10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 2018

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

Commission File Number: 814-01038

POINT CAPITAL, INC.

(Exact name of small business issuer as specified in its charter)

Delaware	27-3046338
(State of incorporation)	(IRS Employer ID Number)

1086 Teaneck Road, Suite 3A

Teaneck, New Jersey 07666

(Address of principal executive offices)

(201) 408-5126

(Issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes ☒ No ☐

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 registration 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth 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 November 14, 2018, 52,082,441 shares of common stock, par value $0.0001 per share, were outstanding.

POINT CAPITAL, INC.

FORM 10-Q

September 30, 2018

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets – As of September 30, 2018 (unaudited) and December 31, 2017	1
	Condensed Consolidated Statements of Operations (unaudited) – For the three and nine months ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) – For the nine months ended September 30, 2018 and 2017	3
	Condensed Consolidated Statements of Cash Flows (unaudited) – For the nine months ended September 30, 2018 and 2017	4
	Notes to Condensed Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	23
Item 6.	Exhibits	23

i

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

POINT CAPITAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	Corporation			Investment Company
	Accounting			Accounting
	September 30, 2018			December 31, 2017
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Equity investments, at fair value (cost of $45,538 and $876,358 at September 30, 2018 and December 31, 2017, respectively)	$	391,698		$	1,320,229
Equity investments		12,767			-
Cash and cash equivalents		626,115			294,591
Prepaid expenses		22,168			26,565
Total Current Assets		1,052,748			1,641,385
OTHER ASSETS:
Note receivable		100,000			-
Intangible assets, net		282,500			-
Total Other Assets		382,500			-
Total Assets	$	1,435,248		$	1,641,385
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	28,733		$	38,343
Total Current Liabilities		28,733			38,343
Commitments and Contingencies
Redeemable Series A, Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 1,000,000 shares designated;
4,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 ($100 per share redemption value)		400,000			400,000
STOCKHOLDERS’ EQUITY::
Common stock, $0.0001 par value, 100,000,000 shares authorized; 52,082,441 and 50,082,441 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively		5,209			5,009
Additional paid-in capital		2,170,880			1,871,080
Accumulated net investment loss		-			(470,388	)
Accumulated undistributed net realized loss on investments		-			(651,530	)
Unrealized appreciation on investments		-			448,871
Accumulated deficit		(1,169,574	)		-
Total Stockholders’ Equity		1,006,515			1,203,042
Total Liabilities and Stockholders’ Equity	$	1,435,248		$	1,641,385
Net Asset Value per Common Share				$	0.02

See accompanying notes to unaudited condensed consolidated financial statements.

1

POINT CAPITAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Investment Company Accounting
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
INVESTMENT INCOME:
Non-controlled/Non-affiliated investments:
Interest income	$	18		$	6,504		$	44		$	20,478
Total investment income		18			6,504			44			20,478
OPERATING EXPENSES:
Compensation expense		30,000			45,000			115,000			135,000
Professional fees		36,020			36,890			130,740			129,567
Insurance expense		8,798			8,925			26,396			26,774
Bad debt (recovery) expense		-			-			(5,000	)		6,750
General and administrative expenses		6,364			7,344			25,009			23,442
Total operating expenses		81,182			98,159			292,145			321,533
NET INVESTMENT LOSS		(81,164	)		(91,655	)		(292,101	)		(301,055	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments
Non-controlled/Non-affiliated investments		(623,188	)		(80,913	)		(101,715	)		(79,879	)
Net unrealized gain (loss) on investments
Non-controlled/Non-affiliated investments		506,190			(346,575	)		(102,711	)		530,586
Net realized and unrealized gain (loss) on investments		(116,998	)		(427,488	)		(204,426	)		450,707
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(198,162	)	$	(519,143	)	$	(496,527	)	$	149,652

See accompanying notes to unaudited condensed consolidated financial statements.

2

POINT CAPITAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2018 and 2017

	Common Stock				Additional  Paid In		Accumulated   Net Investment			Accumulated   Undistributed Net   Realized Gain (Loss) On			Unrealized Appreciation   (Depreciation) on			Accumulated			Total   Stockholders’
	Shares		Amount		Capital		Loss			Investments			Investments			Deficit			Equity
Balance, December 31, 2016		50,082,441	$	5,009	$	1,871,080	$	-		$	(566,360	)	$	(463,223	)				$	846,506
Net (decrease) increase in net assets resulting from operations		-		-		-		(301,055	)		(79,879	)		530,586		$	-			149,652
Balance, September 30, 2017		50,082,441		5,009		1,871,080		(301,055	)		(646,239	)		67,363			-			996,158
Balance, December 31, 2017		50,082,441	$	5,009	$	1,871,080	$	(470,388	)	$	(651,530	)	$	448,871		$	-		$	1,203,042
Common stock issued for asset acquisition		2,000,000		200		299,800		-			-			-			-			300,000
Adoption of corporation accounting		-		-		-		470,388			651,530			(448,871	)		(673,047	)		-
Net decrease in net assets resulting from operations		-		-		-		-			-			-			(496,527	)		(496,527	)
Balance, September 30, 2018		52,082,441	$	5,209	$	2,170,880	$	-			-		$	-		$	(1,169,574	)	$	1,006,515

See accompanying notes to condensed consolidated financial statements.

3

POINT CAPITAL, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Investment Company Accounting
	For the Nine Months Ended September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (decrease) increase in net assets resulting from operations	$	(496,527	)	$	149,652
Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized loss on investments		101,715			79,879
Net unrealized loss (gain) on investments		102,711			(530,586	)
Proceeds from sale of investments		716,338			37,575
Bad debt (recovery) expense		(5,000	)		6,750
Increase in interest receivable		-			(20,361	)
Decrease in prepaid expenses		21,897			22,273
Decrease in accounts payable and accrued expenses		(9,610	)		(22,701	)
Net Cash Provided by (Used In) Operating Activities		431,524			(277,519	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in note receivable		(100,000	)		-
Net Cash Used In Investing Activities		(100,000	)		-
Net Increase (Decrease) in Cash and Cash Equivalents		331,524			(277,519	)
Cash and Cash Equivalents - Beginning of Period		294,591			579,209
Cash and Cash Equivalents - End of Period	$	626,115		$	301,690
Non-cash investing and financing activities:
Interest receivable converted into investments	$	-		$	16,000
Common stock issued for acquisition of intangible assets and prepaid expenses	$	300,000		$	-

See accompanying notes to unaudited condensed consolidated financial statements.

4

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

NOTE 1 - ORGANIZATION AND BUSINESS

Point Capital, Inc. (the “Company”) was incorporated in the State of New York on July 13, 2010. On January 24, 2013, the Company changed its state of incorporation from New York to Delaware.

On October 4, 2013, the Company filed a Form N-54A and elected to become a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company previously elected to be treated for federal income tax purpose as a regulated investment company, or (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended, or (the “Code”). At March 31, 2017, the Company determined that it failed the RIC diversification test since one of the Company’s investments accounted for approximately 78% of the Company’s total assets. To correct the failure, the Company needed to dispose of the asset causing the failure within six months of the end of the quarter in which it identified the failure and the Company would have had to pay an excise tax of $50,000. The Company did not cure its failure to retain its status as a RIC and the Company does not intend to seek to obtain RIC status again. Accordingly, the Company is subject to income taxes at corporate tax rates.

The Company’s investment objective was to provide current income and capital appreciation. The Company intended to accomplish its objective by investing in the common stock, preferred stock, warrants and convertible notes of small and mid-cap companies. The Company’s investments were made principally through direct investments in prospective portfolio companies.  However, the Company also purchased securities in private secondary transactions. The Company to a lesser extent also invested in private companies that met its investment objectives. Through September 29, 2018, the Company met the definition of an investment company in accordance with the guidance under Accounting Standards Codification Topic 946 “Financial Services – Investment Companies.”

On September 29, 2018, the Company filed Form N-54C, Notification of Withdrawal of election to be Subject to Section 55 through 65 of the Investment Company Act of 1940, whereas the Company has changed the nature of its business so as to cease to be a business development company (See Note 2 – Basis of Presentation).

On March 27, 2014, the Company formed a wholly-owned subsidiary, Hemp Funding, Inc., to invest in companies that are positioned for growth in the legal cannabis industry. The subsidiary never made any investments and during 2017, this subsidiary was dissolved.

The Company’s investment activities are managed by Eric Weisblum, the Company’s Chief Executive Officer.

On September 29, 2018 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts Holdings, Inc. a Nevada corporation (the “Seller”) whereby the Company completed the acquisition of 100% of the assets of “NFID” from the Seller (See Note 3). 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”) and include the consolidated financial statements of the Company and its wholly-owned subsidiary, Hemp Funding, Inc., through its date of dissolution in 2017. All intercompany transactions and balances have been eliminated.

Effective September 29, 2018, following authorization by our shareholders, the Company withdrew its previous election to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. Prior to such time, the Company was a closed-end, non-diversified management investment company that had elected to be treated as a BDC under the 1940 Act.

As a result of this change in status, commencing September 29, 2018, the Company shall now report as a corporation for accounting purposes under Regulation S-X. For the period from September 29, 2018 to September 30, 2018, there was no activity and therefore, the Company only presented condensed consolidated statements of operations and cash flows for Investment Company Accounting.

In accordance with FASB Accounting Standards Codification (ASC) Topic 946 – Financial Services – Investment Company, the Company is making this change to its financial reporting prospectively, and not restating or revising periods prior to the Company’s change in status to a non-investment company effective September 29, 2018. Accordingly, in this report, the Company refers to both accounting in accordance with US generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which applies commencing September 29, 2018, and to that applicable to investment companies under the 1940 Act (Investment Company Accounting), which applies to prior periods.

5

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

In order to maintain its status as a non-investment company, the Company will now operate so as to fall outside the definition of an “investment company” or within an applicable exception. The Company expects to continue to operate outside the definition of an “investment company” as a company primarily engaged in the business of developing and selling footwear and apparel products.

All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the periods ended September 30, 2018 and 2017 have been included. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these financial statements have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2017, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018. The consolidated balance sheet and consolidated schedule of investments as of December 31, 2017, contained herein, were derived from those financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2018 and 2017 include the valuation of the Company’s investments, the fair value of assets acquired and the fair value of shares issued for the assets acquired.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 or by the Securities Investor Protection Corporation (“SIPC”) up to $250,000. During the 2018 and 2017 periods, the Company had cash balances exceeding the FDIC and SIPC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents of $626,115 and $294,591 at September 30, 2018 and December 31, 2017, respectively, approximate their fair market value based on the short-term maturity of these instruments.

Note Receivable

The Company recognizes an allowance for losses on note receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense.

Intangible Assets and Goodwill

Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful lives. The brand ambassador agreement is being amortized over a period of 1 year. Trademarks are recorded at cost, have an indefinite useful life and are not amortized.

The Company records goodwill as the excess of the purchase price over the fair values assigned to the net assets acquired in business acquisitions. ASC 350, “Intangibles — Goodwill and Other” requires that intangible assets with indefinite lives, including goodwill, be evaluated on an annual basis for impairment or more frequently if an event occurs or circumstances change that could potentially result in impairment. If the fair value of goodwill or other intangible asset with an indefinite life is determined to be less than the book value, then goodwill or other intangible asset is reduced to its implied fair value and the amount of the write-down is charged to operations. We are required to test our goodwill and intangible assets with indefinite lives for impairment at least annually.

6

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

Securities Transactions

Securities transactions are recorded on a trade date basis. Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. Commissions and other costs associated with transactions involving securities, including legal costs, are included in the cost basis of purchases and deducted from the proceeds of sales.

Equity Investments (Corporation Accounting)

Equity investments of $12,767 at September 30, 2018, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Prior to September 29, 2018, equity investments were recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation. The fair value of equity investments that had no ready market were determined in good faith by the Board of Directors, based upon the financial condition and operating performance of the underlying investee companies as well as general market trends for businesses in the same industry. Included in the equity investments, at fair value were non-marketable securities of $464,446 at December 31, 2017.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Equity Investments (Investment Company Accounting)

Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s cost basis and the net proceeds received from such disposition.  Realized gains and losses on investment transactions are determined by specific identification. Net change in unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment, including any reversal of previously recorded unrealized appreciation/depreciation when gains or losses are realized.

Valuation of Equity Investments

Through September 29, 2018, the Company’s equity investments consisted of loans and securities issued by public and privately-held companies, including convertible debt, loans, equity warrants and preferred and common equity securities.

The Company applied the accounting guidance of Accounting Standards Codification Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”). This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considered the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

● Level 1 - Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

● Level 2 - Valuations based on inputs other than quoted market prices that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, and discounts for lack of marketability.

Through September 29, 2018, on a quarterly basis, the Board of Directors of the Company (the “Board”), in good faith, determined the fair value of investments in the following manner:

Equity securities which are listed on a recognized stock exchange are valued at the adjusted closing trade price on the last trading day of the valuation period. For equity securities that carry a restriction inherent to the security, a restriction discount is applied, as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model. Investments in securities which are convertible at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity securities described above, or at the respective investment’s face value, whichever is a better indicator of fair value. Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.

7

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

Investments without a readily determined market value were primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company’s investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors.

Because there is not a readily available market value for some of the investments in its portfolio, the Company valued certain of its portfolio investments at fair value as determined in good faith by the Board, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments differed significantly from the values that would have been used had a readily available market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

Subsequent to September 29, 2018, the Company categorizes its investment in marketable equity instruments as a trading security since there is an active market in such equity investment. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

Revenue Recognition

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of ASU 2014-09 did not have any impact on the process for, timing of, and presentation and disclosure of revenue recognition from contracts.

The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts.

Income Taxes

Through March 31, 2017, the Company elected to be treated as a RIC under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable to RICs.

At March 31, 2017, the Company failed this diversification test since the Company’s investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDTY”) accounted for over 25% of the Company’s total assets. This discrepancy was not caused by the acquisition of any security. The failure was not a result of willful neglect. The Company did not cure its failure to retain its status as a RIC and the Company does not intend to seek to obtain RIC status again. Accordingly, beginning in 2017, the Company is subject to income taxes at corporate tax rates. The loss of the Company’s status as a RIC did not have any impact on the Company’s financial position or results of operations.

8

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital in excess of par or accumulated net realized loss, as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax characterization of income or loss and any non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual tax returns.

Beginning in 2017, deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), a tax reform bill which, among other items, reduces the current federal income tax rate to 21% from 34%. The rate reduction is effective January 1, 2018, and is permanent. The Act has caused the Company’s deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 (“SAB 118”), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company’s continued analysis or further regulatory guidance that may be issued as a result of the Act.

New Accounting Pronouncements

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) (See Revenue Recognition above).

In January 2016, FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU No. 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU No. 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU No. 2016-01 did not have any effect on the Company’s consolidated financial statements and related disclosures.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

NOTE 3 – ACQUISITION

On September 29, 2018 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts Holdings, Inc. a Nevada Corporation (the “Seller”) whereby the Company completed the acquisition of 100% of the assets of “NFID” from the Seller which consisted of three trademarks related to the NFID brand, the NFID website, shoe designs and samples, and the assumption of a one-year Brand Ambassador Agreement in exchange for 2,000,000 shares of common capital stock of the Company. NFID is a recently developed unisex footwear brand. The Company plans on continuing product development to fully launch the product. The Company’s acquisition of the NFID assets gives the Company access to the growing market for unisex products. 

9

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

As a result of the APA, the Company has elected to no longer be deemed a “Business Development Company” as defined by the Investment Company Act of 1940, as amended from time to time (the “Act”). The withdrawal was generally approved by the shareholders of the Company on April 11, 2017, as evidenced on the Definitive Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 filed on June 5, 2017. The Board, under authority granted by the shareholders, approved the withdrawal on September 27, 2018. On September 28, 2018, the Company filed Form N-54C, officially withdrawing its election to be subject to sections 55 through 65 of the Act.

Pursuant to the terms of the APA, the Company issued 2,000,000 shares of common capital stock of the Company in exchange for 100% of the NFID assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date. 

The fair value of the assets acquired and liabilities assumed were based on management’s initial estimates of the fair values on September 29, 2018. Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired at the date of acquisition:

Prepaid expenses	$	17,500
Intangible assets		282,500
Total assets acquired at fair value		300,000
Total purchase consideration	$	300,000

The assets acquired are recorded at their initial estimated fair values on the acquisition date with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired as of the asset acquisition date. As a result, during the purchase price measurement period, which may be up to one year from the asset acquisition date, the Company may record adjustments to the assets acquired, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record adjustments to assets acquired in operating expenses in the period in which the adjustments were determined.

The purchase price exceeded the fair value of the assets acquired by $282,500 which was initially allocated as follows:

Brand ambassador agreement	$	105,295
Trademarks		29,440
Goodwill		147,765
Total intangible assets acquired	$	282,500

Goodwill recorded is not expected to be deductible for U.S. income tax purposes.

The Company valued the three trademarks acquired at their historical cost of $29,440 which approximates fair market value. The Company valued the Brand Ambassador Agreement using the estimated fair value of required social media posts by the artist/singer Max Schneider, known as Max (“MAX”). MAX is considered a social media influencer with over 600,000 Instagram followers and over 1.5 million YouTube subscribers.

Pursuant to the Brand Ambassador Agreement, the Company will incur a minimum cash payment of $35,000 related to a minimum royalty payment of which $17,500 was paid prior to the Closing Date. The remaining $17,500 is due on January 27, 2019, the six month anniversary of the Effective Date of the Brand Ambassador Agreement.

NOTE 4 - EQUITY INVESTMENTS

At September 30, 2018, equity investments, at fair value, consisted of marketable equity instruments which are treated as a trading security since there is an active market in such equity investment and the Company is actively selling this security. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments, at fair value for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

10

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

At September 30, 2018, equity investments of $12,767, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically.

The following are the Company’s equity investments owned by levels within the fair value hierarchy at September 30, 2018:

	Level 1		Level 2		Level 3		Total
Common Stock	$	391,698	$	-	$	-	$	391,698
LLC Membership		-		-		-		-
Warrants		-		-		-		-
Total Investments	$	391,698	$	-	$	-	$	391,698

The following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2017:

	Level 1		Level 2		Level 3		Total
Common Stock	$	853,163	$	-	$	200	$	853,363
LLC Membership		-		-		9,194		9,194
Convertible Preferred Stock		-		2,600		-		2,600
Warrants		-		-		455,072		455,072
Total Investments	$	853,163	$	2,600	$	464,466	$	1,320,229

The following additional disclosures relate to the changes in fair value of the Company’s Level 3 investments during the nine months ended September 30, 2018 and 2017 (Investment Company Accounting): 

	Nine Months Ended September 30,
	2018			2017
	(Unaudited)			(Unaudited)
Balance at beginning of year	$	464,466		$	474,390
Interest receivable converted to common stock, at cost		-			16,000
Net change in unrealized appreciation on investments		(414,730	)		115,810
Net transfers out of Level 3 (1)		(49,736	)		(100,000	)
Balance at end of period	$	-		$	506,200

	September 30,		December 31,
	2018		2017
	(Unaudited)
Net unrealized depreciation for Level 3 investments at period end	$	-	$	(329,598	)

(1) Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act and to the development of an active market. A review of fair value hierarchy classifications is conducted on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities.  Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur.

At December 31, 2017, level 3 investments consisted of the following:

Investment Type	Fair Value at December 31, 2017		Valuation Technique	Unobservable inputs	Input
Common Stock	$	200	Recent Transactions	N/A	N/A
LLC Membership Units	$	9,194	Recent Transactions	N/A	N/A
Warrants	$	455,072	Black-Scholes Option Pricing Model	Volatility	72.8% to 120.4%
	$	464,466

11

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

If the price multiple or sales multiple were to increase or decrease, the fair value of the investments would increase or decrease, respectively. If the discount for lack of marketability or restriction discount were to increase or decrease, the fair value of the investments would decrease or increase, respectively.

NOTE 5 – NOTE RECEIVABLE

On September 28, 2018, the Company and the Seller executed a two year promissory note receivable agreement with a principal balance of $200,000 of which $100,000 was funded to the Seller in September 2018. The terms of the promissory note include an interest rate of six percent (6%) and the Company shall be repaid in interest only payments on a quarterly basis, until the maturity date of September 27, 2020, at which time the full principal and any interest payments will be due to the Company. At the time the promissory note receivable agreement was executed, the Company also executed a Security Interest and Pledge Agreement with the borrower. Pursuant to the Security Interest and Pledge Agreement, the borrower has pledged all of the assets of its company as security for the performance of the note obligations. As of September 30, 2018, the Company has recorded a note receivable of $100,000 related to the promissory note receivable agreement. Subsequent to September 30, 2018, the Company funded the remaining $100,000 (see Note 11).

NOTE 6 – INTANGIBLE ASSETS

At September 30, 2018 and December 31, 2017, intangible assets consisted of the following:

	Useful life	September 30, 2018		December 31, 2017
Trademarks	N/A	$	29,440	$	-
Brand ambassador agreement	1 year		105,295		-
Goodwill	N/A		147,765		-
			282,500		-
Less: accumulated amortization			-		-
		$	282,500	$	-

Amortization of intangible assets attributable to future periods is as follows:

Year ending:	Amount
2018	$	26,324
2019		78,971
	$	105,295

NOTE 7 - REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK

In April 2013, pursuant to a Series A Preferred Stock Purchase Agreement (the “Preferred Stock Agreement”), the Company issued 4,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) for $400,000. Holders of Preferred Stock vote together with holders of Common Stock on an as-converted basis. Each share of Preferred Stock is currently convertible into 500 shares of common stock at the option of the holder (subject to a 9.99% beneficial ownership limitation) based on a conversion formula (the Stated Value, currently $100, divided by the Conversion Rate, currently $0.20.) The Conversion Rate may be adjusted upon the occurrence of stock dividends or stock splits or subsequent equity sales at a price lower than the current conversion rate. Each share has a $100 liquidation value. The holders of Preferred Stock are entitled to receive dividends on an as-converted basis if paid on Common Stock. 

The Series A Convertible Preferred Stock is redeemable at the option of the holder upon the occurrence of certain “triggering events.” In case of a triggering event, the holder has the right to redeem each share held for cash (currently $100/share) or impose a dividend rate on all of the outstanding Preferred Stock at 6% per annum thereafter. A triggering event occurs if the Company fails to deliver certificates representing conversion shares, fails to pay the amount due pursuant to a Buy-In, fails to have available a sufficient number of authorized shares, fails to observe any covenant in the Certificate of Designation unless cured within 30 calendar days, shall be party to a Change in Control Transaction, sustains a bankruptcy event, fails to list or quote its common stock for more than 20 trading days in a twelve-month period, sustains any monetary judgment, writ or similar final process filed against the Company for more than $100,000 and such judgment writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days, or fails to comply with the Asset Coverage requirement.

Because certain of these “triggering events” are outside the control of the Company, the Preferred Stock is classified within the temporary equity section of the statement of assets and liabilities.

12

POINT CAPITAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

Pursuant to the Preferred Stock Agreement, the Company agreed that as long as the purchasers of its Series A Preferred Stock are holding said shares, the Company would comply in all respects with its reporting and filing obligations under the Exchange Act. The Company did not file its annual report for the year ended December 31, 2015 and its quarterly reports for the period ended March 31, 2016 and June 30, 2016, in a timely manner. The Company is currently not in breach of its agreement to remain current. The purchase agreement does not provide for any immediate consequence or default provision such as a reduction in the conversion price of the Series A Preferred, immediate redemption or the like.

The Preferred Stock has forced conversion rights where the Company may force the conversion of the Preferred Stock if certain conditions are met. The Company may elect to redeem some or all of the outstanding Preferred Stock for the Stated Value (currently $100/share) provided that proper notice is provided to the holders and that a number of conditions (the “Equity Conditions”) have been met.

The Company believes the carrying amount reported in the consolidated balance sheets for the Preferred Stock of $400,000 approximates the fair market value of such Preferred Stock based on the short-term maturity of these instruments which also equals the redemption value reflected as on the consolidated balance sheets.

On March 31, 2017, the Board approved the amendment and restatement of the original Certificate of Designation in order to expressly ensure that holders of the Company’s Preferred Stock have the right to elect at least two directors at all times, have complete priority over any other class as to distribution of assets and payments of dividends, and have equal voting rights with every other outstanding voting stock. On May 11, 2017, the Company filed the amendment and restatement with the State of Delaware.

NOTE 8 – SHAREHOLDERS’ EQUITY

Common stock issued for acquisition

Pursuant to the terms of the APA (See Note 3), the Company issued 2,000,000 shares of common capital stock of the Company in exchange for 100% of the NFID assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date.

NOTE 9 - CONCENTRATIONS AND CREDIT RISKS

Financial instruments that subjected the Company to concentrations of market risk consisted principally of equity investments and debt instruments (other than cash equivalents), which collectively represented approximately 28.2% and 80.4% of the Company’s total assets at September 30, 2018 and December 31, 2017, respectively. These investments consisted of certain securities in companies with no readily determinable market values or in non-public companies, and as such are valued in accordance with the Company’s fair value policies and procedures. The Company’s investment strategy represents a high degree of business and financial risk due to the fact that certain of the Company’s portfolio investments (other than cash equivalents) are generally illiquid, in small and middle market companies, and include entities with little operating history or entities that possess operations in new or developing industries. Investments in non-public entities should they become publicly traded, would generally be (i) subject to restrictions on resale, if they were acquired from the issuer in private placement transactions; and (ii) susceptible to market risk.  Additionally, at September 30, 2018, 100% of the fair value of the Company’s equity investment portfolio is concentrated in one company in the biometric technology industry which gives rise to a risk of significant loss should the performance or financial condition of this company or industry deteriorate.

NOTE 10 - COMMITMENT

In connection with the APA, the Company entered into a one-year Brand Ambassador Agreement (See Note 3) with MAX. Pursuant to this agreement, the Company shall pay MAX a seven percent (7%) royalty on net sales of the product effective November 1, 2018 with a minimum royalty payment of $35,000 during the agreement term. The royalty shall be calculated on a quarterly basis. Pursuant to the Brand Ambassador Agreement, $17,500 was paid prior to the Closing Date. The remaining $17,500 is due on January 27, 2019.

NOTE 11 – SUBSEQUENT EVENTS

In October 2018, the Company advanced Seller the remaining $100,000 balance of the promissory note receivable agreement executed on September 28, 2018 (See Note 5).

13

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

As used in this Form 10-Q, references to “Point Capital”, “Company”, “we”, “our” or “us” refer to Point Capital, Inc. unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

Through September 28, 2018, we were a closed-end, non-diversified investment company that had elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”).  As a business development company, we were required to comply with certain regulatory requirements.  For instance, we generally had to invest at least 70% of our total assets in “qualifying assets,” including securities of private U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less.

On September 29, 2018, we filed Form N-54C, Notification of Withdrawal of election to be Subject to Section 55 through 65 of the Investment Company Act of 1940, whereas we have changed the nature of our business so as to cease to be a business development company. Accordingly, as of the September 30, 2018, the accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. For the period from September 29, 2018 to September 30, 2018, there was no activity and therefore, the Company only presented condensed consolidated statements of operations for Investment Company Accounting.

In accordance with FASB Accounting Standards Codification (ASC) Topic 946 – Financial Services – Investment Company, we are making this change to our financial reporting prospectively, and not restating or revising periods prior to our change in status to a non-investment company effective September 29, 2018. Accordingly, in this report, we refer to both accounting in accordance with US generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which applies commencing September 29, 2018, and to that applicable to investment companies under the 1940 Act (Investment Company Accounting), which applies to prior periods.

In order to maintain its status as a non-investment company, the Company will now operate so as to fall outside the definition of an “investment company” or within an applicable exception. The Company expects to continue to operate outside the definition of an “investment company” as a company primarily engaged in the business of developing and selling footwear and apparel products.

Through March 31, 2017, we elected to be treated as a RIC under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable to RICs. At March 31, 2017, we failed this diversification test since our investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDTY”) accounted for over 25% of our total assets. We did not cure our failure to retain our status as a RIC and we will not seek to obtain RIC status again. Accordingly, beginning in 2017, we are subject to income taxes at corporate tax rates. The loss of the Company’s status as a RIC did not have any impact on our financial position or results of operations.

Currently, we are not making any new equity investments.

14

On September 29, 2018, we entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts Holdings, Inc. a Nevada corporation (the “Seller”) whereby we completed the acquisition of 100% of the assets of “NFID” from the Seller which consisted of three trademarks related to the NFID brand, the NFID website, shoe designs and samples, and the assumption of a one-year Brand Ambassador Agreement in exchange for 2,000,000 shares of common capital stock of the Company. NFID is a recently developed unisex footwear brand. We plan on continuing product development to fully launch the product. Our acquisition of the NFID assets gives us access to the growing market for unisex products. 

Pursuant to the terms of the APA, the Company agreed to issue 2,000,000 shares of common capital stock of the Company in exchange for 100% of the NFID assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date. 

Equity Investments

At September 30, 2018, equity investments of $12,767, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically.

As of September 30, 2018, the fair value of equity investments held by us amounted to $391,698 which consisted of one investment, Ipsidy Inc. (“IDTY”), with a fair value of $391,698, or 100% of the total investment portfolio.

IDTY is an international biometrics and payment processing company with a unique technology platform that provides valuable, secure payment processing for consumers as well as for merchants. At September 30, 2018, we owned 2,165,275 common shares of IDTY with a fair value of $391,698. We are actively selling these shares and plan on using the proceeds from the sale of IDTY for working capital purposes, for NFID product development, or future acquisitions.

Results of Operations

For the three and nine months ended September 30, 2018 and 2017, the principal measure of our financial performance was the net increase (decrease) in our net assets resulting from operations, which includes (i) net investment income (loss), (ii) net realized gain (loss) on investments, and (iii) net change in unrealized appreciation (depreciation) on investments.  Net investment income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating expenses.  Net realized gain (loss), if any, is the difference between the net proceeds from the disposition of portfolio company securities and their stated cost.  Net unrealized appreciation (depreciation) from investments is the net change in the fair value of our investment portfolio.

Interest Income:  For the three months ended September 30, 2018 and 2017, we earned interest income of $18 and $6,540, and for the nine months ended September 30, 2018 and 2017, we earned interest income of $44 and $20,478, respectively, primarily resulting from interest earned on convertible debt and other debt, and on bank deposits. The decrease was attributable to a decrease in income-earning investments.

Operating Expenses: For the three and nine months ended September 30, 2018 and 2017, total operating expenses consisted of the following:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2018		2017		2018			2017
Compensation expense	$	30,000	$	45,000	$	115,000		$	135,000
Professional fees		36,020		36,890		130,740			129,567
Insurance expense		8,798		8,925		26,396			26,774
Bad debt expense (recovery)		-		-		(5,000	)		6,750
General and administrative expenses		6,364		7,344		25,009			23,442
Total operating expenses	$	81,182	$	98,159	$	292,145		$	321,533

Compensation expense: For the three and nine months ended September 30, 2018 and 2017, compensation expense decreased by $15,000 and $20,000, respectively due to the resignation of the Company’s CFO.

Professional fees: For the three months ended September 30, 2018, professional fees decreased by $870, or 2.4%, as compared to the three months ended September 30, 2017. For the nine months ended September 30, 2018, professional fees increased by $1,173, or .91%, as compared to the nine months ended September 30, 2017.

Insurance expense: For the three months ended September 30, 2018, insurance expense decreased by $127, or 1.4%, as compared to the three months ended September 30, 2017. For the nine months ended September 30, 2018, insurance expense decreased by $378, or 1.4%, as compared to the nine months ended September 30, 2017.

15

Bad debt recovery (expense): For the three months ended September 30, 2018 and 2017, we did not record any bad debt expense or recovery. For the nine months ended September 30, 2018, we recorded a bad debt recovery of $5,000 as compared to bad debt expense of $6,750 for the nine months ended September 30, 2017. During the 2017 period, we wrote off interest receivable of $6,750 deemed uncollectable.

General and administrative expenses: General and administrative expenses consist of transfer agent fees, custodian fees, bank service charges, and other fees and expenses. For the three months ended September 30, 2018, general and administrative expenses decreased by $980, or 13.3%, as compared to the three months ended September 30, 2017. For the nine months ended September 30, 2018, general and administrative expenses increased by $1,567, or 6.7%, as compared to the nine months ended September 30, 2017.

Loss from Operations: For the three months ended September 30, 2018 and 2017, loss from operations amounted to $81,182 and $98,159, respectively. For the nine months ended September 30, 2018 and 2017, loss from operations amounted to $292,145 and $321,533, respectively.

Other (Expenses) Income:

Net Realized And Unrealized (Loss) Gain On Investments:

Net Realized Gain on Investments: During the three months ended September 30, 2018 and 2017, we disposed of or permanently impaired certain equity investments recognizing a net realized loss of $623,188 and $80,913, respectively. During the three months ended September 30, 2018, we recognized a net realized loss of $54,001 which consisted of gains of $32,973 from the sale of Ipsidy, Inc. offset by a realized loss of $86,974 from the expiration or write off of certain debentures and warrants. Additionally, we recorded a realized loss of $569,187 related to the permanent write down of nonmarketable equity securities. During the nine months ended September 30, 2018 and 2017, we disposed of or permanently impaired certain equity investments recognizing a net realized loss of $101,715 and $79,879, respectively. During the nine months ended September 30, 2018, we recognized a net realized gain of $467,472 which consisted of realized gains of $648,715 from the sale of Ipsidy, Inc. offset by a realized loss of $32,730 from the sale of our investment in Orbital Tracking Corp. and a realized loss of $148,513 due to the expiration or write off of certain debentures and warrants. Additionally, we recorded a realized loss of $569,187 related to the permanent write down of nonmarketable equity securities.

Net Change in Unrealized (Loss) Gain on investments: At September 30, 2018 and December 31, 2017, we had a cost basis in our portfolio companies of $45,538 and $876,358, respectively, with a fair market value of $391,698 and $1,320,229, respectively. The net change in unrealized gain (loss) on investments for the three months ended September 30, 2018 and 2017 was $506,190 and $(346,575), respectively. During the three months ended September 30, 2018, based on our analysis of the fair value of our investments in Ipsidy, Inc. coupled with the reversal of unrealized gains upon sales of Ipsidy common shares we recorded an unrealized loss of approximately $63,000. Additionally, due to the permanent write down of nonmarketable securities, we reversed previously recorded unrealized losses amounting $569,187 and we and accordingly, recorded an unrealized gain of $569,187. During the three months ended September 30, 2017, based on our analysis of the fair value of our investments in Ipsidy, Inc., we recorded an unrealized loss of approximately $347,000. The net change in unrealized gain (loss) on investments for the nine months ended September 30, 2018 and 2017 was $(671,898) and $530,586, respectively. During the nine months ended September 30, 2018, based on our analysis of the fair value of our investments in Ipsidy, Inc., the reversal of unrealized gains upon sales of Ipsidy common shares, and the reversal of unrealized losses on expired warrants and debentures, we recorded an unrealized loss of approximately $672,000. Additionally, due to the permanent write down of nonmarketable securities, we reversed previously recorded unrealized losses amounting $569,187 and we and accordingly, recorded an unrealized gain of $569,187. During the nine months ended September 30, 2017, based on our analysis of the fair value of our investments in Ipsidy, Inc., we recorded an unrealized gain of approximately $531,000.

 Net (Loss) Income: For the three months ended September 30, 2018 and 2017, we had a net loss of $(198,162) and $(519,143), respectively. For the nine months ended September 30, 2018 and 2017, we had a net loss of $(496,527) and net income of $149,652, respectively.

Liquidity and Capital Resources

As of September 30, 2018, we had $626,115 in cash and cash equivalents, compared to $294,591 as of December 31, 2017, an increase of $331,524. Our primary uses of cash have been for salaries, fees paid to third parties for professional services, and general and administrative expenses. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:

● An increase in working capital requirements to finance our current business,

● An increase in product development and marketing fees related to recently acquired NFID product line;

● Addition of administrative and sales personnel as the business grows, and

● The cost of being a public company.

16

On September 28, 2018, we and the Seller executed a two year promissory note receivable agreement with a principal balance of $200,000 of which $100,000 was funded to the Seller in September 2018. The terms of the promissory note include an interest rate of six percent (6%) and we shall be repaid in interest only payments on a quarterly basis, until the maturity date of September 27, 2020, at which time the full principal and any interest payments will be due to the Company. At the time the promissory note receivable agreement was executed, we also executed a Security Interest and Pledge Agreement with the borrower. Pursuant to the Security Interest and Pledge Agreement, the borrower has pledged all of the assets of its company as security for the performance of the note obligations. As of September 30, 2018, we have recorded a note receivable of $100,000 related to the promissory note receivable agreement. Subsequent to September 30, 2018, we funded the remaining $100,000 (see Note 11).

We believe that our existing available cash will enable us to meet the working capital requirements for at least 12 months from the date of this report.

Although we believe that our existing available cash will enable us to meet our working capital requirements for at least 12 months from the date of this report, we may need to raise additional funds to for the development and marketing of our recently acquitted NFID product line. If we are unable to raise capital, we may be required to reduce the scope of our product development and marketing activities, which could harm our business plans, financial condition and operating results, cease our operations entirely, in which case, you will lose all of your investment.

Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. We will seek to raise capital through additional debt and/or equity financings to fund operations, for product development and for marketing in the future. If we are unable to raise capital or secure lending in the near future, management expects that the Company may need to curtail its operations. 

Until such time as we generate substantial product revenue to offset operational expenses, we expect to finance our cash needs through a combination of public and private equity offerings and debt financing. We may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition. We have no agreements or arrangements to raise capital.

We currently have no material commitments for any capital expenditures.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”) and include the consolidated financial statements of the Company and its wholly-owned subsidiary, Hemp Funding, Inc., through its date of dissolution in 2017. All intercompany transactions and balances have been eliminated.

Effective September 29, 2018, following authorization by our shareholders, we withdrew our previous election to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. Prior to such time, we were a closed-end, non-diversified management investment company that had elected to be treated as a BDC under the 1940 Act.

As a result of this change in status, commencing September 29, 2018, we shall now report as a corporation for accounting purposes under Regulation S-X. For the period from September 29, 2018 to September 30, 2018, there was no activity and therefore, the Company only presented condensed consolidated statements of operations for Investment Company Accounting.

In accordance with FASB Accounting Standards Codification (ASC) Topic 946 – Financial Services – Investment Company, we are making this change to our financial reporting prospectively, and not restating or revising periods prior to the Company’s change in status to a non-investment company effective September 29, 2018. Accordingly, in this report, we refer to both accounting in accordance with US generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which applies commencing September 29, 2018, and to that applicable to investment companies under the 1940 Act (Investment Company Accounting), which applies to prior periods.

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents.

Intangible Assets and Goodwill

Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful lives. The brand ambassador agreement is being amortized over a period of 1 year. Trademarks are recorded at cost, have an indefinite useful life and are not amortized.

17

The Company records goodwill as the excess of the purchase price over the fair values assigned to the net assets acquired in business acquisitions. ASC 350, “Intangibles — Goodwill and Other” requires that intangible assets with indefinite lives, including goodwill, be evaluated on an annual basis for impairment or more frequently if an event occurs or circumstances change that could potentially result in impairment. If the fair value of goodwill or other intangible asset with an indefinite life is determined to be less than the book value, then goodwill or other intangible asset is reduced to its implied fair value and the amount of the write-down is charged to operations. We are required to test our goodwill and intangible assets with indefinite lives for impairment at least annually.

Securities Transactions

Securities transactions are recorded on a trade date basis. Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. We record interest and dividend income on an accrual basis beginning on the trade settlement date (the date on which a financial transaction is settled and monies from the transaction have occurred) or the ex-dividend date, respectively, to the extent that we expect to collect such amounts. Commissions and other costs associated with transactions involving securities, including legal costs, are included in the cost basis of purchases and deducted from the proceeds of sales.

Equity Investments (Corporation Accounting)

Equity investments of $12,767 at September 30, 2018, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Prior to September 29, 2018, equity investments were recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation. The fair value of equity investments that had no ready market were determined in good faith by the Board of Directors, based upon the financial condition and operating performance of the underlying investee companies as well as general market trends for businesses in the same industry. Included in the equity investments, at fair value were non-marketable securities of $464,446 at December 31, 2017.

Net Realized Gains or Losses and Net Change in Unrealized Gains or Losses on Investments

Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company's cost basis and the net proceeds received from such disposition. Net change in unrealized gains or losses is computed as the difference between the fair value of the investment and the cost basis of such investment.

Valuation of Investments

Through September 29, 2018, our investments consisted of loans and securities issued by public and privately-held companies, including convertible debt, loans, equity warrants and preferred and common equity securities.

We applied the accounting guidance of Accounting Standards Codification Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”).  This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we considered the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

● Level 1 - Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

● Level 2 - Valuations based on inputs other than quoted market prices that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, and discounts for lack of marketability.

Through September 29, 2018, on a quarterly basis, the Board of Directors (the “Board”) of the Company, in good faith, determined the fair value of investments in the following manner:

18

Equity securities which are listed on a recognized stock exchange are valued at the closing trade price on the last trading day of the valuation period. For equity securities that carry a restriction inherent to the security, a restriction discount is applied, as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model based on inputs such as stock volatility, risk-free interest rates, holding period and dividend yield. Investments in securities which are convertible at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity securities described above, or at the respective investment’s face value, whichever is a better indicator of fair value. Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.

Investments without a readily determined market value were primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors.

Because there is not a readily available market value for some of the investments in its portfolio, we valued substantially all of our portfolio investments at fair value as determined in good faith by our board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments differed significantly from the values that would have been used had a readily available market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

Subsequent to September 29, 2018, we categorize our investment in marketable equity instruments as a trading security since there is an active market in such equity investment. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). We review equity investments for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

Revenue Recognition

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of ASU 2014-09 did not have any impact on the process for, timing of, and presentation and disclosure of revenue recognition from contracts.

We record interest and dividend income on an accrual basis to the extent that we expect to collect such amounts. We do not accrue as a receivable interest on debt or dividend of preferred shares for accounting purposes if there is reason to doubt the ability to collect such interest.

Income Taxes

Through March 31, 2017, we elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable to RICs.

In order to qualify for favorable tax treatment as a RIC, we were required to distribute annually to our stockholders at least 90% of our investment company taxable income, as defined by the Code. To avoid federal excise taxes, we must have distributed annually at least 98% of our ordinary income and 98.2% of net capital gains from the current year and any undistributed ordinary income and net capital gains from the preceding years. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we chose to do so, all other things being equal, this would have increased expenses and reduce the amount available to be distributed to stockholders. We were required to accrue excise tax on estimated undistributed taxable income as required. Additionally, if more than 25% of our total assets is invested in the securities of one entity, we would not meet the diversification tests in order to qualify as a RIC for federal income tax purposes.

19

Since March 31, 2017, we failed this diversification test since our investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDTY”) accounted for over 25% of our total assets (approximately 27.3% of total assets at September 30, 2018). As of the September 30, 2018 and as of the date of this report, we had not cured the failure to retain our status as a RIC and we do not intend to retain our RIC status. Accordingly, beginning in 2017, we are subject to income taxes at corporate tax rates. The loss of our status as a RIC is not expected to have any impact on our financial position or results of operations. 

We did not have any distributable income as of September 30, 2018.

Effective in 2017, we account for income taxes pursuant to ASC 740 “Accounting for Income Taxes” that requires the recognition of deferred tax assets and liabilities for the differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. Additionally, the accounting standards require the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets, including those related to the net operating loss carry forwards for income tax purposes as compared to financial statement purposes, are dependent upon future taxable income and timing of reversals of future taxable differences along with any other positive and negative evidence during the periods in which those temporary differences become deductible or are utilized.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

During the normal course of its business, the Company trades various financial instruments and enters into various financial transactions where the risk of potential loss due to market risk, credit risk and other risks can equal or exceed the related amounts recorded. The success of any investment activity is influenced by general economic conditions that may affect the level and volatility of equity prices, interest rates and the extent and timing of investor participation in the markets for both equity and interest rate sensitive investments. Unexpected volatility or illiquidity in the markets in which the Company directly or indirectly holds positions could impair its ability to carry out its business and could cause losses to be incurred.

Market risk represents the potential loss that can be caused by increases or decreases in the fair value of investments resulting from market fluctuations.

Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. In addition to its investments, the Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, who is also our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2018. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were ineffective at such time to ensure that information required to be disclosed by us in the reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our principal executive officer and principal financial officer also concluded that our disclosure controls, which are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, was inappropriate to allow timely decisions regarding required disclosure. 

● the lack of Investment Act experienced internal staff,

● a lack of segregation of duties within accounting functions.

● a lack of control over custodian of certain instruments.

● a lack of control over valuation of certain investments. 

● the recent resignation of our Chief Financial Officer who is now is an accounting consultant to the Company.

20

Management determined that the deficiencies, evaluated in the aggregate, could potentially result in a material misstatement of the consolidated financial statements in a future annual or interim period that would not be prevented or detected. Therefore the deficiencies constitute material weaknesses in internal control. Based on that evaluation, management determined that our internal controls over financial reporting were not effective as of September 30, 2018.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Controls over Financial Reporting

Other than the resignation of our chief financial officer, there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Our former chief financial officer is now a consultant to the Company providing us with accounting and financial reporting services and his resignation did not materially change our internal control over financial reporting.    

21

PART II

OTHER INFORMATION 

Item 1. Legal Proceedings. 

There are no pending legal proceedings to which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficially of more than 5% of any class of voting securities of our company, or security holder is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings. 

Item 1A. Risk Factors 

Other than discussed below, there have been no material changes to our risk factors as previously disclosed in our most recent 10-K filing. 

We are subject to corporate-level income tax since we lost our status as to be taxed as a RIC as of March 31, 2017.

Beginning in 2017, we are subject to corporate-level income tax since we were unable to qualify as a RIC under Subchapter M of the Code or to satisfy RIC distribution requirements. Since March 31, 2017, we failed the RIC diversification test since one of our investments accounted for over 25% of the Company’s total assets. As of the date of this report, we had not cured our failure to retain our status as a RIC and we do not intend to retain our RIC status. Accordingly, beginning in 2017, we are subject to income taxes at corporate tax rates.

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

Pursuant to the terms of an asset purchase agreement, we issued 2,000,000 shares of common stock in exchange for 100% of the certain assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date.

The above securities were issued in reliance upon the exemptions provided by Section 4(a)(2) under the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities. 

None. 

Item 4. Mine Safety Disclosures. 

Not applicable. 

22

Item 5. Other Information. 

On September 29, 2018, we filed Form N-54C, Notification of Withdrawal of election to be Subject to Section 55 through 65 of the Investment Company Act of 1940, whereas the Company has changed the nature of its business so as to cease to be a business development company.

Item 6. Exhibits

Exhibit No.	Description
31.1	Rule 13a-14(a)/15d14(a) Certifications of Principal Executive Officer*
31.2	Rule 13a-14(a)/15d14(a) Certifications of Principal Financial Officer*
32.1	Section 1350 Certifications of Principal Executive Officer*
32.2	Section 1350 Certifications of Principal Financial Officer*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

23

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 thereunto duly authorized.

	POINT CAPITAL, INC.
Dated: November 14, 2018	By:	/s/ Eric Weisblum
	Name:	Eric Weisblum
	Title:	Chairman, Chief Executive Officer and Director (Principal Executive Officer)

Dated: November 14, 2018	By:	/s/ Eric Weisblum
	Name:	Eric Weisblum
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

24

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Eric Weisblum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Point Capital, Inc. (the “registrant”) for the period ended September 30, 2018;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s), and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s), and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 14, 2018	By:	/s/ Eric Weisblum
	Name:	Eric Weisblum
	Title:	Chairman, Chief Executive Officer and Director (principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF

PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Eric Weisblum, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Point Capital, Inc.(the “registrant”) for the period ended September 30, 2018;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s), and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer, and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 14, 2018	By:	/s/ Eric Weisblum
	Name:	Eric Weisblum
	Title:	Chief Financial Officer (principal financial & accounting officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Point Capital, Inc. (the “Company”) for the period ended September 30, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Eric Weisblum, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: November 14, 2018

By:	/s/ Eric Weisblum
Name:	Eric Weisblum
Title:	Chairman, Chief Executive Officer and Director (principal executive officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Point Capital, Inc. (the “Company”) for the period ended September 30, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Eric Weisblum, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: November 14, 2018

By:	/s/ Eric Weisblum
Name:	Eric Weisblum
Title:	Chief Financial Officer (principal financial & accounting officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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	Sep. 30, 2018	Nov. 14, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Point Capital, Inc.
Entity Central Index Key	0001514183
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		52,082,441

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Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
CURRENT ASSETS:
Equity investments, at fair value (cost of $45,538 and $876,358 at September 30, 2018 and December 31, 2017, respectively)	$ 391,698	$ 1,320,229
Equity investments	12,767
Cash and cash equivalents	626,115	294,591
Prepaid expenses	22,168	26,565
Total Current Assets	1,052,748	1,641,385
OTHER ASSETS:
Note receivable	100,000
Intangible assets, net	282,500
Total Other Assets	382,500
Total Assets	1,435,248	1,641,385
CURRENT LIABILITIES:
Accounts payable and accrued expenses	28,733	38,343
Total Current Liabilities	28,733	38,343
Commitments and Contingencies
Redeemable Series A, Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 1,000,000 shares designated; 4,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 ($100 per share redemption value)	400,000	400,000
STOCKHOLDERS' EQUITY::
Common stock, $0.0001 par value, 100,000,000 shares authorized; 52,082,441 and 50,082,441 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	5,209	5,009
Additional paid-in capital	2,170,880	1,871,080
Accumulated net investment loss		(470,388)
Accumulated undistributed net realized loss on investments		(651,530)
Unrealized appreciation on investments		448,871
Accumulated deficit	(1,169,574)
Total Stockholders' Equity	1,006,515	1,203,042
Total Liabilities and Stockholders' Equity	$ 1,435,248	$ 1,641,385
Net Asset Value per Common Share		$ 0.02

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Equity investments cost	$ 45,538	$ 876,358
Redeemable Series A, Convertible Preferred stock, par value	$ 0.0001	$ 0.0001
Redeemable Series A, Convertible Preferred stock, shares authorized	5,000,000	5,000,000
Redeemable Series A, Convertible Preferred stock, shares designated	1,000,000	1,000,000
Redeemable Series A, Convertible Preferred stock, shares issued	4,000	4,000
Redeemable Series A, Convertible Preferred stock, shares outstanding	4,000	4,000
Redeemable Series A, Convertible Preferred stock, per share redemption value	$ 100	$ 100
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	50,082,441	50,082,441
Common stock, shares outstanding	50,082,441	50,082,441

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Non-controlled/Non-affiliated investments:
Interest income	$ 18	$ 6,504	$ 44	$ 20,478
Total investment income	18	6,504	44	20,478
OPERATING EXPENSES:
Compensation expense	30,000	45,000	115,000	135,000
Professional fees	36,020	36,890	130,740	129,567
Insurance expense	8,798	8,925	26,396	26,774
Bad debt (recovery) expense			(5,000)	6,750
General and administrative expenses	6,364	7,344	25,009	23,442
Total operating expenses	81,182	98,159	292,145	321,533
NET INVESTMENT LOSS	(81,164)	(91,655)	(292,101)	(301,055)
Net realized loss on investments
Non-controlled/Non-affiliated investments	(623,188)	(80,913)	(101,715)	(79,879)
Net unrealized gain (loss) on investments
Non-controlled/Non-affiliated investments	506,190	(346,575)	(102,711)	530,586
Net realized and unrealized gain (loss) on investments	(116,998)	(427,488)	(204,426)	450,707
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$ (198,162)	$ (519,143)	$ (496,527)	$ 149,652

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Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock	Additional Paid In Capital	Accumulated Net Investment Loss	Accumulated Undistributed Net Realized Gain (Loss) On Investments	Unrealized Appreciation (Depreciation) on Investments	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2016	$ 5,009	$ 1,871,080		$ (566,360)	$ (463,223)		$ 846,506
Beginning balance, shares at Dec. 31, 2016	50,082,441
Net (decrease) increase in net assets resulting from operations			(301,055)	(79,879)	530,586		149,652
Ending balance at Sep. 30, 2017	$ 5,009	1,871,080	(301,055)	(646,239)	67,363		996,158
Ending balance, shares at Sep. 30, 2017	50,082,441
Beginning balance at Dec. 31, 2017	$ 5,009	1,871,080	(470,388)	(651,530)	448,871		1,203,042
Beginning balance, shares at Dec. 31, 2017	50,082,441
Common stock issued for asset acquisition	$ 200	299,800					300,000
Common stock issued for asset acquisition, shares	2,000,000
Adoption of corporation accounting			470,388	651,530	(448,871)	(673,047)
Net (decrease) increase in net assets resulting from operations						(496,527)	(496,527)
Ending balance at Sep. 30, 2018	$ 5,209	$ 2,170,880				$ (1,169,574)	$ 1,006,515
Ending balance, shares at Sep. 30, 2018	52,082,441

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (decrease) increase in net assets resulting from operations	$ (496,527)	$ 149,652
Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized loss on investments	101,715	79,879
Net unrealized loss (gain) on investments	102,711	(530,586)
Proceeds from sale of investments	716,338	37,575
Bad debt (recovery) expense	(5,000)	6,750
Increase in interest receivable		(20,361)
Decrease in prepaid expenses	21,897	22,273
Decrease in accounts payable and accrued expenses	(9,610)	(22,701)
Net Cash Provided by (Used In) Operating Activities	431,524	(277,519)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in note receivable	(100,000)
Net Cash Used In Investing Activities	(100,000)
Net Increase (Decrease) in Cash and Cash Equivalents	331,524	(277,519)
Cash and Cash Equivalents - Beginning of Period	294,591	579,209
Cash and Cash Equivalents - End of Period	626,115	301,690
Non-cash investing and financing activities:
Interest receivable converted into investments		16,000
Common stock issued for acquisition of intangible assets and prepaid expenses	$ 300,000

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Organization and Business

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS

NOTE 1 - ORGANIZATION AND BUSINESS

Point Capital, Inc. (the “Company”) was incorporated in the State of New York on July 13, 2010. On January 24, 2013, the Company changed its state of incorporation from New York to Delaware.

On October 4, 2013, the Company filed a Form N-54A and elected to become a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, the Company previously elected to be treated for federal income tax purpose as a regulated investment company, or (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended, or (the “Code”). At March 31, 2017, the Company determined that it failed the RIC diversification test since one of the Company’s investments accounted for approximately 78% of the Company’s total assets. To correct the failure, the Company needed to dispose of the asset causing the failure within six months of the end of the quarter in which it identified the failure and the Company would have had to pay an excise tax of $50,000. The Company did not cure its failure to retain its status as a RIC and the Company does not intend to seek to obtain RIC status again. Accordingly, the Company is subject to income taxes at corporate tax rates.

The Company’s investment objective was to provide current income and capital appreciation. The Company intended to accomplish its objective by investing in the common stock, preferred stock, warrants and convertible notes of small and mid-cap companies. The Company’s investments were made principally through direct investments in prospective portfolio companies.  However, the Company also purchased securities in private secondary transactions. The Company to a lesser extent also invested in private companies that met its investment objectives. Through September 29, 2018, the Company met the definition of an investment company in accordance with the guidance under Accounting Standards Codification Topic 946 “Financial Services – Investment Companies.”

On September 29, 2018, the Company filed Form N-54C, Notification of Withdrawal of election to be Subject to Section 55 through 65 of the Investment Company Act of 1940, whereas the Company has changed the nature of its business so as to cease to be a business development company (See Note 2 – Basis of Presentation).

On March 27, 2014, the Company formed a wholly-owned subsidiary, Hemp Funding, Inc., to invest in companies that are positioned for growth in the legal cannabis industry. The subsidiary never made any investments and during 2017, this subsidiary was dissolved.

The Company’s investment activities are managed by Eric Weisblum, the Company’s Chief Executive Officer.

On September 29, 2018 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts Holdings, Inc. a Nevada corporation (the “Seller”) whereby the Company completed the acquisition of 100% of the assets of “NFID” from the Seller (See Note 3).

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”) and include the consolidated financial statements of the Company and its wholly-owned subsidiary, Hemp Funding, Inc., through its date of dissolution in 2017. All intercompany transactions and balances have been eliminated.

Effective September 29, 2018, following authorization by our shareholders, the Company withdrew its previous election to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. Prior to such time, the Company was a closed-end, non-diversified management investment company that had elected to be treated as a BDC under the 1940 Act.

As a result of this change in status, commencing September 29, 2018, the Company shall now report as a corporation for accounting purposes under Regulation S-X. For the period from September 29, 2018 to September 30, 2018, there was no activity and therefore, the Company only presented condensed consolidated statements of operations and cash flows for Investment Company Accounting.

In accordance with FASB Accounting Standards Codification (ASC) Topic 946 – Financial Services – Investment Company, the Company is making this change to its financial reporting prospectively, and not restating or revising periods prior to the Company’s change in status to a non-investment company effective September 29, 2018. Accordingly, in this report, the Company refers to both accounting in accordance with US generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which applies commencing September 29, 2018, and to that applicable to investment companies under the 1940 Act (Investment Company Accounting), which applies to prior periods.

In order to maintain its status as a non-investment company, the Company will now operate so as to fall outside the definition of an “investment company” or within an applicable exception. The Company expects to continue to operate outside the definition of an “investment company” as a company primarily engaged in the business of developing and selling footwear and apparel products.

All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the periods ended September 30, 2018 and 2017 have been included. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these financial statements have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2017, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018. The consolidated balance sheet and consolidated schedule of investments as of December 31, 2017, contained herein, were derived from those financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2018 and 2017 include the valuation of the Company’s investments, the fair value of assets acquired and the fair value of shares issued for the assets acquired.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 or by the Securities Investor Protection Corporation (“SIPC”) up to $250,000. During the 2018 and 2017 periods, the Company had cash balances exceeding the FDIC and SIPC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents of $626,115 and $294,591 at September 30, 2018 and December 31, 2017, respectively, approximate their fair market value based on the short-term maturity of these instruments.

Note Receivable

The Company recognizes an allowance for losses on note receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense.

Intangible Assets and Goodwill

Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful lives. The brand ambassador agreement is being amortized over a period of 1 year. Trademarks are recorded at cost, have an indefinite useful life and are not amortized.

The Company records goodwill as the excess of the purchase price over the fair values assigned to the net assets acquired in business acquisitions. ASC 350, “Intangibles — Goodwill and Other” requires that intangible assets with indefinite lives, including goodwill, be evaluated on an annual basis for impairment or more frequently if an event occurs or circumstances change that could potentially result in impairment. If the fair value of goodwill or other intangible asset with an indefinite life is determined to be less than the book value, then goodwill or other intangible asset is reduced to its implied fair value and the amount of the write-down is charged to operations. We are required to test our goodwill and intangible assets with indefinite lives for impairment at least annually.

Securities Transactions

Securities transactions are recorded on a trade date basis. Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. Commissions and other costs associated with transactions involving securities, including legal costs, are included in the cost basis of purchases and deducted from the proceeds of sales.

Equity Investments (Corporation Accounting)

Equity investments of $12,767 at September 30, 2018, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Prior to September 29, 2018, equity investments were recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation. The fair value of equity investments that had no ready market were determined in good faith by the Board of Directors, based upon the financial condition and operating performance of the underlying investee companies as well as general market trends for businesses in the same industry. Included in the equity investments, at fair value were non-marketable securities of $464,446 at December 31, 2017.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Equity Investments (Investment Company Accounting)

Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s cost basis and the net proceeds received from such disposition.  Realized gains and losses on investment transactions are determined by specific identification. Net change in unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment, including any reversal of previously recorded unrealized appreciation/depreciation when gains or losses are realized.

Valuation of Equity Investments

Through September 29, 2018, the Company’s equity investments consisted of loans and securities issued by public and privately-held companies, including convertible debt, loans, equity warrants and preferred and common equity securities.

The Company applied the accounting guidance of Accounting Standards Codification Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”). This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considered the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

● Level 1 - Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

● Level 2 - Valuations based on inputs other than quoted market prices that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, and discounts for lack of marketability.

Through September 29, 2018, on a quarterly basis, the Board of Directors of the Company (the “Board”), in good faith, determined the fair value of investments in the following manner:

Equity securities which are listed on a recognized stock exchange are valued at the adjusted closing trade price on the last trading day of the valuation period. For equity securities that carry a restriction inherent to the security, a restriction discount is applied, as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model. Investments in securities which are convertible at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity securities described above, or at the respective investment’s face value, whichever is a better indicator of fair value. Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.

Investments without a readily determined market value were primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company’s investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors.

Because there is not a readily available market value for some of the investments in its portfolio, the Company valued certain of its portfolio investments at fair value as determined in good faith by the Board, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments differed significantly from the values that would have been used had a readily available market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

Subsequent to September 29, 2018, the Company categorizes its investment in marketable equity instruments as a trading security since there is an active market in such equity investment. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

Revenue Recognition

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of ASU 2014-09 did not have any impact on the process for, timing of, and presentation and disclosure of revenue recognition from contracts.

The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts.

Income Taxes

Through March 31, 2017, the Company elected to be treated as a RIC under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable to RICs.

At March 31, 2017, the Company failed this diversification test since the Company’s investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDTY”) accounted for over 25% of the Company’s total assets. This discrepancy was not caused by the acquisition of any security. The failure was not a result of willful neglect. The Company did not cure its failure to retain its status as a RIC and the Company does not intend to seek to obtain RIC status again. Accordingly, beginning in 2017, the Company is subject to income taxes at corporate tax rates. The loss of the Company’s status as a RIC did not have any impact on the Company’s financial position or results of operations.

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital in excess of par or accumulated net realized loss, as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax characterization of income or loss and any non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual tax returns.

Beginning in 2017, deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), a tax reform bill which, among other items, reduces the current federal income tax rate to 21% from 34%. The rate reduction is effective January 1, 2018, and is permanent. The Act has caused the Company’s deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 (“SAB 118”), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company’s continued analysis or further regulatory guidance that may be issued as a result of the Act.

New Accounting Pronouncements

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) (See Revenue Recognition above).

In January 2016, FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU No. 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU No. 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU No. 2016-01 did not have any effect on the Company’s consolidated financial statements and related disclosures.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

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Acquisition

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

ACQUISITION

NOTE 3 – ACQUISITION

On September 29, 2018 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts Holdings, Inc. a Nevada Corporation (the “Seller”) whereby the Company completed the acquisition of 100% of the assets of “NFID” from the Seller which consisted of three trademarks related to the NFID brand, the NFID website, shoe designs and samples, and the assumption of a one-year Brand Ambassador Agreement in exchange for 2,000,000 shares of common capital stock of the Company. NFID is a recently developed unisex footwear brand. The Company plans on continuing product development to fully launch the product. The Company’s acquisition of the NFID assets gives the Company access to the growing market for unisex products. 

As a result of the APA, the Company has elected to no longer be deemed a “Business Development Company” as defined by the Investment Company Act of 1940, as amended from time to time (the “Act”). The withdrawal was generally approved by the shareholders of the Company on April 11, 2017, as evidenced on the Definitive Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 filed on June 5, 2017. The Board, under authority granted by the shareholders, approved the withdrawal on September 27, 2018. On September 28, 2018, the Company filed Form N-54C, officially withdrawing its election to be subject to sections 55 through 65 of the Act.

Pursuant to the terms of the APA, the Company issued 2,000,000 shares of common capital stock of the Company in exchange for 100% of the NFID assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date. 

The fair value of the assets acquired and liabilities assumed were based on management’s initial estimates of the fair values on September 29, 2018. Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired at the date of acquisition:

Prepaid expenses	$	17,500
Intangible assets		282,500
Total assets acquired at fair value		300,000
Total purchase consideration	$	300,000

The assets acquired are recorded at their initial estimated fair values on the acquisition date with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired as of the asset acquisition date. As a result, during the purchase price measurement period, which may be up to one year from the asset acquisition date, the Company may record adjustments to the assets acquired, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record adjustments to assets acquired in operating expenses in the period in which the adjustments were determined.

The purchase price exceeded the fair value of the assets acquired by $282,500 which was initially allocated as follows:

Brand ambassador agreement	$	105,295
Trademarks		29,440
Goodwill		147,765
Total intangible assets acquired	$	282,500

Goodwill recorded is not expected to be deductible for U.S. income tax purposes.

The Company valued the three trademarks acquired at their historical cost of $29,440 which approximates fair market value. The Company valued the Brand Ambassador Agreement using the estimated fair value of required social media posts by the artist/singer Max Schneider, known as Max (“MAX”). MAX is considered a social media influencer with over 600,000 Instagram followers and over 1.5 million YouTube subscribers.

Pursuant to the Brand Ambassador Agreement, the Company will incur a minimum cash payment of $35,000 related to a minimum royalty payment of which $17,500 was paid prior to the Closing Date. The remaining $17,500 is due on January 27, 2019, the six month anniversary of the Effective Date of the Brand Ambassador Agreement.

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Equity Investments

9 Months Ended

Sep. 30, 2018

Equity Investments [Abstract]

EQUITY INVESTMENTS

NOTE 4 - EQUITY INVESTMENTS

At September 30, 2018, equity investments, at fair value, consisted of marketable equity instruments which are treated as a trading security since there is an active market in such equity investment and the Company is actively selling this security. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments, at fair value for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

At September 30, 2018, equity investments of $12,767, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically.

The following are the Company’s equity investments owned by levels within the fair value hierarchy at September 30, 2018:

	Level 1		Level 2		Level 3		Total
Common Stock	$	391,698	$	-	$	-	$	391,698
LLC Membership		-		-		-		-
Warrants		-		-		-		-
Total Investments	$	391,698	$	-	$	-	$	391,698

The following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2017:

	Level 1		Level 2		Level 3		Total
Common Stock	$	853,163	$	-	$	200	$	853,363
LLC Membership		-		-		9,194		9,194
Convertible Preferred Stock		-		2,600		-		2,600
Warrants		-		-		455,072		455,072
Total Investments	$	853,163	$	2,600	$	464,466	$	1,320,229

The following additional disclosures relate to the changes in fair value of the Company’s Level 3 investments during the nine months ended September 30, 2018 and 2017 (Investment Company Accounting): 

	Nine Months Ended September 30,
	2018			2017
	(Unaudited)			(Unaudited)
Balance at beginning of year	$	464,466		$	474,390
Interest receivable converted to common stock, at cost		-			16,000
Net change in unrealized appreciation on investments		(414,730	)		115,810
Net transfers out of Level 3 (1)		(49,736	)		(100,000	)
Balance at end of period	$	-		$	506,200

	September 30,		December 31,
	2018		2017
	(Unaudited)
Net unrealized depreciation for Level 3 investments at period end	$	-	$	(329,598	)

(1) Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act and to the development of an active market. A review of fair value hierarchy classifications is conducted on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities.  Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur.

At December 31, 2017, level 3 investments consisted of the following:

Investment Type	Fair Value at December 31, 2017		Valuation Technique	Unobservable inputs	Input
Common Stock	$	200	Recent Transactions	N/A	N/A
LLC Membership Units	$	9,194	Recent Transactions	N/A	N/A
Warrants	$	455,072	Black-Scholes Option Pricing Model	Volatility	72.8% to 120.4%
	$	464,466

If the price multiple or sales multiple were to increase or decrease, the fair value of the investments would increase or decrease, respectively. If the discount for lack of marketability or restriction discount were to increase or decrease, the fair value of the investments would decrease or increase, respectively.

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Note Receivable

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

NOTE RECEIVABLE

NOTE 5 – NOTE RECEIVABLE

On September 28, 2018, the Company and the Seller executed a two year promissory note receivable agreement with a principal balance of $200,000 of which $100,000 was funded to the Seller in September 2018. The terms of the promissory note include an interest rate of six percent (6%) and the Company shall be repaid in interest only payments on a quarterly basis, until the maturity date of September 27, 2020, at which time the full principal and any interest payments will be due to the Company. At the time the promissory note receivable agreement was executed, the Company also executed a Security Interest and Pledge Agreement with the borrower. Pursuant to the Security Interest and Pledge Agreement, the borrower has pledged all of the assets of its company as security for the performance of the note obligations. As of September 30, 2018, the Company has recorded a note receivable of $100,000 related to the promissory note receivable agreement. Subsequent to September 30, 2018, the Company funded the remaining $100,000 (see Note 11).

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Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

At September 30, 2018 and December 31, 2017, intangible assets consisted of the following:

	Useful life	September 30, 2018		December 31, 2017
Trademarks	N/A	$	29,440	$	-
Brand ambassador agreement	1 year		105,295		-
Goodwill	N/A		147,765		-
			282,500		-
Less: accumulated amortization			-		-
		$	282,500	$	-

Amortization of intangible assets attributable to future periods is as follows:

Year ending:	Amount
2018	$	26,324
2019		78,971
	$	105,295

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Redeemable Series A Convertible Preferred Stock

9 Months Ended

Sep. 30, 2018

Redeemable Series A Convertible Preferred Stock [Abstract]

REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK

NOTE 7 - REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK

In April 2013, pursuant to a Series A Preferred Stock Purchase Agreement (the “Preferred Stock Agreement”), the Company issued 4,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) for $400,000. Holders of Preferred Stock vote together with holders of Common Stock on an as-converted basis. Each share of Preferred Stock is currently convertible into 500 shares of common stock at the option of the holder (subject to a 9.99% beneficial ownership limitation) based on a conversion formula (the Stated Value, currently $100, divided by the Conversion Rate, currently $0.20.) The Conversion Rate may be adjusted upon the occurrence of stock dividends or stock splits or subsequent equity sales at a price lower than the current conversion rate. Each share has a $100 liquidation value. The holders of Preferred Stock are entitled to receive dividends on an as-converted basis if paid on Common Stock. 

The Series A Convertible Preferred Stock is redeemable at the option of the holder upon the occurrence of certain “triggering events.” In case of a triggering event, the holder has the right to redeem each share held for cash (currently $100/share) or impose a dividend rate on all of the outstanding Preferred Stock at 6% per annum thereafter. A triggering event occurs if the Company fails to deliver certificates representing conversion shares, fails to pay the amount due pursuant to a Buy-In, fails to have available a sufficient number of authorized shares, fails to observe any covenant in the Certificate of Designation unless cured within 30 calendar days, shall be party to a Change in Control Transaction, sustains a bankruptcy event, fails to list or quote its common stock for more than 20 trading days in a twelve-month period, sustains any monetary judgment, writ or similar final process filed against the Company for more than $100,000 and such judgment writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days, or fails to comply with the Asset Coverage requirement.

Because certain of these “triggering events” are outside the control of the Company, the Preferred Stock is classified within the temporary equity section of the statement of assets and liabilities.

Pursuant to the Preferred Stock Agreement, the Company agreed that as long as the purchasers of its Series A Preferred Stock are holding said shares, the Company would comply in all respects with its reporting and filing obligations under the Exchange Act. The Company did not file its annual report for the year ended December 31, 2015 and its quarterly reports for the period ended March 31, 2016 and June 30, 2016, in a timely manner. The Company is currently not in breach of its agreement to remain current. The purchase agreement does not provide for any immediate consequence or default provision such as a reduction in the conversion price of the Series A Preferred, immediate redemption or the like.

The Preferred Stock has forced conversion rights where the Company may force the conversion of the Preferred Stock if certain conditions are met. The Company may elect to redeem some or all of the outstanding Preferred Stock for the Stated Value (currently $100/share) provided that proper notice is provided to the holders and that a number of conditions (the “Equity Conditions”) have been met.

The Company believes the carrying amount reported in the consolidated balance sheets for the Preferred Stock of $400,000 approximates the fair market value of such Preferred Stock based on the short-term maturity of these instruments which also equals the redemption value reflected as on the consolidated balance sheets.

On March 31, 2017, the Board approved the amendment and restatement of the original Certificate of Designation in order to expressly ensure that holders of the Company’s Preferred Stock have the right to elect at least two directors at all times, have complete priority over any other class as to distribution of assets and payments of dividends, and have equal voting rights with every other outstanding voting stock. On May 11, 2017, the Company filed the amendment and restatement with the State of Delaware.

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Shareholders’ Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

SHAREHOLDERS’ EQUITY

NOTE 8 – SHAREHOLDERS’ EQUITY

Common stock issued for acquisition

Pursuant to the terms of the APA (See Note 3), the Company issued 2,000,000 shares of common capital stock of the Company in exchange for 100% of the NFID assets. The shares were valued at $300,000, or $0.15 per share, the fair value of the Company’s common stock based on the quoted bid price of the Company’s common stock on the Closing Date.

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Concentrations and Credit Risks

9 Months Ended

Sep. 30, 2018

Risks and Uncertainties [Abstract]

CONCENTRATIONS AND CREDIT RISKS

NOTE 9 - CONCENTRATIONS AND CREDIT RISKS

Financial instruments that subjected the Company to concentrations of market risk consisted principally of equity investments and debt instruments (other than cash equivalents), which collectively represented approximately 28.2% and 80.4% of the Company’s total assets at September 30, 2018 and December 31, 2017, respectively. These investments consisted of certain securities in companies with no readily determinable market values or in non-public companies, and as such are valued in accordance with the Company’s fair value policies and procedures. The Company’s investment strategy represents a high degree of business and financial risk due to the fact that certain of the Company’s portfolio investments (other than cash equivalents) are generally illiquid, in small and middle market companies, and include entities with little operating history or entities that possess operations in new or developing industries. Investments in non-public entities should they become publicly traded, would generally be (i) subject to restrictions on resale, if they were acquired from the issuer in private placement transactions; and (ii) susceptible to market risk.  Additionally, at September 30, 2018, 100% of the fair value of the Company’s equity investment portfolio is concentrated in one company in the biometric technology industry which gives rise to a risk of significant loss should the performance or financial condition of this company or industry deteriorate.

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Commitment

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENT

NOTE 10 - COMMITMENT

In connection with the APA, the Company entered into a one-year Brand Ambassador Agreement (See Note 3) with MAX. Pursuant to this agreement, the Company shall pay MAX a seven percent (7%) royalty on net sales of the product effective November 1, 2018 with a minimum royalty payment of $35,000 during the agreement term. The royalty shall be calculated on a quarterly basis. Pursuant to the Brand Ambassador Agreement, $17,500 was paid prior to the Closing Date. The remaining $17,500 is due on January 27, 2019.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

In October 2018, the Company advanced Seller the remaining $100,000 balance of the promissory note receivable agreement executed on September 28, 2018 (See Note 5).

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”) and include the consolidated financial statements of the Company and its wholly-owned subsidiary, Hemp Funding, Inc., through its date of dissolution in 2017. All intercompany transactions and balances have been eliminated.

Effective September 29, 2018, following authorization by our shareholders, the Company withdrew its previous election to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the 1940 Act. Prior to such time, the Company was a closed-end, non-diversified management investment company that had elected to be treated as a BDC under the 1940 Act.

As a result of this change in status, commencing September 29, 2018, the Company shall now report as a corporation for accounting purposes under Regulation S-X. For the period from September 29, 2018 to September 30, 2018, there was no activity and therefore, the Company only presented condensed consolidated statements of operations and cash flows for Investment Company Accounting.

In accordance with FASB Accounting Standards Codification (ASC) Topic 946 – Financial Services – Investment Company, the Company is making this change to its financial reporting prospectively, and not restating or revising periods prior to the Company’s change in status to a non-investment company effective September 29, 2018. Accordingly, in this report, the Company refers to both accounting in accordance with US generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which applies commencing September 29, 2018, and to that applicable to investment companies under the 1940 Act (Investment Company Accounting), which applies to prior periods.

In order to maintain its status as a non-investment company, the Company will now operate so as to fall outside the definition of an “investment company” or within an applicable exception. The Company expects to continue to operate outside the definition of an “investment company” as a company primarily engaged in the business of developing and selling footwear and apparel products.

All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the periods ended September 30, 2018 and 2017 have been included. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these financial statements have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2017, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018. The consolidated balance sheet and consolidated schedule of investments as of December 31, 2017, contained herein, were derived from those financial statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the nine months ended September 30, 2018 and 2017 include the valuation of the Company’s investments, the fair value of assets acquired and the fair value of shares issued for the assets acquired.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 or by the Securities Investor Protection Corporation (“SIPC”) up to $250,000. During the 2018 and 2017 periods, the Company had cash balances exceeding the FDIC and SIPC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents of $626,115 and $294,591 at September 30, 2018 and December 31, 2017, respectively, approximate their fair market value based on the short-term maturity of these instruments.

Note Receivable

Note Receivable

The Company recognizes an allowance for losses on note receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense.

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful lives. The brand ambassador agreement is being amortized over a period of 1 year. Trademarks are recorded at cost, have an indefinite useful life and are not amortized.

The Company records goodwill as the excess of the purchase price over the fair values assigned to the net assets acquired in business acquisitions. ASC 350, “Intangibles — Goodwill and Other” requires that intangible assets with indefinite lives, including goodwill, be evaluated on an annual basis for impairment or more frequently if an event occurs or circumstances change that could potentially result in impairment. If the fair value of goodwill or other intangible asset with an indefinite life is determined to be less than the book value, then goodwill or other intangible asset is reduced to its implied fair value and the amount of the write-down is charged to operations. We are required to test our goodwill and intangible assets with indefinite lives for impairment at least annually.

Securities Transactions

Securities Transactions

Securities transactions are recorded on a trade date basis. Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. Commissions and other costs associated with transactions involving securities, including legal costs, are included in the cost basis of purchases and deducted from the proceeds of sales.

Equity Investments (Corporation Accounting)

Equity Investments (Corporation Accounting)

Equity investments of $12,767 at September 30, 2018, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Prior to September 29, 2018, equity investments were recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation. The fair value of equity investments that had no ready market were determined in good faith by the Board of Directors, based upon the financial condition and operating performance of the underlying investee companies as well as general market trends for businesses in the same industry. Included in the equity investments, at fair value were non-marketable securities of $464,446 at December 31, 2017.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Equity Investments (Investment Company Accounting)

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Equity Investments (Investment Company Accounting)

Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company’s cost basis and the net proceeds received from such disposition.  Realized gains and losses on investment transactions are determined by specific identification. Net change in unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment, including any reversal of previously recorded unrealized appreciation/depreciation when gains or losses are realized.

Valuation of Equity Investments

Valuation of Equity Investments

Through September 29, 2018, the Company’s equity investments consisted of loans and securities issued by public and privately-held companies, including convertible debt, loans, equity warrants and preferred and common equity securities.

The Company applied the accounting guidance of Accounting Standards Codification Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”). This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considered the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

● Level 1 - Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

● Level 2 - Valuations based on inputs other than quoted market prices that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or income approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, and discounts for lack of marketability.

Through September 29, 2018, on a quarterly basis, the Board of Directors of the Company (the “Board”), in good faith, determined the fair value of investments in the following manner:

Equity securities which are listed on a recognized stock exchange are valued at the adjusted closing trade price on the last trading day of the valuation period. For equity securities that carry a restriction inherent to the security, a restriction discount is applied, as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model. Investments in securities which are convertible at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity securities described above, or at the respective investment’s face value, whichever is a better indicator of fair value. Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.

Investments without a readily determined market value were primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company’s investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors.

Because there is not a readily available market value for some of the investments in its portfolio, the Company valued certain of its portfolio investments at fair value as determined in good faith by the Board, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments differed significantly from the values that would have been used had a readily available market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

Subsequent to September 29, 2018, the Company categorizes its investment in marketable equity instruments as a trading security since there is an active market in such equity investment. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

Revenue Recognition

Revenue Recognition

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of ASU 2014-09 did not have any impact on the process for, timing of, and presentation and disclosure of revenue recognition from contracts.

The Company records interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts.

Income Taxes

Income Taxes

Through March 31, 2017, the Company elected to be treated as a RIC under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable to RICs.

At March 31, 2017, the Company failed this diversification test since the Company’s investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDTY”) accounted for over 25% of the Company’s total assets. This discrepancy was not caused by the acquisition of any security. The failure was not a result of willful neglect. The Company did not cure its failure to retain its status as a RIC and the Company does not intend to seek to obtain RIC status again. Accordingly, beginning in 2017, the Company is subject to income taxes at corporate tax rates. The loss of the Company’s status as a RIC did not have any impact on the Company’s financial position or results of operations.

Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with U.S. GAAP. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital in excess of par or accumulated net realized loss, as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax characterization of income or loss and any non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Company’s annual tax returns.

Beginning in 2017, deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), a tax reform bill which, among other items, reduces the current federal income tax rate to 21% from 34%. The rate reduction is effective January 1, 2018, and is permanent. The Act has caused the Company’s deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 (“SAB 118”), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company’s continued analysis or further regulatory guidance that may be issued as a result of the Act.

New Accounting Pronouncements

New Accounting Pronouncements

Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 and ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) (See Revenue Recognition above).

In January 2016, FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU No. 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU No. 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU No. 2016-01 did not have any effect on the Company’s consolidated financial statements and related disclosures.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

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Acquisition (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Schedule of estimated fair value of the assets acquired

Prepaid expenses	$	17,500
Intangible assets		282,500
Total assets acquired at fair value		300,000
Total purchase consideration	$	300,000

Schedule of purchase price exceeded the fair value of the intangible assets acquired

Brand ambassador agreement	$	105,295
Trademarks		29,440
Goodwill		147,765
Total intangible assets acquired	$	282,500

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Equity Investments (Tables)

9 Months Ended

Sep. 30, 2018

Equity Investments [Abstract]

Schedule of equity investments owned by levels within the fair value hierarchy

The following are the Company’s equity investments owned by levels within the fair value hierarchy at September 30, 2018:

	Level 1		Level 2		Level 3		Total
Common Stock	$	391,698	$	-	$	-	$	391,698
LLC Membership		-		-		-		-
Warrants		-		-		-		-
Total Investments	$	391,698	$	-	$	-	$	391,698

The following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2017:

	Level 1		Level 2		Level 3		Total
Common Stock	$	853,163	$	-	$	200	$	853,363
LLC Membership		-		-		9,194		9,194
Convertible Preferred Stock		-		2,600		-		2,600
Warrants		-		-		455,072		455,072
Total Investments	$	853,163	$	2,600	$	464,466	$	1,320,229

Schedule of additional disclosures relate to the changes in fair value of the Company's Level 3 investments

	Nine Months Ended September 30,
	2018			2017
	(Unaudited)			(Unaudited)
Balance at beginning of year	$	464,466		$	474,390
Interest receivable converted to common stock, at cost		-			16,000
Net change in unrealized appreciation on investments		(414,730	)		115,810
Net transfers out of Level 3 (1)		(49,736	)		(100,000	)
Balance at end of period	$	-		$	506,200

	September 30,		December 31,
	2018		2017
	(Unaudited)
Net unrealized depreciation for Level 3 investments at period end	$	-	$	(329,598	)

(1) Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act and to the development of an active market. A review of fair value hierarchy classifications is conducted on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities.  Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur.

Schedule of level 3 investments

Investment Type	Fair Value at December 31, 2017		Valuation Technique	Unobservable inputs	Input
Common Stock	$	200	Recent Transactions	N/A	N/A
LLC Membership Units	$	9,194	Recent Transactions	N/A	N/A
Warrants	$	455,072	Black-Scholes Option Pricing Model	Volatility	72.8% to 120.4%
	$	464,466

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	Useful life	September 30, 2018		December 31, 2017
Trademarks	N/A	$	29,440	$	-
Brand ambassador agreement	1 year		105,295		-
Goodwill	N/A		147,765		-
			282,500		-
Less: accumulated amortization			-		-
		$	282,500	$	-

Schedule of amortization of intangible assets attributable to future periods

Year ending:	Amount
2018	$	26,324
2019		78,971
	$	105,295

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Organization and Business (Details)	Mar. 31, 2017 USD ($)
Organization and Business (Textual)
Investments total assets percentage	78.00%
Pay an excise tax amount	$ 50,000

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Summary of Significant Accounting Policies (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies (Textual)
Federal deposit insurance corporation (''FDIC'')	$ 250,000
Securities investor protection corporation ("SIPC")	250,000
Cash and cash equivalents	626,115	$ 294,591	$ 301,690	$ 579,209
Equity investments	$ 12,767
Equity investments, at fair value were non-marketable securities		$ 464,446
Income tax rate changes, description	On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), a tax reform bill which, among other items, reduces the current federal income tax rate to 21% from 34%.
Brand ambassador agreement [Member]
Summary of Significant Accounting Policies (Textual)
Useful life	1 year

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Acquisition (Details)	1 Months Ended
	Sep. 29, 2018 USD ($)
Business Combinations [Abstract]
Prepaid expenses	$ 17,500
Intangible assets	282,500
Total assets acquired at fair value	300,000
Total purchase consideration	$ 300,000

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Acquisition (Details 1)	Sep. 29, 2018 USD ($)
Total intangible assets acquired	$ 282,500
Brand ambassador agreement [Member]
Total intangible assets acquired	105,295
Trademarks [Member]
Total intangible assets acquired	29,440
Goodwill [Member]
Total intangible assets acquired	$ 147,765

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Acquisition (Details Textual) - USD ($)	1 Months Ended	9 Months Ended
	Sep. 29, 2018	Sep. 30, 2018
Acquisition (Textual)
Issued value of common capital stock		$ 300,000
Fair value of intangible assets acquired	$ 282,500
Trademarks acquired at their historical cost	$ 29,440
Description of social media influencer	MAX is considered a social media influencer with over 600,000 Instagram followers and over 1.5 million YouTube subscribers.
Minimum cash payment	$ 35,000
Minimum royalty payment	17,500
Remaining amount due	$ 17,500
Due date	Jan. 27, 2019
Asset Purchase Agreement [Member]
Acquisition (Textual)
Description of business acquisition	The Company entered into an Asset Purchase Agreement (“APA”) with Blind Faith Concepts, Inc. (“Seller”) whereby the Company completed the acquisition of 100% of the assets of “NFID” from the Seller which consisted of three trademarks related to the NFID brand, the NFID website, shoe designs and samples, and the assumption of a one-year Brand Ambassador Agreement in exchange for 2,000,000 shares of common capital stock of the Company.
Percentage of business acquisition	100.00%
Business acquisition share price	$ 0.15
Issued shares of common capital stock	2,000,000
Issued value of common capital stock	$ 300,000

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Equity Investments (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Total Investments	$ 391,698	$ 1,320,229
Convertible Preferred Stock [Member]
Total Investments		2,600
Level 1 [Member]
Total Investments	391,698	853,163
Level 1 [Member] | Convertible Preferred Stock [Member]
Total Investments
Level 2 [Member]
Total Investments		2,600
Level 2 [Member] | Convertible Preferred Stock [Member]
Total Investments		2,600
Level 3 [Member]
Total Investments		464,466
Level 3 [Member] | Convertible Preferred Stock [Member]
Total Investments
Common Stock
Total Investments	391,698	853,363
Common Stock | Level 1 [Member]
Total Investments	391,698	853,163
Common Stock | Level 2 [Member]
Total Investments
Common Stock | Level 3 [Member]
Total Investments		200
LLC Membership [Member]
Total Investments		9,194
LLC Membership [Member] | Level 1 [Member]
Total Investments
LLC Membership [Member] | Level 2 [Member]
Total Investments
LLC Membership [Member] | Level 3 [Member]
Total Investments		9,194
Warrants [Member]
Total Investments		455,072
Warrants [Member] | Level 1 [Member]
Total Investments
Warrants [Member] | Level 2 [Member]
Total Investments
Warrants [Member] | Level 3 [Member]
Total Investments		$ 455,072

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Equity Investments (Details 1) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net change in unrealized appreciation on investments		$ 506,190	$ (346,575)	$ (102,711)	$ 530,586
Level 3 [Member]
Balance at beginning of year				464,466	474,390
Interest receivable converted to common stock, at cost					16,000
Net change in unrealized appreciation on investments				(414,730)	115,810
Net transfers out of Level 3	[1]			(49,736)	(100,000)
Balance at end of period			$ 506,200		506,200
Net unrealized depreciation for Level 3 investments at period end					$ (329,598)

[1] Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act and to the development of an active market. A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur.

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Equity Investments (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018
Fair Value, Total	$ 1,320,229	$ 391,698
Common Stock [Member]
Fair Value, Total	853,363	391,698
LLC Membership Units [Member]
Fair Value, Total	9,194
Warrants [Member]
Fair Value, Total	455,072
Level 3 [Member]
Fair Value, Total	464,466
Level 3 [Member] | Common Stock [Member]
Fair Value, Total	$ 200
Valuation Technique	Recent Transactions
Unobservable inputs	N/A
Input	N/A
Level 3 [Member] | LLC Membership Units [Member]
Fair Value, Total	$ 9,194
Valuation Technique	Recent Transactions
Unobservable inputs	N/A
Input	N/A
Level 3 [Member] | Warrants [Member]
Fair Value, Total	$ 455,072
Valuation Technique	Black-Scholes Option Pricing Model
Unobservable inputs	Volatility
Input	72.8% to 120.4%

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Note Receivable (Details) - USD ($)	1 Months Ended		9 Months Ended
	Oct. 31, 2018	Sep. 28, 2018	Sep. 30, 2018	Sep. 30, 2017
Note Receivable (Textual)
Note receivable related to promissory note			$ 100,000
Promissory note receivable agreement [Member]
Note Receivable (Textual)
Term of note receivable		2 years
Principal balance		$ 200,000
Funded to seller		$ 100,000
Interest rate		6.00%
Maturity date		Sep. 27, 2020
Promissory note receivable agreement [Member] | Subsequent Event [Member]
Note Receivable (Textual)
Remaining balance of promissory note receivable	$ 100,000

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Intangible Assets (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Intangible assets, gross	$ 282,500
Less: accumulated amortization
Intangible assets, net	282,500
Trademarks [Member]
Intangible assets, gross	$ 29,440
Useful life	0 years
Brand ambassador agreement [Member]
Intangible assets, gross	$ 105,295
Useful life	1 year
Goodwill [Member]
Intangible assets, gross	$ 147,765
Useful life	0 years

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Intangible Assets (Details 1)	Sep. 30, 2018 USD ($)
Year ending:
2018	$ 26,324
2019	78,971
Total amortization of intangible assets attributable to future periods	$ 105,295

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Redeemable Series A Convertible Preferred Stock (Details) - USD ($)	1 Months Ended	9 Months Ended
	Apr. 30, 2013	Sep. 30, 2018	Dec. 31, 2017
Redeemable Series A Convertible Preferred Stock (Textual)
Preferred stock, shares issued		4,000	4,000
Preferred stock, value issued		$ 400,000	$ 400,000
Series A Preferred Stock [Member]
Redeemable Series A Convertible Preferred Stock (Textual)
Preferred stock, shares issued	4,000
Preferred stock, value issued	$ 400,000
Description of preferred stock conversion		The Series A Convertible Preferred Stock is redeemable at the option of the holder upon the occurrence of certain “triggering events.” In case of a triggering event, the holder has the right to redeem each share held for cash (currently $100/share) or impose a dividend rate on all of the outstanding Preferred Stock at 6% per annum thereafter. A triggering event occurs if the Company fails to deliver certificates representing conversion shares, fails to pay the amount due pursuant to a Buy-In, fails to have available a sufficient number of authorized shares, fails to observe any covenant in the Certificate of Designation unless cured within 30 calendar days, shall be party to a Change in Control Transaction, sustains a bankruptcy event, fails to list or quote its common stock for more than 20 trading days in a twelve-month period, sustains any monetary judgment, writ or similar final process filed against the Company for more than $100,000 and such judgment writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days, or fails to comply with the Asset Coverage requirement.
Preferred stock, liquidation value	$ 100
Convertible into shares of common stock	500
Preferred stock, redemption per share	$ 0.20
Percentage of beneficial ownership limitation	9.99%

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Shareholders’ Equity (Details) - USD ($)	1 Months Ended	9 Months Ended
	Sep. 29, 2018	Sep. 30, 2018
Shareholders’ Equity (Textual)
Issued value of common capital stock		$ 300,000
Asset Purchase Agreement [Member]
Shareholders’ Equity (Textual)
Business acquisition share price	$ 0.15
Issued shares of common capital stock	2,000,000
Issued value of common capital stock	$ 300,000
Percentage of business acquisition	100.00%

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Concentrations and Credit Risks (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Concentrations and Credit Risks (Textual)
Fair value of the Company's investment portfolio	100.00%
Total assets [Member]
Concentrations and Credit Risks (Textual)
Percentage of company's total assets	28.20%	80.40%

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Commitment (Details)	1 Months Ended
	Sep. 29, 2018 USD ($)
Commitment (Textual)
Minimum cash payment	$ 35,000
Minimum royalty payment	17,500
Remaining amount due	$ 17,500
Due date	Jan. 27, 2019
Percentage of royalty on net sales	7.00%

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Subsequent Events (Details)	1 Months Ended
	Oct. 31, 2018 USD ($)
Promissory note receivable agreement [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Remaining balance of promissory note receivable	$ 100,000