Tribus Enterprises 10-Q 2019 Q3 Quarterly report

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 December 31, 2018
☐	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 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, or a smaller reporting company.

Large accelerated filer     ☐	Accelerated filer	☐
Non-accelerated filer       ☐	Smaller reporting company	☒
	Emerging Growth 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. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

As of February 3, 2019, 2018, the issuer had 7,184,858 shares of common stock issued and outstanding.

TABLE OF CONTENTS Page

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	9
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	12
Item 4.	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	12
Item 1A.	Risk Factors	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits	13

ITEM 1.  FINANCIAL STATEMENTS

TRIBUS ENTERPRISES, INC.

UNADUITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2018

Condensed Consolidated Balance Sheets	1
Unaudited Condensed Consolidated Statements of Operations	2
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	5 - 8

TRIBUS ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2018			March 31, 2018
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	119,084		$	913,958
Prepaid inventory		382,000			-
Prepaid expenses		448			-
Total current assets		501,532			913,958
Deposits		33,337			2,440
Equipment, net of accumulated depreciation of $144,931 and $13,360, respectively		1,137,953			48,444
Total assets	$	1,672,822		$	964,842
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	40,728		$	32,936
Interest payable		14,770			-
Accrued rent		7,971			7,827
Deferred revenue		814			-
Capital lease, current (Note 8)		161,143			-
Loans payable, current (Note 7)		47,184			6,488
Total current liabilities		272,610			47,251
Capital lease, net of current portion (Note 8		723,402			-
Loans payable, net of current portion (Note 7)		15,679			20,545
Total liabilities		1,011,691			67,796
Commitments and contingencies		-			-
Stockholders' equity
Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 19,999,998 issued and outstanding at December 31, 2018 and March 31, 2018, respectively		20,000			20,000
Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; 1,365,625 and 1,007,500 issued or outstanding at December 31, 2018 and March 31, 2018, respectively		1,366			1,008
Common stock, $0.001 par value; 100,000,000 authorized; 7,184,858 and 6,903,658 issued and outstanding at December 31, 2018 and March 31, 2018, respectively		7,185			6,904
Additional paid in capital		1,818,695			1,462,533
Accumulated deficit		(1,186,115	)		(593,399	)
Total stockholders' equity		661,131			897,046
Total liabilities and stockholders' equity	$	1,672,822		$	964,842

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLDIATED STATEMENTS OF OPERATIONS

	Three months ended December 31,						Nine months ended December 31,
	2018			2017			2018			2017
Operating expenses
Employee costs	$	60,729		$	62,657		$	182,688		$	167,007
Professional fees		27,012			11,135			74,115			25,177
General and administrative		21,043			38,471			85,110			136,945
Facilities		12,884			12,458			62,881			33,074
Research and development		-			544			1,140			8,455
Depreciation expense		50,117			3,257			129,679			9,084
Total operating expenses		171,785			128,522			535,613			379,742
Other income (expense)
Other income		10,640			-			10,640			-
Interest expense		(43,549	)					(67,743	)
Total other expense		(32,909	)		-			(93,092	)		-
Net and comprehensive loss	$	(204,694	)	$	(128,522	)	$	(592,716	)	$	(379,742	)
Net loss per share, basic and diluted	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.07	)
Weighted average shares outstanding, basic and diluted		7,146,988			5,575,354			7,065,006			5,552,931

The accompanying notes are an integral part of these condensed consolidated financial statements.

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TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

	Series A Convertible Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid In		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, March 31, 2018		19,999,998	$	20,000		1,007,500	$	1,008		6,903,658	$	6,904	$	1,462,533	$	(593,399	)	$	897,046
Preferred stock issued for cash		-		-		206,875		207		-		-		165,293		-			165,500
Common stock issued for cash		-		-		-		-		155,200		155		38,646		-			38,801
Net loss, three months ended June 30, 2018		-		-		-		-		-		-		-		(172,651	)		(172,651	)
Balance, June 30, 2018		19,999,998		20,000		1,214,375		1,215		7,058,858		7,059		1,666,472		(766,050	)		928,696
Common stock issued for cash		-		-		-		-		8,000		8		1,992		-			2,000
Net loss, three months ended September 30, 2018		-		-		-		-		-		-		-		(215,371	)		(215,371	)
Balance, September 30, 2018		19,999,998		20,000		1,214,375		1,215		7,066,858		7,067		1,668,464		(981,421	)		715,325
Preferred stock issued for cash		-		-		151,250		151		-		-		120,849		-			121,000
Common stock issued for cash		-		-		-		-		118,000		118		29,382		-			29,500
Net loss, three months ended December 31, 2018		-		-		-		-		-		-		-		(204,694	)		(204,694	)
Balance, December 31, 2018		19,999,998	$	20,000		1,365,625	$	1,366		7,184,858	$	7,185	$	1,818,695	$	(1,186,115	)	$	661,131

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended December 31,
	2018			2017
Cash flows from operating activities
Net loss	$	(592,716	)	$	(379,742	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		131,571			9,084
Changes in operating assets and liabilities:
Prepaid expenses		(448	)		2,885
Prepaid inventory		(382,000	)		-
Deposits		(30,897	)		(200	)
Accounts payable and accrued liabilities		7,792			27,832
Interest payable		14,770			-
Deferred rent		144			7,438
Deferred revenue		814			-
Net cash used in operating activities		(850,970	)		(332,703	)
Cash flows from investing activities
Purchase of equipment		(58,840	)		(13,481	)
Net cash used in investing activities		(58,840	)		(13,481	)
Cash flows from financing activities
Repayments of capital leases		(277,695	)		-
Proceeds from loans payable		60,000			-
Repayments of loans payable		(24,170	)		(3,784	)
Proceeds from sale of common stock		70,300			155,000
Proceeds from the sale of series B preferred stock		286,501			200,000
Net cash provided by financing activities		114,936			351,216
Cash, beginning of period		913,958			298,942
Net change in cash		(794,874	)		5,032
Cash, end of period	$	119,084		$	303,974
Supplemental cash flow information
Cash paid for interest	$	28,779		$	-
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities
Capital leases entered into for purchase of equipment	$	1,162,240		$	-
Loan entered into for purchase of vehicle	$	-		$	32,439

The accompanying notes are an integral part of these condensed consolidated financial statements.

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TRIBUS ENTERPRISES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2018

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 periods ended December 31, 2018 and for all periods presented herein, have been made.

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, 2018 audited financial statements. The results of operations for the periods ended December 31, 2018 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.

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 Company'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.

5

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 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. There is substantial doubt as to the Company’s ability to continue as a going concern. 

NOTE 4 – PREPAID INVENTORY

During the nine months ended December 31, 2018, the Company made total advances to a third-party manufacturer of $382,000 in exchange for a discount from the negotiated purchase price of future inventory units. The Company will receive a discount of approximately $2.46 per unit from the originally agreed upon purchase price on the first 154,440 individual units of inventory manufactured when purchases begin.

NOTE 5 – 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 10 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.

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 at 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.

Issued

During the nine months ended December 31, 2018, the Company accepted stock subscriptions to issue a total of 281,200 shares of common stock at $0.25 per share resulting in total cash proceeds of $70,300. Of this total, one subscription for 4,000 shares of common stock for cash proceeds of $1,000 was from a related party.

During the nine months ended December 31, 2018, the Company issued a total of 358,125 shares of Series B Convertible Preferred Stock for total cash proceeds of $286,501. Of this total, one subscription for 151,250 shares of Series Be Convertible Preferred Stock for cash proceeds of $121,000 was from a related party.

There were 19,999,998; 1,365,625 and 7,184,858 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of December 31, 2018.

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, 2018.

6

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2018

NOTE 6 – 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,
2019	$	11,862
2020		48,757
2021		50,207
2022		51,725
2023		4,321
Total	$	166,872

On November 5, 2018, the Company entered into an agreement to sublet a portion of its office space on a month to month basis. The sublease will continue on a month to month basis until the sublessor provides notice to execute a long term lease or will have the option to assume the Company’s lease. The sublease requires monthly rental payments of $5,700 with the first month being prorated accordingly. The Company records sublease payments received as other income in the statement of operations resulting in other income of $10,640 being recognized during the three and nine months ended December 31, 2018.

NOTE 7 – LOANS PAYABLE

During the prior 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 at 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 $22,167 and $27,033 due as of December 31, 2018 and March 31, 2018 of which $6,488 and $6,488 was current and $15,679 and $20,545 was long term, respectively.

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 $40,696 and $0 of principal due as of December 31, 2018 and March 31, 2018, respectively.

NOTE 8 – CAPITAL LEASES PAYABLE

The Company accounts for capital leases in accordance with ACS 840-30. During the nine months ended December 31, 2018, the Company entered into seven separate long-term leases for equipment that contain a $1 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 $34,171.

As of December 31, 2018, there was a total of $1,368,022 of future payments due through June 2023 of which $483,477 are financing charges leaving a total principal balance of $884,545. Of the total principal balance due, $161,143 was current and $723,402 was long term as of December 31, 2018.

7

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2018

NOTE 8 – CAPITAL LEASES PAYABLE (CONTINUED)

Future annual payments required under the capital leases through termination are as follows:

	Principal		Interest		Total
Year ended March 31,
2019	$	20,058	$	72,436	$	92,494
2020		200,911		213,456		414,367
2021		288,523		140,940		429,463
2022		265,396		48,502		313,898
2023		104,397		8,047		112,444
2024		5,260		96		5,356
Total	$	884,545	$	483,477	$	1,368,022

NOTE 9 – SUBSEQUENT EVENTS

On January 2, 2019, the Company made an additional deposit on inventory of $20,000. The deposit entitles the Company to an additional discount of $0.13 per inventory unit for the first 154,440 units purchased. The total discount on the first 154,440 units, including this prepaid amount, is approximately $2.59 per unit.

8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "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'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'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.

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "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's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company'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's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.

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.

9

Tribus has produced several wrenches already and is setting up the production line for full production this year.

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.

•    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 to ratchet, 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 has at 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 in the 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.

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.

10

Liquidity and Capital Resources

As of December 31, 2018, we had $119,084 in cash, total current assets of $501,532 and total current liabilities of $272,610. Current liabilities consisted mainly of $40,728 of accounts payable, $7,971 of accrued rent, a capital lease of $ 161,143 and a current loan payable of $47,184.

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 $32,936 of accounts payable, $7,827 of accrued rent and a current loan payable of $6,488.

Net cash used in operating activities was $850,970 compared to $332,703 for the nine months ended December 30, 2018 and 2017 respectively.

Net cash used in investing activities was $58,840 compared to $13,481 the nine months ended December 31, 2018 and 2017 respectively.

Net cash provided by financing activities was $114,936 and $351,216 for the nine months ended December 31, 2018 and 2017 respectively.

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 Note 3 to the financial statements for additional information.

Results of Operations

We did not generate revenues during the three or nine months ended December 31, 2018 or 2017. Total operating expenses were $171,785 during the three months ended December 31, 2018 and $128,522 for the three months ended December 31, 2017 due to an increase in the company’s operations and preparation therefore. Net loss for the three months ended December 31, 2018 was $204,694 compared to $128,522 for the same period in 2017 due to an increase in the company’s operations and preparation therefore.

Total operating expenses were $535,613 during the nine months ended December 31, 2018 and $379,742 for the nine months ended December 31, 2017 due to an increase in the company’s operations and preparation therefore. Net loss for the nine months ended December 31, 2018 was $592,716 compared to $379,742 for the same period in 2017 due to an increase in the company’s operations and preparation therefore.

CRITICAL ACCOUNTING POLICIES

In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 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'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:going concern, prepaid inventory and capital leases payable.. 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.

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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 December 31, 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 December 31, 2018.

The Company’s weaknesses include lack of duplication in reviewing accounting do to the small nature of the Company and the lack of an audit committee.

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 third 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 10K for the period ended March 31, 2018 filed June 29, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended December 31, 2018, the Company issued a total of 358,125 shares of Series B Convertible Preferred Stock for total cash proceeds of $286,501. Of this total, one subscription for 151,250 shares of Series Be Convertible Preferred Stock for cash proceeds of $121,000 was from a related party.

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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	Description
31.1	Certification of Chief Executive 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.
31.2	Certification 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.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS** XBRL Instance

101.SCH** XBRL Taxonomy Extension Schema

101.CAL** XBRL Taxonomy Extension Calculation

101.DEF** XBRL Taxonomy Extension Definition

101.LAB** XBRL Taxonomy Extension Labels

101.PRE** XBRL Taxonomy Extension Presentation

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(b) REPORTS ON FORM 8-K

None.

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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: February 5, 2019

Tribus Enterprises, Inc.

Registrant

By: /s/ Kendall Bertagnole                     

Kendall Bertagnole

Chief Executive Officer

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