10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d ) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO _____________.

Commission file number: 000-55721

TAUTACHROME, INC.

 (Exact name of registrant as specified in its charter)

Delaware	84-2340972
(State or other Jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1846 e. Innovation Park Drive, Oro Valley, AZ 85755

(Address of principal executive offices)

(520) 318-5578

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

Title of Each Class	Trading Symbols	Name of Exchange on Which Registered
Not applicable	Not applicable	Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒ No

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting 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 for 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 ☒    

The number of shares of the registrant’s common stock outstanding as of July 27, 2021, was 4,485,746,908.

TAUTACHROME, INC.

FORM 10-Q

INDEX

PART I – FINANCIAL INFORMATION		3
Item 1 –	Consolidated Financial Statements	3
Item 2 –	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	16
Item 3 –	Quantitive And Qualitative Disclosures About Market Risk	18
Item 4 –	Controls and Procedures	19
PART II – OTHER INFORMATION		20
Item 1 –	Legal Proceedings	20
Item 2 –	Unregistered Sale of Equity Securities	20
Item 3 –	Defaults Upon Senior Securities	20
Item 4 –	Mine Safety Disclosures	20
Item 5 –	Other Information	20
Item 6 –	Exhibits	21
Signatures		22

2

PART I – FINANCIAL INFORMATION

ITEM 1 – CONSOLIDATED FINANCIAL STATEMENTS

TAUTACHROME, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	6/30/2021			12/31/2020
ASSETS
Current assets:
Cash	$	120,958		$	114,527
Total current assets		120,958			114,527
Non-current assets:
Property, plant and equipment, net		32,584			39,826
TOTAL ASSETS	$	153,542		$	154,353
LIABILITIES
Accounts payable and accrued expenses	$	536,746		$	789,052
Accounts payable - related party		619,908			510,313
Loans from related parties		104,220			104,762
Convertible notes payable - related party, net		59,564			50,094
Short-term convertible notes payable, net		1,137,636			999,406
Convertible notes payable in default		32,000			32,000
Short-term notes payable		16,489			16,957
Derivative liability		3,927,597			1,479,530
Total current liabilities		6,434,160			3,982,114
Long-term convertible notes payable, net		157,725
Long-term convertible notes payable, related party, net		8,717			10,080
Total non-current liabilities		166,442			10,080
TOTAL LIABILITIES		6,600,602			3,992,194
STOCKHOLDERS' DEFICIT
Series D Convertible Preferred, par value $0.0001. 13,795,104 shares authorized, 13,795,104 shares issued and outstanding at June 30, 2021 and December 31, 2020		1,380			1,380
Series E Convertible Preferred Stock, par value $0.0001.  40,000 shares authorized, 40,000 shares outstanding at June 30, 2021 and December 31, 2020, respectively		4			4
Series F Convertible Preferred Stock, par value $0.00001.  290,400 shares authorized, 290,400 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		30			30
Common stock, $0.00001 par value. 4.5 billion shares authorized. 4,485,746,908 and 4,120,475,247 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		44,857			41,205
Additional paid in capital		14,499,554			11,427,087
Common stock payable		588,884			336,584
Accumulated deficit		(21,627,927	)		(15,661,969	)
Effect of foreign currency exchange		46,158			17,838
TOTAL STOCKHOLDERS' DEFICIT		(6,447,060	)		(3,837,841	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	153,542		$	154,353

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

3

TAUTACHROME, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Six Months Ended June 30,						Three Months Ended June 30,
	2021			2020			2021			2020
REVENUES
Online sales platform	$	20		$	-		$	5		$	-
Products		240			-			125			-
Total revenues		260			-			130			-
Cost of sales		79			-			44			-
Gross profit		181			-			86			-
OPERATING EXPENSES
General and administrative	$	2,456,469		$	301,768		$	2,302,093		$	139,631
Bad debt expense		150,760			-			150,760			-
Depreciation expense		7,242			-			3,621			-
Research and development		430,109			322,823			229,334			172,591
Total operating expenses		3,044,580			624,591			2,685,808			312,222
Operating loss		(3,044,399	)		(624,591	)		(2,685,722	)		(312,222	)
OTHER INCOME / (EXPENSE)
Gain on litigation		-			105,000			-			-
Loss on settlement of debt		(225	)		-			(225	)		-
Interest expense		(659,052	)		(721,463	)		(235,282	)		(559,544	)
Change in value of derivatives		(2,262,282	)		1,069,877			(358,835	)		(168,436	)
Loss on conversion of debt		-			(37,267	)		-			(9,819	)
Total other		(2,921,559	)		416,147			(594,342	)		(737,799	)
Net loss	$	(5,965,958	)	$	(208,444	)	$	(3,280,064	)	$	(1,050,021	)
OTHER COMPREHENSIVE INCOME (LOSS)
Effect of foreign currency exchange		28,320			16,137			16,941			(87,108	)
Net comprehensive income or (loss)	$	(5,937,638	)	$	(192,307	)	$	(3,263,123	)	$	(1,137,129	)
Net (loss) or income per common share
Basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding
Basic and fully diluted		4,238,994,677			3,659,613,359			4,297,624,931			3,785,141,462

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

4

TAUTACHROME, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

December 31, 2019 to June 30, 2021

(Unaudited)

	Common Stock				Preferred Stock Series D				Preferred Stock Series E				Preferred Stock Series F				Additional Paid in		Stock			Other Comprehensive			Accumulated			Total Stockholders' Equity /
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable			Income (Loss)			Deficit			(Deficit)
Balance, December 31, 2019		3,504,460,889	$	35,045		13,795,104	$	1,380		-		-		-		-	$	6,095,053	$	2,066,584		$	98,039		$	(12,867,645	)	$	(4,571,544	)
Shares issued for conversion of debt		560,931,025		5,609		-		-		-		-		-		-		843,752		-			-			-			849,361
Shares issued for services		3,333,333		33		-		-		-		-		-		-		19,967		-			-			-			20,000
Shares issued for cash		1,750,000		18		-		-		-		-		-		-		3,482		-			-			-			3,500
Shares issued to settle legal claim		50,000,000		500		-		-		-		-		-		-		144,500		-			-			-			145,000
Issue Series E preferred shares		-		-		-		-		40,000		4		-		-		1,836,996		(1,837,000	)		-			-			-
Issue Series F preferred shares		-		-		-		-		-		-		290,397		30		625,235		-			-			-			625,265
Derivative associated with early debt retirement		-		-		-		-		-		-		-		-		1,844,424		-			-			-			1,844,424
Beneficial conversion features of convertible notes		-		-		-		-		-		-		-		-				-			-			-			-
Shares earned by consultants		-		-		-		-		-		-		-		-		-		107,000			-			-			107,000
Imputed interest		-		-		-		-		-		-		-		-		13,678		-			-			-			13,678
Effect of foreign currency exchange		-		-		-		-		-		-		-		-		-		-			(80,201	)		-			(80,201	)
Net income		-		-		-		-		-		-		-		-		-		-			-			(2,794,324	)		(2,794,324	)
Balance, December 31, 2020		4,120,475,247	$	41,205		13,795,104	$	1,380		40,000	$	4		290,397	$	30	$	11,427,087	$	336,584		$	17,838		$	(15,661,969	)	$	(3,837,841	)
Shares issued for conversion of debt		164,396,661		1,644		-		-		-		-		-		-		684,732		-			-			-			686,376
Derivative associated with early debt retirement		-		-		-		-		-		-		-		-		376,913		-			-			-			376,913
Shares issued for services		198,125,000		1,980		-		-		-		-		-		-		1,979,145		-			-			-			1,981,125
Shares issued as enticement for loan		2,750,000		28		-		-		-		-		-		-		28,847		-			-			-			28,875
Stock payable for services		-		-		-		-		-		-		-		-		-		252,300			-			-			252,300
Imputed interest		-		-		-		-		-		-		-		-		2,830		-			-			-			2,830
Effect of foreign currency exchange		-		-		-		-		-		-		-		-		-		-			28,320			-			28,320
Net income		-		-		-		-		-		-		-		-		-		-			-			(5,965,958	)		(5,965,958	)
Balance, June 30, 2021		4,485,746,908	$	44,857		13,795,104	$	1,380		40,000		4		290,397		30	$	14,499,554	$	588,884		$	46,158		$	(21,624,927	)	$	(6,447,060	)

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

5

TAUTACHROME, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(5,965,958	)	$	(208,444	)
Stock-based compensation		2,233,425			64,300
Depreciation, depletion and amortization		7,242
Loss on debt conversions		-			37,267
Gain on litigation		-			(105,000	)
Change in fair value of derivative		2,262,283			(1,069,877	)
Amortization of discounts on notes payable		591,510			659,035
Bad debt expense		150,760			-
Loss on equity exchange		-
Imputed interest		2,830			7,408
Changes in operating assets and liabilities:
Prepaid expenses		-			338
Accounts receivable		(760	)
Accounts payable and accrued expenses		31,266			5,005
Accounts payable - related party		112,365			130,000
Net cash used in operating activities		(575,037	)		(479,968	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in note receivable		(150,000	)		-
Net cash used in investing activities		(150,000	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of stock		-			3,500
Proceeds from notes payable		-			-
Proceeds from convertible notes payable		708,000			-
Proceeds from convertible notes payable, related party		40,000			478,000
Payment of expenses by related parties		6,000			36,172
Principal payments on related-party loans		(21,348	)		(46,828	)
Net cash provided by financing activities		732,652			470,844
Effect of exchange rate changes on cash and cash equivalents		(1,184	)		(6,106	)
Net increase/(decrease) in cash		6,431			(15,230	)
Cash and equivalents - beginning of period		114,527			31,366
Cash and equivalents - end of period	$	120,958		$	16,136
SUPPLEMENTARY INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS
Discounts on convertible notes	$	623,573		$	170,531
Conversion of debt to common stock	$	660,000		$	812,097
Settlement of derivative liability	$	376,913		$	782,972
Shares issued for trade debts	$	-		$	145,000
Shares issued for stock payable	$	-		$	1,837,000

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

6

TAUTACHROME, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2021

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 allows business users to quickly create virtual stores on the ARknet Platform using our comprehensive “How To” tutorial at www.MainSt.Shopping. Patterned after the Amazon model, shoppers on MainSt use a single sign-on to gain access to all the products of every store on MainSt.

Non-Fungible Tokens (NFTs) The ARknet platform allows users to create and market NFTs of any of their digital creations from imagery, to writings to entire Arks.

Travelpin. With Travelpin users can capture imagery and attach it directly to a specific location on the Travelpin digital map. Users can view public Travelpins from other travelers and see honest reviews, photos, and comments, significantly enhancing the travel experience.

7

Eternals Memorials. Arknet memorials allow users to geolocate Arks at headstones of deceased loved ones, containing such digital records as users may wish to place there as an eternal memory of the person. Using the Arknet app, family and friends can view a memorial while at the headstone, or can use the app’s teleportation feature to view it from any remote location.

3D Imaging for Businesses User products. Store samples may be sent to us for high quality 3D scanning. The ARknet platform allows business users to use these 3D scanned files to display their products to their customers. Seeing products as AR objects in their own home, in 3D, is excellent way to please customers and make sales. Additional discussion of the business can be found in our Form 10-K filing as of December 31, 2020 and filed with the Securities and Exchange Commission.

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.

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 June 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.

8

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 which proscribes a five-step process in evaluating the revenue recognition process:

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.

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 doubt exists as to Tautachrome’s ability to continue as a going concern. No adjustment has been made to these financial statements for the outcome of this uncertainty.

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.

9

Note 4 – Related Party Transactions

For the six months ended June 30, 2021, we accrued $2,458 of interest to the 22^nd Trust (the “Trust”), the trustee of whom is Sonny Nugent, the son of our major shareholder and former Chief Executive Officer, Micheal Nugent.  The outstanding balances of unpaid principal and interest at June 30, 2021 were $99,220 and $32,897, respectively.  The outstanding balances of unpaid principal and interest at December 31, 2020 were $99,762and $30,553, respectively.  

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 $1.00per share.  Also, because this loan is a no-interest loan, an imputed interest expense of $157 was recorded as additional paid-in capital for the six months ended June 30, 2021.  The Company evaluated Dr. Leonard’s note for the existence of a beneficial conversion feature and determined that none existed.

During the six months ended June 30, 2021, we repaid $21,348 to Dr. Leonard.  Dr. Leonard also paid company expenses of $6,000.  At June 30, 2021, the balanced owed Dr. Leonard is $1,169.

Ending balances in related party accounts payable is $619,908.

For ending balances in this category, see Note 7.

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. The Company has reason to believe this note will be repaid after a commercially reasonable delay.  We have, however, reserved the entirety of the balance of $150,760 to bad debt expense.

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.

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During the six months ended June 30, 2021, we issued:

· 164,396,661 shares in conversion of $660,000 of principal and $23,376 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.

· 2,750,000 to a creditor as an enticement to enter into a $520,000 convertible promissory note. The shares were valued at $28,875 and are accounted for as a debt discount.

During the six months ended June 30, 2021, we had the following stock payable transactions:

· We accrued $121,800 to a system development contractor per our contract with them.

· We accrued $1,980,000 to an internet advertising company which we retired by issuing them 198,125,000 shares on June 10, 2021.

· We accrued $130,500 to a contractor who manages the day-to-day marketing activities.

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 six months ended June 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 six months ended June 30, 2021, we imputed $2,830 of such interest.  For the same period in 2020, we imputed $4,008.

Note 7 – Debt

Loans from related parties

At June 30, 2021 we owed $104,220  in related-party loans consisting of $99,220  to the 22^nd Trust and $5,000 owed to a related-party Board member .

Convertible notes payable – related party, net

Short-term portion - At June 30, 2021, we owed $71,142 of related-party notes which are convertible into common stock, of which $69,973 is owed to David LaMountain, Our Chief Operating Officer and $1,169 to Dr. Jon Leonard, our Chief Executive Officer.  Unamortized discounts at June 30, 2021 was $11,578.  During the six months ended June 30, 2021, we amortized $14,737 of discounts to interest expense from this category.

11

Long-term portion - Additionally at June 30, 2021, we owed $40,000 to ArKnet..  Unamortized discount at June 30, 2021 was $31,283.  During the six months ended June 30, 2021, we amortized $19,547 from this category.

Short-term convertible notes payable –  third-party, net

Unpaid principal on short-term convertible notes payable at June 30, 2021 was $1,551,966, net of discounts of $414,330 (or $1,137,636).   

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 six months ended June 30, we issued 164,396,661 shares to convert three outstanding convertible notes.  We reduced unpaid principal by $660,000 and unpaid interest by $26,400.  There was no gain or loss related to the conversions.

Also during the six months ended June 30, 2021, 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.

Also during the six months ended June 30, 2021, we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000.  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 $30,795 of this discount to interest expense during the six months ended June 30, 2021.

During the six months ended June 30, 2021, we amortized $555,841 to interest expense from this category.

Short-term notes payable

At June 30, 2021, we owed AU$22,000 (US$16,489) to three Australian investors on promissory notes which contain no conversion privileges.

Long-term convertible notes payable, net

During the six months ended June 30, 2021, we converted $247,426 from accounts payable which was payable in cash to a convertible promissory note.  The note bears interest at 5% (10% default rate) and is convertible at $0.008265 per share.  The note matures on September 3, 2022.  We originally recorded at discount of $109,247 and have amortized $19,546for the six months ended June 30, 2021.  There was no gain or loss associated with this conversions.

12

Imputed Interest

Certain of our promissory notes bear no nominal interest.  We therefore imputed interest expense and increased Additional Paid in Capital.  For the six months ended June 30, 2021, we imputed $2,830 of such interest.  Of this amount, $157 is imputed on amounts owed to Jon Leonard, our Chief Executive Officer, and $2,674 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 June 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 June 30, 2021. The following assumptions were used for the valuation of the derivative liability related to the Notes:

· The stock price of $0.01250 at 03/31/21 increased to $0.0129 by 06/30/21 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 159% – 199% (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.

13

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 six months ended June 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		562,698
Changes due to extinguishments		(376,913	)
Changes due to adjustment to fair value		2,262,282
Balance,  June 30, 2021	$	3,927,597

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 50 million 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.

14

Note 9 – Income Taxes

Deferred income taxes reflect the tax consequences on future years of differences between the tax bases:

	06/31/21			12/31/20
Net operating loss carry-forward		9,073,257			6,114,681
Deferred tax asset	$	1,905,384		$	1,284,083
Valuation allowance		(1,905,384	)		(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.

Note 10 – Subsequent Events

Subsequent events have been evaluated through the date of this report.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains “forward-looking statements”.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.  “Forward-looking statements” may include the words “may,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words.

Although we believe that the expectations reflected in our “forward-looking statements” are reasonable, actual results could differ materially from those projected or assumed.  Our future financial condition and results of operations, as well as any “forward-looking statements”, are subject to change and to inherent risks and uncertainties, such as those disclosed in this report.  In light of the significant uncertainties inherent in the “forward-looking statements” included in this report, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. Except for its ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any “forward-looking statement”. Accordingly, the reader should not rely on “forward-looking statements”, because they are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by the “forward-looking statements”.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements, including the notes to those financial statements, included elsewhere in this report.

Overview

We are an early stage internet applications company, engaged in advanced technology and business development in the internet applications space.  We have incurred general and administrative costs, marketing expenses and research and development costs since we commenced our current operations in May 2015, against minimal revenue.

The continuing operations of the Company are dependent upon our ability to raise adequate financing and to commence profitable operations in the future. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through loans from related parties. We believe that actions presently being taken to obtain additional funding may provide the opportunity for the Company to continue as a going concern. There is no guarantee, however, that the Company will be successful in achieving these objectives.

Results of Operations - Six months ended June 30, 2021 versus 2020

We had minimal revenues for the six months ended June 30, 2021 as we are currently launching the platform.  We had no revenues for the same period in 2020.

We had general and administrative expenses of $2,456,469 for the six months ended June 30, 2021 versus  $301,768 for the same period in 2020.  The reason for the vast increase is that we entered into a contract with an internet marketer whose fee was payable all in stock (see Note 7) on which we expensed $1,980,000.  Without that charge to expense, general and administrative expenses for the six months ended June 30, 2021 would have been $469,227.

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As explained in Note 5, we fully reserved a loan we made to Akumen Industries, Inc. resulting in bad debt expense of $150,760.  There was no such expense in 2020.

We had depreciation expense of $7,242 for the six months ended June 30, 2020 as opposed to $0 for the previous year.  The depreciation expense is due to our acquiring, in October, 2020, a hand-held self-positioning white light scanner system that we use to showcase products on our website.  

Our research and development expenses increased due to increased development activity during the six months ended June 30, 2021 versus 2020.  R&D costs were $403,109 and $322,823, respectively.

During the six months ended June 30, 2020, we had a gain on litigation from the McRae settlement of $105,000.  We had no such gain in 2021.

We had a decrease in interest expense from $721,463 during the period ending June 30, 2020 to $659,052 in the same period in 2021.   Most of the decrease is attributable to larger discount amortization in 2020 than in 2021.

We had a loss on changes in the fair values of our derivatives of $2,262,282 and a gain of $1,069,877 for the six months ended June 30, 2021 and 2020, respectively.  

During the six months ended June 30, 2021, we had a foreign exchange gain of $28,320 versus a gain of $16,137 during the same period in 2020, all of which are currency translation effects resulting from the fluctuation of exchange rate differences between the U.S. and Australian dollars.  

Our net comprehensive losses of $5,937,638 and $192,307 during the six months ended June 30, 2021 and 2020 are a result of the above items.

Results of Operations - Three months ended June 30, 2021 versus 2020

We had minimal revenues for the three months ended June 30, 2021 as we are just launching our product.  We had no revenues in the previous years.

We had general and administrative expenses of $2,302,093 for the three months ended June 30, 2021 versus  $139,631 for the same period in 2020. The reason for the vast increase is that we entered into a contract with an internet marketer whose fee was payable all in stock (see Note 7) on which we expensed $1,980,000.  Without that charge to expense, general and administrative expenses for the three months ended June 30, 2021 would have been $314,851.  The vast majority of the increase (ignoring the previously-mentioned contract of $1,980,000) was an increase in marketing efforts.  

As explained in Note 5, we fully reserved a loan we made to Akumen Industries, Inc. resulting in bad debt expense of $150,760.  There was no such expense in 2020.

Our research and development expenses increased due to increased development activity during the three months ended June 30, 2021 versus 2020.  R&D costs were $229,334 and $172,591, respectively.

We had a loss on settlement of debt of $225 during the three months ended June 30, 2021 which we did not have in 2020.

We had a vast decrease in interest expense from $559,544 during the period ending June 30, 2020 to $235,282 in the same period in 2021.  Most of the decrease is attributable to larger discount amortization in 2020 than in 2021.

We had a losses on changes in the fair values of our derivatives of $358,835 and $168,436 for the three months ended June 30, 2021 and 2020, respectively.

We had a loss on conversion of debt during the three months ended June 30, 2020 of $9,819.  We had no such losses in the current year.  

17

During the three months ended June 30, 2021, we had a foreign exchange gain of $16,941 versus a loss of $87,108 during the same period in 2020, all of which are currency translation effects resulting from the fluctuation of exchange rate differences between the U.S. and Australian dollars.  

Our net comprehensive losses of $3,105,121 and $1,137,129 during the six months ended June 30, 2021 and 2020 are a result of the above items.

Liquidity and Capital Resources

Our financial statements have been prepared on a going concern basis that contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  

At June 30, 2020, the Company had 153,542 in current assets and current liabilities totaling $6,434,160.  We are currently seeking financing to attain our business goals, but there is no guarantee that we will obtain such financing or, upon obtaining it, that we will be able to invest in productive assets that will result in positive cash flows from operations.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, we had negative cash flows from operations, recurring losses, and negative working capital at June 30, 2021.  These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.  Management intends to finance these deficits by making additional shareholder notes and seeking additional outside financing through either debt or sales of its common stock.

Plan of Operation

Our immediate term plans for operations is discussed extensively in Item 7 – Management’s Discussion and Analysis or Plan of Operation included in our Form 10-K as of December 31, 2020, filed with the Securities and Exchange Commission on March 30, 2021 and is herein incorporated by reference.

ITEM 3 - QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this item.

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ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

We maintain "disclosure controls and procedures" as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based upon the evaluation of our  officers and directors of our disclosure controls and procedures as of June 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"), our Chief Executive Officer has concluded that as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure. Our management concluded that our disclosure controls and procedures were not effective as a result of material weaknesses in our internal control over financial reporting. We are a small organization with only a few employees. Under these circumstances it is impossible to completely segregate duties. We do not expect our internal controls to be effective until such time as we are able to begin full operations and even then, there are no assurances that our disclosure controls will be adequate in future periods.

Change In Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the six months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   

19

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. We are not aware of any pending or threatened litigation against us, other than that described in Note 8, or our officers and directors in their capacity as such that could have a material impact on our operations or finances.

ITEM 2 – UNREGISTERED SALE OF EQUITY SECURITIES

A portion of the securities were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) of Regulation D promulgated thereunder, as a transaction by an issuer not involving any public offering. The investors did not enter into any of the transactions with the Company as a result of or subsequent to any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast on television or radio, or presented at any seminar or meeting. Each investor was also afforded the opportunity to ask questions of management and to receive answers concerning the terms and conditions of the transaction. No selling commissions were paid in connection with these transactions.

A portion of the securities were issued without registration under the Securities Act, by reason of the exemption from registration afforded by Rule 903 of Regulation S promulgated thereunder. In determining that the issuance of certain of such securities qualified for exemption in reliance on Regulation S, the Company relied on the following facts: each recipient represented that it is not a “U.S. Person” within the meaning of Regulation S under the Securities Act and that he, she or it would not sell the shares in the U.S. for a period of at least one year after purchase.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 – OTHER INFORMATION

Not applicable.

20

ITEM 6 - EXHIBITS

Exhibit No.	Description of Exhibit
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
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 (filed herewith).
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

______

* Filed herewith.

** Furnished herewith

21

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Tautachrome, Inc
Date: August 9, 2021	By:	/s/ Dr. Jon Leonard
		Dr. Jon Leonard Chief Executive Officer

22

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Dr. Jon Leonard, Chief Executive Officer of TAUTACHROME, INC. (the “Registrant”) certify that:

1.	I have reviewed the report being filed on Form 10-Q.
2.	Based on my knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3.	Based on my knowledge, the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition, results of operations and cash flows of TAUTACHROME, INC. as of, and for, the periods presented in the report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-a5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-a5(f)) for the Registrant and have;

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure the material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over   financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal three months (the Registrant's fourth fiscal three months in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and;

5. I have disclosed, based on our most recent evaluation, to the Tautachrome auditors and the audit committee of the board of directors (or persons fulfilling the equivalent function):

i.	All significant deficiencies in the design or operation of internal controls which could adversely affect Tautachrome’s ability to record, process, summarize and report financial data and have identified Tautachrome auditors any material weaknesses in internal controls; and
ii.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal controls; and

6. I have indicated in the report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: August 9, 2021	By:	/s/ Dr. Jon Leonard
		Dr. Jon Leonard, Chief Executive Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report for the period ended June 30, 2021 of TAUTACHROME, INC. (the "Company") on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the "Report'), I, Dr. Jon Leonard, Chief Executive Officer of the Company, certify, pursuant to 18 USC section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2021	By:	/s/ Dr. Jon Leonard
		Dr. Jon Leonard, Chief Executive Officer

XML

Cover - shares	6 Months Ended
	Jun. 30, 2021	Jul. 27, 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	Jun. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		4,485,746,908
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 State Or Province	AZ
Entity Address City Or Town	Oro Valley
Entity Address Postal Zip Code	85755
City Area Code	520
Local Phone Number	318-5578

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash	$ 120,958	$ 114,527
Total current assets	120,958	114,527
Non-current assets:
Property, plant and equipment, net	32,584	39,826
TOTAL ASSETS	153,542	154,353
LIABILITIES
Accounts payable and accrued expenses	536,746	789,052
Accounts payable - related party	619,908	510,313
Loans from related parties	104,220	104,762
Convertible notes payable - related party, net	59,564	50,094
Short-term convertible notes payable, net	1,137,636	999,406
Convertible notes payable in default	32,000	32,000
Short-term notes payable	16,489	16,957
Derivative liability	3,927,597	1,479,530
Total current liabilities	6,434,160	3,982,114
Long-term convertible notes payable, net	157,725
Long-term convertible notes payable, related party, net	8,717	10,080
Total non-current liabilities	166,442	10,080
TOTAL LIABILITIES	6,600,602	3,992,194
STOCKHOLDERS' DEFICIT
Common stock, $0.00001 par value. 4.5 billion shares authorized. 4,485,746,908 and 4,120,475,247 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	44,857	41,205
Additional paid in capital	14,499,554	11,427,087
Common stock payable	588,884	336,584
Accumulated deficit	(21,627,927)	(15,661,969)
Effect of foreign currency exchange	46,158	17,838
TOTAL STOCKHOLDERS' DEFICIT	(6,447,060)	(3,837,841)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	153,542	154,353
Series D Convertible Preferred [Member]
STOCKHOLDERS' DEFICIT
Preferrred stock value	1,380	1,380
Series F Convertible Preferred [Member]
STOCKHOLDERS' DEFICIT
Preferrred stock value	30	30
Series E Convertible Preferred [Member]
STOCKHOLDERS' DEFICIT
Preferrred stock value	$ 4	$ 4

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, authorized shares	4,500,000,000	4,500,000,000.0
Common stock, shares issued	4,485,746,908	4,120,475,247
Common stock, shares outstanding	4,485,746,908	4,120,475,247
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 F Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock, shares par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	290,400	290,400
Preferred stock, shares issued	290,400	290,400
Preferred stock, shares outstanding	290,400	290,400
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

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
REVENUES
Online sales platform	$ 5	$ 0	$ 20	$ 0
Products	125	0	240	0
Total revenues	130	0	260	0
Cost of sales	44	0	79	0
Gross profit	86	0	181	0
OPERATING EXPENSES
General and administrative	2,302,093	139,631	2,456,469	301,768
Bad debt expense	150,760	0	150,760	0
Depreciation expense	3,621	0	7,242	0
Research and development	229,334	172,591	430,109	322,823
Total operating expenses	2,685,808	312,222	3,044,580	624,591
Operating loss	(2,685,722)	(312,222)	(3,044,399)	(624,591)
OTHER INCOME / (EXPENSE)
Gain on litigation	0	0	0	105,000
Loss on settlement of debt	(225)	0	(225)	0
Interest expense	(235,282)	(559,544)	(659,052)	(721,463)
Change in value of derivatives	(358,835)	(168,436)	(2,262,282)	1,069,877
Loss on conversion of debt	0	(9,819)	0	(37,267)
Total other	(594,342)	(737,799)	(2,921,559)	416,147
Net loss	(3,280,064)	(1,050,021)	(5,965,958)	(208,444)
OTHER COMPREHENSIVE INCOME (LOSS)
Effect of foreign currency exchange	16,941	(87,108)	28,320	16,137
Net comprehensive income or (loss)	$ (3,263,123)	$ (1,137,129)	$ (5,937,638)	$ (192,307)
Net (loss) or income per common share
Basic and fully diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average shares outstanding
Weighted Basic and fully diluted	4,297,624,931	3,785,141,462	4,238,994,677	3,659,613,359

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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		164,396,661
Shares issued for conversion of debt, amount	686,376	$ 1,644	0	0	0	684,732	0	0	0
Shares issued for services, shares		198,125,000
Shares issued for services, amount	1,981,125	$ 1,980	0	0	0	1,979,145	0	0	0
Shares issued for cash, amount	28,875	28	0	0	0	28,847	0	0	0
Derivative associated with early debt retirement	376,913	0	0	0	0	376,913	0	0	0
Imputed interest	2,830	0	0	0	0	2,830	0	0	0
Effect of foreign currency exchange	28,320	0	0	0	0	0	0	28,320
Net income	(5,965,958)	$ 0	0	0	0	0	0	0	(5,965,958)
Shares issued as enticement for loan, shares		2,750,000
Stock payable for services	252,300	$ 0	$ 0	$ 0	$ 0	0	252,300	0	0
Balance, shares at Jun. 30, 2021		4,485,746,908	13,795,104	40,000	290,397
Balance, amount at Jun. 30, 2021	$ (6,447,060)	$ 44,857	$ 1,380	$ 4	$ 30	$ 14,499,554	$ 588,884	$ 46,158	$ (21,624,927)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (5,965,958)	$ (208,444)
Stock-based compensation	2,233,425	64,300
Depreciation, depletion and amortization	7,242
Loss on debt conversions	0	37,267
Gain on litigation	0	(105,000)
Change in fair value of derivative	2,262,283	(1,069,877)
Amortization of discounts on notes payable	591,510	659,035
Bad debt expense	150,760	0
Loss on equity exchange	0
Imputed interest	2,830	7,408
Changes in operating assets and liabilities:
Prepaid expenses	0	338
Accounts receivable	(760)
Accounts payable and accrued expenses	31,266	5,005
Accounts payable - related party	112,365	130,000
Net cash used in operating activities	(575,037)	(479,968)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in note receivable	(150,000)	0
Net cash used in investing activities	(150,000)	0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of stock	0	3,500
Proceeds from notes payable	0	0
Proceeds from convertible notes payable	708,000	0
Proceeds from convertible notes payable, related party	40,000	478,000
Payment of expenses by related parties	6,000	36,172
Principal payments on related-party loans	(21,348)	(46,828)
Net cash provided by financing activities	732,652	470,844
Effect of exchange rate changes on cash and cash equivalents	(1,184)	(6,106)
Net increase/(decrease) in cash	6,431	(15,230)
Cash and equivalents - beginning of period	114,527	31,366
Cash and equivalents - end of period	120,958	16,136
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	623,573	170,531
Conversion of debt to common stock	660,000	812,097
Settlement of derivative liability	376,913	782,972
Shares issued for trade debts	$ 0	$ 145,000
Shares issued for stock payable		1,837,000

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Organization and Nature of Business

6 Months Ended

Jun. 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 allows business users to quickly create virtual stores on the ARknet Platform using our comprehensive “How To” tutorial at www.MainSt.Shopping. Patterned after the Amazon model, shoppers on MainSt use a single sign-on to gain access to all the products of every store on MainSt.

Non-Fungible Tokens (NFTs) The ARknet platform allows users to create and market NFTs of any of their digital creations from imagery, to writings to entire Arks.

Travelpin. With Travelpin users can capture imagery and attach it directly to a specific location on the Travelpin digital map. Users can view public Travelpins from other travelers and see honest reviews, photos, and comments, significantly enhancing the travel experience.

Eternals Memorials. Arknet memorials allow users to geolocate Arks at headstones of deceased loved ones, containing such digital records as users may wish to place there as an eternal memory of the person. Using the Arknet app, family and friends can view a memorial while at the headstone, or can use the app’s teleportation feature to view it from any remote location.

3D Imaging for Businesses User products. Store samples may be sent to us for high quality 3D scanning. The ARknet platform allows business users to use these 3D scanned files to display their products to their customers. Seeing products as AR objects in their own home, in 3D, is excellent way to please customers and make sales. Additional discussion of the business can be found in our Form 10-K filing as of December 31, 2020 and filed with the Securities and Exchange Commission.

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.

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Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 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 June 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 which proscribes a five-step process in evaluating the revenue recognition process:

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.

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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 doubt exists as to Tautachrome’s ability to continue as a going concern. No adjustment has been made to these financial statements for the outcome of this uncertainty.

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.

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Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions

Note 4 - Related Party Transactions

Note 4 – Related Party Transactions

For the six months ended June 30, 2021, we accrued $2,458 of interest to the 22^nd Trust (the “Trust”), the trustee of whom is Sonny Nugent, the son of our major shareholder and former Chief Executive Officer, Micheal Nugent.  The outstanding balances of unpaid principal and interest at June 30, 2021 were $99,220 and $32,897, respectively.  The outstanding balances of unpaid principal and interest at December 31, 2020 were $99,762and $30,553, respectively.  

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 $1.00per share.  Also, because this loan is a no-interest loan, an imputed interest expense of $157 was recorded as additional paid-in capital for the six months ended June 30, 2021.  The Company evaluated Dr. Leonard’s note for the existence of a beneficial conversion feature and determined that none existed.

During the six months ended June 30, 2021, we repaid $21,348 to Dr. Leonard.  Dr. Leonard also paid company expenses of $6,000.  At June 30, 2021, the balanced owed Dr. Leonard is $1,169.

Ending balances in related party accounts payable is $619,908.

For ending balances in this category, see Note 7.

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Notes and Interest Receivable

6 Months Ended

Jun. 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. The Company has reason to believe this note will be repaid after a commercially reasonable delay.  We have, however, reserved the entirety of the balance of $150,760 to bad debt expense.

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Capital

6 Months Ended

Jun. 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 six months ended June 30, 2021, we issued:

· 164,396,661 shares in conversion of $660,000 of principal and $23,376 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.

· 2,750,000 to a creditor as an enticement to enter into a $520,000 convertible promissory note. The shares were valued at $28,875 and are accounted for as a debt discount.

During the six months ended June 30, 2021, we had the following stock payable transactions:

· We accrued $121,800 to a system development contractor per our contract with them.

· We accrued $1,980,000 to an internet advertising company which we retired by issuing them 198,125,000 shares on June 10, 2021.

· We accrued $130,500 to a contractor who manages the day-to-day marketing activities.

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 six months ended June 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 six months ended June 30, 2021, we imputed $2,830 of such interest.  For the same period in 2020, we imputed $4,008.

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Debt

6 Months Ended

Jun. 30, 2021

Debt

Note 7 - Debt

Note 7 – Debt

Loans from related parties

At June 30, 2021 we owed $104,220  in related-party loans consisting of $99,220  to the 22^nd Trust and $5,000 owed to a related-party Board member .

Convertible notes payable – related party, net

Short-term portion - At June 30, 2021, we owed $71,142 of related-party notes which are convertible into common stock, of which $69,973 is owed to David LaMountain, Our Chief Operating Officer and $1,169 to Dr. Jon Leonard, our Chief Executive Officer.  Unamortized discounts at June 30, 2021 was $11,578.  During the six months ended June 30, 2021, we amortized $14,737 of discounts to interest expense from this category.

Long-term portion - Additionally at June 30, 2021, we owed $40,000 to ArKnet..  Unamortized discount at June 30, 2021 was $31,283.  During the six months ended June 30, 2021, we amortized $19,547 from this category.

Short-term convertible notes payable –  third-party, net

Unpaid principal on short-term convertible notes payable at June 30, 2021 was $1,551,966, net of discounts of $414,330 (or $1,137,636).   

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 six months ended June 30, we issued 164,396,661 shares to convert three outstanding convertible notes.  We reduced unpaid principal by $660,000 and unpaid interest by $26,400.  There was no gain or loss related to the conversions.

Also during the six months ended June 30, 2021, 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.

Also during the six months ended June 30, 2021, we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000.  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 $30,795 of this discount to interest expense during the six months ended June 30, 2021.

During the six months ended June 30, 2021, we amortized $555,841 to interest expense from this category.

Short-term notes payable

At June 30, 2021, we owed AU$22,000 (US$16,489) to three Australian investors on promissory notes which contain no conversion privileges.

Long-term convertible notes payable, net

During the six months ended June 30, 2021, we converted $247,426 from accounts payable which was payable in cash to a convertible promissory note.  The note bears interest at 5% (10% default rate) and is convertible at $0.008265 per share.  The note matures on September 3, 2022.  We originally recorded at discount of $109,247 and have amortized $19,546for the six months ended June 30, 2021.  There was no gain or loss associated with this conversions.

Imputed Interest

Certain of our promissory notes bear no nominal interest.  We therefore imputed interest expense and increased Additional Paid in Capital.  For the six months ended June 30, 2021, we imputed $2,830 of such interest.  Of this amount, $157 is imputed on amounts owed to Jon Leonard, our Chief Executive Officer, and $2,674 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 June 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 June 30, 2021. The following assumptions were used for the valuation of the derivative liability related to the Notes:

· The stock price of $0.01250 at 03/31/21 increased to $0.0129 by 06/30/21 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 159% – 199% (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 six months ended June 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		562,698
Changes due to extinguishments		(376,913	)
Changes due to adjustment to fair value		2,262,282
Balance,  June 30, 2021	$	3,927,597

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Litigation

6 Months Ended

Jun. 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 50 million 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.

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Income Taxes

6 Months Ended

Jun. 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:

	06/31/21			12/31/20
Net operating loss carry-forward		9,073,257			6,114,681
Deferred tax asset	$	1,905,384		$	1,284,083
Valuation allowance		(1,905,384	)		(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.

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events

Note 10 - Subsequent Events

Note 10 – Subsequent Events

Subsequent events have been evaluated through the date of this report.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 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 June 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 which proscribes a five-step process in evaluating the revenue recognition process:

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.

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt

Changes in outstanding derivative liabilities

Balance, December 31, 2020	$	1,479,530
Changes due to new issuances		562,698
Changes due to extinguishments		(376,913	)
Changes due to adjustment to fair value		2,262,282
Balance,  June 30, 2021	$	3,927,597

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2021

Income Taxes

Summary of deferred income taxes

	06/31/21			12/31/20
Net operating loss carry-forward		9,073,257			6,114,681
Deferred tax asset	$	1,905,384		$	1,284,083
Valuation allowance		(1,905,384	)		(1,284,083	)
Net future income taxes	$	-		$	-

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Related Party Transactions (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Jul. 11, 2019
Related party accounts payable	$ 619,908	$ 510,313
Unpaid principal	99,220
Unpaid interest	32,897
Due to related party	104,220	104,762
Additional paid in capital	14,499,554	11,427,087
CEO and Board Chairman [Member]
Additional paid in capital			$ 13,750
Sonny Nugent [Member]
Accrued Interest	$ 2,458
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. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%.
Interest payable		30,553
Outstanding principal amount		$ 99,762
Akumen Industries Corp [Member]
Company expenses	$ 6,000
Conversion of share price	$ 1.00
Imputed interest expenses	$ 157
Repayment	21,348
Due to related party	$ 1,169

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Notes and Interest Receivable (Details Narrative) - Akumen Industries Corp [Member]	Jun. 08, 2021 USD ($)
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

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Capital (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended		9 Months Ended	12 Months Ended
	Jun. 10, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2020
Imputed interest				$ 2,830	$ 4,008
Debt conversion converted instrument shares issued							616,014,358
Accrued interest		$ 32,897		32,897
General and administrative expenses		2,302,093	$ 139,631	2,456,469	$ 301,768
Convertible promissory note		1,137,636		$ 1,137,636			$ 999,406
Convertible promissory note [Member]
Debt conversion converted instrument shares issued				164,396,661
Debt conversion, converted instrument, principal				$ 660,000
Reduction on debt conversion converted instrument, Accrued interest				23,376
General and administrative expenses				$ 1,981,125
Total shares for marketing compaign				198,125,000
Shares issued to creditor				2,750,000
Convertible promissory note		520,000		$ 520,000
Debt discount amount		$ 28,875		28,875
Accrued amount for system development				121,800
Accrued amount for marketing activities				130,500
Accrued internet advertising cost				$ 1,980,000
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
Debt conversion, converted instrument, principal						$ 610,500
Common stock shares issued for cash, shares						290,397

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Debt (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Debt
Opening Balance			$ 1,479,530
Changes due to new issuances			562,698
Changes due to extinguishments			(376,913)
Changes due to adjustment to fair value	$ 358,835	$ 168,436	2,262,282	$ (1,069,877)
Ending balance			$ 3,927,597

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Debt (Details Narrative)	6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($) integer $ / shares shares	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) shares	Mar. 31, 2021 $ / shares
Loans from related parties	$ 104,220		$ 104,762
Convertible related party notes	71,142
Unamortized debt discounts	11,578
Amortized discount	14,737
Amortization of interest expense	$ 555,841
Interest rate	132.00%
Convertible notes payable, default	$ 32,000		$ 32,000
Debt conversion converted instrument shares issued | shares			616,014,358
Imputed interest	2,830	$ 7,408	$ 13,678
Discounts on notes	623,573	$ 170,531
Due to related party	32,897
Long-term convertible notes payable [Member]
Amortized discount	$ 19,546
Interest rate	5.00%
Convertible notes	$ 247,426
Default interest rate	10.00%
Convertible price per shares | $ / shares	$ 0.008265
Debt instrument, maturity date, description	The note matures on September 3, 2022.
Original issue discount	$ 109,247
Convertible Notes Payable [Member]
Net of discount	414,330
Unpaid principal	$ 1,551,966
Debt conversion converted instrument shares issued | shares	164,396,661
Reduction on debt conversion converted instrument, Accrued interest	$ 26,400
Debt conversion unpaid principal, reduction	660,000
Imputed interest	$ 2,830
Promissory Note [Member]
Interest rate	8.00%
Default interest rate	24.00%
Debt instrument, maturity date, description	The note matures February 17, 2022
Debt instrument, principal amount	$ 220,000
Proceeds from promissory note	$ 208,000
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
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
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]
Convertible price per shares | $ / shares	$ 0.0129			$ 0.01250
Notes conversion trading days | integer	20
Estimated effective discount rate	37.00%
Volatility rate	159.00%
Convertible Note Derivatives [Member] | Maximum [Member]
Notes conversion trading days | integer	25
Volatility rate	199.00%
Three Australian Investors [Member] | Promissory Notes [Member]
Loans from related parties	$ 16,489
ArKnet [Member]
Unamortized debt discounts	31,283
Amortized discount	19,547
Owed amount	40,000
Loans in Australia [Member]
Imputed interest	2,674
Jon Leonard [Member]
Imputed interest	157
Lender [Member] | promissory Note [Member]
Amortized discount	$ 30,795
Interest rate	8.00%
Debt instrument, maturity date, description	The note matures September 3, 2022
Original issue discount	$ 20,000
Debt conversion converted instrument shares issued | shares	2,750,000
Debt instrument, principal amount	$ 520,000
Proceeds from promissory note	$ 500,000
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	1,169
Twenty Second Trust [Member]
Due to related party	99,220
Board Member[Member]
Advance loans	$ 5,000

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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

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Income Taxes (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Income Taxes (Details)
Net operating loss carry-forward	$ 9,073,257	$ 6,114,681
Deferred tax asset	1,905,384	1,284,083
Valuation allowance	(1,905,384)	(1,284,083)
Net future income taxes	$ 0	$ 0

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Income Taxes (Details Narrative)	6 Months Ended
	Jun. 30, 2021
Income Taxes
Operating loss carry-forwards expiration year	begin to expire in 2030