Tribus Enterprises 10-Q/A 2020 Q1 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

☒	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2019
☐	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

Securities registered under Section 12(b) of the Act: None

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 [x]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐	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 [x]

As of August 19, 2019, the issuer had 7,184,858 shares of common stock issued and outstanding.

EXPLANATORY NOTE

This amendment is being filed to include the XBRL not included with the original filing.

	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	11
Item 4.	Controls and Procedures	11
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	11
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
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

June 30, 2019

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

	June 30, 2019			March 31, 2019
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	48,115		$	33,970
Inventory		6,907			-
Deposits, current		402,000			402,000
Prepaid expenses		11			20,011
Total current assets		457,033			455,981
Deposits		41,337			41,337
Right of use asset		192,496			-
Equipment, net of accumulated depreciation of $243,728 and $194,226, respectively		1,341,035			1,061,675
Total assets	$	2,031,901		$	1,558,993
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	175,159		$	108,249
Interest payable		60,389			23,612
Accrued rent		-			8,027
Deferred revenue		814			814
Operating lease liability, current		55,933			-
Capital lease, current (Note 7)		288,570			214,529
Loans payable, current (Note 6)		346,913			82,449
Total current liabilities		927,778			437,680
Operating lease liability, net of current portion		141,979			-
Capital lease, net of current portion (Note 7)		597,183			667,053
Loans payable, net of current portion (Note 6)		29,656			14,057
Total liabilities		1,696,596			1,118,790
Commitments and contingencies		-			-
Stockholders' equity
Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 19,999,998 issued and outstanding at June 30, 2019 and March 31, 2019, respectively		20,000			20,000
Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; 1,677,500 and 1,365,625 issued and outstanding at June 30, 2019 and March 31, 2019, respectively		1,678			1,366
Common stock, $0.001 par value; 100,000,000 authorized; 7,188,858 and 7,184,858 issued and outstanding at June 30, 2019 and March 31, 2019, respectively		7,189			7,185
Additional paid in capital		2,068,878			1,818,694
Accumulated deficit		(1,762,440	)		(1,407,042	)
Total stockholders' equity		335,305			440,203
Total liabilities and stockholders' equity	$	2,031,901		$	1,558,993

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

1

TRIBUS ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months ended June 30,
	2019			2018
Operating expenses
Employee costs	$	58,445		$	62,077
Professional fees		60,020			31,291
General and administrative		88,574			18,867
Facilities		19,018			20,845
Research and development		9,765			1,140
Depreciation expense		65,728			33,907
Total operating expenses		301,550			168,127
Other income (expense)
Other income		9,328			-
Loss on sale of equipment		(1,752	)		-
Interest expense		(61,424	)		(4,524	)
Total other income (expense)		(53,848	)		(4,524	)
Net and comprehensive loss	$	(355,398	)	$	(172,651	)
Net loss per share, basic and diluted	$	(0.05	)	$	(0.02	)
Weighted average shares outstanding, basic and diluted		7,185,298			6,986,977

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

2

TRIBUS ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

	Series A Convertible Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		In 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
Series B preferred stock issued for cash		-		-		206,875		206		-		-		165,294		-			165,500
Common stock issued for cash		-		-		-		-		155,200		155		38,645		-			38,800
Net loss, three months ended June 30, 2018		-		-		-		-		-		-		-		(172,651	)		(172,651	)
Balance, June 30, 2018		19,999,998	$	20,000		1,214,375	$	1,214		7,058,858	$	7,059	$	1,666,472	$	(766,050	)	$	928,695
Balance, March 31, 2019		19,999,998		20,000		1,365,625		1,366		7,184,858		7,185		1,818,694		(1,407,042	)		440,203
Series B preferred stock issued for cash		-		-		311,875		312		-		-		249,188		-			249,500
Common stock issued for cash		-		-		-		-		4,000		4		996		-			1,000
Net loss, three months ended June 30, 2019		-		-		-		-		-		-		-		(355,398	)		(355,398	)
Balance, June 30, 2019		19,999,998	$	20,000		1,677,500	$	1,678		7,188,858	$	7,189	$	2,068,878	$	(1,762,440	)	$	335,305

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

3

TRIBUS ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended June 30,
	2019			2018
Cash flows from operating activities
Net loss	$	(355,398	)	$	(172,651	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		75,010			33,907
Loss on sale of equipment		1,751			-
Changes in operating assets and liabilities:
Prepaid expenses		20,000			(2,454	)
Deposits		-			(280,897	)
Accounts payable and accrued liabilities		66,910			(2,995	)
Interest payable		43,438			-
Deferred rent		(2,448	)		33
Inventory		(6,907	)		-
Net cash used in operating activities		(157,644	)		(425,057	)
Cash flows from investing activities
Purchase of equipment		(30,918	)		-
Net cash used in investing activities		(30,918	)		-
Cash flows from financing activities
Repayments of capital leases		(2,490	)		(195,880	)
Payments on operating lease liability		(9,447	)		-
Repayments of loans payable		(35,856	)		-
Proceeds from sale of common stock		1,000			38,800
Proceeds from the sale of series B preferred stock		249,500			165,500
Net cash provided by financing activities		202,707			8,420
Cash, beginning of period		33,970			913,958
Net change in cash		14,145			(416,637	)
Cash, end of period	$	48,115		$	497,321
Supplemental cash flow information
Cash paid for interest	$	22,912		$	4,156
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities
Capital leases entered into for purchase of equipment	$	-		$	960,340
Loan entered into for purchase of fixed assets	$	335,383		$	-

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

4

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2019

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 June 30, 2019 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, 2019 audited financial statements. The results of operations for the periods ended June 30, 2019 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 which raises substantial doubt regarding the Company’s ability 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

June 30, 2019

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 – CURRENT DEPOSITS

During the year ended March 31, 2019, the Company made total advances to a third-party manufacturer of $402,000 in exchange for a discount from the negotiated purchase price of future inventory units. The deposits allowed the Company to receive a discount of approximately $2.46 per unit from the originally agreed upon purchase price on the first 163,415 individual units of inventory manufactured when purchases begin. 

During the three months ended June 30, 2019, the Company entered into a legal dispute with the third-party manufacturer. Among other claims, the Company is seeking a return of the deposits made totaling $402,000. While the dispute is unresolved as of the date the financial statements were issued, the Company, through discussions with outside counsel, believes the deposits totaling $402,000 are likely to be returned to the Company. As such, no reserve against the deposits has been recorded as of June 30, 2019 or March 31, 2019.

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 three months ended June 30, 2019, the Company accepted stock subscriptions to issue a total of 4,000 shares of common stock at $0.25 per share resulting in total cash proceeds of $1,000.

During the three months ended June 30, 2019, the Company issued a total of 311,875 shares of Series B Convertible Preferred Stock for total cash proceeds of $249,500.

There were 19,999,998; 1,677,500 and 7,188,858 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of June 30, 2019.

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 March 31, 2019.

6

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

June 30, 2019

NOTE 6 – OPERATING LEASES

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. Additionally, on March 12, 2019, the Company entered into an additional lease for the rent of warehouse space that terminates on March 31, 2022.

On April 1, 2019, the Company recorded a right of use asset and operating lease liability totaling $207,359 using an imputed interest rate of 25% on its operating leases, equal to the approximate weighted average interest rate imputed on the Company’s existing capital leases. During the three months ended June 30, 2019, the Company made total principal payments on operating leases of $9,447. There was a total operating lease liability of $197,912 as of June 30, 2019 of which $55,933 was current and $141,979 was long term.

The leases require future minimum payments as shown below:

Year ending March 31,
2020	$	72,657
2021		98,207
2022		99,725
2023		4,321
Total payments		274,910
Less: imputed interest		(76,998	)
Operating lease liability, total	$	197,912

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 $9,000 being recognized during the three months ended June 30, 2019.

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. During the three months ended June 30, 2019, the Company sold the vehicle for the remaining balance on the loan resulting in a balance due of $0 as of June 30, 2019.

On July 27, 2018, the Company entered into a loan agreement to borrow $100,000. The loan carries an interest rate of 24.37%, is payable over twelve months and due on July 27, 2019. There was $40,594 and $65,464 of principal due as of June 30, 2019 and March 31, 2019, respectively.

During the year ended March 31, 2019, the Company entered into a loan in order to acquire equipment.  The loan is repayable over twelve months at $954 per month, is secured by the equipment 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 $8,588 and $10,497 due as of June 30, 2019 and March 31, 2019, all of which was current.

On various dates during the three months ended June 30, 2019, the Company entered into three separate verbal loan agreements to purchase equipment totaling $301,651, each with no stated interest rate. The Company recorded the loans using an imputed interest rate of 6.59% per annum, equal to the interest rate associated with other recent borrowings on assets. The first of three loans was for equipment valued at $270,604 and required $27,990 down with six monthly payments of $5,000 and a balloon payment of $221,910 unless otherwise negotiated prior to maturity. The second of three loans was for equipment valued at $24,163 and required $2,500 down with six monthly payments of $1,000 and a balloon payment of $16,395 unless otherwise negotiated prior to maturity. The last of the of three loans was for equipment valued at $36,884 and requires monthly payments of $5,000 until paid in full unless otherwise negotiated prior to maturity.

On June 1, 2019, the Company entered into a loan to borrow $34,222 to purchase a vehicle. As part of the agreement, the Company traded in its existing vehicle for total consideration of $19,464 resulting in a net loss recorded on the asset of $1,751. The loan carries interest at a rate of 6.59% per annum and matures in September 2025. As of June 30, 2019, there was a total of $34,222 due of which $4,666 was current.

NOTE 8 – CAPITAL LEASES PAYABLE

The Company accounts for capital leases in accordance with ASC 842. During the year ended March 31, 2019, 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.

7

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2018

NOTE 8 – CAPITAL LEASES PAYABLE (CONTINUED)

As of June 30, 2019, there was a total of $1,282,756 of future payments due through June 2023 of which $397,003 are financing charges leaving a total principal balance of $885,753. Of the total principal balance due, $288,570 was current and $597,183 was long term as of June 30, 2019.

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

	Principal		Interest		Total
Year ended March 31,
2020	$	255,376	$	217,995	$	473,371
2021		271,026		125,564		396,590
2022		247,275		44,953		292,228
2023		104,863		8,317		113,180
2024		7,213		174		7,387
Total	$	885,753	$	397,003	$	1,282,756

NOTE 9 – SUBSEQUENT EVENTS

The Company evaluated all events occurring subsequent to June 30, 2019 and through the date of this filing and determined there were no additional disclosures required.

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

9

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 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 June 30, 2019, we had $48,115 in cash, total current assets of $457,033 and total current liabilities of $927,778. Current liabilities consisted mainly of $175,159 of accounts payable, a capital lease liability of $288,570, an operating lease liability of $55,933 and current loans payable of $346,913.

As of March 31, 2019, we had current assets totaling $455,981 consisting of $33,970 of cash, $402,222 of current deposits and $20,011 of prepaid expenses. Current liabilities totaled $437,680 as of March 31, 2019. As of March 31, 2018, we had current assets of $913,958, consisting solely of cash, and current liabilities totaling $47,251.

Net cash used in operating activities was $157,644 compared to $425,057 for the three months ended June 30, 2019 and 2018, respectively.

Net cash used in investing activities was $30,918 compared to $0 the three months ended June 30, 2019 and 2018 respectively.

Net cash provided by financing activities was $202,707 and $8,420 for the three months ended June 30, 2019 and 2018 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 months ended June 30, 2019 or 2018. Total operating expenses were $301,550 during the three months ended June 30, 2019 and $168,127 for the three months ended June 30, 2018 due to an increase in the company’s operations and preparation therefore. Net loss for the three months ended June 30, 2019 was $355,398 compared to $172,651 for the same period in 2018 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.

10

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 June 30, 2019, 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”) our disclosure controls and procedures were not effective as of June 30, 2019.

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 the current 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

There are currently two lawsuits pending in Montgomery County, Ohio involving Tribus. The first is Tribus Enterprises, Inc. v. Dynamic Machine Works, LLC, et al., Montgomery County common Pleas Case No. CV 1393 (“Tribus Lawsuit”). The second is Dynamic Machine Works, LLC v Clark Trost, et al., Montgomery County Common Please Case No. 2019 CV 1753 (“Trost Lawsuit”). There has also been additional litigation threatened by Dynamic Machine Works, LLC (“DMV”)

A.            Tribus Lawsuit

Tribus filed the Tribus Lawsuit against DMW on April 1, 2019 and filed an amended complaint against DMW and one of its owners, Nathan Hake, on May 15, 2019. Those complaints assert numerous claims against DMW and Hake arising from their manufacturing relationship. Tribus’s claims against DMW are for breach of contract, unjust enrichment, and promissory estoppel. Tribus’s claims against Hake are for unjust enrichment, fraud, promissory estoppel, conversion, and tortious interference.

Tribus’s claims in the Tribus Lawsuit allege that Hake and DMW misrepresented their expertise and ability in order to obtain the contract to manufacture Tribus’s wrenches. DMW then received $402,000 from Tribus as part of that contract, and ultimately failed to produce any functional wrenches. Tribus’s claims seek the return of the $402,000 paid to DMW, together with any equipment and tooling purchased by Tribus or with Tribus’s funds that continues to be held by DMW or Hake.

DMV has filed counterclaims against Tribus in the Tribus Lawsuit. DMW has sued Tribus for breach of contract, promissory estoppel/detrimental reliance, breach of ND/NCA, theft of trade secrets, tortious interference with prospective and actual business relationships, unjust enrichment, conversion, breach of duty of loyalty or fiduciary duty, unfair competition, deceptive trade practices, and breach of lease agreement.

DMW’s claims against Tribus primarily assert that Tribus stole DMW’s confidential information and trade secrets. Namely, the programming and manufacturing process for the wrenches. DMW also asserts that it was Tribus who breached the contract with DMW. DMW’s counterclaims against Tribus center on Tribus’s decision to terminate its relationship with DMW and enter into an agreement with Clark Trost for the manufacture of the wrenches instead. Trost had been an independent contractor hired by DMW to help DMW manufacture Tribus’s wrenches. DMW’s counterclaims request judgement in excess of $2millon. 

11

To date, the Tribus Lawsuit has seen considerable activity for its nascent stage. It was filed primarily to compel the return of nearly $1.2 million in manufacturing equipment purchased or leased by Tribus and being held at DMW’s facility in Englewood, Ohio. That objective was largely accomplished with the return of the vast majority of the equipment on April 24th, 2019, following a motion for temporary restraining order and preliminary injunction filed on Tribus’s behalf. Certain miscellaneous pieces of equipment remain to be returned however. Those pieces (or their value), and the monetary portion of Tribus’s claims remain to litigated, as do DMW’s counterclaims against Tribus.

Tribus has vigorously prosecuted its claims and defended against DMW’s counterclaims to date. The Compny believes there is a good chance that Tribus will prevail on its claims against DMW, and that DMW will not be successfully on its claims against Tribus will prevail on its claims against DMW, and that DMW will not be successful on its claims against Tribus. Given the range and variety of claims against Tribus by DMW however, it is impossible to provide a range of potential loss with any specificity.

There are additional considerations involving the Tribus Lawsuit. First, DMW has filed a motion with the court to stay that lawsuit and compel arbitration. Tribus has opposed that motion and we are awaiting a decision from the court. Second, Hake has filed bankruptcy in the United States Bankruptcy Court for the Southern District of Ohio, which will necessitate the dismissal of Tribus’s claims against Hake personally. Tribus does not intend to pursue a judgement or claim against Hake in the bankruptcy matter, given the low likelihood of collection and the cost of such pursuit.

None of the above actions name the officers or directors individually.

B.            Trost Lawsuit

In addition to its counterclaims against Tribus, DMW filed a separate lawsuit against Clark Trost and two companies he owns, Troust Technologies, Inc. and CNC Holster, LLC (collectively “Trost”). Tribus has signed and engagement letter with McNamee & McNamee, PLL agreeing to be responsible for the attorneys’ fees and costs of representing Trost in the Trost Lawsuit as well.

DMW’s claims against Trost are for breach of ND/NCA, theft of trade secrets, tortious interference with prospective and actual business relations, unjust enrichment, conversion, breach of duty of loyalty or fiduciary duty, unfair competition, deceptive trade practices, and breach of oral sub-lease agreement. DMW’s complaint in the Trost Lawsuit seeks damages in excess of $2 million.

The crux of DMW’s claims in the Trost Lawsuit mirror its counterclaims in the Tribus Lawsuit. In essence, DMW maintains that Tribus and Trost conspired to steal the programming and manufacturing information for Tribus’s wrenches----which DMW claims to be its confidential information and trade secrets----to terminate their relationships with DMW and enter into business together to manufacture the wrenches without DMW.

The Trost Lawsuit has seen considerable activity to date as well. In addition to substantial motion practice, DMW has filed a motion for temporary restraining order and preliminary injuction, seeking to prevent Trost from doing any business with Tribus. A hearing on that motion began on May 13th, 2019, and is scheduled to be concluded on June 26th, 2019.

Here too, I believe there is a good chance that DMW will not be successful on its claims against Trost, nor on its motion for preliminary injunction. I am confident that, ultimately, it will be determined that the manufacturing and programming information that form the core of DMW’s claims against both Tribus and Trost is not in fact confidential information or trade secrets belonging to DMW.

C.            Threatened Litigation

DMW has threatened to initiate arbitration proceedings for all claims and counterclaims involved in the Tribus Lawsuit. The basis for this is an arbitration provision in the contract between the parties. As mentioned previously, DMW has in fact filed a motion with the court in the Tribus Lawsuit to compel arbitration, with Tribus has opposed. That motion is awaiting a decision by the court.

12

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, 2019 filed July 19, 2019.

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	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

(b) REPORTS ON FORM 8-K

None.

13

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: August 20, 2019.

Tribus Enterprises, Inc.

Registrant

By:  /s/ Kendall Bertagnole                                    

Kendall Bertagnole

Chief Executive Officer

14