NEWPOINT FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations. (Form 10-K)

The following analysis highlights the major 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 related notes included in this report. This discussion contains forward-looking statements. Please see “Caution 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 WE GAAP requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. reporting. Actual results could differ from these estimates.

Some of the Company’s accounting policies which we believe are most important to the representation of the Company’s financial condition and results of operations and which require management’s subjective judgments are described below to facilitate better understanding of our business activities. Management bases its judgments on its experience and on assumptions it deems reasonable and applicable in the circumstances.

We anticipate that the uncertainty and volatility in financial markets related to the COVID-19 pandemic will continue to impact society. 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, regulations, changes in tax policy, political risks and other market risks that may impact our strategy, operations and results.


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Revenue Recognition



The Company has not yet generated revenue from its planned activities.


Results of Operations


Comparison of operating results for the years ended December 31, 2021
and 2020

Revenues. The Company did not realize any income during the years ended December 31, 2021 or
December 31, 2020.

General and administrative expenses. The Company incurred general and administrative expenses of $27,926 and $1,246 over the past years December 31, 2021 and December 31, 2020, respectively. The increase is related to filing fees associated with the SECOND for annual and quarterly reports.

Professional fees. The Company has incurred professional fees of $59,252 and $14,012
over the past years December 31, 2021 and 2020, respectively. The increase relates to accounting, auditing and advisory fees associated with filings with the SECOND for annual and quarterly reports.

Operating loss. As a result of general and administrative expenses and professional fees of the Company, the Company incurred an operating loss of $87,178 and
$15,258 for the years ended December 31, 2021 and December 31, 2020respectively.

Other income (expenses). The Company incurred interest expense of $3,000 over the past years December 31, 2020. The Company recognized a gain on debt forgiveness of $7,805 during the year ended December 31, 2020.

Net loss. As a result of the above, the Company incurred a net loss of
$87,178 and $10,453 over the past years December 31, 2021 and December 31, 2020respectively.

Cash and capital resources

From December 31, 2021we had cash and cash equivalents of $5,843 with current assets totaling $5,843 and current liabilities totaling $99,751 create a working capital deficit of $97,908. Current liabilities consisted of accounts payable and accrued liabilities totaling $31,730related party to pay
$68,021related interest payable from $0 and a related party loan payable from $50,163,500.

From December 31, 2020we had money $0with current assets totaling $0 and current liabilities totaling $93,765 create a working capital deficit of
$93,765. Current liabilities consisted of accounts payable and accrued liabilities totaling $6,730related party to pay $29,829related interest payable from $11,156 and a related party loan payable from $46,050.


Cash Flows


Net cash provided by (used in) operating activities was $5,843 and ($78) over the past years December 31, 2021 and December 31, 2020respectively.

The net cash flows generated by investing activities were $0 and $0 over the past years
December 31, 2021 and December 31, 2020respectively.

Net cash provided by financing activities was $0 and $0 over the past years
December 31, 2021 and December 31, 2020respectively.

To date, the Company has been financially supported by related entities which are also owned by the main shareholders of the Company. The Company will continue to be financially supported by related parties until it generates sufficient cash flow to cover its expenditure needs or raises external capital.


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Off-balance sheet arrangements

During the year, the company entered into a revolving credit facility with
Novea, Inc. The initial borrowing of Revolving Credit Loans under Revolving Credit Commitments may be up to $500,000. Subject to any agreed terms, the aggregate obligation of the Company to make a revolving loan in an aggregate principal amount shall not exceed $5,000,000. The Loan will bear interest on the principal amount outstanding thereof from the applicable date of borrowing at a rate equal to LIBOR plus 5.25%.

The Company has entered into a Revolving Credit Facility Agreement (the “RCFA”) with
Newpoint Reinsurance Company Limited, an entity owned by the principal shareholders of the Company. The RCFA provides loans available up to $1,000,000 for a term of three years and an option to renew the facility. From December 31, 2021
the Company has additional borrowings available of $836,500 after being provided $163,500 as a related party transaction for the Credit Commitment Agreement with Novea.

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