Quarterly report [Sections 13 or 15(d)]



STYLE="font: 10pt Times New Roman, Times, Serif">




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, 2021





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:



















Title
of each class



Trading
Symbol(s)



Name
of each exchange on which registered



None



N/A



N/A








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 and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted 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 and post such files). Yes ☑ No ☐ The registrant
does not have a Web site.








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 June 21, 2021 was 765,501,229 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



23






Item 3.



Quantitative and Qualitative Disclosures About Market Risk



26






Item 4.



Controls and Procedures



26







Part II – Other Information








Item 1.



Legal Proceedings



27






Item 1A.



Risk Factors



27






Item 2.



Unregistered Sales of Equity Securities and Use of Proceeds



27






Item 3.



Defaults Upon Senior Securities



28






Item 4.



Mine Safety Disclosures



28






Item 5.



Other Information



28






Item 6.



Exhibits



29







Signatures



30






























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, 2021,
and 2020 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, 2021 and
2020 are not necessarily indicative of results to be expected for any subsequent period.

















3













PCT LTD




Condensed Consolidated Balance Sheets




(Unaudited)









































































































































































































































































































































































































































































































































































































March
31,






2021








December
31,


2020













(Unaudited)



















ASSETS



























CURRENT ASSETS



























Cash and cash equivalents






$



53,853









$



115,196






Accounts receivable, net









198,443












349,526






Inventory









7,029












6,188






Prepaid expenses









192,333












274,736






Other current
assets






















2,110






Total current
assets









451,658












747,756

































PROPERTY AND EQUIPMENT



























Property
and equipment, net









346,716












358,719

































OTHER ASSETS



























Intangible assets, net









3,323,902












3,400,024






Operating lease, right of use
asset









110,236












118,385






Deposits









15,226












9,726






Total other
assets









3,449,364












3,528,135

































TOTAL ASSETS






$



4,247,738









$



4,634,610

































LIABILITIES
AND STOCKHOLDERS' DEFICIT



























CURRENT LIABILITIES



























Accounts payable






$



231,439









$



272,978






Accrued expenses – related
parties









80,951












139,280






Accrued expenses









611,155












622,040






Deferred revenue









1,075












1,075






Operating lease liability









36,607












34,965






Notes payable – related
parties, net









183,034












789,214






Notes payable, net









413,130












384,380






Convertible notes payable, net









1,935,017












1,554,503






Derivative liability









11,763,555












11,429,043






Total current
liabilities









15,255,963












15,227,478

































Convertible
notes payable, net of current portion and discount






















53,500






Operating
lease liability, net of current portion









77,499












83,420






TOTAL LIABILITIES









15,333,462












15,364,398

































MEZZANINE EQUITY



























Preferred series A stock, $0.001
par value; 1,000,000 authorized; 500,000 and 500,000 issued and outstanding at March 31, 2021 and December 31, 2020, respectively









60,398












60,398






Preferred series B stock, $0.001
par value; 1,000,000 authorized; 1,000,000 and 1,000,000 issued and outstanding at March 31, 2021 and December 31, 2020, respectively









158,247












158,247






Preferred
series C stock, $0.001 par value; 5,500,000 authorized; nil and 490,000 issued and outstanding at March 31, 2021 and December 31,
2020, respectively






















40,000






TOTAL MEZZANINE
EQUITY









218,645












258,645

































STOCKHOLDERS’ DEFICIT



























Common stock, $0.001 par value;
1,000,000,000 authorized; 758,454,354 and 722,487,846 issued and outstanding at March 31, 2021 and December 31, 2020, respectively









758,454












722,488






Additional paid-in-capital









23,962,053












23,202,933






Accumulated
deficit









(36,024,876



)









(34,913,854



)



TOTAL STOCKHOLDERS’
DEFICIT









(11,304,369



)









(10,988,433



)






























TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT






$



4,247,738









$



4,634,610











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,











2021






2020



REVENUES















Product






$



89,263









$



162,648






Licensing









31,750












7,000






Equipment
leases









274,506












102,534






Total
Revenues









395,519












272,182

































OPERATING EXPENSES



























General and administrative









893,451












548,786






Research and
development









9,199



















Costs of product,
licensing and equipment leases









52,901












148,850






Depreciation
and amortization









88,122












83,021






Total
operating expenses









1,043,673












780,657

































Loss
from operations









(648,154



)









(508,475



)






























OTHER INCOME
(EXPENSE)



























Gain/(Loss) on
change in fair value of derivative liability









(650,913



)









(9,294,762



)



Gain/(Loss) on
settlement of debt









316,401












(44,000



)



Interest expense









(178,356



)









(434,411



)



Misc.
income









50,000


















Total
other income (expense)









(462,868



)









(9,773,173



)






























Loss
before income taxes









(1,111,022



)









(10,281,648



)






























Income
taxes
























































NET LOSS






$



(1,111,022



)






$



(10,281,648



)



Preferred
series C stock deemed dividends




















(270,000



)



NET
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS’






$



(1,111,022



)






$



(10,551,648



)






























Basic
and diluted net loss per share






$



(0.00



)






$



(0.02



)






























Basic and
diluted weighted average shares outstanding









751,832,583












545,843,212











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



















5













PCT LTD














































































































































































































































































































































































































Consolidated Statements of Stockholders’ Equity (Deficit)



For the Three-Months Ended March 31, 2021 and 2020


(Unaudited)








































Total









Common Stock






Additional Paid-in






Accumulated






Stockholders’ Equity









Shares






Amount






Capital






Deficit






(Deficit)



Balance – December 31, 2019









498,880,300









$



498,881









$



15,872,330









$



(26,505,567



)






$



(10,134,356



)



Common stock issued for services









15,525,000












15,525












103,538

























119,063






Common stock issued in settlement of debt









250,000












250












7,975

























8,225






Common stock issued in conversion of convertible
notes payable









36,050,000












36,050












360,660

























396,710






Beneficial conversion feature on preferred series
C stock



































270,000












(270,000



)
















Net loss for the three-months
ended March 31, 2020
















































(10,281,648



)









(10,281,648



)



Balance – March 31,
2020









550,705,300









$



550,706









$



16,614,503









$



(37,057,215



)






$



(19,892,006



)


































































Balance – December 31, 2020









722,487,846









$



722,488









$



23,202,933









$



(34,913,854



)






$



(10,988,433



)



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
















































(1,111,022



)









(1,111,022



)



Balance – March 31,
2021









758,454,354









$



758,454









$



23,962,053









$



(36,024,876



)






$



(11,304,369



)








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,











2021






2020



Cash Flows from
Operating Activities



























Net
loss






$



(1,111,022



)






$



(10,281,648



)



Adjustments to
reconcile net loss to net cash used in operating activities:



























Depreciation
and amortization









88,122












83,021






Amortization
of debt discount









78,804












73,588






Common stock
issued for services









14,027












119,063






Loss on change
in fair value of derivative liability









650,913












9,294,762






Amortization
of right of use asset









8,149



















Amortization
of prepaid expense









146,465



















Loss on settlement
of debt









(316,401



)









44,000






Default penalties
on convertible notes









15,172












13,762






Changes in operating
assets and liabilities:



























Accounts receivable









151,083












(15,745



)



Inventory









(841



)









26,669






Prepaid expenses






















33,024






Deposits









(5,500



)









(12,027



)



Operating lease
liability









(4,279



)
















Accrued expenses









(10,885



)









377,306






Accrued expenses
– related party









13,900












5,430






Accounts
payable









(41,539



)









44,573






Net
cash used in operating activities









(323,932



)









(194,222



)






























Cash Flows from
Financing Activities



























Proceeds from
notes payable









207,575












155,525






Proceeds from
notes payable – related parties





















3,500






Proceeds from
convertible notes payable









555,000












76,000






Proceeds from
preferred series C stock subscriptions





















270,000






Repayment of
convertible notes payable









(218,500



)









(8,888



)



Repayment of
notes payable









(256,486



)









(102,414



)



Repayment
of notes payable – related parties









(25,000



)









(12,286



)



Net
cash provided by financing activities









262,589












381,437

































Net change in
cash









(61,343



)









187,215






Cash
and cash equivalents at beginning of period









115,196












67,613






Cash
and cash equivalents at end of period






$



53,853









$



254,828

































Supplemental
Cash Flow Information



























Cash paid for
interest






$



43,339









$



147






Cash paid for
income taxes






$













$





































Non-cash investing
and financing activities:



























Preferred series
C stock deemed dividend






$













$



270,000






Original debt
discount against convertible notes






$













$



41,888






Original debt
discount against notes payable






$













$



25,068






Common stock
issued in conversion of convertible notes payable






$



25,000









$



396,710

































Common stock
issued in settlement of debt






$













$



8,225






Property and
equipment transferred to inventory






$













$



26,669






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,
2021









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, 2020 audited financial statements as reported in
its Form 10-K, filed on April 13, 2021.








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 (formerly Bingham Canyon Corporation,
(the “Company,” “PCT Ltd,” or “Bingham”), 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.





Paradigm is located in Little River, SC and
was formed June 6, 2012 under the name of EUR-ECA, Ltd. On September 11, 2015, its Board of Directors authorized EUR-ECA Ltd to file with
the Nevada Secretary of State to change its name to Paradigm Convergence Technologies Corp. Paradigm is a technology licensing company
specializing in environmentally safe solutions for global sustainability. The company 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 complimentary
relationship and association with its wholly-owned operating company, Paradigm Convergence Technologies Corporation (“Paradigm”
or “PCT Corp.”).








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.

















8













Basic and Diluted Loss Per Share







Basic loss per share is computed by dividing net loss
by the weighted-average number of common shares outstanding during the period.  Diluted loss per share is computed by dividing net
loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. As March 31,
2021, there were outstanding common share equivalents (options, warrants, convertible debt, and preferred series A stock which amounted
to 556,953,901 shares of common stock. These common share equivalents were not included in the computation of diluted loss per share as
their effect would have been anti-dilutive.








Recent Accounting Pronouncements







ASU 2019-12 amends the requirements related to the accounting for “hybrid”
tax regimes. Such regimes are tax jurisdictions that impose the greater of two taxes — one based on income, or one based on items
other than income. Although ASC 740 does not apply to taxes based on items other than income, ASC 740-10-15-4(a) originally specified
that if there is a tax based on income that is greater than a franchise tax based on capital, only that excess is subject to the guidance
in ASC 740. In feedback to the FASB, stakeholders indicated that the guidance on hybrid tax regimes increased the cost and complexity
of applying ASC 740, particularly when the tax amount deemed to be a non-income tax was insignificant. Further, such guidance made it
more difficult for entities to determine the appropriate tax rate to use when recording deferred taxes.





Accordingly, the FASB amended ASC 740-10-15-4(a) to state that an entity
should include the amount of tax based on income in the tax provision and should record any incremental amount recorded as a tax not based
on income. This amendment effectively reverses the order in which an entity determines the type of tax under current U.S. GAAP. In addition,
the ASU amends the illustrative examples referred to and included in ASC 740-10-55-26 and ASC 740-10-55-139 through 55-144. The FASB notes
that such amendments are consistent with the accounting for other incremental taxes, such as the base erosion anti-abuse tax. Moreover,
in paragraph BC12 of the ASU, the FASB concluded that subjecting these taxes to the disclosure requirements in ASC 740 will result in
greater transparency of franchise tax amounts.





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.












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 $36,024,876 and has negative cash flows from operations. As of March 31, 2021, the Company had a working capital deficit of $14,804,305.
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.























9











NOTE 3. PROPERTY AND EQUIPMENT





Property and equipment at March 31, 2021 and December
31, 2020 consisted of the following:





























































































































March 31, 2021


December 31, 2020

Leasehold improvements



18,840




18,840


Machinery and leased equipment


$

365,483



$

365,483


Machinery and equipment not yet in service



32,580




32,580


Office equipment and furniture



39,356




39,357


Website



2,760




2,760











Total property and equipment


$

459,020



$

459,020


Less: Accumulated Depreciation



(112,304

)



(100,301

)










Property and equipment, net



346,716




358,719





Depreciation expense was $12,000 and $6,153
for the three-months ended March 31, 2021 and 2020, respectively.










NOTE 4. INTANGIBLE ASSETS





Intangible assets at March 31, 2021 and December 31,
2020 consisted of the following:






































































March 31, 2021


December 31, 2020

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



(1,381,587

)



(1,305,465

)

Net Carrying Amount


$

3,323,902



$

3,400,024





Amortization expense was $76,122 and $76,868 for the
three-months ended March 31, 2021 and 2020, respectively.





Estimated Future Amortization Expense:












































































$



For year ending December 31, 2021





228,366




For year ending December 31, 2022





304,488




For year ending December 31, 2023





304,488




For year ending December 31, 2024





304,488




For year ending December 31, 2025





304,488




Thereafter





1,877,584




Total





3,323,902



















10











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, 2021.





At March 31, 2021, the weighted average remaining operating lease term
was 2.58 years and the weighted average discount rate associated with operating leases was 18.5%.





On March 15, 2021, the Company entered into a building lease with a two-year
term and an effective date of April 1, 2021. The lease requires the Company to make payments of $2,750 per month.





The Components of lease expenses were as follows:

































2021


$



2020



$









Total operating lease cost





13,500











The following table provides supplemental
cashflow and other information related to leases for the period ended March 31, 2021 and 2020:

































2021


$



2020



$









Lease payments





38,750





17,940







Supplemental balance sheet information
related to leases as of March 31, 2021 and 2020 are as below:























































2021


$



2020



$








Cost



123,614







Accumulated amortization



(13,378

)






Net carrying value



110,236










Future minimum lease payments related
to lease obligations are as follows as of March 31, 2021:








































































































$

2021



40,500


2022



54,000


2023



45,000







Total minimum lease payments



139,500







Less: amount of lease payments representing effects of discounting



(25,394

)






Present value of future minimum lease payments



114,106







Less: current obligations under leases



(36,607

)






Lease liabilities, net of current portion



77,499















11















NOTE 6.

Notes
Payable






The following table summarizes notes payable as of
March 31, 2021 and December 31, 2020:















































































































































































































































































































































































Type






Original
Amount








Origination






Date










Maturity






Date










Effective
Annual






Interest






Rate










Balance
at






March
31,






2021










Balance
at






December
31, 2020





Note
Payable **






$



25,000









05/08/2017






06/30/2018









0



%






$



27,500









$



27,500






Note
Payable **






$



8,700









11/15/2018






06/30/2019









10



%






$



8,700









$



8,700






Note
Payable






$



118,644









05/05/2020






05/05/2021









8



%






$



110,644









$



110,644






Note
Payable (a)






$



199,500









10/01/2020






09/28/2021









66



%






$



95,805









$



149,573






Note
Payable (b)






$



126,000









11/03/2020






04/23/2021









168



%






$



21,000









$



85,050






Note
Payable (c)






$



113,980









11/04/2020






03/15/2021









210



%






$













$



65,988






Note
Payable (d)






$



177,800









01/02/2021






07/12/2021









116



%






$



115,957









$










Note
Payable (e)






$



111,920









03/03/2021






05/21/2021









220



%






$



90,935









$










Subtotal










































$



470,542









$



447,455






Debt
discount










































$



(57,412



)






$



(63,075



)



Balance,
net










































$



413,130









$



384,380






Less
current portion










































$



(413,130



)






$



(384,380



)



Total
long-term










































$













$









































































** Currently
in default











































































a)



On October 1, 2020, the Company sold future receivables with a non-related
party for $199,500, of which $53,250 was loan fees and original issue discount resulting in cash proceeds to the Company of $146,250.
The advance is to be repaid through weekly payments of $3,841. 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, 2021, $14,625 of the discount
was amortized to expense, leaving a net note balance of $79,789 (discount balance of $16,017).













b)



On November 3, 2020, the Company sold future receivables with a non-related
party for $126,000, of which $39,650 was loan fees and original issue discount resulting in cash proceeds to the Company of $86,350. The
advance is to be repaid through $1,050 daily payments. 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, 2021, $17,969 of the discount was amortized
to expense, leaving a net note balance of $20,025 (discount balance of $975).













c)



On November 4, 2020, the Company sold future receivables with a non-related
party for $113,980, of which $34,440 was loan fees and original issue discount resulting in cash proceeds to the Company of $79,540. The
advance is to be repaid through $5,999 weekly payments. 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, 2021, $13,489 of the discount was amortized
to expense, and the remaining $65,988 was repaid leaving a note balance of $0.













d)



On February 2, 2021, the Company sold future receivables with a non-related
party for $177,800, of which $39,795 was loan fees and original issue discount resulting, and $35,994 was paid to settle the loan described
in Note (d) in cash proceeds to the Company of $102,011. The advance is to be repaid through $7,730 weekly payments. 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, 2021, $21,522 of the discount was amortized to expense, leaving a net note balance of $97,684 (discount balance
of $18,273).













e)



On March 9, 2021, the Company sold future receivables with a non-related
party for $111,920, of which $35,120 was loan fees and original issue discount resulting in cash proceeds to the Company of $76,800. The
advance is to be repaid through $1,399 weekly payments. 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, 2021, $12,975 of the discount was amortized
to expense, leaving a net note balance of $68,790 (discount balance of $22,145).













f)



On March 9, 2021, the Company sold future receivables with a non-related
party for $29,686, of which $10,120 was loan fees and original issue discount resulting in cash proceeds to the Company of $19,566. During
the three months ended March 31, 2021, $10,120 of the discount was amortized to expense and $29,686 was repaid, leaving a net note balance
of $0.

















12










The following table summarizes notes payable as of
March 31, 2021 and December 31, 2020:





























































































































































































































































































































































































































Type






Original
Amount








Origination






Date










Maturity






Date










Annual






Interest






Rate










Balance
at






March
31,






2021










Balance
at






December
31, 2020





Note
Payable, RP **






$



30,000









04/10/2018






01/15/2019









3



%






$



5,000









$



30,000






Note
Payable, RP **(g)






$



380,000









06/20/2018






01/02/2020









8



%






$













$



380,000






Note
Payable, RP **(h)






$



350,000









06/20/2018






01/02/2020









5



%






$













$



285,214






Note
Payable, RP **






$



17,000









06/20/2018






01/02/2020









5



%






$



17,000









$



17,000






Note
Payable, RP **






$



50,000









07/27/2018






11/30/2018









8



%






$



50,000









$



50,000






Note
Payable, RP






$



5,000









10/09/2018






Demand









0



%






$



5,000









$



5,000






Note
Payable, RP






$



5,000









10/19/2018






Demand









0



%






$



5,000









$



5,000






Note
Payable, RP **






$



15,000









08/16/2019






02/16/2020









8



%






$



15,000









$



15,000






Note
Payable, RP






$



2,000









02/11/2020






Demand









0



%






$



2,000









$



2,000






Note
Payable, RP (h)






$



84,034









02/16/2021






Demand









5



%






$



84,034









$










Subtotal










































$



183,034









$



789,214






Debt
discount










































$













$










Balance,
net










































$



183,034









$



789,214






Less
current portion










































$



(183,034



)






$



(789,214



)



Total
long-term










































$













$









































































**
Currently in default









































































g)



On February 16, 2021, the Company issued 2,663,299 shares of common stock
to settle a June 20, 2018 note payable of $380,000 and accrued interest of $26,153 owed to the current COO and Director of the Company.
The Company recognized the fair value of the shares issued of $74,572 and due to the related party nature of the transaction no gain was
recognized for the difference between the fair value of the shares and the extinguished debt. The resulting difference was recorded as
Additional Paid-in Capital in the amount of $328,919.













h)



On February 16, 2021, the Company issued 1,803,279 shares of common stock
to settle $247,156 from a $275,000 note payable dated June 20, 2018, which has a balance of $331,190, including interest, to the current
Chairman and CEO of the Company. The Company also agreed to issue a new note for the remaining balance owed to the Chairman and CEO of
$84,034, dated February 16, 2021. The note will bear interest at 5% per annum and is due on June 30, 2021. The Company recognized the
fair value of the shares issued of $50,492 and due to the related party nature of the transaction no gain was recognized for the difference
between the fair value of the shares and the extinguished debt. The resulting difference was recorded as Additional Paid-in Capital in
the amount of $194,861.

















13










The following table summarizes convertible notes payable
as of March 31, 2021 and December 31, 2020:



































































































































































































































































































































































































































































































Type










Original
Amount











Origination






Date












Maturity






Date












Annual






Interest






Rate












Balance
at






March
31,






2021












Balance
at






December
31,






2020





Convertible
Note Payable * **






$



65,000









12/06/2018






12/06/2019









12



%






$



46









$



46






Convertible
Note Payable * **(i)






$



75,000









03/18/2019






12/13/2019









24



%






$



107,795









$



177,795






Convertible
Note Payable * ** (j)






$



30,000









03/06/2020






03/05/2021









12



%






$



36,834









$



21,662






Convertible
Note Payable (k) * **






$



150,000









04/10/2020






04/09/2021









12



%






$



90,000









$



165,000






Convertible
Note Payable ** (l)






$



300,000









08/27/2020






07/31/2021









12



%






$



280,000









$



300,000






Convertible
Note Payable (m)






$



53,500









09/22/2020






03/21/2022









12



%






$













$



53,500






Convertible
Note Payable (n)






$



87,500









09/24/2020






Demand









8



%






$



15,000









$



40,000






Convertible
Note Payable  (o)






$



200,000









10/07/2020






10/06/2021









5



%






$



200,000









$



200,000






Convertible
Note Payable (p)






$



200,000









10/16/2020






10/15/2021









5



%






$



200,000









$



200,000






Convertible
Note Payable  (q)






$



300,000









11/11/2020






11/10/2021









5



%






$



300,000









$



300,000






Convertible
Note Payable (r)






$



150,000









12/29/2020






12/28/2021









5



%






$



150,000









$



150,000






Convertible
Note Payable (s)






$



150,000









01/27/2021






01/27/2022









5



%






$



150,000









$










Convertible
Note Payable (t)






$



128,000









02/22/2021






02/22/2022









12



%






$



128,000









$










Convertible
Note Payable (u)






$



200,000









03/18/2021






03/18/2022









5



%






$



200,000









$










Convertible
Note Payable (v)






$



83,000









03/26/2021






03/26/2022









12



%






$



83,000









$










Subtotal










































$



1,940,675









$



1,608,003






Debt
discount










































$



(5,658



)






$










Balance,
net










































$



1,935,017









$



1,608,003






Less
current portion










































$



(1,935,017



)






$



(1,554,503



)



Total
long-term










































$













$



53,500
















i)



During the three months ended March 31, 2021 the Company repaid $70,000
of the convertible note payable.













j)



During the three months ended March 31, 2021 the Company incurred additional
default penalties of $15,174 on the convertible note.













k)




On April 10, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000, of which $18,000 was an original issue discount resulting in cash proceeds to the Company of $132,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. The Note may be converted by the Lender at any time into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 25-trading day period prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01 an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered.






The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $507,847 and resulted in a discount to the note payable of $132,000 and an initial derivative expense of $375,847. During the year ended December 31, 2020, the Company incurred $15,000 of penalties which increased the principal amount of the note to $165,000. During the three months ended March 31, 2021, the Company repaid $75,000 of the note.
















l)



During the three months ended March 31, 2021, the Company repaid $20,000
of the note.













m)



On September 22, 2020, the Company entered into a convertible promissory
note with a non-related party for $53,500, of which $3,500 was an original issue discount resulting in cash proceeds to the Company of
$50,000. The note is due on March 21, 2022 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. During the three months ended March 31, 2021 the Company
repaid the $53,500 note as well as $25,882 of interest and prepayment penalties. As the note was repaid prior to becoming convertible
no derivative liability was recognized.













n)



During the three months ended March 31, 2021 the Company issued 25,000,000
common shares upon the conversion of $25,000 of the convertible note payable.













o)



On October 7, 2020, the Company entered into a convertible promissory note
with a non-related party for $200,000. The note is due on October 6, 2021 and bears interest on the unpaid principal balance at a rate
of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s
common stock at a conversion price of $0.20.













p)



On October 16, 2020, the Company entered into a convertible promissory note
with a non-related party for $200,000. The note is due on October 15, 2021 and bears interest on the unpaid principal balance at a rate
of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s
common stock at a conversion price of $0.20.













q)



On November 11, 2020, the Company entered into a convertible promissory
note with a non-related party for $300,000. The note is due on November 10, 2021 and bears interest on the unpaid principal balance at
a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s
common stock at a conversion price of $0.15.













r)



On December 29, 2020, the Company entered into a convertible promissory
note with a non-related party for $150,000. The note is due on December 28, 2021 and bears interest on the unpaid principal balance at
a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s
common stock at a conversion price of $0.10.













s)



On January 27, 2021, the Company entered into a convertible promissory note
with a non-related party for $150,000. The note is due on January 26, 2022 and bears interest on the unpaid principal balance at a rate
of 5% per annum. The note may be converted by the lender at any time within 6-months of the date of issuance into shares of Company’s
common stock at a conversion price equal to $0.10.













t)



On February 23, 2021, the Company entered into a convertible promissory
note with a non-related party for $128,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of
$125,000. The note is due on February 22, 2022 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. As the note is not convertible until
180 days following issuance, no derivative liability was recognized as of March 31, 2021.













u)



On March 18, 2021, the Company entered into a convertible promissory note
with a non-related party for $200,000. The note is due on March 17, 2022 and bears interest on the unpaid principal balance at a rate
of 5% per annum. The note may be converted by the lender at any time within 6-months of the date of issuance into shares of Company’s
common stock at a conversion price equal to $0.10.













v)



On March 26, 2021, the Company entered into a convertible promissory note
with a non-related party for $83,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $80,000.
The note is due on March 24, 2022 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. As the note is not convertible until 180 days following
issuance, no derivative liability was recognized as of March 31, 2021.





















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,



2021




December 31,


2020

Balance at the beginning of period


$

11,429,043



$

10,517,873


Original discount limited to proceeds of convertible notes








166,000


Fair value of derivative liabilities in excess of notes proceeds received








1,128,966


Settlement of derivative instruments



(316,401

)



(4,876,287

)

Change in fair value of embedded conversion option



650,913




4,492,491


Balance at the end of the period


$

11,763,555



$

11,429,043





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, 2021





116 - 262



%





0.07-0.92



%





0



%





0.66-4.41
























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



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, of which 1,000,000
shares were designated as Series A Convertible Preferred Stock as of December 31, 2019. The preferred stock may be issued from time to
time by the Board of Directors as shares of one or more classes or series.





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.




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:




  1. 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.




  1. 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.





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, 2021, and December 31, 2020,
there were 500,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively.

















16











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. To date the Company has received $500,500 of equity capital, and upon the receipt of an additional $499,500
in equity capital the redemption right will be triggered.




Conversion Rights



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




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, 2021, and December 31, 2020, there were 1,000,000
shares of Series B Preferred Stock issued and outstanding, respectively.

















17











Series C Preferred Shares



Pursuant to the September 18, 2019 majority consent
of stockholders in lieu of an annual meeting (including the consent of the Series A Convertible Preferred Stockholders), the Registrant
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.



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”.



At December 31, 2020, there
were 40,000 Series C Preferred Shares issued and outstanding, valued at $1 per share or $40,000.



On February 15, 2021, 40,000 shares of preferred
series C stock was 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. At March 31, 2021, no Series C Preferred Shares were outstanding





















18













Common Stock







Effective March 23, 2018, the Company amended the
Articles of Incorporation and increased the authorized shares of common stock with a par value of $0.001 per share from 100,000,000 to
300,000,000 shares. Effective October 4, 2019, the Company amended the Articles of Incorporation and increased the authorized shares of
common stock with a par value of $0.001 per share from 300,000,000 to 1,000,000,000 shares. The number of shares outstanding of the registrant’s
common stock as of March 31, 2021 and December 31, 2020 was 758,454,354 and 722,487,846, respectively.






On January 4, 2021, the Company issued
25,000,000 common shares to settle a convertible note described in Note 6(o), with a remaining balance of $40,000.





On February 15, 2021, 40,000 shares of preferred series C stock was 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.





On February 16, 2021, the Company issued 1,803,279
shares of common stock to settle $247,270 from a $275,000 note payable dated June 20, 2018, which has a balance of $331,304, including
interest, to the current Chairman and CEO of the Company.





On February 16, 2021, the Company issued 2,663,299
shares of common stock to settle a June 20, 2018 note payable of $380,000 and accrued interest of $26,153 owed to the current COO and
Director of the Company.





On March 1, 2021, the Company entered into a consulting
agreement. Pursuant to the agreement, the consultant will provide advisory services through May 31, 2021 in consideration of 2,500,000
shares of common stock. The fair value of the common stock was $62,750, of which $20,917 was recognized in consulting expenses for the
period ended March 31, 2021 and $41,833 was recorded as prepaid expenses.












NOTE 9. STOCK OPTIONS





Below is a table summarizing the options issued and
outstanding as of March 31, 2021:
















































































Number of options


Weighted average exercise price


$



Balance, December 31, 2020





200,000




2.00




Granted















Expired















Settled















Balance, March 31, 2021





200,000




2.00





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



01/26/2017





200,000




200,000




2.00




0.82





01/26/2022





400,000







200,000




200,000















$

400,000





The weighted average exercise prices are $2.00 for
the options outstanding and exercisable, respectively. The intrinsic value of stock options outstanding at March 31, 2021 was $nil.























19











NOTE 9. 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, 2020



457,690,272




0.000179


Adjustment to warrants outstanding











Granted











Settled











Balance, March 31, 2021



457,690,272




0.000179





As at March 31, 2021, 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



11/28/2018





142,857,143

*



142,857,143

*



0.00035

*



0.66





11/28/2021




$

50,000




12/3/2018





500,000




500,000




0.10




2.68





12/3/2023





50,000




2/14/2019





152,899,585

*



152,899,585

*



0.00035

*



2.88





2/14/2024





50,267




3/13/2019





107,142,857

*



107,142,857

*



0.00035

*



2.95





3/13/2024





37,500




9/11/2019





53,571,429

*



53,571,429

*



0.00056

*



3.45





9/11/2024





30,000




8/26/2020





10,000,000




10,000,000




0.06000




4.41





8/26/2025





600,000







457,690,272




457,690,272















$

817,767





*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, 2021 was $9,670,419.












NOTE 10. 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, 9 and 11 for more details.





















20











NOTE 11. 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. Additionally, the Company agreed to sell to the consultant, and the consultant has the
option to purchase from the Company, two and one-half million (2,500,000) shares of the Company’s Common Stock at the price of $0.0001.
This option to purchase is valid for one year.





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,
2021.







Other Obligations and Commitments









No new obligation or commitments during the period
ending March 31, 2021.












NOTE 12. SUBSEQUENT EVENTS





On April 2, 2021 and April 16, 2021, the Company
paid $35,000 and $19,000 respectively to a non-related party towards a $75,000 Convertible Note dated March 18, 2019.





On April 5, 2021, the Company entered into a convertible
promissory note with a non-related party for $43,000. The Note is due on April 5, 2022 and bears interest on the unpaid principal balance
at the rate of 12% per annum. The Note may be converted by the lender at any time before 6-months of the date of issuance into shares
of Company’s common stock at the conversion price equal to 61% multiplied by the Market Price.





On April 14, 2021, the Company entered into a convertible
promissory note with a non-related party for $200,000. The Note is due on April 14, 2022 and bears interest on the unpaid principal balance
at the rate of 5% per annum. The Note may not be converted by the lender before 6 months of the issuance date into shares of Company’s
common stock at a conversion price equal to $0.10.





On May 3, 2021, the Company entered into a convertible
promissory note with a non-related party for $128,000. The Note is due on May 3, 2022 and bears interest on the unpaid principal balance
at the rate of 12% per annum. The Note may be converted by the lender at any time before 6-months of the date of issuance into shares
of Company’s common stock at the conversion price equal to 61% multiplied by the Market Price.





On May 5, 2021, the Company entered into an employment
agreement with a recently appointed officer, whereby it authorized the issuance of 1,000,000 shares of common stock to such officer (see
8-K issued May 21, 2021)





On May 6, 2021, the Company accepted the resignation
of Gregory W. Albers from the position of Secretary/Treasurer of PCT LTD. Mr. Albers will continue to serve as a member of the Board as
a Director (see 8-K issued May 21, 2021)





On May 7, 2021, the Company deemed in the best interest
to settle any and all of the Company’s prior convertible debt with Crown Bridge Partners and allow for the cashless exercise to
purchase 1,921,875 shares of PCT LTD’s common stock (par value $0.001/share) at the rate of $0.032/share, thereby reducing PCT LTD’s
prior debt to Crown Bridge Partners to $0.00. In addition, Crown Bridge Partners shall release 60,072,853 shares to the agreed upon payment
terms of $36,994 cash.





On May 19, 2021, the company received acknowledgement
from a non-related, convertible note holder, with which the Company had previously settled its debt, that 4,623,093 warrants were extinguished
at the time of the settlement (May 8, 2020); thereby returning 4,623,093 warrants to the Company’s treasury.





On June 2, 2021, the Company sold future receivables
to a non-related party for $222,400, of which $8,000 was attributable to loan fees and $62,400 to original issue discount resulting in
cash proceeds to the Company of $152,000. The advance is to be repaid through weekly payments of $8,554. In connection with the advance,
the Company granted the lender a security interest in all past, present and future assets of the Company.





On June 2, 2021, the Company paid $25,000 to a non-related
party toward a $150,000 Convertible Note dated April 9, 2020.





On June 2, 2021, the Company entered into a subscription
and purchase agreement with a non-related party consisting of 3,750,000 restricted shares of common stock (aggregate) at a price per share
of $0.02 for $75,000 cash.






On June 4, 2021, the
Company paid $43,600 to a non-related party to extinguish any and all debt owed on a February 1, 2021 future receivables transaction

.





On July 1, 2021, the Company
renewed its annual lease on the Little River, SC facility for $7,650 per month, which is renewable for an additional three years (with
a 2% increase annually).















21













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”).








COVID-19







The current and potential effects of coronavirus
may impact our business, results of operations and financial condition.






Actual or threatened epidemics,
pandemics, outbreaks, or other public health crises could materially and adversely impact or disrupt our operations, adversely affect
the local economies where we operate and negatively impact our customers’ spending in the impacted regions or depending upon the
severity, globally, which could materially and adversely impact our business, results of operations and financial condition. For example,
since December 2019, a strain of novel coronavirus (causing “COVD-19”) surfaced in China and has spread into the United States,
Europe and most other countries of the world, resulting in certain supply chain disruptions, volatilities in the stock market, lower oil
and other commodity prices due to diminished demand, massive unemployment, and lockdown on international travels, all of which has had
an adverse impact on the global economy. There is significant uncertainty around the breadth and duration of the business disruptions
related to COVID-19, as well as its impact on the U.S. economy. Moreover, an epidemic, pandemic, outbreak or other public health crisis,
such as COVID-19, could adversely affect our ability to adequately staff and manage our business. The extent to which COVID-19 impacts
our business, results of operations and financial condition will depend on future developments, which are highly uncertain, rapidly changing
and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions taken to contain
it or treat its impact.



















22











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 a net loss of $1,111,022 for the three-months ended March 31, 2021 and accumulated losses of $36,024,876 from inception
through March 31, 2021.





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 2021; and

















general and administrative operating costs.





Management projects these costs
to total approximately $2,400,000. 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 fourth quarter of 2021.

















23














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,


2021


December 31,


2020

Cash and cash equivalents


$

53,853



$

115,196


Total current assets



451,659




747,756


Total assets



4,247,738




4,34,610


Total liabilities



15,333,462




15,364,398


Accumulated deficit



(36,024,876

)



(34,913,854

)

Total stockholders’ deficit


$

(11,304,369

)


$

(10,988,433

)






At March 31, 2021, the Company recorded a net loss
of $1,111,022 and a working capital deficit of $14,804,305. While we have recently recorded an increase in the amount of revenues from
operations, since inception and we had not established an ongoing source of revenue sufficient to cover our operating costs. During the
three-months ended March 31, 2021 and 2020 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 $53,853 in cash at March 31, 2021, compared to $115,196 in cash at December 31, 2020. We had total liabilities of $15,333,462
at March 31, 2021 compared to $15,364,398 at December 31, 2020.





Our current cash flow is not sufficient to meet our
monthly expenses of approximately $200,000 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, 2021 the Company recorded notes payable
totaling approximately $2,531,181 (related, non-related and convertible, net of debt discount) compared to notes payable totaling $2,781,597
(related, non-related and convertible, net of debt discount) at December 31, 2020. 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 220% and are due
ranging from on demand to March 26, 2022.






The Company headquarters
and operations is 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) and added
a three-year lease for 9,600 sf. of warehouse space in Fort Wayne, Indiana on November 1, 2020, for $4,500/month


.


The Company also began leasing additional office space in Little River, SC, for $2,750 a month, on an annual
lease, effective March 15, 2021.

















24














Results of Operations





































































































SUMMARY OF OPERATIONS


Three-month period ended


March 31,



(Unaudited)



2021


2020

Revenues


$

395,519



$

272,182


Total operating expenses



1,043,673




780,657


Total other expenses



462,868




9,773,173


Net loss



(1,111,022

)



(10,281,648

)

Preferred series C stock deemed dividends








270,000


Net loss attributable to common stockholders’



(1,111,022

)



(10,551,648

)

Basic and diluted loss per share


$

(0.00

)


$

(0.02

)




Revenues increased to $395,519, for the three-months
ended March 31, 2021 (the “2021 first quarter”) compared to $272,182 for the three-months ended March 31, 2020 (the “2020
first quarter”). The revenue increase for the period was due to the increased volume of fluids sold and the additional revenue from
recurring leased-equipment income.





Total operating expenses increased to $1,043,673 during the 2021 first
quarter compared to $780,657 during the 2020 first quarter. The increase during the first quarter of 2021 was primarily due to an increase
in salaries and wages, legal, consulting fees and rent.





General and administrative expenses increased to $893,451 for the 2021
first quarter compared to $548,786 during the 2020 first quarter. The increase during the first quarter of 2021 was primarily due to an
increase in salaries and wages, legal, consulting fees and rent.





Depreciation and amortization expenses increased slightly
to $88,122 during the 2021 first quarter compared to $83,021 during the 2020 first quarter. Depreciation and amortization was comparable
between the two periods.





Total other expenses decreased to $462,868 for the 2021 first quarter compared
to $9,773,173 during the 2020 first quarter. The overall decrease in other expenses was primarily due to the $9.2M loss in derivatives
incurred during 2020 which did not occur in 2021. There was also a gain on the settlement of debt of $316,401 in 2021 vs. a $44,000 loss
on the settlement of debt in 2020.





As a result of the changes described above, net loss
from operations after income taxes decreased to $1,111,022 during the 2021 first quarter compared to $10,281,648 during the 2020 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.

















25













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 J. Grieco,
our President and principal executive officer, and Arthur Abraham, our Chief Financial Officer and principal financial officer, , 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 officer and principal financial
officer concluded that as of March 31, 2021, our disclosure controls and procedures were not effective for the reasons discussed in our
10-K filing.





Our management is responsible
to establish and maintain adequate internal control over financial reporting. Our principal executive officer is responsible to design
or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. The policies and procedures include:






  • maintenance of records in reasonable detail to accurately and fairly reflect
    the transactions and dispositions of assets,


  • provide reasonable assurance that transactions are recorded as necessary to
    permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
    are being made only in accordance with authorizations of management and directors, and


  • provide reasonable assurance regarding prevention or timely detection of unauthorized
    acquisition, use or disposition of assets that could have a material effect on our financial statements.





For the prior ended March 31,
2021, management has relied on the Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Internal Control -
Integrated Framework (2013),” to evaluate the effectiveness of our internal control over financial reporting. Based upon that framework,
our President has determined that our internal control over financial reporting for the period ended March 31, 2020, was not effective.





The material weaknesses relate
to the limited number of persons responsible for the recording and reporting of financial information, the lack of separation of financial
reporting duties, and the limited size of our management team in general. We are in the process of evaluating methods of improving our
internal control over financial reporting, including the possible addition of financial reporting staff and the increased separation of
financial reporting responsibility, and intend to implement such steps as are necessary and possible to correct these material weaknesses.





Our management determined that
there were no changes made in our internal controls over financial reporting during the first quarter of 2021 that have materially affected
or are reasonably likely to materially affect our internal control over financial reporting.







Notwithstanding this finding of ineffective disclosure
controls and procedures, our certifying officers 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, 2021, 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).



















26













PART II – OTHER INFORMATION






ITEM 1. LEGAL PROCEEDINGS





We may become involved in various routine legal proceedings
incidental to our business. To our knowledge as of the date of this report, other than described below, there are no material pending
legal proceedings to which we are a party or to which any of our property is subject.






Annihilare Litigation





On August 8, 2019, we received
notice from Annihilare Medical Systems, Inc (“Annihilare”) that certain intellectual properties developed jointly between
us and Annihilare were to be discontinued from use by us and our customers. We dispute the claims from Annihilare that the intellectual
properties are exclusively Annihilare’s.





In May of 2020, we filed a complaint
in the United States District Court for the Western District of North Carolina (Charlotte Divisions – Civil Action No. 3:20-cv-00287),
against Annihilare, Marion E. Paris, Jr. and Clay Parker Sipes, seeking damages.





These claims arose from several
consulting agreements and an acquisition agreement between the Company and the Defendants surrounding the purchase of Annihilyzer®
Intellectual property by the Company and subsequent infringement of the intellectual properties. The case settled in the quarter ended
March 31, 2021.










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, 2020.








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





On January 4, 2021, the Company issued 25,000,000
common shares to settle a convertible note described in Note 6(bb), with a remaining balance of $40,000.





On February 16, 2021, the Company issued 1,803,279
shares of common stock to settle $247,270 from a $275,000 note payable dated June 20, 2018, which has a balance of $331,304, including
interest, to the current Chairman and CEO of the Company. The Company also agreed to issue a new note for the remaining balance owed to
the Chairman and CEO of $84,034, dated February 16, 2021. The note will bear interest at 5% per annum and is due on June 30, 2021.





On February 16, 2021, the Company issued 2,663,299
shares of common stock to settle a June 20, 2018 note payable of $380,000 and accrued interest of $26,153 owed to the current COO and
Director of the Company.





On February 15, 2021, 40,000 shares of preferred
series C stock was 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.





On March 1, 2021, the Company released an additional
vested 375,000 shares of common stock to its current COO and Director, as per the Company employment agreement with the executive.





On March 1, 2021, the Company entered into
a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services for a period of three months in consideration
of $5,000 per month and an option to purchase 2,500,000 shares of common stock at $0.0001 for one year, exercisable on issuance.















27











Subsequent Issuances After Quarter-End



On April 5, 2021, the Company entered into a convertible promissory note
with a non-related party for $43,000. The Note is due on April 5, 2022 and bears interest on the unpaid principal balance at the rate
of 12% per annum. The Note may be converted by the lender at any time before 6-months of the date of issuance into shares of Company’s
common stock at the conversion price equal to 61% multiplied by the Market Price.





On April 14, 2021, the Company entered into a convertible promissory note
with a non-related party for $200,000. The Note is due on April 14, 2022 and bears interest on the unpaid principal balance at the rate
of 5% per annum. The Note may not be converted by the lender before 6 months of the issuance date into shares of Company’s common
stock at a conversion price equal to $0.10.





On May 3, 2021, the Company entered into a convertible promissory note
with a non-related party for $128,000. The Note is due on May 3, 2022 and bears interest on the unpaid principal balance at the rate of
12% per annum. The Note may be converted by the lender at any time before 6-months of the date of issuance into shares of Company’s
common stock at the conversion price equal to 61% multiplied by the Market Price.





On May 5, 2021, the Company entered into an employment agreement with a
recently appointed officer, whereby it authorized the issuance of 1,000,000 shares of common stock to such officer (see 8-K issued May
21, 2021)





On May 7, 2021, the Company deemed in the best interest to settle any and
all of the Company’s prior convertible debt with Crown Bridge Partners and allow for the cashless exercise to purchase 1,921,875
shares of PCT LTD’s common stock (par value $0.001/share) at the rate of $0.032/share, thereby reducing PCT LTD’s prior debt
to Crown Bridge Partners to $0.00. In addition, Crown Bridge Partners shall release 60,072,853 shares to the agreed upon payment terms
of $36,994 cash.





On June 2, 2021, the Company paid $25,000 to a non-related party toward
a $150,000 Convertible Note dated April 9, 2020.





One June 2, 2021, the Company entered into a subscription and purchase
agreement with a non-related party consisting of 3,750,000 restricted shares of common stock (aggregate) at a price per share of $0.02
for $75,000 cash.





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, 2021.








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, 2021, or went into default before the filing of this Quarterly Report (See Note 6 to the
financial statements).







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








As of March 31, 2021, had cash
and cash equivalents of $53,853. 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 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. The effect of the conversions in the year ended December 31, 2020 for the convertible notes
has been to substantially dilute existing holders of common stock of our Company. 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.












ITEM 5. OTHER INFORMATION





Not applicable.

















28













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)



4.1



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)



4.2



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)



4.3



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)



4.4



Peak One Opportunity Fund Note dated September 16, 2019 (Incorporated by reference to Exhibit 4.16 of Form 10-Q, filed on August 14, 2020)



4.5



Power-Up #8 Note dated October 8, 2019 (Incorporated by reference to Exhibit 4.17 of Form 10-Q, filed on August 14, 2020)



4.6



Power-Up #9 Note dated October 31, 2019 (Incorporated by reference to Exhibit 4.18 of Form 10-Q, filed on August 14, 2020)



4.7



Power-Up #10 Note dated March 2, 2020 (Incorporated by reference to Exhibit 4.19 of Form 10-Q, filed on August 14, 2020)



4.8



TFK Investments Note dated April 10, 2020 (Incorporated by reference to Exhibit 4.20 of Form 10-Q, filed on August 14, 2020)



4.9



Power-Up #11 Note dated April 16, 2020 (Incorporated by reference to Exhibit 4.21 of Form 10-Q, filed on August 14, 2020)



4.10



Herschbach 2005 Trust Consolidated Note dated May 5, 2020 (Incorporated by reference to Exhibit 4.22 of Form 10-Q, filed on August 14, 2020)



4.11



Power-Up #12 Note dated May 12, 2020 (Incorporated by reference to Exhibit 4.23 of Form 10-Q, filed on August 14, 2020)



4.12



Digital Ally Note dated July 7, 2020 (Incorporated by reference to Exhibit 4.24 of Form 10-Q, filed on August 14, 2020)



4.13



Reserve Capital Management Note dated July 15, 2020 (Incorporated by reference to Exhibit 4.25 of Form 10-Q, filed on November 16, 2020)



4.14



Digital Ally Note #2 dated July 28, 2020



4.15



Signature Note dated October 1, 2020 (Incorporated by reference to Exhibit 4.27 of Form 10-Q, filed on November 16, 2020)



10.1



Agreement with Annihilyzer, Inc. dated November 29, 2016 (Incorporated by reference to Exhibit 10.1 of Form 8-K, filed April 20, 2017)



10.2



Amendment to Agreement with Annihilyzer, Inc. dated April 6, 2017 (Incorporated by reference to Exhibit 10.2 of Form 8-K, filed April 20, 2017)



10.3



Read Consolidated Promissory Note dated September 27, 2017 (Incorporated by reference to Exhibit 10.1 of Form 8-K, filed October 4, 2017)



10.4†



Read Employment Agreement (Incorporated by reference to Exhibit 10.18 of Form 10-Q, filed on September 16, 2019)



10.5†



Read Addendum to Employment Agreement (Incorporated by reference to Exhibit 10.19 of Form 10-Q, filed on September 16, 2019)



10.6†



Grieco 2019 Employment Agreement (Incorporated by reference to Exhibit 10.20 of Form 10-Q, filed on September 16, 2019)



10.7†



Grieco 2020 Employment Agreement (Incorporated by reference to Exhibit 10.21 of Form 10-Q, filed on April 13, 2020)



10.8



Peak One Opportunity Fund Agreement dated September 16, 2019 (Incorporated by reference to Exhibit 10.22 of Form 10-Q, filed on August 14, 2020)



10.9



Power-Up #8 Agreement dated October 8, 2019 (Incorporated by reference to Exhibit 10.23 of Form 10-Q, filed on August 14, 2020)



10.10



Power-Up #9 Agreement dated October 31, 2019 (Incorporated by reference to Exhibit 10.24 of Form 10-Q, filed on August 14, 2020)



10.11



Power-Up #10 Agreement dated March 2, 2020 (Incorporated by reference to Exhibit 10.25 of Form 10-Q, filed on August 14, 2020)



10.12



TFK Investments Agreement dated April 10, 2020 (Incorporated by reference to Exhibit 10.26 of Form 10-Q, filed on August 14, 2020)



10.13



Power-Up #11 Agreement dated April 16, 2020 (Incorporated by reference to Exhibit 10.27 of Form 10-Q, filed on August 14, 2020)



10.14



Herschbach 2005 Trust Agreement dated May 12, 2020 (Incorporated by reference to Exhibit 10.28 of Form 10-Q, filed on August 14, 2020)



10.15



RB Capital $200,000 Note dated October 7, 2020 (Incorporated by reference to Exhibit 10.29 of Form 10-Q, filed on November 16, 2020)



10.16



RB Capital $200,000 Note dated October 16, 2020 (Incorporated by reference to Exhibit 10.30 of Form 10-Q, filed on November 16, 2020)



10.17



October 1, 2020 $199,500 Future Receivables Note (Incorporated by reference to Exhibit 10.17 of Form 10-K, filed on April 13, 2021)



10.18



November 3, 2020 $126,000 Future Receivables Note(Incorporated by reference to Exhibit 10.18 of Form 10-K, filed on April 13, 2021)



10.19



November 4, 2020 $113,980 Future Receivables Note (Incorporated by reference to Exhibit 10.19 of Form 10-K, filed on April 13, 2021)



10.20



RB Capital $300,000 Note dated November 11, 2020 (Incorporated by reference to Exhibit 10.20 of Form 10-K, filed on April 13, 2021)



10.21



RB Capital $150,000 Note dated December 29, 2020 (Incorporated by reference to Exhibit 10.21 of Form 10-K, filed on April 13, 2021)



10.22



RB Capital $150,000 Note dated January 26, 2021 (Incorporated by reference to Exhibit 10.22 of Form 10-K, filed on April 13, 2021)



10.23



February 2, 2021 $177,800 Future Receivables Note (Incorporated by reference to Exhibit 10.23 of Form 10-K, filed on April 13, 2021)



10.24



February 22, 2021 $128,000 Convertible Promissory Note (Incorporated by reference to Exhibit 10.24 of Form 10-K, filed on April 13, 2021)



10.25



March 5, 2021 $522,640 Future Receivables Note (Incorporated by reference to Exhibit 10.25 of Form 10-K, filed on April 13, 2021)



10.26



March 9, 2021 $111,920 Future Receivables Note (Incorporated by reference to Exhibit 10.26 of Form 10-K, filed on April 13, 2021)



10.27



March 18, 2021 $200,000 Convertible Promissory Note (Incorporated by reference to Exhibit 10.27 of Form 10-K, filed on April 13, 2021)



10.28



March 23, 2021 Amended Convertible Note (Incorporated by reference to Exhibit 10.28 of Form 10-K, filed on April 13, 2021)



31.1



Principal Executive Officer Certification



31.2



Principal Financial Officer Certification



32.1



PEO Section 1350 Certification



32.2



PFO Section 1350 Certification



99.15



New Website and Investor Relations Press Release dated January 26, 2021 (Incorporated by reference to Exhibit 99.8 of Form 10-K, filed on April 13, 2021)



99.2



UK Updated Press Release dated January 28, 2021 (Incorporated by reference to Exhibit 99.9 of Form 10-K, filed on April 13, 2021)



99.3



Litigation Settlement Press Release dated March 4, 2021 (Incorporated by reference to Exhibit 99.10 of Form 10-K, filed on April 13, 2021)



99.4



Fiscal 2020 Results Press Release dated April
15, 2021



99.5



Oilfield Testing Press Release dated April 30, 2021



99.6



Current Status of OTC QB Uplisting Press Release dated May 4, 2021



99.7



New Financial Officer Press Release dated May 14, 2021



99.8



ProtectX Joint Business Venture Press Release dated May 27, 2021



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














† Indicates management
contract or compensatory plan or arrangement.















29













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: June 25, 2021



By:





/s/ Gary Grieco











Gary Grieco, Chief Executive Officer and Chairman




















/s/
Arthur Abraham






Arthur
Abraham, Chief Financial Officer











30


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