PCT LTD - Quarter Report: 2017 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2017

or 

Commission file number: 000-31549

BINGHAM CANYON CORPORATION

(Exact name of registrant as specified in its charter)

(913) 353-4560

(Registrant’s telephone number, including area code)

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 an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 August 14, 2017 was 39,981,572.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial information set forth below with respect to our statements of operations for the three and six month periods ended June 30, 2017 and 2016 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 and six month periods ended June 30, 2017 are not necessarily indicative of results to be expected for any subsequent period.

BINGHAM CANYON CORPORATION

Financial Statements

June 30, 2017

(Unaudited)

BINGHAM CANYON CORPORATION

Condensed Consolidated Balance Sheets

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

BINGHAM CANYON CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

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

BINGHAM CANYON CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

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

Bingham Canyon Corporation

Notes to the Unaudited

Condensed Consolidated Financial Statements

June 30, 2017

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited interim condensed consolidated financial statements of Bingham Canyon Corporation (“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, 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 financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2016 audited financial statements as reported in its Form 10-K, filed April 14, 2017.

Nature of Operations

On August 31, 2016, the Company entered into a Securities Exchange Agreement with Paradigm Convergence Technologies Corporation (“Paradigm”) to effect the acquisition of Paradigm as a wholly-owned subsidiary. Under the terms of the agreement, the Company issued 16,790,625 restricted common shares of Company stock to all of the shareholders of Paradigm in exchange for all 22,387,500 outstanding Paradigm common stock. In addition, the Company issued options exercisable into 2,040,000 shares of the Company’s common stock (with exercise prices ranging between $0.133 and $0.333) in exchange for 2,720,000 outstanding Paradigm stock options (with exercise prices ranging between $0.10 and $0.25). These 2,040,000 options have been adjusted at the same exchange rate of 75% that the outstanding common shares were exchanged. As a result of this reverse recapitalization, Paradigm, the operating company, is considered the accounting acquirer.

Paradigm is located in Lenexa, Kansas and was formed June 6, 2012 under the name of EUR-ECA, Ltd. Paradigm also leases office, research and development and production space in Little River, South Carolina. Paradigm is a technology licensing company specializing in environmentally safe solutions for global sustainability. Paradigm holds 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.

Principles of Consolidations

The accompanying consolidated financial statements include the accounts of Bingham Canyon Corporation (“Parent”) and its wholly owned subsidiary, Paradigm Convergence Technologies Corporation (“Paradigm” or “Subsidiary”). All intercompany accounts have been eliminated upon consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting periods. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents are considered to be cash and a highly liquid security with original maturities of three months or less. There was cash of $863 and $21,078 as of June 30, 2017 and December 31, 2016, respectively. There were no cash equivalents as of June 30, 2017 and December 31, 2016.

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. That Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. Based on management’s evaluation, the allowance for doubtful accounts was $12,000 at June 30, 2017 and December 31, 2016.

Inventory

The inventory consists of raw materials $66,773 and finished goods $159,800 in the amount of $226,573 at June 30, 2017. Inventory is valued based upon first-in first-out (“FIFO”) cost, not in excess of market. The Company recorded a reserve allowance against inventory of nil and nil for the periods ending June 30, 2017 and December 31, 2016, respectively.

Fair Value Measurements

The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value:

The carrying values of our financial instruments, including, cash and cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to the short maturities of these financial instruments. We do not have other financial assets or liabilities that are measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016.

Valuation of Long-lived Assets

The carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. When projections indicate that the carrying value of the long-lived asset is not recoverable, the carrying value is reduced by the estimated excess of the carrying value over the projected undiscounted cash flows. Under similar analysis no impairment was recorded as of June 30, 2017 and December 31, 2016. Impairment tests are conducted on an annual basis and, should they indicate a carrying value in excess of fair value, additional impairment changes may be required.

Property and Equipment

Property and equipment are stated at purchased cost and depreciated on a straight-line method over estimated useful lives ranging from 5 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in the results of operations. Accumulated depreciation for period ending June 30, 2017 and December 31, 2016 were $38,768 and $30,479, respectively. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred.

Intangible Assets

Costs to obtain or develop patents are capitalized and amortized over the remaining life of the patents, and technology rights are amortized over estimated useful lives of 1 to 15 years. These assets are stated at cost, net of accumulated amortization. An impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the intangible assets as determined by the projected undiscounted net future cash flows. The Company recorded impairment expense of nil and nil for the periods ending June 30, 2017 and December 31, 2016, respectively. Accumulated amortization was $218,812 and $107,582 as of June 30, 2017 and December 31, 2016, respectively.

Research and Development

Research and development costs are recognized as an expense during the period incurred, which is until the conceptual formulation, design, and testing of the process is completed and the process has been determined to be commercially viable.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, services have been provided or goods delivered, the price to the buyer is fixed or determinable and collectability is reasonably assured. Revenue from the sale of products is recorded at the time of shipment to the customers. Revenue from contracts to license technology to others is immediately recognized since it is a non-refundable deposit.

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. The weighted-average number of common shares outstanding for computing basic EPS was 38,561,158 at June 30, 2017 as compared to 15,865,142 at June 30, 2016. At June 30, 2017 and June 30, 2016 there were 1,444,750 and 1,875,000 common stock equivalents from stock options that were excluded from the diluted EPS calculation as their effect is anti-dilutive.

Recent Accounting Pronouncements

In March, 2016, the FASB issued ASU 2016-09, "Stock Compensation." ASU 2016-09 was issued to simplify the accounting for stock compensation. It focuses on income tax accounting, award classification, estimating forfeitures, and cash flow presentation. For public companies, ASU 2016-09 became effective for annual periods beginning after December 15, 2016 and for interim periods within those annual periods. The Company adopted ASU 2016-09 effective January 1, 2017. ASU 2016-09 has no material effect on the Company’s financial statements.

In January, 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 issues an initial required screen that, if met, eliminates the need for further assessment. Under the new guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset, or group of similar assets, the assets acquired would not represent a business.

A public company with a calendar year end and which is a Securities and Exchange Commission (SEC) filer should adopt the amendments in ASU 2017-01 effective January 1, 2018. Early adoption is permitted for interim or annual dates after September 30, 2016. The Company adopted ASU 2017-01 effective January 1, 2017.

In January, 2017, the FASB issued ASU 2017-04, “Intangible, Goodwill & Other.” ASU 2017-04 simplifies how all entities assess impairment by implementing a one-step test. As amended, the impairment test will compare the fair value with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds fair value.

A public company which is a Securities and Exchange Commission (SEC) filer should adopt the amendments in ASU 2017-04 for its annual or interim period within its annual period in fiscal years beginning December 31, 2019. Early adoption is permitted for interim or annual dates after January 1, 2017. The Company adopted ASU 2017-04 effective January 1, 2017. ASU 2017-04 has no material effect in the Company’s financial statements.

The Company has reviewed all other FASB issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter the previous GAAP and do not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

NOTE 2. GOING CONCERN

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has limited assets, has incurred losses since inception of $5,189,453 and has negative cash flows from operations. As of June 30, 2017, the Company had a working capital deficit of $633,147. 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. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3. PROPERTY AND EQUIPMENT

Property and Equipment consist of the following as of June 30, 2017 and December 31, 2016:

Depreciation expense was $8,289 for the six months ended June 30, 2017, of which $6,095 is included in cost of goods sold and $2,194 is included in operating expenses. Depreciation expense was $7,096 for the six months ended June 30, 2016, of which nil is included in cost of goods sold and $7,096 is included in operating expenses.

NOTE 4. INTANGIBLE ASSETS

On March 10, 2017, the Company entered into a three year Efficacy Test Data License Agreement and Efficacy Test Data Assignment Agreement (the “Agreement”) with a third party for $25,000. Under the Agreement, the Company can use certain Efficacy Test Data and purchases the rights to other Efficacy Test Data to be added to its EPA Registration number 83241-4. The Company paid $25,000 for the use of certain Efficacy Test Data and purchase of other Efficacy Test Data. The $25,000 was paid on April 28, 2017.

On March 13, 2017, the Company entered into a Registration Transfer Agreement (“Transfer Agreement”) and a Data License and Assignment Agreement (“Data Agreement”) with a third party. Pursuant to the Transfer Agreement, the Company received United States Environmental Protection Agency’s (“EPA”) Registration number 82341-4 for Excelyte® VET for a one-time fee of $125,000. The Company agreed to pay $75,000 at the time of executing the agreement and remaining $50,000 within 30 days. The $50,000 was paid on April 7, 2017.

On April 6, 2017, the Company acquired intangible assets by issuing 2,250,000 shares of common stock at $1.96 per share ($4,405,050) to Annihilyzer Inc. in order to close on the amended agreement dated April 6, 2017. Pursuant to the terms of the Agreement, as amended, the Registrant acquired an Annihilyzer patent and all associated intellectual property. In addition, Paradigm Convergence Technologies Corporation (Paradigm) granted Annihilyzer, Inc, a three-year license and sub-registration under Paradigm’s EPA Product Registration #82341-4. Annihilyzer, Inc. had no activity under this sub-registration agreement as of June 30, 2017.

The components of intangible assets at June 30, 2017 and December 31, 2016 were as follows:

Amortization expense was $111,230 and $6,463 for the six months ended June 30, 2017 and June 30, 2016, respectively.

NOTE 5. NOTES PAYABLE

The following tables summarize notes payable as of June 30, 2017 and December 31, 2016:

NOTE 5. NOTES PAYABLE (Continuted)

Notes Payable

On May 18, 2016, the Company entered into a loan agreement for $150,000 with an unrelated individual. The note is due on June 1, 2018. The note is secured by a mortgage or deed of trust on a property located in Fuquay Varina, North Carolina, owned by a minority shareholder, and by a personal guarantee of the President of the Company. The note bears an interest rate of 13% per annum and a default rate of 19% per annum. The Company paid an origination fee of 10% of the loan value and a broker’s commission of 3% of the loan value. There was also appraisal, underwriting, loan service, and attorney fees of approximately $9,500. The Company recorded a debt discount of approximately $29,079 resulting from these issuance costs which is being amortized over the life of the loan. As of June 30, 2017, the note has a remaining balance of $150,000 and a debt discount balance of $13,279. 

On May 8, 2017, the Company entered into a 2-month term promissory note with a non-related party for $25,000 to be used in operations. The note is secured by 50,000 shares of common stock as collateral and guarantees interest in the amount of $2,500 at the time of repayment. As of June 30, 2017, the note has a remaining balance of $25,000.

On May 15, 2017, the Company entered into a 45-day promissory note with a related party for $125,000 to be used in operations. The note was extended on August 1, 2017 and is now due on August 31, 2017. The note is unsecured and bears an interest rate of 10% per annum. As of June 30, 2017, the note has a remaining balance of $125,000.

NOTE 5. NOTES PAYABLE (Continued)

Notes Payable – Related Parties

On October 18, 2016, the Company entered into a promissory note with a related party for $50,000 to be used in operations. The note was extended on April 18, 2017 and is now due on August 18, 2017. The note is unsecured and bears an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $50,000.

On January 1, 2017, the Company consolidated its outstanding promissory notes with the Company’s President and CEO, into one promissory note totaling $293,302. The note is due January 1, 2018 and will accrue interest at 3.5% per annum. As of June 30, 2017, the note has a remaining balance of $278,302.

On April 12, 2017, the Company entered into a 6-month term promissory note with a related party for $25,000 to be used in operations. The note is unsecured, is due on or before October 12, 2017, and bears an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $25,000.

On April 27, 2017 the Company entered into a one-year term promissory note with a related party for $25,000 to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017, the note has a remaining balance of $25,000.

On May 15, 2017, the Company entered into a one-year term promissory note with a related party for $15,000 to be used in operations. The note is unsecured and bears interest at an interest rate of 5% per annum. As of June 30, 2017, the note has a remaining balance of $15,000.

On June 12, 2017 the Company entered into a one-year term promissory note with a related party for $10,000 to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017, the note has a remaining balance of $10,000.

On June 13, 2017, the Company entered into a short-term promissory note with a related party for $25,000 due on July 31, 2017, to be used in operations. The note is unsecured and bears an interest rate of 3% per annum. As of June 30, 2017 the note has a remaining balance of $25,000.

NOTE 6. RELATED PARTY TRANSACTIONS

The Company has agreements with related parties for consulting services, notes payable and stock options. See Notes to Financial Statements numbers 5, 7, and 9.

NOTE 7. STOCKHOLDERS’ DEFICIT

Common Stock

The Company has 100,000,000 shares of common stock authorized with a par value of $0.001 per share. As of June 30, 2017 and December 31, 2016 there were 39,927,572 and 37,117,572 shares of common stock issued respectively.

On January 6, 2017, the Company issued 25,000 shares of common stock at $1.00 per share to an unrelated party for cash proceeds of $25,000.

From January 26, 2017, through March 13, 2017, the Company issued a combined total of 400,000 shares of common stock at $1.00 per share to an unrelated party for cash proceeds of $400,000.

NOTE 7. STOCKHOLDERS’ DEFICIT (Continued)

On April 6, 2017, the Company acquired intangible assets by issuing 2,250,000 shares of common stock at $1.96 per share ($4,405,050) to Annihilyzer Inc. in order to close on the amended agreement dated April 6, 2017. See also note 4.

On April 12, 2017, the Company issued 100,000 shares of common stock at $1.00 per share to a related party for proceeds of $100,000.

On April 14, 2017, the Company issued 5,000 shares of common stock at $1.00 per share to an unrelated party for cash proceeds of $5,000.

On June 16, 2017, the Company issued 20,000 shares of common stock at $1.25 per share to an unrelated party for cash proceeds of $25,000.

On June 27, 2017, the Company issued 10,000 shares of common stock at $1.25 per share to an unrelated party for cash proceeds of $12,500.

Stock Options

On January 1, 2017 the Company issued 30,000 stock options to a related party with an exercise price of $2.00 per share. The options vest on January 1, 2018. The Company used the Black-Scholes methodology to value the stock-based compensation expense for options. Compensation expense is recognized on a straight-line basis over the vesting period. As of June 30, 2017, the Company recognized $28,110 in compensation expense, leaving $28,110 in compensation expense to be recognized through December 31, 2017.

On January 26, 2017, the Company issued 200,000 stock options to a related party with an exercise price of $2.00 per share. The options vested immediately. The Company used the Black-Scholes methodology to value the stock-based compensation expense for options. As of June 30, 2017, the Company recognized $373,800 in compensation expense, leaving $0 in remaining compensation expense.

In applying the Black-Scholes methodology to the options granted through June 30, 2017, the fair value of our stock-based awards was estimated using the following assumptions ranging from:

Below is a table summarizing the options issued and outstanding as of June 30, 2017:

The weighted average exercise prices are $0.34 and $0.32 for the options outstanding and exercisable, respectively.

NOTE 8. COMMITMENTS AND CONTINGENCIES

On November 21, 2016, the Company signed a lease for approximately 12,000 square feet of office, research & development, warehouse, and production space in Little River, South Carolina. The lease was effective December 1, 2016 at a rate of $4,800 per month for a period of three years. The Company has an option to extend the lease for two periods of three years each. The option to extend the first three-year period is at a rate of $5,100 per month. The option to extend the second three-year period is at a rate of $5,400 per month.

NOTE 9. SUBSEQUENT EVENTS

On July 3, 2017, the Company entered into a one year term promissory note with a related party for $5,500 to be used in operations. The note is unsecured, is due on July 3, 2018, and bears an interest rate of 3% per annum.

On July 3, 2017, the Company entered into a two month term promissory note with an unrelated party for $25,000 to be used in operations. The note is unsecured, is due on August 31, 2017, and bears an interest rate of 8% per annum.

On July 13, 2017, the Company issued 24,000 shares of common stock at $1.25 per share to an unrelated party for cash proceeds of $30,000.

On July 14, 2017, the Company entered into a 45 day term promissory note with an unrelated party for $10,000 to be used in operations. The note is unsecured, is due on August 31, 2017, and bears an interest rate of 8% per annum.

On July 25, 2017, the Company entered into a two month term promissory note with a related party for $25,000 to be used in operations. The note is unsecured, is due on September 25, 2017, and bears an interest rate of 5% per annum.

On July 27, 2017, the Company issued 30,000 shares of common stock at $1.25 per share to an unrelated party for cash proceeds of $37,500.

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, our Annual Report on Form 10-K, Current Reports on Form 8-K and other reports we file under the Exchange Act.

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:

In this Form 10-Q references to “Bingham Canyon,” “Bingham,” “the Company,” “we,” “us,” “our” and similar terms refer to Bingham Canyon Corporation and its wholly owned operating subsidiary, Paradigm Convergence Technologies Corporation (“Paradigm,” “PCT Corp.”).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

On August 10, 2016, Bingham 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 Bingham after the exchange transaction. Bingham is a holding company, which through Paradigm is engaged in the business of marketing new products and technologies through licensing and joint ventures.

Bingham is a holding company and Paradigm is the wholly-owned subsidiary of Bingham. Paradigm is a technology company specializing in the development and commercialization of environmentally-safe products and solutions for global sustainability. We hold patent, intellectual property and/or distribution rights to innovative products and technologies; most specifically, our on-site generation and applications systems for Hydrolyte®, GoGreenlyteFirst™, PCT An-O-Lyte™, PCT Cath-O-Lyte™ and Annihilyte™ disinfectant and microbicide fluids and our comprehensive “Green Cleaning” and disinfecting system and program, the Annihilyzer™ System with its patented^[1] tracking, monitoring and reporting system. Our overall strategy is to market new products and technologies using direct sales; system and service agreements; fluid sales; equipment sales and leasing; licensing and distributor agreements; and, joint ventures, and partnerships. We intend to also continue our constant pursuit of new technologies (through acquisition or invention) upon which we can build and expand our joint venture and licensing core business. However, Paradigm may not be able to identify suitable license or joint venture opportunities, nor guarantee that any such agreements will be profitable.

Bingham 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 $1,116,469 for the six months ended June 30, 2017 and accumulated losses of $5,189,453 from inception through June 30, 2017.

Bingham remains dependent upon additional financing to continue operations. The Company intends to raise additional equity financing through private placements of its common stock. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by, and in accordance with, 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:

• a major commercial launch of non-toxic sanitizing, disinfecting and sterilizing products and technologies, particularly the Annihilyzer™ System, 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 systems including those designed for on-site deployment at customers’ facilities;

• accelerated research and development on crop decontamination applications in the agricultural sector, most immediately with respect to abatement of a bacterial disease crisis caused by a specific bacterium carried by Asian Psyllids in the U.S. and elsewhere;

• acquiring available complementary technology rights;

• payment of short-term debt;

• hiring of additional personnel throughout 2017; and,

• general and administrative operating costs.

Management projects these costs to total approximately $1,300,000. 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 expenditures.

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 should be expected to be at or close to profitability by the end of 2017.

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.

At June 30, 2017, the Company recorded a net loss of $1,166,469 and a working capital deficit of $633,147. We have recorded a relatively small amount of revenues from operations since inception and we have not established an ongoing source of revenue sufficient to cover our operating costs. During 2017 and 2016 we have primarily relied upon advances and loans from a stockholder 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 $863 in cash at June 30, 2017, compared to $21,078 in cash at December 31, 2016. We had total liabilities of $871,164 at June 30, 2017 compared to $555,838 at December 31, 2016.

The increase in total liabilities was primarily the result of an increase in debt used for operations and the unusual and non-recurring expenses associated with securing the right to use the EPA production registration (EPA Registration #82341-4 “Excelyte® VET” label) for a period of time.

Our current cash flow is not sufficient to meet our monthly expenses of approximately $80,000 and to fund future research and development. We intend to rely on additional debt financing, loans from existing stockholders and private placements of common stock for additional funding; however, there is no assurance that additional funding will be available. Although we do not yet have material commitments for future capital expenditures, 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

The Company recorded the following notes payable as of June 30, 2017 and December 31, 2016:

During the six months ended June 30, 2017, the Company repaid $19,610 of notes payable to the Company President, Mr. Gary Grieco. At June 30, 2017 the outstanding loan balance on notes payable to Mr. Grieco, after deducting the $19,610 in payments, was $313,302.

During the six months ended June 30, 2017, Paradigm operated under two leases for office space: one located in Lenexa, Kansas and the second located in Little River, South Carolina. The office space lease cost totaled $6,300 per month.

Results of Operations

Revenues decreased to $10,872 for the three months ended June 30, 2017 compared to $69,963 for the three months ended June 30, 2016. Revenues decreased to $22,229 for the six months ended June 30, 2017 compared to $79,061 for the six months ended June 30, 2016. The revenue decreases for both periods were due to fluid sales only. No equipment was sold during either period.

Cost of sales decreased to $8,108 for the three months ended June 30, 2017 compared to $24,400 for the three months ended June 30, 2016. Cost of sales decreased to $19,337 for the six months ended June 30, 2017 compared to $30,606 for the six months ended June 30, 2016. The cost of sales decreases for both periods were due to fluid sales only. There were no equipment costs in either period due to the absence of equipment sales.

Total operating expenses increased to $471,304 for the three months ended June 30, 2017 compared to $203,098 for the three months ended June 30, 2016. Total operating expenses increased to $1,140,915 for the six months ended June 30, 2017 compared to $421,457 for the six months ended June 30, 2016. The total operating expense increases for both periods were due to stock option expenses, hiring new employees and opening new office locations.

General and administrative expenses increased to $327,514 for the three months ended June 30, 2017 compared to $187,709 for the three months ended June 30, 2016. General and administrative expenses increased to $957,579 for the six months ended June 30, 2017 compared to $330,894 for the six months ended June 30, 2016. General and administrative expense increases for both periods were due to stock option expenses, hiring new employees and opening new office locations.

Research and development expenses increased to $56,710 for the three months ended June 30, 2017 compared to $7,437 for the three months ended June 30, 2016. Research and development expenses decreased to $69,912 for the six months ended June 30, 2017 compared to $77,004 for the six months ended June 30, 2016. Research and development expenses increased for the three months ended June 30, 2017 due to field testing required for EPA certification. Research and development expenses decreased for the six months ended June 30, 2017 due to the completion of testing in one segment of business.

Depreciation and amortization expenses increased to $87,080 for the three months ended June 30, 2017 compared to $7,952 for the three months ended June 30, 2016. Depreciation and amortization expenses increased to $113,424 for the six months ended June 30, 2017 compared to $13,559 for the six months ended June 30, 2016. Depreciation and amortization expenses increased for both periods due to fixed asset and intangible asset acquisitions during those periods.

Total interest expense increased to $16,575 for the three months ended June 30, 2017 compared to $10,886 for the three months ended June 30, 2016. Total interest expense increased to $28,446 for the six months ended June 30, 2017 compared to $15,095 for the six months ended June 30, 2016. The increase in interest expense during both periods is due to increased borrowings for continued operations.

Loss on settlement of convertible debt decreased to $0 and $0 for the three months and six months ended June 30, 2017 compared to $48,872 for the three months and six months ended June 30, 2016. On April 4, 2016, the holders of convertible debentures elected to convert the full principal balance of $25,000 into 250,000 shares each at $0.10 per common share. In addition, the note holders received an additional 250,000 shares each in settlement of the remaining accrued interest and warrants, resulting in a loss on settlement of $48,872.

Net loss from operations and after income taxes increased to $485,115 for the three months ended June 30, 2017 compared to $217,293 for the three months ended June 30, 2016. Net loss from operations and after income taxes increased to $1,166,469 for the six months ended June 30, 2017 compared to $436,969 for the six months ended June 30, 2016. Net loss from operations and after income taxes increased for the three months and six months ended June 30, 2017 primarily due to loss on settlement of debt in 2016, increased operating and general and administrative expenses.

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

Emerging Growth Company - We qualify as an “emerging growth company” under the recently enacted Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, among other things, we will not be required to:

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion; (ii) the fifth anniversary of our first sale of common equity pursuant to an effective registration statement; (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed third fiscal quarter; or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Recent Accounting Developments

We reviewed all recent accounting pronouncements issued by the FASB (including the Emerging Issues Task Force), the AICPA, and the SEC and we did not or are not believed by management to have a material impact on our present or future financial statements.

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

Our Principal Executive Officer and Principal Financial Officer, Gary Grieco, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on the evaluation, Mr. Grieco concluded that our disclosure controls and procedures are ineffective in timely alerting him to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings. Notwithstanding the finding of ineffective disclosure controls and procedures, we 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

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 period ended June 30, 2017, management has relied on the Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Internal Control - Integrated Framework,” to evaluate the effectiveness of our internal control over financial reporting. Based upon that framework, our principal executive officer has determined that our internal control over financial reporting for period ended June 30, 2017 and the year ended December 31, 2016, 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 second quarter of 2017 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

There has been no change in the Company’s internal controls over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations.  Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented.  Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

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, there are no material pending legal proceedings to which we are a party or to which any of our property is subject.

ITEM 1A. RISK FACTORS

We are an emerging growth 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, 2016, to which reference is made herein.

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

On January 6, 2017, the Company sold 25,000 shares of common stock at $1.00 per share to an unrelated party for cash proceeds of $25,000.

From January 26, 2017 through March 13, 2017, the Company sold a combined total of 400,000 shares of common stock at $1.00 per share to an unrelated party for cash proceeds of $400,000.

On April 6, 2017, pursuant to the terms of the Annihilyzer Agreement referenced herein, the Company issued 2,250,000 restricted shares of common stock to Annihilyzer, Inc.

On April 12, 2017, the Company sold 100,000 shares of common stock at $1.00 per share to a related party accredited investor for cash proceeds of $100,000.

On April 17, 2017, the Company sold 5,000 shares of common stock to a related party for cash proceeds of $5,000.

On June 19, 2017, the Company sold 20,000 shares of common stock to a non-related party for cash proceeds of $25,000.

On June 27, 2017, the Company sold 10,000 shares of common stock to a related party for cash proceeds of $12,500.

Subsequent Issuances After Quarter-End

On July 13, 2017, the Company sold 24,000 shares of common stock to two accredited investors for cash proceeds of $30,000.

On July 27, 2017, the Company sold 30,000 shares of common stock to an accredited investor for cash proceeds of $37,500.

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 there from.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the quarter ended June 30, 2017.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

We have entered into a number of promissory notes, some of which are in default as of June 30, 2017 or went into default before the filing of this Current Report (See Note 5 to the financial statements).

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Part I Exhibits

Part II Exhibits

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.

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