The following discussion highlights the principal factors that have affected our
financial condition and results of operations as well as our liquidity and
capital resources for the periods described. This discussion should be read in
conjunction with our financial statements and the related notes included in this
report. This discussion contains forward-looking statements. Please see
"Cautionary Note Regarding Forward-Looking Statements" for a discussion of the
uncertainties, risks and assumptions associated with these forward-looking
statements.
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.
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 consider the following accounting policies to be both those most important to
the portrayal of our financial condition and those that require the most
subjective judgment:
Valuation of investments and credit facility allowances: Management relies on
estimates of projected cashflows as support for the amounts disclosed in the
Company's financial statements as investments and valuation allowances taken
against respective investments. The projections are based on the best estimates
available, however these estimates are subject to potential changes in market
conditions, interest rates and market liquidity considerations.
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Going Concern: Management relies on estimates of projections to support the
going concern assumption and relies on the basis that the Company will continue
to be financially supported by related party entities until such time as the
Company generates sufficient cashflow to support its expense requirements or
completes an external capital raising.
Revenue Recognition
The Company has not yet generated revenues from its planned activities.
Results of Operations for the twelve months ended December 31, 2022 and December
31, 2021
Revenues . The Company had no revenue during the years ended December 31, 2022
and December 31, 2021.
Cost of Revenues . The Company had no cost of revenues during the years ended
December 31, 2022 and December 31, 2021.
General and Administrative Expenses. The Company incurred $168,093 and $27,926
of general and administrative expenses during the years ended December 31, 2022
and December 31, 2021, respectively. The costs increase related to insurance,
travel, subscriptions and IT services.
Professional Fees. The Company incurred $464,198 and $59,252 of professional
fees during the years ended December 31, 2022 and December 31, 2021,
respectively. The increase in professional fees is the result of the Company
incurring costs associated with legal fees as disclosed (Item 3) as well as
consultants and transfer agent costs during the period.
Bad Debt expense. The Company incurred $330,800 and $0 of bad debt expense
during the years ended December 31, 2022 and December 31, 2021, respectively
(See Note 5 to the Financial Statements).
Loss From Operations. The Company incurred an operating loss of $963,091 and
$87,178 during the years ended December 31, 2022 and December 31, 2021,
respectively. The increase in net loss is a result of increased professional
fees, bad debt expense and general and administrative expenses incurred during
the year.
Other Income (Expense). The Company incurred interest expense of $406,614 and $0
during the years ended December 31, 2022 and December 31, 2021 , respectively.
The increase in the interest expense is a result of interest payable due to
Newpoint Financial Corp (a Wyoming corporation), now known as NPFC SPV 1, Inc.
Net Profit/Loss. The Company incurred a net loss of $1,339,948 and $87,178
during the years ended December 31, 2022 and December 31, 2021, respectively.
The increase in net loss was a result of increased general and administrative,
professional fees, bad debt expense and interest expense.
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 expense totalling $31,730, and a related party payable of $68,021.
As of December 31, 2022, the Company had cash of $934,300 with current assets
totalling $941,359 and current liabilities totalling $2,375,215 creating a
working capital deficit of $1,433,856. Current liabilities consisted of account
payable and accrued expense totalling $ 113,139 and related party loans payable
of $2,262,076.
On December 10, 2021, the Company entered into a revolving credit commitment
with Novea, Inc., (See Note 5 to the Financial Statements). The initial amounts
Novea can borrow from the Company 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%. During 2022 and 2021 the Company advanced $167,300 and $163,500,
respectively to Novea, Inc. The outstanding principal was $330,800 and $163,500
as of December 31, 2022, and 2021, respectively.
On December 17, 2021 the Company entered into a Revolving Credit Facility
Agreement (the "RCFA") with Newpoint Reinsurance Company Limited, an entity
owned by the Company's majority shareholder (See Note 6 to the Financial
Statements). The RCFA provides available borrowings up to $1,000,000 for a term
of three years and an option to roll the facility. During 2022 and 2021 the
Company borrowed $0 and $163,500, respectively, from Newpoint Reinsurance
Limited. These funds were used to fund the credit commitment with Novea, Inc. As
of December 31, 2022, and 2021 $836,500 was available to be borrowed. Newpoint
Capital Limited also made a payment of $167,300 to fund the credit commitment
agreement with Novea (See Note 6 to the Financial Statements). Newpoint Capital
Limited also provided $489,508 to support the Company's working capital
requirements for the period ended December 31, 2022. During 2022, Newpoint
Reinsurance Limited further provided $100,000 to support the Company's working
capital requirements.
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During 2022, AMIC returned the initial deposit of $1,000,000 to the Company per
the recission agreement dated November 22, 2022.
Given the complaint that the company has filed with regard to the BMA (See Item
3), the company is likely to incur ongoing costs in relation to its legal
proceedings. The company does not have a firm estimate of the cost and further
disclosure of amounts may prejudice proceedings.
As part of the company's acquisition of Judo Capital Corp., it has committed to
continue to pay the health insurance medical expenses of Timothy Cook for the
period to December 2023. This amount is estimated to be $46,800.
Given the Company has not generated revenues sufficient to cover the business
expenses, the Company to date has been financially supported by related party
entities which are also owned by the majority shareholders of the Company. The
Company will continue to be financially supported by related party entities
until such time as the Company generates sufficient cashflow to support its
expense requirements or completes an external capital raising.
Cash Flows
Net cash used in operating activities was $934,798 and $62,178 during the years
ended December 31, 2022 and 2021, respectively. This was due to increased legal
and professional fees being paid during 2022 compared to 2021. The Company has
recognized a non-cash adjustment of $330,800 as a full allowance against the
credit facility provided to Novea during 2022 and 2021.
Net cash provided by in financing activities was $1,863,255 and $68,021 during
the years ended December 31, 2022 and 2021, respectively. The financing was
provided by affiliated entities namely, Newpoint Capital Limited and Newpoint
Reinsurance Limited for 2022 and 2021 respectively. The financing provided was
to support the Company's investment and working capital requirements.
Net Increase in cash was $928,457 and $5,843 during the years ended December 31,
2022 and 2021, respectively. The increase in cash was due to an increase in
related party financing.
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