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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

FORM 10-Q

 

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

or 

 

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 000-31549

 

PCT LTD

(Exact name of registrant as specified in its charter)

 

Nevada 90-0578516
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   

4235 Commerce Street

Little River, South Carolina

 

29566

(Address of principal executive offices) (Zip Code)

 

(843) 390-7900

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 every Interactive Data File required to be submitted 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 registrant was required to submit 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 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:

 

Large accelerated filer ☐

Non-accelerated filer

Accelerated filer ☐

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

 

The number of shares outstanding of the registrant’s common stock as of May 11, 2022 was 790,924,690 which does not include common stock reserved against default on convertible debt. 

 

   

 

TABLE OF CONTENTS

 

Part I – Financial Information Page
     
Item 1. Condensed Consolidated Financial Statements (Unaudited) 3
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26
     
Item 3.  Quantitative and Qualitative Disclosures About Market Risk  29
     
Item 4. Controls and Procedures 29
     
Part II – Other Information  
     
Item 1.  Legal Proceedings  30
     
Item 1A.  Risk Factors  31
     
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  31
     
Item 3.   Defaults Upon Senior Securities  31
     
Item 4.  Mine Safety Disclosures  31
     
Item 5. Other Information 32
     
Item 6. Exhibits 32
     
  Signatures 33

 

   

 

PART I – FINANCIAL INFORMATION

 

 

 

ITEM 1. FINANCIAL STATEMENTS

 

The financial information set forth below with respect to our statements of operations, stockholders’ equity (deficit), and cash flows for the three-month periods ended March 31, 2022, and 2021 is unaudited. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three-month periods ended March 31, 2022 and 2021 are not necessarily indicative of results to be expected for any subsequent period.

 

 3 

 

PCT LTD

Condensed Consolidated Balance Sheets

(Unaudited)

 

  

March 31,

2022

  December 31,
2021
    (Unaudited)      
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $23,618   $116,497 
Accounts receivable, net   85,025    96,022 
Inventory   10,255    36,954 
Prepaid expenses   14,382    53,090 
Other current assets   8,200    8,200 
Total current assets   141,480    310,763 
           
PROPERTY AND EQUIPMENT          
Property and equipment, net   1,053,593    762,054 
           
OTHER ASSETS          
Intangible assets, net   3,023,554    3,098,021 
Operating lease, right of use asset   73,629    83,420 
Total other assets   3,097,183    3,181,441 
           
TOTAL ASSETS  $4,292,256   $4,254,258 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
CURRENT LIABILITIES          
Accounts payable  $224,663   $72,873 
Accrued expenses – related parties   228,077    226,844 
Accrued expenses   727,727    691,364 
Advances payable   300,000       
Operating lease liability   43,985    42,012 
Current portion of notes payable – related parties, net   80,850    85,850 
Current portion of notes payable, net   398,824    133,144 
Current portion of convertible notes payable, net   391,407    480,808 
Derivative liability   1,955,157    3,044,034 
Total current liabilities   4,350,690    4,776,929 
           
     Convertible notes payable, net of current portion and discount   1,465,300    1,465,300 
     Operating lease liability, net of current portion   29,644    41,408 
TOTAL LIABILITIES   5,845,634    6,283,637 
           
MEZZANINE EQUITY          
Preferred series A stock, $0.001 par value; 1,000,000 authorized; 500,000 issued and outstanding at March 31, 2022 and December 31, 2021, respectively   60,398    60,398 
Preferred series B stock, $0.001 par value; 1,000,000 authorized; 1,000,000 issued and outstanding at March 31, 2022 and December 31, 2021, respectively   158,247    158,247 
Preferred series C stock, $0.001 par value; 1,500,000 authorized; 1,500,000 issued and outstanding at March 31, 2022 and December 31, 2021, respectively   2,250,000    2,250,000 
TOTAL MEZZANINE EQUITY   2,468,645    2,468,645 
           
STOCKHOLDERS’ DEFICIT          
Common stock, $0.001 par value; 1,000,000,000 authorized; 790,924,690 issued and outstanding at March 31, 2022 and December 31, 2021, respectively   790,924    790,924 
Additional paid-in-capital   24,317,997    24,310,045 
Accumulated deficit   (29,130,944)   (29,598,993)
TOTAL STOCKHOLDERS’ DEFICIT   (4,022,023)   (4,498,024)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $4,292,256   $4,254,258 

 

 

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

 

 4 

 

PCT LTD

Condensed Consolidated Statements of Operations

(Unaudited) 

    
  

For the Three Months Ended

March 31,

   2022  2021
REVENUES      
Product  $65,862   $89,263 
Licensing         31,750 
    Equipment leases   234,604    274,506 
Total Revenues   300,466    395,519 
           
OPERATING EXPENSES          
General and administrative   714,393    893,451 
Research and development   4,301    9,199 
Costs of product, licensing and equipment leases   22,418    52,901 
Depreciation and amortization   106,471    88,122 
Total operating expenses   847,583    1,043,673 
           
Loss from operations   (547,117)   (648,154)
           
OTHER INCOME (EXPENSE)          
Gain/(Loss) on change in fair value of derivative liability   1,028,251    (257,919)
Gain/(Loss) on settlement of debt   60,626    316,401 
Interest expense   (73,711)   (178,356)
Misc. income         50,000 
Total other income (expense)   1,015,166    (69,874)
           
Income (loss) before income taxes   468,049    (718,028)
           
Income taxes            
           
NET INCOME (LOSS)  $468,049   $(718,028)
           
Basic income (loss) per share  $0.00   $(0.00)
Diluted income (loss) per share  $(0.00)  $(0.00)
           
Basic weighted average shares outstanding   790,924,690    751,832,583 
Diluted weighted average shares outstanding   898,859,515    751,832,583 

 

 

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

 

 5 

 

 PCT LTD

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

For the Three-Months Ended March 31, 2022 and 2021

(Unaudited)

 

               Total
   Common Stock  Additional Paid-in  Accumulated  Stockholders’ Equity
   Shares  Amount  Capital  Deficit  (Deficit)
Balance – December 31, 2020   722,487,846   $722,488   $23,202,933   $(30,587,612)  $(6,662,191)
Common stock issued for services   2,500,000    2,500    74,276          76,776 
Common stock issued in settlement of debt, related parties   4,466,508    4,466    648,844          653,310 
Common stock issued in conversion of convertible notes payable   25,000,000    25,000                25,000 
Conversion of preferred series C stock   4,000,000    4,000    36,000          40,000 
Net loss for the three-months ended March 31, 2021   —                  (718,028)   (718,028)
Balance – March 31, 2021   758,454,354   $758,454   $23,962,053   $(31,305,640)  $(6,585,133)
                          
Balance – December 31, 2021   790,924,690   $790,924   $24,310,045   $(29,598,993)  $(4,498,024)
Stock-based compensation   —            7,952          7,952 
Net income for the three-months ended March 31, 2022   —                  468,049    468,049 
Balance – March 31, 2022   790,924,690   $790,924   $24,317,997   $(29,130,944)  $(4,022,023)

 

  

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

 

 6 

 

PCT LTD

Condensed Consolidated Statements of Cash Flows

(Unaudited)

    
  

For the Three-Months Ended

March 31,

   2022  2021
Cash Flows from Operating Activities          
Net income (loss)  $468,049   $(718,028)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   106,471    88,122 
Amortization of debt discount   16,463    78,804 
Common stock issued for services         14,027 
(Gain) loss on change in fair value of derivative liability   (1,028,251)   257,919 
Amortization of right of use asset   9,791    8,149 
Amortization of prepaid expense         146,465 
(Gain) loss on settlement of debt   (60,626)   (316,401)
Default penalties on convertible notes         15,172 
Stock-based compensation   7,952       
Changes in operating assets and liabilities:          
Accounts receivable   10,997    151,083 
Inventory   26,699    (841)
Prepaid expenses   38,708       
Deposits         (5,500)
Operating lease liability   (9,791)   (4,279)
Accrued expenses   36,363    (10,885)
Accrued expenses – related party   1,233    13,900 
Accounts payable   151,790    (41,639)
Net cash used in operating activities   (224,152)   (323,932)
           
Cash Flows from Investing Activities          
Purchase of property and equipment   (323,543)      
Net cash used in investing activities   (323,543)      
           
Cash Flows from Financing Activities          
Proceeds from notes payable   291,015    207,575 
Proceeds from convertible notes payable         555,000 
Proceeds from advances payable   300,000       
Repayment of convertible notes payable   (97,849)   (218,500)
Repayment of notes payable   (33,350)   (256,486)
Repayment of notes payable – related parties   (5,000)   (25,000)
Net cash provided by financing activities   454,816    262,589 
           
Net change in cash   (92,879)   (61,343)
Cash and cash equivalents at beginning of period   116,497    115,196 
Cash and cash equivalents at end of period  $23,618   $53,853 
           
Supplemental Cash Flow Information          
Cash paid for interest  $56,484   $43,339 
Cash paid for income taxes  $     $   
           
Non-cash investing and financing activities:          
Original debt discount against notes payable  $39,085   $   
Common stock issued in conversion of convertible notes payable  $     $25,000 
Common stock issued for prepaid expenses  $     $62,750 
Preferred series C converted to common stock  $     $40,000 
Common stock issued in settlement of notes payable to related parties  $     $653,309 
Common stock issued in conversion of preferred series C stock  $     $77,998 

 

 

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

 

 7 

 

PCT LTD

Notes to the Unaudited

Condensed Consolidated Financial Statements

March 31, 2022

 

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The unaudited interim condensed consolidated financial statements of PCT LTD (the “Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of our balance sheet, statements of operations, stockholders’ equity (deficit), and cash flows for the periods presented. All such adjustments are of a normal recurring nature.  The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year.  

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2021 audited financial statements as reported in its Form 10-K, filed on March 31, 2022.

 

COVID-19

 

In December 2019 COVID-19 emerged in Wuhan, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to almost all other countries, including the United States, and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future.

 

The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak. Any resulting financial impact cannot be reasonably estimated at this time but may have a material impact on our business, financial condition and results of operations. The significance of the impact of the COVID-19 outbreak on the Company’s businesses and the duration for which it may have an impact cannot be determined at this time. At a minimum, the COVID-19 pandemic caused the Company to restrict travel of its personnel and to initiate distributor installations of certain of the Company’s equipment, as possible. The Company adapted to the immediate need for its US EPA registered disinfectant at the end of March and beginning of April, 2020, but installing greater storage reserves and by assembling more of it higher-volume equipment to produce the hospital grade disinfectant known as Hydrolyte®. There were hard costs associates with these adaptations to the Little River, SC facility, but the Company continues to benefit from its fluid production capacities over the longer term. As the Federal, state and other restrictions associated with the pandemic have lessened, the Company is able to act more effectively in obtaining new contracts for its healthcare equipment, the Annihilyzer®.

 

Nature of Operations

 

PCT LTD (the “Company” or “PCT LTD”), a Delaware corporation, was formed on February 27, 1986. The Company changed its domicile to Nevada on August 26, 1998. The Company acquires, develops and provides sustainable, environmentally safe disinfecting, cleaning and tracking technologies. The Company specializes in providing cleaning, sanitizing, and disinfectant fluid solutions and fluid-generating equipment that creates environmentally safe solutions for global sustainability.

 

On August 31, 2016, the Company entered into a Securities Exchange Agreement with Paradigm Convergence Technologies Corporation (“Paradigm,” or “PCT Corp.”) to effect the acquisition of Paradigm as a wholly-owned subsidiary. Paradigm is located in Little River, SC, was formed June 6, 2012, and is a technology licensing company specializing in environmentally safe solutions for global sustainability. Paradigm holds a patent, intellectual property and/or distribution rights to innovative products and technologies. Paradigm provides innovative products and technologies for eliminating biocidal contamination from water supplies, industrial fluids, hard surfaces, food-processing equipment and medical devices. Paradigm’s overall strategy is to market new products and technologies through the use of equipment leasing, joint ventures, licensing, distributor agreements and partnerships.

 

Effective on February 29, 2018, the Company changed its name from Bingham Canyon Corporation to PCT LTD. to more accurately identify the Company’s direction and to develop the complementary relationship and association with its wholly-owned operating company, Paradigm.

 

On July 11, 2021, the Company incorporated two wholly-owned subsidiaries, Disruptive Oil and Gas Technologies Corp. (“Disruptive”) and Technologies Development Corp., both in the State of Nevada. On October 20, 2021, the Company sold a 53.75% interest in Disruptive in consideration for the assignment of certain patents to Disruptive and realized no gain or loss on the sale.

 

 8 

 

Significant Accounting Policies

 

There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K.

 

Basic and Diluted Income (Loss) Per Share

 

Basic income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.  Diluted income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as options, warrants, convertible notes payable, preferred series A stock and preferred series C stock. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, for the three months ended March 31, 2022, there were outstanding common share equivalents which amounted to 256,399,846 shares of common stock that were not included in the calculation as their effect is anti-dilutive. For fiscal periods with net losses, these common share equivalents were not included in the computation of diluted loss per share as their effect would have been anti-dilutive.

 

   Three months
ended
March 31,
2022
$
  Three months
ended
March 31,
2021
$
Numerator:          
Net income (loss)   468,049    (7,338,523)
(Gain) loss on change in fair value of derivative liability   (942,201)      
Gain on settlement of debt   (60,626)      
Adjusted net income (loss)   (534,778)   (7,338,523)
           
Denominator: Weighted average shares outstanding used in computing net income (loss) per share          
Basic   790,924,690    751,832,583 
           
Effect of dilutive warrants   102,687,429       
Effect of convertible note weighted shares   5,247,396       
Diluted   898,859,515    751,832,583 
           
Net income (loss) per share applicable to common shareholders:          
Basic  $0.00   $(0.00)
Diluted  $(0.00)  $(0.00)

 

 

Recent Accounting Pronouncements 

 

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

 9 

 

NOTE 2. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has limited assets, has an accumulated deficit of $29,130,944 and has negative cash flows from operations. As of March 31, 2022, the Company had a working capital deficit of $4,209,210. The Company has relied on raising debt and equity capital in order to fund its ongoing day-to-day operations and its corporate overhead. The Company will require additional working capital from either cash flow from operations, from debt or equity financing, or from a combination of these sources. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The Company expects that working capital requirements will continue to be funded through a combination of its existing funds and further issuances of securities. Working capital requirements are expected to increase in line with the growth of the business. The Company has no lines of credit or other bank financing arrangements. The Company has financed operations to date through the proceeds of private placement of equity and debt instruments. In connection with the Company’s business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with business growth and (ii) marketing expenses. The Company intends to finance these expenses with further issuances of securities, and debt issuances. Thereafter, the Company expects it will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to current stockholders. Further, such securities might have rights, preferences or privileges senior to common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict business operations.

 

 

NOTE 3. PROPERTY AND EQUIPMENT

 

Property and equipment at March 31, 2022 and December 31, 2021 consisted of the following: 

 

   March 31, 2022  December 31, 2021
Leasehold improvements   61,846    61,580 
Machinery and leased equipment  $383,029   $365,483 
Machinery and equipment not yet in service   737,762    440,150 
Office equipment and furniture   66,033    57,913 
Website   2,760    2,760 
           
Total property and equipment  $1,251,430   $927,886 
Less: Accumulated Depreciation   (197,837)   (165,832)
           
Property and equipment, net   1,053,593    762,054 

 

Depreciation expense was $32,004 and $12,000 for the three-months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, the Company added $297,612 of machinery and equipment not yet in service.

 

 

 10 

 

NOTE 4. INTANGIBLE ASSETS

 

Intangible assets at March 31, 2022 and December 31, 2021 consisted of the following:

 

   March 31, 2022  December 31, 2021
Patents  $4,505,489   $4,505,489 
Technology rights   200,000    200,000 
Intangible, at cost   4,705,489    4,705,489 
Less: Accumulated amortization   (1,681,935)   (1,607,468)
Net Carrying Amount  $3,023,554   $3,098,021 

 

Amortization expense was $74,467 and $76,122 for the three-months ended March 31, 2022 and 2021, respectively.

 

Estimated Future Amortization Expense:

 

    $
  For year ending December 31, 2022       226,503  
  For year ending December 31, 2023       302,003  
  For year ending December 31, 2024       302,003  
  For year ending December 31, 2025       302,003  
  For year ending December 31, 2026       302,003  
  Thereafter       1,589,039  
  Total       3,023,554  

 

 

NOTE 5. LEASES

 

On August 26, 2020, the Company signed a new one-year lease for the Company headquarters and operations located in Little River, South Carolina. The lease was effective retroactively from July 1, 2020, ending on June 30, 2021, for $7,500 per month. The Company re-negotiated an annual lease on the Little River, SC facility for $7,500 per month, retroactive to July 1, 2020, which is renewable for an additional four years (with a 2% increase annually). The Company renewed the lease for another year, effective July 1, 2021, at $7,650/month.

 

On October 19, 2020, the Company entered into a building lease with a three-year term and an effective date of November 1, 2020. The lease requires the Company to make payments of $4,500 per month. The Company recognized operating lease expense of $13,500 during the period ended March 31, 2022.

 

At March 31, 2022, the weighted average remaining operating lease term was 1.59 years and the weighted average discount rate associated with operating leases was 18.5%.

 

 11 

 

The Components of lease expenses were as follows:

 

    2022
$
 

2021

$

         
Total operating lease cost     13,500       13,500   
                 

  

The following table provides supplemental cashflow and other information related to leases for the period ended March 31, 2022 and 2021:

 

    2022
$
 

2021

$

         
Lease payments     36,450       38,750  
                 

Supplemental balance sheet information related to leases as of March 31, 2022 and 2021 are as below:

 

    2022
$
 

2021

$

         
Cost     123,614       123,614  
Accumulated amortization     (49,985 )     (13,378
Net carrying value     73,629       110,236  

 

 

Future minimum lease payments related to lease obligations are as follows as of March 31, 2022:

 

    $
2022     40,500  
2023     45,000  
         
Total minimum lease payments     85,500  
         
Less: amount of lease payments representing effects of discounting     (11,871 )
         
Present value of future minimum lease payments     73,629  
         
Less: current obligations under leases     (43,985 )
         
Lease liabilities, net of current portion     29,644  

 

 

 12 

 

NOTE 6. NOTES PAYABLE

 

The following tables summarize notes payable as of March 31, 2022 and December 31, 2021:

 

Type  Original Amount 

Origination

Date

 

Maturity

Date

 

Effective Annual

Interest

Rate

 

Balance at

March 31,

2022

 

Balance at

December 31,

2021

Note Payable **  $25,000   05/08/2017  06/30/2018  0%  $22,500   $22,500 
Note Payable **  $118,644   05/05/2020  05/05/2021   8%  $110,644   $110,644 
Note Payable (a)  $199,000   02/04/2022  02/03/2023  59%  $178,136   $   
Note Payable (b)  $131,100   03/04/2022  12/16/2022  83%  $118,614   $   
Sub-total                  $429,894   $133,144 
Debt discount                  $(31,070)  $   
Balance, net                  $398,824   $133,144 
Less current portion                  $(398,824)  $(133,144)
Total long-term                  $     $   
                           
** Currently in default                          

  

  a) On February 4, 2022, the Company entered into a loan agreement with a non-related party for $199,000, of which $2,985 was an original issue discount resulting in cash proceeds to the Company of $196,015. The loan is to be repaid through fifty-two weekly payments of $5,013. During the three months ended March 31, 2022, $688 of the discount was amortized to expense, and $20,864 was repaid leaving a note balance of $178,136.

 

  b) On March 4, 2022, the Company sold future receivables with a non-related party for $131,100, of which $36,100 was loan fees and original issue discount resulting in cash proceeds to the Company of $95,000. The advance is to be repaid through weekly payments of $3,121. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the three months ended March 31, 2022, $7,327 of the discount was amortized to expense, and $12,846 was repaid leaving a note balance of $118,614.

 

 

 13 

 

The following table summarizes notes payable, related parties as of March 31, 2022 and December 31, 2021:

 

Type  Original Amount 

Origination

Date

 

Maturity

Date

 

Annual

Interest

Rate

 

Balance at

March 31,

2022

 

Balance at

December 31, 2021

Note Payable, RP **  $17,000   06/20/2018  01/02/2020   5%  $10,000   $10,000 
Note Payable, RP **  $50,000   07/27/2018  11/30/2018   8%  $10,850   $10,850 
Note Payable, RP **  $15,000   08/16/2019  02/16/2020   8%  $15,000   $15,000 
Note Payable, RP (c)  $84,034   02/16/2021  Demand   5%  $45,000   $50,000 
Subtotal                  $80,850   $85,850 
Debt discount                  $     $   
Balance, net                  $80,850   $85,850 
Less current portion                  $(80,850)  $(85,850)
Total long-term                  $     $   
                           
** Currently in default                          

  

  c) On March 7, 2022, the Company repaid the principal amount of $5,000 leaving a note principal balance of $45,000.

 

 

The following table summarizes convertible notes payable as of March 31, 2022 and December 31, 2021:

 

Type  Original Amount 

Origination

Date

 

Maturity Date

 

Annual

Interest

Rate

 

Balance at

March 31,

2022

 

Balance at

December 31, 2021

Convertible Note Payable (d) *  $150,000   04/10/2020  04/09/2021   12%  $     $25,000 
Convertible Note Payable (e)  $300,000   08/27/2020  07/31/2021   12%  $265,000   $270,000 
Convertible Note Payable (f)  $226,162   11/04/2021  11/04/2022   19%  $135,697   $203,546 
Convertible Note Payable  $1,465,300   11/30/2021  11/30/2023   5%  $1,465,300   $1,465,300 
Subtotal                  $1,865,997   $1,963,846 
Debt discount                  $(9,290)  $(17,738)
Balance, net                  $1,856,707   $1,946,108 
Less current portion                  $(391,407)  $(480,808)
Total long-term                  $1,465,300   $1,465,300 
 
** Currently in default
* Embedded conversion feature accounted for as a derivative liability at period end

  

  d) During the three months ended March 31, 2022, the Company repaid $25,000 of the note, leaving a note principal balance of $0.

 

  e) During the three months ended March 31, 2022, the Company repaid $5,000 of the note, leaving a note principal balance of $265,000.

 

  f) During the three months ended March 31, 2022, $8,448 of the discount was amortized to expense, and $67,849 was repaid leaving a note principal balance of $135,697.

 

 

 14 

 

NOTE 7 – DERIVATIVE LIABILITIES

 

The embedded conversion option of (1) the convertible debentures described in Note 6 and (2) warrants, containing conversion features that qualify for embedded derivative classification. The fair value of the liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments.

 

Upon the issuance of the convertible notes payable described in Note 6, the Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible notes, warrants and options. The Company elected to reclassify contracts from equity with the earliest inception date first. As a result, none of the Company’s previously outstanding convertible instruments qualified for derivative reclassification, however, any convertible securities issued after the election, including the warrants described in Note 10, qualified for derivative classification. The Company reassesses the classification of the instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

 

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities.

 

   March 31,
2022
  December 31,
2021
Balance at the beginning of period  $3,044,034   $7,102,801 
Original discount limited to proceeds of convertible notes            
Fair value of derivative liabilities in excess of notes proceeds received            
Settlement of derivative instruments   (60,626)   (4,035,906)
Change in fair value of embedded conversion option   (1,028,251)   (22,861)
Balance at the end of the period  $1,955,157   $3,044,034 

 

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion features and warrant liabilities as their fair values were determined by using the Binomial Model based on various assumptions. 

 

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

 

    Expected Volatility     Risk-free Interest Rate     Expected Dividend Yield     Expected Life (in years)  
At March 31, 2022     113 - 234 %     1.63-2.44 %     0 %     1.00-3.41  
                                 

 

 

 15 

 

NOTE 8 - STOCKHOLDERS’ DEFICIT

 

Preferred Stock

 

Effective March 23, 2018, the Company amended the articles of incorporation and authorized 10,000,000 shares of preferred stock with a par value of $0.001 per share. The preferred stock may be issued from time to time by the Board of Directors as shares of one or more classes or series, as summarized below.

 

Series A Preferred Shares

 

On December 1, 2018, the Company’s Board of Directors authorized an offering for 1,000,000 Preferred Series “A” stock at $0.10 per share and with 100% regular or cashless exercise at $0.10 per share of common stock warrant coverage. At December 31, 2018, the Company received $60,000 of subscriptions for the issuance of 600,000 shares of Preferred Series “A” stock to three accredited investors who are related parties. The Company was unable to issue the subscriber the preferred shares until the Company filed a Certificate of Designation and the Preferred Series “A” stock has been duly validly authorized. Resulting in a preferred stock liability related to the Company’s commitment to issue shares of Series A stock upon the designation.

 

On April 12, 2019, the Company filed a Certificate of Designation with the Nevada Secretary of State designating 1,000,000 shares of its authorized preferred stock as Series A Convertible Preferred Stock. The principal terms of the Series A Preferred Shares are as follows:

Issue Price

The stated price for the Series A Preferred shall be $0.10 per share.

Redemption

This Company may at any time following the first anniversary date of issuance (the “Redemption Date”), at the option of the Board of Directors, redeem in whole or in part the Shares by paying in cash in exchange for the Shares to be redeemed a price equal to the Original Series A Issue Price ($0.10) (the “Redemption Price”). Any redemption affected pursuant to this provision shall be made on a pro rata basis among the holders of the Shares in proportion to the number of the shares then held by them.

Dividends

None.

 16 

 

Preference of Liquidation

In the event of any liquidation, dissolution or winding up of the Company, the holders of Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets of this Company, to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of (i) $0.10 for each outstanding Share (the “Original Series A Issue Price”) and (ii) an amount equal to 6% of the Original Series A Issue Price for each 12 months that has passed since the date of issuance of any Shares (such amount being referred to herein as the “Premium”).

For purposes of this provision, a liquidation, dissolution or winding up of this Company shall be deemed to be occasioned by, or to include, (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the Company); or (B) a sale of all or substantially all of the assets of the Company; unless the Company’s stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Company’s acquisition or sale or otherwise), hold at least 50% of the voting power of the surviving or acquiring entity.

If upon the occurrence of such liquidation, dissolution or winding up event, the assets and funds thus distributed among the holders of the Shares shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of series of preferred stock that may from time to time come into existence, the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of the Shares in proportion to the preferential amount each such holder is otherwise entitled to receive.

In any of such liquidation, dissolution or winding up event, if the consideration received by the Company is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

 A. Securities not subject to investment letter or other similar restrictions on free marketability (covered by (B) below):

 

  1) If traded on a securities exchange (NASDAQ, AMEX, NYSE, etc.), the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing;

 

  2) If traded on a quotation system, such as the OTC:QX, OTC:QB or OTC Pink Sheets, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

 

  3) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

 

 B. The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of such Preferred Stock.

Voting

The holder of each Share shall not have any voting rights, except in the case of voting on a change in the preferences of Shares.

Conversion

Each Share shall be convertible into shares of the Company’s Common Stock at a price per share of $0.10 (1 Share converts into 1 share of Common Stock), at the option of the holder thereof, at any time following the date of issuance of such Share and on or prior to the fifth day prior to the Redemption Date, if any, as may have been fixed in any Redemption Notice with respect to the Shares, at the office of this Company or any transfer agent for such stock. Each Share shall automatically be converted into shares of Common Stock on the first day of the thirty-sixth (36th) month following the original issue date of the shares at the Conversion Price per share. To date, the Shares have not yet been converted into Common Stock.

 17 

 

The Company was unable to issue the subscribers the preferred shares until the Company filed a Certificate of Designation and the Preferred Series “A” stock had been duly validly authorized. As the Company had not filed the Certificate of Designation and as the Company could not issue the preferred shares to settle the proceeds received, it was determined the subscriptions were settleable in cash. As a result, the Company classified the subscriptions received as a liability in accordance with ASC 480 Distinguishing Liabilities from Equity. The filing of the Certificate of Designation and issuance of the preferred shares resulted in the reclassification of the Series A Preferred Shares from a liability to temporary equity or “mezzanine” because the preferred shares include the liquidation preferences described above. The fair value of the preferred series A stock on April 12, 2019 was $60,398 and was valued by using the Binomial Model based on various assumptions and was reclassified from a liability to mezzanine equity.

As of March 31, 2022, and December 31, 2021, there were 500,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively.

Series B Preferred Shares

 

Effective August 13, 2019, the Company filed a Certificate of Designation with the Nevada Secretary of State thereby designating 1,000,000 shares of its authorized preferred stock as Series B –Preferred Stock. The principal terms of the Series B Preferred Shares are as follows:

Voting Rights

Holders of the Series B Preferred Stock shall be entitled to cast five hundred (500) votes for each share held of the Series B Preferred Stock on all matters presented to the stockholders of the Corporation for stockholder vote which shall vote along with holders of the Corporation’s Common Stock on such matters.

Redemption Rights

The Series B Preferred Stock shall be redeemed by the Corporation upon the successful receipt by the Corporation of at least $1,000,000 in equity capital following the issuance of the Series B Preferred Stock. The Company has received in excess of $1,000,000 of equity capital during the year ended December 31, 2021, and the redemption right has been triggered. However, to date the Company has not exercised the redemption rights to redeem the Series B Preferred Stock and currently has no plans to do so.

Conversion Rights

The Series B Preferred Stock is not convertible into shares of Common Stock of the Corporation.

 18 

 

Protective Provisions

So long as any shares of Series B Preferred Stock are outstanding, this Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the Holders of the Series B Preferred Stock which is entitled, other than solely by law, to vote with respect to the matter, and which Preferred Stock represents at least a majority of the voting power of the then outstanding shares of such Series B Preferred Stock:

  a) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Corporation is disposed of; 

 

  b) alter or change the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares;

 

  c) increase or decrease (other than by redemption or conversion) the total number of authorized shares of preferred stock;

 

  d) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security (i) having a preference over, or being on a parity with, the Series B Preferred Stock with respect to dividends or upon liquidation, or (ii) having rights similar to any of the rights of the Series B Preferred Stock; or

 

  e) amend the Corporation’s Articles of Incorporation or bylaws.

Dividends

None.

Preference of Liquidation

None.

 

Upon designation, the Company issued 500,000 shares of the Series B preferred stock to each of its current CEO/Chairman and COO/Director (1,000,000 shares in total) pursuant to their employment agreements. As the Series B Preferred Shares represent share-based payments that are not classified as liabilities but that could require the employer to redeem the equity instruments for cash or other assets, the Company classified the initial redemption amount of the shares of $158,247 as temporary equity or “mezzanine”.

 

As of March 31, 2022, and December 31, 2021, there were 1,000,000 shares of Series B Preferred Stock issued and outstanding, respectively.

 

 19 

 

Series C Preferred Shares

 

Pursuant to the September 18, 2019, the Company filed a Certificate of Designation with the Nevada Secretary of State designating 5,500,000 shares of its authorized preferred stock as Series C Convertible Preferred Stock. The Registrant is awaiting the file stamped Certificate of Designation from the Nevada Secretary of State. The rights and preferences of such preferred stock are as follows:

 

The number of shares constituting the Series C Convertible Preferred Stock shall be 5,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors, provided that no decrease shall reduce the number of shares of Series C Convertible Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series C Convertible Preferred Stock.

Conversion Rights

Each Share shall be convertible into shares of the Company’s Common Stock at a price per share of $0.01 (1 Share converts into 100 shares of Common Stock) (the “Conversion Price”), at the option of the holder thereof, at any time following the date of issuance of such Share and on or prior to the fifth (5th) day prior to the redemption Date, if any, as may have been fixed in any redemption notice with respect to the Shares, at the office of this Company or any transfer agent for such stock.

Voting Rights

The holder of each Share shall not have any voting rights, except in the case of voting on a change in the preferences of Shares.

Protective Provisions

So long as any Shares are outstanding, this Company shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of Shares which is entitled, other than solely by law, to vote with respect to the matter, and which Shares represents at least a majority of the voting power of the then outstanding Shares:

  a) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of;

  b) alter or change the rights, preferences or privileges of the Shares so as to affect adversely the Shares;

  c) increase or decrease (other than by redemption or conversion) the total number of authorized shares of preferred stock;

  d) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security (i) having a preference over, or being on a parity with, the Shares with respect to liquidation, or (ii) having rights similar to any of the rights of the Preferred Stock; or

  e) amend the Company’s Articles of Incorporation or bylaws.

Other Rights

There are no other rights, privileges or preferences attendant or relating to in any way the Shares, including by way of illustration but not limitation, those concerning dividend, ranking, other conversion, other redemption, participation or anti-dilution rights or preferences.

 20 

 

As conversion of the Series C Preferred Shares is not within the control of the Company, and it is not certain that the Company could satisfy its obligation to deliver shares upon conversion, the Series C Preferred Shares were classified in temporary equity or “mezzanine”.

On February 15, 2021, 40,000 shares of preferred series C stock were converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 4,000,000 shares of common stock.

Effective December 1, 2021, the Company filed an Amended and Restated Certificate of Designation with the Nevada Secretary of State designating 1,500,000 shares of its authorized preferred stock as Series C Convertible Preferred Stock. The revised rights and preferences of such preferred stock are as follows:

The amended number of shares constituting the Series C Convertible Preferred Stock shall be 1,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors, provided that no decrease shall reduce the number of shares of Series C Convertible Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series C Convertible Preferred Stock.

Amended Conversion Rights

 

Each Share shall be convertible into shares of the Company’s Common Stock at a price per share of $0.015 (1 Share converts into 150 shares of Common Stock) (the “Conversion Price”), at the option of the holder thereof, at any time following the date of issuance of such Share and on or prior to the fifth (5th) day prior to the redemption Date, if any, as may have been fixed in any redemption notice with respect to the Shares, at the office of this Company or any transfer agent for such stock.

 

During the year ended December 31, 2021, the Company sold 1,500,000 shares of preferred series C stock at $1.50 per share for proceeds of $2,250,000.

 

As of March 31, 2022, and December 31, 2021, there were 1,500,000 shares of Series C Preferred Stock issued and outstanding, respectively.

 

Common Stock

 

The authorized shares of common stock consists of 1,000,000,000 shares with a par value of $0.001 per share. The number of shares of common stock outstanding as of March 31, 2022 and December 31, 2021 was 790,924,690 and 790,924,690, respectively.

 

 

 21 

 

NOTE 9. STOCK OPTIONS

 

Below is a table summarizing the options issued and outstanding as of March 31, 2022:

 

   Number of options  Weighted average exercise price
$
 Balance, December 31, 2021    8,500,000    0.034 
 Granted             
 Expired    (2,500,000)   0.0001 
 Settled             
 Balance, March 31, 2022    6,000,000    0.048 
 Exercisable    2,000,000    0.015 

 

As at March 31, 2021, the following share stock options were outstanding:

 

Date   Number   Number   Exercise   Weighted Average Remaining Contractual   Expiration   Proceeds to Company if
Issued   Outstanding   Exercisable   Price $   Life (Years)   Date   Exercised
  09/01/2021       2,000,000       2,000,000       0.015       4.42       08/31/2026       30,000  
  09/01/2021       1,000,000                0.03       5.42       08/31/2027       30,000  
  09/01/2021       1,000,000                0.05       6.42       08/31/2028       50,000  
  09/01/2021       1,000,000                0.075       7.42       08/31/2029       75,000  
  09/01/2021       1,000,000                0.10       8.42       08/31/2030       100,000  
          6,000,000       2,000,000                             $ 285,250  

 

At March 31, 2022, the weighted average exercise prices are $0.048 and $0.015 for the options outstanding and exercisable, respectively. The intrinsic value of stock options outstanding at March 31, 2022 was $4,000.

 

 

 22 

 

NOTE 10. WARRANTS

 

The Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible instruments. The initial fair value of the warrants issued during the period was calculated using the Binomial Model as described in Note 6.

 

The following table summarizes the continuity of share purchase warrants:

 

   Number of
warrants
  Weighted average exercise price
$
 Balance, December 31, 2021    115,048,858    0.00597 
 Cancelled             
 Granted             
 Exercised             
 Balance, March 31, 2022    115,048,858    0.00597 

 

As at March 31, 2022, the following share purchase warrants were outstanding:

 

Date  Number  Number  Exercise  Weighted Average Remaining Contractual  Expiration  Proceeds to Company if
Issued  Outstanding  Exercisable  Price $  Life (Years)  Date  Exercised
 12/3/2018    500,000    500,000   0.10    1.68    12/3/2023    50,000 
 3/31/2019    104,548,858*   104,548,858*   0.00035*   1.95    3/13/2024    36,592 
 8/26/2020    10,000,000    10,000,000   0.06   3.40    8/26/2025    600,000 
      115,048,858    115,048,858                  $686,592 

  

*The number of warrants outstanding and exercisable is variable based on adjustments to the exercise price of the warrant due to dilutive issuances.

 

The intrinsic value of warrants outstanding at March 31, 2022 was $1,740,738.

 

 

NOTE 11. RELATED PARTY TRANSACTIONS

 

The Company has agreements with related parties for consulting services, accrued rent, accrued interest, notes payable and stock options. See Notes to Financial Statements numbers 6, 8, and 9 for more details.

 

 

NOTE 12. COMMITMENTS AND CONTINGENCIES

 

Consulting Agreements – 

 

On March 1, 2021, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide consulting services to the Company in various marketing and management matters for a period of three months. In consideration for the services performed by the consultant, the Company agreed to compensate the consultant $5,000 per month. The Company also granted stock options to purchase 2,500,000 common shares exercisable at $0.0001 per share for one year. The options expired in full without exercise on March 1, 2022.

 

The Company also uses the professional services of securities attorneys, a US EPA specialist, professional accountants, and other public-company specialists.

 

Employment Agreements –

 

No new agreements during the period ending March 31, 2022.

 

Other Obligations and Commitments 

 

No new obligation or commitments during the period ending March 31, 2022.

 

 

 23 

 

NOTE 13. SUBSEQUENT EVENTS

 

On March 29, 2022, the Company entered into a convertible promissory note with a non-related party for $128,000, of which $500 was an original issue discount and $2,500 was issue costs resulting in cash proceeds to the Company of $125,000. The Company received the cash proceeds on April 4, 2022. The note is due on March 29, 2023 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note's term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company's common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date.

 

On April 1, 2022, Gary Grieco, the Company’s President resigned his position as President, with Arthur E. Abraham being appointed President. Gary Grieco remains Chief Executive Officer and Mr. Abraham serves as President and Chief Financial Officer.

 

On April 12, 2022, the Company incorporated two wholly-owned subsidiaries, 21st Century Healthcare, Inc. and 21st Century Energy, Inc., both in the State of Nevada.

 

On April 14, 2022, the Company sold future receivables with a non-related party for $81,600, of which $21,600 was loan fees and original issue discount resulting in cash proceeds to the Company of $60,000. The advance is to be repaid through weekly payments of $2,147. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company.

 

On April 29, 2022, the Company obtained $200,000 cash proceeds for future considerations.

 

 

 24 

 

FORWARD-LOOKING STATEMENTS

 

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures we make in this Quarterly Report on Form 10-Q, future Quarterly Reports on Form 10-Q, our Annual Report on Form 10-K and Current Reports on Form 8-K.

 

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

 

•  our ability to efficiently manage and repay our debt obligations;
•  our inability to raise additional financing for working capital;
•  our ability to generate sufficient revenue in our targeted markets to support operations;
•  significant dilution resulting from our financing activities;
•  actions and initiatives taken by both current and potential competitors;
•  supply chain disruptions for components used in our products;
•  manufacturers inability to deliver components or products on time;
•  our ability to diversify our operations;
•  the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;
•  adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
•  changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
•  deterioration in general or global economic, market and political conditions;
•  inability to efficiently manage our operations;
•  inability to achieve future operating results;
•  the unavailability of funds for capital expenditures;
•  our ability to recruit, hire and retain key employees;
•  the global impact of COVID-19 on the United States economy and out operations;
•  the inability of management to effectively implement our strategies and business plans; and
•  the other risks and uncertainties detailed in this report. 

 

In this form 10-Q references to “PCT LTD”, “the Company”, “we,” “us,” “our” and similar terms refer to PCT LTD and its wholly owned operating subsidiary, Paradigm Convergence Technologies Corporation (“Paradigm”).

 

 25 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Executive Overview

 

On August 31, 2016, PCT LTD entered into a Securities Exchange Agreement (the “Exchange Agreement”) with Paradigm Convergence Technologies Corporation, a Nevada corporation (“Paradigm”). Pursuant to the terms of the Exchange Agreement, Paradigm became the wholly-owned subsidiary of PCT LTD after the exchange transaction. PCT LTD is a holding company, which through Paradigm is engaged in the business of marketing new products and technologies through licensing and joint ventures.

 

PCT LTD had not recorded revenues for the two fiscal years prior to its acquisition of Paradigm and was dependent upon financing to continue basic operations. Paradigm has recorded revenue since it initiated operations in 2012; however, those revenues have not been sufficient to finance operations. The Company recorded net income of $468,049 for the three-months ended March 31, 2022 and accumulated losses of $29,130,944 from inception through March 31, 2022.

 

PCT LTD remains dependent upon additional financing to continue operations. The Company intends to raise additional financing through private placements of its common stock and note payable issuances. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs, as discussed below, and the available exemptions to the registration requirements of the Securities Act of 1933. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.

  

The expected costs for the next twelve months include:

 

  continuation of commercial launch of non-toxic sanitizing, disinfecting and sterilizing products and technologies with a strong emphasis on health care facilities, including hospitals, nursing homes, assisted living facilities, clinics and medical, dental and veterinarian offices;

 

  continued research and development on product generation units including those designed for on-site deployment at customers’ facilities;

 

  accelerated research and development and initial commercialization on applications of the products in the agricultural sector, most specifically with respect to abatement of a specific crop disease crisis caused by a bacterium in the U.S. and elsewhere;

 

  acquiring available complementary technology rights;

 

  payment of short-term debt;

 

  hiring of additional personnel in 2022; and

 

  general and administrative operating costs.

 

Management projects these costs to total approximately $2,580,000. To minimize these costs, the Company intends to maintain its practice of controlling operating overheads with efficient facilities commitments, generally below market salaries and consulting fees, and rigorous prioritization of expenditure requirements. Based on its understanding of the commercial readiness of its products and technologies, the capabilities of its personnel (current and being hired), established business relationships and the general market conditions, management believes that the Company expects to be covering its fixed operating expenses (“burn rate”) by the end of the third quarter of 2022.

 

 26 

 

Liquidity and Capital Resources

 

A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing. We do not anticipate generating sufficient positive internal operating cash flow until such time as we can deliver our products to market and generate substantial revenues, which may take the next full year to fully realize, if ever. In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to significantly curtail our operations. This would materially impact our ability to continue operations.

 

SUMMARY OF BALANCE SHEET  March 31,
2022
  December 31,
2021
Cash and cash equivalents  $23,618   $116,497 
Total current assets   141,480    310,763 
Total assets   4,292,256    4,254,258 
Total liabilities   5,845,634    6,283,637 
Accumulated deficit   (29,130,944)   (29,598,993)
Total stockholders’ deficit  $(4,022,023)  $(4,498,024)

 

At March 31, 2022, the Company recorded a net income of $468,049 and a working capital deficit of $4,209,210. Since inception we had not established an ongoing source of revenue sufficient to cover our operating costs. During the three-months ended March 31, 2022, we primarily relied upon advances and loans from stockholders and third parties to fund our operations. The Company has relied on raising debt and equity capital in order to fund its ongoing day-to-day operations and its corporate overhead. We had $23,618 in cash at March 31, 2022, compared to $116,497 in cash at December 31, 2021. We had total liabilities of $5,845,634 at March 31, 2022 compared to $6,283,637 at December 31, 2021.

 

Our current cash flow is not sufficient to meet our monthly expenses of approximately $215,000 and to fund future research and development adequately. We intend to rely on additional debt financing, loans from existing stockholders and private placements of common stock for additional funding in addition to the increasing our recognized revenue from the leasing and/or sale of products; however, there is no assurance that additional funding will be available. We do not have material commitments for future capital expenditures. However, we cannot assure you that we will be able to obtain short-term financing, or that sources of such financing, if any, will continue to be available, and if available, that they will be on favorable terms.

  

During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through funds provided by management, significant stockholders and/or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.

  

Commitments and Obligations

 

At March 31, 2022 the Company recorded notes payable totaling approximately $2,336,381 (related, non-related and convertible, net of debt discount) compared to notes payable totaling $2,165,102 (related, non-related and convertible, net of debt discount) at December 31, 2021. These notes payable represent cash advances received and expenses paid from third parties and related parties. All of the notes payable carry effective interest from 0% to 83% and are due ranging from on demand to November 30, 2023.

 

The Company headquarters and operations are located in Little River, South Carolina. The Company re-negotiated an annual lease on the Little River, SC facility for $7,500 per month, retroactive to July 1, 2020, which is renewable for an additional four years (with a 2% increase annually). Effective July 1, 2021 through June 30, 2022, the monthly lease payment is $7,650. The Company added a three-year lease for 9,600 sf. of warehouse space in Fort Wayne, Indiana, effective November 1, 2020, for $4,500/month.

  

 27 

 

Results of Operations

 

SUMMARY OF OPERATIONS  Three-month period ended
March 31,
   (Unaudited)
   2022  2021
Revenues  $300,466   $395,519 
Total operating expenses   847,583    1,043,673 
Total other income (expenses)   1,015,166    (69,874)
Net income (loss)   468,049    (718,028)
Basic income (loss) per share  $0.00   $(0.00)
Diluted income (loss) per share  $(0.00)   (0.00)

 

Revenues decreased to $300,466, for the three-months ended March 31, 2022 (the “2022 first quarter”) compared to $395,519 for the three-months ended March 31, 2021 (the “2021 first quarter”). The revenue decrease for the period was due to service, equipment sales, fluid sales, licensing & territorial rights decreasing. However, equipment leases increased.

 

Total operating expenses decreased to $847,583 during the 2022 first quarter compared to $1,043,673 during the 2021 first quarter. The decrease during the first quarter of 2022 was primarily due to the reduction in professional fees, travel expenses, contract labor and rent.

 

General and administrative expenses decreased to $714,393 for the 2022 first quarter compared to $893,451 during the 2021 first quarter. The decrease during the first quarter of 2022 was primarily due to the reduction in professional fees, travel expenses, contract labor and rent.

 

Depreciation and amortization expenses increased slightly to $106,471 during the 2022 first quarter compared to $88,122 during the 2021 first quarter. The increase is due to depreciation of equipment to be leased or currently being leased.

 

Total other income was $1,015,166 for the 2022 first quarter compared to other expense of $69,874 during the 2021 first quarter. The overall change was a primarily due to a gain on change in fair value of derivative liability of $1,028,251 and a gain on settlement of debt of $60,626 during, 2022 first quarter versus a loss on change in fair value of derivative liability of $257,919 and a gain settlement of debt of $316,401 during the 2021 first quarter.

 

As a result of the changes described above, net income was $468,049 during the 2021 first quarter compared to a net loss of $718,028 during the 2021 first quarter.

   

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

 28 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to smaller reporting companies.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Gary Grieco, our Chief Executive Officer, who serves as our principal executive officer, and Arthur Abraham, our Chief Financial Officer, who serves as our principal accounting officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC's rule and forms; and (ii) accumulated and communicated to our principal executive officer as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and principal accounting officers concluded that as of March 31, 2022, our disclosure controls and procedures were not effective.  

 

Notwithstanding this finding of ineffective disclosure controls and procedures, we concluded that the consolidated financial statements included in this Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

 

Changes in Internal Control Over Financial Reporting

 

During the quarter ended March 31, 2022, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

 

 29 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Auctus Fund Litigation

 

In March of 2019, we entered into a Securities Purchase Agreement with Auctus Fund, LLC (“Auctus”), whereby we borrowed $75,000 from Auctus under the terms of a convertible promissory note and included the issuance to 187,500 warrants to Auctus. Adjustment provisions in the Securities Purchase Agreement and the note required PCTL to adjust the number of warrants and exercise price based upon future financings. 

 

In late 2019, we defaulted on the Auctus note, which triggered a number of default provisions of the note. We disputed the amounts claimed to be owed to Auctus, the number of shares of common stock to be reserved for conversion of the note and the number and exercise price of the warrants held by Auctus. Negotiations of these disputes lasted for several months.

 

In October of 2020, we entered into a Conditional Settlement Agreement with Auctus to settle all disputes and claims between the parties. A material dispute between the parties was the warrants, which according to Auctus had ballooned to 107,142,857 shares at an exercise price of $0.00035. Pursuant to the settlement agreement, Auctus agreed to settle such disputes and claims based upon the payment of $145,000 in cash and the issuance of 8,000,000 shares of common stock.

 

On September 1, 2021, we issued 8,000,000 common shares and paid the remaining cash balance to Auctus under the terms of the settlement. We fully complied with all payments required under the settlement agreement and issued the shares of common stock to Auctus, which triggered the mutual release of all disputes and claims between us and Auctus. Despite our compliance with the terms of the settlement agreement, Auctus has refused to execute the mutual release required by the settlement agreement and acknowledge the cancellation of the warrants as part of the settlement.

 

On January 14, 2022, we filed a complaint in the United States District Court for the District of Massachusetts (Case 1:22-cv-10053), against Auctus seeking damages for:

 

  1. Breach of Contract;

 

  2. Breach of Implied Covenant of Good Faith and Fair Dealing;

 

  3. Reformation of Mutual Release;

 

  4. Fraud;

 

  5. Conversion; and

 

  6. Unjust Enrichment.

 

The case is currently ongoing. 

 

 30 

 

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item. However, we detailed significant business risks in Item 1A to our Form 10-K for the year ended December 31, 2021.

 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On January 12, 2022, the Company sold 5,714,286 shares of common stock to accredited investors at a price of $0.035 for proceeds of $200,000. To date, these shares have not been issued.

 

On February 1, 2022, the Company sold 2,857,143 shares of common stock to accredited investors at a price of $0.035 for proceeds of $100,000. To date, these shares have not been issued.

 

All of the above-described issuances were exempt from registration pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act as transactions not involving a public offering. With respect to each transaction listed above, no general solicitation was made by either the Company or any person acting on its behalf. All such securities issued pursuant to such exemptions are restricted securities as defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate legends have been placed on the documents evidencing the securities and may not be offered or sold absent registration or pursuant to an exemption therefrom.

 

Issuer Purchases of Equity Securities

 

We did not repurchase any of our equity securities during the quarter ended March 31, 2022.

 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

We have entered into a number of promissory notes, some of which are in default as of March 31, 2022, or went into default before the filing of this Quarterly Report (See Note 6 to the financial statements).

 

A portion of our current debt is in default, which may subject us to litigation by the debt holders.

 

As of March 31, 2022, we had cash and cash equivalents of $23,618 and had a portion of short-term debt in default. Management's plan is to raise additional funds in the form of debt or equity in order to continue to fund losses until such time as revenues are able to sustain the Company. To date, the main source of funding has been through the issuance of Preferred C stock, the issuance of notes payable and the issuance of convertible notes with provisions that allow the holder to convert the debt and accrued and unpaid interest at substantial discounts to the trading price of our common stock. However, there is no assurance that management will be successful in being able to continue to obtain additional funding or defend potential litigation by note holders.

 

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

 31 

 

ITEM 5. OTHER INFORMATION

 

Change of President

 

On April 1, 2022, Gary Grieco, the Company’s President resigned his position as President, with Arthur E. Abraham being appointed President. Gary Grieco remains Chief Executive Officer and Mr. Abraham serves as President and Chief Financial Officer. Mr. Grieco’s resignation was not the result of any disagreements with the Company

 

Abraham Amended and Restated Employment Agreement

 

On April 1, 2022, the Company entered into an amended and restated four-year employment agreement with Arthur E. Abraham in his role as President and Chief Financial Officer. The terms of the contract call for an annual salary of $75,000. The agreement allows for incentive cash bonus payments from $5,000 to $50,000 based on certain stock price and gross revenue targets. The employment agreement awards the CFO with stock options to acquire up to 9,000,000 shares of the Company’s common stock, which shall vest incrementally over four years in the following manner: 2,000,000 stock options on September 1, 2021, 1,500,000 stock options on September 1, 2022, 1,500,000 stock options on September 1, 2023, 2,000,000 stock options on September 1, 2024 and the final 2,000,000 stock options on September 1, 2025. A copy of Mr. Abraham’s amended and restated employment agreement is attached hereto as Exhibit 10.6.

 

 

ITEM 6. EXHIBITS

 

Exhibit No. Description
3(i) Amended and Restated Articles of Incorporation, as currently in effect (Incorporated by reference to Exhibit 3.1 of Form 8-K, filed April 13, 2018)
3.1 Amended Articles of Incorporation increasing authorized shares (Incorporated by reference to Exhibit 3.1 of Form 8-K, filed on October 25, 2019)
3(ii) Amended and Restated Bylaws, as currently in effect (Incorporated by reference to Exhibit 3.2 of Form 8-K, filed April 13, 2018)
4.2 Certificate of Designation of Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 4.1 of Form 10-Q, filed on September 16, 2019)
4.3 Certificate of Designation of Series B – Super Voting Convertible Preferred Stock (Incorporated by reference to Exhibit 4.2 of Form 10-Q, filed on September 16, 2019)
4.4 Certificate of Designation of Series C Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of Form 8-K, filed on October 25, 2019)
4.5 Amended and Restated Series C Convertible Preferred Stock Certificate of Designation effective on December 7, 2021 (Incorporated by reference to Exhibit 4.1 of Form 8-K, filed on December 29, 2021)
4.6 Auctus Note dated March 13, 2019 (Incorporated by reference to Exhibit 4.14 of Form 10-Q, filed on September 16, 2019)
10.1 Auctus Agreement dated March 13, 2019 (Incorporated by reference to Exhibit 10.17 of Form 10-Q, filed on September 16, 2019)
10.2† Read Employment Agreement (Incorporated by reference to Exhibit 10.18 of Form 10-Q, filed on September 16, 2019)
10.3† Read Addendum to Employment Agreement (Incorporated by reference to Exhibit 10.19 of Form 10-Q, filed on September 16, 2019)
10.4† Grieco 2019 Employment Agreement (Incorporated by reference to Exhibit 10.20 of Form 10-Q, filed on September 16, 2019)
10.5† Grieco 2020 Employment Agreement Incorporated by reference to Exhibit 10.21 of Form 10-Q, filed on April 13, 2020)
10.6#† Amended and Restated Abraham Employment Agreement dated April 1, 2022
10.7 Disruptive Oil and Gas Contribution Agreement dated October 26, 2021(Incorporated by reference to Exhibit 10.7 of Form 10-K filed on March 31, 2022)
10.8# $199,000 Note dated February 4, 2022
10.9# $131,000 Note dated March 4, 2022
10.10# $81,600 Note dated April 14, 2022
31.1# Principal Executive Officer Certification
31.2# Principal Financial Officer Certification
32.1# Section 1350 Certification, Principal Executive Officer
32.2# Section 1350 Certification, Principal Financial Officer
99.1 New IR/PR Team press release dated February 1, 2022 (Incorporated by reference to Exhibit 99.8 of Form 10-K filed on March 31, 2022)
99.2 Boston Hospital press release dated February 10, 2022 (Incorporated by reference to Exhibit 99.9 of Form 10-K filed on March 31, 2022)
99.3 Oklahoma and Grassy Creek update press release dated February 24, 2022 (Incorporated by reference to Exhibit 99.10 of Form 10-K filed on March 31, 2022)
99.4# PCT Celebrates Earth Week press release dated April 19, 2022
99.5# Chesapeake Group IR engagement press release dated May 3, 2022
   
101.INS# XBRL Instance Document
101.SCH# XBRL Taxonomy Extension Schema Document
101.CAL# XBRL Taxonomy Calculation Linkbase Document
101.DEF# XBRL Taxonomy Extension Definition Linkbase Document
101.LAB# XBRL Taxonomy Label Linkbase Document
101.PRE# XBRL Taxonomy Presentation Linkbase Document

 

# Filed herewith.

 

† Indicates management contract or compensatory plan or arrangement.

 

 

 32 

 

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.

 

    PCT LTD
     
     
Date: May 16, 2022 By:   /s/ Gary Grieco                    
    Gary Grieco, Chief Executive Officer
   

 

 

/s/ Arthur Abraham               

Arthur Abraham, Chief Financial Officer

 

 

33

EX-31.1 2 pctl0513form10qexh31_1.htm EXHIBIT 31.1

Exhibit 31.1

 

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

 

I, Gary Grieco, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of PCT LTD;

 

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

 

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

 

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

 

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

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: May 16, 2022

 

 

/s/ Gary Grieco         

Gary Grieco, Principal Executive Officer,

Chief Executive Officer and Chairman

EX-31.2 3 pctl0513form10qexh31_2.htm EXHIBIT 31.2

Exhibit 31.2

 

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

 

I, Arthur Abraham, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of PCT LTD;

 

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

 

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

 

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

 

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

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: May 16, 2022

 

/s/ Arthur Abraham          

Arthur Abraham

Principal Financial Officer and Chief Financial Officer

EX-32.1 4 pctl0513form10qexh32_1.htm EXHIBIT 32.1

Exhibit 32.1

 

PCT LTD

 

CERTIFICATION OF PERIODIC REPORT

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

18 U.S.C. Section 1350

 

The undersigned executive officer of PCT LTD certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

 

  a. the quarterly report on Form 10-Q of PCT LTD for the period ended March 31, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  b. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PCT LTD.

 

 

 

 

Date: May 16, 2022

 

 

/s/ Gary Grieco          

Gary Grieco

Chief Executive Officer,

Principal Executive Officer

EX-32.2 5 pctl0513form10qexh32_2.htm EXHIBIT 32.2

Exhibit 32.2

 

PCT LTD

 

CERTIFICATION OF PERIODIC REPORT

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

18 U.S.C. Section 1350

 

The undersigned executive officer of PCT LTD certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

 

  a. the quarterly report on Form 10-Q of PCT LTD for the period ended March 31, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  b. the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PCT LTD.

 

 

 

 

Date: May 16, 2022

 

 

/s/ Arthur Abraham          

Arthur Abraham

Chief Financial Officer,

Principal Financial Officer

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