Quarterly Report (10-q)

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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, 21^stCentury Healthcare, Inc. and 21^st 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

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