☒QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of December ~~12, 2022~~14, 2023 the ~~Company~~registrant had ~~4,619,027~~ 9,459,132shares of its common stock, par value $0.001 per share, issued and outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

You are cautioned that all forward-looking statements involve risks and uncertainties. We undertake no obligation to amend this Form 10-Q or our annual report on Form 10-K or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to applicable federal securities laws) to reflect subsequent events or circumstances.

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

For the Six Months Ended October 31, ~~2022~~2023 and the Year Ended April 30, ~~2022~~2023

The accompanying unaudited condensed financial statements of Netcapital Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and ~~footnotes~~notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~six-~~three- and ~~three-month~~six-month periods ended October 31, ~~2022,~~2023, are not necessarily indicative of the results that may be expected for the fiscal year ended April 30, ~~2023.~~2024. For further information, refer to the audited financial statements and ~~footnotes thereto~~accompanying notes included in our Annual Report on Form 10-K for the year ended April 30, ~~2022.~~2023.

Preparation of condensed consolidated financial statements in conformity with GAAP requires the ~~Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets~~use of estimates and ~~Contract Liabilities from Contracts with Customers (Topic 805). This ASU~~judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. GAAP requires ~~an acquirer~~us to make estimates and judgments in ~~a business combination~~several areas, including, but not limited to, ~~recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the~~those related to revenue recognition, ~~guidance~~accounts receivable, valuation of equity securities, income taxes, and valuation of long-lived assets including intellectual property and purchased technology. These estimates are based on management’s knowledge of current events, interpretation of regulations, and expectations about actions we may undertake in ~~Topic 606. At~~ the ~~acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective~~future. Actual results could differ materially from those estimates.

There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year ended April 30, 2023.

The Company accounts for allowance for credit losses under the current expected credit loss (“CECL”) impairment model for its financial assets, including accounts receivable, and presents the net amount of ~~adoption. This ASU is currently not~~the financial instrument expected to ~~have a material impact~~be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on ~~our consolidated financial statements.~~

~~In November 2021,~~this model, the ~~Financial Accounting Standards Board (FASB) issued ASU No. 2021-10,~~ ~~Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance~~ ~~(ASU 2021-10), which requires~~Company estimates the ~~disclosure~~amount of ~~government assistance received by most business entities relating to: (1)~~uncollectible accounts receivable at the ~~types~~end of ~~government assistance received; (2)~~each reporting period based on the ~~accounting for such assistance; and (3) the effect~~aging of the ~~assistance on a business entity’s financial statements. The additional annual disclosures required~~receivable balance, current and historical customer trends, communications with its customers, and macro-economic conditions. Amounts are ~~not expected~~written off after considerable collection efforts have been made and the amounts are determined to ~~have a material impact on our consolidated financial statements.~~be uncollectible.

~~In June 2022, the FASB issued ASU No. 2022-03,~~ ~~Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions~~ (ASU 2022-03), which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The adoption of this new standard is not expected to have a material impact on our consolidated financial statements.

Management does not believe that any ~~other~~ recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

For the three and six months ended October 31, 2023, the Company had one customer that constituted 27% and 31% of revenues, and a second customer that constituted 27% and 31% of revenues, and a third customer that constituted 20% and 11% of revenues, respectively. For the three and six months ended October 31, 2022, the Company had one customer that constituted 79% and 67% of revenues, and a second customer that constituted 0% and 10% of revenues, respectively. ~~For the three and six months ended October 31, 2021, the Company had one customer that constituted~~ 42~~% and~~ 28~~% of revenues, and a second customer that constituted~~ 33~~% and~~ 22~~% of revenues, respectively.~~

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

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%~~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 less. For larger contracts, in addition to the initial payment, the Company may allow for progress payments throughout the term of the contract.

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 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.

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. These reserves are recorded as operating expenses against the 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 revenues represent billings or payments received in advance of revenue recognition and are 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.

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.

The Company’s subscription terms are typically less than one year. All of the Company’s revenues in the three and six months ended October 31, ~~2022,~~2023, which amounted to $~~1,778,973~~2,041,658 and $~~3,119,546~~3,561,467, respectively, are considered contract revenues. Contract revenue as of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, which has not yet been recognized, amounted to $~~660~~508 and $~~2,532~~661, 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.

Revenue is from U.S.-based companies with no notable geographical concentrations in any area. A distinction exists in revenue source; revenues are either generated online or from consulting services.

Schedule of revenue
Three Months Ended Oct. 31, 2022 Three Months Ended Oct. 31, 2021 Six Months Ended Oct. 31, 2022 Six Months Ended Oct. 31, 2021
Consulting services $ 1,594,560 $ 902,174 $ 2,756,390 $ 988,507
Fees from online services 184,413 297,648 363,156 836,502
Total revenues $ 1,778,973 $ 1,199,822 $ 3,119,546 $ 1,825,009

Note 4 – Earnings Per Common Share

Net income per common and diluted share were calculated as follows for the three- and six-month periods ended October 31, ~~2022~~2023 and ~~2021:~~2022:

Schedule of Earnings Per Share

Schedule of earnings per share
Three Months Ended October 31, 2022 Three Months Ended October 31, 2021 Six Months Ended October 31, 2022 Six Months Ended October 31, 2021
Net income attributable to common stockholders – basic $ 183,138 $ (274,156 ) $ 247,615 $ 1,183,254
Adjustments to net income — — — —
Net income attributable to common stockholders – diluted $ 183,138 $ (274,156 ) $ 247,615 $ 1,183,254

Weighted average common shares outstanding - basic 4,289,802 2,718,383 3,729,174 2,462,251
Effect of dilutive securities 250 — 250 35,557
Weighted average common shares outstanding – diluted 4,290,052 2,718,383 3,729,424 2,497,808

Earnings per common share - basic $ 0.04 $ (0.10 ) $ 0.07 $ 0.48
Earnings per common share - diluted $ 0.04 $ (0.10 ) $ 0.07 $ 0.47

	Three Months Ended October 31, 2023		Three Months Ended October 31, 2022		Six Months Ended October 31, 2023			Six Months Ended October 31, 2022
Net income (loss) attributable to common stockholders – basic	$	339,616	$	183,138	$	(152,039	)	$	247,615
Adjustments to net income		—		—		—			—
Net income (loss) attributable to common stockholders – diluted	$	339,616	$	183,138	$	(152,039	)	$	247,615

Weighted average common shares outstanding - basic		9,435,491		4,289,802		8,453,349			3,729,174
Effect of dilutive securities		250		250		—			250
Weighted average common shares outstanding – diluted		9,435,741		4,290,052		8,453,349			3,729,424

Earnings (loss) per common share - basic	$	0.04	$	0.04	$	(0.02	)	$	0.07
Earnings (loss) per common share - diluted	$	0.04	$	0.04	$	(0.02	)	$	0.07

250 shares of common stock that are issuable pursuant to a stock subscription ~~agreements~~agreement are included in the calculation of diluted earnings per share for the three months ended October 31, 2023 and the three and six months ended October 31, 2022. The 250 shares are not included in the calculation of diluted earnings per share for the six months ended October 31, 2023 because their effect is anti-dilutive.

Outstanding vested warrants to purchase 1,541,682 and 1,409,732 shares of common stock are not included in the calculation of earnings per share for the three and six months ended October 31, 2023 and 2022, respectively, because their effect is anti-dilutive.

Outstanding vested options to purchase 521,708 and 262,000 shares of common stock are not included in the calculation of earnings per share for the three and six months ended October 31, 2023 and 2022, respectively, because their effect is anti-dilutive. 35,557 shares that are issuable to satisfy a supplemental consideration liability were excluded for the calculation of loss per share for the three months ended October 31, 2021 because their effect is antidilutive.

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Note 5 – Principal Financing Arrangements

The following table summarizes components debt as of October 31, ~~2022~~2023 and April 30, ~~2022:~~2023:

Schedule of Debt

Schedule of debt
	October 31, 2022		April 30, 2022		Interest Rate			October 31, 2023		April 30, 2023		Interest Rate

Secured lender	$	400,000	$	1,400,000		8.0	%	$	—	$	350,000		12.0	%
Notes payable – related parties		19,660		22,860		0.0	%		15,000		15,000		0.0	%
Convertible promissory notes		—		300,000		8.0	%
U.S. SBA loan		500,000		500,000		3.75	%		500,000		500,000		3.75	%
U.S. SBA loan		1,885,800		1,885,800		1.0	%		1,885,800		1,885,800		1.0	%
Loan payable – bank		34,324		34,324		7.50	%		34,324		34,324		10.00	%
Total Debt		2,839,784		4,142,984					2,435,124		2,785,124
Less: current portion of long-term debt		2,350,721		3,647,911					1,935,124		2,285,124
Total long-term debt	$	489,063	$	495,073				$	500,000	$	500,000

As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owed its principal lender (“Lender”) ~~$400,000~~$0 and ~~$1,400,000,~~$350,000, respectively, under an amended loan and security agreement ~~(“Loan”)~~ dated July 26, 2014, ~~and~~ amended several times thereafter ~~so that the maturity date is now April 30,~~and paid in full in May 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 October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company’s related-party unsecured notes payable totaled ~~$19,660 and $22,860, respectively.~~$15,000.

As of October 31, 2022 and April 30, 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 owes ~~$34,324~~$34,324 as of October 31, ~~2022~~2023 and April 30, ~~2022~~2023 to Chase Bank. ~~The~~For the loan from Chase Bank, the Company pays interest ~~expense to Chase Bank,~~only on a monthly basis, which is calculated at a rate of ~~7.0%~~10.0% per ~~annum.~~annum as of October 31, 2023.

On May 6, 2020, the Company borrowed ~~$1,885,800~~$1,885,800 (the “May Loan”), on June 17, 2020 the Company borrowed ~~$500,000~~$500,000 (the “June Loan”), and on February 2, 2021, the Company borrowed ~~$1,885,800~~$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%1% per annum and 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,~~fiscal 2022.

The June Loan required installment payments of ~~$2,594~~$2,437 monthly, beginning on June 17, 2021, over a term of thirty ~~years.~~years. However, the SBA postponed the first installment payment for 18 months, and the first payment ~~is now~~became due on December 17, ~~2022.~~2022. The monthly payments of $2,437 are first applied to accrued interest payable. The monthly payments will not be applied to any of the outstanding principal balance until 2026. Consequently, the entire loan balance of $500,000 is classified as a long term liability. Interest accrues at a rate of ~~3.75%~~3.75% per annum. The Company agreed to grant a continuing security interest in its assets to secure payment and performance of all debts, liabilities, and obligations to the SBA. The June Loan was personally guaranteed by the Company’s Chief Financial Officer.

The February loan bears interest at a rate of 1%1% per annum and the due date of the first payment has been postponed by the SBA because the Company has applied for forgiveness of the February Loan.

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Note 6 – Income Taxes

~~As of~~For the three and six months ended October 31, ~~2022,~~2023, the Company ~~had net operating loss carryforwards for Federal~~recorded an income tax ~~purposes~~benefit of ~~approximately~~ $~~1,524,000~~326,289and 625,289, ~~expiring in the years of 2023 through 2042.~~

respectively. For the three and six months ended October 31, 2022, the Company recorded income tax expense of ~~$99,000~~ $99,000 and an income tax benefit of ~~$198,000,~~$198,000, respectively. ~~For~~Included in the income tax benefit for the three and six months ended October 31, ~~2021,~~2023 is an employee retention credit (“ERC”) of $508,292, as provided under the Coronavirus Aid, Relief and Economic Security Act. The ERC is a tax incentive available to the Company ~~recorded an income tax benefit of $86,000 and tax expense of $621,000, respectively.~~

~~As of October 31, 2022 and April 30, 2022,~~for retaining employees during the ~~Company had deferred tax assets calculated at an expected federal rate of~~ 21~~%, and a state and local rate of~~ 8~~%, when applicable, or approximately $796,000 and $719,000, respectively. As a result of unrealized book gains on equity securities,~~economic challenges posed by the Company also has a deferred tax liability of $1,575,000 and $1,696,000 as of October 31, 2022 and April 30, 2022, respectively. 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 October 31, 2022 and April 30, 2022 were as follows:COVID-19 pandemic.

Schedule of income taxes
October 31, 2022 April 30, 2022

Deferred tax assets, net:
Net operating loss carryforwards $ 380,000 $ 322,000
Bad debt allowance 40,000 40,000
Stock-based compensation 376,000 357,000
Deferred tax assets 796,000 719,000

Deferred tax liability
Unrealized gain 1,575,000 1,696,000

Net deferred tax liability $ (779,000 ) $ (977,000 )

Note 7 – Related Party Transactions

The Company’s largest shareholder, Netcapital Systems LLC (“Systems”), owns 1,711,261 shares of common stock, or ~~40%~~18% of the Company’s ~~4,312,777~~9,459,132 outstanding shares as of October 31, 2022. The Company has a demand note payable to Systems of $4,660. In addition, 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.

~~In total, the Company owed Systems $4,660 and $294,054 as of October 31, 2022 and April 30, 2022, respectively.~~2023. The company paid Systems ~~$50,000~~$5,000 in the three- and ~~$150,000~~six-month periods ended October 31, 2023, and $50,000 and $150,000 in the three and six months ended October 31, 2022, respectively, ~~and $207,428 and $257,428 in the three and six months ended October 31, 2022 and 2021, respectively,~~ for use of the software that runs the website ~~www.netcapital.com.~~www.netcapital.com.

~~Our~~The Chief Executive Officer of Netcapital Advisors Inc., (“Advisors”), our wholly owned subsidiary, 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~~$200,000 and recorded a realized loss on the sale of the investment of ~~$406,060.~~ $406,060 during the six months ended October 31, 2022. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 3,209,685 ~~and 3,815,745~~ shares of KingsCrowd Inc., valued at ~~$3,209,685 and $3,815,745, respectively.~~$3,209,685.

~~Our~~The Chief Executive Officer of Advisors is a member of the board of directors of Deuce Drone LLC. As of October 31, ~~2022~~2023 and April 30, 2022, the Company owns 2,350,000 membership interest units of Deuce Drone LLC., valued at ~~$2,350,000.~~$2,350,000. The Company has notes receivable aggregating ~~$152,000~~$152,000 from Deuce Drone LLC as of October 31, ~~2022~~2023 and April 30, ~~2022.~~2023.

Compensation to officers in the three- and six-month periods ended October 31, 2023 consisted of stock-based compensation valued at $93,526 and $187,058, respectively, and cash salary of $288,700 and $533,017 respectively.
Compensation to officers in the three- and six-month periods ended October 31, 2022 consisted of stock-based compensation valued at ~~$6,107~~$6,107 and ~~$12,215,~~$12,215, respectively, and cash salary of ~~$112,500~~$112,500 and $202,500, respectively. Compensation to officers in the three- and six-month periods ended October 31, 2021 consisted of stock-based compensation valued at $8,396 and $101,327, respectively, and cash salary of $72,000 and $144,000,$202,500, respectively.

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During the six months ended October 31, 2022, we paid $12,019 to a related party to retire a note payable of $3,200 and expenses payable of $8,819. No payments we made during the three months ended October 31, 2022.

Compensation to a related party consultant in the three- and six-month periods ended October 31, ~~2022 and 2021~~2023 consisted of cash wages of ~~$15,000~~$13,854 and ~~$30,000,~~$30,017, respectively, and ~~stock-based compensation of $6,530 and $25,908~~ for the ~~three~~three- and ~~six months~~six-month periods ended October 31, ~~2021, respectively.~~2022 consisted of cash wages of $15,000 and $30,000, respectively This consultant is also the controlling shareholder of Zelgor Inc. and ~~$16,500~~$16,500 and ~~$27,500~~$33,000 of the Company’s revenues in the ~~three~~three- and ~~six months~~six-month periods ended October 31, 2023, respectively, and $16,500 and $27,500 of the Company’s revenues in the three- and six-month periods ended October 31, 2022, respectively, were from Zelgor Inc. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 1,400,000 shares which are valued at ~~$1,400,000.~~$1,400,000.

As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company has invested ~~$240,080~~$240,080 in an affiliate, 6A Aviation Alaska Consortium, Inc., in conjunction with a land lease in an airport in Alaska. ~~Our~~The Chief Executive Officer of Advisors is also the Chief Executive Officer of 6A Aviation Alaska Consortium, Inc.

We owe Steven Geary, a director, ~~$31,680~~$31,680 as of October 31, ~~2022~~2023 and April 30, ~~2022.~~2023. This obligation is not interest bearing. ~~$16,680~~$16,680 is recorded as a related party trade accounts payable and ~~$15,000~~$15,000 as a related party note payable. We have no signed agreements for the indebtedness to Mr. ~~Geary.~~Geary and accordingly such obligations are not deemed in default. We owe a director of our Netcapital Funding Portal, Inc., $58,524, which is recorded as a related party trade accounts payable, and along with the $16,680 amount due to Mr. Geary, accounts for the total related party trade accounts payable amount of $75,204. The related party trade accounts payable obligations are not interest bearing and are not deemed in default.

During the six months ended October 31, 2022, we paid $12,019 to a related party to retire a note payable of $3,200 and expenses payable of $8,819.

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, Martin Kay, 1,000,000 shares; our Chief Financial Officer, Coreen Kraysler 200,000 shares; our Founder , Jason Frishman, 200,000 shares; and a director of Netcapital Funding Portal, Inc., Paul Riss, 200,000 shares. The 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.

On April 25, 2023, the Company also granted an aggregate of 80,000 options, or 20,000 options each to the following board members: Cecilia Lenk, Avi Liss, Steven Geary and Arnold Scott, 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.

Coreen Kraysler, our Chief Financial Officer, has personally guaranteed a $500,000 promissory note from the U.S. Small Business Administration. The note bears interest at an annual rate of 3.75%, has a 30-year term, and monthly payments of $2,437 began on December 17, 2022.

Note 8 – Stockholders’ Equity

The Company is authorized to issue 900,000,000 shares of its common stock, par value $0$~~.001~~0.001. ~~4,312,777~~9,459,132 and ~~2,934,344~~6,440,527 shares were outstanding as of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, respectively.

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 October 31, 2022 and April 30, 2022, 262,000 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~~$113,714 to settle a related party payable of ~~$294,054.~~$294,054. The Company also issued 93,432 shares of common stock valued at ~~$266,272~~$266,272 to retire ~~$300,000~~$300,000 of convertible promissory notes plus accrued interest of ~~$10,192.~~$10,192. The convertible note holders also received warrants to purchase shares of common stock at a per share exercise price of ~~$5.19,~~$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,~~$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~~$4.15 per share and warrant. The gross proceeds from the offering were ~~$5,000,750~~$5,000,750 prior to deducting underwriting discounts, commissions, and other offering expenses, which resulted in net proceeds of ~~$3,949,117.~~$3,949,117. The warrants have a per share exercise price of ~~$5.19,~~$5.19, are exercisable immediately, and expire five years from the date of issuance.

-16-

~~The following tables summarize information about warrants outstanding as of October 31, 2022 and April 30, 2022:~~

Schedule of warrants outstanding
Warrants Outstanding Warrants Exercisable
Weighted-
Average Weighted- Weighted-
Range of Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life (Years) Price Outstanding Price

As of April 30, 2022
— - — — $ — — $ —

As of October 31, 2022
$5.19 - $5.19 1,469,982 4.72 $ 5.19 1,409,732 $ 5.19

Schedule of warrants activity
Number of
Shares Exercise Price
Per Share Average
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 six months ended October 31, 2022 1,469,982 $ 5.19 $ 5.19

Exercised/canceled during six months ended October 31, 2022 — — $ —

Warrants outstanding October 31, 2022 1,469,982 $ 5.19 $ 5.19

Warrants exercisable, October 31, 2022 1,409,732 $ 5.19 $ 5.19

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, 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, and the Company issued an aggregate of 60,250 warrants to 20 individual representatives of the underwriter.

~~As a result~~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 has~~Company issued the underwriter and its designees warrants ~~outstanding, with a five-year term,~~ to purchase ~~a total of 1,469,982~~62,350 shares of ~~its~~our common stock at an exercise price of ~~$5.19.~~$1.75. The ~~warrants~~underwriters exercised their over-allotment option and on January 5, 2023, the Company issued toan additional 187,000 shares of its common stock. The Company received net proceeds of $1,621,459 for the ~~underwriter’s representatives and to the underwriter were not part~~issuance of a ~~unit, consisting~~total of ~~one share~~1,434,000 shares of common stock for both the initial and ~~one warrant and are valued based upon unadjusted quoted prices on~~over-allotment offering. In conjunction with the ~~Nasdaq market. The value~~exercise of the 60,250 representatives’ warrants amounted to $26,510 and the value of the 111,300 underwriter’s warrants amounted to $48,972. The trading price of a warrant with an identical term and exercise price, under the trading symbol of NCPLW, had a closing price of $0.44 on the day the representatives’ warrants and the underwriter’s warrants were issued. The value of the warrants is not an addition to capital in excess of par value because the value of the warrants is also an offsetting offering cost.

~~During the quarter ended October 31, 2022,~~over-allotment, the Company issued ~~37,500~~the underwriter and its designees warrants to purchase 9,350 shares of our common stock with an exercise price of $1.75.

During the year ended April 30, 2023, in addition to the public offerings, the Company issued 75,000 shares of common stock, valued at ~~$104,487,~~$732,751, in conjunction with the purchase of a ~~10%~~10% equity stake in Caesar Media Group, Inc. ~~The Company also issued~~ , 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.~~$23,400, and 6,250 shares of common stock in conjunction with an acquisition agreement that requires shares to be issued by the Company.

On January 5, 2023, the Company announced the formation of the Netcapital Inc. 2023 Omnibus Equity Incentive Plan (the “Plan”), which was subsequently approved by a vote of the shareholders. In January 2023, 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 and on April 25, 2023 also granted 350,000 stock options under the Plan to employees, consultants, and directors 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.

In May 2023, the Company issued 100,000 shares of its common stock, valued at $144,000, in conjunction with a consulting agreement with a business advisor.

On May 23, 2023, the Company entered into a securities 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 of the Company’s common stock, par value $0.001 per share, 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. The Offering closed on May 25, 2023.

Also, in connection with the Offering, on May 23, 2023, the Company entered into a placement agency agreement with ThinkEquity LLC, pursuant to which, the Company issued warrants to purchase up to 55,000 shares of common stock at an exercise price of $1.94, which were issued on May 25, 2023.

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.

-17-

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 the Company’s common stock at an exercise price of $0.875.

On July 31, 2023 and on October 26, 2023, the Company issued 18,750 shares of its common stock in conjunction with the purchase of a 10% interest in Caesar Media Group Inc. October 26, 2023, the Company issued 6,250 shares of its common stock in conjunction with its purchase of MSG Development Corp. (“MSG”), a wholly owned subsidiary. As a result of the issuance to MSG, the equity account for shares to be issued decreased by $61,063 from $183,187 to $122,124. The Company did not receive any proceeds for the issuance of these shares.

Note 9 –Fair Value

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.

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, we base 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 our 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.

Note 10 – Stock-Based Compensation Plans

In addition to cash payments, the Company enters agreements to issue common stock and records the applicable non-cash expense in accordance with the authoritative guidance of the Financial Accounting Standards Board.

For the three and six months ended October 31, 2023, stock-based compensation expense amounted to $280,522 and 763,873, respectively. For the three and six months ended October 31, 2022, stock-based compensation expense amounted to $32,953 and $65,906, respectively. ~~This expense is the estimated value of the vesting of 262,000 stock options that are outstanding as of October 31, 2022, and vest on a monthly basis over a 48-month period.~~

~~For the three and six months ended October 31, 2021, stock-based compensation expense amounted to $186,087~~ ~~and~~ ~~483,067, respectively.~~

The table below presents the components of compensation expense for the issuance of shares of common stock and stock options to employees and consultants for the three- and six-month periods ended October 31, ~~2022~~2023 and ~~2021.~~2022.

Schedule of Stock-based Compensation Expense

Stock-based compensation expense	Three Months Ended Oct. 31, 2023		Three Months Ended Oct. 31, 2022		Six Months Ended Oct. 31, 2023		Six Months Ended Oct. 31, 2022
Chief Executive Officer	$	62,492	$	—	$	124,986	$	—
Chief Financial Officer		14,913		2,443		29,828		4,886
Chief Executive Officer, Advisors		1,208		1,221		2,416		2,442
Founder		14,913		—		29,828		—
Marketing consultant		—		—		144,000		—
Marketing consultant		—		—		58,829		—
Employee and consultant options		45,845		29,289		91,684		58,578
Business consultant		141,151		—		282,302		—
Total stock-based compensation expense	$	280,522	$	32,953	$	763,873	$	65,906

-18-

Schedule of stock based compensation expense
Stock-based compensation expense Three Months Ended Oct. 31, 2022 Three Months Ended Oct. 31, 2021 Six Months Ended Oct. 31, 2022 Six Months Ended Oct. 31, 2021
Chief Executive Officer $ 1,221 $ — $ 2,442 $ 40,608
Chief Financial Officer 2,443 — 4,886 40,608
Chief Marketing Officer — 8,396 — 20,111
Related party consultant — 6,530 — 25,908
VP of Digital Strategy — 1,677 — 4,017
Marketing consultant — 37,052 — 74,104
Marketing consultant — 125,902 — 251,803
Employee and consultant options 29,289 — 58,578 —
Business consultant — 6,530 — 25,908
Total stock-based compensation expense $ 32,953 $ 186,087 $ 65,906 $ 483,067

~~The following tables summarize information about stock options outstanding as of October 31, 2022 and April 30, 2022:~~

Schedule of stock option outstanding
Options Outstanding Options Exercisable
Weighted-
Average Weighted- Weighted-
Range of Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life (Years) Price Outstanding Price

As of April 30, 2022
$10.50 - $10.50 271,000 9.79 $ 10.50 16,945 $ 10.50

As of October 31, 2022
$10.50 - $10.50 262,000 9.28 $ 10.50 54,583 $ 10.50

Schedule of stock options activity
Number of
Shares Exercise Price
Per Share Average
Exercise
Price
Outstanding May 1, 2021 — — $ —

Issued during year ended April 30, 2022 272,000 $ 10.50 $ 10.50

Exercised/canceled during year ended April 30, 2022 (1,000 ) $ 10.50 $ 10.50

Outstanding April 30, 2022 271,000 $ 10.50 $ 10.50

Issued during six months ended October 31, 2022 — — $ —

Exercised/canceled during six months ended October 31, 2022 (9,000 ) $ 10.50 $ 10.50

Options outstanding October 31, 2022 262,000 $ 10.50 $ 10.50

Options exercisable, October 31, 2022 54,583 $ 10.50 $ 10.50

Note 11 – Deposits and Commitments

We utilize an office at 1 Lincoln Street in Boston, Massachusetts. We currently pay a membership fee of approximately ~~$5,700~~$6,400 a month, under a virtual office agreement that expires in ~~September 2023~~March 2025 and includes a deposit of ~~$6,300.~~$6,300.

Note 12 – 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. 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.

The following table sets forth the major categories of the intangible assts as of October 31, ~~2022~~2023 and April 30, ~~2022~~2023

Schedule of Intangible Assets

Schedule of intangible assets
	October 31, 2022		April 30, 2022		October 31, 2023		April 30, 2023

Acquired users	$	14,288,695	$	14,288,695	$	14,288,695	$	14,288,695
Acquired brand		583,429		583,429		583,429		583,429
Acquired IP and Website						435,000		435,000
Professional practice		556,830		556,830		556,830		556,830
Literary works and contracts		107,750		107,750		107,750		107,750
Total intangible assets	$	15,536,704	$	15,536,704	$	15,971,704	$	15,971,704

As of October 31, ~~2022,~~2023, the weighted average remaining useful life for technology, trade names, professional practice, literary works and domains is ~~14.5~~13.66 years. Accumulated amortization amounted to $~~42,162~~153,069 as of October 31, ~~2022,~~2023, resulting in net intangible assets of ~~$15,494,542.~~$15,818,635.

Note 13 – Investments

In May 2023, the Company received 2,853,659 units of RealWorld 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 October 31, 2023, the Company owned 2,853,659 units which are valued at $1,170,000.

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 October 31, 2023 and April 30, 2023, the Company owned 2,853,659 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 October 31, 2023 and April 30, 2023, the Company owned 2,853,659 units which are valued at $1,170,000.

-19-

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 October 31, 2023 and April 30, 2023, the Company owned 2,853,659 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 October 31, 2023 and 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~~$0.68 per unit based on a sales price of ~~$0.68~~$0.68 per unit on an online funding portal. The receipt of the units satisfied an accounts receivable balance of ~~$1,300,000.~~$1,300,000. As of October 31, ~~2022,~~2023 and April 30, 2023, the Company owned 1,911,765 units which are valued at ~~$1,300,000.~~$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~~$0.68 per unit based on a sales price of ~~$0.68~~$0.68 per unit on an online funding portal. The receipt of the units satisfied an accounts receivable balance of ~~$1,200,000.~~$1,200,000. As of October 31, ~~2022,~~2023 and April 30, 2023, the Company owned 1,764,706 units which are valued at ~~$1,200,000.~~$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~~$0.40 per unit based on a sales price of ~~$0.40~~$0.40 per unit on an online funding portal. The receipt of the units satisfied an accounts receivable balance of ~~$1,200,000.~~$1,200,000. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 3,000,000 units which are valued at ~~$1,200,000.~~$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~~$0.25 per unit based on a sales price of ~~$0.25~~$0.25 per unit on an online funding portal. The receipt of the units satisfied ~~$425,000~~$425,000 of an accounts receivable balance. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 1,700,000 units which are valued at ~~$425,000.~~$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~~$0.25 per unit based on a sales price of ~~$0.25~~$0.25 per unit on an online funding portal. The receipt of the units satisfied an accounts receivable balance of ~~$712,500.~~$712,500. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 2,850,000 units which are valued at ~~$712,500.~~$712,500.

-20-

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.~~$500,000. Caesar is a marketing and technology solutions provider. The purchase agreement ~~includes~~included 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~~period, which have been issued ~~37,500 shares~~as of ~~its common stock in April 2022, 25,000 shares of its common stock in September 2022, and 12,500 shares of its common stock in~~ October ~~2022, as part of its contractual payment obligations.~~31, 2023. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, 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 ~~$1,004,488.~~$1,999,127 as of October 31, 2023.

In May 2020, the Company entered a consulting contract with Watch Party LLC (“WP”), which allowed the Company to receive 110,000 membership interest units of WP in return for consulting services. The Company earned 97,500 membership interest units in the quarter ended July 31, 2020. The WP units are valued at ~~$2.14~~$2.14 per unit based on a sales price of ~~$2.14~~$2.14 per unit on an online funding portal. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 110,000 WP units, which are valued at ~~$235,400.~~$440,000.

In May 2020, the Company entered a consulting contract with ChipBrain LLC (“Chip”), which allowed the Company to receive 710,200 membership interest units of Chip in return for consulting services. The Chip units were initially valued at ~~$0.93~~$0.93 per unit based on a sales price of ~~$0.93~~$0.93 per unit on an online funding portal. Subsequently, Chip sold identical units for ~~$2.40~~$2.40 per unit, and as of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the 710,200 units owned by the Company are valued at ~~$1,704,480.~~$3,366,348.

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 consulting services. The Zelgor shares are valued at ~~$1.00~~$1.00 per share based on a sales price of ~~$1.00~~$1.00 per share on an online funding portal. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 1,400,000 shares which are valued at ~~$1,400,000.~~$1,400,000.

On January 2, 2020, the Company entered a consulting contract with Deuce Drone LLC (“Drone”), which allowed the Company to receive 2,350,000 membership interest units of Drone in return for consulting services. The Drone units were originally valued at ~~$0.35~~$0.35 per unit based on a sales price of ~~$0.35~~$0.35 per unit when the units were earned, or ~~$822,500.~~$822,500. Drone subsequently sold identical Drone units for ~~$1.00~~$1.00 per unit on an online funding portal and as of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the units owned by the Company are valued at ~~$2,350,000~~$2,350,000.

In August 2019, the Company entered into 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~~$1.80 per unit based on a sales price of ~~$1.80~~$1.80 per unit when the units were earned, or ~~$540,000.~~$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~~$1.00 per share. In connection with the conversion to a corporation, each membership interest unit converted into 12.71915 shares of common stock. The Company sold 606,060 shares of KingsCrowd in June 2022 for proceeds of ~~$200,000~~$200,000 and recorded a realized loss on the sale of the investment of ~~$406,060.~~$406,060. KingsCrowd filed a post qualification offering circular amendment on July 21, 2022 and ~~continues~~continued to sell shares of stock to the public for ~~$1.00~~$1.00 per share. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 3,209,685 ~~and 3,815,745~~ shares of KingsCrowd valued at ~~$3,209,685 and $3,815,745, respectively.~~$3,209,685.

During 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 all 1,000 Netcapital units but sold a portion of the units in fiscal 2020 at a sales price of ~~$91.15~~$91.15 per unit. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 528 Netcapital units, at a value of ~~$48,128.~~$48,128.

-21-

In July 2020 the Company entered a consulting agreement with Vymedic, Inc. for a ~~$40,000~~$40,000 fee over a 5-month period. Half the fee was payable in stock and half was payable in cash. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, 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 three and six months ended October 31, 2022.$11,032.

In August 2020 the Company entered a consulting agreement with C-Reveal Therapeutics LLC (“CRT”). for a ~~$120,000~~$120,000 fee over a 12-month period. ~~$50,000~~$50,000 of the fee was payable in CRT units. As of October 31, ~~2022~~2023 and April 30, ~~2022,~~2023, the Company owned 5,000 units, at a value of ~~$50,000.~~$50,000.

The following table summarizes the components of investments as of October 31, ~~2022~~2023 and April 30, ~~2022:~~2023:

Schedule of Investments

Schedule of investments
	October 31, 2022		April 30, 2022		October 31, 2023		April 30, 2023

Netcapital Systems LLC	$	48,128	$	48,128	$	48,128	$	48,128
Watch Party LLC		235,400		235,400		440,000		440,000
Zelgor Inc.		1,400,000		1,400,000		1,400,000		1,400,000
ChipBrain LLC		1,704,480		1,704,480		3,366,348		3,366,348
Vymedic Inc.		11,032		20,000		11,032		11,032
C-Reveal Therapeutics LLC		50,000		50,000		50,000		50,000
Deuce Drone LLC		2,350,000		2,350,000		2,350,000		2,350,000
Hiveskill LLC		712,500		712,500		712,500		712,500
ScanHash LLC		425,000		425,000		425,000		425,000
Caesars Media Group Inc.		1,266,376		900,000
Caesar Media Group Inc.						1,999,127		1,632,752
Cust Corp.		1,200,000		1,200,000		1,200,000		1,200,000
Kingscrowd Inc.						3,209,685		3,209,685
Reper LLC		1,200,000		—		1,200,000		1,200,000
Kingscrowd Inc.		3,209,685		3,815,745
Dark LLC						2,100,000		2,100,000
Netwire LLC		1,300,000		—		1,300,000		1,300,000
CountSharp LLC						1,170,000		1,170,000
CupCrew LLC						1,170,000		1,170,000
HeadFarm LLC						1,170,000		1,170,000
RealWorld LLC						1,170,000		—
Total	$	15,112,601	$	12,861,253	$	24,491,820	$	22,955,445
Investment Owned, at cost					$	24,491,820	$	22,955,445

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 changes in estimated fair value.

Note 14 – Going Concern Matters and Realization of Assets

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However, at October 31, 2023, the Company had negative working capital of $1,131,275 and for the six months ended October 31, 2023, the Company had an operating loss of $696,800 and net cash used in operating activities amounted to $1,945,814.

There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. The Company has recently reduced its operating expenses and has turned its focus to its funding portal business, which generates cash revenues and has seen a growth in revenues on a year-to-year and quarter-to-quarter basis. The Company plans to continue operating with lower fixed overhead amounts and seeks to raise money from private placements, public offerings and/or bank financing. The Company’s management has determined, based on its recent history and the negative cash flow from operations, that it is unlikely that its plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. To the extent that funds generated from any private placements, public offerings and/or bank financing, if available, are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the Company’s management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its business network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty.

Note 1415 – Subsequent Events

The Company evaluated subsequent events through the date these financial statements were available to be issued.

~~In November 2022, the Company issued 6,250 shares of common stock in conjunction with its agreement dated October 30, 2021, to purchase MSG Development Corp.~~

In December 2022, the Company issued 300,000 shares of common stock to purchase all intellectual property, source code, logo, domain names and associated intangible assets of an interactive video platform known as 1ON1.FANS.

There were no ~~other~~ material subsequent events that required recognition or additional disclosure in these financial statements.

-22-

PART I

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This quarterly report on Form 10-Q and other reports filed by ~~the Company~~Netcapital Inc. (the “Company”) from time to time with the U.S. Securities and Exchange Commission (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Unless the context otherwise requires, references in this prospectus to the “Company,” “we,” “us,” and “our” refer to Netcapital Inc. and its subsidiaries.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Overview

Netcapital Inc. is a fintech company with a scalable technology platform that allows private companies to raise capital online from accredited and non-accredited investors. We give ~~virtually all~~ investors the opportunity to access investments in private companies. ~~Our~~We believe our model is disruptive to traditional private equity investing and is based on Title III, Reg CF of the JOBS Act. In addition, we have recently expanded our model to include Regulation A (“Reg A”) offerings. We generate fees from listing private companies on our ~~portal.~~funding portal located at www.netcapital.com. We generate fees from listing private companies on netcapital.com. We also generate fees from advising companies with respect to their Reg A offerings posted on www.netcapital.com. Our consulting group, Netcapital Advisors, Inc. (Netcapital Advisors), which is a wholly-owned subsidiary, provides marketing and strategic advice in exchange for equity positions and cash fees. The Netcapital funding portal is registered with the SEC, is a member of the Financial Industry Regulatory Authority, or FINRA, a registered national securities association, and provides investors with opportunities to invest in private companies. Neither Netcapital Advisors, nor any Netcapital entity or subsidiary, is a broker- dealer, nor do any of such entities operate as a broker-dealer with respect to any Reg A offering listed on the www.netcapital.com website.

-23-

We provide private company investment access to accredited ~~retail~~ and non-accredited ~~retail~~ investors through our online portal (www.netcapital.com)., which is operated by our wholly owned subsidiary Netcapital Funding Portal, Inc. The Netcapital funding portal charges a $5,000 engagement fee and a 4.9% success fee for capital raised at closing. In addition, the portal generates fees for other ancillary services, such as rolling closes. Netcapital Advisors generates fees and equity stakes from consulting in select portfolio and non-portfolio clients. With respect to its services for Reg A offerings, Netcapital Advisors charges a monthly flat fee for each month the offering is listed on the netcapital.com website as well as a nominal administrative flat fee for each investor that is processed to cover out-of-pocket costs. We generated revenues of $3,561,467, with costs of service of $38,187, in the six months ended October 31, 2023 for a gross profit of $3,523,280 (consisting of $2,626,667 in equity securities for payment of services and $934,000 in cash-based revenues, offset by $38,187 for costs of services) in the six months ended October 31, 2023 as compared to revenues of $3,119,546 with costs of service of $57,298 in the six months ended October 31, 2022 for a gross profit of $3,062,248 (consisting of $2,425,000 in equity securities for the payment of services and $694,546 in cash-based revenues, offset by $57,298 for costs of services) in the six months ended October 31, 2022. Our cash-based gross profits as a percentage of gross profits were approximately 2% and 2%, respectively in the six month periods ended October 31, 2023 and 2022, collected from two (2) and one (3) entities (for which we performed administrative services) in which we own equity during such periods The total number of offerings on the Netcapital funding portal in fiscal 2023 and 2022 that closed was 63 and 81, respectively, of which 13 and 17 offerings hosted on the Netcapital funding platform in fiscal 2023 and 2022, respectively terminated their listings without raising the required minimum dollar amount of capital. As of the date of this report, we own minority equity positions in 19 portfolio companies that have utilized the funding portal to facilitate their offerings, which equity was received as payment for services.

Netcapital.com is an SEC-registered funding portal that enables private companies to raise capital online, while investors are able to invest from almost anywhere in the world, at any time, with just a few clicks. Securities offerings on the portal are accessible through individual offering pages, where companies include product or service details, market size, competitive advantages, and financial documents. Companies can accept investment from virtually anyone, including friends, family, customers, employees, etc.

In addition to access to the funding portal, Netcapital provides the following services:

●	a fully automated onboarding process;
●	automated filing of required regulatory documents;
●	compliance review;
●	a custom-built offering page on our portal website;
●	third party transfer agent and custodial services;
●	email marketing to our proprietary list of investors;
●	rolling closes, which provide potential access to liquidity before final close date of offering;
●	assistance with annual filings; and
●	direct access to our team for ongoing support.

~~The company’s~~Our consulting group, Netcapital Advisors helps companies at all stages to raise capital. Netcapital Advisors provides strategic advice, technology consulting and digital marketing services to assist with fundraising campaigns on the Netcapital platform. The company also acts as an incubator and accelerator for select disruptive start-ups.

Netcapital Advisors’ services include:

●	incubation of technology start-ups;
●	investor introductions;
●	digital marketing;
●	website design, software and software development;
●	message crafting, including pitch decks, offering pages, and ad creation;
●	strategic advice; and
●	technology consulting.

-24-

Our valuation group, MSG Development Corp., which is also a wholly-owned subsidiary, prepares valuations.

The valuation services include:

●	business valuations;
●	fairness and solvency opinions;
●	ESOP feasibility and valuation;
●	non-cash charitable contributions;
●	economic analysis of damages;
●	intellectual property appraisals; and
●	compensation studies.

Recent Developments

Notice from Nasdaq on Failure to Satisfy a Continued Listing Rule

On September 1, 2023, we were notified (the “Notification Letter”) by The Nasdaq Stock Market, LLC (“Nasdaq”) that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of our common stock between July 20, 2023 and August 31, 2023, we no longer meet the minimum bid price requirement. The Notification Letter has no immediate effect on the listing or trading of our common stock on The Nasdaq Capital Market and, at this time, the common stock will continue to trade on The Nasdaq Capital Market under the symbol “NCPL.”

The Notification Letter provides that we have 180 calendar days, or until February 28, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. If we do not regain compliance by February 28, 2024, an additional 180 days may be granted to regain compliance, so long as we meet The Nasdaq Capital Market continued listing requirement for market value of publicly-held shares and all other initial listing standards for The Nasdaq Capital Market, other than the minimum closing bid price requirement and notifies Nasdaq in writing of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If we do not qualify for the second compliance period or fails to regain compliance during the second 180-day period, then Nasdaq will notify us of its determination to delist our common stock, at which point the Company will have an opportunity to appeal the delisting determination to a Hearings Panel.

We intend to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of its outstanding securities, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

-25-

Results of Operations

Comparison of the Three Months Ended October 31, ~~2022~~2023 and ~~2021~~2022

Our revenues for the three months ended October 31, ~~2022,~~2023, increased by ~~$579,151,~~$262,685, or approximately ~~48%~~15%, to ~~$1,778,973,~~$2,041,658, as compared to ~~$1,199,822~~$1,778,973 during the three months ended October 31, ~~2021.~~2022. The increase in revenues was primarily attributed to an increase in ~~consulting services~~revenue of $278,611 generated by our funding portal. In the three months ended October 31, 2023, we recorded $462,706 in funding portal revenues, consisting of portal fees of $317,206 and listing fees of $145,500, as compared to funding portal revenues of $184,095 in the three months ended October 31, 2022, consisting of portal fees of $97,595 and listing fees of $86,500. The increase is funding portal revenues in the three months ended October 31, 2023 is primarily attributable to increased offering activity on the platform resulting in higher portal fees due to increased investments in offerings on the portal as well as greater number of offerings on the portal during such period resulting in higher listing fees during the period. The components of revenue were as follows:

	Oct. 31, 2023		Oct. 31, 2022
Consulting services for equity securities	$	1,516,667	$	1,400,000
Consulting revenue		62,000		194,560
Portal fees		317,206		97,595
Listing fees		145,500		86,500
Other revenue		285		318
Total	$	2,041,658	$	1,778,973

Costs of revenues decreased by $16,101 to $20,134, or approximately 44% for ~~equity securities, which amounted to $1,400,000~~the three months ended October 31, 2023 from $36,235 during the three months ended October 31, ~~2022, as compared to $902,174 during the three months ended October 31, 2021.~~2022. The ~~components of revenue were as follows:~~

Oct. 31, 2022 Oct. 31, 2021
Consulting services for equity securities $ 1,400,000 $ 902,174
Consulting revenue 194,560 12,334
Portal fees 97,595 169,111
Listing fees 86,500 116,000
Other revenue 318 203
Total $ 1,778,973 $ 1,199,822

~~Costs of revenues increased by $18,460 to $36,235, or approximately 104% for the three months ended October 31, 2022 from $17,775 during the three months ended October 31, 2021. The increase~~decrease was primarily attributed to ~~an increase~~a decrease in third-party services for business valuations during the three months ended October 31, ~~2022.~~2023.

Payroll and payroll related expenses increased by ~~$146,612,~~$173,927, or 20%, to ~~$876,908~~$1,050,835 for the three months ended October 31, ~~2022,~~2023, as compared to ~~$730,296~~$876,908 during the three months ended October 31, ~~2021.~~2022. The increase was attributed to higher salaries and an increase in ~~staff and wages.~~stock-based compensation expense for stock options granted to employees.

Marketing expense increased by ~~$10,882,~~$13,849, or approximately ~~49%~~42%, to ~~$32,882~~$46,731 for the three months ended October 31, ~~2022,~~2023, as compared to ~~$22,000~~$32,882 during the three months ended October 31, ~~2021.~~2022. The increase in expense was primarily attributed to an increase in marketing outlets that we utilized in the three months ended October 31, ~~2022.~~2023.

Rent expense increased by ~~$6,706,~~$1,192, or approximately ~~64%~~7%, to ~~$17,187~~$18,379 for the three months ended October 31, ~~2022,~~2023, as compared to ~~$10,481~~$17,187 during the three months ended October 31, ~~2021.~~2022. The increase was primarily attributed to a new office-space agreement that became effective in the current fiscal year.

General and administrative expenses ~~decreased~~increased by ~~$280,555,~~$367,810, or ~~50%~~131%, to ~~$280,815~~$648,625 for the three months ended October 31, 2022, from ~~$561,370~~$280,815 during the three months ended October 31, ~~2021.~~2022. The ~~decrease~~increase was primarily attributed to ~~a decrease in~~stock-based compensation utilized to pay for professional fees.

Consulting expense increased by ~~$16,751,~~$4,953, or approximately 9%3%, to ~~$199,781~~$204,734 for the three months ended October 31, ~~2022~~2023 from ~~$183,030~~$199,781 during the three months ended October 31, ~~2021.~~2022. The increase was primarily attributed to an increase in overseas programmers.

Interest expense decreased by ~~$12,048~~$12,416 to ~~$22,978,~~$10,562, or approximately ~~34%~~54%, for the three months ended October 31, ~~2022,~~2023, as compared to ~~$35,026~~$22,978 during the three months ended October 31, ~~2021.~~2022. The decrease in interest expense iswas primarily attributed to lower debt amounts that resulted from paying off a ~~$1,000,000 reduction in debt owed to our~~ secured ~~lender.~~term loan.

Comparison of the Six Months Ended October 31, ~~2022~~2023 and ~~2021~~2022

Our revenues for the six months ended October 31, ~~2022,~~2023, increased by ~~$1,294,537,~~$441,921, or approximately ~~71%~~14%, to ~~$3,119,546,~~$3,561,467, as compared to ~~$1,825,009~~$3,119,546 during the six months ended October 31, ~~2021.~~2022. The increase in revenues ~~was primarily attributed~~is attributable to an increase in ~~consulting services for equity securities, which amounted~~revenue of $475,967 generated by our funding portal. In the six months ended October 31, 2023, we recorded $838,562 in funding portal revenues, consisting of portal fees of $539,062 and listing fees of $299,500, as compared to ~~$2,425,000 during~~funding portal revenues of $362,595 in the six months ended October 31, 2022, ~~as compared to $902,174 during~~consisting of portal fees of $148,595 and listing fees of $214,000. The increase is funding portal revenues in the ~~six~~three months ended October 31, ~~2021.~~ 2023 is primarily attributable to increased offering activity on the platform resulting in higher portal fees due to increased investments in offerings on the portal as well as greater number of offerings on the portal during such period resulting in higher listing fees during the period.

-26-

The components of revenue were as follows:

	Oct. 31, 2022		Oct. 31, 2021		Oct. 31, 2023		Oct. 31, 2022
Consulting services for equity securities	$	2,425,000	$	902,174	$	2,626,667	$	2,425,000
Consulting revenue		331,390		104,021		95,700		331,390
Portal fees		148,595		606,428		539,062		148,595
Listing fees		214,000		212,000		299,500		214,000
Other revenue		561		386		538		561
Total	$	3,119,546	$	1,825,009	$	3,561,467	$	3,119,546

Costs of revenues ~~increased~~decreased by ~~$11,218~~$19,111 to ~~$57,298,~~$38,187, or approximately ~~24%~~33%, for the six months ended October 31, ~~2022~~2023 from ~~$46,080~~$57,298 during the six months ended October 31, ~~2021.~~2022. The ~~increase~~decrease was primarily attributed to ~~an increase~~a decrease in third-party services for business valuations during the ~~three~~six months ended October 31, ~~2022.~~2023.

Payroll and payroll related expenses ~~decreased~~increased by ~~$144,807,~~$441,029, or approximately 8%27%, to ~~$1,646,848~~$2,087,877 for the six months ended October 31, ~~2022,~~2023, as compared to ~~$1,791,655~~$1,646,848 during the six months ended October 31, ~~2021.~~2022. The ~~decrease~~increase was attributed to ~~lower~~higher wages in the ~~three-month~~six-month period ~~ended July 31, 2022. However, payroll costs increased in the three months~~ ended October 31, ~~2022.~~2023 and additional stock-based compensation.

Marketing expense ~~decreased~~increased by ~~$3,164,~~$247,957, or approximately 7%610%, to ~~$40,662~~$288,619 for the six months ended October 31, ~~2022,~~2023, as compared to ~~$43,826~~$40,662 during the six months ended October 31, ~~2021.~~2022. The ~~decrease in expense~~increase was ~~primarily attributed~~ to ~~lower marketing expenses in~~bring awareness to the ~~three-month period ended July 31, 2022. However, marketing costs began~~funding portal operations and the Company to ~~increase in the three months ended October 31, 2022.~~attract new issuers and investors.

Rent expense increased by ~~$11,788,~~$3,590, or approximately ~~52%~~10%, to ~~$34,399~~$37,989 for the six months ended October 31, ~~2022,~~2023, as compared to ~~$22,611~~$34,399 during the six months ended October 31, ~~2021.~~2022. The increase was primarily attributed to a new office-space agreement that became effective in the current fiscal year.

General and administrative expenses ~~decreased~~increased by ~~$283,310,~~$763,807, or approximately ~~30%~~114%, to ~~$673,112~~$1,436,919 for the six months ended October 31, ~~2022,~~2023, from ~~$956,422~~$673,112 during the six months ended October 31, ~~2021.~~2022. The ~~decrease~~increase was primarily attributed to ~~a decrease in~~ professional ~~fees.~~fees, including stock-based compensation.

Consulting expense ~~decreased~~increased by ~~$40,243,~~$43,284, or ~~approximately 11%~~13%, to ~~$325,392~~$368,676 for the six months ended October 31, ~~2022~~2023 from ~~$365,635~~$325,392 during the six months ended October 31, ~~2021.~~2022. The ~~decrease~~increase was primarily attributed to ~~lower consulting expense in the three-month period ended July 31, 2022. However, consulting costs began to increase in the three months ended October 31, 2022.~~increased payments of software engineers.

Interest expense decreased by ~~$10,981~~$35,424 to ~~$59,290,~~$23,866, or approximately ~~16%~~60%, for the six months ended October 31, ~~2022,~~2023, as compared to ~~$70,271~~$59,290 during the six months ended October 31, ~~2021.~~2022. The decrease in interest expense iswas primarily attributed to lower debt amounts that resulted from paying off a ~~$1,000,000 reduction in debt owed to our~~ secured ~~lender.~~term loan.

Liquidity and Capital Resources

At October 31, ~~2022,~~2023, we had cash and cash equivalents of ~~$1,565,242~~$528,827 and negative working capital of ~~$296,200~~$1,131,275 as compared to cash and cash equivalents of ~~$473,925~~$569,441 and negative working capital of ~~$3,113,403~~$2,622,670 at April 30, ~~2022.~~2023.

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

On July 15, 2022, ~~the Company~~we completed an underwritten public offering of 1,205,000 shares of ~~the Company’s~~our common stock and warrants to purchase 1,205,000 shares of ~~the Company’s~~our common stock at a combined public offering price of $4.15 per share and warrant. The gross proceeds from the offering were $5,000,750 prior to deducting underwriting discounts, commissions, and other offering expenses. The warrants have a per share exercise price of $5.19, are exercisable immediately, and expire five years from the date of issuance. With the use of proceeds, we paid $1 million of debt to our secured lender, to reduce the outstanding principal balance to $400,000.

-27-

On December 16, 2022 we completed an underwritten public offering of 1,247,000 shares of our common stock, at a price to the public of $1.40 per share. In conjunction with this offering, we 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, we issued an additional 187,000 shares of its common stock at a price of $1.40 per share. We received net proceeds of $1,621,459 for the issuance of a total of 1,434,000 shares of common stock in 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.

On May 23, 2023, we entered into a securities purchase agreement with certain institutional investors, pursuant to which sold to such investors, in a registered direct offering (the “Offering”), 1,100,000 shares (the “Shares”) of our 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 us. The Offering closed on May 25, 2023. The Shares were offered and issued and sold pursuant to our shelf registration statement on Form S-3 (File 333-267921), filed by us with the Securities and Exchange Commission under the Securities Act of 1933, as amended, on October 18, 2022 and declared effective on October 26, 2022.

With the use of proceeds, we paid our secured lender $350,000 in principal plus accrued interest of $17,167.23 to retire all outstanding obligations to the secured lender.

On July 24, 2023 we completed an underwritten public offering of 1,725,000 shares of our 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 us. In conjunction with this offering, we issued the underwriter, and its designees, warrants to purchase 86,250 shares of our common stock at an exercise price of $0.875.

We believe that our existing cash investment balances, ~~and~~ our anticipated cash flows from operations ~~will~~and liquidity sources includingoffering of equity and/or debt securities and/or the sale of equity positions in certain portfolio companies for which we provide marketing and strategic advice may not be sufficient to meet our working capital and expenditure requirements for the next 12 months. ~~Although~~Consequently, beginning in November 2023, we ~~believe we have adequate sources~~laid off some employees, and our executive officers agreed to defer one half of ~~liquidity over the next 12 months, the success of our operations, the global economic outlook,~~their cash salaries and are continuing efforts to reduce operating expenses. We plan to continue operating with lower fixed overhead amounts and seek to raise money from private placements, public offerings and/or bank financing. Our management has determined, based on its recent history and the ~~pace of sustainable growth in~~negative cash flow from operations, that it is unlikely that its plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. To the extent that funds generated from any private placements, public offerings and/or bank financing, if available, are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. Accordingly, the Company’s management has concluded that these conditions raise substantial doubt about our ~~markets, in each case, in light of the market volatility and uncertainty~~ability to continue as a ~~result of the COVID-19 pandemic, among other factors, could impact~~going concern. There can be no assurance that we will be able to achieve our business ~~and liquidity. Up~~plan objectives or be able to ~~this point in time,~~achieve or maintain cash-flow-positive operating results. If we ~~believe the pandemic has helped drive people~~are unable to ~~online investing, as~~generate adequate funds from operations or raise sufficient additional funds, we ~~see regular monthly increases in users and dollars invested, and an increase in issuers seeking~~may not be able to ~~use online fund-raising services in lieu of face-to-face meetings.~~repay our existing debt, continue to operate our business network, respond to competitive pressures or fund our operations. As a result, we may be required to significantly reduce, reorganize, discontinue or shut down our operations.

Year over Year Changes

Net cash used in operating activities amounted to ~~$2,054,600~~$1,965,814 and ~~$1,898,126~~$2,054,600 for the six months ended October 31, 2023 and 2022, respectively. The principal source of cash from operating activities in the six months ended October 31, 2023 was a non-cash item, stock-based compensation of $763,873. However, the sources of cash were offset by a receipt of equity in lieu of cash of $1,170,000 and ~~2021, respectively.~~an increase in accounts receivable of $1,517,167. The principal sources of cash from operating activities for the six months ended October 31, 2022 was net income of $247,615, a realized loss on investments of $406,060 and stock-based compensation of $65,906. However, these sources of cash were offset by the receipt of equity securities in lieu of cash of $2,500,000, changes in deferred taxes of $198,000, a gain on a debt conversion of $224,260, and a decrease in accounts payable and accrued expenses of $64,294. ~~The principal source of~~

-28-

Net cash ~~from operating~~provided by investing activities amounted to $0 and $200,000 in the six months ended October 31, 2023 and 2022, respectively. Net cash provided by investing activities in the six months ended October 31, ~~2021 was net income of $1,183,254 and a non-cash item, stock-based compensation of $483,067. However, these sources of cash were offset by an unrealized gain on equity securities of $3,275,745.~~

~~Net cash provided by investing activities amounted to $200,000 in the six months ended October 31, 2022. The cash provided~~2022 consisted of proceeds from the sale of 606,060 shares of an investment in KingsCrowd Inc. ~~Net cash used in investing activities in~~

For the six months ended October 31, ~~2021~~2023, net cash provided by financing activities amounted to ~~$247,166. The use of cash~~$1,925,200, which consisted of ~~loans~~proceeds from the sale of common stock of $2,275,200, which was offset by repayment of $350,000 in principal to ~~affiliates of $130,000 and an investment in an affiliate of $117,166.~~

our secured lender. For the six months ended October 31, 2022, net cash provided from financing activities amounted to $2,945,917, which included proceeds from the sale of common stock of $3,949,117, which was offset by a payment of $3,200 for a related party note, and payment of $1,000,000 to a secured lender. ~~For the six months ended October 31, 2021, net cash provided by financing activities amounted to $612,299, which consisted of proceeds from stock subscriptions for the sale of common stock.~~

In the six months ended October 31, ~~2022~~2023 and ~~2021,~~2022, there were no expenditures for capital assets. We do not anticipate any capital expenditures in fiscal 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

ITEM 4. CONTROLS AND PROCEDURES.

(a) 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 October 31, ~~2022.~~2023. Based on that evaluation, the PEO and the PFO concluded that, as of October 31, ~~2022,~~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). A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of management, including the PEO and the PFO, the Company’s management has evaluated the effectiveness of its internal control over financial reporting as of October 31, ~~2022,~~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. 34-55929. 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 October 31, ~~2022.~~2023.

The Company’s annual report on Form 10-K for the year ended April 30, ~~2022~~2023 does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. The Company’s registered public accounting firm was not required to issue an attestation on its internal controls over financial reporting pursuant to the rules of the SEC. The Company will continue to evaluate the effectiveness of internal controls and procedures on an ongoing basis.

(c) Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the quarter ended October 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

-29-

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS.

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended April 30, ~~2022~~2023 as filed with the SEC on ~~August 8, 2022~~July 27, 2023 (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual ~~Report.~~Report, except as discussed below. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

Our financial situation creates doubt whether we will continue as a going concern.

At October 31, 2023, we had negative working capital of $1,131,275 and for the six months ended October 31, 2023, we had an operating loss of $696,800 and net cash used in operating activities amounted to $1,965,814. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. Our management has recently reduced its operating expenses and we have turned our focus to our funding portal business, which generates cash revenues and has seen a growth in revenues on a year-to-year and quarter-to-quarter basis. We plan to continue operating with lower fixed overhead amounts and seek to raise money from private placements, public offerings and/or bank financing. Our management has determined, based on its recent history and the negative cash flow from operations, that it is unlikely that its plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. To the extent that funds generated from any private placements, public offerings and/or bank financing, if available, are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. Accordingly, our management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If we unable to generate adequate funds from operations or raise sufficient additional funds, we may not be able to repay our existing debt, continue to operate our business network, respond to competitive pressures or fund our operations. As a result, we may be required to significantly reduce, reorganize, discontinue or shut down our operations.

Our ability to have our securities traded on the Nasdaq Capital Market is subject to us meeting applicable listing criteria.

We are currently listed on the Nasdaq Stock Market, LLC (“Nasdaq”), a national securities exchange. The Nasdaq requires companies desiring to list their common stock to meet certain listing criteria including total number of shareholders: minimum stock price, total value of public float, and in some cases total shareholders’ equity and market capitalization. Our failure to meet such applicable listing criteria could prevent us from listing our common stock on the Nasdaq. In the event we are unable to have our shares traded on Nasdaq, our common stock could potentially trade on the OTCQX or the OTCQB, each of which is generally considered less liquid and more volatile than the Nasdaq. Our failure to have our shares traded on the Nasdaq could make it more difficult for you to trade our shares, could prevent our common stock trading on a frequent and liquid basis and could result in the value of our common stock being less than it would be if we were able to list our shares on the Nasdaq.

-30-

~~ITEM~~

On September 1, 2023, we received written notice from Nasdaq that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810, we have a period of 180-calendar days, or until February 8, 2024, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for at least 10 consecutive business days during this 180-calendar day period. In the event we do not regain compliance by February 8, 2024, we may be eligible for an additional 180-calendar day grace period if we meet the continued listing standards, with the exception of bid price, for the Nasdaq Capital Market, and we provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period. If we do not qualify for or fail to regain compliance during the second compliance period, then Nasdaq will notify us of its determination to delist our common stock, at which point we would have an option to appeal the delisting determination to a Nasdaq hearings panel. We intend to actively monitor the closing bid price of our common stock and may, if appropriate, consider implementing available options to regain compliance with the minimum bid price under the Nasdaq Listing Rules.

If we are unable to regain compliance with the Nasdaq minimum bid price requirement and Nasdaq delists our common stock and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:

	●	the liquidity of our common stock;

	●	the market price of our common stock;

	●	our ability to obtain financing for the continuation of our operations;

	●	the number of institutional and general investors that will consider investing in our common stock;

	●	the number of investors in general that will consider investing in our common stock;

	●	the number of market makers in our common stock;

	●	the availability of information concerning the trading prices and volume of our common stock; and

	●	the number of broker-dealers willing to execute trades in shares of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

1. On ~~September 1, 2022,~~October 26, 2023, we issued ~~25,000~~18,750 shares of our common stock in conjunction with the purchase of a 10% interest in Caesar Media Group Inc. We did not receive any proceeds ~~from this issuance.~~for the issuance of these shares. The issuance was exempt ~~under~~from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

2. On October 26, ~~2022,~~2023, we issued ~~12,500~~6,250 shares of our common stock in conjunction with the purchase of MSG Development Corp., a ~~10% interest in Caesar Media Group Inc.~~wholly owned subsidiary. We did not receive any proceeds ~~from this issuance.~~for the issuance of these shares. The issuance was exempt ~~under~~from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

3. On October 26, 2022, we issued 2,600 shares of common stock to two accredited investors for gross proceeds of $23,400. We used the proceeds for working capital and general corporate purposes. The issuance was exempt under Section 4(a)(2) of the Securities Act of 1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

-31-

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

~~Appointment of Directors~~None

~~On December 8, 2022, our board of directors (the “Board”) expanded the size of the Board from four (4) to five (5) directors.~~

On December 8, 2022, the Board appointed Arnold D. Scott as a director to fill the vacancy created by the expansion of the Board. Mr. Scott will serve as a director until his successor is duly elected and qualified. In addition, Mr. Scott will be an independent director and has been appointed to serve on each of our audit, compensation and nominating and corporate governance committees to fill the vacancy created by the resignation of Martin Kay from such committee on December 8, 2022

Mr. Scott, age 80, 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. In addition, 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.

~~Mr. Scott served for over 30 years at MFS Investment Management, retiring as senior executive vice president in 2001. He received a JD from Rutgers University Law School in 1967.~~

~~There are no related party transactions between Mr. Scott and Netcapital Inc. that would require disclosure under Item 404(a) of Regulation S-K.~~

~~On December 9, 2022, the Company issued a press release announcing the appointment of Mr. Scott as a director of the Company. A copy of the press release is attached hereto as Exhibit 99.1.~~

ITEM 6. EXHIBITS.

Exhibit No.

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~99.1~~	~~Press release announcing appointment of Arnold Scott as director.~~

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, ~~2022~~2023 is formatted in Inline XBRL

-32-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December ~~12, 2022~~14, 2023	NETCAPITAL INC.

	By:	/s/ ~~Cecilia Lenk~~Martin Kay
		~~Cecilia Lenk~~	Martin Kay
		Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Coreen Kraysler
		Coreen Kraysler Chief Financial Officer
		(Principal Financial and Accounting Officer)

-33-

~~Principal Financial Officer~~

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.001 per share		NCPL		The Nasdaq Stock Market LLC

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☐

	Page
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.	5
Condensed Consolidated Balance Sheets as of October 31, ~~2022~~2023 (unaudited) and April 30, ~~2022~~2023	5
Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended October 31, 2023 and 2022 ~~and 2021~~ (unaudited)	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the six months ended October 31, ~~2022~~2023 and the year ended April 30, ~~2022~~2023 (unaudited)	7
Condensed Consolidated Statements of Cash Flows for the six months ended October 31, 2023 and 2022 ~~and 2021~~ (unaudited)	8
Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23

Item 3. Quantitative and Qualitative disclosures about Market Risk.	2729

Item 4. Controls and Procedures.	2729

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.	2830

Item1A. Risk Factors.	2830

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	2831

Item 3. Defaults Upon Senior Securities.	2831

Item 4. Mine Safety Disclosures.	2932

Item 5. Other Information.	2932

Item 6. Exhibits.	2932

Signatures.	3033


					10/31/2023 (Unaudited)		4/30/2023 (Audited)
Assets:	October 31, 2022 (Unaudited)		April 30, 2022 (Audited)
Cash and cash equivalents	$	1,565,242	$	473,925	$	528,827	$	569,441
Related party receivable		668		668
Accounts receivable net		2,269,800		2,433,900		2,899,667		1,388,500
Other receivables		16,604		—		158,873		-
Note receivable						20,000		-
Prepaid expenses		39,236		5,694		313,058		583,030
Total current assets		3,891,550		2,914,187		3,920,425		2,540,971

Deposits		6,300		6,300		6,300		6,300
Notes receivable – related parties		202,000		202,000
Notes receivable - related parties						202,000		202,000
Notes receivable						202,000		202,000
Purchased technology, net		15,494,542		15,536,704		15,818,635		15,875,297
Investment in affiliate		240,080		240,080		240,080		240,080
Equity securities at fair value		15,112,601		12,861,253
Equity securities						24,491,821		22,955,445
Total assets	$	34,947,073	$	31,760,524	$	44,679,261	$	41,820,093

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Trade	$	451,903	$	536,508	$	812,908	$	578,331
Related party		75,204		378,077		75,204		75,204
Accrued expenses		250,179		229,867		415,603		285,065
Stock subscription payable		10,000		33,400		10,000		10,000
Deferred revenue		660		2,532		508		661
Interest payable		270,083		222,295		88,353		98,256
Current taxes payable						-		174,000
Deferred tax liability, net		779,000		977,000		1,714,000		1,657,000
Related party debt		19,660		22,860		15,000		15,000
Secured note payable		400,000		1,400,000		-		350,000
Current portion of SBA loans		1,896,737		1,890,727		1,885,800		1,885,800
Loan payable - bank		34,324		34,324		34,324		34,324
Convertible notes payable		—		300,000
Total current liabilities		4,187,750		6,027,590		5,051,700		5,163,641

Long-term liabilities:
Long-term SBA loans, less current portion		489,063		495,073		500,000		500,000
Total liabilities		4,676,813		6,522,663		5,551,700		5,663,641

Commitments and contingencies		—		—		-		-

Stockholders’ equity:
Common stock, $.001 par value; 900,000,000 shares authorized, 4,312,777 and 2,934,344 shares issued and outstanding		4,313		2,934
Common stock, $.001 par value; 900,000,000 shares authorized, 9,459,132 and 6,440,527 shares issued and outstanding						9,459		6,441
Shares to be issued		244,250		244,250		122,124		183,187
Capital in excess of par value		27,263,174		22,479,769		33,682,137		30,500,944
Retained earnings		2,758,523		2,510,908		5,313,841		5,465,880
Total stockholders’ equity		30,270,260		25,237,861		39,127,561		36,156,452
Total liabilities and stockholders’ equity	$	34,947,073	$	31,760,524	$	44,679,261	$	41,820,093

															Shares		Amount		Be Issued			Par Value		(Deficit)			Equity
	Common Stock														Common Stock				Shares to			Capital in Excess of		Retained Earnings			Total
	Shares		Amount		Shares To Be Issued		Capital in Excess of Par Value		Retained Earnings (Deficit)			Total Equity			Shares		Amount		Be Issued			Par Value		(Deficit)			Equity
Balance, April 30, 2021		2,178,766	$	2,178	$	—	$	15,168,987	$	(992,622	)	$	14,178,543

Q1 stock-based compensation		937		2				14,054		—			14,056
Sale of common stock		176,934		176				1,592,219		—			1,592,395
Shares issued to acquire funding port:		361,736		362				3,523,100		—			3,523,462
Net income, July 31, 2021		—		—		—		—		1,457,410			1,457,410
Balance, July 31, 2021		2,718,373		2,718		—		20,298,360		464,788			20,765,866

Q2 stock-based compensation		937		1				10,072		—			10,073
Net loss, October 31, 2021		—		—		—		—		(274,156	)		(274,156	)
Balance, October 31, 2021		2,719,310		2,719		—		20,308,432		190,632			20,501,783

Q3 stock-based compensation		55,312		55				553,967		—			554,022
Purchase of equity interest		50,000		50				499,950		—			500,000
Purchase of MSG Development Corp.		50,000		50		244,250		488,450		—			732,750
Sale of common stock		22,222		22				199,978		—			200,000
Net income, January 31, 2022		—		—		—		—		1,821,006			1,821,006
Balance, January 31, 2022		2,896,844		2,896		244,250		22,050,777		2,011,638			24,309,561

Q4 stock-based compensation		—		—				29,030		—			29,030
Purchase of equity interest		37,500		38				399,962		—			400,000
Net income, April 30, 2022		—		—		—		—		499,270			499,270
Balance, April 30, 2022		2,934,344		2,934		244,250		22,479,769		2,510,908			25,237,861			2,934,344	$	2,934	$	244,250		$	22,479,769	$	2,510,908		$	25,237,861

Shares issued for debt conversion		133,333		134				379,852					379,986			133,333		134		-			379,852		-			379,986
Sale of common stock		1,205,000		1,205				3,947,912					3,949,117			1,205,000		1,205		-			3,947,912		-			3,949,117
Vesting of stock options								32,953					32,953			-		-		-			32,953		-			32,953
Net income for July 31, 2022 quarter						—				64,477			64,477			-		-		-			-		64,477			64,477
Balance, July 31, 2022		4,272,677		4,273		244,250		26,840,486		2,575,385			29,664,394			4,272,677		4,273		244,250			26,840,486		2,575,385			29,664,394

Sale of common stock		2,600		3		—		23,397					23,400			2,600		3		-			23,397		-			23,400
Purchase of equity interest		37,500		37				366,338					366,375			37,500		37		-			366,338		-			366,375
Vesting of stock options								32,953					32,953			-		-		-			32,953		-			32,953
Net income for Oct. 31, 2022 quarter										183,138			183,138			-		-		-					183,138			183,138
Balance October 31, 2022		4,312,777	$	4,313	$	244,250	$	27,263,174	$	2,758,523		$	30,270,260			4,312,777		4,313		244,250			27,263,174		2,758,523			30,270,260

Sale of common stock																1,434,000		1,434		-			1,620,025		-			1,621,459
Purchase of equity interest																18,750		19		-			171,105		-			171,124
Purchase of intellectual property																300,000		300		-			434,700		-			435,000
Reduction in shares to be issued																6,250		6		(61,063	)		61,057		-			-
Vesting of stock options																-		-		-			63,057		-			63,057
Net income for Jan. 31, 2023 quarter																-		-		-			-		1,696,499			1,696,499
Balance January 31, 2023																6,071,777		6,072		183,187			29,613,118		4,455,022			34,257,399

Purchase of equity interest																18,750		19		-			195,233		-			195,252
Vesting of stock options																-		-		-			132,943		-			132,943
Stock-based compensation																350,000		350		-			559,650		-			560,000
Net income Q4																-		-		-					1,010,858			1,010,858
Balance April 30, 2023																6,440,527		6,441		183,187			30,500,944		5,465,880			36,156,452

Vesting of stock options																-		-		-			139,371		-			139,371
Stock-based compensation																100,000		100		-			143,900		-			144,000
Sale of common stock																2,825,000		2,825		-			2,272,375		-			2,275,200
Purchase of equity interest																18,750		18		-			183,170		-			183,188
Stock-based settlement																49,855		50		-			58,779		-			58,829
Net loss July 31, 2023 quarter																-		-		-			-		(491,655	)		(491,655	)
Balance July 31, 2023																9,434,132		9,434		183,187			33,298,539		4,974,225			38,465,385
Balance																9,434,132		9,434		183,187			33,298,539		4,974,225			38,465,385

Vesting of stock options																-		-		-			139,371		-			139,371
Reduction in shares to be issued																6,250		6		(61,063	)		61,057		-			-
Purchase of equity interest																18,750		19		-			183,170		-			183,189
Net income October 31, 2023 quarter																-		-		-			-		339,616			339,616
Net income (loss)																-		-		-			-		339,616			339,616
Balance October 31, 2023																9,459,132	$	9,459	$	122,124		$	33,682,137	$	5,313,841		$	39,127,561
Balance																9,459,132	$	9,459	$	122,124		$	33,682,137	$	5,313,841		$	39,127,561

●	capital requirements and the availability of capital to fund our growth and to service our existing debt;

●	difficulties executing our growth strategy, including attracting new issuers and investors;

●	our anticipated use of the net proceeds from our recent public offering;

●	economic uncertainties and business interruptions resulting from the coronavirus COVID-19 global pandemic and its aftermath;

●	as restrictions related to the coronavirus COVID-19 global pandemic are removed and face-to-face economic activities normalize, it may be difficult for us to maintain the recent sales gains that we have experienced;

●	all the risks of acquiring one or more complementary businesses, including identifying a suitable target, completing comprehensive due diligence uncovering all information relating to the target, the financial stability of the target, the impact on our financial condition of the debt we may incur in acquiring the target, the ability to integrate the target’s operations with our existing operations, our ability to retain management and key employees of the target, among other factors attendant to acquisitions of small, non-public operating companies;

●	difficulties in increasing revenue per issuer;

●	challenges related to hiring and training fintech employees at competitive wage rates;

●	difficulties in increasing the average number of investments made per investor;

●	shortages or interruptions in the supply of quality issuers;

●	our dependence on a small number of large issuers to generate revenue;

●	negative publicity relating to any one of our issuers;

●	competition from other online capital portals with significantly greater resources than we have;

●	changes in investor tastes and purchasing trends;

●	our inability to manage our growth;

●	our inability to maintain an adequate level of cash flow, or access to capital, to meet growth expectations;

●	changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel;

●	labor shortages, unionization activities, labor disputes or increased labor costs, including increased labor costs resulting from the demand for qualified employees;

●	our vulnerability to increased costs of running an online portal with any cloud partner;

●	our vulnerability to increasing labor costs;

●	the impact of governmental laws and regulation;

●	failure to obtain or maintain required licenses;

●	changes in economic or regulatory conditions and other unforeseen conditions that prevent or delay the development of a secondary trading market for shares of equity that are sold on our online portal; and

●	inadequately protecting our intellectual property or breaches of security of confidential user information.


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended			Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	October 31, 2022			October 31, 2021			October 31, 2022			October 31, 2021			October 31, 2023			October 31, 2022			October 31, 2023			October 31, 2022

Revenues	$	1,778,973		$	1,199,822		$	3,119,546		$	1,825,009		$	2,041,658		$	1,778,973		$	3,561,467		$	3,119,546
Costs of services		36,235			17,775			57,298			46,080			20,134			36,235			38,187			57,298
Gross profit		1,742,738			1,182,047			3,062,248			1,778,929			2,021,524			1,742,738			3,523,280			3,062,248

Costs and expenses:
Consulting expense		199,781			183,030			325,392			365,635			204,734			199,781			368,676			325,392
Marketing		32,882			22,000			40,662			43,826			46,731			32,882			288,619			40,662
Rent		17,187			10,481			34,399			22,611			18,379			17,187			37,989			34,399
Payroll and payroll related expenses		876,908			730,296			1,646,848			1,791,655			1,050,835			876,908			2,087,877			1,646,848
General and administrative costs		280,815			561,370			673,112			956,422			648,625			280,815			1,436,919			673,112
Total costs and expenses		1,407,573			1,507,177			2,720,413			3,180,149			1,969,304			1,407,573			4,220,080			2,720,413
Operating income (loss)		335,165			(325,130	)		341,835			(1,401,220	)		52,220			335,165			(696,800	)		341,835

Other income (expense):
Interest expense		(22,978	)		(35,026	)		(59,290	)		(70,271	)		(10,562	)		(22,978	)		(23,866	)		(59,290	)
Gain on debt conversion		—			—			224,260			—			-			-			-			224,260
Amortization of intangible assets		(21,081	)		—			(42,162	)		—			(28,331	)		(21,081	)		(56,662	)		(42,162	)
Unrealized loss on equity securities														-			(8,968	)					(8,968	)
Realized loss on sale of investment		—			—			(406,060	)		—			-			-			-			(406,060	)
Unrealized gain (loss) on equity securities		(8,968	)		—			(8,968	)		3,275,745
Total other income (expense)		(53,027	)		(35,026	)		(292,220	)		3,205,474			(38,893	)		(53,027	)		(80,528	)		(292,220	)
Net income (loss) before taxes		282,138			(360,156	)		49,615			1,804,254
Net income before taxes														13,327			282,138			(777,328	)		49,615
Income tax expense (benefit)		99,000			(86,000	)		(198,000	)		621,000			(326,289	)		99,000			(625,289	)		(198,000	)
Net income (loss)	$	183,138		$	(274,156	)	$	247,615		$	1,183,254		$	339,616		$	183,138		$	(152,039	)	$	247,615

Basic earnings (loss) per share	$	0.04		$	(0.10	)	$	0.07		$	0.48
Diluted earnings (loss) per share	$	0.04		$	(0.10	)	$	0.07		$	0.47
Basic earnings per share													$	0.04		$	0.04		$	(0.02	)	$	0.07
Diluted earnings per share													$	0.04		$	0.04		$	(0.02	)	$	0.07

Weighted average number of common shares outstanding:
Basic		4,289,802			2,718,383			3,729,174			2,462,251			9,435,491			4,289,802			8,453,349			3,729,174
Diluted		4,290,052			2,718,383			3,729,424			2,497,808			9,435,741			4,290,052			8,453,349			3,729,424

							Six Months Ended			Six Months Ended
	6 Months Ended October 31, 2022			6 Months Ended October 31, 2021			October 31, 2023			October 31, 2022
OPERATING ACTIVITIES
Net income	$	247,615		$	1,183,254
Adjustments to reconcile net income to net cash used in operating activities:
Net income (loss)							$	(152,039	)	$	247,615
Adjustment to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		65,906			483,067			763,873			65,906
Receipt of equity in lieu of cash		(2,500,000	)		(50,000	)		(1,170,000	)		(2,500,000	)
Unrealized (gain) loss on equity securities		8,968			(3,275,745	)
Unrealized gain on equity securities								-			8,968
Gain on debt conversion		(224,260	)		—			-			(224,260	)
Provision for bad debts								6,000			-
Realized loss on investment		406,060			—			-			406,060
Changes in deferred taxes		(198,000	)		621,000			57,000			(198,000	)
Amortization of intangible assets		42,162			—			56,662			42,162
Changes in non-cash working capital balances:
Accounts receivable		164,100			(792,742	)		(1,517,167	)		164,100
Receivable from bank		—			(212,252	)
Other receivables								(158,873	)		(16,604	)
Prepaid expenses		(33,542	)		16,983			(12,329	)		(33,542	)
Other receivables		(16,604	)		—
Accounts payable and accrued expenses		(64,294	)		59,094			365,115			(64,294	)
Accounts payable - related party								-			(8,819	)
Income taxes payable								(174,000	)		-
Deferred revenue		(1,872	)		48			(153	)		(1,872	)
Accrued interest payable		57,980			69,167			(9,903	)		57,980
Accounts payable – related party		(8,819	)		—
Net cash used in operating activities		(2,054,600	)		(1,898,126	)		(1,945,814	)		(2,054,600	)

INVESTING ACTIVITIES
Note receivable								(20,000	)		-
Proceeds from sale of investment		200,000			—			-			200,000
Loans to affiliates		—			(130,000	)
Investment in affiliate		—			(117,166	)
Net cash provided by (used in) investing activities		200,000			(247,166	)		(20,000	)		200,000

FINANCING ACTIVITIES
Payment to secured lender		(1,000,000	)		—			(350,000	)		(1,000,000	)
Payment of related party note		(3,200	)		—			-			(3,200	)
Proceeds from sale of common stock		3,949,117			612,299			2,275,200			3,949,117
Net cash provided by financing activities		2,945,917			612,299			1,925,200			2,945,917

Net increase (decrease) in cash		1,091,317			(1,532,993	)		(40,614	)		1,091,317
Cash and cash equivalents, beginning of the period		473,925			2,473,959			569,441			473,925
Cash and cash equivalents, end of the period	$	1,565,242		$	940,966		$	528,827		$	1,565,242

Supplemental disclosure of cash flow information:
Cash paid for taxes	$	—		$	—		$	-		$	-
Cash paid for interest	$	1,310		$	1,110		$	33,767		$	1,310

Supplemental Non-Cash Investing and Financing Information:
Supplemental Non-Cash Financing Information:
Common stock issued to pay promissory notes	$	266,272		$	—		$	-		$	266,272
Common stock issued to purchase 10% interest in Caesar Media Group Inc.							$	183,188			-
Common stock issued to pay related party payable	$	113,714		$	3,523,462		$	-		$	113,714

●	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; and

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

Schedule of revenue
	Three Months Ended Oct. 31, 2022		Three Months Ended Oct. 31, 2021		Six Months Ended Oct. 31, 2022		Six Months Ended Oct. 31, 2021
Consulting services	$	1,594,560	$	902,174	$	2,756,390	$	988,507
Fees from online services		184,413		297,648		363,156		836,502
Total revenues	$	1,778,973	$	1,199,822	$	3,119,546	$	1,825,009

Schedule of earnings per share
	Three Months Ended October 31, 2022		Three Months Ended October 31, 2021			Six Months Ended October 31, 2022		Six Months Ended October 31, 2021
Net income attributable to common stockholders – basic	$	183,138	$	(274,156	)	$	247,615	$	1,183,254
Adjustments to net income		—		—			—		—
Net income attributable to common stockholders – diluted	$	183,138	$	(274,156	)	$	247,615	$	1,183,254

Weighted average common shares outstanding - basic		4,289,802		2,718,383			3,729,174		2,462,251
Effect of dilutive securities		250		—			250		35,557
Weighted average common shares outstanding – diluted		4,290,052		2,718,383			3,729,424		2,497,808

Earnings per common share - basic	$	0.04	$	(0.10	)	$	0.07	$	0.48
Earnings per common share - diluted	$	0.04	$	(0.10	)	$	0.07	$	0.47

Schedule of income taxes
	October 31, 2022			April 30, 2022

Deferred tax assets, net:
Net operating loss carryforwards	$	380,000		$	322,000
Bad debt allowance		40,000			40,000
Stock-based compensation		376,000			357,000
Deferred tax assets		796,000			719,000

Deferred tax liability
Unrealized gain		1,575,000			1,696,000

Net deferred tax liability	$	(779,000	)	$	(977,000	)

Schedule of warrants outstanding
	Warrants Outstanding							Warrants Exercisable
				Weighted-
				Average		Weighted-				Weighted-
Range of				Remaining		Average				Average
Exercise	Number			Contractual		Exercise		Number		Exercise
Prices	Outstanding			Life (Years)		Price		Outstanding		Price

As of April 30, 2022
—		-	—		—	$	—		—	$	—

As of October 31, 2022
$5.19 - $5.19		1,469,982			4.72	$	5.19		1,409,732	$	5.19

Schedule of warrants activity
	Number of Shares		Exercise Price Per Share		Average 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 six months ended October 31, 2022		1,469,982	$	5.19	$	5.19

Exercised/canceled during six months ended October 31, 2022		—		—	$	—

Warrants outstanding October 31, 2022		1,469,982	$	5.19	$	5.19

Warrants exercisable, October 31, 2022		1,409,732	$	5.19	$	5.19

Schedule of stock options activity
	Number of Shares			Exercise Price Per Share		Average Exercise Price
Outstanding May 1, 2021		—			—	$	—

Issued during year ended April 30, 2022		272,000		$	10.50	$	10.50

Exercised/canceled during year ended April 30, 2022		(1,000	)	$	10.50	$	10.50

Outstanding April 30, 2022		271,000		$	10.50	$	10.50

Issued during six months ended October 31, 2022		—			—	$	—

Exercised/canceled during six months ended October 31, 2022		(9,000	)	$	10.50	$	10.50

Options outstanding October 31, 2022		262,000		$	10.50	$	10.50

Options exercisable, October 31, 2022		54,583		$	10.50	$	10.50