UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 x           QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For the
quarterly period ended March 31, 2009
 
            TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For the
transition period from _____ to _____
 
 Commission
File Number: 000-52792
 
 SUSPECT DETECTION SYSTEMS
INC.
 (Exact
name of Registrant as specified in its charter)
 
 Delaware
                  (State
      of incorporation)
                98-0511645
                  (IRS
      Employer ID Number)
 
 4 Nafcha Street, Jerusalem,
Israel 95508
 (Address
of principal executive offices)
 
 +972 (2)
500-1128
 (Registrant’s
telephone number)
 
 
 PCMT
CORPORATION
 ________________________________________________________________
 (Former
name, former address and former fiscal year, if changed since last
report)
 
 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 xNo 
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large
      accelerated filer 
              
              Accelerated
      filer Non-accelerated
      filer 
              
              Smaller
      reporting company x(Do
      not check if a smaller reporting company)
 
 
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  No x
 
 
 TABLE
OF CONTENTS
 
 PagePART
      I - FINANCIAL INFORMATIONItem
      1. Financial Statements
                          
                          3Item
      2. Management’s Discussion and Analysis or of Financial Condition and
      Results of Operations
                          
                          3Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
                          
                          5Item
      4. Controls and Procedures
                          
                          5Item
      4(T). Controls and Procedures
                          
                          6PART
      II - OTHER INFORMATION
                          
                          6Item
      1. Legal Proceedings
                          
                          6Item
      IA. Risk Factors
                          
                          6Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                          
                          6Item
      3. Defaults Upon Senior Securities
                          
                          6Item
      4. Submission of Matters to a Vote of Security Holders
                          
                          6Item
      5. Other Information
                          
                          6Item
      6. Exhibits
                          
                          7SIGNATURES
                          
                          8
 
  2
 
 PART
I
 FINANCIAL
INFORMATION
 
 Item
1.                      Financial
Statements.
  SUSPECT
DETECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 INDEX TO INTERIM FINANCIAL
STATEMENTS
 MARCH
31, 2009, AND 2008
 
 Interim
      Consolidated Financial Statements-Consolidated
      Balance Sheets as of March 31, 2009, and December 31, 2008
                            F-2Consolidated
      Statements of Operations for the Three Months Ended March 31,
      2009,and
      2008, and Cumulative from Inception
                            F-3Consolidated
      Statements of Cash Flows for Three Months Ended March 31,
      2009,2008,
      and Cumulative from Inception
                            F-4Notes
      to Consolidated Interim Financial Statements March 31,
    2009,and
      December 31, 2008
                            F-6
  F-1
  SUSPECT
DETECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
BALANCE SHEETS (NOTE 2)
 AS
OF MARCH 31, 2009, AND DECEMBER 31, 2008
 (Unaudited)
 
 As
      of
                                
                                
                                As
      ofMarch
      31,
                                
                                
                                December
      31,2009
                                
                                
                                2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                                
                                $
                                547,629
                                
                                
                                $
                                179,565Restricted
      cash
                                
                                
                                15,827
                                
                                
                                
                                -Due
      from related party - SDS
                                
                                
                                -
                                
                                
                                
                                28,000Inventory
                                
                                
                                43,882Prepaid
      expenses
                                
                                
                                145,739
                                
                                
                                
                                143,392Total
      current assets
                                
                                
                                753,077
                                
                                
                                
                                350,957Property
      and Equipment, net
                                
                                
                                15,638
                                
                                
                                
                                -Other
      Assets:Deferred
      acquisition costs
                                
                                
                                -
                                
                                
                                
                                1,135,000Severance
      pay fund deposit
                                
                                
                                44,728
                                
                                
                                
                                -Goodwill
                                
                                
                                1,033,121
                                
                                
                                
                                -Total
      other assets
                                
                                
                                1,077,849
                                
                                
                                
                                1,135,000Total
      Assets
                                
                                $
                                1,846,564
                                
                                
                                $
                                1,485,957LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      Liabilities:Accounts
      payable - Trade
                                
                                $
                                9,796
                                
                                
                                $
                                807Customer
      deposits
                                
                                
                                451,489
                                
                                
                                
                                -Accrued
      liabilities
                                
                                
                                111,345
                                
                                
                                
                                20,802Accrued
      severance pay
                                
                                
                                56,421
                                
                                
                                
                                -Due
      to related parties
                                
                                
                                17,086
                                
                                
                                
                                -Due
      to Director and stockholder
                                
                                
                                288
                                
                                
                                
                                288Total
      current liabilities
                                
                                
                                646,425
                                
                                
                                
                                21,897Total
      liabilities
                                
                                
                                646,425
                                
                                
                                
                                21,897Commitments
      and ContingenciesStockholders'
      Equity:Common
      stock, par value $0.0001 per share, 100,000,000 shares authorized;
      65,809,668 and 72,689,668 shares issued and outstanding in 2009 and
      2008, respectively
                                
                                
                                6,580
                                
                                
                                
                                7,269Additional
      paid-in capital
                                
                                
                                1,815,991
                                
                                
                                
                                1,797,302(Deficit)
      accumulated during the development stage
                                
                                
                                (629,094
                                )
                                
                                
                                (340,511
                                )Total
      Suspect Detection Systems, Inc. equity
                                
                                
                                1,193,477
                                
                                
                                
                                1,464,060Noncontrolling
      Interest
                                
                                
                                6,662
                                
                                
                                
                                -Total
      stockholders' equity
                                
                                
                                1,200,139
                                
                                
                                
                                1,464,060Total
      Liabilities and Stockholders' Equity
                                
                                $
                                1,846,564
                                
                                
                                $
                                1,485,957
 
 The
accompanying notes to consolidated financial statements are
 an
integral part of these consolidated balance sheets.
 
 F-2
 
 SUSPECT
DETECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF OPERATIONS (NOTE 2)
 FOR
THREE MONTHS ENDED MARCH 31 2009, AND 2008,
 AND
CUMULATIVE FROM INCEPTION (OCTOBER 5, 2006)
 THROUGH
MARCH 31, 2009
 (UNAUDITED)
 
 Three
      Months Ended
                            
                            
                            CumulativeMarch 31,
                            
                            
                            From2009
                            
                            
                            2008
                            
                            
                            InceptionRevenues,
      net
                            
                            $
                            168,982
                            
                            
                            $
                            -
                            
                            
                            $
                            168,982Cost
      of Revenues
                            
                            
                            37,457
                            
                            
                            
                            -
                            
                            
                            $
                            37,457Gross
      Profit
                            
                            
                            131,525
                            
                            
                            
                            -
                            
                            
                            
                            131,525Expenses:Research
      and Development
                            
                            
                            39,747
                            
                            
                            
                            -
                            
                            
                            
                            39,747Sales
      and marketing
                            
                            
                            108,543
                            
                            
                            
                            -
                            
                            
                            
                            108,543General
      and administrative
                            
                            
                            368,673
                            
                            
                            
                            41,003
                            
                            
                            
                            716,970Total
      operating expenses
                            
                            
                            516,963
                            
                            
                            
                            41,003
                            
                            
                            
                            865,260(Loss)
      from Operations
                            
                            
                            (385,438
                            )
                            
                            
                            (41,003
                            )
                            
                            
                            (733,735
                            )Other
      Income
                            
                            
                            5,634
                            
                            
                            
                            2,218
                            
                            
                            
                            13,420Provision
      for income taxes
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      (Loss) Before Noncontrolling Interest
                            
                            
                            (379,804
                            )
                            
                            
                            (38,785
                            )
                            
                            
                            (720,315
                            )Less
      - Loss Attributable to Noncontrolling Interest
                            
                            
                            91,221
                            
                            
                            
                            -
                            
                            
                            
                            91,221Net
      (Loss)
                            
                            $
                            (288,583
                            )
                            
                            $
                            (38,785
                            )
                            
                            $
                            (629,094
                            )(Loss)
      Per Common Share:(Loss)
      per common share - Basic and Diluted
                            
                            $
                            (0.00
                            )
                            
                            $
                            (0.00
                            )Weighted
      Average Number of Common SharesOutstanding
      - Basic and Diluted
                            
                            
                            67,189,668
                            
                            
                            
                            61,981,461
 
 The
accompanying notes to consolidated financial statements are
 an
integral part of these consolidated statements.
 
 F-3
 
 SUSPECT
DETECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS (NOTE 2)
 FOR
THE  THREE MONTHS ENDED DMARCH 31, 2009, AND 2008,
 AND
CUMULATIVE FROM INCEPTION (OCTOBER 5, 2006)
 THROUGH
MARCH 31, 2009
 (UNAUDITED)
 
 Three
      Months Ended
                  
                  
                  CumulativeMarch 31,
                  
                  
                  From2009
                  
                  
                  2008
                  
                  
                  InceptionOperating
      Activities:Net
      (loss)
                  
                  $
                  (379,804
                  )
                  
                  $
                  (38,785
                  )
                  
                  $
                  (720,315
                  )Adjustments
      to reconcile net (loss) to net cash (used in) operating
      activities:Common
      stock issued for officers' compensation
                  
                  
                  18,000
                  
                  
                  
                  -
                  
                  
                  
                  18,250Common
      stock issued for legal services
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  10,500Common
      stock issued for promotional services
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  250,000Depreciation
      Expense
                  
                  
                  1,489
                  
                  
                  
                  -
                  
                  
                  
                  1,489Changes
      in Current Assets and Liabilities-Inventory
                  
                  
                  31,404
                  
                  
                  
                  -
                  
                  
                  
                  31,404Prepaid
      expenses
                  
                  
                  44,137
                  
                  
                  
                  -
                  
                  
                  
                  (99,255
                  )Accounts
      payable - Trade
                  
                  
                  414
                  
                  
                  
                  (6,900
                  )
                  
                  
                  1,221Accrued
      liabilities
                  
                  
                  (10,540
                  )
                  
                  
                  4,635
                  
                  
                  
                  (2,790
                  )Advance
      from Customer
                  
                  
                  (27,762
                  )
                  
                  
                  -
                  
                  
                  
                  (27,762
                  )Accrued
      Severance pay
                  
                  
                  8,620
                  
                  
                  
                  -
                  
                  
                  
                  8,620Accrued
      officer's salary
                  
                  
                  (5,000
                  )
                  
                  
                  (2,000
                  )
                  
                  
                  -Accrued
      office rent - Related party
                  
                  
                  900
                  
                  
                  
                  900
                  
                  
                  
                  8,952Net
      Cash (Used in) Operating Activities
                  
                  
                  (318,142
                  )
                  
                  
                  (42,150
                  )
                  
                  
                  (519,686
                  )Investing
      Activities:Deposit
      in Severance pay fund
                  
                  
                  (3,902
                  )
                  
                  
                  -
                  
                  
                  
                  (3,902
                  )Purchases
      of Property and Equipment
                  
                  
                  (1,108
                  )
                  
                  
                  -
                  
                  
                  
                  (1,108
                  )Net
      Cash (Used in) Investing Activities
                  
                  
                  (5,010
                  )
                  
                  
                  -
                  
                  
                  
                  (5,010
                  )Financing
      Activities:Issuance
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  617,450
                  
                  
                  
                  1,139,070Stock
      subscriptions paid
                  
                  
                  -
                  
                  
                  
                  (107,000
                  )
                  
                  
                  404,751Deferred
      acquisition costs
                  
                  
                  -
                  
                  
                  
                  (8,000
                  )
                  
                  
                  (1,135,000
                  )Due
      from related party - SDS
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (28,000
                  )Due
      to Director and stockholder
                  
                  
                  17,071
                  
                  
                  
                  -
                  
                  
                  
                  17,359Net
      Cash Provided by Financing Activities
                  
                  
                  17,071
                  
                  
                  
                  502,450
                  
                  
                  
                  398,180Net
      Increase(Decrease) in Cash
                  
                  
                  (306,081
                  )
                  
                  
                  460,300
                  
                  
                  
                  (126,516
                  )Cash
      - Beginning of Period
                  
                  
                  853,710
                  
                  
                  
                  364,534
                  
                  
                  
                  674,145Cash
      - End of Period
                  
                  $
                  547,629
                  
                  
                  $
                  824,834
                  
                  
                  $
                  547,629Cash
      - End of Period Consisting of:Cash
      in bank
                  
                  $
                  547,629
                  
                  
                  $
                  824,834
                  
                  
                  $
                  547,629Restricted
      cash
                  
                  
                  15,827
                  
                  
                  
                  -
                  
                  
                  
                  15,827Total
                  
                  $
                  563,456
                  
                  
                  $
                  824,834
                  
                  
                  $
                  563,456Supplemental
      Disclosure of Cash Flow Information:Cash
      paid during the period for:Interest
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Income
      taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
 
 The
accompanying notes to consolidated financial statements are
 an
integral part of these consolidated statements.
 
 F-4
 
 SUSPECT
DETECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS (NOTE 2)
 FOR
THE  THREE MONTHS ENDED DMARCH 31, 2009, AND 2008,
 AND
CUMULATIVE FROM INCEPTION (OCTOBER 5, 2006)
 THROUGH
MARCH 31, 2009
 (UNAUDITED)
 
 On
November 3, 2006, SDS Inc. issued 2,500,000 (post forward stock split) shares of
its common stock to its Director and Corporate Secretary at par value for
services rendered.  The transaction was valued at $250.
 
 On
December 5, 2007, SDS Inc. issued 100,000 (post forward stock split) shares of
its common stock to an attorney for legal services rendered. The transaction was
valued at $10,500.
 
 On April
20, 2008, SDS Inc. issued 666,6666 (post forward stock split) shares of its
common stock to a third-party for marketing and promotional services for one
year.  The transaction was valued at $100,000.
 
 On
October 1, 2008, SDS Inc. issued 1,000,000 (post forward stock split) shares of
its common stock to a third-party for marketing and promotional services for one
year.  The transaction was valued at $150,000.
 
 On
January 16, 2009, SDS Inc. issured 120,000 (post forward stock split) shares to
its Chief Financial Officer, Mr.Zwebner for services rendered. The transaction
was valued at $18,000.
 
 The
accompanying notes to consolidated financial statements are
 an
integral part of these consolidated statements.
 
 F-5
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 1)           Summary
of Significant Accounting Policies
 
 Basis of Presentation and
Organization
 
 Suspect
Detection Systems Inc. (formerly PCMT Corporation) (“SDS Inc.” or the “Company”)
is a Delaware corporation in the development stage and conducts its operations
through its 51 percent owned subsidiary, Suspect Detection System, Ltd, an
Israeli Corporation(“SDS - Israel”).  The Company was incorporated
under the laws of the State of Delaware on October 5, 2006.  The
revised business plan of the Company is the application of proprietary
technologies for law enforcement and border control, including counter terrorism
efforts, immigration control and drug enforcement, as well as human resource
management, asset management and the transportation sector.  The
accompanying consolidated financial statements of SDS Inc. were prepared from
the accounts of the Company under the accrual basis of accounting.
 
 In
November 2006, SDS Inc. began a capital formation activity through a Private
Placement Offering (“PPO #1”), exempt from registration under the Securities Act
of 1933, to raise up to $50,000 through the issuance of 20,000,000 (post
forward stock split) shares of its common stock, par value $0.0001 per share, at
an offering price of $0.0025 per share.  As of February 5, 2007, the
Company had received $50,000 in proceeds from the PPO #1.  SDS Inc.
also commenced an activity to submit a Registration Statement on Form SB-2 to
the SEC to register 20,000,000 shares (post forward stock split) of its
outstanding common stock on behalf of selling stockholders.  SDS Inc.
will not receive any of the proceeds of this registration activity once the
shares of common stock are sold.  The Registration Statement on Form
SB-2 was filed with the SEC on March 12, 2007, and declared effective on March
29, 2007.
 
 In
October 2007, SDS Inc. began a second capital formation activity through a
Private Placement Offering (“PPO #2”), exempt from registration under the
Securities Act of 1933, to raise up to $100,000 through the issuance of
25,000,000 (post forward stock split) shares of its common stock, par value
$0.0001 per share, at an offering price of $0.004 per share.  The PPO
#2 has an offering period of 180 days.  As of November 15, 2008, the
Company had subscribed 16,300,000 (post forward stock split) shares (December
31, 2007 – 16,300,000) related to the PPO #2 to 15 foreign investors, resulting
in gross proceeds of $65,200 (December 31, 2007 - $65,200).  As of
November 15, 2009, the Company declared PPO#2 closed.
 
 In
November 2007, the Company began a third capital formation activity through a
Private Placement Offering (“PPO #3”), exempt from registration under the
Securities Act of 1933, to raise up to $2,500,000 through the issuance of
16,666,666 units.  The purchase price of each unit is
$0.15.  Each unit contains one share of common stock, one warrant
giving the holder the right to purchase one share of common stock for $0.25,
which is exercisable for one year, and one warrant giving the holder the right
to purchase one share of common stock for $0.375, which is exercisable for three
years from the date of issuance.  As of November 15, 2008, the Company
had subscribed 9,523,002 (December 31, 2007 – 2,621,666) units and had received
approximately $1,428,000 (December 31, 2007 - $393,250 and subscription
receivable of $15,000) in proceeds from PPO #3.  As of November 15,
2008, the Company had issued 9,523,002 shares (post forward stock split) of
common stock subscribed and declared PPO#3 closed.
 
 F-6
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 In
October 2008, SDS Inc. began a fourth capital formation activity through a
Private Placement Offering (“PPO #4), exempt from registration under the
Securities Act of 1933, to raise up to $600,000 through the issuance of
Units.  Each Unit consists of a Promissory Note and shares of common
stock of the Company in the amount of 250,000 shares for each $100,000 of
principal amount of the Promissory Note.  As of March 31, 2009, the
Company had not subscribed any shares.
 
 On
November 14, 2007, SDS Inc. executed a letter of intent with SDS - Israel,
providing for the acquisition of SDS - Israel by the Company.  Since
the execution of the letter of intent with SDS - Israel, the Company’s
activities have focused on the consummation of the acquisition of SDS -
Israel.  On December 18, 2008, the Company and SDS - Israel executed
and delivered an investment (the “Investment Agreement”).
 
 In
January 2009, SDS Inc. completed the Investment Agreement between SDS Inc. and
SDS - Israel.  Pursuant to the Investment Agreement, SDS - Israel
issued 1,218,062 ordinary shares, par value NIS 0.01 per share, representing 51
percent of its issued and outstanding share capital to SDS Inc. as consideration
for the $280,000 paid by SDS Inc. to SDS - Israel on December 22, 2008, and
$820,000 previously paid by SDS Inc. to SDS - Israel pursuant to letter
agreements dated as of October 18, 2007, November 14, 2007, January 10, 2008,
May 18, 2008, and October 20, 2008.
 
 On
December 24, 2008, SDS Inc.’s shareholders resolved to change its name from PCMT
Corporation to Suspect Detection Systems, Inc.  On January 27, 2009,
the Company filed an amendment to its Certificate of Incorporation with the
Secretary of State of Delaware to reflect this change.  (See Note 9
for additional information).
 
 Unaudited
Interim Financial Statements
 
 The
interim consolidated financial statements of the Company as of March 31, 2009,
and December 31, 2008, and for the three months ended March 31, 2009, and 2008,
and cumulative from inception, are unaudited.  However, in the opinion
of management, the interim consolidated financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly SDS Inc.’s consolidated financial position as of March 31, 2009,
and December 31, 2008, and the results of its operations and its cash flows for
the three months ended March 31, 2009, and 2008, and cumulative from
inception.  These results are not necessarily indicative of the
results expected for the calendar year ending December 31, 2009.  The
accompanying consolidated financial statements and notes thereto do not reflect
all disclosures required under accounting principles generally accepted in the
United States of America.  Refer to the Company’s audited financial
statements as of December 31, 2008, filed with the SEC for additional
information, including significant accounting policies.
 
 F-7
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 Principles
of Consolidation
  The
consolidated financial statements include the accounts of the Company and its 51
percent-owned Israeli subsidiary, Suspect Detection Systems, Ltd. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
 
 Cash and Cash
Equivalents
 
 For
purposes of reporting within the statement of cash flows, the Company considers
all cash on hand, cash accounts not subject to withdrawal restrictions or
penalties, and all highly liquid debt instruments purchased with a maturity of
three months or less to be cash and cash equivalents.
 
 Revenue
Recognition
 
 The
Company recognizes revenues when delivery of goods or completion of services has
occurred provided there is persuasive evidence of an agreement, acceptance has
been approved by its customers, the fee is fixed or determinable based on the
completion of stated terms and conditions, and collection of any related
receivable is probable.
 
 Loss per Common
Share
 
 Basic
loss per share is computed by dividing the net loss attributable to the common
stockholders by the weighted average number of shares of common stock
outstanding during the periods.  Diluted loss per share is computed
similar to basic loss per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common
shares were dilutive.  There were no dilutive financial instruments
issued or outstanding for the three months ended March 31, 2009, and
2008.
 
 Income
Taxes
 
 The
Company accounts for income taxes pursuant to SFAS No. 109, “Accounting for Income Taxes”
(“SFAS No. 109”).  Under SFAS No. 109, deferred tax assets and
liabilities are determined based on temporary differences between the bases of
certain assets and liabilities for income tax and financial reporting
purposes.  The deferred tax assets and liabilities are classified
according to the financial statement classification of the assets and
liabilities generating the differences.
 
 The
Company maintains a valuation allowance with respect to deferred tax
assets.  SDS Inc. establishes a valuation allowance based upon the
potential likelihood of realizing the deferred tax asset and taking into
consideration SDS Inc.’s financial position and results of operations for the
current period.  Future realization of the deferred tax benefit
depends on the existence of sufficient taxable income within the carryforward
period under the Federal tax laws.
 
 F-8
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 Changes
in circumstances, such as the Company generating taxable income, could cause a
change in judgment about the realizability of the related deferred tax
asset.  Any change in the valuation allowance will be included in
income in the year of the change in estimate.
 
 Fair Value of Financial
Instruments
 
 The
Company estimates the fair value of financial instruments using the available
market information and valuation methods.  Considerable judgment is
required in estimating fair value.  Accordingly, the estimates of fair
value may not be indicative of the amounts SDS Inc. could realize in a current
market exchange.  As of March 31, 2009, and December 31, 2008, the
carry value of financial instruments approximated fair value due to the
short-term nature and maturity of these instruments.
 
 Deferred Offering
Costs
 
 The
Company defers as other assets the direct incremental costs of raising capital
until such time as the offering is completed.  At the time of the
completion of the offering, the costs are charged against the capital
raised.  Should the offering be terminated, deferred offering costs
are charged to operations during the period in which the offering is
terminated.
 
 Concentration
of Risk
 
 As of
March 31, 2009, and December 31, 2008, the Company maintained its cash account
at two commercial banks.  The balances in the accounts are subject to
FDIC coverage of up to $250,000 per institution.
 
 Common Stock Registration
Expenses
 
 The
Company considers incremental costs and expenses related to the registration of
equity securities with the SEC, whether by contractual arrangement as of a
certain date or by demand, to be unrelated to original issuance
transactions.  As such, subsequent registration costs and expenses are
reflected in the accompanying financial statements as general and administrative
expenses, and are expensed as incurred.
 
 Lease
Obligations
 
 All
noncancellable leases with an initial term greater than one year are categorized
as either capital or operating leases.  Assets recorded under capital
leases are amortized according to the methods employed for property and
equipment or over the term of the related lease, if shorter.
 
 F-9
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 Estimates
 
 The
consolidated financial statements are prepared on the basis of accounting
principles generally accepted in the United States of America.  The
preparation of consolidated financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of
March 31, 2009, and December 31, 2008, and expenses for the three months ended
March 31, 2009, and 2008, and cumulative from inception.  Actual
results could differ from those estimates made by management.
 
 Goodwill
 
 Goodwill
represents the excess of acquisition cost over the fair value of net assets
acquired in a business combination.  In accordance with Statement of
Financial Accounting Statement No.142, “Goodwill and Other Intangible
Assets” (“SFAS No.142”), goodwill is not amortized but reviewed annually
for impairment.
 
 (2)           Development
Stage Activities and Going Concern
 
 The
Company is currently in the development stage, and is devoting substantially all
of its efforts toward conducting marketing of its products. The Company’s
activities also include capital formation, and building
infrastructure.  The Company had losses of approximately $288,583 for
the three months ended March 31, 2009 (2008-$38,785) and, as of March 31, 2009,
the Company had an accumulated deficit of approximately $629,094
(2008-$340,511).  The Company’s ability to continue as a going concern
is uncertain.  The revised business plan of the Company is the
application of proprietary technologies for law enforcement and border control,
including counter terrorism efforts, immigration control and drug enforcement,
as well as human resource management, asset management and the transportation
sector.  In January 2009, SDS Inc. completed the Investment Agreement
between SDS Inc. and SDS - Israel.  Pursuant to the Investment
Agreement, SDS - Israel issued 1,218,062 ordinary shares, par value NIS 0.01 per
share, representing 51 percent of its issued and outstanding share capital to
SDS Inc. as consideration for the $280,000 paid by SDS Inc. to SDS - Israel on
December 22, 2008, and $820,000 previously paid by SDS Inc. to SDS - Israel
pursuant to letter agreements dated as of October 18, 2007, November 14, 2007,
January 10, 2008, May 18, 2008, and October 20, 2008.
 
 During
the period from inception (October 5, 2006) through March 31, 2009, the Company
was incorporated, received initial working capital through a loan from a
Director and stockholder, and commenced a capital formation activity through PPO
#1, exempt from registration under the Securities Act of 1933, to raise up to
$50,000 through the issuance of 20,000,000 (post forward stock split)
shares of its common stock, par value $0.0001 per share, at an offering price of
$0.0025 per share.  As of February 5, 2007, SDS Inc. had received
$50,000 in proceeds from PPO #1.  The Company also commenced an
activity to submit a Registration Statement on Form SB-2 to the SEC to register
20,000,000 shares (post forward stock split) of common stock on behalf of
selling stockholders.  SDS Inc. will not receive any of the proceeds
of this registration activity once the shares of common stock are
sold.  The Registration Statement on Form SB-2 was filed with the SEC
on March 12, 2007, and declared effective on March 29, 2007.
 
 F-10
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 In
October 2007, SDS Inc. began a second capital formation activity through a
Private Placement Offering (“PPO #2”), exempt from registration under the
Securities Act of 1933, to raise up to $100,000 through the issuance of
25,000,000 (post forward stock split) shares of its common stock, par value
$0.0001 per share, at an offering price of $0.004 per share.  The PPO
#2 has an offering period of 180 days.  As of November 15, 2008, the
Company had subscribed 16,300,000 (post forward stock split) shares (December
31, 2007 – 16,300,000) related to the PPO #2 to 15 foreign investors, resulting
in gross proceeds of $65,200 (December 31, 2007 - $65,200).  As of
November 15, 2008, the Company declared PPO#2 closed.
 
 In
November 2007, the Company began a third capital formation activity through a
Private Placement Offering (“PPO #3”), exempt from registration under the
Securities Act of 1933, to raise up to $2,500,000 through the issuance of
16,666,666 units.  The purchase price of each unit is
$0.15.  Each unit contains one share of common stock, one warrant
giving the holder the right to purchase one share of common stock for $0.25,
which is exercisable for one year, and one warrant giving the holder the right
to purchase one share of common stock for $0.375, which is exercisable for three
years from the date of issuance.  As of November 15, 2008, the Company
had subscribed 9,523,002 (December 31, 2007 – 2,621,666) units and had received
approximately $1,428,000 (December 31, 2007 - $393,250 and subscription
receivable of $15,000) in proceeds from PPO #3.  As of November 15,
2008, the Company had issued 9,523,002 shares (post forward stock split) of
common stock subscribed and declared PPO#3 closed.
 
 In
October 2008, SDS Inc. began a fourth capital formation activity through a
Private Placement Offering (“PPO #4), exempt from registration under the
Securities Act of 1933, to raise up to $600,000 through the issuance of
Units.  Each Unit consists of a Promissory Note and shares of common
stock of the Company in the amount of 250,000 shares for each $100,000 of
principal amount of the Promissory Note.  As of March 31, 2009, the
Company had not subscribed any shares.
 
 The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate continuation of the Company as a going concern.  The
Company is devoting substantially all of its efforts toward conducting marketing
of its products. The Company’s activities also include raising capital, and
building infrastructure. In the course of such activities, the Company has
sustained operating losses and expects such losses to continue for the
foreseeable future. The Company's ability to continue to operate as a going
concern is dependent upon additional financial support. The accompanying
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.
 
 F-11
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 (3)           Loan
from Director and Shareholder
 
 As of
March 31, 2009, and December 31, 2008, a loan from an individual who is a former
Director, officer, and shareholder of the Company amounted to
$288.  The loan was provided for working capital purposes, and is
unsecured, non-interest bearing, and has no terms for repayment.
 
 (4)           Appointment
of Officers
 
 On
October 18, 2007, SDS Inc. appointed an individual as Chief Financial Officer
(“CFO”).  On October 23, 2007, an employment agreement was entered
into with the CFO.  This agreement provides that the CFO will receive
a base salary of $3,000 per quarter and $5,000 per annual audit.  This
agreement is effective until the next annual general meeting of the stockholders
of the Company or until his successor is elected or appointed.
 
 On
January 23, 2008, the Company appointed Mr. Stukalin as
Treasurer.  This office will be held by the individual until the next
annual general meeting of the stockholders of SDS Inc. or until a successor is
elected or appointed.
 
 On April
30, 2008, Mr. Bernstein resigned as the Company’s Secretary and tendered his
resignation as Director, effective May 31, 2008.
 
 Mr. Kohen
resigned as a Director of SDS Inc. and tendered his resignation as the Company’s
President, effective May 5, 2008.
 
 Mr.
Zwebner was appointed as the Company’s interim Chief Executive Officer, and was
elected as a Director of SDS Inc.
 
 (5)           Common
Stock
 
 On
October 10, 2006, the Company issued 100,000 (post forward stock split) shares
of its common stock to its Director, president, and treasurer at par
value.  The transaction was valued at $1.
 
 On
November 3, 2006, SDS Inc. issued 25,000,000 (post forward stock split) of its
common stock to its Director and corporate secretary for services
rendered.  The transaction was valued at the par value of the common
stock, or $250.
 
 On
November 5, 2006, the Board of Directors of the Company approved PPO #1, exempt
from registration under the Securities Act of 1933, to raise up to $50,000
through the issuance of 20,000,000 (post forward stock split) shares of its
common stock, par value $0.0001 per share, at an offering price of $0.0025 per
share.  The PPO #1 had an offering period of 180 days.  As
of February 5, 2007, the Company had received cash proceeds from the PPO #1
amounting to $50,000 related to the issuance of 20,000,000 (post forward stock
split) shares of common stock.
 
 F-12
  SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 The
Company also commenced an activity to submit a Registration Statement on Form
SB-2 to the SEC to register 20,000,000 shares (post forward stock split) of
common stock on behalf of selling stockholders.  SDS Inc. will not
receive any of the proceeds of this registration activity once the shares of
common stock are sold.  The Registration Statement on Form SB-2 was
filed with the SEC on March 12, 2007, and declared effective on March 29,
2007.
 
 In
October 2007, SDS Inc. began a second capital formation activity through a
Private Placement Offering (“PPO #2”), exempt from registration under the
Securities Act of 1933, to raise up to $100,000 through the issuance of
25,000,000 (post forward stock split) shares of its common stock, par value
$0.0001 per share, at an offering price of $0.004 per share.  The PPO
#2 has an offering period of 180 days.  As of November 15, 2008, the
Company had subscribed 16,300,000 (post forward stock split) shares (December
31, 2007 – 16,300,000) related to the PPO #2 to 15 foreign investors, resulting
in gross proceeds of $65,200 (December 31, 2007 - $65,200).  As of
November 15, 2008, the Company declared PPO#2 closed.
 
 In
November 2007, the Company began a third capital formation activity through a
Private Placement Offering (“PPO #3”), exempt from registration under the
Securities Act of 1933, to raise up to $2,500,000 through the issuance of
16,666,666 units.  The purchase price of each unit is
$0.15.  Each unit contains one share of common stock, one warrant
giving the holder the right to purchase one share of common stock for $0.25,
which is exercisable for one year, and one warrant giving the holder the right
to purchase one share of common stock for $0.375, which is exercisable for three
years from the date of issuance.  As of November 15, 2008, the Company
had subscribed 9,523,002 (December 31, 2007 – 2,621,666) units and had received
approximately $1,428,000 (December 31, 2007 - $393,250 and subscription
receivable of $15,000) in proceeds from PPO #3.  As of November 15,
2008, the Company had issued 9,523,000 shares (post forward stock split) of
common stock subscribed and declared PPO#3 closed.
 
 On
November 14, 2007, the Company notified the NASD of its intention to implement a
10-for-1 forward stock split of its issued and outstanding common stock to the
holders of record as of November 23, 2007.  Such forward stock split
was effective as of November 26, 2007.  The accompanying consolidated
financial statements and related notes thereto have been adjusted accordingly to
reflect this forward stock split.
 
 On
December 5, 2007, the Company entered into a written commitment with a
third-party attorney to provide legal services and assistance with required SEC
filings.  As part of this agreement, SDS Inc. issued to the attorney
100,000 shares (post forward stock split) of common stock on said date valued at
$10,500.
 
 On April
20, 2008, SDS Inc. entered into a written agreement with an unrelated
third-party consulting company to provide advisory services for corporate
development, acquisitions, and management assistance for one year.  As
payment for the consultant’s services, the Company issued 666,666 shares (post
forward stock split) of its unregistered common stock on said date valued at
$100,000.
 
 F-13
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 On
October 1, 2008, SDS Inc. entered into a written agreement with an unrelated
third-party consultant to provide advisory services for corporate development,
acquisitions, and management assistance for one year.  As payment for
the consultant’s services, the Company issued 1,000,000 shares (post forward
stock split) of its unregistered common stock on said date valued at
$150,000.
 
 In
October 2008, SDS Inc. began a fourth capital formation activity through a
Private Placement Offering (“PPO #4), exempt from registration under the
Securities Act of 1933, to raise up to $600,000 through the issuance of
Units.  Each Unit consists of a Promissory Note and shares of common
stock of the Company in the amount of 250,000 shares for each $100,000 of
principal amount of the Promissory Note.  As of March 31, 2009, the
Company had not subscribed any shares.
 
 On
January 16, 2009, the Company issued 120,000 shares of common stock at par
$0.0001, valued at $18,000, to an officer and Director for the services
provided.
 
 On
January 19, the former secretary and Director of SDS Inc. returned 7,000,000
shares of SDS Inc.’s common stock, which shares were cancelled.
 
 (6)           Income
Taxes
 
 The
provision (benefit) for income taxes for the three months ended March 31, 2009,
and 2008 were as follows (assuming a 23 percent effective tax
rate):
 
 Three Months EndedMarch 31,2009
                    
                    
                    2008Current
      Tax Provision:Federal
      and state-Taxable
      income
                    
                    $
                    -
                    
                    
                    $
                    -Total
      current tax provision
                    
                    $
                    -
                    
                    
                    $
                    -Deferred
      Tax Provision:Federal
      and state-Loss
      carryforwards
                    
                    $
                    87,354
                    
                    
                    $
                    8,921Change
      in valuation allowance
                    
                    
                    (87,354
                    )
                    
                    
                    (8,921
                    )Total
      deferred tax provision
                    
                    $
                    -
                    
                    
                    $
                    -
 
 F-14
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 SDS Inc.
had deferred income tax assets as of March 31, 2009, and December 31, 2008, as
follows:
 
 As of
                    
                    
                    As ofMarch 31,
                    
                    
                    December 31,2009
                    
                    
                    2008Loss
      carryforwards
                    
                    $
                    165,672
                    
                    
                    $
                    78,318Less
      - Valuation allowance
                    
                    
                    (165,672
                    )
                    
                    
                    (78,318
                    )Total
      net deferred tax assets
                    
                    $
                    -
                    
                    
                    $
                    -
 
 The
Company provided a valuation allowance equal to the deferred income tax assets
for the three months ended March 31, 2009, and 2008, because it is not presently
known whether future taxable income will be sufficient to utilize the loss
carryforwards.
 
 As of
March 31, 2009, and December 31, 2008, the Company had approximately $720,315
and $340,511 in tax loss carryforwards that can be utilized in future periods to
reduce taxable income, and expire in the year 2029.
 
 (7)           Related
Party Transactions
 
 As
described in Note 3, as of March 31, 2009, and 2008, SDS Inc. owed $288 to an
individual who is a former Director, president, and treasurer of SDS Inc., and a
current stockholder.
 
 As
described in Note 5, the Company has issued 100,000 shares (post forward stock
split) of its common stock to its Director, president, and treasurer at par
value.  The transaction was valued at $1.
 
 As
described in Note 5, SDS Inc. has entered into a transaction with an officer and
Director of the Company for his services, and has issued a total of 25,000,000
shares (post forward stock split) of its common stock at a value of
$250.
 
 Effective
October 5, 2006, SDS Inc. entered into a verbal agreement with an individual who
is a former Director, president, and treasurer of SDS Inc., and current
stockholder of the Company, to lease 250 square feet of office space for
operations in Jerusalem, Israel.  The monthly lease rental amount is
$300, and the term of the lease arrangement is month-to-month.  As of
March 31, 2009, and 2008, SDS Inc. had accrued $8,952 and $8,052, respectively,
in office rent expense related to the lease.
 
 As
described in Note 4, on October 23, 2007, SDS Inc. entered into an employment
agreement with its CFO.  This agreement provides that the CFO will
receive a base salary of $3,000 per quarter and $5,000 per annual
audit.  This agreement is effective until the next annual general
meeting of the stockholders of the Company or until his successor is elected or
appointed.  During the three months ended March 31, 2009 and 2008, SDS
Inc. recognized $3,000 and $20,200, respectively in officer’s compensation
expense.
 
 F-15
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 On
January 16, 2009, the Company issued 120,000 shares of common stock at par
$0.0001, valued at $18,000, to an officer and Director for the services
provided.
 
 (8)           Commitments
 
 As
discussed in Note 7, the Company entered into a verbal agreement for the lease
of office space on a month-to-month basis with an individual who is a former
Director and officer of the Company and a current stockholder.  The
monthly lease amount is $300.
 
 As
discussed in Note 4, on October 18, 2007, SDS Inc. appointed an individual as
CFO.  On October 23, 2007, an employment agreement was entered into
with the CFO.  This agreement provides that the CFO will receive a
base salary of $3,000 per calendar quarter and $5,000 per annual
audit.  The employment agreement is effective until the next annual
general meeting of the stockholders of the Company or until his successor is
elected or appointed.
 
 As
discussed in Note 5, on December 5, 2007, the Company entered into a written
commitment with a third-party attorney to provide legal services and assistance
with required SEC filings.  Legal services under the arrangement
principally commenced during the period ended December 31, 2007.  The
attorney will receive $3,000 per month and miscellaneous reimbursement of
expenses incurred on SDS Inc.’s behalf.
 
 On March
15, 2008, SDS Inc. entered into a written commitment with a third-party
consultant to provide marketing and promotional assistance for up to 50 hours
per month, beginning April 2008.  In return for these services, the
consultant will receive a monthly service fee of $7,000, a stock option for
purchasing 100,000 shares of common stock at $0.15 per share, and an annual
performance-based bonus at the discretion of SDS Inc.  In May 2008,
this agreement was placed on hold.  As of December 31, 2008, the
options were not issued and may not be issued in the future depending on the
resolution of the agreement.
 
 As
described in Note 5, on April 20, 2008, SDS Inc. entered into a written
agreement with an unrelated third-party consulting company to provide advisory
services for corporate development, acquisitions, and management assistance for
one year.  As payment for the consultant’s services, the Company
issued 666,666 shares (post forward stock split) of its unregistered common
stock on said date valued at $100,000.
 
 As
described in Note 5, on October 31, 2008, SDS Inc. entered into a written
agreement with an unrelated third-party consultant to provide advisory services
for corporate development, acquisitions, and management assistance for one
year.  As payment for the consultant’s services, the Company issued
1,000,000 shares (post forward stock split) of its unregistered common stock on
said date valued at $150,000.
 
 F-16
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 On
January 20, 2009, an employment agreement was entered into between SDS - Israel
and its Chief Executive Officer (CEO).  This agreement provides that
the CEO will receive a base salary of NIS 63,000 per month, plus monthly
contributions by SDS - Israel of an aggregate of 20.84 percent of the base
salary towards the cost of the CEO’s life insurance, pension savings, disability
insurance, severance compensation fund, and professional
education.  SDS Inc. has agreed to guarantee the performance by SDS -
Israel of all its obligations under the employment agreement.
 
 (9)           Business
Combination
 
 On
October 18, 2007, SDS Inc. entered into a Letter Agreement with SDS -
Israel.  The Letter Agreement allowed the Company to conduct a due
diligence review of SDS - Israel and its technology for the purpose of entering
into a future business combination transaction on terms and conditions to be
negotiated.  As part of the Letter Agreement, SDS Inc. committed to
raise $1,500,000 and agreed to advance proceeds of $60,000 to SDS -
Israel.  As of December 31, 2007, SDS Inc. had paid SDS - Israel
$60,000.  In January 2008, SDS Inc. and SDS - Israel amended the
Letter Agreement such that the Company agreed to advance SDS - Israel an
additional $30,000 each month commencing January 2008 until the consummation or
termination of the Letter Agreement.  The amount of $60,000 previously
paid by SDS Inc. to SDS - Israel as well as each monthly payment of $30,000
served to reduce the $1,500,000 which SDS Inc. was committed to
raise.  In May 2008, SDS Inc. and SDS - Israel again amended the
Letter Agreement such that the Company agreed to advance SDS - Israel $80,000
each month commencing May 2008 until the consummation or termination of the
Letter Agreement.  In August 2008, SDS Inc. and SDS - Israel again
amended the Letter Agreement such that the Company agreed to advance SDS -
Israel $100,000 each month commencing August 2008 until the consummation or
termination of the Letter Agreement.  In December 2008, SDS Inc. and
SDS - Israel entered into an Investment Agreement and the Company agreed to
advance SDS - Israel an additional $280,000 and SDS - Israel issued to SDS Inc.
1,218,062 shares of SDS – Israel’s capital stock, par value NIS 0.01 per share,
which represented 51 percent of the issued and outstanding share capital of SDS
- Israel.  As of December 31, 2008, SDS Inc. had paid SDS - Israel a
cumulative total of $1,100,000.
 
 On
November 14, 2007, the Company entered into a Letter of Intent with SDS -
Israel, pursuant to which SDS Inc. intended to acquire all of the issued and
outstanding capital stock of SDS - Israel.  In consideration thereof,
SDS Inc. is to issue to the stockholders of SDS - Israel no less than 28,600,000
(post forward stock split) shares of SDS Inc.’s common stock, or such number of
shares of SDS Inc.’s common stock representing not less than 31 percent of SDS
Inc.’s issued and outstanding shares of common stock at the time of
closing.  The closing of the transaction was to take place after SDS
Inc. had raised a minimum of $500,000 from PPO #3.  SDS Inc. also
agreed to pay up to $20,000 in accounting fees to obtain Israel Tax Authority
approval of the transaction, and up to $15,000 in legal fees.  As of
December 31, 2008, SDS Inc. had paid $15,000 (2007 - $8,000) in legal fees, and
$20,000 (2007 - $8,000) in accounting fees in addition to the $1,100,000 (2007 -
$60,000) described above for a total $1,135,000 (2007 -
$75,500).  During the year ended December 31, 2008, the Company paid
$15,000 and $32,500 on behalf of SDS - Israel for additional accounting and
legal expenses, respectively.  As of December 31, 2008, the Company
reflected a receivable in the accompanying financial statements in the amount of
$28,000 related to the accounting and legal fees paid on behalf of SDS -
Israel.
 
 F-17
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 On April
30, 2008, the Company entered into a Share Exchange Agreement (the “Exchange
Agreement”) between SDS Inc. and SDS - Israel.  Pursuant to the
Agreement, SDS Inc. was to acquire on the closing date of the agreement 100
percent of the outstanding capital stock of SDS - Israel (1,170,295 shares), in
exchange for 21,768,032 newly issued shares of its common stock, and options to
purchase 6,831,968 shares of its common stock at an exercise price of $0.0001
per share at any time on or before the 10th anniversary of issuance of SDS
Inc.’s options.  The parties agreed that the fair value of the
transaction was $4,290,000.  On the closing date of the Agreement, SDS
- Israel was to become a wholly owned subsidiary of SDS Inc.  As a
result of the Agreement, the stockholders of SDS - Israel were to become the
beneficial owners of approximately 31 percent of SDS Inc.’s outstanding common
stock on the closing date of the Agreement.  On December 18, 2008, the
Company and SDS - Israel entered into a Termination Agreement and terminated the
Agreement, effective immediately.
 
 On
January 20, 2009, SDS Inc. and SDS - Israel completed the transactions under the
Exchange Agreement.  At closing, SDS - Israel issued 1,218,062
ordinary shares, par value NIS 0.01 per share, representing 51 percent of its
issued and outstanding share capital to SDS Inc., as consideration for $280,000
paid by SDS Inc. to SDS - Israel on December 22, 2008, and $820,000 previously
paid by SDS Inc. to SDS - Israel pursuant to the letter agreements dated October
18, 2007, November 14, 2007, January 10, 2008, May 18, 2008, and October 20,
2008.
 
 On
December 24, 2008, SDS Inc.’s shareholders resolved to change its name from PCMT
Corporation to Suspect Detection Systems, Inc.  On January 27, 2009,
the Company filed with the Secretary of State of Delaware an amendment to its
Certificate of Incorporation to reflect this change.
 
 SDS -
Israel was incorporated under the Companies Law, 5759-1999, of the State of
Israel in 2004.  SDS – Israel specializes in the development and
application of proprietary technologies for law enforcement and border control,
including counter terrorism efforts, immigration control and drug enforcement,
as well as human resource management, asset management and the transportation
sector.  SDS – Israel completed the development of its “Cognito” line
of products in 2007, which are based on proprietary software and use
commercially available hardware to identify individuals that pose security
threats, whether or not they are carrying a weapon on their person or in their
belongings.  Cognito systems are comprised of a front-end test station
and a back office, where multiple-station and multiple-site data is stored,
managed and distributed.  The front-end test station serves as the
point of contact with the individual being examined.  The back-office
is designed to manage and control the test stations at a given site and it
stores all test histories and traveler profiles and interfaces with external
systems and databases.  A provisional patent application has been
issued for the Cognito line of products in the United States.  SDS –
Israel is also engaged in the development of behavior based screening
technologies for the checkpoint screening market.
 
 F-18
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 (10)           Recent
Accounting Pronouncements
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115” (“SFAS No. 159”), which permits entities to measure many financial
instruments and certain other items at fair value that are not currently
required to be measured at fair value.  An entity would report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date.  The objective
is to improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  The decision about whether to elect the fair value option
is applied instrument by instrument, with a few exceptions; the decision is
irrevocable; and it is applied only to entire instruments and not to portions of
instruments.  SFAS No. 159 requires disclosures that facilitate
comparisons (a) between entities that choose different measurement attributes
for similar assets and liabilities and (b) between assets and liabilities in the
financial statements of an entity that selects different measurement attributes
for similar assets and liabilities.  SFAS No. 159 is effective for
financial statements issued for fiscal years beginning after November 15,
2007.  Early adoption is permitted as of the beginning of a fiscal
year, provided the entity also elects to apply the provisions of SFAS No.
157.  Upon implementation, an entity shall report the effect of the
first re-measurement to fair value as a cumulative-effect adjustment to the
opening balance of retained earnings.  Since the provisions of SFAS
No. 159 are applied prospectively, any potential impact will depend on the
instruments selected for fair value measurement at the time of
implementation.  The management of SDS Inc. does not believe that this
new pronouncement will have a material impact on its financial
statements.
 
 In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations – Revised
2007” (“SFAS No. 141R”), which replaces FASB Statement No. 141, “Business
Combinations.”  SFAS No. 141Restablishes principles
and requirements intending to improve the relevance, representational
faithfulness, and comparability of information that a reporting entity provides
in its financial reports about a business combination and its
effects.  This is accomplished through requiring the acquirer to
recognize assets acquired and liabilities assumed arising from contractual
contingencies as of the acquisition date, measured at their acquisition-date
fair values.  This includes contractual contingencies only if it is
more likely than not that they meet the definition of an asset of a liability in
FASB Concepts Statement No. 6, “Elements of Financial
Statements – a
replacement of FASB Concepts Statement No. 3.”This statement also
requires the acquirer to recognize goodwill as of the acquisition date, measured
as a residual.  However, this statement improves the way in which an
acquirer’s obligations to make payments conditioned on the outcome of future
events are recognized and measured, which in turn improves the measure of
goodwill.  This statement also defines a bargain purchases as a
business combination in which the total acquisition-date fair value of the
consideration transferred plus any noncontrolling interest in the acquiree, and
it requires the acquirer to recognize that excess in earnings as a gain
attributable to the acquirer.  This, therefore, improves the
representational faithfulness and completeness of the information provided about
both the acquirer’s earnings during the period in which it makes a bargain
purchase and the measures of the assets acquired in the bargain
purchase.  The management of SDS Inc. does not expect the adoption of
this pronouncement to have a material impact on its financial
statements.
 
 F-19
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS
No. 160”),which
establishes accounting and reporting standards to improve the relevance,
comparability, and transparency of financial information in its consolidated
financial statements.  This is accomplished by requiring all entities,
except not-for-profit organizations, that prepare consolidated financial
statements to (a) clearly identify, label, and present ownership interests in
subsidiaries held by parties other than the parent in the consolidated statement
of financial position within equity, but separate from the parent’s equity; (b)
clearly identify and present both the parent’s and the noncontrolling interest’s
attributable consolidated net income on the face of the consolidated statement
of income; (c) consistently account for changes in parent’s ownership interest
while the parent retains it controlling financial interest in subsidiary and for
all transactions that are economically similar to be accounted for similarly;
(d) measure of any gain, loss, or retained noncontrolling equity at fair value
after a subsidiary is deconsolidated; and (e) provide sufficient disclosures
that clearly identify and distinguish between the interests of the parent and
the interests of the noncontrolling owners. This Statement also clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements.  SFAS No. 160 is effective for fiscal years and
interim periods on or after December 15, 2008.  The management of SDS
Inc. does not expect the adoption of this pronouncement to have a material
impact on its financial statements.
 
 In March
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement 133”
(“SFAS No. 161”).  SFAS No. 161 enhances required disclosures
regarding derivatives and hedging activities, including enhanced disclosures
regarding how:  (a) an entity uses derivative instruments; (b)
derivative instruments and related hedged items are accounted for under SFAS No.
133, “Accounting for
Derivative Instruments and Hedging Activities”; and (c) derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows.  Specifically, SFAS No. 161
requires:
 
 ● Disclosure
of the objectives for using derivative instruments be disclosed in terms of
underlying risk and accounting designation;
 ● Disclosure
of the fair values of derivative instruments and their gains and losses in a
tabular format;
 ● Disclosure
of information about credit-risk-related contingent features;
and
 ● Cross-reference
from the derivative footnote to other footnotes in which derivative-related
information is disclosed.
 
 SFAS No.
161 is effective for fiscal years and interim periods beginning after November
15, 2008.  Earlier application is encouraged.  The
management of SDS Inc. does not expect the adoption of this pronouncement to
have a material impact on its financial statements.
 
 F-20
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 In May
2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles in the United States of America.  The
sources of accounting principles that are generally accepted are categorized in
descending order as follows:
 
 a)
              FASB
      Statements of Financial Accounting Standards and Interpretations, FASB
      Statement 133 Implementation Issues, FASB Staff Positions, and American
      Institute of Certified Public Accountants (AICPA) Accounting Research
      Bulletins and Accounting Principles Board Opinions that are not superseded
      by actions of the FASB.
 
 b)
              FASB
      Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and
      Accounting Guides and Statements of
Position.
 
 c)
              AICPA
      Accounting Standards Executive Committee Practice Bulletins that have been
      cleared by the FASB, consensus positions of the FASB Emerging Issues Task
      Force (EITF), and the Topics discussed in Appendix D of EITF Abstracts
      (EITF D-Topics).
 
 d)
              Implementation
      guides (Q&As) published by the FASB staff, AICPA Accounting
      Interpretations, AICPA Industry Audit and Accounting Guides and Statements
      of Position not cleared by the FASB, and practices that are widely
      recognized and prevalent either generally or in the
    industry.
 
 On May
26, 2008, the FASB issued FASB Statement No. 163, “Accounting for Financial Guarantee
Insurance Contracts” (“SFAS No. 163”).  SFAS No. 163 clarifies
how FASB Statement No. 60, “Accounting and Reporting by
Insurance Enterprises” (“SFAS No. 60”), applies to financial guarantee
insurance contracts issued by insurance enterprises, including the recognition
and measurement of premium revenue and claim liabilities.  It also
requires expanded disclosures about financial guarantee insurance
contracts.
 
 The
accounting and disclosure requirements of SFAS No. 163 are intended to improve
the comparability and quality of information provided to users of financial
statements by creating consistency.  Diversity exists in practice in
accounting for financial guarantee insurance contracts by insurance enterprises
under SFAS No. 60, “Accounting
and Reporting by Insurance Enterprises.”  That diversity
results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred under
FASB Statement No. 5, “Accounting for Contingencies”
(“SFAS No. 5”).  SFAS No. 163 requires that an insurance enterprise
recognize a claim liability prior to an event of default when there is evidence
that credit deterioration has occurred in an insured financial
obligation.  It also requires disclosure about (a) the risk-management
activities used by an insurance enterprise to evaluate credit deterioration in
its insured financial obligations and (b) the insurance enterprise’s
surveillance or watch list.
 
 F-21
 
 SUSPECT
DECTECTION SYSTEMS INC. & SUBSIDIARY
 (FORMERLY
PCMT CORPORATION)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 MARCH
31, 2009, AND 2008
 (Unaudited)
 
 SFAS No.
163 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and all interim periods within those fiscal years,
except for disclosures about the insurance enterprise’s risk-management
activities.  Disclosures about the insurance enterprise’s
risk-management activities are effective the first period beginning after
issuance of SFAS No. 163.  Except for those disclosures, earlier
application is not permitted.  Management of SDS Inc. does not expect
the adoption of this pronouncement to have material impact on its financial
statements.
 
 (11)           Subsequent
Events
 
 On April
1, 2009, a consulting agreement was entered between SDS Inc. and L.A.
Investments Ltd. (the “Consultant”).  The Consultant agreed to render
assistance and advice to the Company relating to capitalization and financing of
the Company. The Consulting Agreement is for a term of three years, commencing
on April 1, 2009.  In consideration for such services, the Company
agreed to compensate the Consultant in the amount of $6,500 quarterly,
commencing on April 1, 2009.
 
 In
addition, the Company agreed to issue to the Consultant warrants to purchase an
aggregate of 1,800,000 shares of the Company’s common stock. On each of April 1,
2009, September 1, 2009, March 1, 2010, and September 1, 2010, provided that the
Consulting Agreement is still in force, the Company shall issue a warrant to
purchase 450,000 shares of the Company’s common stock. Each common stock
purchase warrant entitles the Consultant to purchase one share of the Company’s
common stock at an exercise price of $0.15 per share and is exercisable for a
period of two years.
 
 On May 6,
2009, Constantin Stukalin resigned as Treasurer, Secretary and Director of the
Company. On May 6, 2009, the Board of Directors of the Company appointed
Julius Klein as the Treasurer, Secretary and a Director, effective immediately,
to serve at the discretion of the Board, until his successor(s) are duly
appointed and qualified.  In connection with his appointment as an
officer and a Director of the Company, the Board of Directors approved a one
time issuance of 50,000 shares of the Company’s common stock.
 
 F-22
  Item
2.                      Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
 
 As used
in this Form 10-Q, references to “Suspect,” the “Company,” “we,” “our” or “us”
refer to Suspect Detection Systems, Inc. unless the context otherwise
indicates.
 
 Forward-Looking
Statements
 
 The
following discussion should be read in conjunction with our financial
statements, which are included elsewhere in this Form 10-Q (the “Report”). This
Report contains forward-looking statements which relate to future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our or our industry’s actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements.
 
 For a
description of such risks and uncertainties refer to our Annual Report on Form
10-K, filed with the Securities and Exchange Commission on March 31, 2009. While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
 
 Corporate
Background
 
 The
Company was incorporated under the General Corporation Law of the State of
Delaware on October 5, 2006.  Initially, the Company focused on the
business of offering computer hardware and software products to religious
consumers, with an emphasis on ultra-orthodox Jewish communities in
Israel.  On November 14, 2007, the Company executed a letter of intent
with Suspect Detection Systems Ltd., an Israeli corporation (“SDS”), providing
for the acquisition of SDS by the Company.  Since the execution of the
letter of intent with SDS, the Company’s activities have focused on the
consummation of the acquisition of SDS by the Company.
 
 On
December 18, 2008, the Company and SDS executed and delivered an investment
agreement (the “Investment
Agreement”).  Pursuant to the Investment Agreement, at closing
on January 20, 2009 SDS issued 1,218,062 ordinary shares, par value NIS 0.01 per
share, to the Company, representing 51% of the issued and outstanding share
capital of SDS, in consideration for (a) the sum of $280,000 paid by the Company
to SDS on December 22, 2008, and (b) the sum of $820,000 previously paid by the
Company to SDS pursuant to letter agreements dated as of October 18, 2007,
November 14, 2007, January 10, 2008, May 18, 2008 and October 20,
2008.
 
 3
 The
Investment Agreement also provides for good faith negotiations of a second
agreement (the “Second
Agreement”), following the closing of the Investment Agreement, pursuant
to which: (i) the Company will grant options to the shareholders of SDS to
exchange their SDS ordinary shares into shares of the Company’s common stock;
(ii) the Company will grant options to the holders of options to purchase SDS
ordinary shares to exchange such options into options to purchase shares of the
Company’s common stock; (iii) SDS will grant additional options, to Mr. Shoval
and certain SDS employees or consultants, to purchase new SDS ordinary shares;
and (iv) the Company will grant rights to Mr. Shoval and said SDS employees or
consultants to exchange all or any part of the additional SDS options into
options to purchase shares of the Company’s common stock.
 
 At
a special meeting of the Company’s shareholders on January 23, 2009, a proposal
was approved to amend the Company’s Certificate of Incorporation for the purpose
of changing its name from “PCMT Corporation” to “Suspect Detection Systems
Inc.”
 
 Business and History of
SDS
 
 SDS
specializes in the development and application of proprietary technologies for
law enforcement and border control, including counter terrorism efforts,
immigration control and drug enforcement, as well as human resource management,
asset management and the transportation sector.  SDS completed the
development of its “Cognito” line of products in 2007, which are based on
proprietary software and use commercially available hardware to identify
individuals that pose security threats; whether or not they are carrying a
weapon on their person or in their belongings.  Cognito systems are
comprised of a front-end test station and a back office, where multiple-station
and multiple-site data is stored, managed and distributed.  The
front-end test station serves as the point of contact with the individual being
examined.  The back-office is designed to manage and control the test
stations at a given site and it stores all test histories and traveler profiles
and interfaces with external systems and databases.  A provisional
patent application has been issued for the Cognito line of products in the
United States.  SDS is also engaged in the development of behavior
based screening technologies for the checkpoint screening market.
 
 SDS was
incorporated under the Companies Law, 5759-1999, of the State of Israel in
2004.  In order to finance its research and development activities,
SDS sought public funding and, in 2005, the Transportation Security
Administration of the US Department of Homeland Security (the “TSA”) awarded a grant
to SDS to support the development of behavior pattern recognition
technology.  Additional funding was obtained from the Israeli
government and US and Israeli governmental security authorities performed
evaluations and testing of SDS’s products in 2005.  In 2006, SDS
obtained private financing, issuing shares of preferred stock and warrants to
the NG – The Northern Group LP.  Additional US government funding was
obtained in 2006 from the TSA .
  Plan
of Operation
 
 As a
result of the acquisition of 51% of Suspect Detection Systems Ltd. in the
beginning of the three months ended March 31, 2009, and within the next 12
months we plan to pursue the development and marketing of SDS’s
products.
 
 Going
Concern Consideration
 
 4
 We are a
development stage company. Our registered independent auditors issued a
going concern opinion in their report dated March 13, 2009 with respect to our
audited 2008 year-end financial statements. This means that our auditors believe
there is substantial doubt that we can continue as an on-going business for the
next 12 months. We do not anticipate that we will generate significant revenues
until we have completed our business plan. Accordingly, we must raise additional
capital from sources other than our operations in order to implement our
business plan.Our 2008 year-end financial
statements contain additional note disclosures describing the circumstances that
lead to this disclosure by our independent registered auditors.
 
 Liquidity
and Capital Resources
  As of March 31, 2009, we had $547,629 in unrestricted cash and
cash equivalents as compared to unrestricted cash and cash equivalents of
$179,565 as of  March 31, 2008.  The Company also incurred
net losses of $288,583 during the three months ended March 31, 2009 as compared
with net losses of $38,785 during the three months ended March 31, 2008. These
material changes in the results of operations are the result of the acquisition
of 51% of Suspect Detection Systems Ltd.
 
 Over the
next 12 months, the Company plans to pursue the development and marketing of
SDS’s products. The Company does not have sufficient funds to fund its expenses
over the next 12 months. The Company believes that it will require approximately
$500,000 over the next 12 months of operation. Accordingly, the intention is to
raise these additional funds during 2009. There can be no assurance that
additional capital will be available to the Company. The Company currently has
no agreements, arrangements, or understandings with any person to obtain funds
through bank loans, lines of credit, or any other sources. Since the Company has
no such arrangements or plans currently in effect, its inability to raise funds
for the above purposes will have a severe negative impact on its ability to
remain a viable company. The Company is, however, seeking additional equity
financing from certain financial institutions to enable its continuance with its
proposed business plan.
 
 Off
Balance Sheet Arrangements
 
 We do not
have 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 that are material to investors.
 
 Item
3.  Quantitative and
Qualitative Disclosures About Market Risk
 
 A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.
 
 Item
4.  Controls and
Procedures.
 
 As of the
end of the period covered by this Report,  we conducted an evaluation,
under the supervision and with the  participation of our Chief
Executive Officer and
Chief  Financial  Officer,  of
our  disclosure  controls and  procedures (as
defined in
Rules  13a-15(e)  and  15d-15(e)  under
the 1934 Act).  Based on this evaluation,  the Chief
Executive Officer and Chief Financial  Officer concluded that
our  disclosure  controls  and  procedures  are  effective  to
ensure  that information  required to
be  disclosed  by us in reports  that we file or
submit under the 1934 Act is
recorded,  processed,  summarized and
reported  within the time periods  specified in
the  Securities  and  Exchange  Commission  rules
and forms.
 
 5
 Item
4(T).  Controls and
Procedures.
 
 There
have been no changes  in
the  Company’s  internal  control  over  financial
reporting identified in connection with the evaluation required by paragraph (d)
of Rule  240.15d-15  that occurred during the Company’s last
fiscal quarter that has  materially  affected,  or
is reasonable  likely to materially  affect,  the
Company internal control over financial reporting.
 
 PART
II
 OTHER
INFORMATION
 
 Item
1.  Legal
Proceedings.
 
 There are
no pending legal proceedings to which the Company is a party or in which any
Director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company. The Company’s property is not the subject of any pending
legal proceedings.
 
 Item
1A.    Risk Factors
 
 A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.
  Item
2.  Unregistered Sales of
Equity Securities and Use of Proceeds.
 
 None.
 
 Purchases
of equity securities by the issuer and affiliated purchasers
 
 None.
 
 Use
of Proceeds
 
 None
 
 Item
3.   Defaults Upon Senior
Securities.
 
 None.
 
 Item
4.   Submission of Matters
to a Vote of Security Holders.
 
 At a
special meeting of the Company’s shareholders on January 23, 2009, a proposal
was approved to amend the Company’s Certificate of Incorporation for the purpose
of changing its name from “PCMT Corporation” to “Suspect Detection Systems
Inc.”
 
 Item
5.   Other
Information.
 
 None
  6
 Item
6.   Exhibit
 
 Exhibit
      No.
                
                Description31.1
                
                Rule
      13a-14(a)/15d14(a) Certifications of Asher Zwebner, Interim Chief
      Executive Officer, Chief Financial Officer and Director(attached
      hereto)32.1
                
                Section
      1350 Certifications of Asher Zwebner, Interim Chief Executive Officer,
      Chief Financial Officer and Director(attached
  hereto)
  7
 SIGNATURES
 
 In
accordance with to requirements of the Exchange Act, the Registrant caused this
Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 
 SUSPECT
DETECTION SYSTEMS, INC.
  Dated:
      May 20, 2009
                By:  /s/
      Asher Zwebner
                  Name:   Asher
      Zwebner
                  Title:
      Interim Chief Executive Officer, Chief Financial Officer and Director
      (Principal Executive, Financial and Accounting Officer)
 
  8