U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ | Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, | |
☐ | Transition Report under Section 13 or 15(d) of the Exchange Act |
For the Transition Period from ________to __________ | |
Commission File Number: 333-197642
Tribus Enterprises, Inc.
(Exact (Exact Name of Registrant as Specified in its Charter)
Washington | 82-1104757 | ||
(State of other jurisdiction of | (I.R.S. Employer | ||
incorporation or organization) | Identification Number) |
3808 N. Sullivan Rd. Building 13-D | |||
Spokane Valley, WA | 99216 | ||
(Address of principal executive offices) | (Zip Code) |
Registrant's Phone:(509) 992-4743 Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, Accelerated filer ☐ Smaller reporting company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ x ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes As of November TABLE OF CONTENTS Page PART I – FINANCIAL INFORMATION Item 1. Financial Statements Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation 7 Item 3. Quantitative and Qualitative Disclosures about Market Risk 10 Item 4. Controls and Procedures 10 PART II – OTHER INFORMATION Item 1. Legal Proceedings 10 Item 1A. Risk Factors 10 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11 Item 3. Defaults Upon Senior Securities 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 5. Other Information 11 Item 6. Exhibits 11 ITEM 1.FINANCIAL STATEMENTS TRIBUS ENTERPRISES, INC. September 30, Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Cash Flows 3 Notes to Unaudited Condensed Consolidated Financial Statements 4 - TRIBUS ENTERPRISES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2018 March 31, 2018 (unaudited) (audited) ASSETS Current assets Cash Prepaid inventory Prepaid expenses Total current assets Deposits Equipment, net of accumulated depreciation of $92,922 and $13,360, respectively Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities Interest payable Accrued rent Deferred revenue Capital lease, current (Note 7) Loans payable, current (Note 6) Total current liabilities Capital lease, net of current portion (Note 7) Loans payable, net of current portion (Note 6) Total liabilities Commitments and Contingencies Stockholders' equity Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 19,999,998 issued and outstanding at September 30, 2018 and March 31, 2018, respectively Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; 1,214,375 and 1,007,500 issued or outstanding at September 30, 2018 and March 31, 2018, respectively Common stock, $0.001 par value; 100,000,000 authorized; 7,066,858 and 6,903,658 issued and outstanding at September 30, 2018 and March 31, 2018, respectively Additional paid in capital Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity The accompanying notes are an integral part of these condensed consolidated financial statements. TRIBUS ENTERPRISES, INC. UNAUDITED CONDENSED CONSOLDIATED STATEMENTS OF OPERATIONS Three months ended September 30, Six months ended September 30, 2018 2017 2018 2017 Operating expenses Employee costs Professional fees General and administrative Facilities Research and development Depreciation expense Total operating expenses Other income (expense) Other income Interest expense Total other income (expense) Net and comprehensive loss Net loss per share, basic and diluted Weighted average shares outstanding, basic and diluted The accompanying notes are an integral part of these condensed consolidated financial statements. TRIBUS ENTERPRISES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended September 30, 2018 2017 Cash flows from operating activities Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation Changes in operating assets and liabilities: Prepaid expenses Prepaid inventory Deposits Accounts payable and accrued liabilities Interest payable Deferred rent Deferred revenue Net cash used in operating activities Cash flows from investing activities Purchase of equipment Net cash used in investing activities Cash flows from financing activities Repayments of capital leases Proceeds from loans payable Repayments of loans payable Proceeds from sale of common stock Proceeds from the sale of series B preferred stock Net cash provided by financing activities Cash, beginning of period Net change in cash Cash, end of period Supplemental cash flow information Cash paid for interest Cash paid for income taxes Supplemental disclosure of non-cash financing activities Capital leases entered into for purchase of equipment Loan entered into for purchase of vehicle The accompanying notes are an integral part of these condensed consolidated financial statements. TRIBUS ENTERPRISES, INC. NOTE 1 – NATURE OF OPERATIONS AND ORGANIZATION The Company was incorporated in the State of Washington on March 29, 2017 for the purpose of developing, designing, manufacturing and distributing hand tools. Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC (“Tribus Innovations”) and acquired all of the outstanding ownership interests of Tribus Innovations. Tribus Innovations was formed on December 1, 2015. The transaction was accounted for as a reverse merger and these financial statements present the historical financial information of Tribus Innovations from its inception and include the financial information of the Company from the completion of the share exchange agreement on March 29, 2017. The Company has not yet realized revenues from its planned business activities. NOTE 2 – UNAUDITED CONDENSED CONSOLDIATED INTERIM FINANCIAL STATEMENTS The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented. NOTE 3 – GOING CONCERN The TRIBUS ENTERPRISES, INC. Notes to Unaudited Consolidated Condensed Financial Statements September 30, 2018 NOTE 3 – GOING CONCERN (CONTINUED) The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its plans and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern. During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital. Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders. NOTE 4 – CAPITAL STOCK Authorized The Company is authorized to issue up to 20,000,000 shares of $0.001 par value Series A Preferred Stock, 5,000,000 shares of $0.001 par value Series B Preferred Stock and 100,000,000 shares of $0.001 par value Common Stock. The holders of the Series A Preferred Stock are entitled to 10 votes for each share held. Each share of Series A Preferred Stock is convertible into 10 shares of Common Stock at the discretion of the Company’s directors. In the event that there is a change of control transaction, each share of Series A Preferred Stock is convertible into The holders of the Series B Preferred Stock are entitled to 4 votes for each share held. Each share of Series B Preferred Stock is convertible into 4 shares of Common Stock Issued During the There were There were 19,999,998, 1,007,500 and 6,903,658 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of March 31, TRIBUS ENTERPRISES, INC. Notes to Unaudited Consolidated Condensed Financial Statements September 30, 2018 NOTE 5 – COMMITMENTS AND CONTINGENCIES On March 23, 2017, the Company entered into a lease agreement for the rent of warehouse space that terminates on April 30, 2022 which was amended on May 20, 2017. The lease requires future minimum payments as shown below: Year ending March 31, NOTE 6 – During the On July 27, 2018, the Company entered into a loan agreement to borrow $60,000. The loan carries an interest rate of 24.37%, is payable over twelve months and due on July 27, 2019. There was $55,319 and $0 of principal due as of September 30, 2018 and March 31, 2018, respectively. NOTE As of September 30, 2018, there was a total of $1,372,580 of future payments due through June 2023 of which $470,368 are financing charges leaving a total principal balance of $902,212. Of the total principal balance due, $163,092 was current and $739,120 was long term as of September 30, 2018. Future annual payments required under the capital leases through termination are as follows: Principal Interest Total Year ended March 31, 2019 2020 2021 2022 2023 2024 Total NOTE 8—SUBSEQUENT EVENTS The Company has entered into several long term lease and loan agreements to purchase equipment needed to manufacture its products. The Company has been able to secure funding needed to purchase equipment required to manufacture its product. Management has examined all other events and found none other than those herein requiring disclosure through November 9, 2018. On various dates subsequent to September 30, ITEM 2. FORWARD-LOOKING STATEMENTS This Form 10-Q includes These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements. General Business Development The Company was formed on March 29, 2017 in the State of Washington. Business Strategy Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC (“Tribus Innovations”) and acquired all of the outstanding ownership interests of Tribus Innovations. Tribus Innovations was formed on December 1, 2015. The transaction was accounted for as a reverse merger and these financial statements present the historical financial information of Tribus Innovations from its inception and include the financial information of the Company from the completion of the share exchange agreement on March 29, 2017. The Company has not yet realized revenues from its planned business activities. The membership interests of Tribus Innovations, LLC were all held by the officers and directors of Tribus Enterprises, Inc. The Company acquired 100% of the membership interests of Tribus Innovations, LLC in exchange for 2,600,000 of our common shares and 19,999,998 of our shares of Class A preferred stock. Tribus Innovations is currently a 100% owned subsidiary of the Company. Tribus LLC was formed in December 2015 to develop, manufacture, and market a compelling product line of innovative ratcheting flare nut wrenches which have aPatent Pending since April of 2016, application number: 15/092,056 Duration of Patent should be a standard of 20 years once the patent is granted by the USPTO. Their initial product line uses traditional manufacturing methods of metal forging, subtractive manufacturing (CNC milling), additive manufacturing (3D printing), and plastic injection molding. Tribus LLC has made several plastic resin prototypes in 2016. Tribus Products Tribus LLC’s ratcheting flare nut wrench addresses the market in a way that has never been done before; reducing the time it takes to turn inline fasteners. Tribus LLC also has a smartphone application division that has two additional products under development. One is a home garage door automation application, the other is a construction time management application that is completely cloud driven. The garage door automation application is specific to motorcycle riders. The construction time management application provides employers and employees better analytics and can replace traditional time cards punching in & out. Tribus Innovations’ ratcheting flare nut wrench will be produced for sale in the hand tool industry. Historically there have been limited designs in the ratcheting flare nut wrench sales market such as; Gear Wrench part number 89100 (UPC 099575891007) and the traditional non-ratcheting flare nut wrench. These designs do not allow for small incremental movement in confined spaces, whereas Tribus Innovations’ version of the ratcheting flare nut wrench breaks new ground in this market. Liquidity and Capital Resources As of September 30, As of March 31, 2018, we had $913,958 in cash, total current assets of $913,958 and total current liabilities of $47,251. Current liabilities consisted of Net cash used in operating activities was Net cash used in investing activities was Net cash used by financing activities was $1,653 and provided by financing activities was $18,838 for the six months ended September 30, Going Concern The future of our company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. See Results of Operations We did not generate revenues during the three Total operating expenses were CRITICAL ACCOUNTING POLICIES In Financial Reporting release No. 60, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is not exposed to market risk related to interest rates or foreign currencies. CONTROLS AND PROCEDURES ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our second quarter that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any legal proceedings. ITEM 1A. RISK FACTORS There has been no material changes in the risk factors set forth in the Company’s Form ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS There were no sales of unregistered equity securities during the covered time period. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following documents are included or incorporated by reference as exhibits to this report: Exhibit Number 31.1 31.2 32.1 32.1 (b) REPORTS ON FORM 8-K None. SIGNATURES In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 13, Tribus Enterprises, Inc. Registrant By: /s/ Kendall Bertagnole Kendall Bertagnole Chief Executive Officer 12Registrant’s☒[x]or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐ Non-accelerated filer ☐ Emerging Growth Company ☒[x]☐[] No ☒[x]14, 2017,9, 2018, the issuer had 5,541,6587,136,858 shares of common stock issued and outstanding. 1111 16161616161617UNADUITEDUNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS20172018UnauditedUnauditedUnaudited67 $ 279,345 $ 913,958 250,000 - 1,705 - 531,050 913,958 33,337 2,440 1,189,962 48,444 $ 1,754,349 $ 964,842 $ 38,604 $ 32,936 10,372 - 7,915 7,827 814 - 163,092 - 61,807 6,488 282,604 47,251 739,120 - 17,301 20,545 1,039,025 67,796 - - 20,000 20,000 1,214 1,008 7,067 6,904 1,668,464 1,462,533 (981,421 ) (593,399 ) 715,324 897,046 $ 1,754,349 $ 964,842 $ 59,882 $ 50,167 $ 121,959 $ 104,350 15,812 8,401 47,103 14,042 45,200 48,694 64,067 98,474 29,152 12,206 49,997 20,616 - 5,931 1,140 7,911 45,655 3,258 79,562 5,827 195,701 128,657 363,828 251,220 - - - - (19,670 ) - (24,194 ) - (19,670 ) - (24,194 ) - $ (215,371 ) $ (128,657 ) $ (388,022 ) $ (251,220 ) $ (0.03 ) $ (0.02 ) $ (0.06 ) $ (0.05 ) 7,060,206 5,541,658 7,023,791 5,541,658 $ (388,022 ) $ (251,220 ) 79,562 5,827 (1,705 ) 1,267 (250,000 ) - (30,897 ) (200 ) 5,668 17,112 10,372 - 88 7,049 814 - (574,120 ) (220,165 ) (58,840 ) (13,481 ) (58,840 ) (13,481 ) (260,028 ) - 60,000 - (7,925 ) (2,162 ) 40,800 21,000 165,500 - (1,653 ) 18,838 913,958 298,942 (634,613 ) (214,808 ) $ 279,345 $ 84,134 $ 9,298 $ - $ - $ - $ 1,162,240 $ - $ - $ 32,439 CONSOLIDATED BALANCE SHEETSNotes to Unaudited Condensed Consolidated Financial Statements September 30, 2017 March 31, 2017 (unaudited) ASSETS Current assets Cash $ 84,134 $ 298,942 Prepaid expenses 1,725 2,992 Total current assets 85,859 301,934 Deposits 2,440 2,240 Equipment, net of accumulated depreciation of $6,200 and $374, respectively 47,853 7,760 Total assets $ 136,152 $ 311,934 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities $ 20,356 $ 3,244 Accrued rent 7,049 — Loan, current (Note 7) 6,488 — Total current liabilities 33,893 3,244 Loan, net of current portion (Note 7) 23,789 — Total liabilities 57,682 3,244 Stockholders’ equity Common stock subscribed 21,000 — Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 19,999,998 issued and outstanding at September 30, 2017 and March 31, 2017, respectively 20,000 20,000 Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; none issued or outstanding — — Common stock, $0.001 par value; 100,000,000 authorized 5,541,658 issued and outstanding at September 30, 2017 and March 31, 2017, respectively 5,542 5,542 Additional paid in capital 338,403 338,403 Accumulated deficit (306,475 ) (55,255 ) Total stockholders’ equity 78,470 308,690 Total liabilities and stockholders’ equity $ 136,152 $ 311,934 The accompanying notes are an integral part of these unaudited consolidated financial statements.TRIBUS ENTERPRISES, INC.UNAUDITED CONSOLDIATED STATEMENTS OF OPERATIONS Three months ended September 30, Six months ended September 30, 2017 2016 2017 2016 Operating expenses Employee costs $ 50,167 $ — $ 104,350 $ — Professional fees 8,401 — 14,042 285 General and administrative 48,694 — 98,474 109 Facilities 12,206 — 20,616 — Research and development 5,931 — 7,911 — Depreciation expense 3,256 — 5,827 — Total operating expenses 128,655 — 251,220 394 Net and comprehensive loss $ (128,655 ) $ — $ (251,220 ) $ (394 ) Net loss per share, basic and diluted $ (0.00 ) $ (0.00 ) $ (0.04 ) $ (0.00 ) Weighted average shares outstanding, basic and diluted 5,541,658 — 5,541,658 — The accompanying notes are an integral part of these unaudited consolidated financial statements.TRIBUS ENTERPRISES, INC.UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended September 30, 2017 2016 Cash flows from operating activities Net loss $ (251,220 ) $ (394 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 5,827 — Changes in operating assets and liabilities: Prepaid expenses 1,267 — Deposits (200 ) — Accounts payable and accrued liabilities 17,112 (5,687 ) Deferred rent 7,049 — Net cash used in operating activities (220,165 ) (6,081 ) Cash flows from investing activities Purchase of equipment (13,481 ) — Net cash used in investing activities (13,481 ) — Cash flows from financing activities Loan repayments (2,162 ) — Cash contributions by related parties — 4,160 Proceeds from common stock subscriptions 21,000 — Net cash provided by financing activities 18,838 4,160 Cash, beginning of period 298,942 2,230 Net change in cash (214,808 ) (1,921 ) Cash, end of period $ 84,134 $ 309 Supplemental cash flow information Cash paid for interest $ — $ — Cash paid for income taxes $ — $ — Supplemental disclosure of non-cash investing and financing activities Loan entered into for purchase of vehicle $ 32,439 $ — The accompanying notes are an integral part of these unaudited consolidated financial statements.September 30, 20183 TRIBUS ENTERPRISES, INC.Notes to Unaudited Consolidated Financial StatementsSeptember 30, 2017periodperiods ended September 30, 20172018 and for all periods presented herein, have been made.20172018 audited financial statements. The results of operations for the periods ended September 30, 20172018 are not necessarily indicative of the operating results for the full year. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tribus Innovations LLC. All intercompany balances and transactions are eliminated on consolidation.Company’sCompany's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. There are substantial doubts as to our ability to continue as a going concern.TRIBUS ENTERPRISES, INC.NotesThe Company has made deposits to Unaudited Consolidated Financial Statementsa supplier to assist in the manufacturing process to get the manufacturing facility set up and running. The supplier will repay the deposit by discounting future product purchases. All payments made by the Company to the supplier will be repaid in the full amount in the form of a discount per each product set that is manufactured and purchased by the Company.September 30, 2017NOTE 4 – CAPITAL STOCK410 shares of Common Stock at the option of the holder. The holders of the Series A Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.Subscribedat the discretion of the stockholder. The holders of the Series B Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.threesix months ended September 30, 2017,2018, the Company accepted five separate stock subscriptions to issue a total of 84,000163,200 shares of common stock at $0.25 per share resulting in total cash proceeds of $21,000. The shares of common stock will be issued upon achieving certain minimum cash raise requirements as set forth in the subscription agreements.$40,800.IssuedAt inception on March 29, 2017,During the six months ended September 30, 2018, the Company issued 19,999,998 Series A Preferred Shares to the ownersa total of Tribus Innovations LLC. A further 2,600,000206,875 shares of Common Stock were also issued to the owners of Tribus Innovations LLC pursuant to the share exchange agreement as discussed inNote 1 – Nature of Operations and OrganizationThe issuance of these shares of Common Stock andSeries B Convertible Preferred Stock were accounted as a recapitalization transaction reflecting the reverse merger of the Company by Tribus Innovations LLC.On March 31, 2017, the Company issued 2,941,658 shares of common stock for total cash proceeds of $352,760.$165,500.19,999,998, -0-19,999,998; 1,214,375 and 5,541,6587,066,858 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of September 30, 20172018.2017, respectively.2018.Year ending March 31, Year ending March 31, 2018 $ 23,040 2019 47,334 $ 23,724 2020 48,757 48,757 2021 50,207 50,207 2022 51,725 51,725 2023 4,321 4,321 Total $ 225,384 $ 178,734 RELATED PARTY BALANCESIncluded in accrued liabilities at September 30, 2017 is $nil (March 31, 2017 - $1,154) due to a director and officer of the Company for an accrual of salary. This amount is unsecured, does not bear interest and is due on demand.TRIBUS ENTERPRISES, INC.Notes to Unaudited Consolidated Financial StatementsSeptember 30, 2017NOTE 7 – LOANLOANS PAYABLEsix months ended September 30, 2017prior fiscal year, the Company entered into a loan in order to acquire a vehicle. The loan is repayable over five years at $541 per month, is secured by the vehicle and bears interest aat 0%. Management determined that the fair value of the loan was not significantly different from its face value and therefore no discount has been recorded. There was $23,789 and $27,033 due as of September 30, 2018 and March 31, 2018 of which $6,488 and $6,488 was current and $17,301 and $20,545 was long term, respectively.87 – SUBSEQUENT EVENTSCAPITAL LEASES PAYABLESubsequentThe Company accounts for capital leases in accordance with ASC 840-30. During the six months ended September 30, 2018, the Company entered into seven separate long-term leases for equipment that contain either a $1 or fair value buyout option upon lease termination as well as others that contain bargain purchase option upon the lease termination. The Company determined these were capital leases based on the minimum buy out price and capitalized the net present value of the leases which totaled $1,162,240 as equipment. The leases require total monthly payments of $33,111. $ 67,482 $ 99,534 $ 167,016 205,069 190,784 395,853 270,017 125,836 395,853 246,061 45,430 291,491 108,323 8,686 117,009 5,260 98 5,358 $ 902,212 $ 470,368 $ 1,372,580 2017,2018, the Company accepted subscription agreements to issue a further 462,000 shares of common stock at a price of $0.25 per share resulting in cash proceeds to the Company of $115,500. Additionally, the Company accepted twoeleven separate subscription agreements to issue a total of 250,00070,000 shares of Series B Convertible Preferredcommon stock at a price of $0.80$0.25 per share resulting in total cash proceeds to the Company of $200,000. The Series B Convertible Preferred stock is convertible into four shares of Common Stock at the discretion of the Company’s directors.”$17,500.MANAGEMENT’S MANAGEMENT'S DISCUSSION AND ANALYSIS OFOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS“forward-looking statements”"forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company’sCompany's business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’sCompany's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.“believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,”"believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’sCompany's financial condition or results of operations for its limited history; (ii) the Company’sCompany's business and growth strategies; and, (iii) the Company’sCompany's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’sCompany's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.LLChas produced several wrenches already and is currently developing metal prototypes built out of tool grade steel and will be testingsetting up the results. The detailed designs and specifications of the product are complete and are awaiting testing results. These results may reveal any necessary design changes that may be neededproduction line for either the manufacturing process or to address failures.full production this year.●• Ease of Use – There are no buttons or switches. In order to reverse the tightening direction,simply remove the tool and rotate it 180°.●• Learning Curve – This works the same as a standard open ended wrench but it has the ability toratchet, saving valuable time. There will be a very short and slight learning curve as the users will simply need to remove the tool off the fastener and line up the open slots to remove the tool completely off the line.●• Heavy Torque application – Due to the design of the pawls that engage into the ratchet, it hasat least 4x more contact surfaces than standard ratcheting wrenches. This will translate to much more application of torque.●• Convenience in tight spaces – Pawls have been designed along with corresponding grooves inthe ratchet so users can maximize ratchet pitch. It will only take 2°- 4° to get the ratchet to click. This is crucial in tight spaces where there is very little room to swing the ratchet.2017,2018, we had $84,134$279,345 in cash, total current assets of $85,859$531,050 and total current liabilities of $33,893 creating$282,604. Current liabilities consisted mainly of $38,604 of accounts payable, $7,915 of accrued rent, a working capital balancelease of $51,966.$163,092 and a current loan payable of $61,807.$20,356$32,936 of accounts payable, $7,049$7,827 of accrued rent and a current loan payable of $6,488.$220,165$574,120 compared to $6,081$220,165 for the six months ended September 30, 20172018 and 20162017 respectively.$13,481$58,840 compared to $0$13,481 the six months ended September 30, 2018 and 2017 respectively.20172018 and 20162017 respectively.Net cash provided by financing activities was $18,838 compared to $4,160 for the six months ended September 30, 2017 and 2016 respectively.note 2Note 3 to the financial statements for additional information.or six months ended September 30, 20172018 or 2016.2017. Total operating expenses were $128,655$195,701 during the three months ended September 30, 20172018 and $0$128,657 for the three months ended September 30, 2016.2017 due to an increase in the company’s operations and preparation therefore. Net loss for the three months ended September 30, 20172018 was $128,655$215,371 compared to $0$128,657 for the same period in 2016.2017 due to an increase in the company’s operations and preparation therefore.$251,,20$363,828 during the six months ended September 30, 20172018 and $394$251,220 for the six months ended September 30, 2016.2017 due to an increase in the company’s operations and preparation therefore. Net loss for the six months ended September 30, 20172018 was $251,220$388,022 compared to $394$251,220 for the same period in 2016.2017 due to an increase in the company’s operations and preparation therefore.“CAUTIONARY"CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES” (“POLICIES" ("FRR 60”60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company’scompany's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.March 31, 2015,September 30, 2018, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), who concluded, that because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective as of September 30, 2017.2018.S-1 which went effective on September 20, 2017.10K for the period ended March 31, 2018 filed June 29, 2018.Exhibit Number
Description31.1Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.132.120172018 By: /s/ Kendall BertagnoleChief Executive Officer