The following management's discussion and analysis contains forward-looking
statements that involve risks and uncertainties, such as statements of our
plans, objectives, expectations and intentions. Any statements that are not
statements of historical fact are forward-looking statements. When used, the
words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect"
and the like, and/or future tense or conditional constructions ("will," "may,"
"could," "should," etc.), or similar expressions, identify certain of these
forward-looking statements. These forward-looking statements are subject to
risks and uncertainties that could cause actual results or events to differ
materially from those expressed or implied by the forward-looking statements in
this report. The Company's actual results and the timing of events could differ
materially from those anticipated in these forward-looking statements as a
result of several factors. The Company does not undertake any obligation to
update forward-looking statements to reflect events or circumstances occurring
after the date of this report.
Overview
On May 15, 2013, Receivable Acquisition & Management Corporation, a Delaware
corporation, completed the acquisition of Cornerstone Program Advisors LLC, a
Delaware limited liability company ("Cornerstone") and Sustainable Energy
Industries, Inc., a Delaware corporation ("Sustainable"), and assumed the
operations of each of these entities (the "Merger"). Receivable Acquisition &
Management Corporation had operated as a business purchasing and collecting upon
defaulted consumer receivables; those operations were ceased and collections on
any remaining receivables were run off. Cornerstone has been in the business of
managing energy infrastructure projects, specializing in the non-profit
marketplace. Sustainable is in the business of developing, marketing, and
implementing clean tech technologies. The Company has refocused on managing
energy infrastructure projects and developing applications for a proprietary
environmentally benign heat conversion technology with particular focus on the
geothermal, waste-heat-to-energy production, and water purification markets.
Shareholders approved a name change to PwrCor, Inc. at the shareholder meeting
in January, 2017. The corporate name change in Delaware to "PwrCor, Inc." was
effective on March 3, 2017.
Critical Accounting Policy & Estimates
Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, accrued expenses, financing operations, and contingencies
and litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions and conditions. The most significant accounting estimates
inherent in the preparation of our financial statements include estimates as to
the appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources and our consideration of going concern.
These accounting policies are described at relevant sections in this discussion
and analysis and in the financial statements included in this annual report.
Results of Operations
Year ended December 31, 2020 as compared with December 31, 2019.
Revenue
During the year ended December 31, 2020, the Company had a net loss of
($112,056) on revenues of $189,965, versus a net loss of ($449,421) on revenues
of $757,639 in the year ended December 31, 2019. The revenue decline was
primarily a consequence of the disruption that preparations for Covid-19
treatments caused for hospital operations, and in particular, budgets. The loss
of income was primarily a result of insufficient revenue and margin to cover the
cost of being a fully reporting public company.
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The margin of project management revenue over the corresponding cost of
subcontracted consultants for such projects improved from 2019 to 2020. The
gross profit for that activity for the year ended December 31, 2020 was
approximately 38% of project management revenues, versus approximately 20% in
2019, primarily due to a reduction in contractor resources and improved cost
management.
The revenue decrease for the year ended December 31, 2020, as compared to the
prior year was a consequence of decreased billings for the Company's largest
customer not fully offset by other business.
Operating Expenses
Total operating expenses for the year ended December 31, 2020 were $302,021,
versus $1,207,060 during the year ended December 31, 2019. The 75% decrease in
operating expenses in 2020 as compared with 2019 resulted primarily from the
decline in expenditures for contractor consulting expenses as billable hours
decreased, and also reductions in engine development expenses.
General and Administrative expenses for the year ended December 31, 2020 were
$59,108, versus $97,384, during the year ended 2019, a decrease of 39%, as rent
and travel-related expenses declined. Legal, accounting, and other professional
fees decreased to $100,648 in 2020 from $135,932 in 2019, as discretionary
activities were curtailed.
Technology research, development and fulfillment expenses decreased 94% to
$23,928 in 2020 from $376,432 the year earlier when the development and testing
the new engine design was completed.
Consulting Expenses
The Company outsources a significant portion of its project management,
oversight and advisory activities to a carefully selected group of small firms
and subcontractors with expertise specific to the projects underway. As of the
year ended December 31, 2020, the Company was using two such consulting
resources. Consulting expenses consistently constitute the bulk of operating
costs for the project advisory and management business activities of the
Company, and accordingly generally track revenue.
Liquidity and Capital Resources
As of December 31, 2020, the Company had a working capital deficit of ($499,557)
versus a working capital deficit of ($483,815) as of year ended December 31,
2019, as cash and receivables declined more rapidly than payables.
As of December 31, 2020, the Company had net cash of $49,729 as compared with
$126,632 at December 31, 2019. For the year ended December 31, 2020, the change
in net cash (used) by operating activities was ($155,103) as compared with
($178,274) at December 31, 2019. The change in net cash used by operating
activities was primarily due to a decrease in payables and accrued expenses. In
2020, there was no cash used in investing activities, while, in 2019, $40,500
was used as the remaining outstanding payment to the Licensor.
At the end of 2020, there was $78,100 net cash provided by financing activities
in the form of a long-term loan from the Small Business Administration versus no
net cash provided during 2019.
The worldwide emergence of a new and in some cases fatal coronavirus has caused
major disruptions to daily life domestically and around the world. Most
important to the Company, these developments are causing significant changes in
a wide array of business activities and disruption in capital markets.
Regarding the first, the Company is currently engaged in projects at hospitals
primarily in the New York City, and there can be no assurance that these
hospitals will continue the Company's activity uninterrupted while dealing with
potentially major demands on their treatment facilities, or whether the hospital
environments will be sufficiently safe for the Company's consultants to continue
to work on-site. Regarding the second, the dramatic swings in financial markets
and the related uncertainties are likely to challenge efforts to obtain
additional capital during this pandemic and, possibly, in its near term
aftermath.
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While some of the Company's agreements with its clients remain intact, hospital
construction projects involving capital expenditures for facilities expansion
and renovation are being re-prioritized, and many have been postponed.
Furthermore, Covid infection prevention efforts have created an abnormal work
environment, placing the Company's normal onsite consulting work in a holding
pattern. Work that involves offsite activity continues, however, but at a
modified pace. The timing of returning to normality is unpredictable at the
current time, but unlikely to recover in the near term.
Given these major uncertainties, the Company cannot reliably project its results
from its project management operations for at least the next six months, so it
is uncertain whether any such revenue, together with existing cash and cash
infusions by major stockholders, will be sufficient to finance its operations
for the next twelve months.
However, the Company has engaged the services of an investment bank and is
actively seeking additional capital to cover any working capital needs and to
fund growth initiatives in its identified markets. There can be no assurance
that any new debt or equity financing arrangement will be available to the
Company when needed on acceptable terms, if at all. The initiative is also in
the process of actively introducing the Company's engine technology to business
in a set of identified key markets to accelerate the commercialization of the
Company's latest generation product. These efforts also have no assurance,
particularly in an environment where businesses are being disrupted, of
achieving their objectives at sufficient scale to achieve desirable levels of
cash flow. The continued operations of the Company are dependent on its ability
to collect its receivables and increase revenues.
Income Taxes
The Company has not incurred a material amount of taxes to New Jersey, New York
State and New York City, and does not expect any material income tax liability
for the period ended December 31, 2020.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
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PWRCOR, INC. 
