Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 26, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | TAUTACHROME, INC. | |
Entity Central Index Key | 0001389067 | |
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 | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 4,561,078,768 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-55721 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 84-2340972 | |
Entity Address Address Line 1 | 1846 e. Innovation Park Drive | |
Entity Address City Or Town | Oro Valley | |
Entity Address State Or Province | AZ | |
Entity Address Postal Zip Code | 85755 | |
City Area Code | 520 | |
Local Phone Number | 318-5578 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 332,043 | $ 114,527 |
Total current assets | 332,043 | 114,527 |
Non-current assets: | ||
Property, plant and equipment, net | 28,963 | 39,826 |
TOTAL ASSETS | 361,006 | 154,353 |
LIABILITIES | ||
Accounts payable and accrued expenses | 675,461 | 789,052 |
Accounts payable - related party | 674,399 | 510,313 |
Loans from related parties | 103,539 | 104,762 |
Convertible notes payable - related party, net | 70,942 | 50,094 |
Short-term convertible notes payable, net | 1,384,800 | 999,406 |
Convertible notes payable in default | 32,000 | 32,000 |
Short-term notes payable | 15,902 | 16,957 |
Derivative liability | 1,968,634 | 1,479,530 |
Total current liabilities | 4,925,677 | 3,982,114 |
Long-term convertible notes payable, net | 0 | |
Long-term convertible notes payable, related party, net | 11,368 | 10,080 |
Total non-current liabilities | 11,368 | 10,080 |
TOTAL LIABILITIES | 4,937,045 | 3,992,194 |
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.00001 par value. 4.5 billion shares authorized. 4,561,078,768 and 4,120,475,247 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 45,610 | 41,205 |
Additional paid in capital | 15,120,964 | 11,427,087 |
Common stock payable | 556,634 | 336,584 |
Accumulated deficit | (20,376,537) | (15,661,969) |
Effect of foreign currency exchange | 75,876 | 17,838 |
TOTAL STOCKHOLDERS' DEFICIT | (4,576,039) | (3,837,841) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 361,006 | 154,353 |
Series D Convertible Preferred [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock value | 1,380 | 1,380 |
Series E Convertible Preferred [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock value | 4 | 4 |
Series F Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock value | $ 30 | $ 30 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, authorized shares | 6,500,000,000 | 6,500,000,000 |
Common stock, shares issued | 4,561,078,768 | 4,120,475,247 |
Common stock, shares outstanding | 4,561,078,768 | 4,120,475,247 |
Series F Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 290,397 | 290,397 |
Preferred stock, shares issued | 290,397 | 290,397 |
Preferred stock, shares outstanding | 290,397 | 290,397 |
Series D Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 13,795,104 | 13,795,104 |
Preferred stock, shares issued | 13,795,104 | 13,795,104 |
Preferred stock, shares outstanding | 13,795,104 | 13,795,104 |
Series E Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 40,000 | 40,000 |
Preferred stock, shares outstanding | 40,000 | 40,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES | ||||
Online sales platform | $ 5 | $ 136 | $ 22 | $ 136 |
Products | 125 | 804 | 240 | 804 |
Total revenues | 130 | 940 | 262 | 940 |
Cost of sales | 44 | 336 | 79 | 336 |
Gross profit | 86 | 604 | 183 | 604 |
OPERATING EXPENSES | ||||
General and administrative | 2,302,093 | 153,285 | 2,648,982 | 445,053 |
Bad debt expense | 150,760 | 0 | 150,760 | 0 |
Depreciation expense | 3,621 | 0 | 10,863 | 0 |
Research and development | 229,334 | 303,982 | 812,680 | 636,805 |
Total operating expenses | 2,685,808 | 457,267 | 3,623,285 | 1,081,858 |
Operating loss | (2,685,722) | (456,663) | (3,623,102) | (1,081,254) |
OTHER INCOME / (EXPENSE) | ||||
Gain on litigation | 0 | 0 | 0 | 105,000 |
Loss on settlement of debt | (225) | 0 | (225) | 0 |
Interest expense | (235,282) | (206,596) | (889,289) | (928,059) |
Change in value of derivatives | (358,835) | (2,064,184) | (201,952) | (994,307) |
Loss on conversion of debt | 0 | 0 | 0 | (37,267) |
Total other | (594,342) | (2,270,780) | (1,091,466) | (1,854,633) |
Net loss | (3,280,064) | (2,727,443) | (4,714,568) | (2,935,887) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Effect of foreign currency exchange | 16,941 | (31,810) | 58,038 | (15,673) |
Net comprehensive income or (loss) | $ (3,263,123) | $ (2,759,253) | $ (4,656,530) | $ (2,951,560) |
Net (loss) or income per common share: | ||||
Basic | $ 0 | $ 0 | $ 0 | $ 0 |
Fully diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares outstanding: | ||||
Basic weighted | 4,528,423,105 | 4,120,475,247 | 4,336,530,997 | 3,814,355,307 |
Fully diluted weighted | 4,528,423,105 | 4,120,475,247 | 4,336,530,997 | 3,814,355,307 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders Deficit (Unaudited) - USD ($) | Total | Common Stock [Member] | Series D, Preferred Stock | Series E, Preferred Stock | Series F, Preferred Stock | Additional Paid-in Capital [Member] | Stock Payable [Member] | Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Balance, shares at Dec. 31, 2019 | 3,504,460,889 | 13,795,104 | |||||||
Balance, amount at Dec. 31, 2019 | $ (4,571,544) | $ 35,045 | $ 1,380 | $ 0 | $ 0 | $ 6,095,053 | $ 2,066,584 | $ 98,039 | $ (12,867,645) |
Shares issued for conversion of debt, shares | 560,931,025 | ||||||||
Shares issued for conversion of debt, amount | 849,361 | $ 5,609 | 0 | 0 | 0 | 843,752 | 0 | 0 | 0 |
Shares issued for services, shares | 3,333,333 | ||||||||
Shares issued for services, amount | 20,000 | $ 33 | 0 | 0 | 0 | 19,967 | 0 | 0 | 0 |
Shares issued for cash, shares | 1,750,000 | ||||||||
Shares issued for cash, amount | 3,500 | $ 18 | 0 | 0 | 0 | 3,482 | 0 | 0 | 0 |
Shares issued to settle legal claim, shares | 50,000,000 | ||||||||
Shares issued to settle legal claim, amount | 145,000 | $ 500 | 0 | $ 0 | 0 | 144,500 | 0 | 0 | 0 |
Issue Series E preferred shares, shares | 40,000 | ||||||||
Issue Series E preferred shares, amount | 0 | 0 | 0 | $ 4 | $ 0 | 1,836,996 | (1,837,000) | 0 | 0 |
Issue Series F preferred shares, shares | 290,397 | ||||||||
Issue Series F preferred shares, amount | 625,265 | 0 | 0 | 0 | $ 30 | 625,235 | 0 | 0 | 0 |
Derivative associated with early debt retirement | 1,844,424 | 0 | 0 | 0 | 0 | 1,844,424 | 0 | 0 | 0 |
Beneficial conversion features of convertible notes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Shares earned by consultants | 107,000 | 0 | 0 | 0 | 0 | 0 | 107,000 | 0 | 0 |
Imputed interest | 13,678 | 0 | 0 | 0 | 0 | 13,678 | 0 | 0 | 0 |
Effect of foreign currency exchange | (80,201) | 0 | 0 | 0 | 0 | 0 | 0 | (80,201) | 0 |
Net income | (2,794,324) | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | (2,794,324) |
Balance, shares at Dec. 31, 2020 | 4,120,475,247 | 13,795,104 | 40,000 | 290,397 | |||||
Balance, amount at Dec. 31, 2020 | (3,837,841) | $ 41,205 | $ 1,380 | $ 4 | $ 30 | 11,427,087 | 336,584 | 17,838 | (15,661,969) |
Shares issued for conversion of debt, shares | 220,978,521 | ||||||||
Shares issued for conversion of debt, amount | 948,446 | $ 2,210 | 0 | 0 | 0 | 946,236 | 0 | 0 | 0 |
Shares issued for services, shares | 214,125,000 | ||||||||
Shares issued for services, amount | 7,125 | $ 2,140 | 0 | 0 | 0 | 2,116,385 | (2,111,400) | 0 | 0 |
Derivative associated with early debt retirement | 570,738 | 0 | 0 | 0 | 0 | 570,738 | 0 | 0 | 0 |
Imputed interest | 8,048 | 0 | 0 | 0 | 0 | 8,048 | 0 | 0 | 0 |
Effect of foreign currency exchange | 58,038 | 0 | 0 | 0 | 0 | 0 | 0 | 58,038 | 0 |
Net income | (4,714,568) | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | (4,714,568) |
Shares issued as enticement for loan, shares | 5,500,000 | ||||||||
Shares issued as enticement for loan, amount | 52,525 | $ 55 | 0 | 0 | 0 | 52,470 | 0 | 0 | 0 |
Stock payable for services | 2,331,450 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 2,331,450 | 0 | 0 |
Balance, shares at Sep. 30, 2021 | 4,561,078,768 | 13,795,104 | 40,000 | 290,397 | |||||
Balance, amount at Sep. 30, 2021 | $ (4,576,039) | $ 45,610 | $ 1,380 | $ 4 | $ 30 | $ 15,120,964 | $ 556,634 | $ 75,876 | $ (20,376,537) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (4,714,568) | $ (2,935,887) |
Stock-based compensation | 2,338,575 | 127,000 |
Depreciation, depletion and amortization | 10,863 | 0 |
Loss on debt conversions | 0 | 37,267 |
Gain on litigation | 0 | (105,000) |
Change in fair value of derivative | 201,952 | 994,307 |
Amortization of discounts on notes payable | 784,023 | 838,024 |
Imputed interest | 8,048 | 10,518 |
Bad Debt Expense | 150,760 | 0 |
Changes in operating assets and liabilities: | ||
Accounts Receivable | (760) | 0 |
Prepaid expenses | 0 | 403 |
Accounts payable and accrued expenses | 169,981 | 175,447 |
Accounts payable - related party | 165,000 | 195,000 |
Net cash used in operating activities | (886,126) | (662,921) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in Accumen | (150,000) | 0 |
Acquisitions of property, plant and equipment | 0 | (43,447) |
Net cash used in investing activities | (150,000) | (43,447) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from the sale of stock | 0 | 3,500 |
Proceeds from convertible notes payable | 1,208,000 | 440,000 |
Proceeds from convertible notes payable, related party | 40,000 | 488,000 |
Payment of expenses by related parties | 6,000 | 36,172 |
Principal payments on related-party loans | (21,348) | (63,219) |
Net cash provided by financing activities | 1,232,652 | 906,870 |
Effect of exchange rate changes on cash and cash equivalents | 20,990 | (78,585) |
Net increase/(decrease) in cash | 217,516 | 121,917 |
Cash and equivalents - beginning of period | 114,527 | 31,366 |
Cash and equivalents - end of period | 332,043 | 153,283 |
SUPPLEMENTARY INFORMATION | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS | ||
Discounts on convertible notes | 962,415 | 617,400 |
Conversion of debt to common stock | 948,447 | 812,097 |
Settlement of derivative liability | 570,738 | 1,844,455 |
Shares issued for trade debts | $ 0 | $ 145,000 |
Shares issued for stock payable | 247,426 | 1,837,000 |
Conversion of debt to preferred stock, related party | $ 0 | $ 625,234 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization and Nature of Business | |
Note 1 - Organization and Nature of Business | Note 1 – Organization and Nature of Business History Tautachrome, Inc. was formed in Delaware on June 5, 2006 as Caddystats, Inc., was renamed Roadships Holdings Inc. on March 4, 2009, and on November 2, 2015 was again renamed to its current name Tautachrome Inc. (hereinafter referred to as “Tautachrome,” the “Company,” “we” or “us”). The Company’s accounting year end is December 31. Our Business Tautachrome operates in the internet applications space, uniquely exploiting the technologies of the Augmented Reality (AR) sector, the smartphone trusted imagery sector and the crypto currency and NFT fintech sectors, with granted and pending patents in all these sectors. The Company has completed development of a fully integrated mobile commerce platform, the ARknet platform (“ARknet”). ARknet aims to harness Web 3.0’s deployment of open, permissionless and implicitly trustful networks, where software is developed openly in full view of the world, users don’t need permission from anybody else to participate, and the network itself allows users to trustfully interact with anybody, publicly or privately. The ARknet platform is able to host consumers and their social interaction and businesses selling to those consumers, all implemented through AR interfaces called Arks. The Company has just begun supporting the creation and sale of blockchain non fungible tokens (NFTs) representing unique digital imagery assets consisting of pictures, videos, Arks and such other digital things belonging to and/or developed by ARknet platform participants. In addition, the Company has high-speed blockchain technologies in development that will use digital currencies to make purchases faster and easier. Recently added ARknet platform features include: MainSt.shopping Non-Fungible Tokens (NFTs) Travelpin. Eternals Memorials. 3D Imaging for Businesses User products. Since its public announcement on September 25, 2017 (via SEC form 8-K) that it would be using its Twitter site ( Tautachrome_Inc) (https://twitter.com/tautachrome_inc) to post important Company information, and finding this method of publicizing important Company information both fast and effective, the Company has continued to use this means of public communication, supplemented when required with Current Reports via SEC Form 8-Ks. Shareholders are advised to follow us on Twitter to be current on the Company’s disclosures in conformity with Regulation FD. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Consolidated Financial Statements In the opinion of management, the accompanying financial statements includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ended September 30, 2021. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our audited financial statements for the period ended December 31, 2020, as reported in Form 10-K filed with the SEC on March 30, 2021. 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) valid transactions are recorded; and 3) transactions are recorded in the proper 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. Principles of Consolidation Our consolidated financial statements include the accounts of Tautachrome, Inc. and all majority-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. Long-Lived Assets, Intangible Assets and Impairment The Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. Revenue Recognition The Company sells credits in exchange for cash. These credits can be redeemed for ARks which are geo-location objects downloadable into various digital devices. We recognize revenues once the customer has redeemed previously-purchased credits in exchange for ARks. Until that point, any cash received in exchange for credits is accounted for as liabilities. The company recognizes revenues in accordance with ASC 606 – Revenue From Contracts with Customers Step 1: Identify the contract with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Share Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2021 | |
Going Concern | |
Note 3 - Going Concern | Note 3 – Going Concern In the third quarter 2019, we began operations with our ARknet platform, and in October we acquired assets to enter the business ARk vertical in our market. We will require additional capital to exploit this vertical and to commercialize others. There is no guarantee that we will be able acquire the capital to exploit and commercialize the ARknet markets we envision so as to generate positive cash flows from operations. For these reasons, substantial dou bt Management intends to raise additional capital, partly through convertible debt, partly through the direct sale of equity and partly through partnerships with businesses with whom we will provide exclusive use of ARknet techniques in their arenas of operation. We will commit those funds to further refine and develop our ARknet platform. In addition, we intend to market our products through Google and Facebook. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions | |
Note 4 - Related Party Transactions | Note 4 – Related Party Transactions For the nine months ended September 30, 2021, we accrued $3,674 of interest to the 22 nd According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%. On July 11, 2019, our CEO and Board Chairman contributed $13,750 to the company which was accounted for as additional paid in capital. Convertible note payable, related party On May 5, 2013 (and on August 8, 2013 with an enlargement amendment) the Company entered into a no interest demand-loan agreement with our current Chairman, Jon N. Leonard under which the Company may borrow such money from Dr. Leonard as Dr. Leonard in his sole discretion is willing to loan. The terms of the note provide that at the Company’s option, the Company may make repayments in stock, at a fixed share price of $1.00 per share. Also, because this loan is a no-interest loan, an imputed interest expense of $177 was recorded as additional paid-in capital for the nine months ended September 30, 2021. The Company evaluated Dr. Leonard’s note for the existence of a beneficial conversion feature and determined that none existed. During the nine months ended September 30, 2021, we repaid $21,548 to Dr. Leonard. Dr. Leonard also paid company expenses of $6,000. At September 30, 2021, the balanced owed Dr. Leonard is $967. Ending balances in related party accounts payable is $674,399. For ending balances in this category, see Note 7. |
Notes and Interest Receivable
Notes and Interest Receivable | 9 Months Ended |
Sep. 30, 2021 | |
Notes and Interest Receivable | |
Note 5 - Notes and Interest Receivable | Note 5 – Notes and Interest Receivable On June 8, 2021 we lent Akumen Industries Corp. (“Akumen”) $150,000 at with interest at 5% (10% penalty rate) for seven days in exchange for a promise to provide $3 million in equity capital. As of the balance sheet date, repayment of this note has been delayed. Since the note is overdue, we have reserved the entirety of the balance of $150,760 to bad debt expense. |
Capital
Capital | 9 Months Ended |
Sep. 30, 2021 | |
Capital | |
Note 6 - Capital | Note 6 – Capital During the year ended December 31, 2020 we issued 616,014,358 common shares. The explanation of the nature of those issuances can be found in Note 4 of the financial statements included in our Form 10-K filed with the Securities and Exchange Commission as of December 31, 2020 and filed on March 30, 2021 and herewith included by reference. During the nine months ended September 30, 2021, we issued: · 220,978,521 shares in conversion of $910,000 of principal and $38,446 of interest. We realized no gain or loss on the conversion. · 198,125,000 shares to pay contractors for marketing campaigns. As a result, we charged general and administrative expenses with $1,981,125. · 5,500,000 to a creditor as an enticement to enter into two convertible promissory notes in the amount of $520,000 each, for a total of $1,040,000. The shares were valued at $52,525 and are accounted for as a debt discount. · 15,000,000 to a contractor for marketing campaigns. We valued the shares at $130,500 and included that sum in general and administrative expenses. · 1,000,000 shares to Frank Antenori for signing on to our Board of Directors. We valued the shares at $6,900 and included it in general and administrative expenses. Mr. Antenori will be compensated 1,000,000 per quarter as long as he serves on the Board. During the nine months ended September 30, 2021, we had the following stock payable transactions: · We accrued $220,050 to a system development contractor per our contract with them. The explanation of the balances resulting from stock payable transactions during the year ended December 31, 2020 can be found in Note 4 of the financial statements included in our Form 10-K filed with the Securities and Exchange Commission as of December 31, 2020 and filed on March 30, 2021 and herewith included by reference. Preferred Stock In September, 2020 we issued 290,397 Series F Preferred shares in retirement of twelve convertible promissory notes to Arknet. In so doing, we reduced our liability to them in the amount of $610,500 of principal and $14,735 in interest. Each share of Series F preferred is convertible into 1,000 shares of common stock. This series of preferred shares have the following rights, limitations, restrictions and privileges: · They are not entitled to dividends unless all other classes of dividends have been paid, · They are entitled to no liquidation rights, and · They have no voting rights. No other changes occurred to the balances of our preferred stock for the nine months ended September 30, 2021. Imputed Interest Certain of our promissory notes bear no nominal interest. We therefore imputed interest expense and increased Additional Paid in Capital. For the nine months ended September 30, 2021, we imputed $8,048 of such interest. For the same period in 2020, we imputed $10,518. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Note 7 - Debt | Note 7 – Debt Loans from related parties At September 30, 2021 we owed $103,539 in related-party loans consisting of $98,539 to the 22 nd Convertible notes payable – related party, net Short-term portion - At September 30, 2021, we owed $70,942 of related-party notes which are convertible into common stock, of which $69,973 is owed to David LaMountain, Our Chief Operating Officer and $969 to Dr. Jon Leonard, our Chief Executive Officer. As of September 30, 2021, all discounts on this items had been fully amortized. During the nine months ended September 30, 2021, we amortized $26,316 of discounts to interest expense from this category. Long-term portion - Additionally at September 30, 2021, we owed $40,000 to ArKnet. Unamortized discounts at September 30, 2021 was $28,632. During the nine months ended September 30, 2021, we amortized $4,034 from this category. Short-term convertible notes payable – third-party, net Unpaid principal on short-term convertible notes payable at September 30, 2021 was $2,049,390, net of discounts of $664,590 (or $1,384,800). We have three convertible promissory notes which are in default at June 30, 2021 totaling $32,000. There are no discount balances on these notes. During the nine months ended September 30, we issued 220,978,521 shares to convert five outstanding convertible notes. We reduced unpaid principal by $910,000 and unpaid interest by $38,446. There was no gain or loss related to the conversions. During the nine months ended September 30, 2021, we issued the following promissory notes: · we issued a promissory note in the amount of $220,000, receiving proceeds of $208,000. The note matures February 17, 2022 and bears interest at 8% (24% default rate). They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. · we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000 with a discount of $136,844. The note matures September 3, 2022 and bears interest at 8%. They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount of $344,816 upon issuance consisting of 28,875 for the fair value of the 2,750,000 shares issued to entice the lender, an original issue discount of $20,000 and the initial derivative of $295,941. We amortized $60,720 of this discount to interest expense during the nine months ended September 30, 2021. · we issued a convertible note to a software developer to convert $247,426 of outstanding accounts payable into a convertible note. The initial derivative associated with this instrument was $109,247 of which we have amortized $36,332 as of September 30, 2021. The note is convertible at $0.008265 and is due September 3, 2022. · we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000. The note matures August 17, 2022 and bears interest at 8%. They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount of $338,842 upon issuance consisting of 23,650 for the fair value of the 2,750,000 shares issued to entice the lender, an original issue discount of $20,000 and the initial derivative of $295,192. We amortized $31,263 of this discount to interest expense during the nine months ended September 30, 2021. During the nine months ended September 30, 2021, we amortized $753,672 to interest expense from this category. Short-term notes payable At September 30, 2021, we owed AU$22,000 (US$15,902) to three Australian investors on promissory notes which contain no conversion privileges. Long-term convertible notes payable, net There are no long-term convertible notes payable as all convertible notes have been reclassified either to short-term or in-default. Imputed Interest Certain of our promissory notes bear no nominal interest. We therefore imputed interest expense and increased Additional Paid in Capital. For the nine months ended September 30, 2021, we imputed $8,048 of such interest. Of this amount, $177 is imputed on amounts owed to Jon Leonard, our Chief Executive Officer, and $7,871 was imputed on twenty eight outstanding loans in Australia. Derivative liabilities The above-referenced convertible promissory notes were analyzed in accordance with EITF 07–05 and ASC 815. EITF 07–5, which is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. The objective of EITF 07–5 is to provide guidance for determining whether an equity–linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception under Paragraph 11(a) of ASC 815 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non–derivative instrument that falls within the scope of EITF 00–19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non–derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a two–step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions. Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (“FASB”) as “the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion”. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59–60. The Company issued certain fixed-rate convertible Subscription Notes from 2015 through September 30, 2021 in the United States and Australia These convertible notes have become tainted (“The Tainted Notes”) as a result of the issuance of convertible promissory notes issued in the United States since there is a possibility (however remote) that the Company would not have enough shares in the Treasury to satisfy all possible conversions. The Convertible Note derivatives were valued as of issuance; conversion; redemption/settlement; and each quarterly period from March 31, 2018 through September 30, 2021. The following assumptions were used for the valuation of the derivative liability related to the Notes: · The stock price of $0.001290 at 06/30/21 decreased to $0.0060 by 09/30/21 and would fluctuate with the Company projected volatility. · The notes convert with variable conversion prices based on the percentages of the low or average trades or bids over 20 to 25 trading days. · The effective discounts rates estimated throughout the periods are 37%. · The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default. · The projected annual volatility for each valuation period was based on the historic volatility of the company are 140% – 166% (annualized over the term remaining for each valuation). · An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20%. · The Holders would redeem the notes (with penalties up to 50% depending on the date and full–partial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%. · The Holder would automatically convert the note at the maximum of 2 times the conversion price or the stock price on the date of valuation. · The Holder would automatically convert the note based on ownership or trading volume limitations. We recorded the initial derivative as both a derivative liability and a debt discount (or initial reduction in carrying value of the debt). We then amortized the debt discounts using the Effective Interest Method which recognizes the cost of borrowing at a constant interest rate throughout the contractual term of the obligation. The effective interest rates on instruments issued during the nine months ended September 30, 2021 ranged from 49% to 132%. At each reporting date, we determine the fair market value for each derivative associated with each of the above instruments. Changes in outstanding derivative liabilities are as follows: Balance, December 31, 2020 $ 1,479,530 Changes due to new issuances 857,890 Changes due to extinguishments (570,738 ) Changes due to adjustment to fair value 201,952 Balance, September 30, 2021 $ 1,968,634 |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2021 | |
Litigation | |
Note 8 - Litigation | Note 8 – Litigation McRae Lawsuit On October 10, 2017, the Company received a letter from the lawyer of Eric L McRae (“McRae”) a person whose association with the Company was terminated by the Company on June 16, 2017. The letter demanded payment of 850,000,000 unrestricted Tautachrome common shares to forestall his filing a laundry list of complaints in a variety of government agencies including with the US District Court in Kansas with complaints of contract breaches and fraud by silence, with the EEOC with complaints of termination by racial discrimination, with the OSHA with complains of termination for reasons of his being a whistleblower under Sarbanes-Oxley provisions, and with various regulatory agencies with accusations of an unspecified nature. This history of the legal proceedings in this case are described in Note 7 to the financial statements filed with Form 10-K on March 30, 2020 and are herewith included by reference. On May 5, 2020 the Company settled with the McRae estate for 50million common shares. We valued the shares at the settlement date (May 5, 2020 on which date our closing price was $0.0029) and recorded a Gain on Litigation in the amount of $105,000, a reduction of the amount of the liability to $145,000 as a result of that revaluation. We issued the shares on May 18, 2020. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
Note 9 - Income Taxes | Note 9 – Income Taxes Deferred income taxes reflect the tax consequences on future years of differences between the tax bases: 09/30/21 12/31/20 Net operating loss carry-forward 7,496,651 6,114,681 Deferred tax asset $ 1,574,297 $ 1,284,083 Valuation allowance (1,574,297 ) (1,284,083 ) Net future income taxes $ - $ - In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has provided for a valuation allowance on all of its losses as there is no assurance that future tax benefits will be realized. Our tax loss carry-forwards will begin to expire in 2030. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events | |
Note 10 - Subsequent Events | Note 10 – Subsequent Events Subsequent events have been evaluated through the date of this report. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Consolidated Financial Statements | In the opinion of management, the accompanying financial statements includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ended September 30, 2021. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our audited financial statements for the period ended December 31, 2020, as reported in Form 10-K filed with the SEC on March 30, 2021. 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) valid transactions are recorded; and 3) transactions are recorded in the proper 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. |
Principles of Consolidation | Our consolidated financial statements include the accounts of Tautachrome, Inc. and all majority-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. |
Long-Lived Assets, Intangible Assets and Impairment | The Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. |
Revenue Recognition | The Company sells credits in exchange for cash. These credits can be redeemed for ARks which are geo-location objects downloadable into various digital devices. We recognize revenues once the customer has redeemed previously-purchased credits in exchange for ARks. Until that point, any cash received in exchange for credits is accounted for as liabilities. The company recognizes revenues in accordance with ASC 606 – Revenue From Contracts with Customers Step 1: Identify the contract with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation |
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 revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Net Loss Per Share | Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Changes in outstanding derivative liabilities | Balance, December 31, 2020 $ 1,479,530 Changes due to new issuances 857,890 Changes due to extinguishments (570,738 ) Changes due to adjustment to fair value 201,952 Balance, September 30, 2021 $ 1,968,634 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
Summary of deferred income taxes | 09/30/21 12/31/20 Net operating loss carry-forward 7,496,651 6,114,681 Deferred tax asset $ 1,574,297 $ 1,284,083 Valuation allowance (1,574,297 ) (1,284,083 ) Net future income taxes $ - $ - |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Jul. 11, 2019 | |
Related party accounts payable | $ 674,399 | $ 510,313 | |
Due to related party | 103,539 | 104,762 | |
Additional paid in capital | $ 15,120,964 | 11,427,087 | |
CEO and Board Chairman [Member] | |||
Additional paid in capital | $ 13,750 | ||
Former Chief Executive Officer [Member] | |||
Interest payment default description | According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time | ||
Unpaid interest | $ 33,965 | ||
Unpaid principal | 99,708 | ||
Interest payable | 30,553 | ||
Accrued Interest | 3,674 | ||
Outstanding principal amount | $ 99,762 | ||
Akumen Industries Corp [Member] | |||
Company expenses | $ 6,000 | ||
Conversion of share price | $ 1 | ||
Imputed interest expenses | $ 177 | ||
Repayment | 21,548 | ||
Due to related party | $ 967 |
Notes and Interest Receivable (
Notes and Interest Receivable (Details Narrative) - Akumen Industries Corp [Member] | Jun. 08, 2021USD ($) |
Equity capital exchange descriptions | we lent Akumen Industries Corp. (“Akumen”) $150,000 at with interest at 5% (10% penalty rate) for seven days in exchange for a promise to provide $3 million in equity capital |
Default penalty rate | 10.00% |
Interest rate | 5.00% |
Net amount | $ 150,000 |
Bad debt expense | $ 150,760 |
Capital (Details Narrative)
Capital (Details Narrative) - USD ($) | Jun. 10, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Imputed interest | $ 8,048 | $ 10,518 | ||||
Total shares for marketing campaign | 15,000,000 | |||||
Debt conversion converted instrument shares issued | 247,426 | 616,014,358 | ||||
Total shares for marketing campaign value | $ 130,500 | |||||
General and administrative expenses | $ 2,302,093 | $ 153,285 | $ 2,648,982 | $ 445,053 | ||
Convertible promissory note [Member] | ||||||
Total shares for marketing campaign | 198,125,000 | |||||
Debt conversion converted instrument shares issued | 220,978,521 | |||||
Debt conversion, converted instrument, principal | $ 910,000 | |||||
Convertible promissory note, Total | 1,040,000 | |||||
Reduction on debt conversion converted instrument, Accrued interest | 38,446 | |||||
General and administrative expenses | $ 1,981,125 | |||||
Shares issued to creditor | 5,500,000 | |||||
Debt discount amount | $ 52,525 | $ 52,525 | ||||
Accrued amount for system development | 20,050 | |||||
Accrued amount for marketing activities | $ 130,500 | |||||
Issuing shares for internet advertising company | 198,125,000 | |||||
Arknet [Member] | Series F Preferred Shares [Member] | ||||||
Debt conversion converted instrument shares issued | 1,000 | |||||
Accrued interest | $ 14,735 | $ 14,735 | ||||
Debt conversion, converted instrument, principal | $ 610,500 | |||||
Common stock shares issued for cash, shares | 290,397 | |||||
Frank Antenori [Member] | ||||||
Total shares for marketing campaign | 1,000,000 | |||||
Total shares for marketing campaign value | $ 6,900 | |||||
Compensated per quarter, shares | 1,000,000 |
Debt (Details)
Debt (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Debt | |
Opening Balance | $ 1,479,530 |
Changes due to new issuances | 857,890 |
Changes due to extinguishments | (570,738) |
Changes due to adjustment to fair value | 201,952 |
Ending balance | $ 1,968,634 |
Debt (Details Narrative)
Debt (Details Narrative) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)integer$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)shares | Jun. 30, 2021USD ($)$ / shares | |
Loans from related parties | $ 103,539 | $ 104,762 | ||
Convertible related party notes | $ 70,942 | |||
Debt conversion converted instrument shares issued | shares | 247,426 | 616,014,358 | ||
Unamortized debt discounts | $ 36,332 | |||
Amortized discount | 26,316 | |||
Amortization of interest expense | $ 753,672 | |||
Interest rate | 132.00% | |||
Assumption of stock price per shares | $ / shares | $ 0.008265 | |||
Convertible notes payable, default | $ 32,000 | $ 32,000 | $ 32,000 | |
Imputed interest | 8,048 | $ 10,518 | $ 13,678 | |
Discounts on notes | $ 962,415 | 617,400 | ||
Convertible Notes Payable [Member] | ||||
Debt conversion converted instrument shares issued | shares | 220,978,521 | |||
Net of discount | $ 664,590 | $ 1,384,800 | ||
Unpaid principal | 2,049,390 | |||
Reduction on debt conversion converted instrument, Accrued interest | 38,446 | |||
Debt conversion unpaid principal, reduction | 910,000 | |||
Imputed interest | $ 8,048 | |||
Promissory Note [Member] | ||||
Interest rate | 8.00% | |||
Debt instrument, principal amount | $ 220,000 | |||
Proceeds from promissory note | $ 208,000 | |||
Debt instrument, maturity date, description | February 17, 2022 | |||
Closing bid price percentage | 63.00% | |||
Conversion price description | They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount | |||
Default interest rate | 24.00% | |||
Convertible Note Derivatives [Member] | ||||
Interest rate | 49.00% | |||
Default interest rate, description | An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20% | |||
Notes redemption, description | The Holders would redeem the notes (with penalties up to 50% depending on the date and full–partial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%. | |||
Convertible Note Derivatives [Member] | Minimum [Member] | ||||
Assumption of stock price per shares | $ / shares | $ 0.0060 | $ 0.001290 | ||
Notes conversion trading days | integer | 20 | |||
Estimated effective discount rate | 37.00% | |||
Volatility rate | 140.00% | |||
Convertible Note Derivatives [Member] | Maximum [Member] | ||||
Notes conversion trading days | integer | 25 | |||
Volatility rate | 166.00% | |||
Promissory Note 1 [Member] | ||||
Debt conversion converted instrument shares issued | shares | 2,750,000 | |||
Amortized discount | $ 31,263 | |||
Debt instrument, principal amount | 520,000 | |||
Proceeds from promissory note | $ 500,000 | |||
Closing bid price percentage | 63.00% | |||
Discounts on notes | $ 338,842 | |||
Issusance of shares | shares | 23,650 | |||
Iinitial derivative | $ 295,192 | |||
Original issue discount | 20,000 | |||
Three Australian Investors [Member] | Promissory Notes [Member] | ||||
Loans from related parties | 16,489 | |||
ArKnet [Member] | ||||
Unamortized debt discounts | 28,632 | |||
Amortized discount | 4,034 | |||
Owed amount | 40,000 | |||
Loans in Australia [Member] | ||||
Imputed interest | 7,871 | |||
Jon Leonard [Member] | ||||
Imputed interest | $ 177 | |||
Lender [Member] | promissory Note [Member] | ||||
Debt conversion converted instrument shares issued | shares | 2,750,000 | |||
Amortized discount | $ 60,720 | |||
Interest rate | 8.00% | |||
Original issue discount | $ 136,844 | |||
Debt instrument, principal amount | 520,000 | |||
Proceeds from promissory note | $ 500,000 | |||
Debt instrument, maturity date, description | September 3, 2022 | |||
Closing bid price percentage | 63.00% | |||
Discounts on notes | $ 344,816 | |||
Issusance of shares | shares | 28,875 | |||
Iinitial derivative | $ 295,941 | |||
David LaMountain [Member] | Convertible note payable, related party [Member] | ||||
Owed amount | 69,973 | |||
Dr. Leonard [Member] | Convertible note payable, related party [Member] | ||||
Other amount | 969 | |||
Twenty Second Trust [Member] | ||||
Due to related party | 98,539 | |||
Board Member[Member] | ||||
Advance loans | $ 5,000 |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | 1 Months Ended | ||
May 18, 2020 | May 05, 2020 | Oct. 10, 2017 | |
Decrease in litigation liability | $ 145,000 | ||
McRae [Member] | |||
Shares issued to settle legal claim | 50,000,000 | ||
Gain or (loss) on litigation | $ 105,000 | ||
Loss contingency damages sought by related party, restricted shares | 850,000,000 | ||
Closing price of shares | $ 0.0029 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Income Taxes (Details) | ||
Net operating loss carry-forward | $ 7,496,651 | $ 6,114,681 |
Deferred tax asset | 1,574,297 | 1,284,083 |
Valuation allowance | (1,574,297) | (1,284,083) |
Net future income taxes | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
Operating loss carry-forwards expiration year | begin to expire in 2030 |