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 $719,007 for the six-months ended June 30, 2022
and accumulated losses of $28,879,986 from inception through June 30, 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.
24
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.
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