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    TKLS   US89842T2006

TRUTANKLESS, INC.

(TKLS)
Delayed OTC Markets  -  12:44:08 2022-12-28 pm EST
0.000300 USD   -.--%
2022Trutankless, inc. - 10-k/a - management's discussion and analysis of financial condition and results of operations
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TRUTANKLESS, INC. - 10-K/A - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

11/30/2022 | 06:03am EST

Background

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 sales, marketing, research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. See "Item 1. Business."



RESULTS OF OPERATIONS



Revenues


In the year ended December 31, 2021 we generated $246,032 in revenues, as compared to $1,661,278 in revenues in the prior year. The decrease in sales was attributable to less sales of our trutankless® residential and light commercial products. Cost of goods sold was $127,669, as compared to $1,304,946 in the prior year.




Expenses



Operating expenses totaled $11,518,635 during the year ended December 31, 2021, as compared to $7,246,905 in the prior year. In the year ended December 31, 2021, our expenses primarily consisted of General and Administrative of $10,617,832, Research and Development of $354,045 and Professional fees of $546,758.

General and administrative fees increased $3,831,932 from the year ended December 31, 2020, to the year ended December 31, 2021. General and administrative fees increased due to an increase in consulting fees associated with business development.

Research and Development increased $166,461 from the year ended December 31, 2020, to the year ended December 31, 2021. Research and Development fees decreased due to development of new products.

Professional fees increased $273,337 from the year ended December 31, 2020, to the year ended December 31, 2021. Professional fees increased due to an increase in legal and accounting fees associated with the normal operations of the business.




Other Expenses



Other expense increased $2,302,982 to $5,979,498 in the year ended December 31, 2021, from $3,676,516 for the year ended December 31, 2020. The increase was the result of the loss on extinguishment of notes payable and interest expense during the year.




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Net Loss



In the year ended December 31, 2021, we generated a net loss of $17,379,770, an increase of $6,812,681 from $10,567,089 for the year ended December 31, 2020. This increase was attributable to an increase in stock based consulting payments and interest expense.



Going Concern


The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern.

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 December 31, 2021, the Company had $59,726 cash on hand. At December 31, 2021, the Company has an accumulated deficit of $60,372,841. For the year ended December 31, 2021, the Company had a net loss of $17,379,770, and cash used in operations of $2,431,848. 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 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. 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. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. 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 December 31, 2021, we had an accumulated deficit of $60,372,841. Primarily because of our history of operating losses and our recording of note payables, we have a working capital deficiency of $3,582,297 at December 31, 2021. Losses have been funded primarily through issuance of common stock and borrowings from our stockholders and third-party debt. As of December 31, 2021, we had $59,726 in cash, $5,424 in accounts receivable, $119,418 in inventory.

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 Annual 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 years ended
December 31, 2021 and 2020:



                                                     Year ended
                                                    December 31,
                                                2021             2020

Net cash used in operating activities $ (2,431,848 ) $ (1,474,939 ) Net cash used in investing activities

            (25,298 )              -

Net cash provided by financing activities 2,365,244 1,622,225 Net increase/(decrease) in Cash

                  (91,902 )        147,286
Cash, beginning                                  151,628            4,342
Cash, ending                                $     59,726     $    151,628





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Operating activities


Net cash used in operating activities was $2,431,848 for the year ended December 31, 2021, as compared to $1,474,939 used in operating activities for the same period in 2020. The increase in net cash used in operating activities was primarily due to lower volume of units sold and increase in consulting contract cost.




Investing activities



Net cash used in investing activities was $25,298 for the year ended December 31, 2021, as compared to $0 used in investing activities for the same period in 2020. The increase in net cash used in investing activities was primarily due to the purchase of equipment during 2021.



Financing activities


Net cash provided by financing activities for the year ended December 31, 2021 was $2,365,244, as compared to $1,622,225 for the same period of 2020. The increase of net cash provided by financing activities was mainly attributable more cash raised from debt, equity, and royalty financing.



Ongoing Funding Requirements


As of December 31, 2021, 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.



Critical Accounting Polices


In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed in Note 1 of our audited consolidated financial statements included in the Form 10-K filed with the SEC.

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.




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Financials (USD)
Sales 2021 0,25 M - -
Net income 2021 -17,4 M - -
Net Debt 2021 2,43 M - -
P/E ratio 2021 -1,28x
Yield 2021 -
Capitalization 0,01 M 0,01 M -
EV / Sales 2020 10,2x
EV / Sales 2021 155x
Nbr of Employees 7
Free-Float 70,0%
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Managers and Directors
Michael Stebbins President, CEO, Chief Financial Officer & Director
Robertson James Orr Secretary, Treasurer & Director
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