The following management's discussion and analysis should be read in conjunction
with the Company's historical consolidated financial statements and the related
notes thereto included in our audited financial statements for the year ended
December 31, 2020, and the notes thereto. The management's discussion and
analysis contains forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. Any statements that are not statements of historical fact are
forward-looking statements. When used, the words "believe," "plan," "intend,"
"anticipate," "target," "estimate," "expect" and the like, and/or future tense
or conditional constructions ("will," "may," "could," "should," etc.), or
similar expressions, identify certain of these forward-looking statements. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results or events to differ materially from those expressed or
implied by the forward-looking statements in this quarterly report. The
Company's actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of several
factors. The Company does not undertake any obligation to update forward-looking
statements to reflect events or circumstances occurring after the date of this
quarterly report.
Overview
On May 15, 2013, Receivable Acquisition & Management Corporation, a Delaware
corporation, completed the acquisition of Cornerstone Program Advisors LLC, a
Delaware limited liability company ("Cornerstone") and Sustainable Energy
Industries, Inc., a Delaware corporation ("Sustainable"), and the Company
assumed the operations of each of these entities (the "Merger"). Receivable
Acquisition & Management Corporation had operated as a business purchasing and
collecting upon defaulted consumer receivables; those operations were ceased and
collections on any remaining receivables are being run off. Cornerstone has been
in the business of managing energy infrastructure projects, specializing in the
non-profit marketplace. Sustainable is in the business of developing, marketing,
and implementing clean tech technologies. The Company has refocused on managing
energy infrastructure projects and developing applications for an
environmentally benign heat conversion technology with particular focus on the
geothermal and waste-heat-to-energy production markets.
Shareholders approved a name change to PwrCor, Inc. at the shareholder meeting
in January, 2017, by a large majority of shareholder votes. The corporate name
change in Delaware to "PwrCor, Inc." was effective on March 3, 2017.
Results of Operations
During the three and nine period ended September 30, 2021, the Company had a net
loss of ($27,983) and ($96,485), respectively, on revenues of $7,244 and
$33,744, respectively, versus a net loss of ($25,202) and ($91,851),
respectively, on revenues of $33,050 and $188,390, respectively, in the three
and nine month period ended September 30, 2020. The comparable net loss in the
most recent three month period in 2021 as compared to the corresponding period
last year, despite significantly lower revenues was due primarily to consulting
fee payment reductions in tandem with lower consulting receipts, due primarily
to a reduction in business activity as a direct result of the impact of Covid-19
on the operations of our project management customers, which is currently one
hospital.
Revenue
Revenues for the three months ended September 30, 2021 as compared to the same
period in 2020 from the Company's major customer showed a 82% decrease due to
reduced activity with the customer. The margin of project management revenue
over the corresponding cost of subcontracted consultants for such projects has
increased from 2020 to 2021 due to a changing mix of customer and consultant
activity. This gross profit for the nine month period ended September 30, 2021,
was 46% of revenues, versus 30% for the corresponding period in 2020.
Revenue declined 78% for the three month period and 82% for the nine month
period ended September 30, 2021, as compared to the corresponding periods from
2020. The decline was largely attributable to lingering effects of the Covid-19
virus on business activity.
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Operating Expenses
Total operating expenses for the three and nine month periods ended September
30, 2021 were $35,227 and $130,229 respectively, versus $58,252 and $280,241
respectively, during the three and nine month periods ended September 30, 2020.
Both periods saw most expenses decline in 2021 in tandem with reduced business
activity.
Consulting Expenses
The Company outsources a significant portion of its project management,
oversight and advisory activities to a carefully selected group of small firms,
individuals and subcontractors with expertise specific to the projects underway.
As of the quarter ended September 30, 2021, the Company was using two such
consulting resources. Consulting expenses consistently constitute the bulk of
operating costs for the project advisory and management business activities of
the Company, and accordingly generally track revenue.
Liquidity and Capital Resources
As of September 30, 2021, the Company had a working capital deficit (that is,
total current assets minus total current liabilities) of ($457,597) versus a
working capital deficit of ($499,557) as of the year ended December 31, 2020.
The working capital deficit decrease was due primarily to a capital infusion in
the form of a loan from the Small Business Administration (SBA).
For the period ended September 30, 2021, the Company had cash of $89,861 versus
$49,729 at December 31, 2020. For the nine months ended September 30, 2021, net
cash (used) by operating activities was ($81,668) versus net cash (used) by
operating activities of ($131,049) for the nine months ended September 30, 2020.
The major factor in the change in net cash from operating activities was the
proceeds from the aforementioned SBA loan.
For the three month period ended September 30, 2021, financing activities
provided $121,800 in cash, and for the period ended September 30, 2020,
financing activities provided $78,100 in cash. No cash was used in investing
activities in either period.
The worldwide emergence of a novel and in some cases fatal coronavirus has
caused major disruptions to daily life domestically and around the world. Most
important to the Company, these developments are causing significant changes in
a wide array of business activities and disruptions in capital markets.
Regarding the first, the Company has been engaged in projects at hospitals
primarily in the New York City, which for a period of time were dealing with
unprecedented losses to their normal business and less than forecast demand for
virus-related treatments. Dealing with these major disruptions to their normal
activities, there can be no assurance that these hospitals will resume the
Company's activity in the near term, and if so at what level of activity.
Regarding the second, the dramatic swings in financial markets and the related
uncertainties are likely to challenge efforts to obtain additional capital.
Given these major uncertainties, the Company cannot reliably project its results
from its project management operations for at least the next six months, so it
is uncertain whether any such revenue, together with existing cash and possible
cash infusions by major stockholders, will be sufficient to finance its
operations for the next twelve months.
In the quarter ended September 30, 2020, the Company applied for and received
temporary federal assistance in the form of an economic injury disaster loan,
known as EIDL. The Company received loan proceeds in the amount of $78,100 on
September 15, 2020. On July 8, 2021, the Company received an augmentation of the
assistance loan, bringing the total after fees to an aggregate of $199,900. The
Company intends to use the entire loan amount for qualifying expenses.
Management believes, based on the Company's operations and its existing working
capital resources, together with existing cash flows and the slow resumption of
business activity in general, that the Company has sufficient cash flows to fund
operations at least through the end of 2021.
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The Company has engaged the services of an investment bank and is actively
seeking additional capital to cover any working capital needs and to fund growth
initiatives in its identified markets. However, progress with those initiatives
linked closely to the oil and gas markets may continue to lag due to continued
financial uncertainty in those markets. There can be no assurance that any new
debt or equity financing arrangement will be available to the Company when
needed on acceptable terms, if at all. The initiative is also in the process of
actively introducing the Company's engine technology to businesses in a set of
identified key markets to accelerate the commercialization of the Company's
latest generation product. These efforts also have no assurance, particularly in
an environment where businesses are being disrupted, of achieving their
objectives at sufficient scale to achieve desirable levels of cash flow. The
continued operations of the Company are largely dependent on its ability to
collect its receivables and increase revenues.
Income Taxes
The Company did not record any income tax provision for the nine month period
ended September 30, 2021, and does not expect any material income tax liability
for the period. There were approximately $1,800 in minimum taxes paid in the
nine months ended September 30, 2021, most covering earlier periods.
Critical Accounting Policy & Estimates
Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the reporting period.
On an ongoing basis, management evaluates its estimates and judgments, including
those related to revenue recognition, accrued expenses, financing operations,
and contingencies and litigation. Management bases its estimates and judgments
on historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources.
Actual results may differ from these estimates under different assumptions and
conditions. The most significant accounting estimates inherent in the
preparation of our financial statements include estimates as to the appropriate
carrying value of certain assets and liabilities which are not readily apparent
from other sources. These accounting policies are described at relevant sections
in this discussion and analysis and in the condensed consolidated financial
statements included in this quarterly report.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
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