UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



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



For
the quarter ended September 30, 2017



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



Commission
File Number: 814-01038



POINT
CAPITAL, INC.

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



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



1086
Teaneck Road, Suite 3A

Teaneck,
New Jersey 07666

(Address
of principal executive offices)



(201)
408-5126

(Issuer’s
telephone number)



| | 285
    Grand Avenue, Building 5, Englewood, NJ 07631                                  | 
| | -------------------------------------------------------------------------------------- | 
| | (Former
    name, former address and former fiscal year, if changed since last report) | 



Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registration was required to submit and post such files). Yes ☒ No ☐



Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



| | Large
    accelerated filer                       | ☐                           | Accelerated
    filer         | ☐
| | ------------------------------------------------- | --------------------------- | ----------------------------- | -
| | Non-accelerated
    filer                         | ☒                           | Smaller
    reporting company | ☐
| | (Do
    not check if a smaller reporting company) | Emerging
    growth company | ☐                            



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒



As
of November 14, 2017, 50,082,441 shares of common stock, par value $0.0001 per share, were outstanding.



















POINT
CAPITAL, INC.

FORM
10-Q

September
30, 2017



TABLE
OF CONTENTS



|                                                                                                                     | Page
|-------------------------------------------------------------------------------------------------------------------- | ----
|PART
    I - FINANCIAL INFORMATION                                                                                   |     
|Item
    1.    Financial Statements                                                                                  | 1   
|Condensed
    Statements of Assets and Liabilities – As of September 30, 2017 (unaudited) and December 31, 2016      | 1   
|Condensed
    Statements of Operations (unaudited) – For the three and nine months ended September 30, 2017 and 2016 | 2   
|Condensed
    Statement of Changes in Net Assets (unaudited) – For the nine months ended September 30, 2017 and 2016 | 3   
|Condensed
    Statements of Cash Flows (unaudited) – For the nine months ended September 30, 2017 and 2016           | 4   
|Schedule
    of Investments as of September 30, 2017 (unaudited)                                                     | 5   
|Schedule
    of Investments as of December 31, 2016                                                                  | 6   
|Schedule
    of Investments by Industry as of September 30, 2017 (unaudited) and December 31, 2016                   | 7   
|Notes
    to Condensed Financial Statements (unaudited)                                                              | 8   
|Item
    2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations                 | 16  
|Item
    3.    Quantitative and Qualitative Disclosures About Market Risk                                            | 23  
|Item
    4.    Controls and Procedures                                                                               | 23  
|                                                                                                                     |     
|PART
    II - OTHER INFORMATION                                                                                      |     
|Item
    1.    Legal Proceedings                                                                                     | 24  
|Item
    1A. Risk Factors                                                                                            | 24  
|Item
    2.    Unregistered Sales of Equity Securities and Use of Proceeds                                           | 24  
|Item
    3.    Defaults Upon Senior Securities                                                                       | 24  
|Item
    4.    Mine Safety Disclosures                                                                               | 24  
|Item
    5.    Other Information                                                                                     | 24  
|Item
    6.    Exhibits                                                                                              | 24  












PART
I - FINANCIAL INFORMATION



Item
1. Financial Statements.



POINT
CAPITAL, INC.

Condensed
Statements of Assets and Liabilities



|                                                                                                                                                                                                     |  | September 30, 2017 |           |   | December 31, 2016 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | -
|                                                                                                                                                                                                     |  | (Unaudited)        |           |   |                   |  
|ASSETS                                                                                                                                                                                               |  |                    |           |   |                   |  
|Investments at fair value                                                                                                                                                                            |  |                    |           |   |                   |  
|Non-controlled/Non-affiliated investments (cost of $996,642 and $1,098,096 at September 30, 2017 and December 31, 2016, respectively)                                                                |  | $                  | 1,064,005 |   |                   | $
|Cash and cash equivalents                                                                                                                                                                            |  |                    | 301,690   |   |                   |  
|Interest receivable                                                                                                                                                                                  |  |                    | 56,160    |   |                   |  
|Prepaid expenses                                                                                                                                                                                     |  |                    | 4,700     |   |                   |  
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Total Assets                                                                                                                                                                                         |  | $                  | 1,426,555 |   |                   | $
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|LIABILITIES                                                                                                                                                                                          |  |                    |           |   |                   |  
|Accounts payable and accrued expenses                                                                                                                                                                |  | $                  | 30,397    |   |                   | $
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Total Liabilities                                                                                                                                                                                    |  |                    | 30,397    |   |                   |  
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Redeemable Series A, Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 1,000,000 shares designated; 4,000 shares issued and outstanding ($100 per share redemption value) |  |                    | 400,000   |   |                   |  
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|NET ASSETS                                                                                                                                                                                           |  |                    |           |   |                   |  
|Common stock, $0.0001 par value, 100,000,000 shares authorized; 50,082,441 shares issued and outstanding at September 30, 2017 and December 31, 2016                                                 |  |                    | 5,009     |   |                   |  
|Additional paid-in capital                                                                                                                                                                           |  |                    | 1,871,080 |   |                   |  
|Accumulated net investment loss                                                                                                                                                                      |  |                    | (301,055  | ) |                   |  
|Accumulated undistributed net realized loss on investments                                                                                                                                           |  |                    | (646,239  | ) |                   |  
|Unrealized appreciation (depreciation) on investments                                                                                                                                                |  |                    | 67,363    |   |                   |  
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Total Net Assets                                                                                                                                                                                     |  |                    | 996,158   |   |                   |  
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Total Liabilities and Net Assets                                                                                                                                                                     |  | $                  | 1,426,555 |   |                   | $
|                                                                                                                                                                                                     |  |                    |           |   |                   |  
|Net Asset Value per Common Share                                                                                                                                                                     |  | $                  | 0.02      |   |                   | $



See
accompanying notes to unaudited condensed financial statements.





1







POINT
CAPITAL, INC.

Condensed
Statements of Operations

(Unaudited)



|                                                                |  | For the Three Months Ended |          |   | For the Nine Months Ended |  
|--------------------------------------------------------------- |  | -------------------------- | -------- | - | ------------------------- | -
|                                                                |  | September 30,              |          |   | September 30,             |  
|                                                                |  | 2017                       |          |   | 2016                      |  
|                                                                |  |                            |          |   |                           |  
|INVESTMENT INCOME:                                              |  |                            |          |   |                           |  
|Non-controlled/Non-affiliated investments:                      |  |                            |          |   |                           |  
|Interest income                                                 |  | $                          | 6,504    |   |                           | $
|                                                                |  |                            |          |   |                           |  
|Total investment income                                         |  |                            | 6,504    |   |                           |  
|                                                                |  |                            |          |   |                           |  
|OPERATING EXPENSES:                                             |  |                            |          |   |                           |  
|Compensation expense                                            |  |                            | 45,000   |   |                           |  
|Professional fees                                               |  |                            | 36,890   |   |                           |  
|Filing fees                                                     |  |                            | 484      |   |                           |  
|Insurance expense                                               |  |                            | 8,925    |   |                           |  
|Bad debt expense                                                |  |                            | -        |   |                           |  
|General and administrative expenses                             |  |                            | 6,860    |   |                           |  
|                                                                |  |                            |          |   |                           |  
|Total operating expenses                                        |  |                            | 98,159   |   |                           |  
|                                                                |  |                            |          |   |                           |  
|NET INVESTMENT LOSS                                             |  |                            | (91,655  | ) |                           |  
|                                                                |  |                            |          |   |                           |  
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:         |  |                            |          |   |                           |  
|Net realized gain (loss) on investments                         |  |                            |          |   |                           |  
|Non-controlled/Non-affiliated investments                       |  |                            | (80,913  | ) |                           |  
|Net unrealized gain (loss) on investments                       |  |                            |          |   |                           |  
|Non-controlled/Non-affiliated investments                       |  |                            | (346,575 | ) |                           |  
|                                                                |  |                            |          |   |                           |  
|Net realized and unrealized gain (loss) on investments          |  |                            | (427,488 | ) |                           |  
|                                                                |  |                            |          |   |                           |  
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |  | $                          | (519,143 | ) |                           | $



See
accompanying notes to unaudited condensed financial statements.





2







POINT
CAPITAL, INC.

Condensed
Statements of Changes in Net Assets

For
the Nine Months Ended September 30, 2017 and 2016

(Unaudited)



|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  | Accumulated                     |          |   |                |   |          |                | 
|------------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | ---------------------- | - | ----- | -------------- |  | - | ----------------------- |  |  | ------------------------------- | -------- | - | -------------- | - | -------- | -------------- | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   | Accumulated             |  |  | Undistributed                   |          |   | Unrealized     |   |          |                | 
|                                                                    |  | Common
    Stock,
$0.0001 Par Value |            |   | Additional
    Paid In |   |       | Net Investment |  |   | Net RealizedGain (Loss) |  |  | Appreciation
    (Depreciation) |          |   | Total          |  
|                                                                    |  | Shares                              |            |   | Amount                 |   |       | Capital        |  |   | Loss                    |  |  | On Investments                  |          |   | on Investments |   |          | Net
    Assets | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Balance - December
    31, 2015                                     |  |                                     | 50,582,441 |   |                        | $ | 5,059 |                |  | $ | 2,318,842               |  |  | $                               | -        |   |                | $ | (217,750 | )              | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Cancellation of shares                                              |  |                                     | (500,000   | ) |                        |   | (50   | )              |  |   | 50                      |  |  |                                 | -        |   |                |   | -        |                | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Net
    (decrease) increase in net assets resulting from operations |  |                                     | -          |   |                        |   | -     |                |  |   | -                       |  |  |                                 | (326,829 | ) |                |   | 23,400   |                | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Balance
    - September 30, 2016 (Unaudited)                        |  |                                     | 50,082,441 |   |                        | $ | 5,009 |                |  | $ | 2,318,892               |  |  | $                               | (326,829 | ) |                | $ | (194,350 | )              | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Balance - December 31,
    2016                                     |  |                                     | 50,082,441 |   |                        | $ | 5,009 |                |  | $ | 1,871,080               |  |  | $                               | -        |   |                | $ | (566,360 | )              | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Net
    (decrease) increase in net assets resulting from operations |  |                                     | -          |   |                        |   | -     |                |  |   | -                       |  |  |                                 | (301,055 | ) |                |   | (79,879  | )              | 
|                                                                    |  |                                     |            |   |                        |   |       |                |  |   |                         |  |  |                                 |          |   |                |   |          |                | 
|Balance
    - September 30, 2017 (Unaudited)                        |  |                                     | 50,082,441 |   |                        | $ | 5,009 |                |  | $ | 1,871,080               |  |  | $                               | (301,055 | ) |                | $ | (646,239 | )              | 



See
accompanying notes to unaudited condensed financial statements.





3







POINT
CAPITAL, INC.

Condensed
Statements of Cash Flows

(Unaudited)



|                                                                                                                                   |  | For the Nine Months Ended September 30, |         
|---------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | --------
|                                                                                                                                   |  | 2017                                    |         
|                                                                                                                                   |  |                                         |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                              |  |                                         |         
|Net increase (decrease) in net assets resulting from operations                                                                    |  | $                                       | 149,652 
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities: |  |                                         |         
|Purchases of investments                                                                                                           |  |                                         | -       
|Net realized (gain) loss on investments                                                                                            |  |                                         | 79,879  
|Net unrealized (gain) loss on investments                                                                                          |  |                                         | (530,586
|Proceeds from sale of investments                                                                                                  |  |                                         | 37,575  
|Non-cash interest income                                                                                                           |  |                                         | -       
|Bad debt expense                                                                                                                   |  |                                         | 6,750   
|Increase in interest receivable                                                                                                    |  |                                         | (20,361 
|Decrease in prepaid expenses                                                                                                       |  |                                         | 22,273  
|Decrease in accounts payable and accrued expenses                                                                                  |  |                                         | (22,701 
|                                                                                                                                   |  |                                         |         
|Net Cash Used In Operating Activities                                                                                              |  |                                         | (277,519
|                                                                                                                                   |  |                                         |         
|Net decrease in cash and cash equivalents                                                                                          |  |                                         | (277,519
|                                                                                                                                   |  |                                         |         
|Cash and Cash Equivalents - Beginning of Period                                                                                    |  |                                         | 579,209 
|                                                                                                                                   |  |                                         |         
|Cash and Cash Equivalents - End of Period                                                                                          |  | $                                       | 301,690 
|                                                                                                                                   |  |                                         |         
|Non-cash investing and financing activities:                                                                                       |  |                                         |         
|Interest receivable converted into investments                                                                                     |  | $                                       | 16,000  



See
accompanying notes to unaudited condensed financial statements.





4







POINT
CAPITAL, INC.

SCHEDULE
OF INVESTMENTS

September
30, 2017

(Unaudited)

|United
    States (U.S.) Company                                     |  | Industry                          |  | Type
    of Investment                  |  | Principal/Shares |           |   | Cost    |   |         | Fair
    Value |           |   | %
    of  Net Assets | 
|-------------------------------------------------------------------- |  | --------------------------------- |  | --------------------------------------- |  | ---------------- | --------- | - | ------- | - | ------- | -------------- | --------- | - | -------------------- | 
|Non-controlled/Non-affiliated investments                            |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |  
|Accelerize, Inc. (2)                                                 |  | Application Software              |  | Common Stock                            |  |                  | 100,379   |   |         | $ | 55,205  |                |           | $ | 27,102               | 
|Accelerize, Inc. (2)                                                 |  | Application Software              |  | Warrants                                |  |                  | 60,000    |   |         |   | 38,533  |                |           |   | 4,802                | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Actinium Pharmaceuticals Inc.
    (2)                                |  | Biotechnology                     |  | Warrants                                |  |                  | 29,250    |   |         |   | 51,055  |                |           |   | 22                   | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Arista Power, Inc. (1) (2)                                           |  | Electrical Components & Equipment |  | Series A Convertible Preferred Stock    |  |                  | 100       |   |         |   | -       |                |           |   | -                    | 
|Arista Power, Inc. (1) (2)                                           |  | Electrical Components & Equipment |  | Warrants                                |  |                  | 750,000   |   |         |   | -       |                |           |   | -                    | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Cesca Therapeutics, Inc. (2)                                         |  | Health Care Equipment             |  | Warrants                                |  |                  | 825       |   |         |   | 14,159  |                |           |   | 910                  | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|CombiMatrix Corp.(2)                                                 |  | Life Sciences Tools & Services    |  | Warrants                                |  |                  | 2,589     |   |         |   | 31,021  |                |           |   | 606                  | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|DatChat Inc. (1)(2)                                                  |  | Application Software              |  | Common Stock                            |  |                  | 2,000,000 |   |         |   | 100,150 |                |           |   | 100,150              | 
|DatChat Inc. (1)                                                     |  | Application Software              |  | 10% Debenture (Due 12/2016)             |  | $                | 35,000    |   |         |   | 35,000  |                |           |   | 35,000               | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Home Bistro, Inc.(1)                                                 |  | Personal Services                 |  | 15% Convertible Debenture (Due 11/2015) |  | $                | 150,000   |   |         |   | 150,000 |                |           |   | 150,000              | 
|Home Bistro, Inc. (1) (2)                                            |  | Personal Services                 |  | Warrants                                |  |                  | 75,000    |   |         |   | -       |                |           |   | -                    | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|IPSIDY INC.  (formerly
    ID Global Solutions Corporations) (1)     |  | Biometric Technology              |  | Common Stock                            |  |                  | 3,866,667 |   |         |   | 77,781  |                |           |   | 503,053              | 
|IPSIDY INC.  (formerly
    ID Global Solutions Corporations) (1) (2) |  | Biometric Technology              |  | Warrants                                |  |                  | 2,200,000 |   |         |   | 38,219  |                |           |   | 203,873              | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|iNeedMD Holdings, Inc. (1)
    (2)                                   |  | Health Care Supplies              |  | Common Stock                            |  |                  | 25,000    |   |         |   | 795     |                |           |   | 12,750               | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|MabVax Therapeutics Holdings
    Inc. (1) (2)                        |  | Biotechnology                     |  | Warrants                                |  |                  | 9,009     |   |         |   | 30,674  |                |           |   | -                    | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|MultiMedia Platforms, Inc.(1)                                        |  | Multimedia Technology             |  | 9% Debenture (Due 7/2016)               |  | $                | 100,000   |   |         |   | 38,461  |                |           |   | -                    | 
|MultiMedia Platforms, Inc.
    (1) (2)                               |  | Multimedia Technology             |  | Common Stock                            |  |                  | 15,000    |   |         |   | 4,500   |                |           |   | -                    | 
|MultiMedia Platforms, Inc.
    (1) (2)                               |  | Multimedia Technology             |  | Warrants                                |  |                  | 333,334   |   |         |   | 61,539  |                |           |   | -                    | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Orbital Tracking Corp. (1)(2)                                        |  | Communications Equipment          |  | Series D Convertible Preferred Stock    |  |                  | 23,449    |   |         |   | 11,724  |                |           |   | 6,988                | 
|Orbital Tracking Corp. (1)(2)                                        |  | Communications Equipment          |  | Common Stock                            |  |                  | 531,020   |   |         |   | 26,552  |                |           |   | 7,912                | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Pish Posh Baby, LLC.(1)(2)                                           |  | Online Retail - Specialty Apparel |  | Membership Units                        |  |                  | 19,155    |   |         |   | 149,988 |                |           |   | 9,194                | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Provectus BioPharmaceuticals
    Inc.(2)                             |  | Biotechnology                     |  | Warrants                                |  |                  | 100,000   |   |         |   | 1,000   |                |           |   | 510                  | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Vapor Corp. (1) (2)                                                  |  | Tobacco                           |  | Warrants                                |  |                  | -         |   |         |   | 48,513  |                |           |   | -                    | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Xtant Medical Holdings, Inc.                                         |  | Health Care Supplies              |  | Warrants                                |  |                  | 11,513    |   |         |   | 31,773  |                |           |   | 1,133                | 
|                                                                     |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           |   |                      | 
|Total Non-controlled/Non-affiliated investments                      |  |                                   |  |                                         |  |                  |           | $ | 996,642 |   |         | $              | 1,064,005 |   |                      | 
|Net Assets at September
    30, 2017                                 |  |                                   |  |                                         |  |                  |           |   |         |   |         |                |           | $ | 996,158              | 



(1)
Securities are exempt from registration under Rule 144A promulgated under the Securities Act.

(2)
Securities are not income producing.

See
accompanying notes to unaudited condensed financial statements.



5







POINT
CAPITAL, INC.

SCHEDULE
OF INVESTMENTS

December
31, 2016

|United
    States (U.S.) Company                |  | Industry                          |  | Type of Investment                      |  | Principal/Shares |           |   | Cost      |   |         | Fair Value |         |   | % of  Net Assets | 
|----------------------------------------------- |  | --------------------------------- |  | --------------------------------------- |  | ---------------- | --------- | - | --------- | - | ------- | ---------- | ------- | - | ---------------- | 
|Non-controlled/Non-affiliated investments       |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |  
|Accelerize, Inc. (2)                            |  | Application Software              |  | Common Stock                            |  |                  | 136,879   |   |           | $ | 75,279  |            |         | $ | 71,177           | 
|Accelerize, Inc. (2)                            |  | Application Software              |  | Warrants                                |  |                  | 60,000    |   |           |   | 38,533  |            |         |   | 16,617           | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Actinium Pharmaceuticals Inc.
    (2)           |  | Biotechnology                     |  | Warrants                                |  |                  | 29,250    |   |           |   | 51,055  |            |         |   | 1,418            | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Arista Power, Inc. (1) (2)                      |  | Electrical Components & Equipment |  | Series A Convertible Preferred Stock    |  |                  | 100       |   |           |   | -       |            |         |   | -                | 
|Arista Power, Inc. (1) (2)                      |  | Electrical Components & Equipment |  | Warrants                                |  |                  | 750,000   |   |           |   | -       |            |         |   | -                | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Aytu Bioscience, Inc. (1)
    (2)               |  | Biotechnology                     |  | Warrants                                |  |                  | 67,709    |   |           |   | 2,625   |            |         |   | 20,005           | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Cesca Therapeutics, Inc. (2)                    |  | Health Care Equipment             |  | Warrants                                |  |                  | 825       |   |           |   | 14,159  |            |         |   | 1,044            | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|CombiMatrix Corp.(2)                            |  | Life Sciences Tools & Services    |  | Warrants                                |  |                  | 2,589     |   |           |   | 31,021  |            |         |   | 41               | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|DatChat Inc. (1)(2)                             |  | Application Software              |  | Common Stock                            |  |                  | 2,000,000 |   |           |   | 100,150 |            |         |   | 100,150          | 
|DatChat Inc. (1)                                |  | Application Software              |  | 10% Debenture (Due 12/2016)             |  | $                | 35,000    |   |           |   | 35,000  |            |         |   | 35,000           | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Home Bistro, Inc.(1)                            |  | Personal Services                 |  | 15% Convertible Debenture (Due 11/2015) |  | $                | 150,000   |   |           |   | 150,000 |            |         |   | 150,000          | 
|Home Bistro, Inc. (1) (2)                       |  | Personal Services                 |  | Warrants                                |  |                  | 75,000    |   |           |   | -       |            |         |   | -                | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|ID Global Solutions Corporations
    (1)        |  | Biometric Technology              |  | 10% Debenture (Due 7/2016)              |  | $                | 100,000   |   |           |   | 61,781  |            |         |   | 100,000          | 
|ID Global Solutions Corporations
    (1)        |  | Biometric Technology              |  | Common Stock                            |  |                  | 20,000    |   |           |   | 9,190   |            |         |   | 1,000            | 
|ID Global Solutions Corporations
    (1) (2)    |  | Biometric Technology              |  | Warrants                                |  |                  | 2,200,000 |   |           |   | 38,219  |            |         |   | 59,836           | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|iNeedMD Holdings, Inc. (1)
    (2)              |  | Health Care Supplies              |  | Common Stock                            |  |                  | 25,000    |   |           |   | 795     |            |         |   | 7,500            | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|MabVax Therapeutics Holdings
    Inc. (1) (2)   |  | Biotechnology                     |  | Warrants                                |  |                  | 9,009     |   |           |   | 30,674  |            |         |   | 682              | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|MultiMedia Platforms, Inc.(1)                   |  | Multimedia Technology             |  | 9% Debenture (Due 7/2016)               |  | $                | 100,000   |   |           |   | 38,461  |            |         |   | -                | 
|MultiMedia Platforms, Inc.
    (1) (2)          |  | Multimedia Technology             |  | Common Stock                            |  |                  | 15,000    |   |           |   | 4,500   |            |         |   | -                | 
|MultiMedia Platforms, Inc.
    (1) (2)          |  | Multimedia Technology             |  | Warrants                                |  |                  | 333,334   |   |           |   | 61,539  |            |         |   | -                | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Orbital Tracking Corp. (1)(2)                   |  | Communications Equipment          |  | Series D Convertible Preferred Stock    |  |                  | 23,449    |   |           |   | 11,724  |            |         |   | 25,794           | 
|Orbital Tracking Corp. (1)(2)                   |  | Communications Equipment          |  | Common Stock                            |  |                  | 531,020   |   |           |   | 26,552  |            |         |   | 29,206           | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Pershing Gold Corp.(2)                          |  | Mining Exploration                |  | Warrants                                |  |                  | 6,838     |   |           |   | 9,965   |            |         |   | -                | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Pish Posh Baby, LLC.(1)(2)                      |  | Online Retail - Specialty Apparel |  | Membership Units                        |  |                  | 19,155    |   |           |   | 149,988 |            |         |   | 9,194            | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Provectus BioPharmaceuticals
    Inc.(2)        |  | Biotechnology                     |  | Common Stock                            |  |                  | 100,000   |   |           |   | 74,000  |            |         |   | 1,960            | 
|Provectus BioPharmaceuticals
    Inc.(2)        |  | Biotechnology                     |  | Warrants                                |  |                  | 100,000   |   |           |   | 1,000   |            |         |   | 110              | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Rennova Health, Inc. (1) (2)                    |  | Biotechnology                     |  | Warrants                                |  |                  | 160,000   |   |           |   | 1,600   |            |         |   | 3,840            | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Vapor Corp. (1) (2)                             |  | Tobacco                           |  | Common Stock                            |  |                  | 0         |   |           |   | -       |            |         |   | -                | 
|Vapor Corp. (1) (2)                             |  | Tobacco                           |  | Warrants                                |  |                  | 0         |   |           |   | 48,513  |            |         |   | -                | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Xtant Medical Holdings, Inc.                    |  | Health Care Supplies              |  | Warrants                                |  |                  | 11,513    |   |           |   | 31,773  |            |         |   | 299              | 
|                                                |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         |   |                  | 
|Total Non-controlled/Non-affiliated investments |  |                                   |  |                                         |  |                  |           | $ | 1,098,096 |   |         | $          | 634,873 |   |                  | 
|Net Assets at December
    31, 2016             |  |                                   |  |                                         |  |                  |           |   |           |   |         |            |         | $ | 846,506          | 



(1)
Securities are exempt from registration under Rule 144A promulgated under the Securities Act.

(2)
Securities are not income producing.

See
accompanying notes to consolidated financial statements.



6







POINT
CAPITAL, INC.

SCHEDULE
OF INVESTMENTS BY INDUSTRY

September
30, 2017 (Unaudited) and December 31, 2016



The
following table shows the portfolio composition by industry grouping based on fair value at September 30, 2017 and December 31,
2016



|                                  |  | September 30, 2017 (Unaudited) |           |  | December 31, 2016              | 
|--------------------------------- |  | ------------------------------ | --------- |  | ------------------------------ | 
|Industry Classification           |  | Investments  at
 Fair Value    |           |  | Percentage of  Total Portfolio | 
|Application Software              |  | $                              | 167,054   |  |                                | 
|Biometric Technology              |  |                                | 706,926   |  |                                | 
|Biotechnology                     |  |                                | 532       |  |                                | 
|Communications Equipment          |  |                                | 14,900    |  |                                | 
|Health Care Equipment             |  |                                | 910       |  |                                | 
|Health Care Supplies              |  |                                | 13,883    |  |                                | 
|Life Sciences Tools & Services    |  |                                | 606       |  |                                | 
|Online Retail - Specialty Apparel |  |                                | 9,194     |  |                                | 
|Personal Services                 |  |                                | 150,000   |  |                                | 
|                                  |  | $                              | 1,064,005 |  |                                | 



See
accompanying notes to unaudited consolidated financial statements





7







POINT
CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
1 - ORGANIZATION AND BUSINESS



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



On October 4, 2013, the Company filed a Form
N-54A and elected to become a Business Development Company (“BDC”) under the Investment Company Act of 1940, as amended
(the “1940 Act”). In addition, we elected to be treated for federal income tax purpose as a regulated investment company,
or (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended, or (the “Code”). Since
March 31, 2017, the Company failed a RIC diversification test since one of the Company’s investments accounted for approximately
25% of the Company’s total assets. If the Company were to correct the failure, the Company should have disposed of the asset
causing the failure within six months of the end of the quarter in which it identified the failure to cure the failure and the
Company would be required to pay an excise tax of $50,000. As of September 30, 2017, the Company had not cured its failure to
retain its status as a RIC and the Company does not intend to retain its RIC status. Accordingly, the Company is subject to income
taxes at corporate tax rates.



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 also invested 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.”



Currently,
the Company is considering various options, including liquidation, merger with another BDC or registered investment company, merger
with an operating company and the withdrawal of its election to be regulated as a BDC.



On
March 27, 2014, the Company formed a wholly-owned subsidiary, Hemp Funding, Inc., to invest in companies that are positioned
for growth in the legal cannabis industry. The subsidiary has not made any investments to date and is inactive. During 2017, this
subsidiary was dissolved.



The
Company’s investment activities are managed by Eric Weisblum, the Company’s chief executive officer.



NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis
of presentation and principles of consolidation



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



All
adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September
30, 2017, and the results of operations and cash flows for the periods ended September 30, 2017 and 2016 have been included. The
results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to
be expected for the full year. The accounting policies and procedures employed in the preparation of these financial statements
have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2016, which
are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on
March 31, 2017. The consolidated balance sheet and consolidated schedule of investments as of December 31, 2016, contained herein,
were derived from those financial statements.



Use
of Estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least
reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date
of the financial statements, which management considered in formulating its estimate could change in the near term due to one
or more future confirming events. Accordingly, the actual results could differ significantly from estimates. Significant estimates
during the nine months ended September 30, 2017 and 2016 include the valuation of the Company’s investments.





8







POINT CAPITAL, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017





NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Cash
and Cash Equivalents



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



Securities
Transactions



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



Net
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.  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



Our
investments consist of loans and securities issued by public and privately-held companies, including convertible debt, loans,
equity warrants and preferred and common equity securities.



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





9







POINT CAPITAL, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017



NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Valuation
of Investments (continued)



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



On
a quarterly basis, 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 restriction discount is applied,
as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model. Investments in
securities which are convertible at a date in the future are valued assuming a full conversion into common shares and valued based
on the methodology for equity securities described above, or at the respective investment’s face value, whichever is a better
indicator of fair value. Investments in unlisted securities are valued using a market approach net of the appropriate discount
for lack of marketability.



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



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



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 September 30,
2017 and December 31, 2016, the Company did not have any Controlled or Affiliated investments.



Revenue
Recognition



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





10







POINT
                                         CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Income
Taxes



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



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



Since
March 31, 2017, the Company failed this diversification test since the Company’s investment in IPSIDY INC. (formerly ID
Global Solutions Corporation) (“IDGS”) accounted for over 25% of the Company’s total assets (49.6% of total
assets at September 30, 2017). The Company may be eligible for relief under certain RIC provisions. A fund which meets the requirements
of the diversification test at the close of any quarter shall not lose its status as a RIC because of a discrepancy during a subsequent
quarter between the value of its various investments and such requirements unless such discrepancy exists immediately after the
acquisition of any security or other property and is wholly or partly the result of such acquisition. This discrepancy was not
caused by the acquisition of any security. The failure was not a result of willful neglect. If the Company were to correct the
failure, the Company should have disposed of the asset causing the failure within six months of the end of the quarter in which
it identified the failure to cure the failure unless the Company would otherwise be in compliance within the six month period
and the Company would be required to pay an excise tax of $50,000. As of the September 30, 2017, the Company had not cured its
failure to retain its status as a RIC and the Company does not intend to retain its RIC status. Accordingly, the Company will
be subject to income taxes at corporate tax rates. The loss of the Company’s status as a RIC is not expected to have any
impact on the Company’s financial position or results of operations.



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



New
Accounting Pronouncements



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





11







POINT
                                         CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
3 – PORTFOLIO INVESTMENTS



The
following are the Company’s investments owned by levels within the fair value hierarchy at September 30, 2017 (unaudited):



|                            |  | Level
    1 |         |  | Level
    2 |   |       | Level
    3 |  |   | Total   | 
|--------------------------- |  | ----------- | ------- |  | ----------- | - | ----- | ----------- |  | - | ------- | 
|Common Stock                |  | $           | 550,817 |  |             | $ | -     |             |  | $ | 100,150 | 
|LLC Membership              |  |             | -       |  |             |   | -     |             |  |   | 9,194   | 
|Convertible Preferred Stock |  |             | -       |  |             |   | 6,988 |             |  |   | -       | 
|Convertible Debentures      |  |             | -       |  |             |   | -     |             |  |   | 150,000 | 
|Debenture                   |  |             | -       |  |             |   | -     |             |  |   | 35,000  | 
|Warrants                    |  |             | -       |  |             |   | -     |             |  |   | 211,856 | 
|Total
    Investments       |  | $           | 550,817 |  |             | $ | 6,988 |             |  | $ | 506,200 | 



The
following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2016:



|                            |  | Level
    1 |         |  | Level
    2 |   |        | Level
    3 |  |   | Total   | 
|--------------------------- |  | ----------- | ------- |  | ----------- | - | ------ | ----------- |  | - | ------- | 
|Common Stock                |  | $           | 110,843 |  |             | $ | -      |             |  | $ | 100,150 | 
|LLC Membership              |  |             | -       |  |             |   | -      |             |  |   | 9,194   | 
|Convertible Preferred Stock |  |             | -       |  |             |   | 25,794 |             |  |   | -       | 
|Convertible Debentures      |  |             | -       |  |             |   | -      |             |  |   | 250,000 | 
|Debenture                   |  |             | -       |  |             |   | -      |             |  |   | 35,000  | 
|Warrants                    |  |             | 23,846  |  |             |   | -      |             |  |   | 80,046  | 
|Total
    Investments       |  | $           | 134,689 |  |             | $ | 25,794 |             |  | $ | 474,390 | 



The
following additional disclosures relate to the changes in fair value of the Company’s Level 3 investments during the nine
months ended September 30, 2017 and 2016:



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



|                                                                                     |  | September 30, |          |   | December 31, |  
|------------------------------------------------------------------------------------ |  | ------------- | -------- | - | ------------ | -
|                                                                                     |  | 2017          |          |   | 2016         |  
|                                                                                     |  | (Unaudited)   |          |   |              |  
|Net
    unrealized appreciation (depreciation) for Level 3 investments at period end |  | $             | (313,886 | ) |              | $



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





12







POINT
                                         CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
3 – PORTFOLIO INVESTMENTS (continued)



At
September 30, 2017 and December 31, 2016, level 3 investments consisted of the following:



|Investment
    Type    |  | Fair Value atSeptember 30,2017 (Unaudited) |         |  | Valuation
    Technique |                                        | Unobservable
    inputs |            | Input | 
|---------------------- |  | ------------------------------------------ | ------- |  | ----------------------- | -------------------------------------- | ----------------------- | ---------- | ----- | 
|Common Stock           |  | $                                          | 100,150 |  |                         | Recent Transactions                    |                         | N/A        |       | 
|LLC Membership Units   |  | $                                          | 9,194   |  |                         | Recent Transactions                    |                         | N/A        |       | 
|Convertible Debentures |  | $                                          | 150,000 |  |                         | Recent Transactions                    |                         | N/A        |       | 
|Debenture              |  | $                                          | 35,000  |  |                         | Recent Transaction                     |                         | N/A        |       | 
|Warrants               |  | $                                          | 211,856 |  |                         | Black-Scholes
    Option Pricing Model |                         | Volatility |       | 
|                       |  | $                                          | 506,200 |  |                         |                                        |                         |            |       | 



|Investment
    Type        |  | Fair
    Value atDecember 31,2016 |         |  | Valuation
    Technique |                                    | Unobservable
    inputs |            | Input | 
|-------------------------- |  | --------------------------------- | ------- |  | ----------------------- | ---------------------------------- | ----------------------- | ---------- | ----- | 
|Common
    Stock           |  | $                                 | 100,150 |  |                         | Recent
    Transactions            |                         | N/A        |       | 
|LLC
    Membership Units   |  | $                                 | 9,194   |  |                         | Recent
    Transactions            |                         | N/A        |       | 
|Convertible
    Debentures |  | $                                 | 250,000 |  |                         | Recent
    Transactions            |                         | N/A        |       | 
|Debenture                  |  | $                                 | 35,000  |  |                         | Recent
    Transaction             |                         | N/A        |       | 
|Warrants                   |  | $                                 | 80,046  |  |                         | Black-Scholes
Option Pricing Model |                         | Volatility |       | 
|                           |  | $                                 | 474,390 |  |                         |                                    |                         |            |       | 



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



NOTE
4 - REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK



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



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



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





13







POINT
                                         CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
4 - REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK (continued)



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



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



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.



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



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



NOTE
5 – CONCENTRATIONS AND CREDIT RISKS



Financial
instruments that subjected the Company to concentrations of market risk consisted principally of equity investments and debt instruments
(other than cash equivalents), which collectively represented approximately 74.6% and 48.9% of the Company’s total assets
at September 30, 2017 and December 31, 2016, respectively. These investments consist of certain securities in companies with no
readily determinable market values or in non-public companies, and as such are valued in accordance with the Company’s fair
value policies and procedures. The Company’s investment strategy represents a high degree of business and financial risk
due to the fact that certain of the Company’s portfolio investments (other than cash equivalents) are generally illiquid,
in small and middle market companies, and include entities with little operating history or entities that possess operations in
new or developing industries. Investments in non-public entities should they become publicly traded, would generally be (i) subject
to restrictions on resale, if they were acquired from the issuer in private placement transactions; and (ii) susceptible
to market risk.  Additionally, the Company is classified as a non-diversified investment company within the meaning of the
1940 Act, and therefore may invest a significant portion of our assets in a relatively small number of portfolio companies, which
gives rise to a risk of significant loss should the performance or financial condition of one or more portfolio companies deteriorate.





14







POINT
                                         CAPITAL, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER
30, 2017



NOTE
6 - FINANCIAL HIGHLIGHTS



The
following is a schedule of financial highlights for the nine months ended September 30, 2017 and 2016:



|                                                                        |  | For
    the Nine Months Ended September 30, |           
|----------------------------------------------------------------------- |  | ------------------------------------------- | ----------
|                                                                        |  | 2017                                        |           
|                                                                        |  | (Unaudited)                                 |           
|Net asset value per common share data:                                  |  |                                             |           
|Net asset value per
    common share, beginning of period               |  | $                                           | 0.02      
|Net investment loss                                                     |  |                                             | (0.01     
|Net realized gain (loss) on investments                                 |  |                                             | 0.00      
|Net change in
    unrealized appreciation (depreciation) on investments |  |                                             | 0.01      
|Net increase
    (decrease) in net assets resulting from operations     |  |                                             | 0.00      
|Net asset value per common share,
    end of period                     |  | $                                           | 0.02      
|Ratios and supplemental data:                                           |  |                                             |           
|Per share market price, end of period (1)                               |  | $                                           | 0.20      
|Total return (2)                                                        |  |                                             | 17.68     
|Common shares outstanding, end of period                                |  |                                             | 50,082,441
|Weighted average common shares outstanding during period                |  |                                             | 50,082,441
|Net assets, end of period                                               |  | $                                           | 996,158   
|Ratio of operating expenses to average
    net assets                   |  |                                             | (25.44    
|Ratio of net investment loss to average
    net assets                  |  |                                             | (23.82    
|Portfolio Turnover                                                      |  |                                             | 1.24      



|(1) | The
    shares of the Company’s common stock were listed in the OTC Market beginning on January 5, 2012.  The Company’s
    shares were not actively traded through September 30, 2017.                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Total
    return is based on the change in net asset value during the period, adjusted for the impact of capital stock transactions
    and related offering costs. Since the shares were not actively traded during the period presented, total return based on stock
    price has not been presented for the nine months ended September 30, 2017 and 2016.



NOTE
7 – RISKS AND UNCERTAINTIES



As
a business development company, the Company must continue to comply with numerous rules and regulations under the 1940 Act, including
without limitation, maintaining at least 70% of its total assets as “qualifying assets”, having a majority of non-interested
directors on its board, maintaining its securities under specific regulations, and the Company must meet certain diversification
tests. If more than 25% of the Company’s total assets is invested in the securities of one entity, the Company would not
meet the diversification tests in order to qualify as a RIC for federal income tax purposes. Currently, the Company is not in
compliance. Since March 31, 2017, the Company failed a RIC diversification test since the Company’s investment in IPSIDY
INC. (formerly ID Global Solutions Corporation) (“IDGS”) accounted for over 25% of the Company’s total assets
(49.6% of total assets at September 30, 2017). If the Company were to correct the failure, the Company should have disposed of
the asset causing the failure within six months of the end of the quarter in which it identified the failure unless the Company
would otherwise be in compliance within the six month period. Additionally, the Company would be required to pay an excise tax
of $50,000. As of September 30, 2017, the Company had not cured its failure to retain its status as a RIC and the Company does
not intend to retain its RIC status. Accordingly, the Company is subject to income taxes at corporate tax rates.



If
the Company loses its status or decides to revoke its status as a business a business development company, this would have a material
adverse effect on the Company’s ability to invest, on the Company’s operating results, financial condition and ability
to pay dividends, and on the value of its common stock.





15







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. Through March 31, 2017, we were
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”).  However, since March 31, 2017, we failed a RIC diversification test since our
investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDGS”) accounted for over 25% of our total
assets (49.6% of total assets at September 30, 2017). We were eligible for relief under certain RIC provisions. Unless we would
otherwise be in compliance, in order to cure the failure, we must dispose of the asset causing the failure within six months of
the end of the quarter in which we identified the failure. Additionally, we may be required to pay an excise tax of $50,000. As
of the September 30, 2017, we had not cured our failure to retain our status as a RIC and we do not intend to retain our RIC status.
Accordingly, we are subject to income taxes at corporate tax rates. The loss of our status as a RIC is not expected to have any
impact on our financial position or results of operations.



Investment
Strategy



We
seek to invest in companies that are asset rich and generating cash flow on a sustainable basis. Further, when identifying prospective
portfolio companies, we 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.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





16







| | ● | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ● | 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 September 30, 2017, we held 16 portfolio companies. All are non-controlled and non-affiliated investments.



Accelerize,
Inc. (ACLZ) –As of September 30, 2017, we own 100,379 shares of common stock and 60,000 warrants of Accelerize Inc.,
an OTCQB listed company. Each warrant expires on August 18, 2020 and is exercisable at an exercise price of $1.32 per common share.
ACLZ owns and operates CAKE, a Software-as-a-Service, or SaaS, platform providing online tracking and analytics solutions
for advertisers and online marketers. The Company provides software solutions for businesses interested in optimizing their digital
advertising spend.



Actinium
Pharmaceuticals Inc. (ATNM) -As of September 30, 2017, we own 29,250 warrants of Actinium Pharmaceuticals Inc., a NYSE listed
company. ATNM operates as a biopharmaceutical company that develops alpha particle immunotherapeutic and other radiopharmaceuticals
for select applications. The warrants expire on February 11, 2019 and are exercisable at $6.50 per common share.



Arista
Power, Inc. (ASPW)-On March 31, 2014, we completed a $100,000 investment in 9% convertible preferred stock and 750,000
warrants of Arista Power, Inc., a company that develops and manufactures renewable power equipment. ASPW produces wind turbines,
solar energy systems, and custom-designed power management systems. The Preferred Stock is convertible into shares of common stock
at a conversion price equal to $0.20 per common share. The warrants expire on March 31, 2019 and the exercise price of the warrants
is $0.25 per common share. In March 2015, ASPW filed a form with the Securities and Exchange Commission to termination
its registration under Section 12(g) of the securities exchange act of 1934. On December 31, 2015, we determined that the fair
value of ASPW was zero and accordingly, for the year ended December 31, 2015, we recorded a realized loss on investments of $100,000.



Cesca
Therapeutics, Inc.(KOOL) - As of September 30, 2017, we own 825 warrants (adjusted to reflect 1 for 20 reverse split effective
March 7, 2016) of Cesca Therapeutics, Inc., a Nasdaq-listed company, who 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. These warrants are exercisable at a price of $31.00 per share and expire on June 18, 2019.



CombiMatrix
Corp. (CBMX) -On December 19, 2013, we completed an investment in warrants of CombiMatrix Corp., a Nasdaq-listed company.
CBMX is a molecular diagnostics company specializing in DNA-testing services for development disorders. We currently hold 2,589
warrants of CombiMatrix. The warrants expire on December 19, 2018 and the exercise price of the warrants is $46.80 per common
share. (All warrant information adjusted to reflect 1 for 15 reverse split effective January 29, 2016).





17







DatChat
Inc. -Between February 6, 2015 and April
2, 2015, we completed a $100,150 investment in 2,000,000 shares of common stock in DatChat, Inc., a private company that develops
mobile messaging applications as well as other intellectual property. Additionally, on May 2015, we completed a $30,000 investment
in a 10% debenture. In February 2016, we increased the principal amount of this debenture by $5,000 in connection with the extension
of debenture due date to December 2016.



Home
Bistro, Inc. (“Home Bistro”) -On August 7, 2015, we completed an investment of $150,000 in a 15% convertible
debenture and 75,000 warrants of Home Bistro, Inc. We have the right to convert all or any portion of the then aggregate outstanding
principal amount of this note, together with any accrued and unpaid interest thereon, into shares of common stock of Home Bistro
at any time following a closing date, at 75% of the pricing of the Home Bistro’s securities offered at their next round
of financing. Each warrant expires on August 7, 2020 and is exercisable at an exercise price equal to 150% of the pricing of Home
Bistro’s next round of financing. Home Bistro, Inc. is a private company.



IPSIDY
INC. (formerly ID Global Solution Corp.) (IDGS)-
On June 25, 2015, we completed an investment of $100,000 in a 10% convertible debenture and 2,200,000 warrants of ID Global Solution
Corp., an OTCPinks listed company. We had the right to convert all or any portion of the then aggregate outstanding principal
amount of this debenture, together with any accrued and unpaid interest thereon, into shares of common stock of IDGS at a conversion
price of $.03 per share. Each warrant expires on June 25, 2020 and is exercisable at an exercise price of $0.05. In March 2016,
we purchased 20,000 common shares IDGS of for $9,190 and during the six months ended June 30, 2017, we sold these 20,000 common
shares. In January 2017, we converted the $100,000 10% convertible debt and accrued interest receivable of $16,000 into 3,866,667
share common shares of IDGS. IDGS is an international biometrics and payment processing company with a unique technology platform
that provides valuable, secure payment processing for consumers as well as for merchants.



iNeedMD
Holdings, Inc. (NEMD) -On October 15, 2014,
we completed a $795 investment in 25,000 shares of common stock of iNeedMD Holdings Inc., an OTCPinks listed company that manufactures
medical devices that acquires and transmits health related data.



MabVax
Therapeutics Holdings Inc. (MBVX) -As of
September 30, 2017, we own 9,009 warrants (adjusted to reflect 1 for 7.4 reverse split effective August 16, 2016) of MabVax
Therapeutics Holdings Inc., a NASDAQ listed company. Each warrants expired on October 6, 2017. MabVax Therapeutics Holdings Inc.
is a biopharmaceutical company that discovers, develops, and commercializes small molecule drugs to treat serious diseases. MVBX’s
most advanced product development programs are for the treatment of cancer and diabetes.



MultiMedia
Platforms Inc. (MMPW) -On July 6, 2015, we completed an investment of $100,000 in a 9% convertible debenture and 333,334
warrants of MultiMedia Platforms Inc., an OTCQB listed company. We have the rightto
convert all or any portion of the then aggregate outstanding principal amount of this note, together with any accrued and unpaid
interest thereon, into shares of common stock of MMPW at the lower of $.30 per share or at such price that equals 85% of the price
of the MMPW’s common stock or common stock equivalent sold at the next equity or convertible debt financing with gross proceeds
to MMPW of no less than $1,000,000. Each warrant expires on July 6, 2019 and is exercisable
at an exercise price equal to the lesser of (i) $0.75 or (ii)85% of the exercise price of the warrants issued at the next
equity or convertible debt financing with gross proceeds to MMPW of no less than $1,000,000.
In October 2015, we received 15,000 common shares of MMPW as payment of accrued interest receivable. MultiMedia Platforms Inc.
is amultimedia technology and publishing company that integrates print media with social media, and related online platforms,
to deliver information and advertising to niche markets. On October 4, 2016, MMPW filed a voluntary petition under Chapter 11
of Title 11 under the United States Code. The cases were filed in the United States Bankruptcy Court, Southern District of Florida.
Accordingly, at September 30, 2017, our investment in MMPW is valued at zero.



Orbital
Tracking Corp. (TRKK) -On October 10, 2014, we completed a $150,000 investment in 200,000 shares of Series C Preferred Stock
and 100,000 shares of Series D Preferred Stock of Orbital Tracking Corp., an OTCQB listed company that provides satellite telecommunications
voice airtime, tracking devices and services, and ground station construction. TRKK provides mobile voice and data communications
services globally via satellite. During 2016, each share of Series C Preferred converted into 10 shares of TRKK common stock for
an aggregate of 2,000,000 common shares. Each share of Series D Preferred converts into 20 shares of TRKK common stock for an
aggregate of 2,000,000 common shares. On June 6, 2016, we converted 76,551 Series D preferred shares into 1,531,020 shares of
TRKK common stock, At September 30, 2017, we own 23,449 Series D preferred shares which are convertible into 468,980 shares of
common stock, and 531,020 common shares.



Pish
Posh Baby LLC.- On July 2, 2014, we made an investment of $150,000 in Convertible Preferred Stock of 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 was convertible at $1.00 and $50,000 was convertible at $0.2666. In January 2016, pursuant
to an Asset Purchase Agreement, all holders of notes, shares of its common stock, Series A Preferred Stock and warrants to purchase
common stock exchange their securities into 420,000 membership units (the “Units”) issued by Pish Posh Baby LLC, a
Delaware limited liability company (“PPB”). Accordingly, we currently own 19,155 membership units in PPB.





18







Provectus
BioPharmaceuticals Inc. (PVCT) -On June
22, 2015, we completed an investment of $75,000 in 100,000 shares of common stock and 100,000 warrants in Provectus BioPharmaceuticals
Inc., an NYSE listed company. Each warrant expires on June 22, 2020 and is exercisable at an exercise price of $0.85. Provectus
BioPharmaceuticals Inc. is a development-stage biopharmaceutical company that is primarily engaged in developing ethical pharmaceuticals
for oncology and dermatology indications. PVCTs goal is to develop alternative treatments that are safer, more effective, less
invasive and more economical than conventional therapies. During the three months ended September 30, 2017, we sold all 100,000
shares of common stock.



Vapor
Corp. (VPCO) -On November 14, 2014, we completed a $100,000 investment in a 7% convertible debenture and warrants of Vapor
Corp., an OTCQB listed company that markets and distributes electronic cigarettes. VPCO distributes electronic devices that vaporize
a liquid solution, which provides users an experience akin to smoking without actual combustion. On August 3, 2015, the Company
collected the principal amount of $100,000 and all unpaid and accrued interest. Additionally, in September 2015, pursuant to certain
anti-dilutive provisions in the convertible debt agreement, the Company received common shares of VPCO. In February 2016, VPCO
effected a 1 for 70 reverse stock split and in June 2016, VPCO effected a 1 for 20,000 reverse stock split. All share and warrant
information has been adjusted to reflect 1 for 70 and 1 for 20,000 reverse split which adjusted our share and warrant amounts
to zero.



Xtant
Medical Holdings, Inc. (XTNT)-As
of September 30, 2017, we own 11,513 warrants of Xtant Medical Holdings, Inc., a NYSE listed
company that produces human tissue for orthopedic procedures. XTNT produces allografts of human cancellous bone which has been
demineralized. XTNT also produces medical devices for orthopedic, plastic, and cardiovascular surgery; and antimicrobial coatings
for medical devices. The warrants expire on August 1, 2019 and the exercise price of the warrants is $7.12 per share.



Results
of Operations



For
the three and nine months ended September 30, 2017 and 2016, the principal measure of our financial performance was the net increase
(decrease) in our net assets resulting from operations, which includes (i) net investment income (loss), (ii) net realized gain
(loss) on investments, and (iii) net change in unrealized appreciation (depreciation) on investments.  Net investment
income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating
expenses.  Net realized gain (loss), if any, is the difference between the net proceeds from the disposition of portfolio
company securities and their stated cost.  Net unrealized appreciation (depreciation) from investments is the net change
in the fair value of our investment portfolio.



Investment
Income: For the three months ended September 30, 2017 and 2016, we earned interest income of $6,504 and $11,256,
and for the nine months ended September 30, 2017 and 2016, we earned interest income of $20,478 and $40,789, respectively, primarily
resulting from interest earned on convertible debt and other debt. The decrease was attributable to a decrease in income-earning
investments.



Operating
Expenses: For the three and nine months ended September 30, 2017 and 2016, total operating expenses consisted of the following:



|                                        |  | For the Three Months Ended |        |  | For the Nine Months Ended |  
|--------------------------------------- |  | -------------------------- | ------ |  | ------------------------- | -
|                                        |  | September
    30,          |        |  | September
    30,         |  
|                                        |  | 2017                       |        |  | 2016                      |  
|Compensation expense                    |  | $                          | 45,000 |  |                           | $
|Professional fees                       |  |                            | 36,890 |  |                           |  
|Filing fees                             |  |                            | 484    |  |                           |  
|Insurance expense                       |  |                            | 8,925  |  |                           |  
|Bad debt expense                        |  |                            | -      |  |                           |  
|General and administrative
    expenses |  |                            | 6,860  |  |                           |  
|                                        |  |                            |        |  |                           |  
|Total
    operating expenses            |  | $                          | 98,159 |  |                           | $



Changes
in operating expenses primarily consisted of the following:



Compensation
expense: For the three months ended September 30, 2017, we incurred compensation expense of $45,000 as compared $40,000 for the
three months ended September 30, 2016, an increase of $5,000 or 12.5%. During the three months ended September 30, 2017, compensation
paid to our chief executive officer was $15,000 as compared to $10,000 during the three months ended September 30, 2016. For the
nine months ended September 30, 2017, we incurred compensation expense of $135,000 as compared $97,500 for the nine months ended
September 30, 2016, an increase of $37,500 or 38.5%. During the nine months ended September 30, 2017, compensation paid to our
chief executive officer was $45,000 as compared to $10,000 during the nine months ended September 30, 2016.





19







Professional
fees: For the three months ended September 30, 2017, professional fees increased by $1,381 or 3.9% as compared to the three months
ended September 30, 2016. This increases was attributable to an increase in legal fees of $16,777 and a decrease in accounting
fees of $15,395. For the nine months ended September 30, 2017, professional fees decreased by $91,700 or 41.1% as compared to
the nine months ended September 30, 2016. These decreases was attributable to a decrease in legal fees of $37,081, a decrease
in accounting fees of $48,619, and a decrease in consulting fees of $6,000.



Bad
debt expense: For the three and nine months ended September 30, 2017, we wrote off interest receivable of $0 and $6,750 deemed
uncollectable, respectively. We did not incur bad debt expense in the 2016 periods.



Net
Investment loss:For the three months ended September 30, 2017 and 2016, net investment loss amount to $91,655 and
$81,841, respectively. For the nine months ended September 30, 2017 and 2016, net investment loss amount to $301,055 and
$326,829, respectively.



Net
Realized And Unrealized (Loss) Gain On Investments:



Net
Realized Gain (Loss) on Investments: During the three months ended September 30, 2017 and 2016, we disposed of certain
investment positions and recognized a net realized gain (loss) of $(80,913) and $131, respectively. During the nine months ended
September 30, 2017 and 2016, we disposed of certain investment positions and recognized a net realized (loss) gain of $(79,879)
and $23,400, respectively.



Net
Change in Unrealized Loss on Investments: At September 30, 2017 and December 31, 2016, we had a cost basis in our portfolio
companies of $996,642 and $1,098,096 with a fair market value of $1,064,005 and $634,873, respectively. The net unrealized loss
on investments for the three months ended September 30, 2017 and 2016 was $346,575 and $349,795, respectively. The net unrealized
gain (loss) on investments for the nine months ended September 30, 2017 and 2016 was $530,586 and $(666,541), respectively. During
the nine months ended September 30, 2017, we converted our debt investment in Ipsidy, Inc. (f/k/s ID Global Solutions, Inc,) of
$100,000 and the related interest receivable of $16,000 into 3,866,667 common shares of Ipsidy, Inc. Based on our analysis of
the fair value of our investments in Ipsidy, Inc., for the three and nine months ended September 30, 2017, we recorded an unrealized
(loss) gain of approximately $(410,058) and $539,280, respectively.



Net
Decrease in Net Assets Resulting from Operations: For the three months ended September 30, 2017 and 2016, the net decrease
in net assets resulting from operations was $519,143 and $431,505, respectively. For the nine months ended September 30, 2017
and 2016, the net increase (decrease) in net assets resulting from operations was $149,652 and $(969,970), respectively.



Liquidity
and Capital Resources



As
of September 30, 2017, we had $301,690 in cash and cash equivalents, compared to $579,209 as of December 31, 2016, a decrease
of $277,519. We primarily used operating cash to pay professional fees and compensation expense.



The
Company believes that our existing available cash and liquid investments will enable the Company to meet its working capital requirements
for at least 12 months from the date of this report.



The
Company has no agreements or arrangements to raise capital.



Since
inception we have funded our operations and the purchase of our investments primarily through equity financings and we expect
that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances.
Additional funding may not be available on favorable terms, if at all. We intend to continue to fund our business by way of equity
or debt financing until realized gains on our investments can support our operations. If we raise additional capital through the
issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will
be reduced and those shareholders may experience significant dilution. We cannot assure you that we will be able to raise the
working capital as needed in the future on terms acceptable to us, if at all.



Although
we believe that our existing available cash will enable us to meet our working capital requirements for at least 12 months, we
may need to raise additional funds to continue investing in portfolio companies. If we are unable to raise capital, we may be
required to reduce the scope of our investment activities, which could harm our business plans, financial condition and operating
results, or cease our operations entirely, in which case, you will lose all of your investment.



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





20







Off-Balance
Sheet Arrangements



We
have no off-balance sheet arrangements.



Critical
Accounting Policies



Basis
of Presentation



The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”).  We formed a wholly-owned subsidiary, Hemp Funding, Inc., to invest
in companies that are positioned 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.



Cash
and Cash Equivalents



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



Securities
Transactions



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



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



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



Valuation
of Investments



Our
investments consist of loans and securities issued by public and privately-held companies, including convertible debt, loans,
equity warrants and preferred and common equity securities.



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



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



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





21







On
a quarterly basis, 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 restriction discount is applied,
as appropriate. Investments in warrants are valued at fair value using the Black-Scholes option pricing model based on inputs
such as stock volatility, risk-free interest rates, holding period and dividend yield. Investments in securities which are convertible
at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity
securities described above, or at the respective investment’s face value, whichever is a better indicator of fair value.
Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability.



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



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



Revenue
Recognition



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



Income
Taxes



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



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



Since March 31, 2017,
we failed this diversification test since our investment in IPSIDY INC. (formerly ID Global Solutions Corporation) (“IDGS”)
accounted for over 25% of our total assets (49.6% of total assets at September 30, 2017). We may be eligible for relief under
certain RIC provisions. A fund which meets the requirements of the diversification test at the close of any quarter shall not
lose its status as a RIC because of a discrepancy during a subsequent quarter between the value of its various investments and
such requirements unless such discrepancy exists immediately after the acquisition of any security or other property and is wholly
or partly the result of such acquisition. This discrepancy was not caused by the acquisition of any security. The failure was
not a result of willful neglect. If we were to correct the failure, we should have disposed of the asset causing the failure within
six months of the end of the quarter in which we identified the failure to cure the failure unless we would otherwise be in compliance
within the six month period and we would be required to pay an excise tax of $50,000. As of the September 30, 2017, we had not
cured the failure to retain our status as a RIC and we do not intend to retain our RIC status. Accordingly, we are subject to
income taxes at corporate tax rates. The loss of our status as a RIC is not expected to have any impact on our financial position
or results of operations.



22







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



We
did not have any distributable income as of September 30, 2017 or 2016.



Item
3. Quantitative and Qualitative Disclosures about Market Risk.



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



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



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



Item
4. Controls and Procedures.



Evaluation
of Disclosure Controls and Procedures



Under
the supervision and with the participation of our management, who is also our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2017. 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.



| | ● | our
    failure to timely recognize that we issued shares to a consultant in 2014 and stock options to directors in 2015 in contravention
    of Section 23(a) of the Investment Act of 1940,
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                              
| | ● | the
    lack of Investment Act experienced internal staff,                                                                                                                                   
| |   |                                                                                                                                                                                              
| | ● | a
    lack of segregation of duties within accounting functions.                                                                                                                             
| |   |                                                                                                                                                                                              
| | ● | a
    lack of control over custodian of certain instruments.                                                                                                                                 
| |   |                                                                                                                                                                                              
| | ● | a
    lack of control over valuation of certain investments.                                                                                                                                 



As
of September 30, 2017, we concluded that such weaknesses continue to exist. Management determined that the deficiencies, evaluated
in the aggregate, could potentially result in a material misstatement of the consolidated financial statements in a future annual
or interim period that would not be prevented or detected. Therefore the deficiencies constitute material weaknesses in internal
control. Based on that evaluation, management determined that our internal controls over financial reporting were not effective
as of September 30, 2017.



Due
to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.
However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets
and the recording of transactions will be performed by separate individuals.



Changes
in Internal Controls over Financial Reporting



There
were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last
fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.





23







PART
II

OTHER
INFORMATION

Item
1. Legal Proceedings.

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

Item
1A. Risk Factors

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

We
are subject to corporate-level income tax since we are unable to qualify as a RIC under Subchapter M of the Code.

To
obtain and maintain RIC tax treatment under the Code, we were required to meet certain asset diversification requirements. The
asset diversification requirement states that no more than 25% of the value of our assets can be invested in the securities, other
than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined
under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified
publicly traded partnerships.” Since March 31, 2017, we failed this diversification test since our investment in IPSIDY
INC. (formerly ID Global Solutions Corporation) (“IDGS”) accounted for over 25% of our total assets (49.6% of total
assets at September 30, 2017). As of the September 30, 2017, we had not cured the failure to retain our status as a RIC and we
do not intend to retain our RIC status. Accordingly, we are subject to income taxes at corporate tax rates. The loss of our status
as a RIC is not expected to have any impact on our financial position or results of operations.

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

None

Item
3. Defaults Upon Senior Securities.

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

Item
4. Mine Safety Disclosures.

Not
applicable.

Item
5. Other Information.

On
March 6, 2017, the Board unanimously approved the proposal to seek stockholder approval to authorize the withdrawal of the Company’s
election to be regulated as a BDC under the 1940 Act, referred to herein as the “Corporate Action.” The Board
approved the proposal because it believes that it is in the best interests of the Company and its stockholders to make this change
for various reasons including increased investment opportunities and greater access to capital through flexible financing activities.

On
April 11, 2017, the Majority Stockholders adopted resolutions by Written Consent authorizing the Board to undertake the Corporate
Action. This Corporate Action will become effective immediately upon the Company’s filing of Form N-54C—“Notification
of Withdrawal of Election to be Subject to Sections 55 Through 65 of the Investment Company Act of 1940” with the SEC (the
” Notice of Withdrawal”). This Notice of Withdrawal, when filed, will immediately terminate the Company’s
status as a BDC under the 1940 Act. This approval does not, however, guarantee that the Company will file its Notice of Withdrawal.
Rather, the Company intends to file its Notice of Withdrawal only if it identifies suitable business opportunities which would
allow the Company to conduct its business as an operating company rather than as an investment company, as described in Section
3 of the 1940 Act.

Item
6. Exhibits



|Exhibit No. |  | Description                                                                                                                                                                                  
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1         |  | Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to Form 10-Q filed on May 17, 2017)
|            |  |                                                                                                                                                                                              
|31.1        |  | Rule 13a-14(a)/15d14(a) Certifications of Principal Executive Officer*                                                                                                                       
|            |  |                                                                                                                                                                                              
|31.2        |  | Rule 13a-14(a)/15d14(a) Certifications of Principal Financial Officer*                                                                                                                       
|            |  |                                                                                                                                                                                              
|32.1        |  | Section 1350 Certifications of Principal Executive Officer*                                                                                                                                  
|            |  |                                                                                                                                                                                              
|32.2        |  | Section 1350 Certifications of Principal Financial Officer*                                                                                                                                  



*
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.
|---------------------------- | -----------------------
|                             |                        
|Dated:
    November 14, 2017 | By:                    
|                             | Name:                  
|                             | Title:                 



|Dated:
    November 14, 2017 | By:    | /s/ Adam
    Wasserman                                                 
|---------------------------- | ------ | -----------------------------------------------------------------------
|                             | Name:  | Adam
    Wasserman                                                     
|                             | Title: | Chief
    Financial Officer(Principal Financial and Accounting Officer)





25