Forward-Looking Statements
This report contains forward-looking statements. The statements regarding
Newpoint Financial Corp. contained in this report that are not historical in
nature, particularly those that utilize terminology such as "may," "will,"
"should," "likely," "expects," "anticipates," "estimates," "believes" or
"plans," or comparable terminology, are forward-looking statements based on
current expectations and assumptions, and entail various risks and uncertainties
that could cause actual results to differ materially from those expressed in
such forward-looking statements.
Important factors known to us that could cause such material differences
include: uncertainties associated with the following:
? Inadequate capital and barriers to raising the additional capital or to
obtaining the financing needed to implement our business plans;
? Our failure to earn revenues or profits;
? Risks associated with potential acquisitions, including increased operating
expenses and cash requirements; assimilation of operations, intellectual
property and products of an acquired company, and
? Lack of an active trading market for our common stock;
We undertake no obligation to correct or update any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required under applicable law. You are advised, however, to consult any
future disclosures we make on related subjects in future reports to the SEC.
Overview
Newpoint Financial Corp., a Delaware corporation (the "Company," "we," "us," or
"our") is a holding company that strategically invests primarily in regulated
entities such as banks and insurance companies. These investments may result in
us acquiring a controlling or non-controlling interests of these entities. To
date, we have entered into three such transactions (one of which has closed): in
December 2021 we acquired a 10% interest in Novea, Inc., a financial and
insurance services software company; we have also entered into an agreement for
the acquisition of an interest in American Millennium Insurance Co., a New
Jersey based insurance company through purchase of shares of its parent holding
companies. Closing is subject to receipt of regulatory approvals and other
customary closing conditions.
Since our current investments (one of which has closed) constitute (or will
constitute) a minority interest in these companies, we anticipate that our
income will be dependent on the ability of these companies to generate revenue
and payment of dividends.
Critical Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires us
to make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
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Certain of the Company's accounting policies that we believe are the most
important to the portrayal of the Company's financial condition and results of
operations and that require management's subjective judgments are described
below to facilitate a better understanding of our business activities.
Management bases its judgments on its experience and assumptions which it
believes are reasonable and applicable under the circumstances.
We expect that uncertainty and volatility in financial markets relating to the
COVID-19 pandemic will continue to impact the company. The scope, duration and
magnitude of the direct and indirect effects of the COVID-19 pandemic are
changing rapidly and are difficult to anticipate.
We are subject to economic factors such as interest rates, inflation, foreign
exchange rates, adverse reserve developments, regulation, tax policy changes,
political risks and other market risks that can impact our strategy, operations,
and results.
Results of Operations for the three months ended March 31, 2022 and March 31,
2021
Revenues. The Company had $4,860 of interest income during the three months
ended March 31, 2022 and $0 for the three months ended March 31, 2021.
Cost of Revenues. The Company had no cost of revenues for the three months ended
March 31, 2022 or 2021.
General and Administrative expenses. The Company incurred $20,621 of general and
administrative expenses during the three months ended March 31, 2022, compared
to $20,924 during the same period in 2021. The decline in general and
administrative expenses was a result of higher costs related to personnel costs
being offset by lower costs related to filing and banking fees.
Professional fees. The Company incurred $14,457 of professional fees during the
three months ended March 31, 2022 compared to $0 during the same period in 2021.
The increase in professional fees is the result of costs relating the financial
and audit costs during the period.
Loss From Operations. The Company incurred an operating loss of $35,078 during
the three months ended March 31, 2022 compared to $20,924 during the same period
in 2021. The decrease in net loss is a result of lower general and
administration fees incurred in the quarter.
Net Loss. The Company incurred a net loss of $172,684 during the three months
ended March 31, 2022 compared to $20,924 during the same period in 2021. The
increase in net loss is a result of higher interest costs incurred during the
period.
Liquidity and Capital Resources
As of March 31, 2022, we had cash and cash equivalents of $0 with current assets
totaling $4,860 and current liabilities totaling $271,452 creating a working
capital deficit of $ 266,592. Current liabilities consisted of accounts payable
and accrued liabilities totaling $35,631 and related party payable of $235,821.
As of December 31, 2021, we had cash and cash equivalents of $5,843 with current
assets totaling $5,843 and current liabilities totaling $99,751 creating a
working capital deficit of $93,908. Current liabilities consisted of accounts
payable and accrued liabilities totaling $31,730 and related party payable of
$68,021.
Any liquidity needs will be met by the related entities.
Cash Flows
Net cash used in operating activities was $5,843 and $0 during the three months
ended March 31, 2022 and 2021, respectively. The decrease of $5,843 was a result
of a decline in cash costs during the quarter.
Net cash provided by financing activities was $0 and $0 during the three months
ended March 31, 2022 and 2021, respectively.
Net cash provided by investing activities were $0 and $0 during the years ended
March 31, 2022 and 2021, respectively.
The Company to date has been financially supported by related party entities
which are also owned by the principal shareholders of the Company. The Company
will continue to be financially supported by related party entities until such
time as the company generates sufficient cash flow to support its expense
requirements or completes an external capital raising.
Off-Balance Sheet Arrangements
During 2021, the Company entered into a revolving credit commitment with Novea,
Inc. The initial borrowing of the revolving credit loans under the revolving
credit commitments may be an amount up to $500,000. Subject to agreed terms, the
total obligation of the Company to make revolving credit loan in an aggregate
principal amount shall not exceed $5,000,000. The loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate equal to LIBOR plus 5.25%.
The Company entered into a Revolving Credit Facility Agreement (the "RCFA") with
Newpoint Reinsurance Company Limited, an entity owned by the Company's principal
shareholders. The RCFA provides for available borrowings up to $1,000,000 for a
term of three years and an option to roll the facility. As of March 31, 2022,
the Company has additional available borrowings of $836,500 after it was
provided $163,500 as a related party transaction for the credit commitment
agreement with Novea.
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