+(c)+(d)

Compensation Plans

2021 Equity Incentive Plan and 2023 Omnibus

Equity Incentive Plan

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

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

options granted under the Plan.

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

providing services to us or our affiliates.

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

The following table shows information regarding our

equity compensation plans as of April 30, 2023.

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)

Weighted average exercise price of outstanding options, warrants and rights (b)

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (c)

Equity compensation plans approved by security holders (1)

Equity compensation plans not approved by security holders (2)

(1) 2023 Omnibus Equity

Incentive Plan .

On January 3, 2023, the Board of Directors of the Company approved and adopted the Netcapital Inc., 2023 Omnibus Equity

Incentive Plan (the “2023 Plan”), subject to the approval of the 2023 Plan by the Company’s stockholders.

number of Shares of Common Stock authorized for issuance under the 2023 Plan is (i) 2,000,000 Shares of Common Stock plus (ii) an annual

increase on the first day of each calendar year beginning with May 1, 2024 and ending with the last May 1 during the initial ten-year

term of the 2023 Plan, equal to the lesser of (A) five percent (5%) of the Shares of Common Stock outstanding (on an as-converted basis,

which shall include Shares issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable

for Shares of Common Stock, including without limitation, preferred stock, warrants and employee options to purchase any Shares of Common

Stock) on the final day of the immediately preceding calendar year and (B) such lesser number of Shares of Common Stock as determined

by the Board;

provided, that, Shares of Common Stock issued under the 2023 Plan with respect to an Exempt Award shall not count against

such share limit.

No more than 2,000,000 Shares, and as increased on an annual basis, on the first day of each calendar year beginning

with May 1, 2024 and ending with the last May 1 during the initial ten-year term of the Plan, by the lesser of (A) five percent (5%)

of the shares of Common Stock outstanding (on an as-converted basis, which shall include Shares of Common Stock issuable upon the exercise

or conversion of all outstanding securities or rights convertible into or exercisable for shares of Common Stock, including without limitation,

preferred stock, warrants and employee options to purchase any shares of Common Stock) on the final day of the immediately preceding calendar

(B) 300,000 shares of Common Stock, and (C) such lesser number of shares of Common Stock as determined by the Board, shall

be issued pursuant to the exercise of ISOs.

As of April 30, 2023, we had awarded an aggregate of 1,950,000 options to purchase shares

of common stock to directors and there remain 50,000 shares for grant under the 2023 Plan.

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

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

The forfeiture estimate impacts the estimated

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

Plan is administered by our Board.

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

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

conditions for earning such awards.

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

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

of the recipient.

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

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

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

and cash-based incentive awards.

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

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

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

The terms and conditions

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

Administration.

2023 Plan will be administered by the Board or a committee to which the Board delegates such responsibility (the “Administrator”).

The 2023 Plan will be administered by the Administrator in accordance with Rule 16b-3 of the Securities Exchange Act of 1934, as amended.

The Administrator may interpret the 2023 Plan and may prescribe, amend and rescind rules and make all other determinations necessary or

desirable for the administration of the 2023 Plan.

The 2023 Plan permits the Administrator to select the eligible recipients who will

receive awards (“Awards”), to determine the terms and conditions of those awards, including but not limited to the exercise

price or other purchase price of an award, the number of shares of common stock or cash or other property subject to an award, the term

of an award and the vesting schedule applicable to an award, to determine the terms and conditions of written instruments evidencing such

awards (an “Award Agreement”) and to amend the terms and conditions of outstanding awards.

directors and independent contractors of the Company or any of its affiliates of the Company will be eligible to receive Awards under

the 2023 Plan, subject to certain limitations to avoid accelerated taxation and/or tax penalties under Section 409A of the Code.

The participants

in the 2023 Plan shall be selected from time to time by the Administrator, in its sole discretion, from those individuals that qualify

as eligible recipients.

Consideration for Awards.

The purchase price for any Award granted under the 2023 Plan or the Common Stock to be delivered pursuant to any such Award, as applicable,

may be paid by means of any lawful consideration as determined by the Administrator, including, without limitation, one or a combination

of the following methods:

services rendered by the recipient of such Award;

cash, check payable to the order of the Company, or electronic funds transfer;

notice and third party payment in such manner as may be authorized by the Administrator;

the delivery of previously owned and fully vested Shares of Common Stock;

by a reduction in the number of Shares otherwise deliverable pursuant to the Award;

subject to such procedures as the Administrator may adopt, pursuant to a “cashless exercise” with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of Awards.

The 2023 Plan

permits the grant of:

(a) stock options, which may be intended as incentive stock options (“ISOs”) or as nonqualified stock

options (options not meeting the requirements to qualify as ISOs);

(b) stock appreciation rights (“SARs”);

(d) restricted stock units;

(e) cash incentive awards;

or (f) other awards, including:

(i) stock bonuses, performance stock, performance

units, dividend equivalents, or similar rights to purchase or acquire Shares, whether at a fixed or variable price or ratio related to

the Common Stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other

conditions, or any combination thereof;

or (ii) any similar securities with a value derived from the value of or related to the Common

Stock and/or returns thereon.

extent necessary to preserve the economic intent of an Award or of the 2023 Plan, following a “Change in Capitalization”,

such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion.

in Capitalization” means any of the following:

(i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out,

repurchase or other reorganization or corporate transaction or event, (ii) special or extraordinary dividend or other extraordinary distribution

(whether in the form of cash, Common Stock or other property), stock split, reverse stock split, share subdivision or consolidation, (iii)

combination or exchange of shares or (iv) other change in corporate structure, which, in any such case, the Administrator determines,

in its sole discretion, affects the Shares such that an adjustment would be appropriate.

Options granted

under the 2023 Plan shall be designated as nonqualified stock options or ISOs.

Each participant (“Participant”) who is granted

an option (“Option”) shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator

shall determine, in its sole discretion, including, among other things, the Exercise Price (as defined in the 2023 Plan) of the Option,

the term of the Option and provisions regarding exercisability of the Option, and whether the Option is intended to be an ISO or a nonqualified

stock option (and in the event the Award Agreement has no such designation, the Option shall be a nonqualified stock option).

The provisions

of each Option need not be the same with respect to each Participant.

More than one Option may be granted to the same Participant and

be outstanding concurrently hereunder.

The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator

in its sole discretion at the time of grant, but in no event shall the exercise price of an Option be less than one hundred percent (100%)

of the Fair Market Value of a Share of Common Stock on the date of grant.

The maximum term of each Option shall be fixed by the Administrator,

but no Option shall be exercisable more than ten (10) years after the date such Option is granted.

The Administrator shall have the authority

to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole

discretion, deems appropriate.

Each Option shall be exercisable

at such time or times and subject to such terms and conditions, including the attainment of performance goals, as shall be determined

by the Administrator in the applicable Award Agreement.

The Administrator may also

provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions

at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion.

The Administrator shall

have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator,

in its sole discretion, deems appropriate.

Notwithstanding anything

to the contrary in the 2023 Plan, if an ISO is granted to a participant who owns Shares representing more than ten percent (10%) of the

voting power of all classes of Shares of the Company at the time of grant, its “parent corporation” (as such term is defined

in Section 424(e) of the Code) or a subsidiary of the Company, the term of the ISO shall not exceed five (5) years from the time of grant

of such ISO and the Exercise Price shall be at least one hundred and ten percent (110%) of the Fair Market Value of the Shares on the

date of grant.

A Participant shall have no rights to dividends, dividend equivalents or distributions or any other rights of a stockholder

with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, and has paid in

full for such Shares and has satisfied the requirements of the 2023 Plan.

Treatment of an Option upon

termination of employment of a Participant shall be provided for by the Administrator in the Award Agreement.

An Option shall be affected,

both with regard to vesting schedule and termination, by leaves of absence, including unpaid and un-protected leaves of absence, changes

from full-time to part-time employment, partial disability or other changes in the employment status or service status of a Participant,

in the discretion of the Administrator.

Stock Appreciation Rights.

The Administrator will be authorized to award SARs under the 2023 Plan.

SARs will be subject to the terms and conditions established

by the Administrator and reflected in the Award Agreement.

A SAR is a contractual right that allows a participant to receive, in the form

of either cash, Shares or any combination of cash and Shares, the appreciation, if any, in the value of a Share over a certain period

An option granted under the 2023 Plan may include SARs, and SARs may also be awarded to a participant independent of the grant

of an option.

SARs granted in connection with an option shall be subject to terms similar to the option corresponding to such SARs.

Restricted Stock and Restricted

Stock Units (RSUs).

The Administrator will be authorized to award restricted stock or RSUs under the 2023 Plan.

Awards of restricted

stock and RSUs will be subject to the terms and conditions established by the Administrator at its sole discretion.

Other Stock-Based Awards.

Other Stock-Based Awards may be issued under the 2023 Plan.

Subject to the provisions of the 2023 Plan, the Administrator shall have

sole and complete authority to determine the individuals to whom and the time or times at which such Other Stock-Based Awards shall be

An example of an Other Stock-Based Award is a performance bonus payable as Company Common Stock.

Change in Control.

the event that a change in control occurs, as defined in the 2023 Plan to include, among other things, the acquisition by a person of

more than 50% of the voting power of the Company, the Administrator may, at its sole discretion, modify any unvested and un-exercisable

portion of any Award to make it fully vested and exercisable.

Amendment and Termination.

The Board may amend, alter or terminate the 2023 Plan at any time, but no amendment, alteration or termination shall be made that

would impair the rights of a participant under any Award theretofore granted without such participant’s consent.

The Board shall

obtain approval of the Company’s stockholders for any amendment that would require such approval in order to satisfy the requirements

of any rules of the stock exchange on which the Common Stock is traded or other applicable law.

The foregoing description

of the 2023 Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2023 Plan, a copy

of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

(2) 2021 Equity Incentive Plan .

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

An aggregate of 300,000 shares of our common stock is reserved

for issuance and available for awards under the Plan, including incentive stock options granted under the 2021 Plan.

The 2021 Plan administrator

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

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

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

Additionally, in the case of incentive stock options

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

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

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

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

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

At the Plan administrator’s

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

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

of “cashless” or “net” exercise).

Appreciation Rights .

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

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

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

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

provided, however, that in no event

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

Shares and Restricted Units .

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

restrictions (“restricted shares”).

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

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

over the forfeiture period.

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

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

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

The terms and conditions of restricted

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

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

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

and/or the achievement of performance conditions.

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

deems appropriate.

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

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

Performance awards may be paid in cash, shares

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

Stock-Based Awards .

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

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

The terms and conditions

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

Payment under any other stock-based awards will

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

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

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

each person whom we know

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

may grant awards to any employee, director, consultant or other person providing services to us or our affiliates.

As of April 30, 2023,

we had awarded an aggregate of 252,000 options to purchase shares of common stock to directors and there remain 48,000 shares for grant

under the 2021 Plan.

The 2021 Plan is administered by our Board.

Plan administrator has the authority to determine, within the limits of the express provisions of the 2021 Plan, the individuals to whom

awards will be granted, the nature, amount and terms of such awards and the objectives and conditions for earning such awards.

may at any time amend or terminate the 2021 Plan, provided that no such action may be taken that adversely affects any rights or obligations

with respect to any awards previously made under the 2021 Plan without the consent of the recipient.

No awards may be made under the 2021

Plan after the tenth anniversary of its effective date.

Awards under the 2021 Plan may include incentive stock

options, nonqualified stock options, stock appreciation rights (“SARs”), restricted shares of common stock, restricted stock

units, performance share awards, stock bonuses and other stock-based awards and cash-based incentive awards.

Stock Options .

The 2021 Plan administrator

may grant to a participant options to purchase our common stock that qualify as incentive stock options for purposes of Section 422 of

the Internal Revenue Code (“incentive stock options”), options that do not qualify as incentive stock options (“non-qualified

stock options”) or a combination thereof.

The terms and conditions of stock option grants, including the quantity, price, vesting

periods, and other conditions on exercise will be determined by the 2021 Plan administrator.

The exercise price for stock options will

be determined by the 2021 Plan administrator in its discretion, but non-qualified stock options and incentive stock options may not be

less than 100% of the fair market value of one share of our company’s common stock on the date when the stock option is granted.

Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes

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

on the date the stock option is granted.

Stock options must be exercised within a period fixed by the 2021 Plan administrator that may

not exceed ten years from the date of grant, except that in the case of incentive stock options granted to a holder of more than 10% of

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

2021 Plan administrator’s discretion, payment for shares of common stock on the exercise of stock options may be made in cash, shares

of our common stock held by the participant or in any other form of consideration acceptable to the 2021 Plan administrator (including

one or more forms of “cashless” or “net” exercise).

Stock Appreciation Rights .

The 2021 Plan administrator

may grant to a participant an award of SARs, which entitles the participant to receive, upon its exercise, a payment equal to (i) the

excess of the fair market value of a share of common stock on the exercise date over the SAR exercise price, times (ii) the number of

shares of common stock with respect to which the SAR is exercised.

The exercise price for a SAR will be determined by the 2021 Plan administrator

in its discretion;

provided, however, that in no event shall the exercise price be less than the fair market value of our common stock

on the date of grant.

Restricted Shares and Restricted Units .

The 2021 Plan administrator may award to a participant shares of common stock subject to specified restrictions (“restricted shares”).

Restricted shares are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified

forfeiture period and/or the attainment of specified performance targets over the forfeiture period.

The 2021 Plan administrator also

may award to a participant units representing the right to receive shares of common stock in the future subject to the achievement of

one or more goals relating to the completion of service by the participant and/or the achievement of performance or other objectives (“restricted

The terms and conditions of restricted share and restricted unit awards are determined by the 2021 Plan administrator.

Stock Bonuses .

Stock bonuses may be granted

as additional compensation for service or performance and may be settled in the form of common stock, cash or a combination thereof, and

may be subject to restrictions, which may vest subject to continued service and/or the achievement of performance conditions.

Performance Awards .

The 2021 Plan administrator

may grant performance awards to participants under such terms and conditions as the 2021 Plan administrator deems appropriate.

A performance

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

targets over a specified award period.

Performance awards may be paid in cash, shares of common stock or a combination thereof, as determined

by the 2021 Plan administrator.

Other Stock-Based Awards .

The 2021 Plan administrator

may grant equity-based or equity-related awards, referred to as “other stock-based awards,” other than options, SARs, restricted

shares, restricted units, or performance awards.

The terms and conditions of each other stock-based award will be determined by the 2021

Plan administrator.

Payment under any other stock-based awards will be made in common stock or cash, as determined by the 2021 Plan administrator.

Diversity Matrix

Our Nominating

and Corporate Governance Committee is committed to promoting diversity on our Board of Directors.

We have surveyed our current directors

and asked each director to self-identify their race, ethnicity, and gender using one or more of the below categories.

The results of this

survey as of July 26, 2023 are included in the matrix below.

Diversity Matrix (As of July 26, 2023)

Total Number of Directors:

Gender Identity

Did Not Disclose Gender

Demographic Background

African American or Black

Alaskan Native or Native American

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or More Races or Ethnicities

Did Not Disclose Demographic Background

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

The following table sets forth information with respect

to the beneficial ownership of shares of our common stock as of July 26, 2023 by:

each person whom we know beneficially owns more than 5% of any class of equity security;

each of our directors individually;

each of our named executive officers individually;

all of our current directors and executive officers

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

These rules generally attribute beneficial ownership

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

In addition, pursuant

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

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

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

of computing the percentage ownership of any other person.

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

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

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

The inclusion in

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

all of our current directors and executive officers as a group.

We have determined beneficial ownership in accordance

with the rules of the SEC.

These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting

or investment power with respect to such securities.

In addition, pursuant to such rules, we deemed outstanding shares of common stock

subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of July 26, 2023.

not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

Except as indicated

by the footnotes below, we believe, based on the information furnished to us, that the beneficial owners named in the table below have

sole voting and investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community

property laws.

The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial

ownership of those shares.

Name and Address

Amount of Shares and Nature

of Beneficial Owner (1)

of Shares and Nature

of Beneficial Ownership of Common

of Common Stock*

Systems LLC (2)

and Directors as a group (6 persons)

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

** Less than 1%

of Beneficial Ownership of Common Stock

Percent of Common Stock*

Netcapital Systems LLC (2)

Bard Associates LLC (3)

Martin Kay (4)

Arnold Scott (5)

Coreen Kraysler (6)

Cecilia Lenk (7)

Steven Geary (8)

Officers and Directors as a group (6 persons)

_________________

on 9,415,382 shares outstanding as of July 26, 2023.

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

1 Lincoln Street, Boston Massachusetts 02111.

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

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

Netcapital Systems LLC

2 unchanged sentences

brought to a shareholder vote.

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

July 29, 2022.

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

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

and Procedures for Transactions with Related Parties

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

(as defined below).

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

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

be a participant.

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

any person who is, or at any time

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

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

any immediate family member of any of the

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

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

of the foregoing persons;

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

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

with Related Parties

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

as of April 30, 2022.

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

of its former managers of $3,200.

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

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

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

Of the 361,736 shares that were issued,

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

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

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

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

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

majority shareholder during fiscal 2022.

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

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

The Company owns 710,200 shares of ChipBrain,

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

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

The Company owns 3,815,745 shares of KingsCrowd

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

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

The Company owns 2,350,000 membership interest

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

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

of April 30, 2022.

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

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

solely on a Schedule 13D/A filed with the SEC on May 26, 2023, Bard Associates Inc.

is an investment manager and beneficially owns

1,494,835 shares of our common stock (including 233,525 shares of common stock under presently exercisable warrants), including sole

voting power over 73,000 shares, sole dispositive power over 73,000 shares, shared dispositive power over 1,421,835 shares;

Johnson has sole dispositive power over 101,000 shares.

The address for Bard Associates Inc.

and Timothy Johnson is 135 South LaSalle

Street, Suite 3700, Chicago, IL 60603.

Includes 187,500 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 26, 2023.

Includes 2,500 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 26, 2023.

Includes 45,833 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 26, 2023.

Includes 6,667 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 26, 2023.

Includes 4,583 shares of common stock subject to stock options that are presently exercisable or exercisable within 60 days after July 26, 2023.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Policies and Procedures for Transactions with Related

Our Chief Executive Officer or our Chief Financial

Officer must review and approve certain transactions between us and Related Parties (as defined below).

A “Related-Party Transaction”

is defined as a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which

we (including any of our subsidiaries) were, are or will be a participant.

For the purposes of our Related-Party Transactions,

a “Related Party” is defined as:

any person who is, or at any time since the beginning of our last two fiscal years was, a

director or executive officer or a nominee to become a director;

any person who is known to be the beneficial owner of more than ten percent

of our common stock;

any immediate family member of any of the foregoing persons, including any child, stepchild, parent, stepparent,

spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and any person (other than

a tenant or employee) sharing the household of any of the foregoing persons;

and any firm, corporation or other entity in which any of

the foregoing persons is a general partner or, for other ownership interests, a limited partner or other owner in which such person has

a beneficial ownership interest of 10% or more.

Transactions with Related Parties

The Company’s largest shareholder, Netcapital

Systems LLC (“Systems”), owns 1,711,261 shares of common stock, or 26.6% of the Company’s 6,440,527 outstanding shares

as of April 30, 2023 (and approximately 18.2% of the Company’s outstanding stock as of July 26, 2023).

As of April 30, 2022, the

Company accrued a payable to Systems of $294,054 for supplemental consideration owed in conjunction with its purchase of Netcapital Funding

Portal Inc., which was paid in full on July 14, 2022, with the issuance to Systems of 39,901 shares of the Company’s common stock.

The Company provided professional services to Systems in the years ended April 30, 2023 and 2022 and recorded revenue of $4,660 and $15,000,

respectively, for those services.

In total, the Company owed Systems $0 and $294,054

as of April 30, 2023 and 2022, respectively.

The company paid Systems $430,000 and $357,429 in the years ended April 30, 2023 and 2022,

respectively, for use of the software that runs the website www.netcapital.com.

The Chief Executive Officer of our wholly owned

subsidiary, Netcapital Advisors Inc., is a member of the board of directors of KingsCrowd Inc.

The Company sold 606,060 shares of KingsCrowd

in June 2022 for proceeds of $200,000 and recorded a realized loss on the sale of the investment of $406,060.

As of April 30, 2023 and

2022, the Company owned 3,209,685 and 3,815,745 shares of KingsCrowd Inc., valued at $3,209,685 and $3,815,745, respectively.

The Chief Executive Officer of our wholly owned subsidiary,

Netcapital Advisors Inc.

is a member of the board of directors of Deuce Drone LLC.

As of April 30, 2023 and 2022, the Company owned 2,350,000

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

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

Drone LLC as of April 30, 2023 and 2022.

expense to officers in the years ended April 30, 2023 and 2022 consisted of common stock valued at $0 and $190,763, respectively, cash

compensation of $598,077 and $265,688, respectively, and options to purchase common stock valued at $137,994 and $3,147, respectively.

Compensation to a related party consultant in the

1 unchanged sentence

and $60,000, respectively.

This consultant is also the controlling shareholder of Zelgor Inc.

This consultant is also the controlling shareholder of Zelgor Inc., and

the Company earned revenues from Zelgor Inc.

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

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

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

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

of $66,000 and $5,500 in the years ended April 30, 2023 and 2022.

The Company owns 1,400,000

shares of Zelgor Inc., valued at $1,400,000 and holds a note receivable of $50,000 as of April 30, 2023.

Cash compensation to the President of Netcapital Systems

LLC amounted to $184,808 and $96,000, and stock-based compensation amounted to $25,927 and $0, in the years ended April 30, 2023 and 2022,

respectively.

We owe Steven Geary, a director, $31,680

as of April 30, 2023 and 2022.

This obligation is not interest bearing.

$16,680 is recorded

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

We have no signed agreements for the indebtedness

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

in an airport in Alaska.

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

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

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

We paid cash compensation

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

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

committee, valued at $100,000.

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

stock at an exercise price of $10.50 per share.

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

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

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

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

$16,680 is recorded as a related party trade accounts payable

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

We have no signed agreements for the indebtedness to Mr.

The Company made an investment of $240,080 in an affiliate,

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

Our Chief Executive Officer is also the

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

As a result of the investment, the Company is a 19% owner of 6A Aviation

Consortium Inc.

In November 2021, we issued a member of our Board

10,000 shares of common stock for his service as a member of our board and audit committee, valued at $100,000.

On February 2, 2022, the Company granted members of

our board of directors an aggregate of 25,000 options to purchase shares of our common stock at an exercise price of $10.50 per share.

An option to purchase 10,000 shares of common stock was granted to the Chief Executive Officer of Netcapital Advisors Inc., who is also

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

The options vest

on a straight-line basis over 48 months and expire in 10 years.

On April 25, 2023, the Company also granted the same four members of our

board of directors an aggregate of 80,000 options, or 20,000 for each board member, to purchase shares of our common stock at an exercise

price of $1.40 per share.

The options vest monthly on a straight-line basis over a 4-year period and expire in 10 years.

In January 2023 we granted stock options to purchase

an aggregate of 1,600,000 shares of our common stock to four related parties as follows:

Our Chief Executive Officer, 1,000,000 shares;

our Chief Financial Officer, 200,000 shares;

our Founder, 200,000 shares;

and a director of one of our subsidiaries, 200,000 shares.

options have an exercise price of $1.43, vest monthly on a straight-line basis over a 4-year period and expire in 10 years.

Coreen Kraysler, our Chief Financial Officer, has

personally guaranteed a $500,000 promissory note from the U.S.

Small Business Administration.

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

The note bears interest at an annual

rate of 3.75%, has a 30-year term, and monthly payments of $2,594 began on December 17, 2022.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

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

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

the past two fiscal years.

Fruci & Associates II, PLLC is the Company’s

independent registered public accounting firm.

The following table presents fees for professional

audit services rendered by our independent registered public accounting firm during the past two fiscal years.

Audit related fees

All other fees

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

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

and overseeing the work of the independent auditor.

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

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

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

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

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

only the independent auditor can reasonably be expected to provide, including comfort letters and reviews of our financial statements

included in our Quarterly Reports on Form 10-Q.

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

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

to meet certain regulatory requirements.

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

related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

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

We generally do not request

such services from the independent auditor.

Policy on Audit Committee Pre-Approval of Audit

and Permissible Non-Audit Services of Independent Auditors

Consistent with SEC policies regarding auditor independence,

our board of directors has responsibility for appointing, setting compensation and overseeing the work of the independent auditor.

recognition of this responsibility, the board of directors has established a policy to pre-approve all audit and permissible non-audit

services provided by the independent auditor.

Prior to engagement of the independent auditor for

the next year's audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories

of services to the board of directors for approval.

Audit services

include audit work performed in the preparation of financial statements, as well as work that generally only the independent auditor can

reasonably be expected to provide, including comfort letters and reviews of our financial statements included in our Quarterly Reports

on Form 10-Q.

Audit-Related services

are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to

mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

include all services performed by the independent auditor's tax personnel except those services specifically related to the audit of the

financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

Other services

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

We generally do not request such services from the independent

FINANCIAL STATEMENTS AND EXHIBITS.

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

Underwriting Agreement between the registrant and ThinkEquity LLCincorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K dated July 12, 2022.

Agreement dated July 19, 2023 between the Registrant and ThinkEquity LLC, incorporated by reference to our Current Report on Form

8-K dated July 19, 2023.

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

2 unchanged sentences

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

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

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

September 3, 2013

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

September 3, 2013

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

S-1 dated February 14, 2022

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

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

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

Amendment to Articles of Incorporation filed on September 7, 1999, incorporated by reference to Exhibit 3.2 to our Form 10 dated September 3, 2013

Amendment to Articles of Incorporation filed on December 4, 2003, incorporated by reference to Exhibit 3.2 to our Form 10 dated September 3, 2013

Amendment to Articles of Incorporation filed on April 13, 2015, incorporated by reference to Exhibit 3.1.3 to our Form S-1 dated February 14, 2022

Amendment to Articles of Incorporation filed on September 29, 2020, incorporated by reference to Exhibit 3.1 to our Form 8-K dated November 5, 2020

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

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

of Representative’s Warrant (Included in Exhibit 1.1)

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

of Representative’s Warrant incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated July 15, 2022.

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

of Warrant (Included in Exhibit 4.4)

Form of Public Warrant, incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated July 15, 2022

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

Description of capital stock

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

and incorporated herein by reference.

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

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

Secured Lending Agreement between ValueSetters, Inc.

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

Form 10/A filed on July 28, 2014.

and Assignment Agreement between ValueSetters, Inc.

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

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

Loan and Security Agreement between ValueSetters, Inc.

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

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

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

and Vaxstar LLC dated October 30, 2020.

Amendment to Revolving Loan and Security Agreement between Netcapital Inc.

and Vaxstar LLC dated January 31, 2021.

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

and Vaxstar LLC.

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

and Vaxstar LLC, filed as Exhibit

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

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

and Vaxstar LLC, filed as Exhibit

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

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

our Form S-1 dated February 14, 2022

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

our Form S-1 dated February 14, 2022

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

Form S-1 dated February 14, 2022

Form of Representative’s Warrant incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated July 15, 2022.

Form of Unsecured Convertible Notes incorporated by reference to our Current Report on Form 8-K dated July 15, 2022.

Form of Representative Warrant (included as Exhibit A to Exhibit 1.1) incorporated by reference to our Current Report on Form 8-K dated December 16, 2022.

of Placement Agent Warrant, incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated May 23, 2023.

of Representative Warrant, incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated July 19, 2023.

of capital stock

2021 Equity Incentive Plan, filed as Exhibit 4.1 to the registrant’s registration statement on Form S-8 on January 27, 2022, and incorporated herein by reference.

Employment Agreement with Carole Murko, incorporated by reference to Exhibit 10.12 to our Form S-1 dated February 14, 2022

Separation Agreement with Carole Murko, incorporated by reference to Exhibit 10.13 to our Form S-1 dated February 14, 2022

Form of Note Purchase Agreement, incorporated by reference to Exhibit 10.14 to our Form S-1 dated February 14, 2022

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

2 unchanged sentences

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

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

Consent of Independent Registered Public Accounting Firm

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

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

Certification by the Principal Executive Officer pursuant to 18 U.S.C.

Netcapital Inc 2023 Omnibus Equity Incentive Plan incorporated by reference to our Current Report on Form 8-K dated January 5, 2023.

Employment Agreement with Martin Kay dated January 3, 2023 incorporated by reference to our Current Report on Form 8-K dated January 5, 2023.

Form of Stock Option Agreement incorporated by reference to our Current Report on Form 8-K dated January 5, 2023.

Software License and Services Agreement between Templum, Inc.

and Netcapital Systems LLC dated January 2, 2023 incorporated by reference to our Current Report on Form 8-K dated January 6, 2023.

of Securities Purchase Agreement between Netcapital Inc.

and certain institutional investors dated May 23, 2023, incorporated by

reference to Exhibit 10.1 to our Current Report on Form 8-K dated May 23, 2023.

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

of Independent Registered Public Accounting Firm

Certification

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

Certification

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

Certification

by the Principal Executive Officer pursuant to 18 U.S.C.

1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification by the Principal Financial Officer pursuant to 18 U.S.C.

Certification

by the Principal Financial Officer pursuant to 18 U.S.C.

1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

1 unchanged sentence

Indicates a management contract or compensatory plan or arrangement.

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

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized .

August 5, 2022

/s/ Cecilia Lenk

of the Board and Chief Executive Officer

NETCAPITAL INC .

July 26, 2023

/s/ Martin Kay

Chief Executive Officer and Director

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates

/s/ Martin Kay

Chief Executive Officer and Director

July 26, 2023

(Principal Executive Officer)

/s/ Coreen Kraysler

Chief Financial Officer,

July 26, 2023

Coreen Kraysler

Financial Officer

(Principal Financial and Accounting Officer)

August 5, 2022

(Principal Accounting and Financial Officer)

July 26, 2023

/s/ Cecilia Lenk

July 26, 2023

/s/ Arnold Scott

July 26, 2023

/s/ Steven Geary

July 26, 2023

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of Netcapital Inc.

the Board of Directors and Shareholders of Netcapital Inc.

and Subsidiaries

51 unchanged sentences

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

Obtain and test management assumptions and analysis.

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

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

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

strategic and funding plans.

have served as the Company’s auditor since 2017.

and test management assumptions and analysis, including review of third-party market data,

public flings, and funding activities of investee entities.

investee shares held by the Company, relative ownership percentages, and active reported

share prices.

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

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

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

Fruci & Associates , PLLC – PCAOB ID # 5525

We have served as the Company’s auditor since 2017.

Spokane, Washington

& Associates II, PLLC 5525

ENDED APRIL 30, 2022 AND 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements

Balance Sheets

Statements of Operations

Statements of Stockholders’ Equity

Statements of Cash Flows

to Consolidated Financial Statements

Balance Sheets

July 26, 2023

NETCAPITAL INC.

YEARS ENDED APRIL 30, 2023 AND 2022

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

NETCAPITAL INC.

Consolidated Balance Sheets

April 30, 2023

17 unchanged sentences

Interest payable

Deferred tax liability

Income taxes payable

Deferred tax liability, net

Related party debt

9 unchanged sentences

Stockholders’ equity:

Common stock, $ .001

shares authorized, 2,934,344

and 2,178,766

shares issued and outstanding

Common stock to be issued

Common stock, $ .001 par value;

900,000,000 shares authorized, 6,440,527 and 2,934,344 shares issued and outstanding

Capital in excess of par value

Accumulated deficit

Shares to be issued

Retained earnings

Total stockholders’ equity

Total liabilities and stockholders’ equity

Accompanying Notes to the Financial Statements

Statements of Operations

See Accompanying Notes to the Financial Statements

NETCAPITAL INC.

Consolidated Statements of Operations

April 30, 2023

5 unchanged sentences

General and administrative costs

costs and expenses

Total costs and expenses

Operating income (loss)

3 unchanged sentences

Debt forgiveness

Gain on debt conversion

Amortization of intangible assets

Realized loss on sale of investment

Unrealized gain on equity securities

Total other income (expense)

income before taxes

Income tax (expense) benefit

Total other income

Net income before taxes

Income tax expense

Basic earnings per share

1 unchanged sentence

Weighted average number of common shares outstanding:

Accompanying Notes to the Financial Statements

Statements of Stockholders' Equity

the Years Ended April 30, 2022 and 2021

See Accompanying Notes to the Financial Statements

NETCAPITAL INC.

Consolidated Statements of Stockholders’ Equity

For the Years Ended April 30, 2023 and 2022

Balance, April 30, 2021

$ ( 992,622 )

Q1 stock-based compensation

Stock-based compensation

Sale of common stock

Shares issued to acquire funding portal

Net income, July 31, 2021

Balance, July 31, 2021

( 2,431,411 )

Q2 stock-based compensation

Net income, October 31, 2020

Stock-based compensation

Net loss, October 31, 2021

Balance, October 31, 2021

( 2,401,389 )

Shares issued to acquire funding portal

Return of shares of common stock

Q3 stock-based compensation

Stock-based compensation

Purchase of equity interest

Purchase of MSG Development Corp.

Sale of common stock

Net income, January 31, 2022

Balance, January 31, 2022

( 2,358,747 )

Q4 stock-based compensation

Shares issued for debt settlement

Stock-based compensation

Purchase of equity interest

Net income, April 30, 2022

Balance, April 30, 2022

Q1 stock-based compensation

Shares issued for debt conversion

Sale of common stock

Shares issued to settle related party accounts payable

Vesting of stock options

Net income July 31, 2022

Balance, July 31, 2022

Q2 stock-based compensation

Net loss, October 31, 2021

Balance, October 31, 2021

Q3 stock-based compensation

Sale of common stock

Purchase of equity interest

Purchase of MSG Development Corp.

Vesting of stock options

Net income Oct.

Balance October 31, 2022

Sale of common stock

Purchase of equity interest

Purchase of intellectual property

Reduction in shares to be issued

Vesting of stock options

Net income January 31, 2023

Balance January 31, 2023

Q4 stock-based compensation

Purchase of equity interest

Vesting of stock options

Stock-based compensation

Net income April 30, 2023

Balance, April 30, 2023

Accompanying Notes to the Financial Statements

Statements of Cash Flows

See Accompanying Notes to the Financial Statements

NETCAPITAL INC.

Consolidated Statements of Cash Flows

April 30, 2023

April 30, 2022

OPERATING ACTIVITIES

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

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

Stock-based compensation

5 unchanged sentences

( 1,904,302 )

Amortization of intangible assets

Realized loss on investment

Gain on debt conversion

Unrealized gain on equity securities

5 unchanged sentences

( 1,153,598 )

( 1,417,257 )

Related party receivable

2 unchanged sentences

Deferred revenue

Income taxes payable

Accrued interest payable

Accounts payable – related

Net cash used in operating

Accounts payable – related party

Net cash used in operating activities

( 4,617,200 )

1 unchanged sentence

INVESTING ACTIVITIES

Proceeds from purchase of funding portal subsidiary

Proceeds from sale of investment

Loans to affiliate

Investment in affiliate

Net cash provided by (used

in) investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES

Proceeds from SBA loans

Proceeds from secured lender

Payment of related party note

Proceeds from sale of common stock

Proceeds from (payments to) secured lender

( 1,050,000 )

Proceeds from stock subscriptions

Proceeds from convertible notes

Cash flow provided by financing

Cash flow provided by financing activities

Net increase (decrease) in cash

( 2,000,034 )

Cash and cash equivalents, beginning

of the period

Cash and cash equivalents, end

of the period

Supplemental disclosure of cash flow

Cash and cash equivalents, beginning of the period

Cash and cash equivalents, end of the period

Supplemental disclosure of cash flow information:

Cash paid for taxes

Cash paid for

Supplemental Non-Cash Investing and

Financing Information:

Common stock issued as prepaid

Common stock issued to reduce

related party payable

Common stock issued to purchase

10% interest in Caesar Media Group Inc.

Common stock for purchase of

MSG Development Corp.

Accompanying Notes to the Financial Statements

TO CONSOLIDATED FINANCIAL STATEMENTS

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

Description of Business and Summary of Accounting Principles

of Business and Concentrations

(“Netcapital,” “we,” “our,” or the “Company”) is a fintech company with a scalable

technology platform that allows private companies to raise capital online and provides private equity investment opportunities to investors.

The company's consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies

with disruptive technologies.

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

Securities & Exchange Commission (SEC) and

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

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

accounting principles in the United States of America.

The Company’s fiscal year end is April 30.

of Consolidation

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

intercompany balances and transactions.

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

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

Corp, which was acquired in November 2021.

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

Deferred tax assets and liabilities

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

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

Deferred tax assets and liabilities

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

to be recovered or settled.

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

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

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

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

The tax benefits recognized in the financial

statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized

upon settlement with the tax authorities.

Changes in recognition or measurement are reflected in the period in which the change in judgment

The Company records interest related to unrecognized tax benefits in interest expense and penalties in income tax expense.

Company has determined that it had no significant uncertain tax positions requiring recognition or disclosure.

Recognition under ASC 606

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

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

Cash paid for interest

Supplemental Non-Cash Investing and Financing Information:

Common stock issued as prepaid compensation

Common stock issued to pay related party payable

Common stock issued to pay promissory notes

Common stock issued to purchase intellectual property

Common stock issued to purchase 10% interest in Caesar Media Group Inc.

Common stock for the purchase of MSG Development Corp.

See Accompanying Notes to the Financial Statements

NETCAPITAL INC.

NOTES TO CONSOLIDATED FINANCIAL

AS OF AND FOR THE YEARS ENDED APRIL 30, 2023 AND

Description of Business and Summary

of Accounting Principles

Description of Business and Concentrations

Netcapital Inc.

(“Netcapital,” “we,”

“our,” or the “Company”) is a fintech company with a scalable technology platform that allows private companies

to raise capital online and provides private equity investment opportunities to investors.

The company’s consulting group, Netcapital

Advisors, provides marketing and strategic advice and takes equity positions in select companies with disruptive technologies.

The Netcapital

funding portal is registered with the U.S.

Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory

Authority (FINRA), a registered national securities association.

The consolidated financial statements are presented

in United States dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America.

The Company’s fiscal year ends April 30.

Principles of Consolidation

The consolidated financial statements include the

accounts of the Company and its wholly owned subsidiaries after the elimination of significant intercompany balances and transactions.

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

Inc., which provides marketing and strategic advice to select companies, and MSG Development Corp, which was acquired in November 2021,

and provides business valuation services.

The Company accounts for income taxes under the asset

and liability method in accordance with ASC 740.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable

to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and

operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply

to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The ultimate realization

of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the

period in which related temporary differences become deductible.

The Company recognizes the tax benefit from an uncertain

tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based

on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position are measured based

on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the tax authorities.

in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest related

to unrecognized tax benefits in interest expense and penalties in income tax expense.

The Company has determined that it had no significant

uncertain tax positions requiring recognition or disclosure.

Revenue Recognition under ASC 606

The Company recognizes service revenue from its consulting

contracts, funding portal and game website using the five-step model as prescribed by ASC 606:

Identification of the contract, or contracts,

with a customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract;

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

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

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

The transaction price is determined based on the

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

The transaction

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

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

Revenue is recognized when performance obligations are

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

Contracts are typically one year or less.

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

for progress payments throughout the term of the contract.

and Estimates

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

The Company enters

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

offering statements, and professional services.

For arrangements with multiple services, the Company evaluates whether the individual

services qualify as distinct performance obligations.

In its assessment of whether a service is a distinct performance obligation, the

Company determines whether the customer can benefit from the service on its own or with other readily available resources, and whether

the service is separately identifiable from other services in the contract.

This evaluation requires the Company to assess the nature

of each individual service offering and how the services are provided in the context of the contract, including whether the services

are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts

and circumstances of the contract.

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

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

Where the Company

has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised service

separately to a customer, such data is used to establish SSP.

In instances where standalone sales data is not available for a particular

performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs.

The Company continues to review

the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis.

revenue from subscriptions to the Company's game website is recognized over time on a ratable basis over the contractual subscription

term beginning on the date that the platform is made available to the customer.

Payments received in advance of subscription services

being rendered are recorded as a deferred revenue.

Allocation of the transaction price to the

performance obligations in the contract;

Recognition of revenue when or as the Company

satisfies a performance obligation.

The Company identifies performance obligations in

contracts with customers, which primarily are professional services, listing fees on our funding portal, and a portal fee of 4.9% of the

money raised on the funding portal.

The transaction price is determined based on the amount the Company expects to be entitled to receive

in exchange for transferring the promised services to the customer.

The transaction price in the contract is allocated to each distinct

performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying

each performance obligation.

Revenue is recognized when performance obligations are satisfied.

The Company usually bills its customers

before it provides any services and begins performing services after the first payment is received.

Contracts are typically one year or

For larger contracts, in addition to the initial payment, the Company may allow for progress payments throughout the term of the

Judgments and Estimates

The estimation of variable consideration for each

performance obligation requires the Company to make subjective judgments.

The Company enters into contracts with customers that regularly

include promises to transfer multiple services, such as digital marketing, web-based videos, offering statements, and professional services.

For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations.

In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from

the service on its own or with other readily available resources, and whether the service is separately identifiable from other services

in the contract.

This evaluation requires the Company to assess the nature of each individual service offering and how the services are

provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly

modify each other, which may require judgment based on the facts and circumstances of the contract.

When agreements involve multiple distinct performance

obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on

the relative standalone selling prices (SSP) of each performance obligation.

Where the Company has standalone sales data for its performance

obligations which are indicative of the price at which the Company sells a promised service separately to a customer, such data is used

to establish SSP.

In instances where standalone sales data is not available for a particular performance obligation, the Company estimates

SSP by the use of observable market and cost-based inputs.

The Company continues to review the factors used to establish list price and

will adjust standalone selling price methodologies as necessary on a prospective basis.

Service Revenue

Service revenue from subscriptions to the Company’s

game website is recognized over time on a ratable basis over the contractual subscription term beginning on the date that the platform

is made available to the customer.

Payments received in advance of subscription services being rendered are recorded as a deferred revenue.

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

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

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

trends, and communications with its customers.

These reserves are recorded as operating expenses against the contract asset (Accounts

assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance obligations are completed.

The revenue is recognized when the customer receives services.

Contract assets are included in other current assets in the consolidated

balance sheets and will be recognized during the succeeding twelve-month period.

revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control.

consist primarily of annual plan subscription services and professional services not yet provided as of the balance sheet date.

revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred revenues in the consolidated

balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance sheets.

to Obtain a Customer Contract

commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts.

These costs are capitalized

as other current or non-current assets and amortized on a straight-line basis over the life of the contract, which approximates the benefit

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

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

Performance Obligations

When a contract with a customer is signed, the Company

assesses whether collection of the fees under the arrangement is probable.

The Company estimates the amount to reserve for uncollectible

amounts based on the aging of the contract balance, current and historical customer trends, and communications with its customers.

reserves are recorded as operating expenses against the contract asset (accounts receivable).

Contract Assets

Contract assets are recorded for those parts of the

contract consideration not yet invoiced but for which the performance obligations are completed.

The revenue is recognized when the customer

receives services.

Contract assets are included in other current assets in the consolidated balance sheets and will be recognized during

the succeeding twelve-month period.

Deferred Revenue

Deferred revenues represent billings or payments received

in advance of revenue recognition and is recognized upon transfer of control.

Balances consist primarily of annual plan subscription services

and professional services not yet provided as of the balance sheet date.

Deferred revenues that will be recognized during the succeeding

twelve-month period are recorded as current deferred revenues in the consolidated balance sheets, with the remainder recorded as other

non-current liabilities in the consolidated balance sheets.

Costs to Obtain a Customer Contract

Sales commissions and related expenses are considered

incremental and recoverable costs of acquiring customer contracts.

These costs are capitalized as other current or non-current assets

and amortized on a straight-line basis over the life of the contract, which approximates the benefit period.

The benefit period was estimated

by taking into consideration the length of customer contracts, technology lifecycle, and other factors.

All sales commissions are recorded as consulting fees

within the Company’s consolidated statement of operations.

Remaining Performance Obligations

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

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

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

and $ 4,721,003 ,

respectively, are considered contract revenues.

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

to $ 2,532 and

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

The Company expects to recognize revenue on all of its remaining

performance obligations over the next 12 months.

Disaggregation

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

2023 and 2022, which amounted to $8,493,985 and $5,480,835, respectively, are considered contract revenues.

Contract revenue as of April

30, 2023 and 2022, which has not yet been recognized, amounted to $661 and $2,532, respectively, and is recorded on the balance sheet

as deferred revenue.

The Company expects to recognize revenue on all of its remaining performance obligations over the next 12 months.

Disaggregation of Revenue

Our revenue is from U.S.-based companies with no notable

geographical concentrations in any area.

A distinction exists in revenue source;

our revenues are either generated online or from personal services.

disaggregated by revenue source consist of the following:

Schedule of Disaggregation

April 30, 2022

April 30, 2021

our revenues are either generated online or from personal

Revenues disaggregated by revenue source consist of

the following:

Schedule of Disaggregation of Revenue

Year Ended April 30, 2023

Year Ended April 30, 2022

Consulting services

1 unchanged sentence

Total revenues

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

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

common shares outstanding during the period.

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

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

and Cash Equivalents

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

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

The Company uses three financial institutions for its cash balances

and has maintained cash balances that exceed federally insured limits.

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

an allowance for potential credit losses.

Costs of Services

Costs of services consist of direct costs that we

pay to third parties to provide the services that generate revenue.

Earnings Per Share

Basic net income per share is computed by dividing

net income available to common stockholders by the weighted average number of vested, unrestricted common shares outstanding during the

Diluted net income per share is computed based on the weighted average number of shares of common stock outstanding plus the effect

of dilutive potential common shares outstanding during the period using the if-converted method.

Cash and Cash Equivalents

The Company considers all highly liquid investments

purchased with original maturities of three months or less to be cash equivalents.

The Company did not have any cash equivalents during

fiscal 2023 and 2022.

The Company uses three financial institutions for its cash balances and has maintained cash balances that exceed

federally insured limits.

Accounts Receivable

The Company extends credit to its customers in the

normal course of business and performs ongoing credit evaluations of its customers, maintaining an allowance for potential credit losses.

Accounts receivable is reported net of the allowance for doubtful accounts.

The allowance is

based on management’s estimate of the amount of receivables that will be collected.

The Company recorded an allowance for doubtful

accounts of $ 136,955

as of April 30, 2022 and 2021, respectively.

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

allowance for potential credit losses when appropriate.

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

The useful life is determined using

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

Impairments are

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

The recoverable amount is the higher of either the

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

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

the weighted average cost of capital.

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

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

has declined.

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

Schedule of intangible assets

April 30, 2022

April 30, 2021

Acquired users

Acquired brand

Professional practice

Literary works and contracts

Total intangible assets

of Long-Lived Assets

Authoritative

guidance requires that certain assets be reviewed for impairment and, if impaired, remeasured at fair value whenever events or changes

in circumstances indicate that the carrying amount of the asset may not be recoverable.

Impairment loss estimates are primarily based

upon management’s analysis and review of the carrying value of long-lived assets at each balance sheet date, utilizing an undiscounted

future cash flow calculation.

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

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

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

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

The fair value of the equity instrument is charged directly to

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

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

investments in equity securities are initially measured at cost.

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

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

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

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

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

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

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

The most significant

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

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

historical experience and reasonable assumptions.

The allowance is based on management’s estimate of the

amount of receivables that will be collected.

The Company recorded an allowance for doubtful accounts of $ 91,955 and $ 136,955 as of April

30, 2023 and 2022, respectively.

Notes Receivable

The Company lends money to companies in limited instances,

performs ongoing credit evaluations of its notes receivable and establishes an allowance for potential credit losses when appropriate.

Intangible Assets

Intangible assets with defined useful lives are generally

measured at cost less straight-line amortization.

The useful life is determined using the period of the underlying contract or the period

of time over which the intangible asset can be expected to be used.

Impairments are recognized if the recoverable amount of the asset

is lower than the carrying amount.

The recoverable amount is the higher of either the fair value less costs to sell or the value in use.

The value in use is determined on the basis of future cash inflows and outflows, and the weighted average cost of capital.

assets with indefinite useful lives, such as trade names and trademarks, that have been acquired as part of acquisitions are measured

at cost and tested for impairment annually, or if there is an indication that their value has declined.

Impairment of Long-Lived Assets

Authoritative guidance requires that certain assets

be reviewed for impairment and, if impaired, remeasured at fair value whenever events or changes in circumstances indicate that the carrying

amount of the asset may not be recoverable.

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

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

did not recognize an impairment loss in fiscal 2023 and 2022.

Stock-Based Compensation

The Company accounts for employee stock-based compensation

in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments

to employees, including the vesting of restricted stock grants to employees, to be recognized in the financial statements based on their

The fair value of the equity instrument is charged directly to compensation expense and credited to common stock and capital

in excess of par value during the period during which services are rendered.

The Company follows ASC Topic 505-50, formerly EITF

96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling

Goods and Services,” for common stock issued to consultants and other non-employees.

These shares of common stock are issued as

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

value of the equity instrument is charged directly to compensation expense, or to prepaid expenses in instances where stock was issued

under a contractual arrangement to a consultant who agreed to provide services over a period of time.

Advertising Expenses

Advertising and marketing expenses are recorded separately

in the Consolidated Statements of Operations and are expensed as incurred.

Equity Securities

All investments in equity securities are initially

measured at cost.

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

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

If the Company identifies an observable

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

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

Use of Estimates

In preparing financial statements in conformity with

generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of

assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported

amounts of revenues and expenses during the reporting period.

The most significant estimate relates to investments, the allowance for

doubtful accounts and the calculation of stock-based compensation for the stock options.

On a continual basis, management reviews its

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

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

Actual results could differ from those estimates.

Accounting Pronouncements

June 2016, the FASB issued ASU No.

2016-13 Financial Instruments-Credit Losses .

The new guidance provides better representation

about expected credit losses on financial instruments.

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

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

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

The company is studying the impact

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

The Company believes the accounting change would not have a material

effect on the financial statements.

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

financial statements.

As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13 Financial

Instruments-Credit Losses .

The new guidance provides better representation about expected credit losses on financial instruments.

This update requires the use of a methodology that reflects expected losses and requires consideration of a broader range of reasonable

and supportive information to inform credit loss estimates.

This ASU is effective for reporting periods beginning after December 15, 2022,

with early adoption permitted.

The company is studying the impact of adopting the ASU in fiscal year 2023, and what effect it could have.

The Company believes the accounting change would not have a material effect on the financial statements.

Management does not believe that any other recently

issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting

pronouncements are issued, we will adopt those that are applicable under the circumstances.

Concentrations

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

of its revenues, a second customer that constituted

of its revenues, and a third customer that constituted

of its revenues.

For the year ended April 30,

2021, the Company had one customer that constituted 30 %

of its revenues, a second customer that constituted

of its revenues, a third customer that constituted

of its revenues and a fourth customer that accounted

of its revenues.

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

For the year ended April 30, 2023, the

Company had one customer that constituted 25% of its revenues, and four customers that each constituted 14% of its revenues.

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.

The following table summarizes components debt as

of April 30, 2023 and 2022:

Schedule of Debt

1 unchanged sentence

Secured lender

8.0% – 12.0 %

Notes payable – related parties

3 unchanged sentences

Total long-term debt

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

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

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

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

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.

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

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

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

2022 Notes”).

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

In addition, the

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

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

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

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

of such Qualified Equity Financing.

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

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

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

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

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

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

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

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

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

Small Business Administration

(“SBA”) loan program.

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

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

As a result, the Company recognized debt forgiveness

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

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

However, the SBA

has postponed the first installment payment for 18 months.

As of April 30, 2023 and 2022, the Company

owed its principal lender (“Lender”) $350,000 and $1,400,000, respectively, under a loan and security agreement (“Loan”)

dated April 28, 2011, that was amended on July 26, 2014 and several times thereafter to extend the maturity date to October 31, 2023.

In connection with the financing, 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.

To secure the payment of all

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

As of April 30, 2023 and 2022, the Company’s

related-party unsecured notes payable totaled $15,000 and $22,860, respectively.

As of April 30, 2023 and 2022, the company owed $0

and $300,000 in convertible notes payable.

On July 14, 2022, the Company issued 93,432 shares of common stock valued at $266,272 to retire

the $300,000 in convertible promissory notes plus accrued interest of $10,192.

The Company also owes $34,324 as of April 30, 2023

and 2022 to Chase Bank.

For the loan from Chase Bank, the Company pays interest only on a monthly basis, which is calculated at a rate

of 10.0% per annum as of April 30, 2023.

On May 6, 2020, the Company borrowed $1,885,800 (the

“May Loan”), on June 17, 2020 the Company borrowed $500,000 (the “June Loan”), and on February 2, 2021, the Company

borrowed $1,885,800 (the “February Loan”) from a U.S.

Small Business Administration (“SBA”) loan program.

The May loan bore interest at a rate of 1% per annum

and the SBA postponed any installment payments until September 6, 2021.

In November 2021 the May Loan was forgiven in its entirety, including

accrued interest of $18,502.

As a result, the Company recognized debt forgiveness of $1,904,296 in the year ended April 30, 2022.

The June Loan required installment payments of $2,594

monthly, beginning on June 17, 2021, over a term of thirty years.

However, the SBA postponed the first installment payment for 18 months

and the first payment became due on December 17, 2022.

The monthly payments of $2,594 are first applied to accrued interest payable.

monthly payments will not be applied to any of the outstanding principal balance until August of 2026.

Consequently, the entire loan balance

of $500,000 is classified as a long term liability.

Interest accrues at a rate of 3.75% per annum.

The Company agreed to grant

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

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

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

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

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

The Company agreed to grant a continuing

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

The February loan bears interest at a rate of 1% per

annum and the due date of the first payment has been postposed by the SBA because the Company has applied for forgiveness of the February

Loan in its entirety.

30, 2023, future payments under debt obligations over each of the next five years and thereafter were as follows:

Schedule of future payments under debt obligations

Twelve months ended April 30:

future payments of principal

Minimum future payments of principal

Fair Value Measurements

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

of financial instruments on a recurring basis.

and cash equivalents, accounts receivable, and accounts payable

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

Value Hierarchy

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

to valuation techniques used to measure fair value.

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

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

inputs (Level 3 measurements).

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

1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access

at the measurement date.

2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

3 inputs are unobservable inputs for the asset or liability.

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

Schedule of Financial assets measured at fair value on a

recurring basis

The Company uses fair value measurements to record

fair value adjustments to certain assets and liabilities and to determine fair value disclosures of financial instruments on a recurring

Cash and cash equivalents, accounts receivable,

and accounts payable

In general, carrying amounts approximate fair value

because of the short maturity of these instruments.

Fair Value Hierarchy

The Fair Value Measurements Topic of the FASB Accounting

Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)

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

The three levels of the fair

value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active

markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices

included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset

or liability.

Financial assets measured at fair value on a recurring

basis are summarized below as of April 30, 2023 and 2022:

Schedule of Financial assets measured at fair value on a recurring basis

April 30, 2023

2 unchanged sentences

Equity securities at fair value

Determination

of Fair Value

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

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

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

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

Fair value measurements for assets and liabilities where there

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

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

Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement

of the asset or liability.

Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying

assumptions used, including discount rates and estimates of future cash flows, that could significantly affect the results of current

or future value.

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

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

Topic of the FASB Accounting Standards Codification).

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

expiring in the years of 2023 through 2042.

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

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

reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and

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

Determination of Fair Value

Under the Fair Value Measurements Topic of the FASB

Accounting Standards Codification, the Company bases its fair value on the price that would be received to sell an asset or paid to transfer

a liability in an orderly transaction between market participants at the measurement date.

It is the Company’s policy to maximize

the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the

fair value hierarchy.

Fair value measurements for assets and liabilities where there exists limited or no observable market data and,

therefore, are based primarily upon management’s own estimates, are often calculated based on current pricing policy, the economic

and competitive environment, the characteristics of the asset or liability and other such factors.

Therefore, the results cannot be determined

with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

Additionally, there may be

inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates

of future cash flows, that could significantly affect the results of current or future value.

See Note 1 for a description of valuation methodologies

used for assets and liabilities recorded at fair value and for estimating fair value where it is practicable to do so for financial instruments

not recorded at fair value (disclosures required by the Fair Value Measurements Topic of the FASB Accounting Standards Codification).

Deferred income taxes reflect the net tax effects

of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used

for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities as of April 30, 2023 and 2022

were as follows:

Schedule of Income Taxes

1 unchanged sentence

Net operating loss carryforwards

Bad debt expense

Bad debt allowance

Stock-based compensation

Asset impairment loss

Deferred tax assets

2 unchanged sentences

Total deferred tax liability

Total net deferred tax

assets (liabilities)

Total net deferred tax assets (liabilities)

$ ( 1,657,000 )

$ ( 977,000 )

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

with an effective tax rate of 13 % .

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

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

For fiscal 2023, our income tax expense was $ 854,000 ,

with an effective tax rate of 22%, Our effective tax rate and the resulting provision for income taxes were impacted by tax benefits related

to a net operating loss carryforward of $1.6 million.

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

with an effective tax rate of 13%.

similar to the statutory rate for federal and state taxes.

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

The Company does not expect the unrecognized

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

The Company recorded no interest and penalties

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

Our effective tax rate and the resulting provision for income taxes were impacted by tax benefits related

to a net operating loss carryforward of $1.1 million and non-taxable debt forgiveness of $1.9 million.

The Company did not have any material unrecognized

tax benefits as of April 30, 2023 and 2022.

The Company does not expect the unrecognized tax benefits to significantly increase or decrease

within the next twelve months.

The Company recorded no interest and penalties relating to unrecognized tax benefits as of and during the

years ended April 30, 2023 and 2022.

The Company is subject to U.S.

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

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

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

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

The Company is currently open to audit under the statute of limitations by the federal and state jurisdictions for the years ending April

30, 2020 through 2023.

Commitments and Contingencies

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

In the opinion of management, the

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

of the Company.

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

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

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

that ends on September 30, 2023.

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

novel strain of coronavirus, or COVID-19, has spread throughout the world and has been declared to be a pandemic by the World Health

Organization.

As of the date this report was issued, our operations have not been significantly impacted by the COVID-19 outbreak.

number of people establishing accounts on our website Netcapital.com more than doubled during the pandemic.

Most of our employees work

remotely from a home office to access our technology, which runs 24 hours a day on the internet.

However, we cannot at this time predict

the specific extent, duration, or full impact that the COVID-19 outbreak will have on our financial condition, operations, and business

plans for fiscal year 2023.

Our operations have adapted social distancing practices, and the next expected milestones of our product

may be impacted, and we may experience delays in anticipated timelines and milestones.

The Company is subject to legal proceedings and claims

that arise in the ordinary course of its business.

In the opinion of management, the amount of ultimate liability, if any, is not likely

to have a material effect on the financial condition, results of operations or liquidity of the Company.

However, as the outcome of litigation

or legal claims is difficult to predict, significant changes in the estimated exposures could occur.

There are no known legal complaints

or claims against the Company.

The Company utilizes virtual office space in Boston,

Massachusetts, at a cost of approximately $5,700 per month under a membership agreement that ends on September 30, 2023.

The membership

agreement includes a deposit of $6,300.

A novel strain of coronavirus, or COVID-19, has spread

throughout the world and has been declared to be a pandemic by the World Health Organization.

As of the date this report was issued, our

operations have not been significantly impacted by the COVID-19 outbreak.

The number of people establishing accounts on our website Netcapital.com

more than doubled during the pandemic.

Most of our employees work remotely from a home office to access our technology, which runs 24

hours a day on the internet.

However, we cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak

will have on our financial condition, operations, and business plans for fiscal year 2023.

Our operations have adapted social distancing

practices, and the next expected milestones of our product may be impacted, and we may experience delays in anticipated timelines and

Stockholders’ Equity

Company is authorized to issue 900,000,000 shares of its common stock, par value $0.001.

As of April 30, 2022 and 2021, there were 2,934,344

and 2,178,766 shares outstanding, respectively.

fiscal 2022, 57,186 shares of common stock were issued for stock-based compensation, 361,736 shares of common stock were issued to settle

related party liabilities in conjunction with the purchase Netcapital Funding Portal Inc., 199,156 shares of common stock were sold in

a private placement to accredited investors at a price of $9 per share, 50,000 shares of common stock were issued to purchase MSG Development

and 87,500 shares were issued in conjunction with the purchase of a 10% interest in Caesar Media Group Inc.

fiscal 2021, 99,270 shares of common stock were issued for stock-based compensation, 1,666,360 shares of common stock were issued to

purchase Netcapital Funding Portal Inc., and 5,000 shares of common stock were returned to the Company in exchange for a 20% ownership

of AthenaSoft Corp.

that was acquired by the Company during fiscal 2018.

The book value of the AthenaSoft Corp.

shares surrendered by

the Company was zero dollars, as the Company had recognized an impairment loss in a prior year.

The Company also issued 1,077 shares

of common stock, valued at $15,000, to pay a $15,000 liability.

The Company is authorized to issue 900,000,000 shares

of its common stock, par value $0.001.

As of April 30, 2023 and 2022, there were 6,440,527 and 2,934,344 shares outstanding, respectively.

In fiscal 2022, 57,186 shares of common stock were

issued for stock-based compensation, 361,736 shares of common stock were issued to settle related party liabilities in conjunction with

the purchase Netcapital Funding Portal Inc., 199,156 shares of common stock were sold in a private placement to accredited investors at

a price of $9 per share, 50,000 shares of common stock were issued to purchase MSG Development Corp.

and 87,500 shares were issued in

conjunction with the purchase of a 10% interest in Caesar Media Group Inc.

On January 27, 2022, the Company filed a Form S-8

registration statement for securities to be offered in employee benefit plans, to register 300,000 shares of common stock from the Company’s

2021 Equity Incentive Plan.

On February 2, 2022, the Company granted an aggregate of 272,000 options to purchase shares of common stock

of the company at a price of $10.50 per share.

The options were granted to employees, consultants, and members of the board of directors.

The options vest monthly on a straight-line basis over a 4-year period and expire in 10 years.

As of April 30, 2023 and 2022, 252,000

and 271,000 options, respectively, were outstanding.

During the quarter ended July 31, 2022, the Company

issued 39,901 shares of common stock with a value of $113,714 to settle a related party payable of $294,054.

The Company also issued 93,432

shares of common stock valued at $266,272 to retire $300,000 of convertible promissory notes plus accrued interest of $10,192.

The convertible

note holders also received warrants to purchase shares of common stock at a per share exercise price of $5.19, that are exercisable immediately,

and expire five years from the date of issuance.

These equity issuances resulted in a gain from the conversion of debt totaling $224,260,

which is recorded as other income in the income statement.

On July 15, 2022, the Company completed an underwritten

public offering of 1,205,000 shares of the Company’s common stock and warrants to purchase 1,205,000 shares of the Company’s

common stock at a combined public offering price of $4.15 per share and warrant.

The gross proceeds from the offering were $5,000,750

prior to deducting underwriting discounts, commissions, and other offering expenses, which resulted in net proceeds of $3,949,117.

warrants have a per share exercise price of $5.19, are exercisable immediately, and expire five years from the date of issuance.

In addition, the Company granted the underwriter a

45-day option to purchase up to an additional 180,750 shares of common stock and/or up to 180,750 additional warrants to cover over-allotments,

In connection with the closing of the offering, the underwriter partially exercised its over-allotment option and purchased an

additional 111,300 warrants, and the Company issued an aggregate of warrants to purchase 60,250 shares of our common stock to the underwriter

and its designees.

On December 16, 2022 the

Company completed an underwritten public offering of 1,247,000 shares of the Company’s common stock, at a price to the public of

$1.40 per share.

Pursuant to the terms of an underwriting agreement, the Company also granted the underwriters a 45-day option to purchase

up to an additional 187,000 shares of common stock solely to cover over-allotments, at the same price per share of $1.40, less the underwriting

discounts and commissions.

In conjunction with this offering, the Company issued the underwriter and its designees warrants to purchase

62,350 shares of our common stock at an exercise price of $1.75.

The underwriters exercised their over-allotment option and on January

5, 2023, the Company issued an additional 187,000 shares of its common stock.

The Company received net proceeds of $1,621,459 for the

issuance of a total of 1,434,000 shares of common stock for both the initial and over-allotment offering.

In conjunction with the exercise

of the over-allotment, the Company issued the underwriter and its designees warrants to purchase 9,350 shares of our common stock with

an exercise price of $1.75.

The Securities were offered,

issued and sold to the public pursuant to the Company’s shelf registration statement on Form S-3 (File No.

333-267921) previously

filed with the Securities and Exchange Commission (the “Commission”) on October 18, 2022 and declared effective by the Commission

on October 26, 2022 and related prospectus supplements dated December 13, 2022, as amended on December 16, 2022.

The following tables summarize information about warrants outstanding as

of April 30, 2023 and 2022:

Schedule of warrants outstanding

Warrants Outstanding

Warrants Exercisable

As of April 30, 2023

$ 1.75 - $5.19

As of April 30, 2022

Schedule of Warrants activity

Exercise Price

Outstanding May 1, 2021

Issued during year ended April 30, 2022

Exercised/canceled during year ended April 30, 2022

Outstanding April 30, 2022

Issued during year ended April 30, 2023

$ 1.75 - $ 5.19

Exercised/canceled during year ended April 30, 2023

Warrants outstanding April 30, 2023

$ $ 1.75 - $ 5.19

Warrants exercisable, April 30, 2023

As a result of the two offerings, the company has

warrants outstanding, with a five-year term, to purchase a total of 1,469,982 shares of its common stock at an exercise price of $5.19

and 71,700 shares of its common stock at an exercise price of $1.75.

The warrants issued to the underwriter’s representatives and

to the underwriter were not part of a unit, consisting of one share of common stock and one warrant and are valued based upon unadjusted

quoted prices on the Nasdaq market.

During the year ended April 30, 2023, in addition

to the public offerings, the Company issued 75,000 shares of common stock, valued at $732,751, in conjunction with the purchase of a 10%

equity stake in Caesar Media Group, Inc., 300,000 shares of common stock, valued at $435,000 to purchase the website and intellectual

property of a real-time video conferencing website, 2,600 shares of common stock in conjunction with a stock subscription agreement with

accredited investors, valued at $23,400, and 6,250 shares of common stock in conjunction with an acquisition agreement that requires shares

to be issued by the Company.

As a result of this issuance, the value of the balance sheet account for shares to be issued decreased by

$61,063 to $183,187 as of April 30, 2023, from a balance of $244,250 as of April 30, 2022.

On January 5, 2023, the Company filed a Current Report

on Form 8-K and announced the formation of the Netcapital Inc.

2023 Omnibus Equity Incentive Plan (the “Plan”), which has

subsequently been approved by a vote of the shareholders.

The purposes of the Plan are to (i) provide an additional incentive to

selected employees, directors, and independent contractors of the Company or its affiliates whose contributions are essential to the growth

and success of the Company, (ii) strengthen the commitment of such individuals to the Company and its affiliates, (iii) motivate

those individuals to faithfully and diligently perform their responsibilities and (iv) attract and retain competent and dedicated

individuals whose efforts will result in the long-term growth and profitability of the Company.

In conjunction with these purposes, the

Company granted stock options to four individuals to purchase an aggregate of 1,600,000 of the Company’s common stock at a price

of $1.43 per share.

The Company also granted 350,000 stock options under the Plan to employees, consultants, and directors

on April 25, 2023 at an exercise price of $1.40 per share.

All stock options in the Plan vest monthly on a straight-line basis over a

4-year period and expire in 10 years.

the years ended April 30, 2023 and 2022, the Company recorded $269,577 and $1,176,058, respectively, in stock-based compensation expense.

As of April 30, 2023 and 2022, there was $552,329 and $0 of prepaid stock-based compensation expense.

table below presents the components of stock-based compensation expense for the years ended April 30, 2022 and 2021.

The prepaid balance of $552,329

is the result of the issuance of 350,000 shares of common stock to a third-party business consultant.

The table below presents the components of stock-based

compensation expense for the years ended April 30, 2023 and 2022.

Schedule of stock-based compensation expense

1 unchanged sentence

April 30, 2022

Chief Executive Officer

Chief Executive Officer, Netcapital Inc.

Chief Financial Officer

Chief Executive Officer, Netcapital Advisors Inc.

Chief Marketing Officer

3 unchanged sentences

Marketing consultant

Business consultant

1 unchanged sentence

Business development manager

Employee stock options

table below presents the number of shares issued as compensation for the years ended April 30, 2022 and 2021:

Employee and director stock options

The table below presents the number of shares issued

as compensation for the years ended April 30, 2023 and 2022:

April 30, 2023

3 unchanged sentences

Chief Marketing Officer

Marketing consultant

table below presents the prepaid stock-based compensation expense as of April 30, 2022 and 2021:

April 30, 2022

April 30, 2021

Chief Executive Officer

Chief Financial Officer

Related party consultant

Business consultant

Marketing consultant

following tables summarize information about stock options outstanding as of April 30, 2022 and 2021:

of stock options outstanding

of April 30, 2022

of November 30, 2021

Schedule of stock options activity

Business consultants

The following tables summarize information about stock options outstanding

as of April 30, 2023 and 2022:

Schedule of stock options outstanding

Options Outstanding

Options Exercisable

As of April 30, 2023

$1.40 - $10.50

As of April 30, 2022

$10.50 - $10.50

of stock options activity

Exercise Price

Outstanding May

Issued during year ended April

Exercised/canceled during

year ended April 30, 2021

Outstanding April 30, 2021

Issued during year ended April 30, 2022

Exercised/canceled during

year ended April 30, 2022

$ 10.50 - $ 10.50

Exercised/canceled during year ended April 30, 2022

$ 10.50 - $ 10.50

Options outstanding April 30, 2022

$ 10.50 - $ 10.50

Issued during year ended April 30, 2023

$ 1.40 - $ 1.43

Exercised/canceled during year ended April 30, 2023

$ 10.50 - $ 10.50

Options outstanding April 30, 2023

$ 1.40 - $ 10.50

Options exercisable, April 30, 2023

$ 1.40 - $ 10.50

Earnings Per Common Share

per common share data was computed as follows:

Earnings per common share data was computed as follows:

Schedule of earnings per share

4 unchanged sentences

Earnings per common share – diluted

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

common shares outstanding during the period.

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

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

Dilutive potential common shares include 39,901 and 397,296 shares, for the years ended April 30, 2022 and 2021, respectively,

that are issuable to satisfy a supplemental consideration liability.

In fiscal 2022, the Company also had $300,000 in convertible promissory

notes plus $5,326 in accrued interest payable that could convert, at a price per share of $7.20, into 42,406 shares of common stock.

Outstanding stock options, totaling 271,000 and 0 for the years ended April 30, 2022 and 2021, respectively, were not included in the

calculation of dilutive securities because their effect was anti-dilutive.

Basic net income per share is computed by dividing

net income available to common stockholders by the weighted average number of vested, unrestricted common shares outstanding during the

Diluted net income per share is computed based on the weighted average number of shares of common stock outstanding plus the effect

of dilutive potential common shares outstanding during the period using the if-converted method.

Dilutive potential common shares include

250 shares and 82,307 shares, respectively for the years ended April 30, 2023 and 2022.

As of April 30, 2022, 39,901 shares were issuable

to satisfy a supplemental consideration liability, in addition to $300,000 in convertible promissory notes plus $5,326 in accrued interest

payable that could convert, at a price per share of $7.20, into 42,406 shares of common stock.

Outstanding stock options, totaling 2,202,000 and

271,000 for the years ended April 30, 2023 and 2022, respectively, were not included in the calculation of dilutive securities because

their effect was anti-dilutive.

Vested warrants totaling 1,469,982 and 0 shares, for the years ended April 30, 2023 and 2022, were also

not included in the calculation of dilutive securities because their effect was anti-dilutive.

Related Party Transactions

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

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

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

with its purchase of Netcapital Funding Portal Inc., which was reduced to $294,054 as of April 30, 2022, because of the issuance to 361,736

shares of common stock, valued at $3,523,462.

Of the 361,736 shares that were issued, a total of 32,458 shares, representing a reduction

in the payable amount of $346,821, were issued to managers of Netcapital Systems LLC, and 3,151 shares, representing a reduction in the

payable amount of $30,691, were issued to our Chief Executive Officer.

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

software that runs the website www.netcapital.com.

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

during fiscal 2022.

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

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

The Company owns 710,200 shares of ChipBrain, Inc.,

valued at $1,704,480.

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

The Company owns 3,815,745 shares of KingsCrowd Inc.,

valued at $3,815,745.

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

The Company owns 2,350,000 membership interest units

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

The Company has notes receivable aggregating $152,000 from Deuce Drone LLC as of April 30,

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

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

to a related party consultant in the years ended April 30, 2022 and 2021 consisted of common stock valued at $25,908 and $76,882, respectively,

and cash compensation of $60,000 and $81,431, respectively.

This consultant is also the controlling

shareholder of Zelgor Inc., and the Company earned revenues from Zelgor Inc.

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

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

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

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

The Company’s largest shareholder, Netcapital

Systems LLC (“Systems”), owns 1,711,261 shares of common stock, or 26.6% of the Company’s 6,440,527 outstanding shares

as of April 30, 2023.

As of April 30, 2022, the Company accrued a payable to Systems of $294,054 for supplemental consideration owed in

conjunction with its purchase of Netcapital Funding Portal Inc., which was paid in full on July 14, 2022, with the issuance to Systems

of 39,901 shares of the Company’s common stock.

The Company provided professional services to Systems in the years ended April 30,

2023 and 2022 and recorded revenue of $4,660 and $15,000, respectively, for those services.

In total, the Company owed Systems $0 and $294,054

as of April 30, 2023 and 2022, respectively.

The company paid Systems $430,000 and $357,429 in the years ended April 30, 2023 and 2022,

respectively, for use of the software that runs the website www.netcapital.com.

The Chief Executive Officer of our wholly owned subsidiary,

Netcapital Advisors Inc., is a member of the board of directors of KingsCrowd Inc.

The Company sold 606,060 shares of KingsCrowd in June

2022 for proceeds of $200,000 and recorded a realized loss on the sale of the investment of $406,060.

As of April 30, 2023 and 2022, the

Company owned 3,209,685 and 3,815,745 shares of KingsCrowd Inc., valued at $3,209,685 and $3,815,745, respectively.

The Chief Executive Officer of our wholly owned subsidiary,

Netcapital Advisors Inc.

is a member of the board of directors of Deuce Drone LLC.

As of April 30, 2023 and 2022, the Company owned 2,350,000

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

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

Drone LLC as of April 30, 2023 and 2022.

expense to officers in the years ended April 30, 2023 and 2022 consisted of common stock valued at $0 and $190,763, respectively, cash

compensation of $598,077 and $265,688, respectively, and options to purchase common stock valued at $137,994 and $3,147, respectively.

Compensation to a related party consultant in the

years ended April 30, 2023 and 2022 consisted of common stock valued at $0 and $25,908, respectively, and cash compensation of $60,039

and $60,000, respectively.

This consultant is also the controlling shareholder of Zelgor Inc., and

the Company earned revenues from Zelgor Inc.

of $66,000 and $5,500 in the years ended April 30, 2023 and 2022.

The Company owns 1,400,000

shares of Zelgor Inc., valued at $1,400,000 and holds a note receivable of $50,000 as of April 30, 2023.

Cash compensation to the President of Netcapital Systems

LLC amounted to $184,808 and $96,000, and stock-based compensation amounted to $25,927 and $0, in the years ended April 30, 2023 and 2022,

respectively.

We owe Steven Geary, a director, $31,680

as of April 30, 2023 and 2022.

This obligation is not interest bearing.

$16,680 is recorded as

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

We have no signed agreements for the indebtedness

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

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

As a result of the

investment, the Company is a 19% owner of 6A Aviation Consortium Inc.

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

We paid cash compensation of

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

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

valued at $100,000.

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

an exercise price of $10.50 per share.

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

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

The options vest on a monthly

basis over 48 months and expire in 10 years.

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

$16,680 is recorded as a related party trade accounts payable

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

We have no signed agreements for the indebtedness to Mr.

The Company made an investment of $240,080 in an affiliate,

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

Our Chief Executive Officer is also the

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

As a result of the investment, the Company is a 19% owner of 6A Aviation

Consortium Inc.

In November 2021, we issued a member of our Board

10,000 shares of common stock for his service as a member of our board and audit committee, valued at $100,000.

On February 2, 2022, the Company granted members of

our board of directors an aggregate of 25,000 options to purchase shares of our common stock at an exercise price of $10.50 per share.

An option to purchase 10,000 shares of common stock was granted to the Chief Executive Officer of Netcapital Advisors Inc., who is also

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

The options vest

on a straight-line basis over 48 months and expire in 10 years.

On April 25, 2023, the Company also granted the same four members of our

board of directors an aggregate of 80,000 options, or 20,000 for each board member, to purchase shares of our common stock at an exercise

price of $1.40 per share.

The options vest monthly on a straight-line basis over a 4-year period and expire in 10 years.

In January 2023 we granted stock options to purchase

an aggregate of 1,600,000 shares of our common stock to four related parties as follows:

Our Chief Executive Officer, 1,000,000 shares;

our Chief Financial Officer, 200,000 shares;

our Founder, 200,000 shares;

and a director of one of our subsidiaries, 200,000 shares.

options have an exercise price of $1.43, vest monthly on a straight-line basis over a 4-year period and expire in 10 years.

Coreen Kraysler, our Chief Financial Officer, has

personally guaranteed a $500,000 promissory note from the U.S.

Small Business Administration.

note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,594 are scheduled to begin on June 17,

Company recorded $19,844 in revenues from a company that Cecilia Lenk, our Chief Executive Officer, serves as a member of the board of

April 2022, the Company received 3,000,000 units of Cust Corp.

as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.40 per unit based on a sales price of $0.40 per unit on an online funding portal.

The receipt of

the units satisfied an accounts receivable balance of $1,200,000.

As of April 30, 2022, the Company owned 3,000,000 units which are valued

The note bears interest at an annual

rate of 3.75%, has a 30-year term, and monthly payments of $2,594 began on December 17, 2022.

In April 2023, the Company received 2,853,659 units

of HeadFarm LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.41 per unit

based on a sales price of $0.41 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance

of $1,170,000.

As of April 30, 2023, the Company owned 2,856,659 units which are valued at $1,170,000.

In April 2023, the Company received 2,853,659 units

of CupCrew LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.41 per unit

based on a sales price of $0.41 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance

of $1,170,000.

As of April 30, 2023, the Company owned 2,856,659 units which are valued at $1,170,000.

In April 2023, the Company received 2,853,659 units

of CountSharp LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.41 per unit

based on a sales price of $0.41 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance

of $1,170,000.

As of April 30, 2023, the Company owned 2,856,659 units which are valued at $1,170,000.

In January 2023, the Company received 2,100,000 units

of Dark LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $1.00 per unit based

on a sales price of $1.00 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance of $2,100,000.

As of April 30, 2023, the Company owned 2,100,000 units which are valued at $2,100,000.

In August 2022, the Company received 1,911,765 units

of NetWire LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.68 per unit

based on a sales price of $0.68 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance

of $1,300,000.

As of April 30, 2023, the Company owned 1,911,765 units which are valued at $1,300,000.

In May 2022, the Company received 1,764,706 units

of Reper LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.68 per unit based

on a sales price of $0.68 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance of $1,200,000.

As of April 30, 2023, the Company owned 1,764,706 units which are valued at $1,200,000.

In April 2022, the Company received 3,000,000 units

of Cust Corp.

as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.40 per unit based

on a sales price of $0.40 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance of $1,200,000.

As of April 30, 2023 and 2022, the Company owned 3,000,000 units which are valued at $1,200,000.

In January 2022, the Company received 1,700,000 units

of ScanHash LLC as a payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.25 per unit

based on a sales price of $0.25 per unit on an online funding portal.

The receipt of the units satisfied $425,000 of an accounts receivable

As of April 30, 2023 and 2022, the Company owned 1,700,000 units which are valued at $425,000.

In January 2022, the Company received 2,850,000 units

of Hiveskill LLC as payment for services rendered in conjunction with a crowdfunding offering.

The units are valued at $0.25 per unit

based on a sales price of $0.25 per unit on an online funding portal.

The receipt of the units satisfied an accounts receivable balance

As of April 30, 2023 and 2022, the Company owned 2,850,000 units which are valued at $712,500.

In fiscal 2022, the Company purchased a 10% interest,

or 400 shares of common stock, in Caesar Media Group Inc.

(“Caesar”) for an initial purchase price of 50,000 shares of the

Company’s common stock, valued at $500,000.

Caesar is a marketing and technology solutions provider.

The purchase agreement includes

additional contractual requirements for the Company and Caesar, including the issuance of an additional 150,000 shares of common stock

of the Company over a two-year period.

The Company issued 37,500 shares of its common stock in April 2022, 25,000 shares of its common

stock in September 2022, 12,500 shares of its common stock in October 2022, 18,750 shares of its common stock in January 2023 and 18,750

shares of its common stock in April 2023, as part of its contractual payment obligations.

As of April 30, 2023 and 2022, there have been

no observable price changes in the value of Caesar’s common stock and the Company has valued its ownership in Caesar at cost, which

amounted to $1,632,751 and $900,000 as of April 30, 2023 and 2022, respectively.

In August 2020

the Company entered a consulting agreement with C-Reveal Therapeutics LLC (“CRT”).

for a $120,000 fee over a 12-month period.

$50,000 of the fee was payable in CRT units.

As of April 30, 2023 and 2022, the Company owned 5,000 units, at a value of $50,000.

In May 2020, the Company entered a consulting contract

with MustWatch LLC (“MW”), which allowed the Company to receive 110,000 membership interest units of MW in return for services

rendered in conjunction with a crowdfunding offering.

The Company earned 97,500 membership interest units in the quarter ended July 31,

2020, valued at $2.14 per unit, or $235,400.

As of April 30, 2023, the MW units are valued at $4 per unit based on a sales price of $4

per unit on an online funding portal.

As of April 30, 2023 and 2022, the Company owned 110,000 MW units, which are valued at $440,000

and $235,400, respectively.

The $204,600 increase in value of the MW units owned by the Company is recorded as an unrealized gain in the

year ended April 30, 2023.

In May 2020, the Company entered into a consulting

contract with ChipBrain LLC (“Chip”), which allowed the Company to receive 710,200 membership interest units of Chip in return

for services rendered in conjunction with a crowdfunding offering.

The Chip units were initially valued at $0.93 per unit based on a sales

price of $0.93 per unit on an online funding portal.

Subsequently, Chip sold identical units for $4.74 per unit, and as of April 30, 2023

and April 30, 2022, the 710,200 units owned by the Company are valued at $3,366,348 and $1,704,480, respectively.

The $1,661,868 increase

in value of the Chip units owned by the Company was recorded as an unrealized gain in the year ended April 30, 2023.

In May 2020, the Company entered a consulting contract

with a related party, Zelgor Inc.

(“Zelgor”), which allowed the Company to receive 1,400,000 shares of common stock of Zelgor

in return for services rendered in conjunction with a crowdfunding offering.

The Zelgor shares are valued at $1.00 per share based on

a sales price of $1.00 per share on an online funding portal.

As of April 30, 2023 and 2022, the Company owned 1,400,000 shares which

are valued at $1,400,000.

On January 2, 2020, the Company entered a consulting

contract with Deuce Drone LLC (“Drone”), which allowed the Company to receive up to 2,350,000 membership interest units of

Drone in return for consulting services.

The Company earned all 2,350,000 membership interest units in fiscal 2020.

The Drone units were

valued at $0.35 per unit based on a sales price of $0.35 per unit when the units were earned, or $822,500.

Drone subsequently sold identical

Drone units for $1.00 per unit on an online funding portal and as of April 30, 2023 and 2022, the units owned by the Company are valued

at $2,350,000.

January 2022, the Company received 1,700,000 units of ScanHash LLC as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal.

The receipt of

the units satisfied $425,000 of an accounts receivable balance.

As of April 30, 2022, the Company owned 1,700,000 units which are valued

January 2022, the Company received 2,850,000 units of Hiveskill LLC as a payment for services rendered in conjunction with a crowdfunding

The units are valued at $0.25 per unit based on a sales price of $0.25 per unit on an online funding portal.

The receipt of

the units satisfied an accounts receivable balance of $712,500.

As of April 30, 2022, the Company owned 2,850,000 units which are valued

fiscal 2022, the Company purchased a 10% interest, or 400 shares of common stock, in Caesar Media Group Inc.

(“Caesar”) for

an initial purchase price of 50,000 shares of the Company’s common stock, valued at $500,000.

Caesar is a marketing and technology

solutions provider.

The purchase agreement includes additional contractual requirements for the Company and Caesar, including the issuance

of an additional 150,000 shares of common stock of the Company over a two-year period.

The Company issued 37,500 shares of its common

stock in April 2022 as part of its contractual payment obligations.

As of April 30, 2022, there have been no observable price changes

in the value of the Caesar’s common stock and the Company has valued its ownership in Caesar at cost, which is $900,000.

May 2020, the Company entered a consulting contract with Watch Party LLC (“WP”), which allowed the Company to receive up

to 110,000 membership interest units of WP in return for consulting services.

The WP units are valued at $2.14 per unit based on a sales

price of $2.14 per unit on an online funding portal, resulting in revenues of $235,400 for the year ended April 30, 2021.

30, 2022 and 2021, the Company owned 110,000 WP units, which are valued at $235,400.

May 2020, the Company entered a consulting contract with ChipBrain LLC (“Chip”), which allowed the Company to receive up

to 710,200 membership interest units of Chip in return for consulting services.

The Company earned 500,000 membership interest units

in the quarter ended July 31, 2020 and earned the remaining units in the quarter ending October 31, 2020.

The Chip units were initially

valued at $0.93 per unit based on a sales price of $0.93 per unit on an online funding portal, resulting in revenues of $660,486 for

the year ended April 30, 2021.

Subsequently, ChipBrain sold identical units for $2.40 per unit, and as of April 30, 2022 and 2021, the

units owned by the Company are valued at $1,704,480.

May 2020, the Company entered a consulting contract with a related party, Zelgor Inc.

(“Zelgor”), which allowed the Company

to receive up to 1,400,000 shares of common stock of Zelgor in return for consulting services.

The Company earned 1,050,000 shares in

the quarter ended July 31, 2020 and 350,000 shares in the quarter ending October 31, 2020.

The Zelgor shares are valued at $1.00 per

share based on a sales price of $1.00 per share on an online funding portal, resulting in revenues of $1,400,000 for the year ended April

January 2, 2020, the Company entered a consulting contract with Deuce Drone LLC (“Drone”), which allowed the Company to receive

up to 2,350,000 membership interest units of Drone in return for consulting services.

The Company earned all 2,350,000 membership interest

units in fiscal 2020.

The Drone units were valued at $0.35 per unit based on a sales price of $0.35 per unit when the units were earned,

Drone subsequently sold identical Drone units for $1.00 per unit on an online funding portal and as of April 30, 2022 and

2021, the units owned by the Company are valued at $2,350,000

August 2019, the Company entered a consulting contract with KingsCrowd LLC (“KingsCrowd”), which allowed the Company to receive

300,000 membership interest units of KingsCrowd in return for consulting services.

The KingsCrowd units were valued at $1.80 per unit

based on a sales price of $1.80 per unit when the units were earned, or $540,000.

In December 2020, KingsCrowd converted from a limited

liability company to a corporation to facilitate raising capital under Regulation A.

KingsCrowd filed a Form 1-A Offering Statement under

the Securities Act of 1933 and is selling shares at $1.00 per share.

In connection with the conversion to a corporation, each membership

interest unit converted into 12.71915 shares of common stock.

As of April 30, 2022 and 2021, the Company owned 3,815,745 shares of KingsCrowd

Inc., valued at $3,815,745 as of April 30, 2022 and $540,000 as of April 30, 2021.

fiscal 2019, the Company entered a consulting contract with Netcapital Systems LLC (“Netcapital”), which allowed the Company

to receive up to 1,000 membership interest units of Netcapital in return for consulting services.

The Company earned 40 units in the

quarter ended July 31, 2020, at a value of $91.15 per unit, or $3,646.

The Company earned all 1,000 Netcapital units but sold a portion

of the units in fiscal 2020 at a sales price of $91.15 per unit.

As of April 30, 2022 and 2021, the Company owned 528 Netcapital units,

at a value of $48,128.

July 20, 2020 the Company entered a consulting agreement with Vymedic, Inc.

In August 2019, the Company entered a consulting contract

with KingsCrowd LLC (“KingsCrowd”), which allowed the Company to receive 300,000 membership interest units of KingsCrowd in

return for services rendered in conjunction with a crowdfunding offering.

The KingsCrowd units were valued at $1.80 per unit based on

a sales price of $1.80 per unit when the units were earned, or $540,000.

In December 2020, KingsCrowd converted from a limited liability

company to a corporation to facilitate raising capital under Regulation A.

KingsCrowd filed a Form 1-A Offering Statement under the Securities

Act of 1933 and sold shares at $1.00 per share.

In connection with the conversion to a corporation, each membership interest unit converted

into 12.71915 shares of common stock, and the Company recorded an unrealized gain of $3,275,745 for the year ended April 30, 2022.

Company sold 606,060 shares of KingsCrowd in June 2022 for proceeds of $200,000 and recorded a realized loss on the sale of the investment

KingsCrowd filed a post qualification offering circular amendment on July 21, 2022 and continued to sell shares of stock

to the public for $1.00 per share.

As of April 30, 2023 and 2022, the Company owned 3,209,685 and 3,815,745 shares of KingsCrowd, valued

at $3,209,685 and $3,815,745, respectively.

During fiscal 2019, the Company entered into a consulting

contract with Netcapital Systems LLC, a related party, and earned membership interest units.

As of April 30, 2023 and 2022, the Company

owned 528 units, at a value of $48,128.

the Company entered into a consulting agreement with Vymedic, Inc.

for a $40,000 fee over a 5-month period.

Half the fee was

payable in stock and half is payable in cash.

As of April 30, 2022 and 2021, the Company owned $20,000 worth of stock.

following table summarizes the components of equity securities as of April 30, 2022 and 2021:

Half the fee was payable in

stock and half was payable in cash.

As of April 30, 2023 and 2022, the Company owned 4,000 units, at a value of $11,032 and $20,000,

respectively.

Based upon recent sales of shares of common stock of Vymedic Inc., the per share value dropped from $5.00 per share to $2.758

per share, and the Company recorded an unrealized loss on equity securities of $8,968 for the year ended April 30, 2023.

This unrealized

loss of $8,968 is netted with the unrealized gains of $204,600 and $1,661,868 in the MW and Chip securities, respectively, and results

in an unrealized gain in equity securities of $1,857,500 in the year ended April 30, 2023.

The following table summarizes the components of equity

securities as of April 30, 2023 and 2022:

Schedule of investments

7 unchanged sentences

Hiveskill LLC

Caesars Media Group Inc.

Caesar Media Group Inc.

Kingscrowd Inc.

above investments in equity securities are within the scope of ASC 321.

The Company monitors the investments for any changes in observable

prices from orderly transactions.

All investments are initially measured at cost and evaluated for impairment.

No impairment expense

was recognized in the years ended April 30, 2022 and 2021.

In fiscal 2022, the Company identified that Kingscrowd Inc.

had an observable

price change.

The result of the price change was an increase in the fair value of the equity securities totaling $3,275,745 in the fiscal

year ended April 30, 2022, which was recorded in the income statement as an unrealized gain on equity securities.

In fiscal 2021, there

were observable price changes in two securities, ChipBrain LLC and Deuce Drone LLC.

The result of these price changes was an increase

in the fair value of the equity securities totaling $2,571,494 in the fiscal year ended April 30, 2021, which was recorded in the income

statement as an unrealized gain on equity securities.

Business Acquisition

November 2, 2021, the owners of ValuCorp Inc.

(“ValuCorp”), a business valuation firm, formed a new company MSG Development

(“MSG”) and transferred most of the assets of ValuCorp to MSG.

The Company entered into an exchange agreement (“Agreement”)

whereby the Company received 100% of the outstanding shares of MSG in exchange for 75,000 shares of common stock of the Company.

shares of the Company’s common stock were issued in December 2021 and four annual installments of 6,250 shares are due over the

next four years.

Company finalized the allocation of the purchase price of the assets acquired in the purchase of MSG.

The value assigned to the professional

practice was derived using multi-period excess earnings methods under the income approach.

This approach estimates the excess earnings

generated over the lives of the customers that existed as of the acquisition date and discounts such earnings to present value.

The customers,

the business practice and other intangible assets are deemed to have a useful life of fifteen years and will be amortized on a straight-line

basis over the useful life.

assets were less than 20% of the value of the Company’s assets and the Company’s investment in MSG is less than 20% of the

Company’s market value.

Furthermore, the revenue and operating income of MSG’s predecessor, ValuCorp, for the prior two years,

is less than 20% of the revenue and operating income of the Company.

Upon evaluation of the components of the business combination, including

the relative voting rights in the combined entity, the composition of the governing body and senior management of the combined entity,

the relative size of each entity and the terms of the exchange of equity interests, the Company recorded the transaction in the third

quarter of fiscal 2022 as a purchase.

following table summarizes the value of the consideration for MSG and the amounts of the assets acquired in conjunction with the Agreement.

MSG had no liabilities.

Schedule of Merger agreement

Total consideration:

75,000 shares

of common stock of the Company

Recognized amounts of identifiable assets acquired:

Professional practice intangible

Technology-related intangibles

Marketing-related intangibles

Computer-related intangibles

Customer-related intangibles

Contract-related intangibles

Human capital and artistic-related intangibles

Total identifiable net assets

fair value of the common shares issued as the consideration for MSG was determined by the most recent closing price of the Company’s

common shares at the time the shares were issued.

Seven identifiable intangible assets were valued, as noted in the above table (the

CountSharp LLC

The above investments in equity securities are within

the scope of ASC 321.

The Company monitors the investments for any changes in observable prices from orderly transactions.

All investments

are initially measured at cost and evaluated for impairment.

No impairment expense was recognized in the years ended April 30, 2023 and

In fiscal 2023, there were observable price changes

in three securities, ChipBrain LLC, MustWatch LLC and Vymedic Inc.

The result of these price changes was an increase in the fair value

of the equity securities totaling $ 1,857,500 in the fiscal year ended April 30, 2023, which was recorded in the income statement as an

unrealized gain on equity securities.

In fiscal 2022, the Company identified that Kingscrowd

had an observable price change.

The result of the price change was an increase in the fair value of the equity securities totaling

$3,275,745 in the fiscal year ended April 30, 2022, which was recorded in the income statement as an unrealized gain on equity securities.

Intangible Assets

The estimated market value of the Intangible Assets on the date of purchase was $1,000,000, and the

value of the 75,000 shares of common stock of the Company, payable as consideration was $9.77 per share, or $732,750.

The value of the

Intangible Assets has been recorded at an aggregate value of $732,750.

of MSG’s revenues and earnings are included in the Company’s consolidated income statements through the day of closing of

November 8, 2021.

The consolidated income statements for the year ended April 30, 2022, include $250,100 in revenues from MSG for the

period November 8, 2021 to April 30, 2022.

MSG was a newly formed company with no operations when it was purchased.

It had intangible

assets that were contributed by its founder (the “Founder”) and no liabilities.

Consequently, there are no supplemental pro

forma revenues and earnings to report.

In conjunction with the purchase of MSG, the Company retained the Founder, who is a valuation

professional, to operate the business.

The parties agreed that Founder shall receive the first $360,000 in gross profits per year as

his compensation, that the Company would receive the next $720,000 per year in gross profits and any gross profits beyond $1,080,000

per year shall be split one-third to the Founder and two-thirds to the Company.

August 23, 2020, the Company entered into an Agreement and Plan of Merger (“Agreement”) whereby Netcapital Systems LLC (“Systems”)

would become an 80% owner of the Company.

Pursuant to the requirements of this agreement, the Company filed a definitive information

statement on Form 14C on September 21, 2020 to change the Company’s corporate name from ValueSetters, Inc.

to Netcapital Inc.

to amend the Company’s Articles of Incorporation to effect a stock combination, or reverse stock split, pursuant to which 2,000

shares of the Company’s common stock would be exchanged for one new share of common stock.

In conjunction with the merger agreement,

the Company issued 1,666,360 shares of common stock to Systems on November 5, 2020.

Agreement was a tax-free merger of Netcapital Funding Portal Inc.

(“FP”), a wholly owned subsidiary of Systems, with Netcapital

Acquisition Vehicle Inc., an indirect wholly owned subsidiary of the Company, wherein FP was the surviving corporation.

This transaction

was designed to enhance the Company’s revenues and ability to provide services to democratize the private capital markets while

helping companies at all stages to build, grow and fund their businesses with a full range of services from strategic advice to raising

As a result of the transaction, the Company is expected to be a leading provider of private capital transactions for entrepreneurs

seeking to raise money under the exemption provided by section 4(a)(6) of the Securities Act of 1933, which allows private companies

to raise up to $5 million every 12 months.

805-10-25-4 requires the identification of one of the combining entities in each business combination as the acquirer.

Upon evaluation

of the components of the business combination, including the relative voting rights in the combined entity, the composition of the governing

body and senior management of the combined entity, the relative size of each entity and the terms of the exchange of equity interests,

the Company recorded the transaction in the third quarter of fiscal 2021 as a purchase.

In conjunction with the purchase, Systems agreed

to vote all of its shares of common stock to support the resolutions of the existing board of directors of the Company.

following table summarizes the value of the consideration for FP and the amounts of the assets acquired and liabilities assumed in conjunction

with the Agreement.

Schedule of Merger agreement

Consideration:

1,666,360 shares of common stock of the Company

Payment of promissory notes and interest

Total consideration

Recognized amounts of identifiable assets acquired, and liabilities

Current assets

Accounts payable

Platform users

Platform investors

Platform issuers

Unpatented technology

Total identifiable net assets

fair value of the common shares issued as the consideration for FP was determined by the most recent (the prior day’s) closing

price of the Company’s common shares at the time the shares were issued.

The fair value of the assets and the liabilities of FP

equaled their book value.

Four identifiable intangible assets were valued;

platform users, platform investors, platform issuers and unpatented

technology (collectively the “Intangible Assets”).

The estimated market value of the Intangible Assets is approximately $27,800,000.

This amount is derived from valuing the IP functionality, brand, and license of FP at $1,000,000;

valuing current issuers and pipeline

issuers at approximately $14,000 each;

valuing platform users at $382 each;

and valuing investors at $1,025 each.

These values are derived

from comparing the FP Intangible Assets to the values recorded by funding portal offerings of FP’s competitors in public filings

via Regulation CF and Regulation A.

excess of purchase price over the total identifiable tangible net assets of $344,810, leaves an aggregate value of $14,803,954 to be

assigned to the Intangible Assets.

The estimated value of the $27,800,000 of Intangible Assets is allocated on a percentage basis in

the above table to equal $14,803,954.

of FP’s revenues and earnings are included in the Company’s consolidated income statements through the day of closing of

November 5, 2020.

The consolidated income statements for the year ended April 30, 2021 include $834,981 in revenues from FP.

If the entities

had been combined for the two reporting periods, the supplemental pro forma revenues and earnings are as follows:

Schedule of Pro forma revenue and earnings

Supplemental pro forma for 4/1/20 – 11/04/20

Supplemental pro forma for 4/1/19 – 11/04/19

in the supplemental pro forma information above is revenue earned by the Company from Netcapital Systems LLC of $ 18,646

and $ 152,864

in the periods ended November 4, 2020 and 2019,

respectively.

quarter the Company reviews events and circumstances to determine if impairment of indefinite-lived intangible assets is indicated.

the years ended April 30, 2022 and 2021, we did not identify any triggering events or circumstances, including impacts due to COVID-19,

which would indicate an impairment of indefinite-lived intangible assets.

Intangible assets with defined useful lives are generally

measured at cost less straight-line amortization.

The useful life is determined using the period of the underlying contract or the period

of time over which the intangible asset can be expected to be used.

Impairments are recognized if the recoverable amount of the asset

is lower than the carrying amount.

The recoverable amount is the higher of either the fair value less costs to sell or the value in use.

The value in use is determined on the basis of future cash inflows and outflows, and the weighted average cost of capital.

assets with indefinite useful lives, such as trade names and trademarks, that have been acquired as part of acquisitions are measured

at cost and tested for impairment annually, or if there is an indication that their value has declined.

In December 2022, the Company purchased the website,

intellectual property, source code and domain names of 1ON1.FANS and ONEONONE.FANS (the “Assets”).

Pursuant to the guidance

of Topic 805, it was determined that the purchase of the Assets did not meet the definition of a business and the asset purchase was accounted

for as an asset acquisition.

The fair value of the consideration, consisting of 300,000 shares of the Company’s common stock, valued

at $435,000, was attributed to a single asset and is classified as acquired intellectual property and website.

The following table sets forth the major categories

of the intangible assets as of April 30, 2023 and 2022

Schedule of intangible assets

April 30, 2023

April 30, 2022

Acquired users

Acquired brand

Acquired intellectual property and website

Professional practice

Literary works and contracts

Total intangible assets

As of April 30, 2023, the weighted average remaining

useful life for technology, trade names, professional practice, literary works and domains is 14.16 years.

Accumulated amortization amounted

to $ 96,407 as of April 30, 2023, resulting in net intangible assets of $ 15,875,297 .

Subsequent Events

Company evaluated subsequent events through the date these financial statements were available to be issued.

July 14, 2022, the Company paid in full two outstanding convertible promissory notes and accrued interest payable totaling $310,192 by

the issuance of 93,432 shares of common stock of the Company.

The Company also issued 39,901 shares of common stock to pay off the $294,054

balance of supplemental consideration due to Netcapital Systems LLC.

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

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

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

The warrants have a per share exercise price of $5.19, are exercisable immediately, and expire five years from the date of issuance.

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

symbols “NCPL” and “NCPLW,” respectively.

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

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

In connection with the closing of the offering, the underwriter partially

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

The underwriter retains the right to exercise the balance

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

July 21, 2022 the company paid $1 million to its secured lender, Vaxstar LLC, to reduce the principal balance on its debt from $1,400,000

The Company evaluated subsequent events through the

date these financial statements were available to be issued.

On May 23, 2023the Company entered into a securities

purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to

issue and sell to such investors, in a registered direct offering (the “Offering”), 1,100,000 shares (the “Shares”)

of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price of $1.55 per Share, for aggregate

gross proceeds of $1,705,000, before deducting the placement agent’s fees and other offering expenses payable by the Company.

Offering closed on May 25, 2023.

The Shares were offered and issued and sold pursuant to the Company’s shelf registration statement

on Form S-3 (File 333-267921) (the “Shelf Registration Statement”), filed by the Company with the Securities and Exchange

Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), on October 18, 2022

and declared effective on October 26, 2022.

Also in connection with the Offering, on May 23, 2023,

the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with ThinkEquity LLC (the “Placement

Agent”), pursuant to which (i) the Placement Agent agreed to act as placement agent on a “best efforts” basis in connection

with the Offering, (ii) the Company agreed to pay the Placement Agent an aggregate fee equal to 8.0% of the gross proceeds raised in the

Offering, and to reimburse the Placement Agent for certain expenses, and (iii) the Company agreed to issue to the Placement Agent warrants

to purchase up to 55,000 shares of common stock at an exercise price of $1.94 (the “Placement Agent Warrants”), which were

issued on May 25, 2023.

The Placement Agent Warrants (and the shares of Common Stock issuable upon the exercise of the Placement Agent

Warrants) were not registered under the Securities Act and were offered pursuant to an exemption from the registration requirements of

the Securities Act provided in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

The Placement Agency Agreement and the Purchase Agreement

contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations

of the Company, the Placement Agent, or the investors, as the case may be, other obligations of the parties and termination provisions.

In conjunction with the above noted Offering, the

Company paid off its secured lender, Vaxstar LLC, $350,000 in principal plus accrued interest of $17,167.23 to retire all outstanding

obligations to Vaxstar LLC.

In July 2023, the Company issued 49,855 shares of

its common stock in consideration of a release from an unrelated third party in conjunction with the settlement of an outstanding debt

between such third party and Netcapital Systems LLC.

On July 24, 2023 the Company completed an underwritten

public offering of 1,725,000 shares of the Company’s common stock, at a price to the public of $0.70 per share for aggregate gross

proceeds of $1,207,500, before deducting underwriting discounts and offering expenses payable by the Company.

In conjunction with this

offering, the Company issued the underwriter, and its designees, warrants to purchase 86,250 shares of our common stock at an exercise

price of $0.875.

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

What changed 10-K

Item 9A. Controls and Procedures