Form N-CSRS NORTHQUEST CAPITAL FUND For: Jun 30

August 3, 2021 11:23 AM EDT

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FORM N-CSRS



CERTIFIED SHAREHOLDERS REPORT

OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES





Investment Company Act - file number:                               811-10419


Exact Name of registrant as specified in charter:                  NorthQuest Capital Fund, Inc.


Address of principal executive offices:                                 16 Rimwood Lane

                                                                                               Colts Neck, NJ  07722


Name and address of agent for service:                                Peter J. Lencki

                                                                                              16 Rimwood Lane

                                                                                              Colts Neck, NJ  07722


Registrant telephone number, including area code:              732-842-3465


Date of fiscal year:                                                                December 31st


Date of reporting period:                                                      6/30/2021



ITEM  1.   Report to Shareholders.













NORTHQUEST CAPITAL FUND, INC.




SEMI-ANNUAL REPORT

JUNE 30, 2021


(UNAUDITED)



[ncsrs001.jpg]


NorthQuest Capital Fund, Inc.

16 Rimwood Lane

Colts Neck, NJ  07722

1-800-239-9136


Ticker: NQCFX

www.NorthQuestFund.com




Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request from your financial intermediary (such as a broker-dealer or bank) or the Fund to receive (free of charge) paper copies of the reports. Instead, the reports will be made available on the Fund’s website www.northquestfund.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.


If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by contacting your financial intermediary or, if you are a direct investor, by following the instructions included with paper Fund documents that have been mailed to you.  







NORTHQUEST CAPITAL FUND, INC.


SHAREHOLDER LETTER  

JUNE 30, 2021 (UNAUDITED)



To the Shareholders of NorthQuest Capital Fund, Inc.:


Our Fund began the year at a share price of $21.28 and ended the past six months at $24.66.  The Fund’s total return for this period increased 15.88%. Please see the performance chart.

              

      The Fund and Other Indexes           2021 Performance          Year-To-Date    

        NorthQuest Capital Fund                                                           15.88%        

        Dow Jones Industrial Average                                                   12.73%    

        NASDAQ Composite                                                                 12.54%

        S&P500 Index with dividends reinvested                                  15.25%


Sales

Company                            Shares sold            Company                                            Shares sold

1. Apple, Inc. (AAPL)            1600                  4. Stryker Corp. (SYK)                             200

2. MasterCard, Inc. (MA)         200                  5. Zebra Technologies Corp. (ZBRA)      300

3. Rollins, Inc. (ROL)              ALL   

                          

Purchases

Company                              Shares purchased       Company                            Shares purchased

1. Dollar General Corp. (DG)             1100             4. Royal Gold Inc. (RGLD)            2000

2. Generac Holdings Inc. (GNRC)       700             5. UnitedHealth Inc. (UNH)              150

3. Lam Research Corp. (LRCX)           500               

            

Strategy

The Fund continued to adjust its investment strategy to the following developments that are impacting the U.S.; undocumented immigrants flood southern border; violent crime is surging; ransomware cyberattacks are on the rise; China is expanding its influence globally, and questionable government policies are starting to take hold that are hostile to American founding principles. These economic, social and political events greatly concern the Fund. Sales of common stocks were made to purchase four new companies (DG, GNRC, LRCX, and RGLD). See above sections, “Sales” and “Purchases”. DG is a discount retailer in the United States. GNRC designs and manufactures stationary, portable and mobile generators for residential, commercial, and industrial customers. LRCX is a supplier of wafer fabrication equipment and services which are used by the semiconductor industry to build faster and smaller performing devices that are used in mobile phones, personal computers, automotive vehicles and other electronic products. RGLD finances and invests in the mining of gold, silver, copper, and other metals and receives royalties and precious metals during the various stages of mining projects.


DG, GNRC, and LRCX have low debt, large amounts of cash assets, and managements that have a good track record in growing net profits and efficiently reinvesting retained earnings. RGLD has similar characteristics and may to some degree safeguard our portfolio against a weak U.S. dollar as the federal government continues to spend lavishly and increase its indebtedness.



Semi-Annual Report |  1


NORTHQUEST CAPITAL FUND, INC.


SHAREHOLDER LETTER (CONTINUED)

JUNE 30, 2021 (UNAUDITED)



On March 29, 2021 our shareholders elected four directors to serve one-year terms on the Fund’s Board of Directors. Fund shareholders ratified Sanville & Company, an independent registered public accounting firm, to audit the Fund’s financial statements for 2021. See section “Shareholder Meeting” in the report for the voting results.  Thank you for your votes!


You will find enclosed the Fund’s financial report. Please do not hesitate to call or write me with regard to any comments or questions about this report.  


Sincerely,

[ncsrs003.gif]

Peter J. Lencki

President



Semi-Annual Report |  2


NORTHQUEST CAPITAL FUND, INC.


TOP TEN HOLDINGS as a Percentage of the Fund's Net Assets

JUNE 30, 2021 (UNAUDITED)






1.

Pool Corp.

5.12%

2.

Fortinet, Inc.

4.65%

3.

Apple, Inc.

4.59%

4.

MasterCard, Inc. Class A

4.58%

5.

S&P Global, Inc.

4.58%

6.

The Sherwin-Williams Co.

4.56%

7.

Lam Research Corp.

4.54%

8.

The Home Depot, Inc.

4.45%

9.

Zebra Technologies Corp. Class A

4.43%

10.

Intuit, Inc.

4.10%

 

 

45.60%




























Semi-Annual Report |  3


NORTHQUEST CAPITAL FUND, INC.


PORTFOLIO ILLUSTRATION

JUNE 30, 2021 (UNAUDITED)



The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.


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Sectors are categorized using Morningstar® classifications.


















Semi-Annual Report |  4


NORTHQUEST CAPITAL FUND, INC.


SCHEDULE OF INVESTMENTS

JUNE 30, 2021 (UNAUDITED)







 Shares

 

 

Value

 

 

 

 

COMMON STOCKS - 98.79%

 

 

 

 

 

Communication Equipment - 4.43%

 

600

 

Zebra Technologies Corp. Class A *

$         317,694

 

 

 

 

Electronic Computers - 4.59%

 

2,400

 

Apple, Inc.

328,704

 

 

 

 

Hospital & Medical Service Plans - 3.07%

 

550

 

UnitedHealth Group, Inc.

220,242

 

 

 

 

Insurance Agents Brokers & Services - 3.71%

 

1,900

 

Arthur J. Gallagher & Co.

266,152

 

 

 

 

Medical Devices - 3.61%

 

2,500

 

Edwards Lifesciences Corp. *

258,925

 

 

 

 

Mineral Royalty Traders - 3.18%

 

2,000

 

Royal Gold, Inc.

228,200

 

 

 

 

Motors & Generators - 4.06%

 

700

 

Generac Holdings, Inc. *

290,605

 

 

 

 

Pharmaceutical Preparations - 3.90%

 

1,500

 

Zoetis, Inc. Class A

279,540

 

 

 

 

Railroads, Line-Haul Operating - 3.07%

 

1,000

 

Union Pacific Corp.

219,930

 

 

 

 

Retail-Auto & Home Supply Stores - 3.95%

 

500

 

O'Reilly Automotive, Inc. *

283,105

 

 

 

 

Retail-Building Materials, Hardware, Garden Supply - 4.56%

 

1,200

 

The Sherwin-Williams Co.

326,940

 

 

 

 

Retail-Catalog & Mail-Order Houses - 2.88%

 

60

 

Amazon.com, Inc. *

206,410

 

 

 

 

Retail-Lumber & Other Building Materials Dealers - 4.45%

 

1,000

 

Home Depot, Inc.

318,890

 

 

 

 

Retail-Variety Stores - 3.32%

 

1,100

 

Dollar General Corp.

238,029

 

 

 

 

Security & Commodity Brokers, Dealers, Exchanges & Services - 3.64%

 

2,200

 

Intercontinental Exchange, Inc.

261,140



The accompanying notes are an integral part of these financial statements.




Semi-Annual Report |  5


NORTHQUEST CAPITAL FUND, INC.


SCHEDULE OF INVESTMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)






Shares

 

 

Value

 

 

 

 

Services-Business Services - 8.65%

 

900

 

Mastercard, Inc. Class A

$         328,581

1,000

 

PayPal Holdings, Inc. *

291,480

 

 

 

620,061

Services-Consumer Credit Reporting, Collection Agencies - 4.58%

 

800

 

S&P Global, Inc.

328,360

 

 

 

 

Services-Prepackaged Software - 11.21%

 

500

 

Adobe, Inc. *

292,820

600

 

Intuit, Inc.

294,102

800

 

Microsoft Corp.

216,720

 

 

 

803,642

Software - Infrastructure - 4.65%

 

1,400

 

Fortinet, Inc. *

333,466

 

 

 

 

Special Industry Machinery - 4.54%

 

500

 

Lam Research Corp.

325,350

 

 

 

 

Surgical & Medical Instruments - 3.62%

 

1,000

 

Stryker Corp.

259,730

 

 

 

 

Wholesale-Misc. Durable Goods - 5.12%

 

800

 

Pool Corp.

366,928

 

 

 

 

TOTAL COMMON STOCKS (Cost $3,747,383) - 98.79%

      7,082,043

 

 

 

 

SHORT-TERM INVESTMENT - 1.24%

 

89,103

 

Huntington Conservative Deposit Account 0.02% **

           89,103

TOTAL SHORT-TERM INVESTMENT (Cost $89,103) - 1.24%

            89,103

 

 

 

 

TOTAL INVESTMENTS (Cost $3,836,486) - 100.03%

       7,171,146

 

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS, NET - (0.03)%

          (2,586)

 

 

 

 

NET ASSETS - 100.00%

$      7,168,560













* Non-income producing securities during the period.

** Variable rate security; the coupon rate shown represents the yield at June 30, 2021.

The accompanying notes are an integral part of these financial statements.




Semi-Annual Report |  6


NORTHQUEST CAPITAL FUND, INC.


STATEMENT OF ASSETS AND LIABILITIES

JUNE 30, 2021 (UNAUDITED)






Assets:

 

 

       Investments in Securities, at Value (Cost $3,836,486)

$     7,171,146

       Cash

 

3,604

       Receivables:

 

            Dividends and Interest

            2,351

       Prepaid Expenses

            3,799

                     Total Assets

      7,180,900

Liabilities:

 

 

        Due to Advisor

5,715

        Trustee Fees

149

        Accrued Expenses

6,476

                     Total Liabilities

           12,340

 

 

 

Net Assets

 

$     7,168,560

 

 

 

Net Assets Consist of:

 

    Common Stock, at $0.001 par value

$               291

    Paid In Capital

3,396,032

    Distributable Earnings

      3,772,237

Net Assets, for 290,642 Shares Outstanding

$     7,168,560

 

 

 

Net Asset Value Per Share

$            24.66































The accompanying notes are an integral part of these financial statements.



Semi-Annual Report |  7


NORTHQUEST CAPITAL FUND, INC.


STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2021 (UNAUDITED)






Investment Income:

 

       Dividends

$      21,627

       Interest

 

              13

            Total Investment Income

        21,640

 

 

 

Expenses:

 

 

       Advisory fees

        31,513

       Trustee fees

            149

       Transfer Agent fees

          4,985

       Audit fees

          4,471

       Custody

 

          2,136

       Insurance fees

            184

       State & local taxes

          1,500

       Registration

          2,089

       Postage & printing

            530

       Telephone

            498

       NASDAQ fees

            310

       Other expenses

            265

            Total Expenses

        48,630

 

 

 

Net Investment Loss

     (26,990)

 

 

 

Realized and Unrealized Gain on Investments:

 

   Realized Gain on Investments

      499,413

   Net Change in Unrealized Appreciation on Investments

      514,075

Realized and Unrealized Gain on Investments

    1,013,488

 

 

 

Net Increase in Net Assets Resulting from Operations

$    986,498





















The accompanying notes are an integral part of these financial statements.  




Semi-Annual Report |  8


NORTHQUEST CAPITAL FUND, INC.


STATEMENTS OF CHANGES IN NET ASSETS






 

 

(Unaudited)

 

 

 

 

Six Months

 

 

 

 

Ended

 

Year Ended

 

 

6/30/2021

 

12/31/2020

Increase (Decrease) in Net Assets From Operations:

 

 

 

    Net Investment Loss

 $    (26,990)

 

 $    (34,848)

    Net Realized Gain on Investments

      499,413

 

       606,001

    Unrealized Appreciation on Investments

      514,075

 

       424,749

    Net Increase in Net Assets Resulting from Operations

      986,498

 

       995,902

 

 

 

 

 

Distributions to Shareholders:

               -

 

    (606,001)

 

 

 

 

 

Capital Share Transactions

      321,481

 

       295,461

 

 

 

 

 

Total Increase in Net Assets

    1,307,979

 

       685,362

 

 

 

 

 

Net Assets:

 

 

 

 

Beginning of Year/Period

    5,860,581

 

    5,175,219

 

 

 

 

 

End of Year/Period

$  7,168,560

 

$  5,860,581



































The accompanying notes are an integral part of these financial statements.



Semi-Annual Report |  9


NORTHQUEST CAPITAL FUND, INC.


FINANCIAL HIGHLIGHTS

Selected data for a share outstanding throughout the year/period.






 

 

(Unaudited)

 

 

 

 

 

 

 

 

Six Months

 

 

 

 

 

 

 

 

Ended

 

Years Ended

 

 

6/30/2021

 

12/31/2020

12/31/2019

12/31/2018

12/31/2017

12/31/2016

 

 

 

 

 

 

 

 

 

Net Asset Value, at Beginning of

   Year/Period

$    21.28

 

$   19.85

$    15.07

$    16.38

$   14.34

$   14.31

 

 

 

 

 

 

 

 

 

Income (Loss) From Investment

   Operations:

 

 

 

 

 

 

 

  Net Investment Loss *

     (0.09)

 

   (0.14)

    (0.10)

     (0.10)

    (0.09)

    (0.09)

  Net Gain (Loss) on Securities

        (Realized and Unrealized)

           3.47

 

           4.03

           5.49

         (0.30)

            3.36

            1.70

     Total from Investment Operations

      3.38

 

      3.89

     5.39

    (0.40)

       3.27

       1.61

 

 

 

 

 

 

 

 

 

Distributions from Realized Capital Gains

           -

 

    (2.46)

    (0.61)

    (0.91)

    (1.23)

   (1.58)

 

 

 

 

 

 

 

 

 

Net Asset Value, at End of Year/Period

$    24.66

 

$   21.28

$    19.85

$    15.07

$   16.38

$   14.34

 

 

 

 

 

 

 

 

 

Total Return **

15.88%(b)

 

19.70%

35.75%

  (2.34)%

22.73%

11.18%

 

 

 

 

 

 

 

 

 

Ratios/Supplemental Data:

 

 

 

 

 

 

 

  Net Assets at End of Year/Period

     (Thousands)

$    7,169

 

$   5,861

$    5,175

$    3,808

$   3,842

$   3,160

  Ratio of Expenses to Average Net Assets

 

 

 

 

 

 

 

       Before Reimbursement

1.54%(a)

 

1.59%

1.60%

1.65%

1.75%

1.90%

       After Reimbursement

1.54%(a)

 

1.59%

1.60%

1.65%

1.75%

1.79%

  Ratio of Net Investment Loss to

       Average Net Assets

 

 

 

 

 

 

 

       Before Reimbursement

(0.86)%(a)

 

 (0.67)%

 (0.55)%

 (0.61)%

 (0.55)%

 (0.69)%

       After Reimbursement

(0.86)%(a)

 

 (0.67)%

 (0.55)%

 (0.61)%

 (0.55)%

 (0.58)%

  Portfolio Turnover

13.90%(b)

 

30.94%

22.90%

13.30%

21.78%

30.61%



















* Per share net investment loss has been determined on the basis of average shares outstanding during the year.

** Assumes reinvestment of dividends.

(a) Annualized.

(b) Not annualized.

The accompanying notes are an integral part of these financial statements.




Semi-Annual Report |  10


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2021 (UNAUDITED)  



1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Nature of Operations: NorthQuest Capital Fund, Inc. (the “Fund”) was incorporated on January 3, 2001 in New Jersey and commenced investment operations January 15, 2002.  The Fund is registered as an open-end, non-diversified management investment company under the Investment Company Act of 1940, as amended, and its shares are registered under the Securities Act of 1933.  


The Fund's investment objective is to seek long-term capital appreciation and to secondarily earn dividend income.


The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.  The Fund is an investment company that follows the accounting and reporting guidance of Accounting Standards Codification Topic 946 applicable to investment companies.


Security Valuation: All investments in securities are recorded at their estimated fair value, as described in Note 2.


Federal Income Taxes: The Fund makes no provision for federal income or excise tax.  The Fund intends to qualify each year as a “regulated investment company” (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of their taxable income.  The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that they will not be subject to excise tax on undistributed income and gains.  If the required amount of net investment income or gains is not distributed, the Fund could incur a tax expense. Therefore, no federal income tax or excise provision is required.


The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Management has analyzed the Fund’s tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (2017-2019) or expected to be taken in the Fund’s 2020 tax returns. The Fund identifies their major tax jurisdiction as U.S. Federal and state of New Jersey, however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.


The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the six months ended June 30, 2021, the Fund did not incur any interest or penalties.



Semi-Annual Report |  11


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)  



Distributions to Shareholders:  The Fund intends to distribute to its shareholders substantially all of its net realized capital gains and net investment income, if any, annually.


Other:  The Fund follows industry practice and records security transactions on the trade date.  The specific identification method is used for determining gains or losses for financial statements and income tax purposes.  Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis.


Cash and Cash Equivalents:  The Fund maintains its cash in an account at a custodian bank, which, at times, may exceed federally insured limits. The Fund has not experienced any losses in such account and believes it is not exposed to any significant credit risk on its cash deposits.


Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period.  Actual results could differ from those estimates.


Subsequent events: Management has evaluated subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.


2.  SECURITIES VALUATIONS


Processes and Structure


The Fund’s Board of Directors have adopted guidelines for valuing securities including in circumstances in which market quotes are not readily available and has delegated to the Advisor the responsibility for determining fair value prices, subject to review by the Board of Directors.


Hierarchy of Fair Value Inputs


The Fund utilizes various methods to measure the fair value of most of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:


·

Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.


·

Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar



Semi-Annual Report |  12


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)  



instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.


·

Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.


The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.


The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.


Fair Value Measurements


A description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis follows.


Equity securities (common stocks). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange Traded Funds, and the movement of the certain indexes of securities based on a statistical analysis of the historical relationship and that are categorized in level 2.


Short term investments.  Short term investments are valued using amortized cost, which approximates fair value.  These securities will be categorized in Level 1 of the fair value hierarchy.









Semi-Annual Report |  13


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)  



The following table summarizes the inputs used to value the Fund’s assets measured at fair value as of June 30, 2021:


 

Financial Instruments—Assets

Categories

Level 1

Level 2

Level 3

Fair Value

 

 

 

 

 

Common Stocks *

$ 7,082,043

$          -

$          -

$ 7,082,043

Short-Term Investment

89,103

 -

 -

89,103

 

$ 7,171,146

$          -

$          -

$ 7,171,146


* Industry classifications for these categories are detailed in the Schedule of Investments.


The Fund did not hold any Level 3 assets during the six months ended June 30, 2021. The Fund did not hold any derivative instruments at any time during the six months ended June 30, 2021. There were no significant transfers into or out of Level 1 or Level 2 during the period. It is the Fund's policy to recognize transfers into and out of Level 1 and Level 2 at the end of the reporting period.


3.  INVESTMENT ADVISORY AGREEMENT AND OTHER RELATED TRANSACTIONS


The Fund has an investment advisory agreement with Emerald Research Corporation (“the Advisor”), whereby the Advisor receives a fee of 1% per year on the net assets of the Fund.  All fees are computed on the average daily closing net assets of the Fund and are payable monthly. The investment advisory fee earned by the Advisor for the six months ended June 30, 2021 was $31,513. The Advisor has contractually agreed to decrease the investment advisory fee or, if necessary, to reimburse the Fund for expenses if and to the extent that the Fund’s aggregate annual operating expenses exceed 1.79% of the Fund’s daily average net assets until August 10, 2021. The Fund owed the Advisor $5,715 at June 30, 2021 for advisory fees. There was no reimbursement for the six months ended June 30, 2021.


Mr. Peter J. Lencki is President of the Advisor and is also President of the Fund.


4.  CAPITAL SHARE TRANSACTIONS


As of June 30, 2021, there were 500,000,000 shares of $0.001 par value capital stock authorized. Total capital stock and paid-in capital as of June 30, 2021 amounted to $3,396,323. Transactions in capital for the six months ended June 30, 2021 and the year ended December 31, 2020 were as follows:


 

June 30, 2021

December 31, 2020

 

Shares

Amount

Shares

Amount

Shares sold

15,273

$   321,481

2,109

$   40,155

Shares reinvested

-

-

28,748

606,001

Shares redeemed

               -

                -

  (16,233)

(350,695)

  Net increase

     15,273

$   321,481

     14,624

$ 295,461



Semi-Annual Report |  14


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)  






5.  INVESTMENT TRANSACTIONS


For the six months ended June 30, 2021, purchases and sales of investment securities other than short-term investments aggregated $1,182,934 and $865,960, respectively.


6.  TAX MATTERS


Income and long-term capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from the character of net investment income or net realized gains presented in these financial statements in accordance with U.S. GAAP.


The tax character of distributions paid for the years ended December 31, 2020 and 2019 were as follows:


 

2020

2019

Long-term capital gain

$606,001

$154,054


For the six months ended June 30, 2021, the Fund did not pay any distributions.


The Fund’s distributable earnings on a tax basis are determined only at the end of each fiscal year.  As of December 31, 2020, the Fund’s most recent fiscal year-end, the components of distributable earnings on a tax basis were as follows:


Unrealized Appreciation

 

$

 2,820,585

     Total Distributable Earnings, Net

 

$

 2,820,585


As of December 31, 2020, the tax basis components of unrealized appreciation (depreciation) and cost of investments were as follows:


Gross tax appreciation of investments

$  2,820,585

Gross tax depreciation of investments

$                 -

Net tax appreciation of investments

$  2,820,585

 

 

Federal tax cost of investments, including short-term investments

$  3,043,236


7.  CONTROL AND OWNERSHIP


The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund under Section 2(a)(9) of the Investment Company Act of 1940. As of June 30, 2021, the Portfolio manager and immediate family members, in aggregate, owned approximately 38% of the shares of the Fund.





Semi-Annual Report |  15


NORTHQUEST CAPITAL FUND, INC.


NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021 (UNAUDITED)  



8.  INDEMNIFICATIONS


In the normal course of business, the Fund enters into contracts that contain general indemnification to other parties.  The Fund’s maximum exposure under these contracts is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.  The Fund expects the risk of loss to be remote.


9. MARKET RISK


Overall market risks may also affect the value of the Fund. Factors such as domestic economic growth and market conditions, interest rate levels and political events affect the securities markets. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions and depressions, or other events could have a significant impact on the Fund and its investments and could result in increased premiums or discounts to the Fund’s net asset value, and may impair market liquidity, thereby increasing liquidity risk. The Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns.  During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments.


An outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has now been detected globally. This coronavirus has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.





Semi-Annual Report |  16


NORTHQUEST CAPITAL FUND, INC.


EXPENSE ILLUSTRATION

JUNE 30, 2021 (UNAUDITED)



  Expense Example


As a shareholder of the NorthQuest Capital Fund, you incur ongoing costs which typically consist of management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.


The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period, January 1, 2021 through June 30, 2021.


Actual Expenses


The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.


Hypothetical Example for Comparison Purposes


The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in this Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.


Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


 

Beginning Account Value

Ending Account Value

Expenses Paid During the Period*

 

January 1, 2021

June 30, 2021

January 1, 2021 to June 30, 2021

 

 

 

 

Actual

$1,000.00

$1,158.83

$8.24

Hypothetical

 

 

 

 (5% Annual Return before expenses)

$1,000.00

$1,017.16

$7.70

 

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.54%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).



Semi-Annual Report |  17


NORTHQUEST CAPITAL FUND, INC.


ADDITIONAL INFORMATION

JUNE 30, 2021 (UNAUDITED)



PORTFOLIO HOLDINGS

The Fund files its complete schedule of investments with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The Form N-PORT filing must be made within 60 days of the end of the quarter. The Fund’s Form N-PORT is available on the SEC’s web site at http://www.sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at 1-800-239-9136, free of charge.


PROXY VOTING

The Fund’s proxy voting policies, procedures and voting records relating to common stock securities in the Fund’s investment portfolio are available without charge, upon request, by calling the Fund’s toll-free telephone number 1-800-239-9136.  The Fund will send this information within three business days of receipt of the request, by first class mail or other means designed to ensure prompt delivery. The Fund’s proxy information is also available on the Securities and Exchange Commission website at http://www.sec.gov.


ADDITIONAL INFORMATION

The Fund's Statement of Additional Information ("SAI") includes additional information about the directors and is available, without charge, upon request.  You may call toll-free 1-800-239-9136 to request a copy of the SAI or to make shareholder inquiries.


At the Fund’s annual shareholder meeting held on March 29, 2021, shareholders of record on January 22, 2021, elected four directors.  In addition, Fund shareholders ratified Sanville & Company as the Fund’s independent registered public accounting firm for the fiscal year ending December 31, 2021.


Below are the voting results from the meeting:


Total Shares Voted:

217,470

Total Outstanding Shares:

275,412


Proposal #1. The following four persons were elected to serve as directors of the Fund:


 

 

 

 

 

 

Shares

 

 

 

For

Against

Abstain

Returned

Charles G. Camarata

 

217,470

0

0

217,470

William S. Foote, Jr.

 

217,470

0

0

217,470

Peter J. Lencki

 

217,470

0

0

217,470

George Sikora

 

217,470

0

0

217,470

 

 

 

 

 

 

 

Total

 

 

217,470

0

0

217,470

Percentage of Shares Voted

78.96%

0%

0%

78.96%



Semi-Annual Report |  18


NORTHQUEST CAPITAL FUND, INC.


ADDITIONAL INFORMATION (CONTINUED)

JUNE 30, 2021 (UNAUDITED)



Proposal #2. The shareholders approved the appointment of Sanville & Company as the Independent Registered Public Accounting Firm for the Fund for fiscal year 2021.


 

 

 

 

 

 

Shares

 

 

 

For

Against

Abstain

Returned

Sanville & Company

 

217,470

0

0

217,470

 

 

 

 

 

 

 

Total

 

 

217,470

0

0

217,470

Percentage of Shares Voted

78.96%

0%

0%

78.96%


LIQUIDITY RISK MANAGEMENT PROGRAM

The Fund has adopted and implemented a Liquidity Risk Program (the “LRM Program”) as required by Rule 22e-4 under the Investment Act of 1940. The LRM Program is to assess and manage the risk that the Fund could not meet requests to redeem Fund shares without significant dilution of the remaining investor interests in the Fund. The Fund considers a variety of factors such as the Fund’s long-term investment strategy, liquidity classifications of portfolio investments, and holdings of cash and cash equivalents during normal and unprecedented stressful stock market conditions as part of the management and assessment of liquidity risk.


The Board approved an Independent Director to act as the Program Administrator to oversee the LRM Program. On December 4, 2020, the Board reviewed the Program Administrator’s annual report. During the period covered by the report, the Fund maintained a high level of liquidity by being primarily invested in “highly liquid investments”. During the cover period, there were no liquidity events that impacted the Fund’s ability to meet redemptions in a timely manner.



Semi-Annual Report |  19


NORTHQUEST CAPITAL FUND, INC.


DIRECTORS & OFFICERS

JUNE 30, 2021 (UNAUDITED)



The Fund’s Board of Directors has the ultimate responsibility of operating the Fund.  Information about the Fund’s Directors is provided below.  Additional board member information is included in the SAI, which is available free of charge by calling 1-800-239-9136.


INDEPENDENT DIRECTORS


Name and Age

Position

Term/Time on Bd.

Principal Occupation During Last 5 Years

Other Public Company Directorships

Charles G. Camarata

Age 77

Lead Director

1 year term;

9 years

Private Investor

None

William S. Foote, Jr.

Age 77

Director

1 year term;

6 years

Private Investor

None

George Sikora

Age 74

Director

1 year term;

5 years

Private Investor

None

                                                                                                             


INTERESTED DIRECTOR & OFFICER


Name and Age

Position

Term/Time on Bd.

Principal Occupation During Last 5 Years

Other Public Company Directorships

Peter J. Lencki

Age  66

Chairman President/

Treasurer

Chief Compliance Officer

1 year term;

19 years

Portfolio Manager NorthQuest Capital Fund

None

Mary E. Lencki *

Age 63

Secretary

1 year term;

19 years

Nurse

Brighton Gardens Assisted Living

None


* Directors of the Fund are considered "Interested persons", as define in the Investment Company Act of 1940, because these individuals are affiliated with the Investment Adviser. Mary and Peter Lencki have a "family relationship".


Directors of the Fund are considered “Interested Directors”, as defined in the Investment Company Act of 1940, because these individuals are affiliated with the Fund’s Investment Adviser.  Mr. Peter Lencki is president/owner of the Fund’s Investment Advisor.


No compensation was paid to either the independent or interest directors during the six months ended June 30, 2021.




Semi-Annual Report |  20




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Semi-Annual Report |  21





This Page Was Left Blank Intentionally



Semi-Annual Report |  22







Board of Directors

Charles G. Camarata

William S. Foote, Jr.

Peter J. Lencki

George Sikora



Investment Adviser

Emerald Research Corporation

16 Rimwood Lane

Colts Neck, NJ 07722



Dividend Paying Agent,

Shareholders’ Servicing Agent,

Transfer Agent

Mutual Shareholder Services, LLC

8000 Town Centre Drive, Suite 400

Broadview Heights, OH 44147



Custodian

The Huntington National Bank

7 Easton Oval

Columbus, Ohio 43219



Independent Registered Public Accounting Firm

Sanville & Company

1514 Old York Road

Abington, PA 19001



Administration and Compliance

Empirical Administration, LLC

8000 Town Centre Drive, Suite 400

Broadview Heights, OH 44147



This report and the financial statements contained herein are submitted for the general information of shareholders and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale or solicitation of an offer to buy shares of NorthQuest Capital Fund, Inc.  Such offering is made only by prospectus, which includes details as to offering price and material information.














Item  2.  Code of Ethics. Not Applicable


Item 3.  Audit Committee Financial Expert. Not Applicable


Item 4.  Principal Accountant Fees and Services. Not Applicable


Item 5.  Audit Committee of Listed Registrants. Not Applicable.


Item 6.  Schedule of Investments - Included in Item1, report to shareholders, of this form.


Item 7.   Disclosure of Proxy Voting Policies and Procedures for Closed-End    

              Management Companies.

Not applicable.


Item 8.   Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.


Item 9.   Purchase of Equity Securities by Closed-End Management Investment Company

              and Affiliated Purchasers

Not applicable.


Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable.


Item 11.  Controls and Procedures.

(a)

The Principal executive and financial officer have concluded that as of a date within 90 days of the filing of this report there were no significant deficiencies in the design or operation of the disclosure controls and procedures of the registrant which would have adversely affected the ability of the registrant to record, process, summarize and report the subject matter contained in this report.


(b)

There were no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Item 12. Exhibits.

(a) 12 (a) 2

A separate certification of the principal executive and principal financial officer as required by Rule 30a-2(a) und the Investment company Act of 1940 is filed herewith as an exhibit to and part of this Form N-CSRS.


(b) 12 (b)

A separate certification of the principal executive and principal financial offices required by Section 906 of the Sarbanes-Oxley Act is filed herewith as an exhibit to and part of this Form N-CSRS.





SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



(Registrant)                                                       NorthQuest Capital Fund, Inc.



By (Signature and Title)                                    /s/  Peter J. Lencki

                                                                                 Peter J. Lencki

                                                                                 President

                                                                                 Principal Executive Officer

 

         Principal Financial Officer


Date: August 3, 2021




Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report to be signed below by the following person on behalf of the registrant and in capacities and on the date indicated.



(Registrant)                                                        NorthQuest Capital Fund, Inc.


By (Signature and Title)                                    /s/  Peter J. Lencki

                                                                                 Peter J. Lencki

                                                                                 President

         Principal Executive Officer

                                                                                 Principal Financial Officer


Date: August 3, 2021









Exhibit EY99Q4.CER



CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT



Pursuant to 18 U.S.C. 1350, the undersigned, being the President, Prinicipal Executive officer and Principal Chief Financial Officer of NorthQuest Capital Fund, Inc. (the “Registrant”), hereby certifies that, to the best of such officer’s knowledge, the Registrant’s report on Form N-CSRS for the period ended June 30, 2021 (the “Report”) fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented in the Report.



Date:  August 3, 2021                                        By:  /s/  Peter J. Lencki

                                                                                  Peter J. Lencki

                                                                                  President

                                                                                  Principal Executive Officer

                                                                            Principal Financial Officer



This certification is furnished as an exhibit solely pursuant to Item 12 (b) of Form N-CSRS and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. This certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended except to the extent that the registrant especially incorporates this certification by reference.




        Exhibit 12 (a) (2)

CERTIFICATION of

PRINCIPAL EXECUTIVE OFFICER

and

PRINCIPAL FINANCIAL OFFICER


I, Peter J. Lencki, President, Principal Executive Officer and Principal Financial officer of NorthQuest Capital Fund, Inc., certify that:


1.   I have reviewed this report on Form N-CSRS for the NorthQuest Capital Fund,

      Inc.;


2.

Based on my knowledge, this report does not contain any untrue statement, a      

            material fact or omit to state a material fact necessary to make the statement

            made, in light of the circumstances under which such statements were made,

            misleading with respect to the period covered by this report;

      

3.

Based on my knowledge, the financial statements, and other financial information

included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant,  as of, and for, the periods presented in this report;


4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and has;     

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,  particularly during the period which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting

                  and the preparation of financial statements for external purposes in accordance

                  with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered in this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

v

5.

I have disclosed to the registrant’s Board of Directors and the registrant’s auditors:

a.     All significant deficiencies and material weaknesses in the design or in the            

  operation of internal control over financial reporting which are reasonably

  likely to adversely affect the registrant’s ability to record, process,

  summarize, and report financial information; and

b.

  Any fraud, whether or not material, that involves management or other

        employees who have a significant role in the registrant’s internal control    

        over financial reporting.


      



Date:  08/03/2021                                          By:  /s/  Peter J. Lencki

                                                                                    Peter J. Lencki

                                                                                    President

                                                                                    Principal Executive Officer

                                                                              Principal Financial Officer






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