10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2019
☐	Transition Report under Section 13 or 15(d) of the Exchange Act
	For the Transition Period from ________to __________

Commission File Number: 333-197642

Tribus Enterprises, Inc.

(Exact Name of Registrant as Specified in its Charter)

Washington	82-1104757
(State of other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

155 Haas Drive
Englewood, OH	45322
(Address of principal executive offices)	(Zip Code)

Registrant's Phone: (509) 992-4743

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

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes ☐ No ☒

As of February 14, 2020, the issuer had 7,320,858 shares of common stock issued and outstanding.

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	13
Item 4.	Controls and Procedures	13
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item3A.	Off Balance Sheet Arrangements	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	15

ITEM 1. FINANCIAL STATEMENTS

TRIBUS ENTERPRISES, INC.

UNADUITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2019

Condensed Consolidated Balance Sheets	1
Unaudited Condensed Consolidated Statements of Operations	2
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	5 - 10

TRIBUS ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2019			March 31, 2019
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	423,674		$	33,970
Inventory		78,282			-
Deposits, current		402,000			402,000
Prepaid expenses		5,511			20,011
Total current assets		909,467			455,981
Deposits		41,337			41,337
Right of use asset		170,526			-
Equipment, net of accumulated depreciation of $460,039 and $194,226, respectively		1,326,580			1,061,675
Total assets	$	2,447,910		$	1,558,993
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	129,274		$	108,249
Interest payable		50,417			23,612
Accrued rent		-			8,027
Deferred revenue		3,814			814
Operating lease liability, current		61,886			-
Capital lease, current (Note 7)		301,162			214,529
Loans payable, current (Note 6)		349,670			82,449
Total current liabilities		896,223			437,680
Operating lease liability, net of current portion		108,880			-
Capital lease, net of current portion (Note 7)		456,981			667,053
Loans payable, net of current portion (Note 6)		27,257			14,057
Total liabilities		1,489,341			1,118,790
Commitments and contingencies		-			-
Stockholders' equity
Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 19,999,998 issued and outstanding at December 31, 2019 and March 31, 2019, respectively		20,000			20,000
Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; 3,910,000 and 1,365,625 issued and outstanding at December 31, 2019 and March 31, 2019, respectively		3,910			1,366
Common stock, $0.001 par value; 100,000,000 authorized; 7,320,858 and 7,184,858 issued and outstanding at December 31, 2019 and March 31, 2019, respectively		7,321			7,185
Additional paid in capital		3,590,792			1,818,694
Accumulated deficit		(2,663,454	)		(1,407,042	)
Total stockholders' equity		958,569			440,203
Total liabilities and stockholders' equity	$	2,447,910		$	1,558,993

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

1

TRIBUS ENTERPRISES, INC.

CONSOLDIATED STATEMENTS OF OPERATIONS

	Three months ended December 31,						Nine months ended December 31,
	2019			2018			2019			2018
Revenue	$	25,554		$	-		$	25,554		$	-
Cost of goods sold		67,868			-			67,868			-
Gross margin		(42,314	)		-			(42,314	)		-
Operating expenses
Employee costs		20,047			60,729			110,928			182,688
Professional fees		169,777			27,012			287,885			74,115
General and administrative		115,281			21,043			258,685			85,110
Facilities		19,630			12,884			64,559			62,881
Research and development		55,851			-			65,616			1,140
Depreciation expense		92,627			50,117			282,037			129,679
Total operating expenses		473,213			171,785			1,069,710			535,613
Net loss from operations		(515,527	)		(171,785	)		(1,112,024	)		(535,613	)
Other income (expense)
Other income		13,861			10,640			35,489			10,640
Loss on sale of equipment		-			-			(1,752	)		-
Interest expense		(54,592	)		(43,549	)		(178,125	)		(67,743	)
Total other income (expense)		(40,731	)		(32,909	)		(144,388	)		(57,103	)
Net and comprehensive loss	$	(556,258	)	$	(204,694	)	$	(1,256,412	)	$	(592,716	)
Net loss per share, basic and diluted	$	(0.08	)	$	(0.03	)	$	(0.17	)	$	(0.08	)
Weighted average shares outstanding, basic and diluted		7,317,206			7,146,988			7,255,462			7,065,006

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

2

TRIBUS ENTERPRISES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

	Series A Convertible Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid In		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, March 31, 2018		19,999,998	$	20,000		1,007,500	$	1,008		6,903,658	$	6,904	$	1,462,533	$	(593,399	)	$	897,046
Series B preferred stock issued for cash		-		-		206,875		206		-		-		165,294		-			165,500
Common stock issued for cash		-		-		-		-		155,200		155		38,645		-			38,800
Net loss, three months ended June 30, 2018		-		-		-		-		-		-		-		(172,651	)		(172,651	)
Balance, June 30, 2018		19,999,998		20,000		1,214,375		1,214		7,058,858		7,059		1,666,472		(766,050	)		928,695
Common stock issued for cash		-		-		-		-		8,000		8		1,992		-			2,000
Net loss, three months ended September 30, 2018		-		-		-		-		-		-		-		(215,371	)		(215,371	)
Balance, September 30, 2018		19,999,998		20,000		1,214,375		1,214		7,066,858		7,067		1,668,464		(981,421	)		715,324
Series B preferred stock issued for cash		-		-		151,250		151		-		-		120,849		-			121,000
Common stock issued for cash		-		-		-		-		118,000		118		29,382		-			29,500
Net loss, three months ended December 31, 2018		-		-		-		-		-		-		-		(204,694	)		(204,694	)
Balance, December 31, 2018		19,999,998	$	20,000		1,365,625	$	1,365		7,184,858	$	7,185	$	1,818,695	$	(1,186,115	)	$	661,130
Balance, March 31, 2019		19,999,998		20,000		1,365,625		1,366		7,184,858		7,185		1,818,694		(1,407,042	)		440,203
Series B preferred stock issued for cash		-		-		311,875		312		-		-		249,188		-			249,500
Common stock issued for cash		-		-		-		-		4,000		4		996		-			1,000
Net loss, three months ended June 30, 2019		-		-		-		-		-		-		-		(355,398	)		(355,398	)
Balance, June 30, 2019		19,999,998		20,000		1,677,500		1,678		7,188,858		7,189		2,068,878		(1,762,440	)		335,305
Series B preferred stock issued for cash		-		-		375,000		375		-		-		299,625		-			300,000
Common stock issued for cash		-		-		-		-		88,000		88		21,912		-			22,000
Shareholder cash contribution		-		-		-		-		-		-		3,040		-			3,040
Shareholder forgiveness of wages payable		-		-		-		-		-		-		73,738		-			73,738
Net loss, three months ended September 30, 2019		-		-		-		-		-		-		-		(344,756	)		(344,756	)
Balance, September 30, 2019		19,999,998		20,000		2,052,500		2,053		7,276,858		7,277		2,467,193		(2,107,196	)		389,327
Series B preferred stock issued for cash		-		-		1,857,500		1,857		-		-		1,112,643		-			1,114,500
Common stock issued for cash		-		-		-		-		44,000		44		10,956		-			11,000
Net loss, three months ended December 31, 2019		-		-		-		-		-		-		-		(556,258	)		(556,258	)
Balance, December 31, 2019		19,999,998	$	20,000		3,910,000	$	3,910		7,320,858	$	7,321	$	3,590,792	$	(2,663,454	)	$	958,569

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

3

TRIBUS ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended December 31,
	2019			2018
Cash flows from operating activities
Net loss	$	(1,256,412	)	$	(592,716	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		313,291			131,571
Loss on sale of equipment		1,751			-
Changes in operating assets and liabilities:
Prepaid expenses		14,500			(448	)
Deposits		-			(412,897	)
Accounts payable and accrued liabilities		94,762			7,792
Interest payable		36,290			14,770
Deferred rent		(2,448	)		144
Deferred revenue		3,000			814
Inventory		(78,282	)		-
Net cash used in operating activities		(873,548	)		(850,970	)
Cash flows from investing activities
Purchase of equipment		(3,758	)		(58,840	)
Net cash used in investing activities		(3,758	)		(58,840	)
Cash flows from financing activities
Repayments of capital leases		(132,924	)		(277,695	)
Payments on operating lease liability		(36,593	)		-
Proceeds from loans payable		-			60,000
Repayments of loans payable		(264,513	)		(24,170	)
Shareholder cash contribution		3,040			-
Proceeds from sale of common stock		34,000			70,300
Proceeds from the sale of series B preferred stock		1,664,000			286,501
Net cash provided by financing activities		1,267,010			114,936
Cash, beginning of period		33,970			913,958
Net change in cash		389,704			(794,874	)
Cash, end of period	$	423,674		$	119,084
Supplemental cash flow information
Cash paid for interest	$	62,816		$	28,779
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities
Capital leases entered into for purchase of equipment	$	-		$	1,162,240
Loan entered into for purchase of equipment	$	564,398		$	-
Forgiveness of accrued wages by related parties	$	73,738		$	-

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

4

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2019

NOTE 1 – NATURE OF OPERATIONS AND ORGANIZATION

The Company was incorporated in the State of Washington on March 29, 2017 for the purpose of developing, designing, manufacturing and distributing hand tools. Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC (“Tribus Innovations”) and acquired all of the outstanding ownership interests of Tribus Innovations. Tribus Innovations was formed on December 1, 2015. The transaction was accounted for as a reverse merger and these financial statements present the historical financial information of Tribus Innovations from its inception and include the financial information of the Company from the completion of the share exchange agreement on March 29, 2017. The Company has realized minimal revenues from its planned business activities.

NOTE 2 – UNAUDITED CONDENSED CONSOLDIATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the periods ended December 31, 2019 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2019 audited financial statements. The results of operations for the periods ended December 31, 2019 are not necessarily indicative of the operating results for the full year. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tribus Innovations LLC. All intercompany balances and transactions are eliminated on consolidation.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

NOTE 3 – GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs which raises substantial doubt regarding the Company’s ability to continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

5

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2019

NOTE 3 – GOING CONCERN (CONTINUED)

The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its plans and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.  During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital. Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

NOTE 4 – CURRENT DEPOSITS

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

During the nine months ended December 31, 2019, the Company entered into a legal dispute with the third-party manufacturer. Among other claims, the Company is seeking a return of the deposits made totaling $402,000. During the three months ended December 31, 2019, the third-party manufacturer’s motion to compel arbitration with the Company was denied and the attorney of record filed a motion to withdraw their representation leaving the third party manufacturer without legal representation as of December 31, 2019. While the dispute is unresolved as of the date the financial statements were issued, the Company, through discussions with outside counsel, believes the deposits totaling $402,000 are likely to be returned to the Company. As such, no reserve against the deposits has been recorded as of December 31, 2019 or March 31, 2019.

NOTE 5 – REVENUE RECOGNITION

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, for revenue recognition. Adoption of ASC 606 did not have a significant impact on our financial statements. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration expected to be received in exchange for those products. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company offers a limited lifetime warranty for manufacturing defects only on product sold. Due to sales recently occurring, the Company is unable to reasonably estimate future costs that will be incurred under its lifetime warranty program on revenue recognized as of December 31, 2019. However, the Company anticipates the amounts associated with revenues recognized as of December 31, 2019 to be immaterial to the financial statements.

The Company recognized revenues of $25,554 during the three and nine months ended December 31, 2019.

NOTE 6 - INVENTORY

The Company carries inventory at cost and recognizes the cost of each through cost of goods sold as product is shipped to customers. The value of inventory is carried at the cost of raw materials purchased to manufacture the finished goods, direct labor associated with manufacturing and certain overhead related to the manufacturing facility. The Company had inventory balances of $78,282 and $0, all of which was finished goods, as of December 31, 2019 and March 31, 2019, respectively.

During the three and nine months ended December 31, 2019, the Company wrote off $48,203 of inventory as scrap costs. The scrap was incurred as early production yielded undesirable results. Due to the cost of scrap materials incurred during the three and nine months ended December 31, 2019, gross margin was negative for each period.

6

NOTE 7 – DEFERRED REVENUE

During the year ended March 31, 2019, the Company accepted pre-orders of its products totaling $814 which was carried as deferred revenue as of March 31, 2019. The Company accepted additional prepaid sales of $3,000 during the nine months ended December 31, 2019 for product which has yet to ship resulting in a total deferred revenue balance of $3,814 as of December 31, 2019.

NOTE 8 – CAPITAL STOCK

Authorized

The Company is authorized to issue up to 20,000,000 shares of $0.001 par value Series A Preferred Stock, 5,000,000 shares of $0.001 par value Series B Preferred Stock and 100,000,000 shares of $0.001 par value Common Stock.

The holders of the Series A Preferred Stock are entitled to 10 votes for each share held. Each share of Series A Preferred Stock is convertible into 10 shares of Common Stock at the discretion of the Company’s directors. In the event that there is a change of control transaction, each share of Series A Preferred Stock is convertible into 10 shares of Common Stock at the option of the holder. The holders of the Series A Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.

The holders of the Series B Preferred Stock are entitled to 4 votes for each share held. Each share of Series B Preferred Stock is convertible into 4 shares of Common Stock at the discretion of the stockholder. The holders of the Series B Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.

Issued

During the nine months ended December 31, 2019, the Company accepted stock subscriptions to issue a total of 136,000 shares of common stock at $0.25 per share resulting in total cash proceeds of $34,000.

During the nine months ended December 31, 2019, the Company issued a total of 2,544,375 shares of Series B Convertible Preferred Stock for total cash proceeds of $1,664,000. Of this amount, 1,138,625 shares of Series B Convertible Preferred Stock was issued to related parties for total cash proceeds of $820,550. Additionally, the Company paid approximately $110,00 to a related party as a finders’ fee in conjunction with the sale of equity investments.

There were 19,999,998; 3,910,000 and 7,320,858 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of December 31, 2019.

There were 19,999,998, 1,365,625 and 7,184,858 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of March 31, 2019.

Shareholder Contributions

During the nine months ended December 31, 2019, the Company received $3,040 in cash from a shareholder as a capital contribution.

Additionally during the nine months ended December 31, 2019, two former officers of the Company forgave accrued wages totaling $73,738 which was treated as a forgiveness of debt by a related party resulting in a capital contribution of $73,738.

7

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2019

NOTE 9 – OPERATING LEASES

On March 23, 2017, the Company entered into a lease agreement for the rent of warehouse space that terminates on April 30, 2022 which was amended on May 20, 2017. Additionally, on March 12, 2019, the Company entered into an additional lease for the rent of warehouse space that terminates on March 31, 2022.

On April 1, 2019, the Company recorded a right of use asset and operating lease liability totaling $207,359 using an imputed interest rate of 25% on its operating leases, equal to the approximate weighted average interest rate imputed on the Company’s existing capital leases. During the nine months ended December 31, 2019, the Company made total principal payments on operating leases of $36,593. There was a total operating lease liability of $170,766 as of December 31, 2019 of which $61,886 was current and $108,880 was long term.

The leases require future minimum payments as shown below:

Year ending March 31,
2020	$	26,128
2021		98,207
2022		99,725
2023		4,321
Total payments		228,381
Less: imputed interest		(57,615	)
Operating lease liability, total	$	170,766

On November 5, 2018, the Company entered into an agreement to sublet a portion of its office space on a month to month basis. The sublease will continue on a month to month basis until the sublessor provides notice to execute a long term lease or will have the option to assume the Company’s lease. The sublease requires monthly rental payments of $5,700 with the first month being prorated accordingly.

On May 8, 2019, the Company entered into a separate sublease agreement whereby it will sublet a portion of its space for a period of twelve months commencing on May 1, 2019. The sublease requires a prorated amount of rent total $1,800 for May 2019 followed by eleven monthly payments of $4,100 through April 2020.

The Company records sublease payments received as other income in the statement of operations resulting in other income of $12,300 and $33,600 being recognized during the three and nine months ended December 31, 2019. The Company has not been released from its obligations under the master lease and accounts for rental income from subleases on a straight line basis monthly.

NOTE 10 – LOANS PAYABLE

During the prior fiscal year, the Company entered into a loan in order to acquire a vehicle. The loan is repayable over five years at $541 per month, is secured by the vehicle and bears interest at 0%. Management determined that the fair value of the loan was not significantly different from its face value and therefore no discount has been recorded. During the nine months ended December 31, 2019, the Company sold the vehicle for the remaining balance on the loan resulting in a balance due of $0 as of December 31, 2019.

On July 27, 2018, the Company entered into a loan agreement to borrow $100,000. The loan carries an interest rate of 24.37%, is payable over twelve months and due on July 27, 2019. There was $0 and $65,464 of principal due as of December 31, 2019 and March 31, 2019, respectively.

During the year ended March 31, 2019, the Company entered into a loan in order to acquire equipment.  The loan is repayable over twelve months at $954 per month, is secured by the equipment and bears interest at 0%.  Management determined that the fair value of the loan was not significantly different from its face value and therefore no discount has been recorded. There was $0 and $10,497 due as of December 31, 2019 and March 31, 2019, all of which was current.

8

On various dates during the nine months ended December 31, 2019, the Company entered into five separate verbal loan agreements to purchase equipment totaling $501,077, each with no stated interest rate. The Company recorded the loans using an imputed interest rate of 6.59% per annum, equal to the interest rate associated with other recent borrowings on assets.

● The first of five loans was for equipment valued at $270,604 and required $27,990 down with six monthly payments of $5,000 and a balloon payment of $221,910 unless otherwise negotiated prior to maturity. During the three months ended December 31, 2019, the Company renegotiated the note to require monthly payments of $5,000 until paid in full, removing the balloon payment.

● The second of five loans was for equipment valued at $24,163 and required $2,500 down with six monthly payments of $1,000 and a balloon payment of $16,395 unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

● The third of the of five loans was for equipment valued at $36,884 and requires monthly payments of $5,000 until paid in full unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

●

● The fourth of five loans was for equipment valued at $137,040 and required $5,000 down with 6 monthly payments of $1,000 and a balloon payment of $126,040 unless otherwise negotiated prior to maturity. During the three months ended December 31, 2019, the Company renegotiated the note to require monthly payments of $5,000 until paid in full, removing the balloon payment.

●

● The fifth of five loans was for equipment valued at $32,386 and required $6,477 down with 3 monthly payments of $6,477 and one payment of $6,478 unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

On June 1, 2019, the Company entered into a loan to borrow $34,222 to purchase a vehicle. As part of the agreement, the Company traded in its existing vehicle for total consideration of $19,464 resulting in a net loss recorded on the asset of $1,751. The loan carries interest at a rate of 6.59% per annum and matures in September 2025. As of December 31, 2019, there was a total of $31,977 due of which $4,720 was current.

Total loans outstanding at December 31, 2019 were $376,927 of which $349,670 was current and $27,257 was long term.

NOTE 11 – CAPITAL LEASES PAYABLE

The Company accounts for capital leases in accordance with ASC 842. During the year ended March 31, 2019, the Company entered into seven separate long-term leases for equipment that contain a $1 buyout option upon lease termination as well as others that contain bargain purchase option upon the lease termination. The Company determined these were capital leases based on the minimum buy out price and capitalized the net present value of the leases which totaled $1,162,240 as equipment. The leases require total monthly payments of $34,171.

9

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2019

NOTE 11 – CAPITAL LEASES PAYABLE (CONTINUED)

As of December 31, 2019, there was a total of $1,046,115 of future payments due through June 2023 of which $287,972 are financing charges leaving a total principal balance of $758,143. Of the total principal balance due, $301,162 was current and $456,981 was long term as of December 31, 2019.

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

	Principal		Interest		Total
Year ended March 31,
2020	$	115,731	$	90,693	$	206,424
2021		268,302		137,008		405,310
2022		259,304		50,164		309,468
2023		107,662		9,864		117,526
2024		7,144		243		7,387
Total	$	758,143	$	287,972	$	1,046,115

NOTE 12 – SUBSEQUENT EVENTS

The Company evaluated all events occurring subsequent to December 31, 2019 and through the date of this filing and determined there were no additional disclosures required.

10

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

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company's business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by. the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

General Business Development

The Company was formed on March 29, 2017 in the State of Washington.

Business Strategy

Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC (“Tribus Innovations”) and acquired all of the outstanding ownership interests of Tribus Innovations. Tribus Innovations was formed on December 1, 2015. The transaction was accounted for as a reverse merger and these financial statements present the historical financial information of Tribus Innovations from its inception and include the financial information of the Company from the completion of the share exchange agreement on March 29, 2017. The Company has realized limited revenues from its planned business activities. The membership interests of Tribus Innovations, LLC were all held by the officers and directors of Tribus Enterprises, Inc. The Company acquired 100% of the membership interests of Tribus Innovations, LLC in exchange for 2,600,000 of our common shares and 19,999,998 of our shares of Class A preferred stock. Tribus Innovations is currently a 100% owned subsidiary of the Company.

Tribus LLC was formed in December 2015 to develop, manufacture, and market a compelling product line of innovative ratcheting flare nut wrenches which have been issued a Patent under application number: 15/092,056 which was issued on September 17, 2019 under Patent Number 10,414,029. The initial product line uses traditional manufacturing methods of metal forging, subtractive manufacturing (CNC milling), additive manufacturing (3D printing), and plastic injection molding. Tribus LLC has made several plastic resin prototypes in 2016.

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

Products

Tribus LLC’s ratcheting flare nut wrench addresses the market in a way that has never been done before; reducing the time it takes to turn inline fasteners.

11

•    Ease of Use – There are no buttons or switches. In order to reverse the tightening direction, simply remove the tool and rotate it 180°.

•    Learning Curve – This works the same as a standard open ended wrench but it has the ability to ratchet, saving valuable time. There will be a very short and slight learning curve as the users will simply need to remove the tool off the fastener and line up the open slots to remove the tool completely off the line.

•    Heavy Torque application – Due to the design of the pawls that engage into the ratchet, it has at least 4x more contact surfaces than standard ratcheting wrenches. This will translate to much more application of torque.

•    Convenience in tight spaces – Pawls have been designed along with corresponding grooves in the ratchet so users can maximize ratchet pitch. It will only take 2°- 4° to get the ratchet to click. This is crucial in tight spaces where there is very little room to swing the ratchet.

Tribus Innovations’ ratcheting flare nut wrench will be produced for sale in the hand tool industry. Historically there have been limited designs in the ratcheting flare nut wrench sales market such as; Gear Wrench part number 89100 (UPC 099575891007) and the traditional non-ratcheting flare nut wrench. These designs do not allow for small incremental movement in confined spaces, whereas Tribus Innovations’ version of the ratcheting flare nut wrench breaks new ground in this market.

Liquidity and Capital Resources

As of December 31, 2019, we had $423,674 in cash, total current assets of $909,467 and total current liabilities of $896,223. Current liabilities consisted mainly of $129,274 of accounts payable, a capital lease liability of $301,162, an operating lease liability of $61,886 and current loans payable of $349,670.

As of March 31, 2019, we had current assets totaling $455,981 consisting of $33,970 of cash, $402,000 of current deposits and $20,011 of prepaid expenses. Current liabilities totaled $437,680 as of March 31, 2019.

Net cash used in operating activities was $873,548 compared to $850,970 for the nine months ended December 31, 2019 and 2018, respectively.

Net cash used in investing activities was $3,758 compared to $58,840 the nine months ended December 31, 2019 and 2018 respectively.

Net cash provided by financing activities was $1,267,010 and $114,936 for the nine months ended December 31, 2019 and 2018, respectively.

Going Concern

The future of our company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. See Note 3 to the financial statements for additional information.

Results of Operations

We generated limited revenues during the three and nine months ended December 31, 2019 and no revenues during the three and nine months ended December 31, 2018. Total operating expenses were $473,213 during the three months ended December 31, 2019 and $171,785 for the three months ended December 31, 2018. Total operating expenses were $1,069,710 during the nine months ended December 31, 2019 and $535,613 for the nine months ended December 31, 2018. The increase in operating expenses for the three and nine months ended December 31, 2019 when compared to the same periods in 2018 were due to an increase in the company’s operations and preparation in the current year. Net loss for the three months ended December 31, 2019 was $556,258 compared to $204,694 for the same period in 2018. Net loss for the nine months ended December 31, 2019 was $1,256,412 compared to $592,716 for the same period in 2018.

CRITICAL ACCOUNTING POLICIES

In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: going concern, inventory, revenue recognition and capital leases payable.. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.

12

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to market risk related to interest rates or foreign currencies.

ITEM 3A. OFF BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off balance sheet arrangements.

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of December 31, 2019, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), who concluded, that because of the material weakness in our internal control over financial reporting (“ICFR”) our disclosure controls and procedures were not effective as of December 31, 2019.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the current quarter that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

A.            Tribus Lawsuit

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

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

13

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

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

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

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

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

On September 14, 2019, the United States Bankruptcy Court for the Southern District of Ohio issued an order denying Nathan Hake a discharge in bankruptcy, and his bankruptcy proceedings have now concluded. As a result, Tribus is entitled to continue pursuing its claims against Hake personally in the Tribus Lawsuit.

On December 11, 2019, the trial court denied DMW’s motion to stay the Tribus Lawsuit and compel arbitration. The deadline to appeal that decision has now passed, and was not appealed. In addition, the trial court granted Tribus’s motion to consolidate the Tribus Lawsuit and the Trost Lawsuit. Consequently, the Tribus Lawsuit and the Trost Lawsuit are now proceeding as a single lawsuit.

On December 16, 2019, counsel for DMW filed a motion to withdraw as counsel from both the Tribus Lawsuit and the Trost Lawsuit, citing lack of payment by DMW and a separate, unrelated conflict. On January 23, 2020, the trial court granted that motion to withdraw, leaving DMW and Hake without counsel of record in either lawsuit.

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

B.            Trost Lawsuit

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

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

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

14

The Trost Lawsuit has seen considerable activity to date as well. In addition to substantial motion practice, DMW has filed a motion for temporary restraining order and preliminary injunction, seeking to prevent Trost from doing any business with Tribus. The motion for temporary restraining order and preliminary injunction was referred to a magistrate for decision. In Ohio, a judge can refer a matter to a magistrate for decision, but a magistrate’s decision is not effective until it is adopted by the judge. Following a magistrate’s decision, any party is permitted to file objections to that decision with the judge, and the judge must then perform an independent review of the record of proceedings before the magistrate before deciding whether to adopt or reject the magistrate’s decision.

An evidentiary hearing was held on DMW’s motion on May 13, 2019, and June 26, 2019. On August 6, 2019, the magistrate issued a decision in favor of DMW, which was later amended in another magistrate’s decision dated August 27, 2019. Trost has filed objections to the magistrate’s. If adopted by the judge, the magistrate’s decision would prohibit Trost from performing any work for Tribus. Trost filed objections to the magistrate’s decision, and the judge has not adopted or rejected the magistrate’s decision. Until such action is taken by the judge, the magistrate’s decision is not effective.

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

ITEM 1A. RISK FACTORS

There has been no material changes in the risk factors set forth in the Company’s Form 10K for the period ended March 31, 2019 filed July 19, 2019.

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

During the nine months ended December 31, 2019, the Company accepted stock subscriptions to issue a total of 136,000 shares of common stock at $0.25 per share resulting in total cash proceeds of $34,000.

During the nine months ended December 31, 2019, the Company issued a total of 2,544,375 shares of Series B Convertible Preferred Stock for total cash proceeds of $1,664,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are included or incorporated by reference as exhibits to this report:

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

(b) REPORTS ON FORM 8-K

None.

15

SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: February 14, 2020.

Tribus Enterprises, Inc.
Registrant
By:	/s/ Kendall Bertagnole
	Kendall Bertagnole
	Chief Executive Officer

16

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Kendall Bertagnole, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Tribus Enterprises, Inc. (the “Company”); 

2. Based on my knowledge, this 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 this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented ire this report; 

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, 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 Company’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; and 

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

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: February 14, 2020

/s/ Kendall Bertagnole

Kendall Bertagnole

Principal Executive Officer

EX-31.2

EXHIBIT 31.2 

CERTIFICATION

I, Kendall Bertagnole, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Tribus Enterprises, Inc. (the “Company”); 

2. Based on my knowledge, this 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 this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented ire this report; 

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, 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 Company’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; and 

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

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: February 14, 2020

/s/ Kendall Bertagnole

Kendall Bertagnole

Principal Financial 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 of Tribus Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kendall Bertagnole, Principal Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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: February 14, 2020

/s/ Kendall Bertagnole

Kendall Bertagnole

Principal Executive and Financial Officer

XML

Note 9 - Operating Leases (Tables)

9 Months Ended

Dec. 31, 2019

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year ending March 31,
2020	$	26,128
2021		98,207
2022		99,725
2023		4,321
Total payments		228,381
Less: imputed interest		(57,615	)
Operating lease liability, total	$	170,766

XML

Note 5 - Revenue Recognition

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE

5

– REVENUE RECOGNITION

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

606,

 

Revenue from Contracts with Customers

, for revenue recognition. Adoption of ASC

606

did

not

have a significant impact on our financial statements. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration expected to be received in exchange for those products. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company offers a limited lifetime warranty for manufacturing defects only on product sold. Due to sales recently occurring, the Company is unable to reasonably estimate future costs that will be incurred under its lifetime warranty program on revenue recognized as of

December 31, 2019.

However, the Company anticipates the amounts associated with revenues recognized as of

December 31, 2019

to be immaterial to the financial statements.

The Company recognized revenues of

$25,554

during the

three

and

nine

months ended

December 31, 2019.

XML

Note 9 - Operating Leases

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE

9

–

OPERATING LEASES

On

March 23, 2017,

the Company entered into a lease agreement for the rent of warehouse space that terminates on

April 30, 2022

which was amended on

May 20, 2017.

Additionally, on

March 12, 2019,

the Company entered into an additional lease for the rent of warehouse space that terminates on

March 31, 2022.

On

April 1, 2019,

the Company recorded a right of use asset and operating lease liability totaling

$207,359

using an imputed interest rate of

25%

on its operating leases, equal to the approximate weighted average interest rate imputed on the Company’s existing capital leases. During the

nine

months ended

December 31, 2019,

the Company made total principal payments on operating leases of

$36,593.

There was a total operating lease liability of

$170,766

as of

December 31, 2019

of which

$61,886

was current and

$108,880

was long term.

The leases require future minimum payments as shown below:

Year ending March 31,
2020	$	26,128
2021		98,207
2022		99,725
2023		4,321
Total payments		228,381
Less: imputed interest		(57,615	)
Operating lease liability, total	$	170,766

On

November 5, 2018,

the Company entered into an agreement to sublet a portion of its office space on a month to month basis. The sublease will continue on a month to month basis until the sublessor provides notice to execute a long term lease or will have the option to assume the Company’s lease. The sublease requires monthly rental payments of

$5,700

with the

first

month being prorated accordingly.

On

May 8, 2019,

the Company entered into a separate sublease agreement whereby it will sublet a portion of its space for a period of

twelve

months commencing on

May 1, 2019.

The sublease requires a prorated amount of rent total

$1,800

for

May 2019

followed by

eleven

monthly payments of

$4,100

through

April 2020.

The Company records sublease payments received as other income in the statement of operations resulting in other income of

$12,300

and

$33,600

being recognized during the

three

and

nine

months ended

December 31, 2019.

The Company has

not

been released from its obligations under the master lease and accounts for rental income from subleases on a straight line basis monthly.

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Revenue	$ 25,554		$ 25,554
Cost of goods sold	67,868		67,868
Gross margin	(42,314)		(42,314)
Operating expenses
Employee costs	20,047	60,729	110,928	182,688
Professional fees	169,777	27,012	287,885	74,115
General and administrative	115,281	21,043	258,685	85,110
Facilities	19,630	12,884	64,559	62,881
Research and development	55,851		65,616	1,140
Depreciation expense	92,627	50,117	282,037	129,679
Total operating expenses	473,213	171,785	1,069,710	535,613
Net loss from operations	(515,527)	(171,785)	(1,112,024)	(535,613)
Other income (expense)
Other income	13,861	10,640	35,489	10,640
Loss on sale of equipment			(1,752)
Interest expense	(54,592)	(43,549)	(178,125)	(67,743)
Total other income (expense)	(40,731)	(32,909)	(144,388)	(57,103)
Net and comprehensive loss	$ (556,258)	$ (204,694)	$ (1,256,412)	$ (592,716)
Net loss per share, basic and diluted (in dollars per share)	$ (0.08)	$ (0.03)	$ (0.17)	$ (0.08)
Weighted average shares outstanding, basic and diluted (in shares)	7,317,206	7,146,988	7,255,462	7,065,006

XML

Note 2 - Unaudited Condensed Consolidated Interim Financial Statements

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE

2

– UNAUDITED CONDENSED CONSOLDIATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the periods ended

December 31, 2019

and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s

March 31, 2019

audited financial statements. The results of operations for the periods ended

December 31, 2019

are

not

necessarily indicative of the operating results for the full year. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tribus Innovations LLC. All intercompany balances and transactions are eliminated on consolidation.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (

1

) recorded transactions are valid; (

2

) all valid transactions are recorded and (

3

) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

XML

Note 6 -Inventory (Details Textual) - USD ($)	3 Months Ended	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Mar. 31, 2019
Inventory, Net, Total	$ 78,282	$ 78,282	$ 0
Inventory Write-down	$ 48,203	$ 48,203

XML

Note 9 - Operating Leases - Future Minimum Payments (Details)	Dec. 31, 2019 USD ($)
2020	$ 26,128
2021	98,207
2022	99,725
2023	4,321
Total payments	228,381
Less: imputed interest	(57,615)
Operating lease liability, total	$ 170,766

XML

Note 5 - Revenue Recognition (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Revenue from Contract with Customer, Excluding Assessed Tax, Total	$ 25,554		$ 25,554

XML

Note 9 - Operating Leases (Details Textual) - USD ($)			1 Months Ended	3 Months Ended	9 Months Ended
	May 08, 2019	Nov. 05, 2018	May 31, 2019	Dec. 31, 2019	Dec. 31, 2019	Apr. 01, 2019	Mar. 31, 2019
Operating Lease, Right-of-Use Asset				$ 170,526	$ 170,526	$ 207,359
Lessee, Operating Lease, Discount Rate						25.00%
Operating Lease, Payments					36,593
Operating Lease, Liability, Total				170,766	170,766
Operating Lease, Liability, Current				61,886	61,886
Operating Lease, Liability, Noncurrent				108,880	108,880
Operating Sublease, Monthly Rental Payments	$ 4,100	$ 5,700
Sublease Income			$ 1,800
Other Nonoperating Income (Expense) [Member]
Sublease Income				$ 12,300	$ 33,600

XML

Note 4 - Current Deposits

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Current Deposits [Text Block]

NOTE

4

– CURRENT DEPOSITS

During the year ended

March 31, 2019,

the Company made total advances to a

third

-party manufacturer of

$402,000

in exchange for a discount from the negotiated purchase price of future inventory units. The deposits allowed the Company to receive a discount of approximately

$2.46

per unit from the originally agreed upon purchase price on the

first

163,415

individual units of inventory manufactured when purchases begin. 

During the

nine

months ended

December 31, 2019,

the Company entered into a legal dispute with the

third

-party manufacturer. Among other claims, the Company is seeking a return of the deposits made totaling

$402,000.

During the

three

months ended

December 31, 2019,

the

third

-party manufacturer’s motion to compel arbitration with the Company was denied and the attorney of record filed a motion to withdraw their representation leaving the

third

party manufacturer without legal representation as of

December 31, 2019.

While the dispute is unresolved as of the date the financial statements were issued, the Company, through discussions with outside counsel, believes the deposits totaling

$402,000

are likely to be returned to the Company. As such,

no

reserve against the deposits has been recorded as of

December 31, 2019

or

March 31, 2019.

XML

Note 8 - Capital Stock

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

8

– CAPITAL STOCK

Authorized

The Company is authorized to issue up to

20,000,000

shares of

$0.001

par value Series A Preferred Stock,

5,000,000

shares of

$0.001

par value Series B Preferred Stock and

100,000,000

shares of

$0.001

par value Common Stock.

The holders of the Series A Preferred Stock are entitled to

10

votes for each share held. Each share of Series A Preferred Stock is convertible into

10

shares of Common Stock at the discretion of the Company’s directors. In the event that there is a change of control transaction, each share of Series A Preferred Stock is convertible into

10

shares of Common Stock at the option of the holder. The holders of the Series A Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.

The holders of the Series B Preferred Stock are entitled to

4

votes for each share held. Each share of Series B Preferred Stock is convertible into

4

shares of Common Stock at the discretion of the stockholder. The holders of the Series B Preferred Stock are entitled to participate in dividends. Dividends are non-cumulative and are at the discretion of the Company’s directors.

Issued

During the

nine

months ended

December 31, 2019,

the Company accepted stock subscriptions to issue a total of

136,000

shares of common stock at

$0.25

per share resulting in total cash proceeds of

$34,000.

During the

nine

months ended

December 31, 2019,

the Company issued a total of

2,544,375

shares of Series B Convertible Preferred Stock for total cash proceeds of

$1,664,000.

Of this amount,

1,138,625

shares of Series B Convertible Preferred Stock was issued to related parties for total cash proceeds of

$820,550.

Additionally, the Company paid approximately

$110,00

to a related party as a finders’ fee in conjunction with the sale of equity investments.

There were

19,999,998;

3,910,000

and

7,320,858

shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of

December 31, 2019.

There were

19,999,998,

1,365,625

and

7,184,858

shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of

March 31, 2019.

Shareholder Contributions

During the

nine

months ended

December 31, 2019,

the Company received

$3,040

in cash from a shareholder as a capital contribution.

Additionally during the

nine

months ended

December 31, 2019,

two

former officers of the Company forgave accrued wages totaling

$73,738

which was treated as a forgiveness of debt by a related party resulting in a capital contribution of

$73,738.

XML

Note 12 - Subsequent Events

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

1

2

– SUBSEQUENT EVENTS

The Company evaluated all events occurring subsequent to

December 31, 2019

and through the date of this filing and determined there were

no

additional disclosures required.

XML

Note 3 - Going Concern

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE

3

– GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does

not

have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs which raises substantial doubt regarding the Company’s ability to continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its plans and eventually attain profitable operations. The accompanying financial statements do

not

include any adjustments that

may

be necessary if the Company is unable to continue as a going concern.  During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company

may

experience a cash shortfall and be required to raise additional capital. Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management

may

raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be

no

assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

XML

Consolidated Statement of Stockholders' Equity - USD ($)	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Series B Preferred Stock [Member]	Total
Balance (in shares) at Mar. 31, 2018	19,999,998	1,007,500	6,903,658
Balance at Mar. 31, 2018	$ 20,000	$ 1,008	$ 6,904	$ 1,462,533	$ (593,399)		$ 897,046
Series B preferred stock issued for cash (in shares)		206,875
Series B preferred stock issued for cash		$ 206		165,294			165,500
Common stock issued for cash (in shares)			155,200
Common stock issued for cash			$ 155	38,645			38,800
Net loss					(172,651)		(172,651)
Balance (in shares) at Jun. 30, 2018	19,999,998	1,214,375	7,058,858
Balance at Jun. 30, 2018	$ 20,000	$ 1,214	$ 7,059	1,666,472	(766,050)		928,695
Balance (in shares) at Mar. 31, 2018	19,999,998	1,007,500	6,903,658
Balance at Mar. 31, 2018	$ 20,000	$ 1,008	$ 6,904	1,462,533	(593,399)		897,046
Net loss							(592,716)
Balance (in shares) at Dec. 31, 2018	19,999,998	1,365,625	7,184,858
Balance at Dec. 31, 2018	$ 20,000	$ 1,365	$ 7,185	1,818,695	(1,186,115)		661,130
Balance (in shares) at Jun. 30, 2018	19,999,998	1,214,375	7,058,858
Balance at Jun. 30, 2018	$ 20,000	$ 1,214	$ 7,059	1,666,472	(766,050)		928,695
Common stock issued for cash (in shares)			8,000
Common stock issued for cash			$ 8	1,992			2,000
Net loss					(215,371)		(215,371)
Balance (in shares) at Sep. 30, 2018	19,999,998	1,214,375	7,066,858
Balance at Sep. 30, 2018	$ 20,000	$ 1,214	$ 7,067	1,668,464	(981,421)		715,324
Series B preferred stock issued for cash (in shares)		151,250
Series B preferred stock issued for cash		$ 151		120,849			121,000
Common stock issued for cash (in shares)			118,000
Common stock issued for cash			$ 118	29,382			29,500
Net loss					(204,694)		(204,694)
Balance (in shares) at Dec. 31, 2018	19,999,998	1,365,625	7,184,858
Balance at Dec. 31, 2018	$ 20,000	$ 1,365	$ 7,185	1,818,695	(1,186,115)		661,130
Balance (in shares) at Mar. 31, 2019	19,999,998	1,365,625	7,184,858
Balance at Mar. 31, 2019	$ 20,000	$ 1,366	$ 7,185	1,818,694	(1,407,042)		440,203
Series B preferred stock issued for cash (in shares)		311,875
Series B preferred stock issued for cash		$ 312		249,188			249,500
Common stock issued for cash (in shares)			4,000
Common stock issued for cash			$ 4	996			1,000
Net loss					(355,398)		(355,398)
Balance (in shares) at Jun. 30, 2019	19,999,998	1,677,500	7,188,858
Balance at Jun. 30, 2019	$ 20,000	$ 1,678	$ 7,189	2,068,878	(1,762,440)		335,305
Balance (in shares) at Mar. 31, 2019	19,999,998	1,365,625	7,184,858
Balance at Mar. 31, 2019	$ 20,000	$ 1,366	$ 7,185	1,818,694	(1,407,042)		440,203
Common stock issued for cash (in shares)						2,544,375
Net loss							(1,256,412)
Shareholder forgiveness of wages payable							73,738
Balance (in shares) at Dec. 31, 2019	19,999,998	3,910,000	7,320,858
Balance at Dec. 31, 2019	$ 20,000	$ 3,910	$ 7,321	3,590,792	(2,663,454)		958,569
Balance (in shares) at Jun. 30, 2019	19,999,998	1,677,500	7,188,858
Balance at Jun. 30, 2019	$ 20,000	$ 1,678	$ 7,189	2,068,878	(1,762,440)		335,305
Series B preferred stock issued for cash (in shares)		375,000
Series B preferred stock issued for cash		$ 375		299,625			300,000
Common stock issued for cash (in shares)			88,000
Common stock issued for cash			$ 88	21,912			22,000
Net loss					(344,756)		(344,756)
Shareholder cash contribution				3,040			3,040
Shareholder forgiveness of wages payable				73,738			73,738
Balance (in shares) at Sep. 30, 2019	19,999,998	2,052,500	7,276,858
Balance at Sep. 30, 2019	$ 20,000	$ 2,053	$ 7,277	2,467,193	(2,107,196)		389,327
Series B preferred stock issued for cash (in shares)		1,857,500
Series B preferred stock issued for cash		$ 1,857		1,112,643			1,114,500
Common stock issued for cash (in shares)			44,000
Common stock issued for cash			$ 44	10,956			11,000
Net loss					(556,258)		(556,258)
Balance (in shares) at Dec. 31, 2019	19,999,998	3,910,000	7,320,858
Balance at Dec. 31, 2019	$ 20,000	$ 3,910	$ 7,321	$ 3,590,792	$ (2,663,454)		$ 958,569

XML

Document And Entity Information - shares	9 Months Ended
	Dec. 31, 2019	Feb. 14, 2020
Document Information [Line Items]
Entity Registrant Name	Tribus Enterprises, Inc.
Entity Central Index Key	0001706573
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		7,320,858
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Interactive Data Current	Yes

XML

Note 11 - Capital Leases Payable (Tables)

9 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

	Principal		Interest		Total
Year ended March 31,
2020	$	115,731	$	90,693	$	206,424
2021		268,302		137,008		405,310
2022		259,304		50,164		309,468
2023		107,662		9,864		117,526
2024		7,144		243		7,387
Total	$	758,143	$	287,972	$	1,046,115

XML

Note 7 - Deferred Revenue (Details Textual) - USD ($)	9 Months Ended
	Dec. 31, 2019	Mar. 31, 2019
Contract with Customer, Liability, Total	$ 3,814	$ 814
Contract with Customer, Liability, Revenue Recognized	$ 3,000

XML

Note 1 - Nature of Operations and Organization

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Nature of Operations [Text Block]

NOTE

1

– NATURE OF OPERATIONS AND ORGANIZATION

The Company was incorporated in the State of Washington on

March 29, 2017

for the purpose of developing, designing, manufacturing and distributing hand tools. Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC (“Tribus Innovations”) and acquired all of the outstanding ownership interests of Tribus Innovations. Tribus Innovations was formed on

December 1, 2015.

The transaction was accounted for as a reverse merger and these financial statements present the historical financial information of Tribus Innovations from its inception and include the financial information of the Company from the completion of the share exchange agreement on

March 29, 2017.

The Company has realized minimal revenues from its planned business activities.

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Dec. 31, 2019	Mar. 31, 2019
Accumulated depreciation	$ 460,039	$ 194,226
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	7,320,858	7,184,858
Common stock, shares outstanding (in shares)	7,320,858	7,184,858
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	19,999,998	19,999,998
Preferred stock, shares outstanding (in shares)	19,999,998	19,999,998
Series B Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	3,910,000	1,365,625
Preferred stock, shares outstanding (in shares)	3,910,000	1,365,625

XML

Note 6 -Inventory

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE

6

- INVENTORY

The Company carries inventory at cost and recognizes the cost of each through cost of goods sold as product is shipped to customers. The value of inventory is carried at the cost of raw materials purchased to manufacture the finished goods, direct labor associated with manufacturing and certain overhead related to the manufacturing facility. The Company had inventory balances of

$78,282

and

$0,

all of which was finished goods, as of

December 31, 2019

and

March 31, 2019,

respectively.

During the

three

and

nine

months ended

December 31, 2019,

the Company wrote off

$48,203

of inventory as scrap costs. The scrap was incurred as early production yielded undesirable results. Due to the cost of scrap materials incurred during the

three

and

nine

months ended

December 31, 2019,

gross margin was negative for each period.

XML

Note 10 - Loans Payable

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

10

– LOANS PAYABLE

During the prior fiscal year, the Company entered into a loan in order to acquire a vehicle. The loan is repayable over

five

years at

$541

per month, is secured by the vehicle and bears interest at

0%.

Management determined that the fair value of the loan was

not

significantly different from its face value and therefore

no

discount has been recorded. During the

nine

months ended

December 31, 2019,

the Company sold the vehicle for the remaining balance on the loan resulting in a balance due of

$0

as of

December 31, 2019.

On

July 27, 2018,

the Company entered into a loan agreement to borrow

$100,000.

The loan carries an interest rate of

24.37%,

is payable over

twelve

months and due on

July 27, 2019.

There was

$0

and

$65,464

of principal due as of

December 31, 2019

and

March 31, 2019,

respectively.

During the year ended

March 31, 2019,

the Company entered into a loan in order to acquire equipment.  The loan is repayable over

twelve

months at

$954

per month, is secured by the equipment and bears interest at

0%.

  Management determined that the fair value of the loan was

not

significantly different from its face value and therefore

no

discount has been recorded. There was

$0

and

$10,497

due as of

December 31, 2019

and

March 31, 2019,

all of which was current.

On various dates during the

nine

months ended

December 31, 2019,

the Company entered into

five

separate verbal loan agreements to purchase equipment totaling

$501,077,

each with

no

stated interest rate. The Company recorded the loans using an imputed interest rate of

6.59%

per annum, equal to the interest rate associated with other recent borrowings on assets.

● The first of five loans was for equipment valued at $270,604 and required $27,990 down with six monthly payments of $5,000 and a balloon payment of $221,910 unless otherwise negotiated prior to maturity. During the three months ended December 31, 2019, the Company renegotiated the note to require monthly payments of $5,000 until paid in full, removing the balloon payment.

● The second of five loans was for equipment valued at $24,163 and required $2,500 down with six monthly payments of $1,000 and a balloon payment of $16,395 unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

● The third of the of five loans was for equipment valued at $36,884 and requires monthly payments of $5,000 until paid in full unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

●

● The fourth of five loans was for equipment valued at $137,040 and required $5,000 down with 6 monthly payments of $1,000 and a balloon payment of $126,040 unless otherwise negotiated prior to maturity. During the three months ended December 31, 2019, the Company renegotiated the note to require monthly payments of $5,000 until paid in full, removing the balloon payment.

●

● The fifth of five loans was for equipment valued at $32,386 and required $6,477 down with 3 monthly payments of $6,477 and one payment of $6,478 unless otherwise negotiated prior to maturity. This loan was repaid in full during the period ended December 31, 2019.

On

June 1, 2019,

the Company entered into a loan to borrow

$34,222

to purchase a vehicle. As part of the agreement, the Company traded in its existing vehicle for total consideration of

$19,464

resulting in a net loss recorded on the asset of

$1,751.

The loan carries interest at a rate of

6.59%

per annum and matures in

September 2025.

As of

December 31, 2019,

there was a total of

$31,977

due of which

$4,720

was current.

Total loans outstanding at

December 31, 2019

were

$376,927

of which

$349,670

was current and

$27,257

was long term.

XML

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net loss	$ (1,256,412)	$ (592,716)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	313,291	131,571
Loss on sale of equipment	1,751
Changes in operating assets and liabilities:
Prepaid expenses	14,500	(448)
Deposits		(412,897)
Accounts payable and accrued liabilities	94,762	7,792
Interest payable	36,290	14,770
Deferred rent	(2,448)	144
Deferred revenue	3,000	814
Inventory	(78,282)
Net cash used in operating activities	(873,548)	(850,970)
Cash flows from investing activities
Purchase of equipment	(3,758)	(58,840)
Net cash used in investing activities	(3,758)	(58,840)
Cash flows from financing activities
Repayments of capital leases	(132,924)	(277,695)
Payments on operating lease liability	(36,593)
Proceeds from loans payable		60,000
Repayments of loans payable	(264,513)	(24,170)
Shareholder cash contribution	3,040
Proceeds from sale of common stock	34,000	70,300
Proceeds from the sale of series B preferred stock	1,664,000	286,501
Net cash provided by financing activities	1,267,010	114,936
Cash, beginning of period	33,970	913,958
Net change in cash	389,704	(794,874)
Cash, end of period	423,674	119,084
Supplemental cash flow information
Cash paid for interest	62,816	28,779
Cash paid for income taxes
Supplemental disclosure of non-cash financing activities
Capital leases entered into for purchase of equipment		1,162,240
Loan entered into for purchase of equipment	564,398
Forgiveness of Wages Payable by Related Parties	$ 73,738

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 31, 2019	Mar. 31, 2019
Current assets
Cash	$ 423,674	$ 33,970
Inventory	78,282	0
Deposits, current	402,000	402,000
Prepaid expenses	5,511	20,011
Total current assets	909,467	455,981
Deposits	41,337	41,337
Right of use asset	170,526
Equipment, net of accumulated depreciation of $460,039 and $194,226, respectively	1,326,580	1,061,675
Total assets	2,447,910	1,558,993
Current liabilities
Accounts payable and accrued liabilities	129,274	108,249
Interest payable	50,417	23,612
Accrued rent		8,027
Deferred revenue	3,814	814
Operating lease liability, current	61,886
Capital lease, current (Note 7)	301,162	214,529
Loans payable, current (Note 6)	349,670	82,449
Total current liabilities	896,223	437,680
Operating lease liability, net of current portion	108,880
Capital lease, net of current portion (Note 7)	456,981	667,053
Loans payable, net of current portion (Note 6)	27,257	14,057
Total liabilities	1,489,341	1,118,790
Commitments and contingencies
Stockholders' equity
Common stock, $0.001 par value; 100,000,000 authorized; 7,320,858 and 7,184,858 issued and outstanding at December 31, 2019 and March 31, 2019, respectively	7,321	7,185
Additional paid in capital	3,590,792	1,818,694
Accumulated deficit	(2,663,454)	(1,407,042)
Total stockholders' equity	958,569	440,203
Total liabilities and stockholders' equity	2,447,910	1,558,993
Series A Preferred Stock [Member]
Stockholders' equity
Preferred stock	20,000	20,000
Series B Preferred Stock [Member]
Stockholders' equity
Preferred stock	$ 3,910	$ 1,366

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Note 11 - Capital Leases Payable - Future Annual Principal Payments Under Capital Leases (Details)	Dec. 31, 2019 USD ($)
2020	$ 206,424
2021	405,310
2022	309,468
2023	117,526
2024	7,387
Total	1,046,115
Capital Lease [Member]
2020	115,731
2021	268,302
2022	259,304
2023	107,662
2024	7,144
Total	758,143
Interest Payable [Member]
2020	90,693
2021	137,008
2022	50,164
2023	9,864
2024	243
Total	$ 287,972

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Note 7 - Deferred Revenue

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Contract with Customer Liability, Deferred Revenue Disclosure [Text Block]

NOTE

7

– DEFERRED REVENUE

During the year ended

March 31, 2019,

the Company accepted pre-orders of its products totaling

$814

which was carried as deferred revenue as of

March 31, 2019.

The Company accepted additional prepaid sales of

$3,000

during the

nine

months ended

December 31, 2019

for product which has yet to ship resulting in a total deferred revenue balance of

$3,814

as of

December 31, 2019.

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Note 11 - Capital Leases Payable

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

NOTE

1

1

– CAPITAL LEASES PAYABLE

The Company accounts for capital leases in accordance with ASC

842.

During the year ended

March 31, 2019,

the Company entered into

seven

separate long-term leases for equipment that contain a

$1

buyout option upon lease termination as well as others that contain bargain purchase option upon the lease termination. The Company determined these were capital leases based on the minimum buy out price and capitalized the net present value of the leases which totaled

$1,162,240

as equipment. The leases require total monthly payments of

$34,171.

As of

December 31, 2019,

there was a total of

$1,046,115

of future payments due through

June 2023

of which

$287,972

are financing charges leaving a total principal balance of

$758,143.

Of the total principal balance due,

$301,162

was current and

$456,981

was long term as of

December 31, 2019.

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

	Principal		Interest		Total
Year ended March 31,
2020	$	115,731	$	90,693	$	206,424
2021		268,302		137,008		405,310
2022		259,304		50,164		309,468
2023		107,662		9,864		117,526
2024		7,144		243		7,387
Total	$	758,143	$	287,972	$	1,046,115

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Note 4 - Current Deposits (Details Textual)	9 Months Ended	12 Months Ended
	Dec. 31, 2019 USD ($)	Mar. 31, 2019 USD ($) $ / shares
Advances for Inventory Units		$ 402,000
Inventory, Discount Price Per Unit | $ / shares		$ 2.46
Inventory, Number of Units to be Purchased		163,415
Loss Contingency, Damages Sought, Value	$ 402,000
Reserve Against Deposit	$ 0	$ 0

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Note 8 - Capital Stock (Details Textual)	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($)	Mar. 31, 2019 $ / shares shares
Common Stock, Shares Authorized		100,000,000		100,000,000
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.001		$ 0.001
Proceeds from Issuance of Common Stock | $		$ 34,000	$ 70,300
Common Stock, Shares, Issued, Total		7,320,858		7,184,858
Proceeds from Contributed Capital | $		$ 3,040
Forgiveness of Wages Payable by Related Parties | $		73,738
Adjustments to Additional Paid in Capital, Increase for Shareholder Forgiveness of Wages Payable | $	$ 73,738	73,738
Sale of Equity Instrument [Member]
Related Party Transaction, Expenses from Transactions with Related Party | $		$ 11,000
Subscription Agreements [Member] | Commo Stock Subscriber [Member]
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.25
Common Stock, Shares Subscribed but Unissued		136,000
Proceeds from Issuance of Common Stock | $		$ 34,000
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized		20,000,000		20,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares		$ 0.001		$ 0.001
Preferred Stock, Voting Rights, Votes Per Share Held		10
Convertible Preferred Stock, Shares Issuable upon Conversion		10
Preferred Stock, Shares Issued, Total		19,999,998		19,999,998
Preferred Stock, Shares Outstanding, Ending Balance		19,999,998		19,999,998
Series B Preferred Stock [Member]
Preferred Stock, Shares Authorized		5,000,000		5,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares		$ 0.001		$ 0.001
Preferred Stock, Voting Rights, Votes Per Share Held		4
Convertible Preferred Stock, Shares Issuable upon Conversion		4
Stock Issued During Period, Shares, New Issues		2,544,375
Proceeds from Issuance of Convertible Preferred Stock | $		$ 1,664,000
Preferred Stock, Shares Issued, Total		3,910,000		1,365,625
Preferred Stock, Shares Outstanding, Ending Balance		3,910,000		1,365,625
Series B Preferred Stock [Member] | Sale of Equity Instrument [Member]
Stock Issued During Period, Shares, New Issues		1,138,625
Proceeds from Issuance of Convertible Preferred Stock | $		$ 820,550

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Note 11 - Capital Leases Payable (Details Textual)	12 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Capital Leased Assets, Number of Units	7
Capital Leases, Buyout Option	$ 1
Capitalized Contract Cost, Net, Current	1,162,240
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments, Total		$ 1,046,115
Capital Leases, Future Minimum Payments, Interest Included in Payments		287,972
Capital Leases, Future Minimum Payments, Net Minimum Payments, Total		758,143
Capital Lease Obligations, Current	214,529	301,162
Capital Lease Obligations, Noncurrent	667,053	$ 456,981
Capital Lease Obligations [Member]
Debt Instrument, Periodic Payment, Total	$ 34,171