Trutankless, Inc 10-Q for FY2024 Q2

Trutankless, Inc. (TKLS)

10-Q 2024-08-20 For: 2024-06-30

Added on April 06, 2026

About this 10-Q

Trutankless, Inc filed this 10-Q on August 20, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

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

Revenue: $11.58K; up 6335.6% from $180 a year earlier
Net loss: $1.08M; compared with a net loss of $504.26K 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.		19
Item 3. Quantitative and Qualitative Disclosure About Market Risk		24
Item 4. Controls and Procedures		24
PART II - OTHER INFORMATION		26
Item 1. Legal Proceedings.		26
Item 1A. Risk Factors		26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		26
Item 3. Defaults Upon Senior Securities.		27
Item 4. Mine Safety Disclosures		27
Item 5. Other Information.		27
Item 6. Exhibits.		28
SIGNATURES		29

	June 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets
Cash	$	584		$	21,453
Prepaid expenses		476,359			5,000
Total current assets		476,943			26,453

Other assets
Right-to-use asset		165,341			203,477
Trademarks		11,914			11,914
Other assets		13,947			13,947
Total other assets		191,202			229,338
Total assets	$	668,145		$	255,791

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	1,058,428		$	956,240
Advances payable - related parties		31,000			31,000
Lease liability		70,882			64,199
Accrued interest payable		322,776			483,238
Accrued interest payable - related parties		457,524			368,952
Royalty liabilities payable		527,500			417,500
Notes payable, net of discounts		780,000			1,030,000
Notes payable, net of discounts - related parties		119,450			241,950
Convertible notes payable, net of discounts		413,500			999,352
Convertible notes payable, net of discounts - related parties		2,549,023			2,840,623
Total current liabilities		6,330,083			7,433,054

Long-term liabilities
Lease liability - long-term		98,370			144,702
Notes payable - net of discounts and current portion - related parties		247,500			125,000
Convertible notes payable, net of discounts and current portion		250,000			-
Total long-term liabilities		595,870			269,702
Total liabilities		6,925,953			7,702,756

Commitments and contingencies (Note 7)		-			-

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, 10,000 shares issued and outstanding		10			10
Common stock, $0.001 par value, 150,000,000 shares authorized, 93,326,511 and 38,773,230 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		93,326			38,773
Additional paid in capital		61,800,542			57,717,685
Subscriptions payable		2,980			1,462,480
Accumulated deficit		(68,154,666	)		(66,665,913	)
Total stockholders' deficit		(6,257,808	)		(7,446,965	)
Total liabilities and stockholders' deficit	$	668,145		$	255,791

	For the Three Months Ended						For the Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net sales	$	11,584		$	180		$	11,584		$	765
Cost of sales		-			-			-			-
Gross profit		11,584			180			11,584			765

Operating expenses
General and administrative expenses		537,175			246,502			841,986			734,126
Research and development		241,931			41,228			419,557			98,179
Professional fees		7,500			18,704			35,065			43,499
Total operating expenses		786,606			306,434			1,296,608			875,804
Operating loss		(775,022	)		(306,254	)		(1,285,024	)		(875,039	)

Other income (expense)
Other income		73			-			73			-
Loss on extinguishment of debt		(166,800	)		-			109,990			-
Interest expense		(141,852	)		(198,002	)		(313,792	)		(351,298	)
Total other income (expense)		(308,579	)		(198,002	)		(203,729	)		(351,298	)
Net loss	$	(1,083,601	)	$	(504,256	)	$	(1,488,753	)	$	(1,226,337	)

Net loss per share - basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.06	)

Weighted average number of common shares - basic		88,885,462			22,047,952			65,714,511			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 in accordance with standby letter of credit		-		-		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	)

	Preferred Stock				Common Stock				Additional Paid-in			Subscriptions			Accumulated
	Shares		Amount		Shares		Amount		Capital			Payable			Deficit			Total
Balance, December 31, 2022		10,000	$	10		20,367,477	$	20,368	$	54,261,311		$	4,793,611		$	(64,627,455	)	$	(5,552,155	)
Stock issued for services		-		-		90,000		90		(67	)		12			-			35
Stock issued for debt restructuring		-		-		115,973		116		(89	)		(27	)		-			-
Net loss for the period		-		-		-		-		-			-			(722,081	)		(722,081	)
Balance, March 31, 2023		10,000		10		20,573,450		20,574		54,261,155			4,793,596			(65,349,536	)		(6,274,201	)
Stock issued for services		-		-		2,200,000		2,200		2,386,850			(2,389,045	)		-			5
Stock issued to extend notes		-		-		84,400		84		42,960			-			-			43,044
Net loss for the period		-		-		-		-		-			-			(504,256	)		(504,256	)
Balance, June 30, 2023		10,000	$	10		22,857,850	$	22,858	$	56,690,965		$	2,404,551		$	(65,853,792	)	$	(6,735,408	)

	June 30, 2024			December 31, 2023
Accounts receivable		186,750			186,750
Allowance for doubtful accounts		(186,750	)		(186,750	)
Total	$	-		$	-

	June 30, 2024			December 31, 2023
Note payable, secured, 5% interest, due on demand	$	19,450		$	19,450
Note payable, secured, 12% interest, due April 26, 2024		60,000			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	$	366,950		$	366,950
Less current portion		(119,450	)		(241,950	)
Total notes payable - related party - long term	$	247,500		$	125,000

	June 30, 2024			December 31, 2023
Convertible note payable, 8% interest, due December 2024	$	2,299,023		$	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			-
Total convertible notes payable - related party	$	2,549,023		$	2,840,623
Less current portion		(2,549,023	)		(2,840,623	)
Total convertible notes payable - related party - long-term	$	-		$	-

	June 30, 2024			December 31, 2023
Convertible note payable, secured, 12% interest, due August 31, 2019, in default	$	50,000		$	50,000
Convertible note payable, secured, 10% interest, due February 2024		45,000			45,000
Convertible note payable, secured, 12% interest, due Feb 15, 2024		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		25,000			25,000
Convertible notes payable, 8% interest, due December 2023		-			295,000
Convertible notes payable, 12% interest, due January 2025		25,000			-
Convertible notes payable, 8% interest, due March 2025		10,000			-
Convertible notes payable, 12% interest, due April 2026		150,000			-
Convertible notes payable, 12% interest, due May 2026		100,000			-
Total convertible notes payable		663,500			1,023,500
Less unamortized discounts		-			(24,148	)
Total convertible notes payable, net of discounts		663,500			999,352
Less current portion		(250,000	)		(999,352	)
Total convertible notes payable, net of discounts - long-term	$	413,500		$	-

Amounts due as of June 30, 2024	Operating Leases
2024	$	39,663
2025		87,654
2026		72,998
Total minimum lease payments		200,315
Less: effect of discounting		(31,063	)
Present value of future minimum lease payments		169,252
Less: current obligations under leases		(70,882	)
Long-term lease obligations	$	98,370

	Number of Shares			Weighted Average Exercise Price
Balance, December 31, 2023		1,317,387		$	0.20
Warrants expired		(915,500	)		1.00
Balance outstanding and exercisable, June 30, 2024		401,887		$	0.35

	·	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;

	Six months ended
	June 30, 2024			June 30, 2023
Net cash used in operating activities	$	(824,269	)	$	(761,916	)
Net cash used in investing activities		-			-
Net cash provided by financing activities		803,400			756,786
Net increase/(decrease) in Cash		(20,869	)		(5,130	)
Cash, beginning		21,453			84,034
Cash, ending	$	584		$	78,904

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: August 19, 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.