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 be 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.
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.
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Results of Operations for the three and six months ended June 30, 2022 and June
30, 2021
Revenues . The Company had no revenue during the six months ended June 30, 2022
and the six months ended June 30, 2021.The Company had no revenue during the 3
months ended June 30, 2022 and June 30, 2021.
Cost of Revenues . The Company had no cost of revenues for the six months ended
June 30, 2022 and the six months ended June 30, 2021. The Company had no cost of
revenues for the 3 months ended June 30, 2022 and June 30, 2021.
General and Administrative expenses. The Company incurred $84,010 of general and
administrative expenses during the six months ended June 30, 2022 compared to
$20,924 during the same period in 2021. The Company incurred $63,389 of general
and administrative expenses during the three months ended June 30, 2022 compared
to $0 during the same period in 2021. The costs increase related to travel,
subscriptions and IT services.
Professional fees. The Company incurred $106,450 of professional fees during the
six months ended June 30, 2022 compared to $38,622 during the same period in
2021. The Company incurred $91,994 of professional fees during the three months
ended June 30, 2022 compared to $38,622 during the same period in 2021. The
increase in professional fees is the result of the Company incurring costs
associated with consultants and transfer agent costs during the period.
Loss From Operations. The Company incurred an operating loss of $190,460 during
the six months ended June 30, 2022 compared to $59,546 during the same period in
2021. The Company incurred an operating loss of $155,382 during the three months
ended June 30, 2022 compared to $38,622 during the same period in 2021. The
increase in net loss is a result of increased professional fees and additional
costs associated with the change in control.
Other Income (Expense). The Company accrued interest income of $11,985 during
the six months ended June 30, 2022 compared to $0 during the six months ended
June 30, 2021. The Company accrued interest income of $7,125 during the three
months ended June 30, 2022 compared to $0 during the six months ended June 30,
2021.
Net Loss. The Company incurred a net loss of $429,028 during the six months
ended June 30, 2022 compared to $59,546 during the same period in 2021. The
Company incurred a net loss of $256,344 during the three months ended June 30,
2022 compared to $38,622 during the same period in 2021. The increase in net
loss is a result of increased general and administrative and professional fees.
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Liquidity and Capital Resources
As of December 31, 2021, the Company had cash of $5,843, with current assets
totalling $5,843 and current liabilities totalling $99,751 creating a working
capital deficit of $93,908. Current liabilities consisted of accounts payable
and accrued liabilities totalling $31,370, related party payable of $68,021
As of June 30, 2022, the Company had cash of $39,543 with current assets
totalling $46,668 and current liabilities totalling $569,603 creating a working
capital deficit of $522,935. Current liabilities consisted of accounts payable
of $6,730, related party payable of $522,873 and other current liabilities of
$40,000.
Cash Flows
Net cash generated in operating activities was $33,700 and $0 during the six
months ended June 30, 2022 and 2021, respectively.
There were no cash flows from investing activities during the six months ended
June 30, 2022 and 2021, respectively.
There were no cash flows from financing activities during the six months ended
June 30, 2022 and 2021, respectively.
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 December 31, 2021
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. As of March 30, 2022 Newpoint Capital Limited made a
payment of $167,300 on behalf of the Company as per credit agreement with Novea
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