Item 8.01 Other Events.
Auctus Fund Litigation
In March of 2019, we entered into a Securities Purchase Agreement with Auctus
Fund, LLC ("Auctus"), whereby we borrowed $75,000 from Auctus under the terms of
a convertible promissory note and included the issuance to 187,500 warrants to
Auctus. Adjustment provisions in the Securities Purchase Agreement and the note
required PCTL to adjust the number of warrants and exercise price based upon
future financings.
In late 2019, we defaulted on the Auctus note, which triggered a number of
default provisions of the note. We disputed the amounts claimed to be owed to
Auctus, the number of shares of common stock to be reserved for conversion of
the note and the number and exercise price of the warrants held by Auctus.
Negotiations of these disputes lasted for several months.
In October of 2020, we entered into a Conditional Settlement Agreement with
Auctus to settle all disputes and claims between the parties. A material dispute
between the parties was the warrants, which according the Auctus had ballooned
to 107,142,857 shares at an exercise price of $0.00035. Pursuant to the
settlement agreement, Auctus agreed to settle such disputes and claims based
upon the payment of $145,000 in cash and the issuance of 8,000,000 shares of
common stock.
On September 1, 2021, we issued 8,000,000 common shares and paid the remaining
cash balance to Auctus under the terms of the settlement. We fully complied with
all payments required under the settlement agreement and issued the shares of
common stock to Auctus, which triggered the mutual release of all disputes and
claims between us and Auctus. Despite our compliance with the terms of the
settlement agreement, Auctus has refused to execute the mutual release required
by the settlement agreement and acknowledge the cancellation of the warrants as
part of the settlement.
On January 14, 2022, we filed a complaint in the United States District Court
for the District of Massachusetts (Case 1:22-cv-10053), against Auctus seeking
damages for:
1. Breach of Contract;
2. Breach of Implied Covenant of Good Faith and Fair Dealing;
3. Reformation of Mutual Release;
4. Fraud;
5. Conversion; and
6. Unjust Enrichment.
The case is currently ongoing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline
XBRL document)© Edgar Online, source Glimpses
PCT LTD 
