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 June 30, 2014



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



Commission File Number: 333-173163



POINT CAPITAL, INC.

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



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



285 Grand Avenue

Building 5

Englewood, New Jersey 07631

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



|Large
accelerated filer                       | £ | Accelerated
    filer     | £
|--------------------------------------------- | - | ------------------------- | -
|Non-accelerated
filer                         | S | Smaller
reporting company | £
|(Do not check if a smaller reporting company) |  





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 August 12, 2014, 49,832,441 shares of common stock, par value $0.0001 per share, were outstanding.




















TABLE
OF CONTENTS



|            | Page                                                                                 
|----------- | -------------------------------------------------------------------------------------
|PART
    I  |                                                                                      
|Item
1.     | Financial Statements                                                                 
|Item
2.     | Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|Item 3      | Quantitative and Qualitative Disclosures About Market Risk                           
|Item
4      | Controls and Procedures                                                              
|            |                                                                                      
|PART
    II |                                                                                      
|Item 1.     | Legal Proceedings                                                                    
|Item 1A.    | Risk Factors                                                                         
|Item 2.     | Unregistered Sales of Equity Securities and Use of Proceeds                          
|Item 3.     | Defaults Upon Senior Securities                                                      
|Item 4.     | Mine Safety Disclosures                                                              
|Item
5.     | Other Information                                                                    
|Item 6.     | Exhibits                                                                             





2







PART
I

FINANCIAL
INFORMATION



Item
1. Financial Statements.



CONTENTS



|                                                                                                                                                                                            |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------
|                                                                                                                                                                                            | Page(s)
|                                                                                                                                                                                            |        
|Consolidated
                                         Statements of Assets and Liabilities – As of June 30, 2014 (unaudited) and December
                                         31, 2013 | 4      
|                                                                                                                                                                                            |        
|Consolidated
                                         Statements of Operations (unaudited) – Three and six months ended June 30, 2014
                                         and 2013     | 5      
|                                                                                                                                                                                            |        
|Consolidated
                                         Statement of Changes in Net Assets (unaudited) – Six months ended June 30, 2014
                                         and 2013     | 6      
|                                                                                                                                                                                            |        
|Consolidated
                                         Statements of Cash Flows (unaudited) – Six months ended June 30, 2014 and 2013                                                        | 7      
|                                                                                                                                                                                            |        
|Consolidated
    Schedule of Investments as of June 30, 2014 (unaudited)                                                                                                                    | 8      
|                                                                                                                                                                                            |        
|Schedule
    of Investments as of December 31, 2013                                                                                                                                         | 9      
|                                                                                                                                                                                            |        
|Notes
    to Consolidated Financial Statements (unaudited)                                                                                                                                  | 10 - 17









3









|Point Capital, Inc.                                                                                                                                                                              
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Assets
    and Liabilities                                                                                                                                            
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|ASSETS                                                                                                                                                                                           
|Investments at fair value                                                                                                                                                                        
|Non-controlled/Non-affiliated investments (cost $665,524 and $131,021)                                                                                                                           
|Cash and cash equivalents                                                                                                                                                                        
|Interest receivable                                                                                                                                                                              
|Investment in advance                                                                                                                                                                            
|Total Assets                                                                                                                                                                                     
|                                                                                                                                                                                                 
|LIABILITIES                                                                                                                                                                                      
|Accounts payable and accrued expenses                                                                                                                                                            
|Notes payable                                                                                                                                                                                    
|Interest payable                                                                                                                                                                                 
|Total Liabilities                                                                                                                                                                                
|                                                                                                                                                                                                 
|Redeemable Series A,
    Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 1,000,000 shares designated; 4,000 issued and outstanding ($100 per share redemption value)
|                                                                                                                                                                                                 
|NET ASSETS                                                                                                                                                                                       
|Common stock, $0.0001 par
    value, 100,000,000 shares authorized; 48,382,440 and 40,606,200 shares issued and outstanding                                                                      
|Additional paid-in capital                                                                                                                                                                       
|Accumulated net investment loss                                                                                                                                                                  
|Accumulated undistributed net realized gain on investments                                                                                                                                       
|Unrealized appreciation on investments                                                                                                                                                           
|Accumulated deficit during development stage                                                                                                                                                     
|Total Net Assets                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Total Liabilities and Net Assets                                                                                                                                                                 
|                                                                                                                                                                                                 
|Net Asset Value per common share                                                                                                                                                                 



See
accompanying notes to financial statements





4









|Point Capital, Inc.                                                                           
|----------------------------------------------------------------------------------------------
|Consolidated Statements of Operations                                                         
|(Unaudited)                                                                                   
|                                                                                              
|                                                                                              
|                                                                                              
|INVESTMENT INCOME                                                                             
|Interest income                                                                               
|Non-controlled/Non-affiliated investments                                                     
|                                                                                              
|EXPENSES                                                                                      
|Professional fees                                                                             
|Filing fees                                                                                   
|General and administrative expenses                                                           
|                                                                                              
|Total expenses                                                                                
|                                                                                              
|Net investment loss                                                                           
|                                                                                              
|Net change in unrealized appreciation on investments                                          
|Non-controlled/Non-affiliated investments                                                     
|                                                                                              
|NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                               
|                                                                                              
|Net loss                                                                                      
|                                                                                              
|Net loss per common share - basic and diluted (1)                                             
|                                                                                              
|Weighted average number of common shares outstanding during the period - basic and diluted (1)





(1) Not presented for
2014 as presentation of earnings per share is not required for investment companies.



See
accompanying notes to financial statements



5









|Point
    Capital, Inc.                                            
|-------------------------------------------------------------------
|Consolidated
    Statements of Changes in Net Assets               
|(Unaudited)                                                        
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Balance
    - December 31, 2012                                    
|                                                                   
|Common
    stock issued ($0.20/share)                              
|                                                                   
|Net
    loss                                                       
|                                                                   
|Balance
    - June 30, 2013                                        
|                                                                   
|Balance
    - December 31, 2013                                    
|                                                                   
|Common
    stock issued ($0.20/share)                              
|                                                                   
|Shares
    issued for services                                     
|                                                                   
|Offering
    costs                                                 
|                                                                   
|Net
    increase (decrease) in net assets resulting from operations
|                                                                   
|Balance
    - June 30, 2014                                        





See
accompanying notes to financial statements





6









|Point Capital, Inc.                                                                                                                 
|------------------------------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Cash
    Flows                                                                                           
|(Unaudited)                                                                                                                         
|                                                                                                                                    
|                                                                                                                                    
|                                                                                                                                    
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                               
|Net increase in net assets resulting from operations                                                                                
|Net loss                                                                                                                            
|Adjustments to
    reconcile net increase in net assets resulting from operations/net loss to net cash used in operating activities:
|Purchases of investments                                                                                                            
|Net change in unrealized appreciation on investments                                                                                
|Increase in investment in advance                                                                                                   
|Decrease in interest receivable                                                                                                     
|Decrease in accounts payable and accrued expenses and interest payable                                                              
|Net Cash Used In Operating Activities                                                                                               
|                                                                                                                                    
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                               
|Repayment of notes payable                                                                                                          
|Proceeds from issuance of Series A, Convertible Preferred Stock                                                                     
|Proceeds from issuance of common stock                                                                                              
|Offering costs                                                                                                                      
|Net Cash Provided By Financing Activities                                                                                           
|                                                                                                                                    
|Net (Decrease) Increase in cash and cash equivalents                                                                                
|                                                                                                                                    
|Cash and cash equivalents - Beginning of period                                                                                     
|                                                                                                                                    
|Cash and cash equivalents - End of period                                                                                           
|                                                                                                                                    
|Supplemental Disclosure of Cash Flow Information:                                                                                   
|Interest paid                                                                                                                       
|Taxes Paid                                                                                                                          
|                                                                                                                                    
|Noncash Financing Activities                                                                                                        
|Issuance of common stock for services                                                                                               
|Offering costs                                                                                                                      





See
accompanying notes to financial statements



7







|POINT
    CAPITAL, INC.                            
|---------------------------------------------------
|CONSOLIDATED
    SCHEDULE OF INVESTMENTS           
|June
    30, 2014                                  
|(Unaudited)                                        
|                                                   
|                                                   
|Company                                            
|Non-controlled/Non-affiliated
    investments      
|Intercloud
    Systems, Inc. (1)(3)                
|                                                   
|CombiMatrix
    Corp.(2)                           
|                                                   
|Be
    Active Holdings, Inc. (1)(2)                
|                                                   
|Ruthigen,
    Inc. (2)                             
|                                                   
|                                                   
|Arista
    Power, Inc. (1)                         
|                                                   
|                                                   
|Cesca
    Therapeutics, Inc. (2)                   
|                                                   
|                                                   
|Musclepharm
    Corp. (2)(4)                       
|                                                   
|Total Non-controlled/Non-affiliated
    investments
|                                                   
|Reconciliation
    to Net Assets:                  
|Investments
    at fair value                      
|Investment
    in advance                          
|Cash
    and cash equivalents                      
|Liabilities
    in excess of other assets          
|Net
    Assets                                     



|(1) Securities are exempt from registration under Rule 144A promulgated under the Securities Act.
|-------------------------------------------------------------------------------------------------
|(2) Securities are not income producing.                                                         
|(3) Converted $112,000 in principal and interest into 17,610 shares of common stock.             
|(4) Security is subject to an 8 month (12.5%/month) bleed-out agreement.                         



See
accompanying notes to financial statements



8









|POINT CAPITAL, INC.                            
|-----------------------------------------------
|SCHEDULE OF INVESTMENTS                        
|As of December 31, 2013                        
|                                               
|Company                                        
|Non-controlled/Non-affiliated investments      
|Intercloud Systems, Inc. (1)                   
|                                               
|                                               
|CombiMatrix Corp.(1)(2)                        
|                                               
|Total Non-controlled/Non-affiliated investments
|                                               
|Reconciliation to Net Assets:                  
|Investments at fair value                      
|Cash and cash equivalents                      
|Liabilities in excess of other assets          
|Net Assets                                     



|(1) Securities are exempt from registration under Rule 144A promulgated under the Securities Act.
|-------------------------------------------------------------------------------------------------
|(2) Securities are not income producing.                                                         



*Certain
prior year investment industry disclosures have been reclassified for consistency with the current period presentation. These
reclassifications had no effect on the reported results of operations. In the quarter ended June 30, 2014, the Company concluded
that it was appropriate to classify its investments in accordance with Global Industry Classification Standards ("GICS"). Accordingly,
the Company has revised the investment classifications. Corresponding reclassifications have also been made to the reported investment
industry classifications on the December 31, 2013 Schedule of Investments.  This change in classification does not materially
affect previously reported financial statement information.



The
following table shows the portfolio composition by industry grouping based on fair value at June 30, 2014 and December 31, 2013:



|                                  |  | June 30, 2014              |         |                               
|--------------------------------- |  | -------------------------- | ------- | ------------------------------
|                                  |  | (unaudited)                |         | December 31, 2013             
|Industry Classification           |  | Investments  at Fair Value |         | Percentage of  Total Portfolio
|IT Consulting & Other Services    |  | $                          | 122,069 |                               
|Life Sciences Tools & Services    |  |                            | 77,483  |                               
|Packaged Foods & Meats            |  |                            | 118,831 |                               
|Biotechnology                     |  |                            | 185,512 |                               
|Electrical Components & Equipment |  |                            | 81,538  |                               
|Health Care Equipment             |  |                            | 92,036  |                               
|Personal Products                 |  |                            | 118,000 |                               
|                                  |  | $                          | 795,469 |                               



9







Point Capital,
Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



| | 1. | Organization
                                                               and Business
| | -- | ----------------------------------------------------------------------------------------



Point
Capital, Inc. (formerly known as Gold Swap Inc.) (the “Company”), was incorporated in the State of New York on July
13, 2010.



Prior
to January 24, 2013, the Company intended to purchase precious metals and second-hand jewelry for refining and resale. The Company
had not clearly identified how it would operate its business, only that it would explore commercial feasibility.



On
January 24, 2013, the merger of Point Capital, Inc., an inactive Delaware corporation, with Gold Swap, Inc., a New York corporation,
became effective. As a result, (a) Gold Swap’s state of incorporation changed from New York to Delaware and (b) the name
of the company changed from “Gold Swap Inc.” to “Point Capital, Inc.”



Effective
January 28, 2013, in connection with the merger and name change of Gold Swap, Inc. (the "Company") described above, (i) Melvin Schlossberg resigned from his position as president, chief executive officer, secretary and a director of
the Company, (ii) Donald Ptalis resigned from his position as chief financial officer and a director, and (iii) Vadim Mats
resigned from his position as Vice President - Business Development. The Board of Directors of the Company (i) elected
Richard A. Brand as Chairman, Chief Executive Officer and a director of the Company; (ii) Eric Weisblum was appointed
President of the Company; (iii) Vadim Mats was appointed as Chief Financial Officer and (iv) Richard A. Brand, Eric Weisblum
and Van E. Parker became directors of the Company.



The
Company was formerly a development stage company. 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”), and
no longer considers itself to be a development stage company.



The
Company’s investment objective is to provide current income and capital appreciation. The Company intends 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 are made principally through direct investments in prospective
portfolio companies. However, the Company may also purchase securities in private secondary transactions. The Company to a lesser
extent will also invest in private companies that meet its investment objectives. The Company meets the definition of an investment
company in accordance with the guidance under Accounting Standards Codification Topic 946 “Financial Services – Investment
Companies.”



| | 2. | Summary
                                                                of Significant 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"). The Company formed a wholly-owned subsidiary, Hemp Funding, Inc., to
invest in companies that are positioned to for growth in the legal cannabis industry. The subsidiary has not made investments
to date. The Company consolidates the subsidiary. All significant intercompany balances and transactions have been eliminated
in consolidation.





10







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



Cash
and Cash Equivalents



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



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. 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.



Realized
Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Portfolio 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 without regard to unrealized appreciation or depreciation previously recognized.
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 Investments



The
Company applies 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 considers 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 - quoted market prices in active markets for identical assets or liabilities.





11







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



●
Level 2 -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 – unobservable inputs for which little or no market activity exists, therefore requiring an entity to develop its
own assumptions.



The
Board of Directors (the “Board”) of the Company, in good faith, determines the fair value of investments in the following
manner:



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 restricted discount is applied, as
appropriate.



Investments
in warrants are valued at fair value using 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.



Investments
in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.



The
following are the Company’s investments owned by levels within the fair value hierarchy at June 30, 2014:



|                      |  | Level
    1 |         |  | Level
    2 |   |         | Level
    3 |  |   | Total   | 
|--------------------- |  | ----------- | ------- |  | ----------- | - | ------- | ----------- |  | - | ------- | 
|Common Stock          |  | $           | 459,689 |  |             | $ | -       |             |  | $ | 118,831 | 
|Convertible Preferred |  |             | -       |  |             |   | -       |             |  |   | 35,000  | 
|Warrants              |  |             | -       |  |             |   | 135,411 |             |  |   | 46,538  | 
|Total Investments     |  | $           | 459,689 |  |             | $ | 135,411 |             |  | $ | 200,369 | 



The
following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2013:



|                       |  | Level
    1 |   |  | Level
    2 |   |        | Level
    3 |  |   | Total   | 
|---------------------- |  | ----------- | - |  | ----------- | - | ------ | ----------- |  | - | ------- | 
|Common Stock           |  | $           | - |  |             | $ | -      |             |  | $ | 2,891   | 
|Convertible Debentures |  |             | - |  |             |   | -      |             |  |   | 144,340 | 
|Warrants               |  |             | - |  |             |   | 48,933 |             |  |   | -       | 
|Total Investments      |  | $           | - |  |             | $ | 48,933 |             |  | $ | 147,231 | 





12







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



The
following additional disclosures relate to the changes in fair value of the Company’s Level 3 investments during the six
months ended June 30, 2014:



|Balance at January 1,
    2014                                                      |  | $ | 147,231  |  
|----------------------------------------------------------------------------------- |  | - | -------- | -
|Purchase of investments                                                             |  |   | 200,000  |  
|Net change in unrealized appreciation
    on investments                            |  |   | 369      |  
|Net transfers in and/or out of Level
    3(1)(2)                                    |  |   | (147,231 | )
|Balance at June 30, 2014                                                            |  | $ | 200,369  |  
|                                                                                    |  |   |          |  
|Net change in unrealized appreciation
    in earnings relating to assets still held |  | $ | 369      |  



(1)Transfers
between levels, if any, are recognized at the beginning of the period in which transfers occur.

(2)Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act.



|                               |  | Fair
    Value at June 30, 2014 |         |  | Valuation
    Technique |                                                                                                                                | Unobservable
    
    inputs |                          | Input | 
|------------------------------ |  | ------------------------------- | ------- |  | ----------------------- | ------------------------------------------------------------------------------------------------------------------------------ | ---------------------------- | ------------------------ | ----- | 
|Investments, at
    fair value |  |                                 |         |  |                         |                                                                                                                                |                              |                          |       | 
|Common
    stock               |  | $                               | 118,831 |  |                         | Comparable
    market value                                                                                                    |                              | Restriction
    discount |       | 
|Convertible preferred          |  | $                               | 35,000  |  |                         | Comparable
                                                                                                       market value |                              | Restriction
    discount |       | 
|Warrants                       |  | $                               | 46,538  |  |                         | Comparable market
    value                                                                                                    |                              | Restriction discount     |       | 



|                            |  | Fair
    Value at December 31, 2013 |         |  | Valuation
                                                                                Technique |                         | Unobservable
                                                                                inputs |                      | Input | 
|--------------------------- |  | ----------------------------------- | ------- |  | --------------------------------------------------------------------------------------------------- | ----------------------- | --------------------------------------------------------------------------------------------------- | -------------------- | ----- | 
|Investments,  at fair value |  |                                     |         |  |                                                                                                     |                         |                                                                                                     |                      |       | 
|Common stock                |  | $                                   | 2,891   |  |                                                                                                     | Comparable market value |                                                                                                     | Restriction discount |       | 
|Convertible debentures      |  | $                                   | 144,340 |  |                                                                                                     | Comparable market value |                                                                                                     | Restriction discount |       | 





If
the restriction discount were to increase or decrease, the fair value of the investments would decrease or increase, respectively.





Portfolio
Company Investment Classification



The
Company classifies its portfolio company investments in accordance with the requirements of the 1940 Act. Under the 1940 Act,
“Controlled Investments” are defined as investments in which the Company owns more than 25% of the voting securities
or has rights to nominate greater than 50% of the board representation. Under the 1940 Act, “Affiliated Investments”
are defined as investments in which the Company owns between 5% and 25% of the voting securities. Under the 1940 Act, “Non-Controlled/Non-Affiliated
Investments” are defined as investments that are neither Controlled Investments nor Affiliated Investments.



At
June 30, 2014 and December 31, 2013, the Company did not have any Controlled or Affiliated investments.





13







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



Offering
and Related Offering Costs



During
the six months ended June 30, 2014, the Company issued 1,650,000 shares of common stock for gross proceeds of $330,000 through
a private capital raise.



Offering
costs include any costs associated with the offering of the Company’s shares. These costs are recorded as a reduction to
additional paid-in capital.



During
the six months ended June 30, 2014, the Company incurred $33,140 in offering costs to a third party placement agent (“Agent”)
associated with capital raising activities with gross proceeds of $330,000. The offering costs were paid to the Agent based upon
a 7% fixed amount related to gross proceeds raised. The Agent is also entitled to receive an additional amount up to 3% in a non-accountable
expense allowance.



In
addition to the above offering costs, the Agent was issued 6,126,240 shares of common stock as additional compensation for a maximum
raise of $2,000,000. As of June 30, 2014, the agent raised $2,305,000 and was entitled to 6,126,240 shares which have a fair value
(based on $0.20/share price of the private placement transactions) of $1,225,248 upon final closing. The fair value of these shares
was recorded as a reduction of offering proceeds upon issuance of the shares in March 2014.



The
Company incurred $1,258,388 and $0 in offering costs for the six months ended June 30, 2014 and 2013, respectively.



Use
of Estimates



The
preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 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.



Income Taxes



The
Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income
Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between
the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the
years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax
assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred
tax assets will not be realized.





14







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



The
Company evaluates tax positions taken or expected to be taken in the course of preparing its tax returns to determine whether
the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed
to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the applicable period.
Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The 2010, 2011, 2012 and 2013
federal tax years for the Company remain subject to examination by tax authorities.



As
of June 30, 2014 and December 31, 2013, the Company had not recorded a liability for any unrecognized tax positions. Management’s
evaluation of uncertain tax positions may be subject to review and adjustment at a later date based upon factors including, but
not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. The Company’s policy is to include
interest and penalties related to income taxes, if applicable, in general and administrative expenses. There were no such expenses
for the six months ended June 30, 2014 and 2013.



The
Company intends to elect to be taxed as a Regulated Investment Company (“RIC”) for the year ending December 31, 2014.



Recent
Accounting Pronouncements



In
June 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU")
2013-08, Financial Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements
("ASU 2013-08"). ASU 2013-08 amends the criteria that define an investment company, clarifies the measurement guidance
and requires certain additional disclosures. Public companies are required to apply ASU 2013-08 prospectively for interim and
annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-08 did not have a material effect on our
financial condition or results of operations.



| | 3. | Notes
                                                                Payable
| | -- | -----------------------------------------------------------------------------



During
February 2012, the Company executed notes payable for $15,000. The notes bear interest at 6%, default interest at 12% and are
unsecured. The notes were amended in April 2012 to provide that all the notes are due and payable in February 2014. These notes
were repaid in January 2014.



| | 4. | Redeemable
                                                                Series A, Convertible Preferred Stock
| | -- | ----------------------------------------------------------------------------------------------------------------



In
April 2013, 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 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.







15







Point
Capital, Inc.

(Formerly
Known As Gold Swap Inc.)

Notes
to Consolidated Financial Statements

(unaudited)



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.



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.



If
any shares of Preferred Stock are outstanding and the Company is a Business Development Company, the Company shall have asset
coverage of at least 200% as of the close of business on the last business day of a calendar quarter. If the Company fails to
comply with this requirement and it is not cured on a timely basis, the Company shall, to the extent permitted by the 1940 Act
and Delaware law, proceed to redeem a sufficient number of shares of Preferred Stock (at $100/share plus any unpaid dividends
and distributions) to meet is asset coverage requirement.



| | 5. | Financial
                                                                Highlights
| | -- | ------------------------------------------------------------------------------------



The
following is a schedule of financial highlights for the six months ended June 30, 2014 (1):



|Net asset
    value per common share data:                          |  |   |           
|------------------------------------------------------------------- |  | - | ----------
|Net
    asset value, beginning of period                            |  | $ | 0.04      
|                                                                    |  |   |           
|Net
    investment loss                                             |  |   | (0.00     
|Net
    change in unrealized appreciation on investments            |  |   | 0.00      
|                                                                    |  |   |           
|Net
    change in net assets resulting from operations              |  |   | 0.00      
|                                                                    |  |   |           
|Capital
    stock transactions:                                     |  |   |           
|Issuance
    of common stock (2)                                    |  |   | 0.03      
|Offering
    costs from issuance of common stock                    |  |   | (0.03     
|                                                                    |  |   |           
|Net
    increase in net assets from capital stock transactions      |  |   | 0.00      
|                                                                    |  |   |           
|Net asset value,
    end of period                                  |  | $ | 0.04      
|                                                                    |  |   |           
|Ratios
    and supplemental data:                                   |  |   |           
|Per
    share market price, end of period (3)                       |  | $ | -         
|Total
    return (4)                                                |  |   | (1.95     
|Common
    shares outstanding, end of period                        |  |   | 48,382,440
|Weighted
    average common shares outstanding during period        |  |   | 45,256,726
|Net
    assets, end of period                                       |  | $ | 2,090,853 
|Ratio
    of operating expenses to average net assets (annualized)  |  |   | (6.36     
|Ratio
    of net investment loss to average net assets (annualized) |  |   | (5.34     



| | 1. | Prior to
                                                        October 4, 2013, the Company was not an investment company. Accordingly,
                                                        financial highlights are presented for the six months ended June 30, 2014
                                                        only.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





16









| | 2. | Issuance
                                                        of common stock for the six months ended June 30, 2014 based on the average
                                                        increase in net asset value attributable to each share issued in the Company's
                                                        offerings during such period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 3. | The shares
                                                        of the Company's common stock were listed in the OTC Market beginning
                                                        January 4, 2012. There was no market price for the shares as of June 30,
                                                        2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 4. | Total
                                                                                             return is based on change in net asset
                                                                                             value during the period, adjusted
                                                                                             for the impact of capital stock transactions
                                                                                             and related offering costs. Since
                                                                                             there was no market price, total
                                                                                             return based on stock price has not
                                                                                             been presented for the six months
                                                                                             ended June 30, 2014. Total return
                                                                                             is not annualized.



| | 6. | Subsequent
                                                                Events
| | -- | ---------------------------------------------------------------------------------



On
July 30, 2014, the Company added two independent members to the Board of Directors and the Audit Committee, Joel Stone and Leonard
Schiller. Richard Brand, CEO, resigned from the Committee so as to have a fully independent Audit Committee.



On
July 2, 2014, the Company closed on a $150,000 investment in convertible preferred stock. $100,000
of the Convertible Preferred Stock is convertible at $1.00 and $50,000 is convertible at $0.2666.



On
July 1, 2014, the Company closed on a private capital raise and issued 1,450,000 shares
of the Company’s common stock to various purchasers for $435,000 ($0.30/share). There were no offering costs incurred with
this capital raise.







17







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



We
are a closed-end, non-diversified investment company that has 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 are required
to comply with certain regulatory requirements. For instance, we generally have 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. For 2014, we will elect to be treated for tax purposes as a
regulated investment company, or a RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).



Investment
Strategy



We
will seek to invest in companies that are asset rich and generating cash flow on a sustainable basis. Further, when identifying
prospective portfolio companies, we will seek the following attributes, which we believe will help us generate higher total returns
with an acceptable level of risk. These attributes are:



| | ● | Strong
    management teams with meaningful equity ownership. We will seek experienced management teams with an established track
    record of success in place or available. We will typically require the portfolio companies to have proper incentives to align
    management’s goals with ours. Generally, we will seek companies in which the management teams have significant equity
    interests.                                                                                                                                                                                                                                                                             
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Secure
    market positions that present attractive growth opportunities. We will seek companies that we believe possess advantages
    in scale, scope, customer loyalty, product pricing, or product quality versus their competitors, minimizing sales risk and
    generating margins that can be readily forecast.                                                                                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Industries
    with favorable trends.We will seek industries with favorable industry trends and companies performing well
    within their industries and poised to benefit from a catalyst.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Investing
    in private companies. We do not expect to invest in start-up companies or companies with speculative business plans.  We
    may also consider companies that are underperforming compared to their potential due to structural impediments with opportunities
    to restructure and refocus strategy and resources.                                                                                                                                                                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Investing
    primarily in senior loans.  Under normal market conditions, approximately 65% of the value of our future net
    assets (including the amount of any borrowings for investment purposes) is expected to be invested in senior
    loans.  Senior     loans typically pay interest at rates which are determined periodically on the basis of a
    floating base lending rate, primarily     LIBOR, plus a premium.  Senior loans typically are rated below investment
    grade, and may be considered “high     risk” compared to debt instruments that are rated above investment grade.
    Senior loans, however, are generally less     risky than subordinated debt.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Diversification.
    We will seek to diversify our portfolio among companies engaged in a variety of industries, thereby potentially reducing the
    risk of a downturn in any one industry having a disproportionate impact on the value of our portfolio. We cannot assure you
    that we will be successful in this regard.                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Structure
    financing terms to limit down side risk.Originating our own lending opportunities through our network will
    permit us to structure loans to enhance the element of capital preservation for our stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                           



18







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Private
    equity sponsorship. Often we will seek to participate in transactions sponsored by what we believe to be high-quality
    private equity firms. Point Capital’s senior management team believes that a private equity sponsor’s willingness
    to invest significant sums of equity capital into a company provides an additional level of due diligence investigation and
    is an implicit endorsement of the quality of the investment. Further, by co-investing with quality private equity firms which
    commit significant sums of equity capital with junior priority to our future debt investments, we may benefit from having
    due diligence on our investments performed by both parties.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | Viable
    exit strategy. We intend to focus our investment activity primarily in companies whose business models and growth prospects
    offer attractive exit possibilities, including repayment of our investments, with the potential for capital gain on any equity
    interest we hold through an initial public offering of common stock, a merger, a sale or other recapitalization. See “Investment
    Objectives and Strategy.”                                                                                                                                                                                                                                                                           



We
plan to be the lead investor for transactions, as well as a co-investor with investment institutions for other transactions. Moreover,
we may acquire investments in the secondary loan market, and, in analyzing such investments, we will employ the same analytical
process that we use for our primary investments.



Portfolio
Update



As
of June 30, 2014, we held seven portfolio companies, Arista Power, Inc. (symbol: ASPW), Ruthigen, Inc. (symbol: RTGN), Be Active
Holdings, Inc. (symbol: JALA), Intercloud Systems, Inc. (symbol: ICLD), Combimatrix Corp. (symbol: CBMX), Cesca Therapeutics,
Inc. (symbol: KOOL), and Musclepharm Corp. (symbol: MSLP). All are non-controlled and non-affiliated investments.



Pishposh,
Inc.On June 30, 2014, we made an investment in advance of $150,000 in Convertible Preferred Stock. The effective date of
the investment is July 2, 2014. Pishposh, Inc. is a private company that operates a commerce platform serving parents and
grandparents of newborns, infants, and toddlers. $100,000 of the Convertible Preferred Stock is convertible at $1.00 and
$50,000 is convertible at $0.2666.



Musclepharm
Corp.On June 19, 2014, we completed a $90,000 investment in 10,000 shares of Common Stock. Musclepharm Corp., an OTC
BB listed company, markets sports nutrition products. The company's products include amino acids, herbs and proteins and are intended
to enhance workouts, repair muscles, and nourish the body. The company markets its products through specialty retailers throughout
the world.



Cesca
Therapeutics, Inc.On June 13, 2014, we completed an $82,501 investment in 55,000 shares of Common Stock as well as
16,500 warrants. Cesca Therapeutics, Inc., a Nasdaq listed company, operates as a supplier of products targeting the worldwide
adult stem cell market.The company offers automated and semi-automated devices and single-use processing disposables that
enable the collection, processing and cryopreservation of stem cells and other cellular tissues from cord blood and bone marrow
used in regenerative medicine. The exercise price of the warrants is $1.55 per share.



Arista
Power, Inc.On March 31, 2014, we completed a $100,000 investment in 9% Convertible Preferred Stock as well as 750,000
warrants. Arista Power, Inc., an OTC BB listed company, develops and manufactures renewable power equipment. The company produces
wind turbines, solar energy systems, and custom-designed power management systems. The Preferred Stock is convertible into shares
of common stock at our discretion at a conversion price equal to $0.20. The exercise price of the warrants is $0.25 per share.



Ruthigen,
Inc.On March 21, 2014, we completed a $150,002 investment in 20,690 shares of Common Stock as well as 20,690 warrants.
Ruthigen, Inc., a Nasdaq listed company,focuses on the discovery,
development, and commercialization of pharmaceutical-grade hypochlorous acid based therapeutics to prevent and treat infection
in invasive applications. The exercise price of the warrants is $7.25 per share.





19







Be
Active Holdings, Inc.On February 18, 2014, we completed a $100,000 investment in 3,333,333 shares of Common Stock
as well as 3,333,333 warrants. Be Active Holdings, Inc., an OTC BB listed company,manufactures
and sells low fat, low calorie, and natural probiotic frozen yogurt primarily to supermarkets, as well as to convenience and other
foods stores. The exercise price of the warrants is $0.03 per share. We exercised 3,333,333
warrants on a cashless basis and received 2,729,468 shares of common stock.



Intercloud
Systems, Inc.On December 13, 2013, we completed a $100,000 investment in a 12% Convertible Debenture as well as 315
shares of common stock. Intercloud Systems, Inc., a Nasdaq listed company, is a single-source provider of end-to-end IT and telecom
solutions to the service provider and corporate enterprise markets through cloud platforms and professional services. The debenture,
which matures June 13, 2015, is convertible into shares of common stock of InterCloud at our discretion at a conversion price
equal to the lesser of $6.36 or 85% of the price in a qualified underwritten public offering. We exercised the entire Convertible
Debenture and accrued interest into 17,925 shares of common stock.



Combimatrix
Corp.On December19, 2013 we completed an $80,000 investment in Series D Convertible Preferred Stock and warrants.
CombiMatrix Corp., a Nasdaq-listed company, is a molecular diagnostics company specializing in DNA-testing services for development
disorders. The preferred stock was convertible to common stock at $2.06 per share. The exercise price of the warrants is $3.12
per share.We currently hold 38,835 warrants of Combimatrix.



Results
of Operations



For
the three and six months ended June 30, 2014, 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 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.



Net
Change in Unrealized AppreciationFor the three months ended June 30, 2014 and 2013, the cost basis in our portfolio companies
was $665,524 and $0 with a fair market value of $795,469 and $0, respectively. The net change in unrealized appreciation for the
three months ended June 30, 2014 and 2013 was ($401,343) and $0, respectively.



For
the six months ended June 30, 2014 and 2013, the cost basis in our portfolio companies was $665,524 and $0 with a fair market
value of $795,469 and $0, respectively. The net change in unrealized appreciation for the six months ended June 30, 2014 and 2013
was $64,802 and $0, respectively.



Investment
Income For the three months ended June 30, 2014 and 2013, we earned interest income from cash and cash equivalents of
$5 and $0, respectively. During the three months ended June 30, 2014, we also earned $8,400 of interest from our convertible debenture
investment in Intercloud Systems, Inc. We did not earn any investment income for the three months ended June 30, 2013.



For
the six months ended June 30, 2014 and 2013, we earned interest income from cash and cash equivalents of $9 and $0, respectively.
During the six months ended June 30, 2014, we also earned $11,400 of interest from our convertible debenture investment in Intercloud
Systems, Inc. We did not earn any investment income for the six months ended June 30, 2013.





Operating
ExpensesFor the three months ended June 30, 2014 and 2013, total operating expenses were $37,022 and $22,477, respectively,
which consisted mainly of professional accounting, legal, insurance, and Edgar fees related to SEC required filings.



For
the six months ended June 30, 2014 and 2013, total operating expenses were $70,885 and $45,359, respectively, which consisted
mainly of professional accounting, legal, insurance and Edgar fees related to SEC required filings.



Net
Increase in Net Assets Resulting from OperationsFor the three months ended June 30, 2014, the net decrease in
net assets resulting from operations was $429,960 primarily related to a decrease in unrealized appreciation of our portfolio
companies. For the three months ended June 30, 2013, the net loss was $22,477.



For
the six months ended June 30, 2014, the net increase in net assets resulting from operations was $5,326. For the six months ended
June 30, 2014, the net loss was $45,359.





20







Liquidity
and Capital Resources



As
of June 30, 2014, the Company had $1,548,288 in cash and cash equivalents, compared to $2,010,620 as of December 31, 2013, primarily
generated from the sale of 11,625,000 common shares at $0.20 per share for a total gross offering price of $2,325,000, of which
$330,000 was raised during the three months ended March 31, 2014. In addition, the Company sold 4,000 shares of Series A Convertible
Preferred Stock sold in April 2013 to Alpha Capital Anstalt for total gross proceeds of $400,000.



The
Company believes that our existing available cash will enable the Company to meet the working capital requirements for at least
12 months.



The
Company has no agreements or arrangements to raise capital. Network 1 Financial Services Inc. completed an offer to sell up to
$2,000,000 of common shares (of which $2,305,000 has been closed upon as of January 31, 2014) in accordance with the terms of
the placement agency agreement. As of the date of this filing, total direct offering costs paid in cash were $231,190. The placement
agent was also entitled to 6,126,240 shares of the Company’s common stock which was issued on March 25, 2014. These shares
have a fair value of $1,225,248, based upon the recent cash offering price of $0.20/share, which represented the best evidence
of fair value.



On
July 1, 2014, the Company closed on a private capital raise and issued 1,450,000 shares
of the Company’s common stock to various purchasers for $435,000 ($0.30/share). There were no offering costs incurred with
this capital raise.



We
currently have no commitments with any person for any capital expenditures.



Off-Balance
Sheet Arrangements



We
have no off-balance sheet arrangements.



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, liquidity risk 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.





21







Item
4.  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 March 31, 2014. 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. Additionally, based on management’s assessment, the Company determined that
there were material weaknesses in its internal control over financial reporting as of March 31, 2014 as discussed in Item 9A.
Controls and Procedures in our most recent 10-K filing (filed on March 31st, 2014).

On
July 30, 2014, the Company added two independent members to the Board of Directors and the Audit Committee, Joel Stone and Leonard
Schiller. Richard Brand, our CEO, resigned from the Committee so as to have a fully independent Audit Committee. There have been
no other changes in the Company's internal control over financial reporting during the last quarterly period covered by this report
that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.







22







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



There
have been no material changes to our risk factors as previously disclosed in our most recent 10-K filing.



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



Unregistered
Sales of Equity Securities



On
July 1, 2014, the Company issued 1,450,000 shares of the Company’s common stock to
various purchasers for $435,000 ($0.30/share). The issuance of such securities was exempt from registration pursuant to Section
4(2) of the Securities Act and Regulation D promulgated thereunder.





Purchases
of equity securities by the issuer and affiliated purchasers



None.



Use
of Proceeds



The
company intends to use the proceeds from the sale of unregistered securities to make additional investments in portfolio companies.



Item
3.    Defaults Upon Senior Securities.



Not
applicable.



Item
4.    Mine Safety Disclosures.



Not
applicable.



Item
5.    Other Information.



None





23







Item 6.    Exhibits



|Exhibit
    No. |  | Description                                                                                    
|--------------- |  | -----------------------------------------------------------------------------------------------
|                |  |                                                                                                
|31.1            |  | Rule
    13a-14(a)/15d14(a) Certifications of Richard A Brand, the Principal Executive Officer*
|                |  |                                                                                                
|31.2            |  | Rule
    13a-14(a)/15d14(a) Certifications of Vadim Mats, the Principal Financial Officer*     
|                |  |                                                                                                
|32.1            |  | Section
    1350 Certifications of Richard A. Brand, the Principal Executive Officer*          
|                |  |                                                                                                
|32.2            |  | Section
    1350 Certifications of Vadim Mats, the Principal Financial Officer*                



*Filed
herewith.





24







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. |                                                                                          
| | ----------------------- | -----------------------------------------------------------------------------------------
| |                         |                                                                                          
| | By:                     | /s/
    Richard A. Brand                                                                 
| |                         | Name:
    Richard A. Brand                                                               
| |                         | Title:   Chairman,
    Chief Executive Officer and Director (Principal Executive Officer)



| | Dated:
    August 12, 2014 |                                                                                  
| | -------------------------- | ---------------------------------------------------------------------------------
| |                            |                                                                                  
| | By:                        | /s/
    Vadim Mats                                                               
| |                            | Name:
    Vadim Mats                                                             
| |                            | Title:   Chief
    Financial Officer (Principal Financial and Accounting Officer)





Dated:
August 12, 2014





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