UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 000-54219

 

TRUTANKLESS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

26-2137574

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

15900 North 78th StreetSuite 200

 

 

ScottsdaleAZ

 

85260

(Address of principal executive offices)

 

(Zip Code)

 

(480275-7572

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐     No ☒

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒      No ☐

 

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 Ruble 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated Filer

Smaller reporting company

(Do not check if a smaller reporting company)

 

Emerging growth company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No ☒

 

The number of shares of Common Stock, $0.001 par value, outstanding on August 19, 2024, was 101,626,511 shares.

 

 

 

 

TRUTANKLESS, INC.

QUARTERLY PERIOD ENDED MARCH 31, 2024

 

Index to Report on Form 10-Q

 

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

 

 

 
2

Table of Contents

 

 TRUTANKLESS, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

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

 

  

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 
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TRUTANKLESS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

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

 

 

 See accompanying notes to the unaudited condensed consolidated financial statements.

 

 
4

Table of Contents

 

TRUTANKLESS, INC

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(Unaudited)

 

 

 

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)

 

 See accompanying notes to the unaudited condensed consolidated financial statements.

 

 
5

Table of Contents

 

TRUTANKLESS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$(1,488,753)

 

$(1,226,337 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

-

 

 

 

130

 

Amortization of debt discounts

 

 

24,148

 

 

 

56,829

 

Stock issued for services

 

 

379,813

 

 

 

40

 

Shares issued to extend notes

 

 

-

 

 

 

43,044

 

Loss on extinguishment of debt

 

 

(109,990

 

 

-

 

Non-cash operating lease expense

 

 

(1,513 )

 

 

368

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

-

 

 

 

(150 )

Prepaid expenses

 

 

1,989

 

 

-

 

Accounts payable

 

 

107,415

 

 

 

389,233

 

Accounts payable - related parties

 

 

-

 

 

 

(31,599 )

Accrued liabilities

 

 

(5,228 )

 

 

-

 

Interest payable

 

 

179,279

 

 

 

-

 

Interest payable to related parties

 

 

88,571

 

 

 

6,526

 

Net cash used in operating activities

 

 

(824,269 )

 

 

(761,916 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Net cash flows from investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

 

275,000

 

 

 

154,000

 

Proceeds from convertible notes payable - related parties

 

 

343,400

 

 

 

717,786

 

Proceeds from notes payable

 

 

310,000

 

 

 

-

 

Proceeds from royalty payable

 

 

110,000

 

 

 

-

 

Repayment of convertible notes payable

 

 

(250,000 )

 

 

(65,000 )

Repayment of convertible notes payable - related parties

 

 

-

 

 

 

(22,500 )

Repayment of notes payable

 

 

-

 

 

 

(27,500 )

Proceeds from issuance of common stock

 

 

15,000

 

 

 

-

 

Net cash provided by financing activities

 

 

803,400

 

 

 

756,786

 

 

 

 

 

 

 

 

 

 

Net change in cash

 

 

(20,869 )

 

 

(5,130 )

Cash and cash equivalents - beginning of period

 

 

21,453

 

 

 

84,034

 

Cash and cash equivalents - end of period

 

$584

 

 

$78,904

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$21,794

 

 

$32,189

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental non-cash information

 

 

 

 

 

 

 

 

Conversion of notes payable into common stock

 

$1,809,750

 

 

$-

 

Common stock issued per consulting agreements

 

$853,160

 

 

$-

 

  

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 
6

Table of Contents

 

TRUTANKLESS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

(UNAUDITED)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc. On June 4, 2018, the Company amended its articles of incorporation and changed its name to Trutankless, Inc.

 

The Company is involved in sales, marketing, research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. Management anticipates the Company’s trutankless water heater, with Wi-Fi capability and Trutankless’ proprietary apps offered in the iOS and Android store, will augment existing products in the home automation space.

 

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the six months ended June 30, 2024 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2023, as filed with the SEC.

 

The consolidated balance sheet as of December 31, 2023, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

 

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ending December 31, 2024.

 

Principles of consolidation

The consolidated financial statements include the accounts of Trutankless, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On August 20, 2020 the Company formed a wholly owned subsidiary, Notation Labs, Inc. On October 20, 2021 the Company formed a wholly owned subsidiary, Tankless 365, Inc. All significant inter-company transactions and balances have been eliminated.

 

Spinoff - On January 24, 2022, the Company completed the previously announced spin-off of its subsidiary Notation Labs Inc into a stand-alone company. The historical results of Notation Labs Inc that were contributed to Trutankless Inc in the spinoff have been reflected as discontinued operations in our condensed consolidated financial statements through the date of the spinoff and in the prior year periods as the spinoff represents a strategic shift in our business that has a major effect on operations and financial results. As of December 31, 2022, the assets and liabilities associated with these Notation Labs Inc. are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheet. The disclosures presented in our notes to the consolidated financial statements are presented on a continuing operations basis.

 

On July 15, 2023, the Company announced its intention to spin-off its wholly-owned subsidiary, Tankless365, Inc. On a date determined by the Board of Directors of the Company, each Shareholder having common stock as of the Distribution Date will be entitled to receive shares of the common stock of Tankless365, Inc. pro rata based on a 4:1 ratio. Subsequent to this announcement, the Company’s management decided that the subsidiary, Tankless 365, Inc. will not be spun-off but will remain as a subsidiary of the Company. 

 

 
7

Table of Contents

 

Use of estimates

The preparation of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

 

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

 

Stock-based compensation

The Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

 

Income Taxes

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of June 30, 2024.

 

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of June 30, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions.

 

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

 

Accounts receivable

Accounts receivable is comprised of uncollateralized customer obligations due under normal trade terms. The Company performs ongoing credit evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded. Accounts receivables are presented net of an allowance for doubtful accounts of $186,750 and $186,750 at June 30, 2024 and December 31, 2023, respectively.

 

 
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Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expenses of $2,522 and $4,310 during the six months ended June 30, 2024 and 2023, respectively.

 

Research and development costs

The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. These research and development expenses are not related to the patent that the Company has, but are focused on future product developments. Research and development costs were $419,557 and $98,179 for the six months ended June 30, 2024 and 2023, respectively. 

 

Revenue recognition

Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

 

Revenue recognition occurs at the time product is shipped to customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance.

 

Fair value of financial instruments

The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

 

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

 

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

 

 
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The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of March 31, 2024 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at June 30, 2024 and December 31, 2023.

 

Recently Issued Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

NOTE 2 - GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of June 30, 2024, the Company had $584 cash on hand. On June 30, 2024, the Company has an accumulated deficit of $68,154,666. For the six months ended June 30, 2024, the Company had a net loss of $1,488,753, and cash used in operations of $824,269. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing.

 

Over the next twelve months management plans to raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 3 - ACCOUNTS RECEIVABLE, NET

 

Accounts receivable consist of the following at:

 

 

 

June 30,

2024

 

 

December 31,

2023

 

Accounts receivable

 

 

186,750

 

 

 

186,750

 

Allowance for doubtful accounts

 

 

(186,750 )

 

 

(186,750 )

Total

 

$-

 

 

$-

 

 

NOTE 4 – ROYALTY LIABILITIES

 

Starting November 2023, the Company issued 16 royalty agreements to investors for a total of $527,500. These agreements require the Company to pay up to $50 per unit sold in royalties to these investors based on their investment amounts. The royalty obligation shall commence upon the 500th unit that is produced and sold and continue for 6 (six) calendar years from the anniversary date of the receipt of the first royalty payment. As of June 30, 2024, the Company had not produced any units relating to these royalty agreements, thus there is no royalty obligation accumulated.

 

 
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NOTE 5 - RELATED PARTY

 

Accounts payable and accrued liabilities – related party

 

During the six months ended June 30, 2024 and 2023, the Company received $0 and $15,000 in advances and made payments $0 and $0 from a related party, respectively. As of June 30, 2024 and December 31, 2023, the Company had advances from a related party of $31,000 and $31,000, respectively.

 

Notes payable - related party consist of the following at:

 

 

 

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

 

 

During the six months ended June 30, 2024, the Company received $0 under a note payable from a director of the Company. As of June 30, 2024 and December 31, 2023, the Company had one note payable due to a director of the Company in the amount of $19,450. The note has an interest rate of 5% and is due on demand.

 

As of June 30, 2024 and December 31, 2023, the Company had one note payable due to an officer of the Company in the amount of $60,000. The note has an interest rate of 12% and is due April 26, 2024.

 

On April 30, 2021, the Company entered into a $150,000, 12% grid note payable with a Company controlled by the CEO that is due upon demand but no later than April 30, 2026. As of June 30, 2024 and December 31, 2023 and 2022, the Company has received advances under the note of $0 and $20,500 and made repayment of $0 and $0, respectively. As of June 30, 2024 and December 31, 2023, the note had a balance of $122,500.

 

On January 8, 2021, the Company entered into a $125,000, 30% note payable due on June 8, 2021. Under the note the Company must make interest only payments of $3,125 starting on February 10, 2021 and continuing through maturity. On December 31, 2022, the noteholder extended the due date to June 8, 2022 for $1,250. On September 1, 2023, the noteholder sold the ownership of the note to an entity under common ownership of a related party who concurrently amended the terms of the note with the Company to accrue interest at 18% interest and to extend the maturity date of the note to August 31, 2025. As of June 30, 2024 and December 31, 2023, the balance of the note was $125,000.

 

On July 23, 2023, the Company entered into a $40,000, 12% note payable with an entity under common control of a related party on July 22, 2024. As of June 30, 2024 and December 31, 2023, the balance on this note was $40,000.

 

Interest expense associated with the related party notes for the six months ended June 30, 2024 and 2023 was $68,295 and $13,347 respectively.

 

 
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Convertible notes payable - related party consist of the following at:

 

 

 

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

 

$-

 

 

$-

 

 

On September 1, 2022, the Company entered into a $2,500,000 8% convertible grid note with Notation Labs, Inc, a company commonly controlled by a director of the Company. The note is due on December 31, 2024 and is convertible at a rate of $0.80 per share. During the year ending December 31, 2023, the Company received $1,190,853 in advances from the note and made payments of $479,160 on the note. During the six months ending June 30, 2024, the Company received $515,000 in advances from the note and made payments of $421,600 on the note. As of June 30, 2024 and December 31, 2023, the balance of the note was $2,299,023 and $2,205,623, respectively.

 

On July 26, 2022, the Company issued a $400,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 15, 2023 and is convertible into shares of the Company’s common stock at a rate of $0.08 per share. On April 4, 2024, the Company issued 24,063,562 shares of common stock for the conversion of $400,000 principal and $81,271 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $400,000, respectively.

 

On June 15, 2023, the Company issued a $150,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 31, 2024 and is convertible into shares of the Company’s common stock at a rate of $0.02 per share. On April 4, 2024, the Company issued 8,224,932 shares of common stock for the conversion of $150,000 principal and $15,090 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $150,000, respectively.

 

On July 25, 2023, the Company issued a $85,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 31, 2024 and is convertible into shares of the Company’s common stock at a rate of $0.02 per share. On April 4, 2024, the Company issued 4,604,904 shares of common stock for the conversion of $85,000 principal and $7,098 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $85,000, respectively.

 

On March 25, 2024, the Company issued a $250,000 12% convertible promissory note to a trust controlled by a shareholder of the Company. The note is due on March 25, 2025 and is convertible into shares of the Company’s common stock at a rate of $0.05 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $250,000 and $0, respectively.

 

Interest expense on all of the above convertible notes for the six months ended June 30, 2024 and 2023 was $113,714 and $122,911, respectively.

 

NOTE 6 - NOTES PAYABLE

 

Notes payable consist of the following at:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Note payable, secured, 12% interest, due June 2024

 

$-

 

 

$300,000

 

Notes payable, secured, 12% interest, due April 2022

 

 

95,000

 

 

 

95,000

 

Notes payable, secured, 12% interest, due December 2023

 

 

10,000

 

 

 

10,000

 

Notes payable, 12% interest, due starting August 2024

 

 

325,000

 

 

 

500,000

 

Notes payable, 18% interest, due starting August 2024

 

 

350,000

 

 

 

125,000

 

Total notes payable

 

$780,000

 

 

$1,030,000

 

Less current portion

 

 

(780,000 )

 

 

(1,030,000 )

Total Notes Payable - long term

 

$-

 

 

$-

 

  

 
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On January 1, 2020, the Company entered into an agreement to consolidate three notes payable above dated September 2, 2016 and February 2, 2018 into one $300,000, 12% note due September 1, 2021. As consideration the Company issued the note holder 175,000 shares of common stock valued at $61,250 which was recorded as financing expense. On May 1, 2022, for the issuance of 25,000 shares valued at $29,000 on the date of commitment, the loan was further extended to September 1, 2024. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $61,250 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. On January 19, 2024, the Company issued 3,000,000 shares of common stock in settlement of the principal amount of $300,000 and accrued interest of $10,948. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $300,000, respectively.

 

On April 26, 2021, the Company entered into a $95,000, 12% note payable due on April 26, 2022. As of June 30, 2024 and December 31, 2023, the balance of the note was $95,000.

 

On August 18, 2021, the Company entered into a $10,000, 12% note payable due on August 18, 2022. On April 10, 2022 the note was amended to have a due date of December 7, 2023. As of June 30, 2024 and December 31, 2023, the balance of the note was $10,000.

 

On August 3, 2023 the Company’s wholly owned subsidiary initiated an offering of 12% Notes with maturity dates of 12 months starting on August 3, 2024. As of June 30, 2024 and December 31, 2023, the Company has raised $575,000 and $500,000, respectively, under the offering. On April 3, 2024, the Company issued 3,857,143 shares of common stock to one noteholder for the conversion of $250,000 principal and $20,055 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the notes was $325,000 and $500,000, respectively.

 

On October 19, 2023 the Company’s wholly owned subsidiary initiated an offering of 18% Notes with maturity dates of 12 months starting on August 3, 2024. As of June 30, 2024 and December 31, 2023, the Company has raised $350,000 and $125,000, respectively, under the offering. As of June 30, 2024 and December 31, 2023, the balance of the notes was $350,000 and $125,000, respectively.

 

Interest expense including amortization of the associated debt discount for the six months ended June 30, 2024 and 2023 was $58,756 and $63,921, respectively.

 

Convertible notes payable, net of debt discount consist of the following:

 

 

 

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

 

 

$-

 

 

 
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On September 2, 2016, the Company issued $50,000 of principal amount of 12% secured convertible promissory notes and 6,250 warrants to purchase common stock (post-split). The note was due on August 31, 2018, was later extended to August 31, 2019, bears interest of twelve percent (12%) and is currently in default. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $8.00 per share (post-split). The notes were issued with warrants to purchase up to 6,250 shares of the Company’s common stock at an exercise price of $12 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $50,000.

 

On May 2, 2017, the Company issued $50,000 of principal amount of 10% secured convertible promissory notes and 10,000 warrants to purchase common stock. The note was due on May 2, 2020 and is secured by the Company’s accounts receivable and inventory. On April 22, 2020, the note was extended to May 2, 2021. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $4 per share (post-split). The notes were issued with warrants to purchase up to 1,250 shares (post-split) of the Company’s common stock at an exercise price of $8.00 per share. One December 31, 2021 the note was amended to cease accruing interest as of May 1,2022 and the due date of the note was amended to April 1, 2023 and on February 8, 2023 the note was extended to February 8, 2024. As of June 30, 2024 and December 31, 2023, the balance of the note was $45,000.

 

On February 15, 2018, the Company issued a $75,000 12% secured convertible promissory note. The note was due on February 24, 2020 and is secured by the Company’s accounts receivable and inventory. On April 22, 2020, the due date of the note was extended to February 15, 2021 for the issuance of 6,250 shares of common stock valued at $8,995 and is currently in default. On February 22, 2022 the due date of the note was further extended to February 15, 2024. As of June 30, 2024 and December 31, 2023, the balance of the note was $75,000.

 

On February 8, 2019, the Company issued a $50,000 10% convertible note. The note was due on February 8, 2020 and is currently in default. As an incentive to enter into the agreement, the noteholder was also granted 7,500 shares valued at $30,000, which was recognized as a debt discount. On February 19, 2019, the Company issued a $25,000 4% convertible note. The note was due on August 19, 2019 and is convertible at a rate of $4 per share. On February 14, 2019, the noteholder agreed to extend the note through October 14, 2020. As an incentive to enter into the agreement, the noteholder was also granted 625 shares valued at $2,500, which was recognized as a debt discount. These notes were merged into one note at the time of extension with a principal amount of $75,000. As of June 30, 2024 and December 31, 2023, the balance of the note was $75,000.

 

On November 19, 2019, the Company entered in to a $281,000 convertible note payable, including an original issue discount of $28,100 convertible promissory note pursuant to which $150,000 was borrowed, including a $18,500 discount during the year ended December 31, 2019. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding, which has July 19, 2020 for the first tranche. On May 20, 2020, the noteholder agreed to extend the due date of the first tranche of funding until July 19, 2020 and is currently past due. The note is convertible at the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price with a floor of $0.01. As an incentive to enter into the agreement, the noteholder was also granted 53,375 shares valued at $175,070. As of June 30, 2024 and December 31, 2023, the balance of the note was $108,500.

 

 
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On May 5, 2020, the Company issued a $350,000 10% convertible note. The note is due on May 1, 2021 and is convertible at a rate of $1 per share (post-split). As an incentive to enter into the agreement the noteholder was also granted 187,500 shares (post-split) valued at $207,000, which was recognized as a debt discount. On April 21, 2021, the noteholder agreed to extend the note through May 1, 2022. As an incentive to enter into the agreement, the noteholder was also granted 12,500 shares (post-split) valued at $20,000, which was recognized as financing expense. On May 1, 2022, for the issuance of 75,000 shares valued at $87,000 on the date of commitment, the loan was further extended to May 1, 2024. On May 3, 2024, the Company issued 7,002,740 shares of common stock for the conversion of $350,000 principal and $140,288 accrued interest at $0.22 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $350,000, respectively.

 

On March 3, 2021, the Company issued a $25,000 4% convertible note. The note is due on March 3, 2022 and is convertible at a rate of $0.80 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $25,000.

 

On February 22, 2022 the Company entered into a $385,000, 12% note payable due on February 22, 2023. The note is convertible upon default at the higher of the closing price of the common stock on the closing date, or par value. As an inducement to enter into the agreement the Company also granted the noteholder 165,216 shares of common stock (post-split). The issuance of the note and shares resulted in a total debt discount of $158,147, with $123,147 attributable to the shares. On February 8, 2023, the note was extended to December 31, 2023. During the year ended December 31, 2023, the Company made principal payments totaling $60,000. On March 26, 2024, the Company entered a settlement agreement with the noteholder, in which the noteholder agreed to accept payment of $250,000 as settlement in full for all principal and accrued interest. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $295,000.

 

On July 18, 2022, the Company entered into a $150,000 8% convertible grid note. The note is due on July 18, 2023 and is convertible at a rate of $0.80 per share. During the year ending December 31, 2023, the Company received $4,000 in advances from the note. During the year ended December 31, 2023, the Company converted the balance of the note and accrued interest into 2,254,986 shares of common stock valued at $45,100. On March 26, 2024, the Company received $10,000 in advance from the note. As of June 30, 2024 and December 31, 2023, the balance of the note was $10,000 and $0, respectively.

 

On April 23, 2024, the Company entered into a convertible note agreement for $150,000 for a 24-month period and interest rate of 12% and is convertible at $0.10 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $150,000 and $0, respectively.

 

On May 14, 2024, the Company entered into a convertible note agreement for $25,000 for a 12-month period and interest rate of 12% and is convertible at $0.15 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $25,000 and $0, respectively.

 

On May 29, 2024, the Company entered into a convertible note agreement for $100,000 for a 24-month period and interest rate of 12% and is convertible at $0.15 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $100,000 and $0, respectively.

 

Interest expense including financing cost and amortization of the associated debt discount on all of the above convertible notes for the six months ended June 30, 2024 and 2023 was $47,835 and $118,111, respectively.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Operating Lease Agreements

 

The Company determines whether or not a contract contains a lease based on whether or not it provides the Company with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. The Company elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less.

 

 
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The discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on the Company’s collateralized incremental interest rate to borrow of 12%, as the rate implicit in the lease is not determinable.

 

The Company has entered into lease agreements as a lessee for the use of office space. These lease agreements are classified as operating leases, and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

 

During 2018, the Company executed a lease agreement. The lease term is 39 months at a rate of $1,680 per month with 3% increases beginning January 1, 2021 and rent commencing on January 1, 2019. The Company was required to pay a $1,781 security deposit. The Company agreed to renew the lease through December 31, 2025.

 

On August 24, 2023, the Company executed a lease agreement. The lease term is 39 months at a starting rate of $5,624 per month with 4% increases beginning December 1, 2024 and rent commencing on September 1, 2023. As a result of the adoption of ASC 842, the Company recognized an operating lease liability and right-of-use asset of $171,276 and $171,798 associated with the lease.

 

In early 2022, the Company spun-off a wholly owned subsidiary, Notation Labs, Inc. (“Notation Labs”). Notation Labs and the Company have continued to share office and warehouse spaces. The agreement is that Notation Labs pays portions of the leases based on agreements between the two companies for usage and other factors. The Company does not recognize rent expense on amounts paid by Notation Labs nor is it required to repay Notation Labs.

 

Undiscounted Cash Flows

 

As of June 30, 2024, the right of use asset and lease liability were shown on the consolidated balance sheet at $165,341 and $169,252, respectively. The table below reconciles the fixed component of the undiscounted cash flows and the total remaining years to the operating lease liability recorded on the consolidated balance sheet as of June 30, 2024:

 

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

 

   

Legal Matters

 

On July 6, 2020, we received a letter from the staff of the Division of Enforcement of the Securities and Exchange Commission (the “Staff”) that indicated the Company may have violated certain rules and regulations regarding a late filing notification filed by the Company and that the Staff is conducting an informal inquiry into the matter. On April 29, 2021, the Company agreed to pay civil penalties of $25,000 to the Securities and Exchange Commission in settlement of the matter. Payment shall be made in the following four installments: (1) $5,000 within 14 days of entry of the order; (2) $7,500 within 180 days of entry of the order; (3) $6,250 within 270 days of entry of the order; and (4) $6,250 within 360 days of entry of the order. As of June 30, 2024, $20,000 remained due.

 

 
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On April 6, 2023, the Company was served a Summons for an Amended Complaint filed in the state of Florida with claims for Strict Liability, Negligence and Breach of Implied Warranty. The complaint, filed by an insurance company, stems from its payments for claims filed by a policy holder on two separate occasions. The first insurance claim payment was due to a leak caused by improper installation in which the contractor failed to meet local codes. The second insurance claim payment followed the contractor’s failure to properly repair the improper installation. The complaint states that the contractor failed to follow basic installation guidelines supplied with the product in either incident, resulting in damages. On June 8, 2023, the Court of Duval County, FL entered a default judgement for $38,768. As of June 30, 2024, the Company has not paid any of this balance.

 

NOTE 8 - STOCK WARRANTS

 

The following is a summary of stock warrants activity during the period ended June 30, 2024:

 

 

 

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

 

 

NOTE 9 - STOCKHOLDERS’ EQUITY

 

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock. On October 26, 2020, the Board of Directors (the Board), authorized the Company to amend the Articles of Incorporation of the Corporation to increase the authorized capital stock of the Corporation to 1,010,000,000 shares, of which 1,000,000,000 shall be authorized as common shares and 10,000,000 shall be authorized as preferred shares. Additionally, the Board authorized the execution of a reverse split of the issued and outstanding shares of the Corporation’s common stock at a ratio of up to one post-split share per twenty-five pre-split shares (1:25) at a time and exact ratio amount the Board of Directors deems appropriate. On September 27, 2021, FINRA approved a 1-for-8 reverse stock split of the Company’s common stock that was approved by the Company’s Board of Directors. The Company’s equity transactions have been retroactively restated to reflect the effect of the stock split.

 

The Series B Preferred Stock does not pay a dividend, does not have any liquidation preference over other securities issued by the Company and are not convertible into shares of the Company’s common stock. For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to a controlling 51% of the total vote on all shareholder matters of the Company. Upon or after the third anniversary of the initial issuance date, the Company shall have the right, at the Company’s option, to redeem all or a portion of the shares of Series B Preferred Stock, at a price per share equal to par value.

 

On January 18, 2024, the Company issued 1,050,000 shares pursuant to amendments to a related party promissory note which were made on October 20, 2021.

 

On January 19, 2024, the Company issued 3,000,000 shares for a notice of conversion of a promissory note.

 

On February 15, 2024, the Company issued 200,000 shares for cash at $0.05 per share for a total of $10,000.

 

On February 19, 2024, the Company issued 750,000 shares for services pursuant to two consulting agreements.

 

On February 19, 2024, the Company issued 100,000 shares for cash at $0.05 per share for a total of $5,000.

 

On April 2, 2024 the Company issued 1,000,000 shares for services pursuant to a consulting agreement.

 

On April 3, 2024, the Company issued 3,857,143 shares pursuant to a promissory note amendment and conversion dated April 3, 2023.

 

On April 4, 2024, the Company issued 36,893,398 shares to convert certain related party convertible notes dated July 26, 2022, June 15, 2023 and July 25, 2023.

 

On April 14, 2024 the Company issued 100,000 shares for services pursuant to a consulting agreement.

 

 
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On April 22, 2024, the Company entered into a consulting agreement with an individual for a six-month period. As compensation, the Company will issue 300,000 shares of common stock to the consultant immediately upon signing the agreement.

 

On May 3, 2024, the Company issued 7,002,740 shares of common stock for the conversion of $350,000 in principal and $140,192 in accrued interest on a convertible note.

 

On May 7, 2024, the Company issued 100,000 shares of common stock valued at $47,835, which was recorded in the prior year in Stock payable as an incentive to enter into a certain note payable.

 

NOTE 10 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements other than as set forth below.

 

On July 10, 2024, the Company issued 200,000 shares for services pursuant to two separate consulting agreements.

 

On July 14, 2024, the Company issued 100,000 shares for services pursuant to a consulting agreement.

 

On July 16, 2024, the Company received $10,000 in advances on a continuing grid loan.

 

On July 23, 2024, the Company entered into a convertible note agreement for $50,000 for a 24-month period and interest rate of 12% and is convertible at $0.15 per share.

 

On July 24, 2024, the Company entered into a note agreement for $50,000 for a 6-month period and interest rate of 18%. The Company issued 300,000 shares of common stock as incentive for this financing agreement.

 

On July 25, 2024, the Company entered into a convertible note agreement for $500,000 for a 12-month period and interest rate of 15% and is convertible at $0.15 per share.

 

On July 25, 2024, the Company issued 2,500,000 shares for services pursuant to a consulting agreement.

 

On July 26, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 600,000 shares of common stock as incentive for this financing agreement.

 

On August 5, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 200,000 shares of common stock as incentive for this financing agreement.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to an amendment to the consulting agreement with the CEO.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to a consulting agreement.

 

On August 6, 2024, the Company issued 600,000 shares pursuant to a 2023 consulting agreement entered into on February 1, 2023.

 

On August 8, 2024, the Company issued 150,000 shares per a subscription agreement at $0.05 per share for $7,500 in cash.

 

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

This Quarterly Report on Form 10-Q contains forward-looking statements. Any statements contained herein that are not historical fact may deem to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions identify some of the forward-looking statements. Forward-looking statements are not guarantees of performance or future results and involve risks, uncertainties and assumptions. These statements include, among other things, statements regarding:

 

 

·

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;

 

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

References in the following discussion and throughout this Quarterly Report to “we”, “our”, “us”, “TKLS”, “Trutankless”, “Bollente”, “the Company”, and similar terms refer to Trutankless, Inc. unless otherwise expressly stated or the context otherwise requires.

 

AVAILABLE INFORMATION

 

The Company’s stock symbol is TKLS, and is presently traded on the OTCQB maintained by OTC Markets Group, Inc. We file annual, quarterly and other reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.trutanklessinc.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt of a written request to us at Trutankless, Inc., 15900 North 88th Street, Suite 200, Scottsdale, Arizona 85260.

 

 
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General

 

Trutankless Inc. was incorporated in the state of Nevada on March 7, 2008. The Company is headquartered in Scottsdale, Arizona and currently operates through its wholly-owned subsidiary, Bollente, Inc., a Nevada corporation incorporated on December 3, 2009.

 

Trutankless is involved in research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. Management anticipates the Company's trutankless water heater, with Wi-Fi capability and trutankless' proprietary apps offered in the iOS and Android store, will augment existing products in the hope automation space.

 

The Company spun off its wholly owned subsidiary, Notation Labs, Inc. with shareholders of the Company to receive pro rata ownership of the spun off company in the form of an equity dividend distribution. Common shares of Notation Labs, Inc. were issued to shareholders of record December 10th, 2021 and the spin off occurred on January 24th, 2022, with each shareholder of record receiving 1 share in the subsidiary for every 4 shares in the Company held as of the Record Date.

 

Trutankless® Products

 

Our trutankless® water heaters were designed to provide an endless hot water supply because they are designed to heat water as it flows through the system. We believe that our products have an improved design and greater efficiency thereby saving energy and offering reduction operating costs compared to tank systems because unlike tanks, if there is no hot water demand, no energy is being used. In addition, we intend to improve manufacturing and life-cycle costs with an improved design conceived not only to increase efficiency, but also the longevity of our products versus competitive units. We have several features and design innovations which are new to the electric tankless water heater market that we believe will give our products a sustainable competitive advantage over our rivals in the market.

 

Our trutankless® water heaters will be available through wholesale plumbing distributors, including Home Depot Pro, Ferguson, Hajoca, WinSupply locations, Morrison Supply, and several regional distributors. A partial listing of wholesalers may be found on our website (www.trutankless.com).

 

We created a custom heat exchanger for our trutankless® product line that utilizes our patented technology to heat water as it flows through the system, which means customers need not worry about running out of hot water. We are developing systems using upgraded materials, electronics, and a collection of exclusive design elements and features to maximize capacity, minimize energy use, and provide a truly maintenance free experience.

 

Our trutankless® water heaters were officially launched in the first quarter of 2014 and is sold throughout the wholesale plumbing distribution channel. We began generating revenue in the first quarter of 2014. As of the fiscal year ended December 31, 2014, we generated $238,912 in revenue. As of the fiscal year ended December 31, 2015, we generated $265,504 in revenue. As of the fiscal year ended December 31, 2016, we generated $429,582 in revenue. As of the fiscal year ended December 31, 2017, we generated $695,857 in revenue. As of the fiscal year ended December 31, 2018, we generated $1,537,958 in revenue. 1, 2019, we generated $1,908,708. As of December 31, 2020, we generated $1,661,278. As of the fiscal year ended December 31, 2021, we generated $246,032 in revenue. As of the fiscal year ended December 31, 2022, we generated $77,009 in revenue. As of the fiscal year ended December 31, 2023, we generated $3,549 in revenue. For the six months ended June 30, 2024, we generated $11,584 in revenue.

 

We are developing a new, customizable app and control panel for our smart electric water heaters. Using our app, residential and commercial users will be able to obtain real-time status reports, adjust unit temperature settings, view water usage data, and change notification settings from anywhere in the world on their mobile device.

 

Our primary markets, Florida, Texas, Arizona, and the rest of the Sunbelt region are centers of growth in the U.S. construction and we plan to continue intend to take advantage of our relationships as we launch our totally redesigned trutankless® brand whole home tankless water heaters.

 

 
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Www.trutankless.com is available as a service to consumers of trutankless® water heaters. We expect to have new apps available for download from the Apple iOS and Goggle Play stores, which will integrate with other devices in the Smart Home market.

 

Industry Recognition and Awards

 

Leading home improvement website, houzz.com, honored the company with 4 consecutive “Best of Houzz” honors from 2014 through 2018.

 

We expect our new line of water heaters will garner similar accolades once the product has been launched with proprietary improvements which will continue to lead the market in the tankless water heating technology which we expect will continue to be driven, in large part, through industry professionals in their local markets.

 

Customers and Markets

 

We intend to continue selling our products to plumbing wholesale distributors and dealers.

 

Approximately 100% of our sales in 2022 and 2021, were to wholesale plumbing equipment distributors for commercial and residential repair and replace applications. Additionally, our products have historically been sold to various home builders throughout the United States in both single family and multi-family applications.

 

Manufacturing and Logistics

 

We have a Manufacturing Services Agreement establishing our financial and payment arrangements, warranty, shipping, and delivery terms with a large US based contract manufacturer with vertically integrated capabilities for electro-mechanical box builds. Finished product are to be generally shipped Freight on Board (FOB) via standard LTL freight and are to be either drop-shipped to customers directly with some inventory to be warehoused at Associated Global Systems located in Phoenix, Arizona. Merchandise is typically shipped using common carriers or freight companies which are selected at the time of shipment based on order volume and the best available rates.

 

RESULTS OF OPERATIONS

 

Results of Operations for the six months ended June 30, 2024 compared with the six months ended June 30, 2023.

 

Revenues

 

In the six months ended June 30, 2024, we generated $11,584 in revenues, as compared to $765 in revenues in the prior year. The increase in sales was attributable to sales of parts for our trutankless® residential and light commercial products.

 

Cost of goods sold was $0 in the six months ended June 30, 2024, as compared to $0 in the six months ended June 30, 2023.

 

To the knowledge of management, the Company is unaware of any trends or uncertainties in the sales or costs of our products and services for the periods discussed.

 

Expenses

 

Operating expenses totaled $1,296,608 during the six months ended June 30, 2024 as compared to $875,804 in the prior year. In the six months ended June 30, 2024, our expenses primarily consisted of General and Administrative of $841,986, Research and development of $419,557 and Professional fees of $35,065.

 

General and administrative expenses increased by $107,860, or approximately 14.7% to $841,986 for the six months ended June 30, 2024 from $734,126 for the six months ended June 30, 2023. This increase was primarily the result of an increase in consulting fees.  

 

 
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Research and development expenses increased by $321,378, or approximately 327.3% to $419,557 for the six months ended June 30, 2024 from $98,179 for the six months ended June 30, 2023. This increase is attributed primarily to the increased consulting fees associated with the Company’s research and development efforts.

 

Professional fees decreased by $8,434, or approximately 19.4% to $35,065 for the six months ended June 30, 2024 from $43,499 for the six months ended June 30, 2023. Professional fees decreased due to increase in production efforts and less efforts associated with business development.

 

Other Expenses

 

Other expenses decreased by $147,569 to ($203,729) in the six months ended June 30, 2024 from ($351,298) in the six months ended June 30, 2023. The decrease was the result of a gain on extinguishment of debt.

 

Net Loss

 

In the six months ended June 30, 2024, we generated a net loss of $1,488.753, an increase of $262,416 from $351,298 for the six months ended June 30, 2023. This increase was attributable to an increase in overall expenditures.

 

Results of Operations for the three months ended June 30, 2024 compared with the three months ended June 30, 2023.

 

Revenues

 

In the three months ended June 30, 2024, we generated $11,584 in revenues, as compared to $180 in revenues in the prior year. The increase in sales was attributable to sales of parts for our trutankless® residential and light commercial products.

 

Cost of goods sold was $0 in the three months ended June 30, 2024, as compared to $0 in the three months ended June 30, 2023.

 

To the knowledge of management, the Company is unaware of any trends or uncertainties in the sales or costs of our products and services for the periods discussed.

 

Expenses

 

Operating expenses totaled $786,606 during the three months ended June 30, 2024 as compared to $306,434 in the prior year. In the three-month period ended June 30, 2024, our expenses primarily consisted of General and Administrative of $537,175, Research and development of $241,931 and Professional fees of $7,500.

 

General and administrative expenses increased by $290,673, or approximately 117.9% to $537,175 for the three months ended June 30, 2024 from $246,502 for the three months ended June 30, 2023. This increase was primarily the result of an increase in consulting fees.  

 

Research and development expenses increased by $200,703, or approximately 486.8% to $241,931 for the three months ended June 30, 2024 from $41,228 for the three months ended June 30, 2023. This increase is attributed primarily to the increased consulting fees associated with the Company’s research and development efforts.

 

Professional fees decreased by $11,204, or approximately 59.9% to $7,500 for the three months ended June 30, 2024 from $18,704 for the three months ended June 30, 2023. Professional fees decreased due to increase in production efforts and less efforts associated with business development.

 

Other Expenses

 

Other expenses increased by $110,577 to ($308,579) in the three months ended June 30, 2024 from ($198,002) in the three months ended June 30, 2023. The increase was the result of a loss on extinguishment of debt of $166,800.

 

 
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Net Loss

 

In the three months ended June 30, 2024, we generated a net loss of $1,083,601, an increase of $579,345 from $504,256 for the three months ended June 30, 2023. This decrease was attributable to an increase in overall expenditures and the gain on extinguishment of debt.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of June 30, 2024, the Company had $584 cash on hand. On June 30, 2024, the Company has an accumulated deficit of $68,154,666. For the six months ended June 30, 2024, the Company had a net loss of $1,488,753, and cash used in operations of $824,269. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing.

 

Over the next twelve months management plans to raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Liquidity and Capital Resources

 

At June 30, 2024, we had an accumulated deficit of $68,154,666. Primarily because of our history of operating losses and our recording of note payables, we have a working capital deficiency of $5,853,140 at June 30, 2024. Losses have been funded primarily through issuance of common stock and borrowings from our stockholders and third-party debt. As of June 30, 2024, we had $584 in cash, $0 in accounts receivable, and $0 in inventory. We used net cash in operating activities of $824,269 for the six months ended June 30, 2024.

 

Cash Flows from Operating, Investing and Financing Activities

 

The following table provides detailed information about our net cash flow for all financial statement periods presented in this Quarterly Report. To date, we have financed our operations through the issuance of stock and borrowings.

 

The following table sets forth a summary of our cash flows for the six months ended June 30, 2024 and 2023:

 

 

 

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

 

 

 
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Operating activities - Net cash used in operating activities was $824,269 for the six months ended June 30, 2024, as compared to $761,916 used in operating activities for the same period in 2023. The decrease in net cash used in operating activities was primarily due to an increase in operating expenses.

 

Financing activities - Net cash provided by financing activities for the six months ended June 30, 2024 was $803,400 as compared to $756,786 for the same period of 2023. The increase of net cash provided by financing activities was mainly attributable to increased equity and debt financing.

 

Ongoing Funding Requirements

 

As of June 30, 2024, we continue to use traditional and/or debt financing to provide the capital we need to run the business. It is possible that we may need additional funding to enable us to fund our operating expenses and capital expenditures requirements.

 

Until such time, if ever, as we can generate substantial product revenues, we intend to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. There can be no assurance that any of those sources of funding will be available when needed on acceptable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or relationships with third parties when needed or on acceptable terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts; abandon our business strategy of growth through acquisitions; or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

 

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 is material to investors.

 

Critical Accounting Policies and Estimates

 

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions.

 

There have been no material changes to our critical accounting policies as compared to the critical accounting policies and significant judgements and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on June 26, 2024.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk

 

This item in not applicable as we are currently considered a smaller reporting company.

 

Item 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

As required by Rule 13a-15 under the Exchange Act, as of the end of the Company’s last fiscal quarter, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s current management, including the Company’s Chief Executive Officer and Principal Financial Officer (Principal Financial and Accounting Officer), who concluded that the Company’s disclosure controls and procedures are not effective.

 

 
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Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Principal Financial Officer (Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in internal control over financial reporting

 

Management reviews the Company’s system of internal control over financial reporting and makes changes to the Company’s processes and systems to improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities and migrating processes.

 

During the Company’s last fiscal quarter, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Limitations on Effectiveness of Controls and Procedures

 

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

 
25

Table of Contents

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

On July 6, 2020, we received a letter from the staff of the Division of Enforcement of the Securities and Exchange Commission (the “Staff”) that indicated the Company may have violated certain rules and regulations regarding a late filing notification filed by the Company and that the Staff is conducting an informal inquiry into the matter. On April 29, 2021, the Company agreed to pay civil penalties of $25,000 to the Securities and Exchange Commission in settlement of the matter. Payment shall be made in the following four installments: (1) $5,000 within 14 days of entry of the order; (2) $7,500 within 180 days of entry of the order; (3) $6,250 within 270 days of entry of the order; and (4) $6,250 within 360 days of entry of the order. As of June 30, 2024, $20,000 remained due.

 

On April 6, 2023, the Company was served a Summons for an Amended Complaint filed in the state of Florida with claims for Strict Liability, Negligence and Breach of Implied Warranty. The complaint, filed by an insurance company, stems from its payments for claims filed by a policy holder on two separate occasions. The first insurance claim payment was due to a leak caused by improper installation in which the contractor failed to meet local codes. The second insurance claim payment followed the contractor’s failure to properly repair the improper installation. The complaint states that the contractor failed to follow basic installation guidelines supplied with the product in either incident, resulting in damages. On June 8, 2023, the Court of Duval County, FL entered a default judgement for $38,768. As of June 30, 2024, the Company has not paid any of this balance.

 

Item 1A. Risk Factors

 

The risk factors listed in our 2023 Form 10-K, filed with the Securities Exchange Commission on June 26, 2024, are hereby incorporated by reference.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On January 18, 2024, the Company issued 1,050,000 shares pursuant to amendments to a related party promissory note which were made on October 20, 2021.

 

On January 19, 2024, the Company issued 3,000,000 shares for a notice of conversion of a promissory note.

 

On February 15, 2024, the Company issued 200,000 shares for cash at $0.05 per share for a total of $10,000.

 

On February 19, 2024, the Company issued 750,000 shares for services pursuant to two consulting agreements.

 

On February 19, 2024, the Company issued 100,000 shares for cash at $0.05 per share for a total of $5,000.

 

On April 3, 2024, the Company issued 3,857,143 shares pursuant to a promissory note amendment and conversion dated April 3, 2023.

 

On April 4, 2024, the Company issued 36,893,398 shares to convert certain related party convertible notes dated July 26, 2022, June 15, 2023 and July 25, 2023.

 

On April 11, 2024 the Company issued 1,000,000 shares for services pursuant to a consulting agreement.

 

On April 22, 2024, the Company entered into a consulting agreement with an individual for a six-month period. As compensation, the Company will issue 300,000 shares of common stock to the consultant immediately upon signing the agreement.

 

On May 3, 2024, the Company issued 7,002,740 shares of common stock for the conversion of $350,000 in principal and $140,192 in accrued interest on a convertible note.

 

On May 7, 2024, the Company issued 100,000 shares of common stock valued at $47,835, which was recorded in the prior year in Stock payable as an incentive to enter into a certain note payable.

 

On May 14, 2024 the Company issued 100,000 shares for services pursuant to a consulting agreement.

 

On July 10, 2024 the Company issued 200,000 shares for services pursuant to two separate consulting agreements.

 

On July 14, 2024 the Company issued 100,000 shares for services pursuant to a consulting agreement.

 

On July 24, 2024, the Company entered into a note agreement for $50,000 for a 6-month period and interest rate of 18%. The Company issued 300,000 shares of common stock as incentive for this financing agreement.

 

On July 26, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 600,000 shares of common stock as incentive for this financing agreement.

 

 
26

Table of Contents

 

On August 5, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 200,000 shares of common stock as incentive for this financing agreement.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to an amendment to the consulting agreement with the CEO.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to a consulting agreement.

 

On August 6, 2024, the Company issued 600,000 shares pursuant to a 2023 consulting agreement entered into on February 1, 2023.

 

On August 8, 2024, the Company issued 150,000 shares per a subscription agreement at $0.05 per share for $7,500 in cash.

 

We believe that the above issuances and sale of the securities was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule. The securities were sold directly by us and did not involve a public offering or general solicitation. The recipients of the securities were afforded an opportunity for effective access to files and records of the Registrant that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipients, immediately prior to the sale of the securities, were accredited investors and had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The management of the recipients had the opportunity to speak with our management on several occasions prior to their investment decision. There were no commissions paid on the issuance and sale of the securities.

 

Issuer Purchases of Equity Securities

 

The Company did not repurchase any of its equity securities during the period ended March 31, 2024.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable

 

Item 5. Other Information.

 

None.

 

 
27

Table of Contents

 

Item 6. Exhibits.

 

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).

 

* Filed herewith.

 

 
28

Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

TRUTANKLESS, INC.

(Registrant)

 

By:

/s/ Guy Newman

 

 

Guy Newman, CEO,

Principal Financial Officer and

Principal Executive Officer

 

 

 

 

 

Date: August 19, 2024

 

 

 

29

 

nullnullv3.24.2.u1
Cover - shares
6 Months Ended
Jun. 30, 2024
Aug. 19, 2024
Cover [Abstract]    
Entity Registrant Name TRUTANKLESS, INC.  
Entity Central Index Key 0001429393  
Document Type 10-Q  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Small Business true  
Entity Shell Company false  
Entity Emerging Growth Company false  
Entity Current Reporting Status No  
Document Period End Date Jun. 30, 2024  
Entity Filer Category Non-accelerated Filer  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Entity Common Stock Shares Outstanding   101,626,511
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 000-54219  
Entity Incorporation State Country Code NV  
Entity Tax Identification Number 26-2137574  
Entity Address Address Line 1 15900 North 78th Street  
Entity Address Address Line 2 Suite 200  
Entity Address City Or Town Scottsdale  
Entity Address State Or Province AZ  
Entity Address Postal Zip Code 85260  
City Area Code 480  
Local Phone Number 275-7572  
Entity Interactive Data Current Yes  
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Jun. 30, 2024
Dec. 31, 2023
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
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 0
Total long-term liabilities 595,870 269,702
Total liabilities 6,925,953 7,702,756
Commitments and contingencies (Note 7) 0 0
Stockholders' deficit    
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
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Common Stock, Par Value $ 0.001 $ 0.001
Common Stock, Shares Authorized 150,000,000 150,000,000
Common Stock, Shares, Issued 93,326,511 38,773,230
Common Stock, Shares Outstanding 93,326,511 38,773,230
Preferred Stock, Par Value $ 0.001 $ 0.001
Preferred Stock, Shares Authorized 9,990,000 9,990,000
Series B Preferred Stock [Member]    
Preferred Stock, Par Value $ 0.001 $ 0.001
Preferred Stock, Shares Authorized 10,000 10,000
Preferred Stock, Shares Issued 10,000 10,000
Preferred Stock, Shares Outstanding 10,000 10,000
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)        
Net sales $ 11,584 $ 180 $ 11,584 $ 765
Cost of sales 0 0 0 0
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 73 0 73 0
Loss on extinguishment of debt (166,800) 0 109,990 0
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
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)
Total
Preferred Stock
Common Stock
Additional Paid-In Capital
Subscription Payable
Accumulated Deficit
Balance, shares at Dec. 31, 2022   10,000 20,367,477      
Balance, amount at Dec. 31, 2022 $ (5,552,155) $ 10 $ 20,368 $ 54,261,311 $ 4,793,611 $ (64,627,455)
Stock issued for services, shares     90,000      
Stock issued for services, amount 35 0 $ 90 (67) 12 0
Stock issued for debt restructuring, shares     115,973      
Stock issued for debt restructuring, amount 0 0 $ 116 (89) (27) 0
Net loss for the period (722,081) $ 0 $ 0 0 0 (722,081)
Balance, shares at Mar. 31, 2023   10,000 20,573,450      
Balance, amount at Mar. 31, 2023 (6,274,201) $ 10 $ 20,574 54,261,155 4,793,596 (65,349,536)
Balance, shares at Dec. 31, 2022   10,000 20,367,477      
Balance, amount at Dec. 31, 2022 (5,552,155) $ 10 $ 20,368 54,261,311 4,793,611 (64,627,455)
Net loss for the Period (1,226,337)          
Balance, shares at Jun. 30, 2023   10,000 22,857,850      
Balance, amount at Jun. 30, 2023 (6,735,408) $ 10 $ 22,858 56,690,965 2,404,551 (65,853,792)
Balance, shares at Mar. 31, 2023   10,000 20,573,450      
Balance, amount at Mar. 31, 2023 (6,274,201) $ 10 $ 20,574 54,261,155 4,793,596 (65,349,536)
Stock issued for services, shares     2,200,000      
Stock issued for services, amount 5 0 $ 2,200 2,386,850 (2,389,045) 0
Net loss for the period (504,256) 0 $ 0 0 0 (504,256)
Stock issued to extend notes, shares     84,400      
Stock issued to extend notes, amount 43,044 $ 0 $ 84 42,960 0 0
Net loss for the Period (504,256)          
Balance, shares at Jun. 30, 2023   10,000 22,857,850      
Balance, amount at Jun. 30, 2023 (6,735,408) $ 10 $ 22,858 56,690,965 2,404,551 (65,853,792)
Balance, shares at Dec. 31, 2023   10,000 38,773,230      
Balance, amount at Dec. 31, 2023 (7,446,965) $ 10 $ 38,773 57,717,685 1,462,480 (66,665,913)
Stock issued for services, shares     750,000      
Stock issued for services, amount 224,250 0 $ 750 223,500 0 0
Stock issued in accordance with standby letter of credit, shares     1,050,000      
Stock issued in accordance with standby letter of credit, amount 0 0 $ 1,050 1,458,450 (1,459,500) 0
Stock issued for conversion of notes payable, shares     3,000,000      
Stock issued for conversion of notes payable, amount 120,000 0 $ 3,000 117,000 0 0
Stock issued for cash, shares     300,000      
Stock issued for cash, amount 15,000 0 $ 300 14,700 0 0
Net loss for the Period (405,152) $ 0 $ 0 0 0 (405,152)
Balance, shares at Mar. 31, 2024   10,000 43,873,230      
Balance, amount at Mar. 31, 2024 (7,492,867) $ 10 $ 43,873 59,531,335 2,980 (67,071,065)
Balance, shares at Dec. 31, 2023   10,000 38,773,230      
Balance, amount at Dec. 31, 2023 (7,446,965) $ 10 $ 38,773 57,717,685 1,462,480 (66,665,913)
Net loss for the Period (1,488,753)          
Balance, shares at Jun. 30, 2024   10,000 93,326,511      
Balance, amount at Jun. 30, 2024 (6,257,808) $ 10 $ 93,326 61,800,542 2,980 (68,154,666)
Balance, shares at Mar. 31, 2024   10,000 43,873,230      
Balance, amount at Mar. 31, 2024 (7,492,867) $ 10 $ 43,873 59,531,335 2,980 (67,071,065)
Stock issued for services, shares     1,600,000      
Stock issued for services, amount 628,910 0 $ 1,600 627,310 0 0
Stock issued for conversion of notes payable, shares     47,853,281      
Stock issued for conversion of notes payable, amount 1,689,750 0 $ 47,853 1,641,897 0 0
Net loss for the Period (1,083,601) $ 0 $ 0 0 0 (1,083,601)
Balance, shares at Jun. 30, 2024   10,000 93,326,511      
Balance, amount at Jun. 30, 2024 $ (6,257,808) $ 10 $ 93,326 $ 61,800,542 $ 2,980 $ (68,154,666)
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net loss $ (1,488,753) $ (1,226,337)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 0 130
Amortization of debt discounts 24,148 56,829
Stock issued for services 379,813 40
Shares issued to extend notes 0 43,044
Loss on extinguishment of debt (109,990) 0
Non-cash operating lease expense (1,513) 368
Changes in operating assets and liabilities:    
Accounts receivable 0 (150)
Prepaid expenses 1,989 0
Accounts payable 107,415 389,233
Accounts payable - related parties 0 (31,599)
Accrued liabilities (5,228) 0
Interest payable 179,279 0
Interest payable to related parties 88,571 6,526
Net cash used in operating activities (824,269) (761,916)
Cash flows from investing activities:    
Net cash flows from investing activities 0 0
Cash flows from financing activities:    
Proceeds from convertible notes payable 275,000 154,000
Proceeds from convertible notes payable - related parties 343,400 717,786
Proceeds from notes payable 310,000 0
Proceeds from royalty payable 110,000 0
Repayment of convertible notes payable (250,000) (65,000)
Repayment of convertible notes payable - related parties 0 (22,500)
Repayment of notes payable 0 (27,500)
Proceeds from issuance of common stock 15,000 0
Net cash provided by financing activities 803,400 756,786
Net change in cash (20,869) (5,130)
Cash and cash equivalents - beginning of period 21,453 84,034
Cash and cash equivalents - end of period 584 78,904
Supplemental disclosures of cash flow information:    
Cash paid for interest 21,794 32,189
Cash paid for income taxes 0 0
Supplemental non-cash information    
Conversion of notes payable into common stock 1,809,750 0
Common stock issued per consulting agreements $ 853,160 $ 0
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc. On June 4, 2018, the Company amended its articles of incorporation and changed its name to Trutankless, Inc.

 

The Company is involved in sales, marketing, research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. Management anticipates the Company’s trutankless water heater, with Wi-Fi capability and Trutankless’ proprietary apps offered in the iOS and Android store, will augment existing products in the home automation space.

 

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the six months ended June 30, 2024 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2023, as filed with the SEC.

 

The consolidated balance sheet as of December 31, 2023, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

 

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ending December 31, 2024.

 

Principles of consolidation

The consolidated financial statements include the accounts of Trutankless, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On August 20, 2020 the Company formed a wholly owned subsidiary, Notation Labs, Inc. On October 20, 2021 the Company formed a wholly owned subsidiary, Tankless 365, Inc. All significant inter-company transactions and balances have been eliminated.

 

Spinoff - On January 24, 2022, the Company completed the previously announced spin-off of its subsidiary Notation Labs Inc into a stand-alone company. The historical results of Notation Labs Inc that were contributed to Trutankless Inc in the spinoff have been reflected as discontinued operations in our condensed consolidated financial statements through the date of the spinoff and in the prior year periods as the spinoff represents a strategic shift in our business that has a major effect on operations and financial results. As of December 31, 2022, the assets and liabilities associated with these Notation Labs Inc. are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheet. The disclosures presented in our notes to the consolidated financial statements are presented on a continuing operations basis.

 

On July 15, 2023, the Company announced its intention to spin-off its wholly-owned subsidiary, Tankless365, Inc. On a date determined by the Board of Directors of the Company, each Shareholder having common stock as of the Distribution Date will be entitled to receive shares of the common stock of Tankless365, Inc. pro rata based on a 4:1 ratio. Subsequent to this announcement, the Company’s management decided that the subsidiary, Tankless 365, Inc. will not be spun-off but will remain as a subsidiary of the Company. 

Use of estimates

The preparation of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

 

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

 

Stock-based compensation

The Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

 

Income Taxes

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of June 30, 2024.

 

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of June 30, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions.

 

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

 

Accounts receivable

Accounts receivable is comprised of uncollateralized customer obligations due under normal trade terms. The Company performs ongoing credit evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded. Accounts receivables are presented net of an allowance for doubtful accounts of $186,750 and $186,750 at June 30, 2024 and December 31, 2023, respectively.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expenses of $2,522 and $4,310 during the six months ended June 30, 2024 and 2023, respectively.

 

Research and development costs

The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. These research and development expenses are not related to the patent that the Company has, but are focused on future product developments. Research and development costs were $419,557 and $98,179 for the six months ended June 30, 2024 and 2023, respectively. 

 

Revenue recognition

Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

 

Revenue recognition occurs at the time product is shipped to customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance.

 

Fair value of financial instruments

The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

 

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

 

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of March 31, 2024 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at June 30, 2024 and December 31, 2023.

 

Recently Issued Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

v3.24.2.u1
GOING CONCERN
6 Months Ended
Jun. 30, 2024
GOING CONCERN  
GOING CONCERN

NOTE 2 - GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

 

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of June 30, 2024, the Company had $584 cash on hand. On June 30, 2024, the Company has an accumulated deficit of $68,154,666. For the six months ended June 30, 2024, the Company had a net loss of $1,488,753, and cash used in operations of $824,269. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing.

 

Over the next twelve months management plans to raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

v3.24.2.u1
ACCOUNTS RECEIVABLE, NET
6 Months Ended
Jun. 30, 2024
ACCOUNTS RECEIVABLE, NET  
ACCOUNTS RECEIVABLE, NET

NOTE 3 - ACCOUNTS RECEIVABLE, NET

 

Accounts receivable consist of the following at:

 

 

 

June 30,

2024

 

 

December 31,

2023

 

Accounts receivable

 

 

186,750

 

 

 

186,750

 

Allowance for doubtful accounts

 

 

(186,750 )

 

 

(186,750 )

Total

 

$-

 

 

$-

 

v3.24.2.u1
ROYALTY LIABILITIES
6 Months Ended
Jun. 30, 2024
ROYALTY LIABILITIES  
ROYALTY LIABILITIES

NOTE 4 – ROYALTY LIABILITIES

 

Starting November 2023, the Company issued 16 royalty agreements to investors for a total of $527,500. These agreements require the Company to pay up to $50 per unit sold in royalties to these investors based on their investment amounts. The royalty obligation shall commence upon the 500th unit that is produced and sold and continue for 6 (six) calendar years from the anniversary date of the receipt of the first royalty payment. As of June 30, 2024, the Company had not produced any units relating to these royalty agreements, thus there is no royalty obligation accumulated.

v3.24.2.u1
RELATED PARTY
6 Months Ended
Jun. 30, 2024
RELATED PARTY  
RELATED PARTY

NOTE 5 - RELATED PARTY

 

Accounts payable and accrued liabilities – related party

 

During the six months ended June 30, 2024 and 2023, the Company received $0 and $15,000 in advances and made payments $0 and $0 from a related party, respectively. As of June 30, 2024 and December 31, 2023, the Company had advances from a related party of $31,000 and $31,000, respectively.

 

Notes payable - related party consist of the following at:

 

 

 

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

 

 

During the six months ended June 30, 2024, the Company received $0 under a note payable from a director of the Company. As of June 30, 2024 and December 31, 2023, the Company had one note payable due to a director of the Company in the amount of $19,450. The note has an interest rate of 5% and is due on demand.

 

As of June 30, 2024 and December 31, 2023, the Company had one note payable due to an officer of the Company in the amount of $60,000. The note has an interest rate of 12% and is due April 26, 2024.

 

On April 30, 2021, the Company entered into a $150,000, 12% grid note payable with a Company controlled by the CEO that is due upon demand but no later than April 30, 2026. As of June 30, 2024 and December 31, 2023 and 2022, the Company has received advances under the note of $0 and $20,500 and made repayment of $0 and $0, respectively. As of June 30, 2024 and December 31, 2023, the note had a balance of $122,500.

 

On January 8, 2021, the Company entered into a $125,000, 30% note payable due on June 8, 2021. Under the note the Company must make interest only payments of $3,125 starting on February 10, 2021 and continuing through maturity. On December 31, 2022, the noteholder extended the due date to June 8, 2022 for $1,250. On September 1, 2023, the noteholder sold the ownership of the note to an entity under common ownership of a related party who concurrently amended the terms of the note with the Company to accrue interest at 18% interest and to extend the maturity date of the note to August 31, 2025. As of June 30, 2024 and December 31, 2023, the balance of the note was $125,000.

 

On July 23, 2023, the Company entered into a $40,000, 12% note payable with an entity under common control of a related party on July 22, 2024. As of June 30, 2024 and December 31, 2023, the balance on this note was $40,000.

 

Interest expense associated with the related party notes for the six months ended June 30, 2024 and 2023 was $68,295 and $13,347 respectively.

Convertible notes payable - related party consist of the following at:

 

 

 

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

 

$-

 

 

$-

 

 

On September 1, 2022, the Company entered into a $2,500,000 8% convertible grid note with Notation Labs, Inc, a company commonly controlled by a director of the Company. The note is due on December 31, 2024 and is convertible at a rate of $0.80 per share. During the year ending December 31, 2023, the Company received $1,190,853 in advances from the note and made payments of $479,160 on the note. During the six months ending June 30, 2024, the Company received $515,000 in advances from the note and made payments of $421,600 on the note. As of June 30, 2024 and December 31, 2023, the balance of the note was $2,299,023 and $2,205,623, respectively.

 

On July 26, 2022, the Company issued a $400,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 15, 2023 and is convertible into shares of the Company’s common stock at a rate of $0.08 per share. On April 4, 2024, the Company issued 24,063,562 shares of common stock for the conversion of $400,000 principal and $81,271 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $400,000, respectively.

 

On June 15, 2023, the Company issued a $150,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 31, 2024 and is convertible into shares of the Company’s common stock at a rate of $0.02 per share. On April 4, 2024, the Company issued 8,224,932 shares of common stock for the conversion of $150,000 principal and $15,090 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $150,000, respectively.

 

On July 25, 2023, the Company issued a $85,000 12% convertible promissory note to a company commonly controlled by a shareholder of the Company. The note is due on December 31, 2024 and is convertible into shares of the Company’s common stock at a rate of $0.02 per share. On April 4, 2024, the Company issued 4,604,904 shares of common stock for the conversion of $85,000 principal and $7,098 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $85,000, respectively.

 

On March 25, 2024, the Company issued a $250,000 12% convertible promissory note to a trust controlled by a shareholder of the Company. The note is due on March 25, 2025 and is convertible into shares of the Company’s common stock at a rate of $0.05 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $250,000 and $0, respectively.

 

Interest expense on all of the above convertible notes for the six months ended June 30, 2024 and 2023 was $113,714 and $122,911, respectively.

v3.24.2.u1
NOTES PAYABLE
6 Months Ended
Jun. 30, 2024
NOTES PAYABLE  
NOTES PAYABLE

NOTE 6 - NOTES PAYABLE

 

Notes payable consist of the following at:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Note payable, secured, 12% interest, due June 2024

 

$-

 

 

$300,000

 

Notes payable, secured, 12% interest, due April 2022

 

 

95,000

 

 

 

95,000

 

Notes payable, secured, 12% interest, due December 2023

 

 

10,000

 

 

 

10,000

 

Notes payable, 12% interest, due starting August 2024

 

 

325,000

 

 

 

500,000

 

Notes payable, 18% interest, due starting August 2024

 

 

350,000

 

 

 

125,000

 

Total notes payable

 

$780,000

 

 

$1,030,000

 

Less current portion

 

 

(780,000 )

 

 

(1,030,000 )

Total Notes Payable - long term

 

$-

 

 

$-

 

On January 1, 2020, the Company entered into an agreement to consolidate three notes payable above dated September 2, 2016 and February 2, 2018 into one $300,000, 12% note due September 1, 2021. As consideration the Company issued the note holder 175,000 shares of common stock valued at $61,250 which was recorded as financing expense. On May 1, 2022, for the issuance of 25,000 shares valued at $29,000 on the date of commitment, the loan was further extended to September 1, 2024. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $61,250 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. On January 19, 2024, the Company issued 3,000,000 shares of common stock in settlement of the principal amount of $300,000 and accrued interest of $10,948. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $300,000, respectively.

 

On April 26, 2021, the Company entered into a $95,000, 12% note payable due on April 26, 2022. As of June 30, 2024 and December 31, 2023, the balance of the note was $95,000.

 

On August 18, 2021, the Company entered into a $10,000, 12% note payable due on August 18, 2022. On April 10, 2022 the note was amended to have a due date of December 7, 2023. As of June 30, 2024 and December 31, 2023, the balance of the note was $10,000.

 

On August 3, 2023 the Company’s wholly owned subsidiary initiated an offering of 12% Notes with maturity dates of 12 months starting on August 3, 2024. As of June 30, 2024 and December 31, 2023, the Company has raised $575,000 and $500,000, respectively, under the offering. On April 3, 2024, the Company issued 3,857,143 shares of common stock to one noteholder for the conversion of $250,000 principal and $20,055 accrued interest at $0.45 per share. As of June 30, 2024 and December 31, 2023, the balance of the notes was $325,000 and $500,000, respectively.

 

On October 19, 2023 the Company’s wholly owned subsidiary initiated an offering of 18% Notes with maturity dates of 12 months starting on August 3, 2024. As of June 30, 2024 and December 31, 2023, the Company has raised $350,000 and $125,000, respectively, under the offering. As of June 30, 2024 and December 31, 2023, the balance of the notes was $350,000 and $125,000, respectively.

 

Interest expense including amortization of the associated debt discount for the six months ended June 30, 2024 and 2023 was $58,756 and $63,921, respectively.

 

Convertible notes payable, net of debt discount consist of the following:

 

 

 

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

 

 

$-

 

On September 2, 2016, the Company issued $50,000 of principal amount of 12% secured convertible promissory notes and 6,250 warrants to purchase common stock (post-split). The note was due on August 31, 2018, was later extended to August 31, 2019, bears interest of twelve percent (12%) and is currently in default. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $8.00 per share (post-split). The notes were issued with warrants to purchase up to 6,250 shares of the Company’s common stock at an exercise price of $12 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $50,000.

 

On May 2, 2017, the Company issued $50,000 of principal amount of 10% secured convertible promissory notes and 10,000 warrants to purchase common stock. The note was due on May 2, 2020 and is secured by the Company’s accounts receivable and inventory. On April 22, 2020, the note was extended to May 2, 2021. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $4 per share (post-split). The notes were issued with warrants to purchase up to 1,250 shares (post-split) of the Company’s common stock at an exercise price of $8.00 per share. One December 31, 2021 the note was amended to cease accruing interest as of May 1,2022 and the due date of the note was amended to April 1, 2023 and on February 8, 2023 the note was extended to February 8, 2024. As of June 30, 2024 and December 31, 2023, the balance of the note was $45,000.

 

On February 15, 2018, the Company issued a $75,000 12% secured convertible promissory note. The note was due on February 24, 2020 and is secured by the Company’s accounts receivable and inventory. On April 22, 2020, the due date of the note was extended to February 15, 2021 for the issuance of 6,250 shares of common stock valued at $8,995 and is currently in default. On February 22, 2022 the due date of the note was further extended to February 15, 2024. As of June 30, 2024 and December 31, 2023, the balance of the note was $75,000.

 

On February 8, 2019, the Company issued a $50,000 10% convertible note. The note was due on February 8, 2020 and is currently in default. As an incentive to enter into the agreement, the noteholder was also granted 7,500 shares valued at $30,000, which was recognized as a debt discount. On February 19, 2019, the Company issued a $25,000 4% convertible note. The note was due on August 19, 2019 and is convertible at a rate of $4 per share. On February 14, 2019, the noteholder agreed to extend the note through October 14, 2020. As an incentive to enter into the agreement, the noteholder was also granted 625 shares valued at $2,500, which was recognized as a debt discount. These notes were merged into one note at the time of extension with a principal amount of $75,000. As of June 30, 2024 and December 31, 2023, the balance of the note was $75,000.

 

On November 19, 2019, the Company entered in to a $281,000 convertible note payable, including an original issue discount of $28,100 convertible promissory note pursuant to which $150,000 was borrowed, including a $18,500 discount during the year ended December 31, 2019. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding, which has July 19, 2020 for the first tranche. On May 20, 2020, the noteholder agreed to extend the due date of the first tranche of funding until July 19, 2020 and is currently past due. The note is convertible at the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price with a floor of $0.01. As an incentive to enter into the agreement, the noteholder was also granted 53,375 shares valued at $175,070. As of June 30, 2024 and December 31, 2023, the balance of the note was $108,500.

On May 5, 2020, the Company issued a $350,000 10% convertible note. The note is due on May 1, 2021 and is convertible at a rate of $1 per share (post-split). As an incentive to enter into the agreement the noteholder was also granted 187,500 shares (post-split) valued at $207,000, which was recognized as a debt discount. On April 21, 2021, the noteholder agreed to extend the note through May 1, 2022. As an incentive to enter into the agreement, the noteholder was also granted 12,500 shares (post-split) valued at $20,000, which was recognized as financing expense. On May 1, 2022, for the issuance of 75,000 shares valued at $87,000 on the date of commitment, the loan was further extended to May 1, 2024. On May 3, 2024, the Company issued 7,002,740 shares of common stock for the conversion of $350,000 principal and $140,288 accrued interest at $0.22 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $350,000, respectively.

 

On March 3, 2021, the Company issued a $25,000 4% convertible note. The note is due on March 3, 2022 and is convertible at a rate of $0.80 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $25,000.

 

On February 22, 2022 the Company entered into a $385,000, 12% note payable due on February 22, 2023. The note is convertible upon default at the higher of the closing price of the common stock on the closing date, or par value. As an inducement to enter into the agreement the Company also granted the noteholder 165,216 shares of common stock (post-split). The issuance of the note and shares resulted in a total debt discount of $158,147, with $123,147 attributable to the shares. On February 8, 2023, the note was extended to December 31, 2023. During the year ended December 31, 2023, the Company made principal payments totaling $60,000. On March 26, 2024, the Company entered a settlement agreement with the noteholder, in which the noteholder agreed to accept payment of $250,000 as settlement in full for all principal and accrued interest. As of June 30, 2024 and December 31, 2023, the balance of the note was $0 and $295,000.

 

On July 18, 2022, the Company entered into a $150,000 8% convertible grid note. The note is due on July 18, 2023 and is convertible at a rate of $0.80 per share. During the year ending December 31, 2023, the Company received $4,000 in advances from the note. During the year ended December 31, 2023, the Company converted the balance of the note and accrued interest into 2,254,986 shares of common stock valued at $45,100. On March 26, 2024, the Company received $10,000 in advance from the note. As of June 30, 2024 and December 31, 2023, the balance of the note was $10,000 and $0, respectively.

 

On April 23, 2024, the Company entered into a convertible note agreement for $150,000 for a 24-month period and interest rate of 12% and is convertible at $0.10 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $150,000 and $0, respectively.

 

On May 14, 2024, the Company entered into a convertible note agreement for $25,000 for a 12-month period and interest rate of 12% and is convertible at $0.15 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $25,000 and $0, respectively.

 

On May 29, 2024, the Company entered into a convertible note agreement for $100,000 for a 24-month period and interest rate of 12% and is convertible at $0.15 per share. As of June 30, 2024 and December 31, 2023, the balance of the note was $100,000 and $0, respectively.

 

Interest expense including financing cost and amortization of the associated debt discount on all of the above convertible notes for the six months ended June 30, 2024 and 2023 was $47,835 and $118,111, respectively.

v3.24.2.u1
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2024
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Operating Lease Agreements

 

The Company determines whether or not a contract contains a lease based on whether or not it provides the Company with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. The Company elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less.

The discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on the Company’s collateralized incremental interest rate to borrow of 12%, as the rate implicit in the lease is not determinable.

 

The Company has entered into lease agreements as a lessee for the use of office space. These lease agreements are classified as operating leases, and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

 

During 2018, the Company executed a lease agreement. The lease term is 39 months at a rate of $1,680 per month with 3% increases beginning January 1, 2021 and rent commencing on January 1, 2019. The Company was required to pay a $1,781 security deposit. The Company agreed to renew the lease through December 31, 2025.

 

On August 24, 2023, the Company executed a lease agreement. The lease term is 39 months at a starting rate of $5,624 per month with 4% increases beginning December 1, 2024 and rent commencing on September 1, 2023. As a result of the adoption of ASC 842, the Company recognized an operating lease liability and right-of-use asset of $171,276 and $171,798 associated with the lease.

 

In early 2022, the Company spun-off a wholly owned subsidiary, Notation Labs, Inc. (“Notation Labs”). Notation Labs and the Company have continued to share office and warehouse spaces. The agreement is that Notation Labs pays portions of the leases based on agreements between the two companies for usage and other factors. The Company does not recognize rent expense on amounts paid by Notation Labs nor is it required to repay Notation Labs.

 

Undiscounted Cash Flows

 

As of June 30, 2024, the right of use asset and lease liability were shown on the consolidated balance sheet at $165,341 and $169,252, respectively. The table below reconciles the fixed component of the undiscounted cash flows and the total remaining years to the operating lease liability recorded on the consolidated balance sheet as of June 30, 2024:

 

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

 

   

Legal Matters

 

On July 6, 2020, we received a letter from the staff of the Division of Enforcement of the Securities and Exchange Commission (the “Staff”) that indicated the Company may have violated certain rules and regulations regarding a late filing notification filed by the Company and that the Staff is conducting an informal inquiry into the matter. On April 29, 2021, the Company agreed to pay civil penalties of $25,000 to the Securities and Exchange Commission in settlement of the matter. Payment shall be made in the following four installments: (1) $5,000 within 14 days of entry of the order; (2) $7,500 within 180 days of entry of the order; (3) $6,250 within 270 days of entry of the order; and (4) $6,250 within 360 days of entry of the order. As of June 30, 2024, $20,000 remained due.

On April 6, 2023, the Company was served a Summons for an Amended Complaint filed in the state of Florida with claims for Strict Liability, Negligence and Breach of Implied Warranty. The complaint, filed by an insurance company, stems from its payments for claims filed by a policy holder on two separate occasions. The first insurance claim payment was due to a leak caused by improper installation in which the contractor failed to meet local codes. The second insurance claim payment followed the contractor’s failure to properly repair the improper installation. The complaint states that the contractor failed to follow basic installation guidelines supplied with the product in either incident, resulting in damages. On June 8, 2023, the Court of Duval County, FL entered a default judgement for $38,768. As of June 30, 2024, the Company has not paid any of this balance.

v3.24.2.u1
STOCK WARRANTS
6 Months Ended
Jun. 30, 2024
STOCK WARRANTS  
STOCK WARRANTS

NOTE 8 - STOCK WARRANTS

 

The following is a summary of stock warrants activity during the period ended June 30, 2024:

 

 

 

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

 

v3.24.2.u1
STOCKHOLDERS EQUITY
6 Months Ended
Jun. 30, 2024
STOCKHOLDERS EQUITY  
STOCKHOLDERS EQUITY

NOTE 9 - STOCKHOLDERS’ EQUITY

 

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock. On October 26, 2020, the Board of Directors (the Board), authorized the Company to amend the Articles of Incorporation of the Corporation to increase the authorized capital stock of the Corporation to 1,010,000,000 shares, of which 1,000,000,000 shall be authorized as common shares and 10,000,000 shall be authorized as preferred shares. Additionally, the Board authorized the execution of a reverse split of the issued and outstanding shares of the Corporation’s common stock at a ratio of up to one post-split share per twenty-five pre-split shares (1:25) at a time and exact ratio amount the Board of Directors deems appropriate. On September 27, 2021, FINRA approved a 1-for-8 reverse stock split of the Company’s common stock that was approved by the Company’s Board of Directors. The Company’s equity transactions have been retroactively restated to reflect the effect of the stock split.

 

The Series B Preferred Stock does not pay a dividend, does not have any liquidation preference over other securities issued by the Company and are not convertible into shares of the Company’s common stock. For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to a controlling 51% of the total vote on all shareholder matters of the Company. Upon or after the third anniversary of the initial issuance date, the Company shall have the right, at the Company’s option, to redeem all or a portion of the shares of Series B Preferred Stock, at a price per share equal to par value.

 

On January 18, 2024, the Company issued 1,050,000 shares pursuant to amendments to a related party promissory note which were made on October 20, 2021.

 

On January 19, 2024, the Company issued 3,000,000 shares for a notice of conversion of a promissory note.

 

On February 15, 2024, the Company issued 200,000 shares for cash at $0.05 per share for a total of $10,000.

 

On February 19, 2024, the Company issued 750,000 shares for services pursuant to two consulting agreements.

 

On February 19, 2024, the Company issued 100,000 shares for cash at $0.05 per share for a total of $5,000.

 

On April 2, 2024 the Company issued 1,000,000 shares for services pursuant to a consulting agreement.

 

On April 3, 2024, the Company issued 3,857,143 shares pursuant to a promissory note amendment and conversion dated April 3, 2023.

 

On April 4, 2024, the Company issued 36,893,398 shares to convert certain related party convertible notes dated July 26, 2022, June 15, 2023 and July 25, 2023.

 

On April 14, 2024 the Company issued 100,000 shares for services pursuant to a consulting agreement.

On April 22, 2024, the Company entered into a consulting agreement with an individual for a six-month period. As compensation, the Company will issue 300,000 shares of common stock to the consultant immediately upon signing the agreement.

 

On May 3, 2024, the Company issued 7,002,740 shares of common stock for the conversion of $350,000 in principal and $140,192 in accrued interest on a convertible note.

 

On May 7, 2024, the Company issued 100,000 shares of common stock valued at $47,835, which was recorded in the prior year in Stock payable as an incentive to enter into a certain note payable.

v3.24.2.u1
SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2024
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements other than as set forth below.

 

On July 10, 2024, the Company issued 200,000 shares for services pursuant to two separate consulting agreements.

 

On July 14, 2024, the Company issued 100,000 shares for services pursuant to a consulting agreement.

 

On July 16, 2024, the Company received $10,000 in advances on a continuing grid loan.

 

On July 23, 2024, the Company entered into a convertible note agreement for $50,000 for a 24-month period and interest rate of 12% and is convertible at $0.15 per share.

 

On July 24, 2024, the Company entered into a note agreement for $50,000 for a 6-month period and interest rate of 18%. The Company issued 300,000 shares of common stock as incentive for this financing agreement.

 

On July 25, 2024, the Company entered into a convertible note agreement for $500,000 for a 12-month period and interest rate of 15% and is convertible at $0.15 per share.

 

On July 25, 2024, the Company issued 2,500,000 shares for services pursuant to a consulting agreement.

 

On July 26, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 600,000 shares of common stock as incentive for this financing agreement.

 

On August 5, 2024, the Company entered into a note agreement for $100,000 for a 6-month period and interest rate of 18%. The Company issued 200,000 shares of common stock as incentive for this financing agreement.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to an amendment to the consulting agreement with the CEO.

 

On August 5, 2024, the Company issued 2,500,000 shares for services pursuant to a consulting agreement.

 

On August 6, 2024, the Company issued 600,000 shares pursuant to a 2023 consulting agreement entered into on February 1, 2023.

 

On August 8, 2024, the Company issued 150,000 shares per a subscription agreement at $0.05 per share for $7,500 in cash.

 

v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Jun. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Organization

The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc. On June 4, 2018, the Company amended its articles of incorporation and changed its name to Trutankless, Inc.

 

The Company is involved in sales, marketing, research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. Management anticipates the Company’s trutankless water heater, with Wi-Fi capability and Trutankless’ proprietary apps offered in the iOS and Android store, will augment existing products in the home automation space.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the six months ended June 30, 2024 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2023, as filed with the SEC.

 

The consolidated balance sheet as of December 31, 2023, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

 

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ending December 31, 2024.

Principles of consolidation

The consolidated financial statements include the accounts of Trutankless, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On August 20, 2020 the Company formed a wholly owned subsidiary, Notation Labs, Inc. On October 20, 2021 the Company formed a wholly owned subsidiary, Tankless 365, Inc. All significant inter-company transactions and balances have been eliminated.

 

Spinoff - On January 24, 2022, the Company completed the previously announced spin-off of its subsidiary Notation Labs Inc into a stand-alone company. The historical results of Notation Labs Inc that were contributed to Trutankless Inc in the spinoff have been reflected as discontinued operations in our condensed consolidated financial statements through the date of the spinoff and in the prior year periods as the spinoff represents a strategic shift in our business that has a major effect on operations and financial results. As of December 31, 2022, the assets and liabilities associated with these Notation Labs Inc. are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheet. The disclosures presented in our notes to the consolidated financial statements are presented on a continuing operations basis.

 

On July 15, 2023, the Company announced its intention to spin-off its wholly-owned subsidiary, Tankless365, Inc. On a date determined by the Board of Directors of the Company, each Shareholder having common stock as of the Distribution Date will be entitled to receive shares of the common stock of Tankless365, Inc. pro rata based on a 4:1 ratio. Subsequent to this announcement, the Company’s management decided that the subsidiary, Tankless 365, Inc. will not be spun-off but will remain as a subsidiary of the Company. 

Use of estimates

The preparation of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Stock-based compensation

The Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

Income Taxes

The Company’s calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. The Company recognizes tax liabilities for uncertain tax positions based on management’s estimate of whether it is more likely than not that additional taxes will be required. The Company had no uncertain tax positions as of June 30, 2024.

 

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from net operating losses, differences in depreciation methods of archived images, and property and equipment, stock-based and other compensation, and other accrued expenses. A valuation allowance is established when it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S., or the various state jurisdictions, may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Interest and penalties are included in tax expense.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of June 30, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions.

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Accounts receivable

Accounts receivable is comprised of uncollateralized customer obligations due under normal trade terms. The Company performs ongoing credit evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded. Accounts receivables are presented net of an allowance for doubtful accounts of $186,750 and $186,750 at June 30, 2024 and December 31, 2023, respectively.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expenses of $2,522 and $4,310 during the six months ended June 30, 2024 and 2023, respectively.

Research and development costs

The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. These research and development expenses are not related to the patent that the Company has, but are focused on future product developments. Research and development costs were $419,557 and $98,179 for the six months ended June 30, 2024 and 2023, respectively. 

Revenue recognition

Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

 

Revenue recognition occurs at the time product is shipped to customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance.

Fair value of financial instruments

The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

 

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

 

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

 

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of March 31, 2024 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at June 30, 2024 and December 31, 2023.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

v3.24.2.u1
ACCOUNTS RECEIVABLE, NET (Tables)
6 Months Ended
Jun. 30, 2024
ACCOUNTS RECEIVABLE, NET  
Schdule of Accounts receivable, net

 

 

June 30,

2024

 

 

December 31,

2023

 

Accounts receivable

 

 

186,750

 

 

 

186,750

 

Allowance for doubtful accounts

 

 

(186,750 )

 

 

(186,750 )

Total

 

$-

 

 

$-

 

v3.24.2.u1
RELATED PARTY (Tables)
6 Months Ended
Jun. 30, 2024
RELATED PARTY  
Schdule of notes payable related party

 

 

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

 

Schdule of convertible notes payable related party

 

 

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

 

$-

 

 

$-

 

v3.24.2.u1
NOTES PAYABLE (Tables)
6 Months Ended
Jun. 30, 2024
NOTES PAYABLE  
Schedule of Notes Payable

 

 

June 30, 2024

 

 

December 31, 2023

 

Note payable, secured, 12% interest, due June 2024

 

$-

 

 

$300,000

 

Notes payable, secured, 12% interest, due April 2022

 

 

95,000

 

 

 

95,000

 

Notes payable, secured, 12% interest, due December 2023

 

 

10,000

 

 

 

10,000

 

Notes payable, 12% interest, due starting August 2024

 

 

325,000

 

 

 

500,000

 

Notes payable, 18% interest, due starting August 2024

 

 

350,000

 

 

 

125,000

 

Total notes payable

 

$780,000

 

 

$1,030,000

 

Less current portion

 

 

(780,000 )

 

 

(1,030,000 )

Total Notes Payable - long term

 

$-

 

 

$-

 

Schdule of convertible notes payable, net of debt discount

 

 

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

 

 

$-

 

v3.24.2.u1
COMMITMENTS AND CONTINGENCIES (Tables)
6 Months Ended
Jun. 30, 2024
COMMITMENTS AND CONTINGENCIES  
Schedule of Undiscounted Cash Flows

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

 

v3.24.2.u1
STOCK WARRANTS (Tables)
6 Months Ended
Jun. 30, 2024
STOCK WARRANTS  
Schdule of Stock warrants activity

 

 

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

 

v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
May 16, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES            
Outstanding stock acquired percentage           100.00%
Allowance for doubtful accounts $ 186,750   $ 186,750   $ 186,750  
Advertising expense     2,522 $ 4,310    
Research and development costs $ 241,931 $ 41,228 $ 419,557 $ 98,179    
v3.24.2.u1
GOING CONCERN (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
GOING CONCERN        
Net loss $ (1,488,753) $ (1,226,337)    
Cash 584   $ 21,453 $ 84,034
Accumulated deficit (68,154,666)   $ (66,665,913)  
Operating cash flow from continued operations $ (824,269) $ (761,916)    
v3.24.2.u1
ACCOUNTS RECEIVABLE, NET (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
ACCOUNTS RECEIVABLE, NET    
Accounts receivable $ 186,750 $ 186,750
Allowance for doubtful accounts (186,750) (186,750)
Total $ 0 $ 0
v3.24.2.u1
ROYALTY LIABILITIES (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
ROYALTY LIABILITIES    
Description of royalty agreement These agreements require the Company to pay up to $50 per unit sold in royalties to these investors based on their investment amounts. The royalty obligation shall commence upon the 500th unit that is produced and sold and continue for 6 (six) calendar years from the anniversary date of the receipt of the first royalty payment  
Royalty liability $ 527,500 $ 417,500
v3.24.2.u1
RELATED PARTY (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
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
Note payable, secured, 5% interest, due on demand [Member]    
Total notes payable - related party 19,450 19,450
Note payable, secured, 12% interest, due April 26, 2024 [Member]    
Total notes payable - related party 60,000 60,000
Note payable, secured, 12% interest, due April 30, 2024 [Member]    
Total notes payable - related party 122,500 122,500
Note payable, secured, 18% interest, due July 25, 2024 [Member]    
Total notes payable - related party 40,000 40,000
Note payable, secured, 18% interest, due August 31, 2025 [Member]    
Total notes payable - related party $ 125,000 $ 125,000
v3.24.2.u1
RELATED PARTY (Details 1) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
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 0 0
Convertible note payable, 8% interest, due December 2024 [Member]    
Total convertible notes payable - related party 2,299,023 2,205,623
Convertible note payable, 12% interest, due December 2023 [Member]    
Total convertible notes payable - related party 0 400,000
Convertible note payable, 12% interest, due December 2024 [Member]    
Total convertible notes payable - related party 0 150,000
Convertible note payable, 12% interest, due March 2025 [Member]    
Total convertible notes payable - related party 250,000 0
Convertible note payable 1, 12% interest, due December 2024 [Member]    
Total convertible notes payable - related party $ 0 $ 85,000
v3.24.2.u1
RELATED PARTY (Details Narrative) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Jun. 08, 2022
Feb. 10, 2021
Note payable $ 780,000   $ 1,030,000    
Interest expense 68,295 $ 13,347      
Convertible note payable 663,500   1,023,500    
Repayments of note advances 0 27,500      
Related party One [Member]          
Note payable due $ 19,450   19,450    
Interest rate 5.00%        
Related party [Member]          
Received note payable from director $ 0        
Officer [Member]          
Note payable due $ 60,000   60,000    
Interest rate 12.00%        
Accounts payable and accrued liability-related party [Member]          
Advances received from a related party $ 0 15,000      
Repayments of note advances 0 0      
Advances 31,000   31,000    
Notation Labs, Inc [Member]          
Convertible note payable $ 2,500,000        
Convertible note payable due date Dec. 31, 2024        
Convertible rate $ 0.80        
Net advances from the note $ 515,000   1,190,853    
Repayments of note advances $ 421,600   479,160    
Interest rate 8.00%        
Outstanding amount notes payable $ 2,299,023   2,205,623    
Convertible Promissory Note [Member]          
Interest expense 113,714 $ 122,911      
On July 26, 2022 [Member] | Convertible Promissory Note [Member]          
Issued of convertible promissory note $ 400,000        
Note payable due date Dec. 15, 2023        
Convertible into shares company common stock at a rate $ 0.08        
Interest rate 12.00%        
Outstanding amount convertible promissory note $ 0   400,000    
On June 15, 2023 [Member] | Convertible Promissory Note [Member]          
Issued of convertible promissory note $ 150,000        
Note payable due date Dec. 31, 2024        
Convertible into shares company common stock at a rate $ 0.02        
Interest rate 12.00%        
Outstanding amount convertible promissory note $ 0   150,000    
On July 25, 2023 [Member] | Convertible Promissory Note [Member]          
Issued of convertible promissory note $ 85,000        
Note payable due date Dec. 31, 2024        
Convertible into shares company common stock at a rate $ 0.02        
Interest rate 12.00%        
Outstanding amount convertible promissory note $ 0   85,000    
On March 25, 2024 [Member] | Convertible Promissory Note [Member]          
Issued of convertible promissory note $ 250,000        
Note payable due date Mar. 25, 2025        
Convertible into shares company common stock at a rate $ 0.05        
Interest rate 12.00%        
Outstanding amount convertible promissory note $ 250,000   0    
April 2021 [Member] | CEO [Member]          
Note payable 150,000        
Repayments of note advances $ 0   0    
Interest rate 12.00%        
Received advances from the company $ 0   20,500    
Outstanding amount notes payable $ 122,500   122,500    
On January 8, 2021 [Member] | CEO [Member]          
Note payable due date Jun. 08, 2021        
Note payable $ 125,000        
Interest on notes       $ 1,250 $ 3,125
Interest rate 30.00%        
Outstanding amount notes payable $ 125,000   125,000    
Accrued interest rate 18.00%        
July 23, 2023 [Member]          
Note payable $ 40,000        
Interest rate 12.00%        
Outstanding amount notes payable $ 40,000   $ 40,000    
On April 4, 2024 [Member] | Convertible Promissory Note [Member]          
Issued of convertible promissory note 400,000        
Accrued interest of convertible promissory note $ 81,271        
Issued of convertible promissory note, shares 24,063,562        
Convertible into shares company common stock at a rate $ 0.45        
On April 4, 2024 [Member] | Convertible Promissory Note One [Member]          
Issued of convertible promissory note $ 150,000        
Accrued interest of convertible promissory note $ 15,090        
Issued of convertible promissory note, shares 8,224,932        
Convertible into shares company common stock at a rate $ 0.45        
On April 4, 2024 [Member] | Convertible Promissory Note Two [Member]          
Issued of convertible promissory note $ 85,000        
Accrued interest of convertible promissory note $ 7,098        
Issued of convertible promissory note, shares 4,604,904        
Convertible into shares company common stock at a rate $ 0.45        
v3.24.2.u1
NOTES PAYABLE (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Total Notes Payable $ 780,000 $ 1,030,000
Less current portion (780,000) (1,030,000)
Total Notes Payable - long term 0 0
Notes payable, secured, 12% interest, due June 2024 [Member]    
Notes payable 0 300,000
Notes payable, secured, 12% interest, due April 2022 [Member]    
Notes payable 95,000 95,000
Notes Payable Secured 12 Interest Due December 2023 [Member]    
Notes payable 10,000 10,000
Notes payable, 12% interest, due starting August 2024 [Member]    
Notes payable 325,000 500,000
Notes payable, 18% interest, due starting August 2024 [Member]    
Notes payable $ 350,000 $ 125,000
v3.24.2.u1
NOTES PAYABLE (Details 1) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Total notes payable $ 663,500 $ 1,023,500
Less unamortized discounts 0 (24,148)
Total convertible notes payable, net of discounts 663,500 999,352
Less current portion of Convertible notes payable (250,000) (999,352)
Total convertible notes payable, net of discounts - long-term 413,500 0
Convertible note payable, secured, 10% interest, due February 2024 [Member]    
Total notes payable 45,000 45,000
Convertible notes payable, 8% interest, due December 2023 [Member]    
Total notes payable 0 295,000
Convertible notes payable, 8% interest, due March 2025 [Member]    
Total notes payable 10,000 0
Convertible notes payable, 12% interest, due January 2025 [Member]    
Total notes payable 25,000 0
CConvertible notes payable, 12% interest, due April 2026 [Member]    
Total notes payable 150,000 0
Convertible notes payable, 12% interest, due May 2026 [Member]    
Total notes payable 100,000 0
Convertible note payable, secured, 12% interest, due August 31, 2019 [Member]    
Total notes payable 50,000 50,000
Convertible note payable, secured, 12% interest, due Feb 15, 2024 [Member]    
Total notes payable 75,000 75,000
Convertible notes payable, secured, 4% interest, due October 14, 2020 [Member]    
Total notes payable 75,000 75,000
Convertible note payable ,12% interest, due May 2020 [Member]    
Total notes payable 108,500 108,500
Convertible notes payable, secured, 4% interest, due March 3, 2021 [Member]    
Total notes payable 25,000 25,000
Convertible note payable, secured, 10% interest, due May 1, 2024 [Member]    
Total notes payable $ 0 $ 350,000
v3.24.2.u1
NOTES PAYABLE (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended 12 Months Ended
May 03, 2024
Apr. 04, 2024
Apr. 03, 2024
May 01, 2022
May 05, 2020
May 02, 2017
Sep. 02, 2016
Jan. 19, 2024
Aug. 18, 2021
Nov. 19, 2019
Feb. 19, 2019
Feb. 15, 2018
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Feb. 19, 2024
Feb. 15, 2024
Feb. 22, 2022
Interest rate                 12.00%                  
Debt discount                         $ 24,148 $ 56,829        
Issuance of common stock, value                         15,000 0        
Issuance of common stock   36,893,398 3,857,143         3,000,000                    
Post-split shares of common stock value                         93,326   $ 38,773     $ 123,147
Proceeds from convertible notes payable                         275,000 $ 154,000        
Convertible Notes Payable                         663,500   1,023,500      
Notes payable, net of debt discount                         $ 780,000   1,030,000      
Common stock shares issued for the conversion, shares 7,002,740                                  
Common stock shares issued for the conversion, amount $ 350,000                                  
Shares issued price per share                               $ 0.05 $ 0.05  
Notes payable entered into August 3, 2023 [Member]                                    
Interest rate                         12.00%          
Notes payable                         $ 575,000   500,000      
Notes payable entered into April 3, 2024 [Member]                                    
Balance related to debt amount                         325,000   500,000      
Common stock shares issued for the conversion, shares                           3,857,143        
Common stock shares issued for the conversion, amount                           $ 250,000        
Accrued interest note payable                         $ 20,055          
Shares issued price per share                         $ 0.45          
Notes payable entered into October 19, 2023 [Member]                                    
Balance related to debt amount                         $ 350,000   125,000      
Interest rate                         18.00%          
Interest expenses including amortization                         $ 58,756   63,921      
Notes payable                         350,000   125,000      
Consideration for the consolidation of three notes payable to one - Jan 1, 2020 [Member]                                    
Gain (loss) on extinguishment of notes                         61,250          
Proceeds from notes payable                         $ 300,000          
Issuance shares of common stock       25,000                 175,000          
Issuance shares of common stock value       $ 29,000                 $ 61,250          
Share issued for settelment               3,000,000                    
Notes payable, net of debt discount                         $ 0   300,000      
Settlement of principal amount               $ 300,000                    
Accrued interest               10,948                    
Debt interest rate                         12.00%          
Notes payable entered into April 26, 2021 [Member]                                    
Interest rate                         12.00%          
Proceeds from notes payable                         $ 95,000          
Notes payable, net of debt discount                         95,000   95,000      
Convertible note entered into September 2, 2016 [Member]                                    
Proceeds from convertible notes payable             $ 50,000                      
Convertible Notes Payable                         50,000          
Warrants Purchase             6,250                      
Interest rate             12.00%                      
Conversion price             $ 8.00                      
Exercise price             $ 12                      
Convertible note issued April 23, 2024 [Member]                                    
Convertible Notes Payable                         150,000          
Convertible note balance amount                         $ 150,000   0      
Conversion price                         $ 0.10          
Debt interest rate                         12.00%          
Convertible note issued May 14, 2024 [Member]                                    
Convertible Notes Payable                         $ 25,000          
Convertible note balance amount                         $ 25,000   0      
Conversion price                         $ 0.15          
Debt interest rate                         12.00%          
Convertible note issued May 29, 2024 [Member]                                    
Convertible Notes Payable                         $ 100,000          
Convertible note balance amount                         $ 100,000   0      
Conversion price                         $ 0.15          
Debt interest rate                         12.00%          
Interest expense including financing cost and amortization                         $ 47,835 $ 118,111        
Convertible notes payable, due July 18 2022 [Member]                                    
Advance recevied                         10,000          
Convertible Notes Payable                         150,000          
Notes payable, net of debt discount                         $ 10,000   0      
Convertible conversion per shares                         $ 0.80          
Due Date                         July 18, 2023          
Debt interest rate                         8.00%          
Convertible note issued Feb 8, 2019 [Member]                                    
Debt discount                     $ 30,000              
Proceeds from convertible notes payable                     $ 50,000              
Due Date                     February 8, 2020              
Shares Granted                     7,500              
Convertible note issued Feb 19, 2019 [Member]                                    
Debt discount                     $ 2,500              
Proceeds from convertible notes payable                     $ 25,000              
Convertible Notes Payable                         $ 75,000   75,000      
Due Date                     August 19, 2019              
Shares Granted                     625              
Convertible Rate                     $ 4              
Debt interest rate                     4.00%              
Convertible note payable issued Mar 3, 2021 [Member]                                    
Proceeds from convertible notes payable                         25,000          
Convertible Notes Payable                         $ 25,000          
Conversion price                         $ 0.80          
Convertible note issued Feb 15, 2018 [Member]                                    
Issuance of common stock, value                       $ 8,995            
Issuance of common stock                       6,250            
Secured convertible promissory note                             75,000      
Convertible Notes Payable                         $ 75,000   75,000      
Due Date                       February 24, 2020            
Debt interest rate                         12.00%          
Convertible note issued May 2017 [Member]                                    
Stock issued for debt discounts and extensions, value           $ 10,000                        
Proceeds from convertible notes payable           $ 50,000                        
Convertible Notes Payable                         $ 45,000          
Warrants Purchase           1,250                        
Interest rate           10.00%                        
Exercise price           $ 8.00                        
Convertible note issued Nov 19, 2019 [Member]                                    
Stock issued for debt discounts and extensions, value                   $ 175,070                
Discount price                   $ 18,500                
Lowest trading price percentage                   70.00%                
Proceeds from convertible notes payable                   $ 281,000                
Convertible Notes Payable                         108,500          
Shares Granted                   53,375                
Origional issue discount                   $ 28,100                
Market floor price per share amount                   $ 0.01                
Convertible promissory note percentage rate                   12.00%                
Convertible note issued May 5, 2020 [Member]                                    
Stock issued for debt discounts and extensions, value         $ 207,000                          
Proceeds from convertible notes payable         $ 350,000                          
Convertible Notes Payable                         $ 0   350,000      
Issuance shares of common stock       12,500                 75,000          
Issuance shares of common stock value       $ 20,000                 $ 87,000          
Due Date         May 1, 2021                          
Shares Granted         187,500                          
Convertible note February 22, 2022 [Member]                                    
Convertible Notes Payable                             385,000      
Notes payable, net of debt discount                         $ 0   $ 295,000      
Settlement of principal amount               $ 250,000                    
Due Date                         February 22, 2023          
Shares Granted                         165,216          
Debt interest rate                         12.00%          
Principal payments                         $ 60,000          
Total debt discount                         $ 158,147          
v3.24.2.u1
COMMITMENTS AND CONTINGENCIES (Details)
Jun. 30, 2024
USD ($)
COMMITMENTS AND CONTINGENCIES  
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
v3.24.2.u1
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended 12 Months Ended
Aug. 24, 2023
Apr. 29, 2021
Jun. 30, 2024
Dec. 31, 2018
Dec. 31, 2023
Right of use asset     $ 165,341   $ 203,477
Operating Lease liability     169,252    
Office Lease Agreement [Member]          
Payment of civil penalties   $ 25,000      
Settlement expense     38,768    
Civil penelties payment terms   Payment shall be made in the following four installments: (1) $5,000 within 14 days of entry of the order; (2) $7,500 within 180 days of entry of the order; (3) $6,250 within 270 days of entry of the order; and (4) $6,250 within 360 days of entry of the order.      
Right of use asset $ 171,798        
Operating Lease liability $ 171,276        
Penelties due     $ 20,000    
Lease term 39 months     39 months  
Intrest rate 4.00%   12.00% 3.00%  
Monthly Installment and Interest Amount $ 5,624     $ 1,680  
Security deposit       $ 1,781  
v3.24.2.u1
STOCK WARRANTS (Details)
6 Months Ended
Jun. 30, 2024
$ / shares
shares
STOCK WARRANTS  
Number of shares, Outstanding, Beginning Balance | shares 1,317,387
Warrants expired | shares (915,500)
Number of shares, Outstanding, Ending balance | shares 401,887
Weighted average Excercese price, Begining balance | $ / shares $ 0.20
Weighted average exercise price of shares expired | $ / shares 1.00
Weighted average exercise price of shares outstanding, Ending balance | $ / shares $ 0.35
v3.24.2.u1
STOCKHOLDERS EQUITY (Details Narrative) - USD ($)
1 Months Ended
May 07, 2024
May 03, 2024
Apr. 04, 2024
Apr. 03, 2024
Apr. 02, 2024
Apr. 22, 2024
Apr. 14, 2024
Feb. 19, 2024
Feb. 15, 2024
Jan. 19, 2024
Jan. 18, 2024
Sep. 27, 2021
Jun. 30, 2024
Dec. 31, 2023
Oct. 26, 2020
Preferred stock, Par value                         $ 0.001 $ 0.001  
Common stock, Par value                         $ 0.001 $ 0.001  
Authorized capital stock                             1,010,000,000
Common stock, share Authorized                         100,000,000   1,000,000,000
Preferred stock, shares authorized                         10,000,000   10,000,000
Reverse stock split                       1-for-8      
Per share Value               $ 0.05 $ 0.05            
Issue shares of common stock 100,000             100,000 200,000            
Common stock issued during period for compensation           300,000                  
Share issued for services         1,000,000   100,000 750,000              
Issue shares of common stock, Value $ 47,835             $ 5,000 $ 10,000            
Share issued for promissory note amendment and conversion     36,893,398 3,857,143           3,000,000          
Common stock shares issued for the conversion, shares   7,002,740                          
Common stock shares issued for the conversion, amount   $ 350,000                          
Accrued interest on convertible note   $ 140,192                          
Amendments to a related party [Member]                              
Issue shares of common stock                     1,050,000        
v3.24.2.u1
SUBSEQUENT EVENT (Details Narrative) - USD ($)
1 Months Ended
Aug. 08, 2024
Aug. 06, 2024
Aug. 05, 2024
Jul. 14, 2024
Jul. 10, 2024
May 07, 2024
Apr. 02, 2024
Jul. 26, 2024
Jul. 25, 2024
Jul. 24, 2024
Jul. 23, 2024
Apr. 14, 2024
Feb. 19, 2024
Feb. 15, 2024
Jul. 16, 2024
Common stock issued for services             1,000,000         100,000 750,000    
Share issued during period           100,000             100,000 200,000  
Share issued during period, value           $ 47,835             $ 5,000 $ 10,000  
Subsequent Event [Member]                              
Debt instrument conversion price                 $ 0.15   $ 0.15        
Common stock issued for services       100,000 200,000                    
Loan advance received                             $ 10,000
Debt instrument agreement value     $ 100,000         $ 100,000 $ 500,000 $ 50,000 $ 50,000        
Debt instrument term     6 months         6 years 12 years 6 years 24 years        
Interest rate     18.00%         18.00% 15.00% 18.00% 12.00%        
Common stock shares issued     200,000         600,000   300,000          
Subsequent Event [Member] | Agreement [Member]                              
Share issued during period 150,000 600,000 2,500,000           2,500,000            
Share price $ 0.05                            
Share issued during period, value $ 7,500                            
Subsequent Event [Member] | CEO [Member]                              
Share issued during period     2,500,000                        

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