Trutankless, Inc 10-Q for FY2024 Q3

Trutankless, Inc. (TKLS)

10-Q 2024-11-14 For: 2024-09-30

Added on April 06, 2026

About this 10-Q

Trutankless, Inc filed this 10-Q on November 14, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $179.7K; up 6545.7% from $2704 a year earlier
Net loss: $3.42M; compared with a net loss of $732.49K a year earlier

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15900 North 78th Street, Suite 200
Scottsdale, AZ		85260
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		21
Item 3. Quantitative and Qualitative Disclosure About Market Risk		27
Item 4. Controls and Procedures		27
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.		28
Item 1A. Risk Factors		28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		28
Item 3. Defaults Upon Senior Securities.		30
Item 4. Mine Safety Disclosures		30
Item 5. Other Information.		30
Item 6. Exhibits.		31
SIGNATURES		32

	September 30, 2024			December 31, 2023
ASSETS
Current assets
Cash	$	34,719		$	21,453
Accounts receivable		83,046			-
Prepaid expenses		2,047,001			5,000
Inventory		84,036			-
Vendor deposits		274,342			-
Total current assets		2,523,144			26,453

Other assets
Right-to-use asset		148,133			203,477
Trademarks		11,914			11,914
Other assets		13,947			13,947
Total other assets		173,994			229,338
Total assets	$	2,697,138		$	255,791

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	1,061,495		$	956,240
Accounts payable and accrued liabilities - related parties		-			-
Advances payable - related parties		7,500			31,000
Lease liability		73,891			64,199
Accrued interest payable		368,812			483,238
Accrued interest payable - related parties		484,163			368,952
Royalty liabilities payable		527,500			417,500
Notes payable, net of discounts		935,000			1,030,000
Notes payable, net of discounts - related parties		184,450			241,950
Convertible notes payable, net of discounts		324,000			999,352
Convertible notes payable, net of discounts - related parties		3,039,523			2,840,623
Total current liabilities		7,006,334			7,433,054

Long-term liabilities
Deferred warranty revenue		249			-
Lease liability - long-term		77,505			144,702
Notes payable - net of discounts and current portion		95,000			-
Notes payable - net of discounts and current portion - related parties		177,500			125,000
Convertible notes payable, net of discounts and current portion		375,000			-
Total long-term liabilities		725,254			269,702
Total liabilities		7,731,588			7,702,756

Commitments and contingencies (Note 8)		-			-

Stockholders' deficit
Preferred stock, $0.001 par value, 9,990,000 shares authorized
Preferred stock - Series B, $0.001 par value, 10,000 shares authorized, 0 and 10,000 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		-			10
Common stock, $0.001 par value, 150,000,000 shares authorized, 113,008,178 and 38,773,230 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		113,008			38,773
Additional paid in capital		66,427,320			57,717,685
Subscriptions payable		-			1,462,480
Accumulated deficit		(71,574,778	)		(66,665,913	)
Total stockholders' deficit		(5,034,450	)		(7,446,965	)
Total liabilities and stockholders' deficit	$	2,697,138		$	255,791

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net sales	$	179,701		$	2,704		$	191,285		$	3,469
Cost of sales		115,480			10,225			115,480			10,225
Gross profit		64,221			(7,521	)		75,805			(6,756	)

Operating expenses
General and administrative expenses		123,578			375,746			965,564			1,109,872
Research and development		136,124			129,374			555,681			227,553
Professional fees		1,860,541			84,700			1,895,606			128,199
Depreciation and amortization expense		-			-			-			-
Total operating expenses		2,120,243			589,820			3,416,851			1,465,624
Operating loss		(2,056,022	)		(597,341	)		(3,341,046	)		(1,472,380	)

Other income (expense)
Other income		-			-			73			-
Gain (loss) on extinguishment of debt		(109,990	)		-			-			-
Interest expense		(100,100	)		(135,149	)		(413,892	)		(486,447	)
Financing incentive expense		(1,154,000	)		-			(1,154,000	)		-
Total other income (expense)		(1,364,090	)		(135,149	)		(1,567,819	)		(486,447	)
Net income (loss)	$	(3,420,112	)	$	(732,490	)	$	(4,908,865	)	$	(1,958,827	)

Net loss per share - basic and diluted	$	(0.03	)	$	(0.03	)	$	(0.06	)	$	(0.09	)

Weighted average number of common shares - basic		104,452,652			22,047,952			78,721,478			22,042,993

	Preferred Stock						Common Stock						Additional Paid-in		Subscriptions			Accumulated
	Shares			Amount			Shares			Amount			Capital		Payable			Deficit			Total
Balance, December 31, 2023		10,000		$	10			38,773,230		$	38,773		$	57,717,685	$	1,462,480		$	(66,665,913	)	$	(7,446,965	)
Stock issued for financing incentives		-			-			1,050,000			1,050			1,458,450		(1,459,500	)		-			-
Stock issued for conversion of notes payable		-			-			3,000,000			3,000			117,000		-			-			120,000
Stock issued for cash		-			-			300,000			300			14,700		-			-			15,000
Stock issued for services		-			-			750,000			750			223,500		-			-			224,250
Net loss for the Period		-			-			-			-			-		-			(405,152	)		(405,152	)
Balance, March 31, 2024		10,000			10			43,873,230			43,873			59,531,335		2,980			(67,071,065	)		(7,492,867	)
Stock issued for conversion of notes payable		-			-			47,853,281			47,853			1,641,897		-			-			1,689,750
Stock issued for services		-			-			1,600,000			1,600			627,310		-			-			628,910
Net loss for the period		-			-			-			-			-		-			(1,083,601	)		(1,083,601	)
Balance, June 30, 2024		10,000			10			93,326,511			93,326			61,800,542		2,980			(68,154,666	)		(6,257,808	)
Stock issued for financing incentives		-			-			5,800,000			5,800			1,148,200		-			-			1,154,000
Stock issued for conversion of notes payable		-			-			156,667			157			23,343		-			-			23,500
Stock issued for services		-			-			13,575,000			13,575			3,347,875		(2,980	)		-			3,358,470
Stock issued for cash		-			-			1,150,000			1,150			106,350		-			-			107,500
Cancellation of common stock		-			-			(1,000,000	)		(1,000	)		1,000		-			-			-
Cancellation of preferred stock		(10,000	)		(10	)		-			-			10		-			-			-
Net loss for the period		-			-			-			-			-		-			(3,420,112	)		(3,420,112	)
Balance, September 30, 2024		-		$	-			113,008,178		$	113,008		$	66,427,320	$	-		$	(71,574,778	)	$	(5,034,450	)

	September 30, 2024		December 31, 2023
Parts	$	84,036	$	-
Total Inventory	$	84,036	$	-

	September 30, 2024			December 31, 2023
Note payable, secured, 5% interest, due on demand	$	19,450		$	19450
Note payable, secured, 12% interest, due April 26, 2026		55,000			60,000
Note payable, secured, 12% interest, due April 30, 2026		122,500			122,500
Note payable, secured, 18% interest, due July 25, 2024		40,000			40,000
Notes payable, secured, 18% interest, due August 31, 2025		125,000			125,000
Total notes payable - related party	$	361,950		$	366,950
Less current portion		(184,450	)		(241,950	)
Total notes payable - related party - long term	$	177,500		$	125,000

	September 30, 2024			December 31, 2023
Convertible note payable, 8% interest, due December 2024	$	2,289,523		$	2,205,623
Convertible note payable, 12% interest, due December 2023		-			400,000
Convertible note payable, 12% interest, due December 2024		-			150,000
Convertible note payable, 12% interest, due December 2024		-			85,000
Convertible note payable, 12% interest, due March 2025		250,000			-
Convertible note payable, 15% interest, due July 2025		500,000			-
Total convertible notes payable - related party	$	3,039,523		$	2,840,623
Less current portion		(3,039,523	)		(2,840,623	)
Total convertible notes payable - related party - long-term	$	-		$	-

	September 30, 2024			December 31, 2023
Convertible note payable, secured, 12% interest, due August 31, 2019, in default	$	40,000		$	50,000
Convertible note payable, secured, 10% interest, due February 2024		45,000			45,000
Convertible note payable, secured, 12% interest, due Feb 15, 2026		75,000			75,000
Convertible notes payable, secured, 4% interest, due October 14, 2020, in default		75,000			75,000
Convertible note payable ,12% interest, due May 2020, in default		108,500			108,500
Convertible note payable, secured, 10% interest, due May 1, 2024		-			350,000
Convertible notes payable, secured, 4% interest, due March 3, 2021, in default		10,500			25,000
Convertible notes payable, 8% interest, due December 2023		-			295,000
Convertible note payable, 12% interest, due May 25		25,000			-
Convertible notes payable, 8% interest, due March 2025		20,000			-
Convertible notes payable, 12% interest, due April 2026		150,000			-
Convertible notes payable, 12% interest, due May 2026		100,000			-
Convertible note payable, 12% interest, due July 2026		50,000			-
Total convertible notes payable		699,000			1,023,500
Less unamortized discounts		-			(24,148	)
Total convertible notes payable, net of discounts		699,000			999,352
Less current portion		(324,000	)		(999,352	)
Total convertible notes payable, net of discounts - long-term	$	375,000		$	-

Amounts due as of September 30, 2024	Operating Leases
2024	$	21,883
2025		87,532
2026		64,891
Total minimum lease payments		174,306
Less: effect of discounting		(22,910	)
Present value of future minimum lease payments		151,396
Less: current obligations under leases		(73,891	)
Long-term lease obligations	$	77,505

	Number of Shares			Weighted Average Exercise Price
Balance, December 31, 2023		1,317,387		$	0.20
Warrants granted and assumed		-			-
Warrants expired		(1,071,750	)		1.00
Warrants canceled		-			-
Warrants exercised		-			-
Balance outstanding and exercisable, September 30, 2024		245,637		$	0.50

	·	our ability to diversify our operations;
	·	inability to raise additional financing for working capital;
	·	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;
	·	our ability to attract key personnel;
	·	our ability to operate profitably;
	·	deterioration in general or regional economic conditions;
	·	adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
	·	changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
	·	the inability of management to effectively implement our strategies and business plan;
	·	inability to achieve future sales levels or other operating results;
	·	the unavailability of funds for capital expenditures;
	·	other risks and uncertainties detailed in this report;

	Nine months ended
	September 30, 2024			September 30, 2023
Net cash used in operating activities	$	(1,668,634	)	$	(1,243,739	)
Net cash used in investing activities		-			-
Net cash provided by financing activities		1,681,900			1,238,900
Net increase/(decrease) in cash		13,266			(4,839	)
Cash, beginning		21,453			84,034
Cash, ending	$	34,719		$	79,195

Exhibit No.		Description

31.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

By:	/s/ Guy Newman
	Guy Newman, CEO, Principal Financial Officer and Principal Executive Officer

	Date: November 14, 2024

1.	I have reviewed this quarterly report on Form 10-Q of TruTankless, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Guy Newman
Guy Newman
Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)

	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant at the dates and for the periods indicated.