Trutankless, Inc 10-Q for FY2023 Q2

Trutankless, Inc. (TKLS)

10-Q 2023-12-11 For: 2023-06-30

Added on April 06, 2026

About this 10-Q

Trutankless, Inc filed this 10-Q on December 11, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $180; down 95.8% from $4332 a year earlier
Net loss: $504.26K; compared with a net loss of $1.45M 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		28
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.		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information.		29
Item 6. Exhibits.		30
SIGNATURES		31

	June 30, 2023			December 31, 2022
ASSETS
Current assets
Cash	$	78,904		$	84,034
Accounts receivable		7,369			7,219
Inventory		117,980			117,980
Total current assets		204,253			209,233

Other Assets
Right to use asset		58,639			100,125
Other assets		13,694			13,824
Total other assets		72,333			113,949

Total assets	$	276,586		$	323,182

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities		1,458,144			1,062,385
Accounts payable and accrued liabilities - related party		23,500			164,300
Lease liability		29,057			51,223
Accrued interest payable - related party		202,270			93,069
Notes payable - related party		98,950			121,450
Notes payable, net of debt discount		511,840			684,380
Convertible notes payable, net of debt discount		1,474,950			1,329,121
Convertible notes payable - related party		2,346,716			500,000
Total current liabilities		6,145,427			4,005,928

Lease liability - long-term		25,568			44,520
Notes payable - long term, net of debt discount		215,500			70,460
Notes payable - related party, non current		125,500			125,500
Convertible notes payable - related party, non current		500,000			1,628,930
Total long-term liabilities		866,568			1,869,410

Total liabilities		7,011,995			5,875,338

Stockholders' deficit
Preferred stock, $0.001 par value, 9,990,000 shares authorized,
0 and 0 shares issued and outstanding as of
June 30, 2023 and December 31, 2022, respectively		-			-
Series B Preferred stock, $0.001 par value, 10,000 shares authorized,
10,000 and 10,000 shares issued and outstanding as of
June 30, 2023 and December 31, 2022 , respectively		10			10
Common stock, $0.001 par value, 1,000,000,000 shares authorized,
22,857,850 and 20,367,477 shares issued and outstanding as of
June 30, 2023 and December 31, 2022 , respectively		22,857			20,367
Additional paid in capital		56,690,965			54,261,311
Subscriptions payable		2,404,551			4,793,611
Accumulated deficit		(65,853,792	)		(64,627,455	)
Total stockholders' deficit		(6,735,409	)		(5,552,156	)

Total liabilities and stockholders' deficit	$	276,586		$	323,182

	For the three months ended						For the three months ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022

Revenue	$	180		$	4,332		$	765		$	20,012

Cost of goods sold		-			(3,652	)		-			(10,404	)

Gross profit		180			680			765			9,608

Operating expenses
General and administrative		246,502			1,003,051			734,126			2,153,683
Research and development		41,228			73,872			98,179			119,030
Professional fees		18,704			20,667			43,499			60,579
Total operating expenses		306,434			1,097,590			875,804			2,333,292

Loss from operations		(306,254	)		(1,096,910	)		(875,039	)		(2,323,684	)

Other income (expenses)
Interest expense		(198,002	)		(323,417	)		(351,298	)		(496,027	)
Total income (expenses)		(198,002	)		(323,417	)		(351,298	)		(496,027	)

Net loss before tax provision		(504,256	)		(1,420,327	)		(1,226,337	)		(2,819,711	)
Tax provision		-			-			-			-
Net loss from continuing operations	$	(504,256	)	$	(1,420,327	)	$	(1,226,337	)	$	(2,819,711	)
Net loss from discontinued operations before tax provision		-			(26,489	)		-			(26,489	)
Tax provision for discontinued operations		-			-			-			-
Net loss from discontinued operations	$	-		$	(26,489	)	$	-		$	(26,489	)
Net loss	$	(504,256	)	$	(1,446,816	)	$	(1,226,337	)	$	(2,846,200	)

Net loss per common share from continuing operations - basic and diluted	$	(0.02	)	$	(0.07	)	$	(0.06	)	$	(0.14	)
Net loss per common share from discontinued operations- basic and diluted	$	-		$	(0.00	)	$	-		$	(0.00	)
Net loss per common share - basic and diluted	$	(0.02	)	$	(0.07	)	$	(0.06	)	$	(0.14	)

Weighted average number of common shares outstanding - basic and diluted		22,047,952			20,387,793			22,042,993			20,319,142

																			Total
	Preferred Stock				Common Stock					Additional			Subscriptions			Accumulated			Stockholders'
	Shares		Amount		Shares			Amount		Paid-in Capital			Payable			Deficit			Deficit
Balance, December 31, 2022		10,000		10		20,367,477			20,367		54,261,311			4,793,611			(64,627,455	)		(5,552,156	)
Stock issued for services		-		-		90,000			90		(67	)		12			-			35
Shares issued for debt restructuring		-		-		115,973			116		(89	)		(27	)		-			-
Net loss		-		-		-			-		-			-			(722,081	)		(722,081	)
Balance, March 31, 2023		10,000		10		20,573,450			20,573		54,261,155			4,793,596			(65,349,536	)		(6,274,202	)
Stock issued for services		-		-		2,200,000			2,200		2,386,850			(2,389,045	)		-			5
Shares issued to extend notes		-		-		84,400			84		42,960			-			-			43,044
Net loss		-		-		-			-		-			-			(504,256	)		(504,256	)
Balance, June 30, 2023		10,000		10		22,857,850			22,857		56,690,965			2,404,551			(65,853,792	)		(6,735,409	)


Balance, December 31, 2021		10,000		10		20,217,577			20,217		54,170,266			2,288,551			(60,372,841	)		(3,893,797	)
Stock issued for services		-		-		5,000			5		4,995			608,990			-			613,990
Shares issued for debt discount		-		-		165,216			165		122,982			-			-			123,147
Spin-off of Notation labs		-		-		-			-		-			-			391,441			391,441
Rounding shares cancellation		-		-		(126	)		-		-			-			-			-
Imputed interest		-		-		-			-		19,595			-			-			19,595
Net loss		-		-		-			-		-			-			(1,425,873	)		(1,425,873	)
Balance, March 31, 2022		10,000		10		20,387,667			20,387		54,317,838			2,897,541			(61,407,273	)		(4,171,497	)
Stock issued for services		-		-		-			-		-			642,990			-			642,990
Shares issued to extend notes		-		-		-			-		-			217,500			-			217,500
Net loss		-		-		-			-		-			-			(1,420,327	)		(1,420,327	)
Balance, June 30, 2022		10,000		10		20,387,667			20,387		54,317,838			3,758,031			(62,827,600	)		(4,731,334	)

	For the six months ended
	June 30, 2023			June 30, 2022
Cash Flows from Operating Activities
Net loss from continuing operations	$	(1,226,337	)	$	(2,819,711	)
Net loss from discontinued operations		-			(26,489	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Imputed interest		-			19,595
Shares issued for services		40			1,256,980
Shares issued to extend notes		43,044			217,500
Depreciation		130			6,255
Non cash operating lease expense		368			(5,371	)
Amortization of debt discount		56,829			88,234
Changes in assets and liabilities
Accounts receivable		(150	)		925
Inventory		-			(1,092	)
Accounts payable and accrued liabilities		389,233			61,783
Accounts payable and accrued liabilities - related party		(31,599	)		15,974
Interest payable - related party		6,526			6,526
Operating cash flow from continued operations		(761,916	)		(1,178,891	)
Operating cash flow from discontinued operations		-			(10,667	)
Net cash used in operating activities		(761,916	)		(1,189,558	)

Cash Flows from Investing Activities:
Purchase of fixed assets		-			-
Net cash used in investing activities		-			-

Cash Flows from Financing Activities:

Proceeds from convertible notes payable		154,000			350,000
Repayments of convertible notes payable		(65,000	)		(35,381	)
Proceeds from convertible notes payable - related party		717,786			1,063,680
Repayments from notes payable		(27,500	)		(292,904	)
Proceeds from notes payable - related party		(22,500	)		30,100
Financing cash flows from continued operations		756,786			1,115,495
Financing cash flows from discontinued operations		-			37,160
Net cash provided by financing activities		756,786			1,152,655

Net decrease in cash		(5,130	)		(36,903	)
Cash of continuing operations, beginning of period		84,034			38,895
Cash, end of period	$	78,904		$	1,992

Supplemental disclosure of cash flow information
Cash paid for interest	$	32,189		$	129,182
Cash paid for taxes	$	-		$	-

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

	June 30, 2023			December 31, 2022
Accounts receivable		186,749			186,600
Allowance for doubtful accounts		(179,381	)		(179,381	)
Total	$	7,369		$	7,219

	June 30, 2023			December 31, 2022
Note payable, secured, 5% interest, due May 2022	$	19,450		$	19,450
Note payable, secured, 12% interest, due May 2030		125,500			125,500
Note payable, secured, 12% interest, due April 2022		79,500			102,000
Total Notes Payable - related party	$	224,450		$	246,950
Less unamortized debt discounts		-			-
Total Notes Payable		224,450			246,950
Less current portion		(121,450	)		(121,450	)
Total Notes Payable - long term	$	98,950		$	125,500

	June 30, 2023			December 31, 2022
Convertible note payable, 8% interest, due December 2024	$	2,346,716		$	1,628,930
Convertible note payable, 12% interest, due December 2023		400,000			400,000
Convertible note payable, 12% interest, due July 2023		100,000			100,000
Total Notes Payable - related party	$	2,846,716		$	2,128,930
Less unamortized debt discounts		-			-
Total Notes Payable		2,846,716			2,128,930
Less current portion		(2,346,716	)		(500,000	)
Total Notes Payable - long term	$	500,000		$	1,628,930

	June 30,			December 31,
	2023			2021
Convertible note payable, secured, 12% interest, due August 31, 2019, in default		50,000			50,000
Convertible note payable, secured, 12% interest, due May 2, 2024		100,000			100,000
Convertible note payable, secured, 10% interest, due February 2024		45,000			45,000
Convertible note payable, secured, 10% interest, due May 22, 2020, in default		-			5,000
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		162,750			162,750
Convertible note payable, secured, 10% interest, due May 1, 2024		350,000			350,000
Convertible note payable, secured, 12% interest, due January 6, 2022		-			-
Convertible note payable, secured, 12% interest, due February 8, 2024		95,000			95,000
Convertible notes payable, secured, 4% interest, due March 3, 2021, in default		25,000			25,000
Convertible notes payable, secured, 10% interest, due December 2021, in default		10,000			10,000
Convertible notes payable, 8% interest, due December 2023		295,000			355,000
Convertible notes payable, 8% interest, due July 2023		48,200			38,200
Convertible notes payable, 8% interest, due December 31, 2024		150,000			-
Total notes payable		1,474,950			1,385,950

Less unamortized discounts	(- )				(56,829	)
Total convertible notes payable, net	$	1,474,950		$	1,329,121
Less current portion		(1,324,950	)		(1,329,121	)

Convertible notes payable, net - Long-term	$	-		$	-

Amounts due as of June 30, 2023	Operating Leases
2023		17,795
2024		22,634
2025		21,886
Total minimum lease payments	$	62,315
Less: effect of discounting		(7,690	)
Present value of future minimum lease payments	$	54,625
Less: current obligations under leases		(29,057	)
Long-term lease obligations	$	25,568

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2022		2,510,485	$	1.85
Warrants granted and assumed		-		-
Warrants expired		-		-
Warrants canceled		-		-
Warrants exercised		-		-
Balance outstanding and exercisable, June 30, 2023		2,510,485	$	1.85

	·	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;

	Three months ended June 30,
	2023			2022
Net cash used in operating activities	$	(761,916	)	$	(1,189,558	)
Net cash used in investing activities		-			-
Net cash provided by financing activities		756,786			1,152,655
Net increase/(decrease) in Cash		(5,130	)		(36,903	)
Cash, beginning		84,034			38,895
Cash, ending	$	78,904		$	1,992

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/ Michael Stebbins
	Michael Stebbins, CEO, Principal Financial Officer and Principal Executive Officer

	Date: December 11, 2023

1.	I have reviewed this Form 10-Q of Trutankless, Inc.;

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(s) 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 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; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	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.

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

	2)	The information contained in the Report fairly presents, in all material respects, the Company's financial position and results of operations.

By:	/s/ Michael Stebbins
	Principal Executive Officer and
	Principal Financial Officer