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Tautachrome Inc. – ‘10-Q’ for 6/30/22

On:  Friday, 8/5/22, at 12:40pm ET   ·   For:  6/30/22   ·   Accession #:  1477932-22-5672   ·   File #:  0-55721

Previous ‘10-Q’:  ‘10-Q’ on 5/17/22 for 3/31/22   ·   Next & Latest:  ‘10-Q’ on 11/21/22 for 9/30/22

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/05/22  Tautachrome Inc.                  10-Q        6/30/22   38:2.4M                                   Discount Edgar/FA

Quarterly Report   —   Form 10-Q

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    564K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     17K 
 3: EX-32.1     Certification -- §906 - SOA'02                      HTML     13K 
 9: R1          Cover                                               HTML     60K 
10: R2          Consolidated Balance Sheets                         HTML    120K 
11: R3          Consolidated Balance Sheets (Parenthetical)         HTML     33K 
12: R4          Consolidated Statements of Operations (Unaudited)   HTML     99K 
13: R5          Consolidated Statement of Changes in Stockholders   HTML     65K 
                Deficit (Unaudited)                                              
14: R6          Consolidated Statements of Cash Flows (Unaudited)   HTML     89K 
15: R7          Organization and Nature of Business                 HTML     21K 
16: R8          Basis of Presentation and Summary of Significant    HTML     22K 
                Accounting Policies                                              
17: R9          Going Concern                                       HTML     16K 
18: R10         Related Party Transactions                          HTML     18K 
19: R11         Capital                                             HTML     23K 
20: R12         Debt                                                HTML     43K 
21: R13         Income Taxes                                        HTML     24K 
22: R14         Subsequent Events                                   HTML     15K 
23: R15         Basis of Presentation and Summary of Significant    HTML     36K 
                Accounting Policies (Policies)                                   
24: R16         Debt (Tables)                                       HTML     29K 
25: R17         Income Taxes (Tables)                               HTML     20K 
26: R18         Related Party Transactions (Details Narrative)      HTML     51K 
27: R19         Capital (Details Narrative)                         HTML     37K 
28: R20         Debt (Details)                                      HTML     34K 
29: R21         Debt (Details 1)                                    HTML     20K 
30: R22         Debt (Details Narrative)                            HTML     87K 
31: R23         Income Taxes (Details)                              HTML     21K 
32: R24         Income Taxes (Details Narrative)                    HTML     13K 
33: R25         Subsequent Events (Details Narrative)               HTML     22K 
36: XML         IDEA XML File -- Filing Summary                      XML     60K 
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35: EXCEL       IDEA Workbook of Financial Reports                  XLSX     57K 
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37: JSON        XBRL Instance as JSON Data -- MetaLinks              204±   276K 
38: ZIP         XBRL Zipped Folder -- 0001477932-22-005672-xbrl      Zip    108K 


‘10-Q’   —   Quarterly Report

Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Table of Contents
"Part I -- Financial Information
"Item 2 -- Management's Discussion And Analysis Of Financial Condition And Results Of Operations
"Item 3 -- Quantitive And Qualitative Disclosures About Market Risk
"Part Ii -- Other Information
"Item 1 -- Legal Proceedings
"Item 2 -- Unregistered Sale of Equity Securities
"Item 4 -- Mine Safety Disclosures
"Signatures

This is an HTML Document rendered as filed.  [ Alternative Formats ]



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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM  i 10-Q

 

 i 

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

 

FOR THE QUARTERLY PERIOD ENDED  i JUNE 30, 2022

 

 i 

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

 

FOR THE TRANSITION PERIOD FROM ___________ TO _____________.

 

Commission file number:  i 000-55721

 

 i TAUTACHROME, INC.

(Exact name of registrant as specified in its charter)

 

 i Delaware

 

 i 84-2340972

(State or other Jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

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

(Address of principal executive offices)

 

( i 520)  i 318-5578

(Registrant’s telephone number, including area code)

 

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

 

Title of Each Class

Trading Symbols

Name of Exchange on Which Registered

Not applicable

Not applicable

Not applicable

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  i Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  i Yes ☒ No

 

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

 

Large accelerated filer

Accelerated filer

 i Non-accelerated Filer

Smaller reporting company

 i 

Emerging growth company

 i 

 

 

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes  i  No ☒

 

The number of shares of the registrant’s common stock outstanding as of August 1, 2022, was  i 5,962,823,071.

 

 

 

 

TAUTACHROME, INC.

FORM 10-Q

 

INDEX

 

PART I - FINANCIAL INFORMATION

3

Item 1 - Consolidated Financial Statements

3

Item 2 - Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

15

Item 3 - Quantitive And Qualitative Disclosures About Market Risk

18

Item 4 - Controls and Procedures

18

PART II - OTHER INFORMATION

19

Item 1 - Legal Proceedings

19

Item 2 - Unregistered Sale of Equity Securities

19

Item 3 - Defaults Upon Senior Securities

19

Item 4 - Mine Safety Disclosures

19

Item 5 - Other Information

19

Item 6 - Exhibits

20

Signatures

21

 

 
2

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1 – Consolidated Financial Statements

TAUTACHROME, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

6/30/2022

 

 

12/31/2021

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$ i 123

 

 

$ i 119,466

 

Total current assets

 

 

 i 123

 

 

 

 i 119,466

 

 

 

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

 i 18,102

 

 

 

 i 25,344

 

TOTAL ASSETS

 

$ i 18,225

 

 

$ i 144,810

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ i 939,530

 

 

$ i 813,024

 

Accounts payable - related party

 

 

 i 856,181

 

 

 

 i 706,476

 

Loans from related parties

 

 

 i 102,713

 

 

 

 i 103,640

 

Convertible notes payable - related party, net

 

 

 i 70,392

 

 

 

 i 70,392

 

Short-term convertible notes payable, net

 

 

 i 1,543,923

 

 

 

 i 1,637,812

 

Convertible notes payable in default

 

 

 i 341,000

 

 

 

 i 32,000

 

Short-term notes payable, net

 

 

 i 64,174

 

 

 

 i 15,989

 

Derivative liability

 

 

 i 803,874

 

 

 

 i 1,384,775

 

Total current liabilities

 

 

 i 4,721,787

 

 

 

 i 4,764,108

 

 

 

 

 

 

 

 

 

 

Long-term convertible notes payable, net

 

 

 i 49,029

 

 

 

 i -

 

Long-term convertible notes payable, related party, net

 

 

 i 26,746

 

 

 

 i 14,996

 

Total non-current liabilities

 

 

 i 75,775

 

 

 

 i 14,996

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

$ i 4,797,562

 

 

$ i 4,779,104

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Series E Convertible Preferred Stock, par value $ i 0.0001 i 40,000 shares authorized,  i 40,000 shares outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

 i 4

 

 

 

 i 4

 

Series F Convertible Preferred Stock, par value $ i 0.00001 i 290,400 shares authorized,  i 290,400 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

 i 30

 

 

 

 i 30

 

Common stock, $ i 0.00001 par value.   i 6.4 billion shares authorized.  i 5,962,823,071 and  i 5,866,608,915 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

 i 59,628

 

 

 

 i 58,666

 

Additional paid in capital

 

 

 i 15,478,574

 

 

 

 i 15,337,300

 

Common stock payable

 

 

 i 727,759

 

 

 

 i 640,584

 

Accumulated deficit

 

 

( i 21,161,620)

 

 

( i 20,742,160)

Effect of foreign currency exchange

 

 

 i 116,288

 

 

 

 i 71,282

 

TOTAL STOCKHOLDERS' DEFICIT

 

 

( i 4,779,337)

 

 

( i 4,634,294)

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$ i 18,225

 

 

$ i 144,810

 

 

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

 

 
3

Table of Contents

 

TAUTACHROME, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 Six Months Ended June 30,

 

 

 Three Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Online sales platform

 

$ i 3

 

 

$ i 20

 

 

 

 i 2

 

 

$ i 5

 

Products

 

 

 i 30

 

 

 

 i 240

 

 

 

 i -

 

 

 

 i 125

 

Total revenues

 

 

 i 33

 

 

 

 i 260

 

 

 

 i 2

 

 

 

 i 130

 

Cost of sales

 

 

 i 2

 

 

 

 i 79

 

 

 

 i -

 

 

 

 i 44

 

Gross profit

 

 

 i 31

 

 

 

 i 181

 

 

 

 i 2

 

 

 

 i 86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$ i 393,851

 

 

$ i 2,456,469

 

 

$ i 185,471

 

 

$ i 2,302,093

 

Bad debt expense

 

 

 i -

 

 

 

 i 150,760

 

 

 

 i -

 

 

 

 i 150,760

 

Depreciation expense

 

 

 i 7,242

 

 

 

 i 7,242

 

 

 

 i 3,621

 

 

 

 i 3,621

 

Research and development

 

 

 i 178,377

 

 

 

 i 430,109

 

 

 

 i 91,495

 

 

 

 i 229,334

 

Total operating expenses

 

 

 i 579,470

 

 

 

 i 3,044,580

 

 

 

 i 280,587

 

 

 

 i 2,685,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

( i 579,439)

 

 

( i 3,044,399)

 

 

( i 280,585)

 

 

( i 2,685,722)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME / (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on settlement of debt

 

 

 i -

 

 

 

( i 225)

 

 

 i -

 

 

 

( i 225)

Interest expense

 

 

( i 437,094)

 

 

( i 659,052)

 

 

( i 211,734)

 

 

( i 235,282)

Change in value of derivatives

 

 

 i 597,073

 

 

 

( i 2,262,282)

 

 

 i 564,639

 

 

 

( i 358,835)

Total other

 

 

 i 159,979

 

 

 

( i 2,921,559)

 

 

 i 352,905

 

 

 

( i 594,342)

Net income or (loss)

 

$( i 419,460)

 

$( i 5,965,958)

 

 

 i 72,320

 

 

$( i 3,280,064)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency exchange

 

 

 i 45,006

 

 

 

 i 28,320

 

 

 

 i 73,172

 

 

 

 i 16,941

 

Net comprehensive income or (loss)

 

$( i 374,454)

 

$( i 5,937,638)

 

 

 i 145,492

 

 

$( i 3,263,123)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) or income per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$ i -

 

 

$ i -

 

 

 

 i -

 

 

$ i -

 

Fully diluted

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 i 5,899,110,589

 

 

 

 i 4,238,994,677

 

 

 

 i 5,929,268,997

 

 

 

 i 4,297,624,931

 

Fully diluted

 

 

 i 5,899,110,589

 

 

 

 i 4,238,994,677

 

 

 

 i 6,607,286,944

 

 

 

 i 4,297,624,931

 

 

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

 

 
4

Table of Contents

 

TAUTACHROME, INC.

Consolidated Statement of Changes in Stockholders’ Deficit

December 31, 2020 to June 30, 2022

(Unaudited)

 

 

 

 Common Stock

 

 

 Preferred Stock Series D

 

 

 Preferred Stock Series E

 

 

 Preferred Stock Series F

 

 

Additional Paid in

 

 

Stock

 

 

 Other Comprehensive

 

 

Accumulated

 

 

 Total Stockholders' Equity /

 

 

 

 Shares

 

 

 Amount

 

 

 Shares

 

 

 Amount

 

 

 Shares

 

 

 Amount

 

 

 Shares

 

 

 Amount

 

 

 Capital

 

 

  Payable

 

 

Income (Loss)

 

 

Deficit

 

 

(Deficit)

 

Balance, December 31, 2020

 

 

 i 4,120,475,247

 

 

$ i 41,205

 

 

 

 i 13,795,104

 

 

$ i 1,380

 

 

 

 i 40,000

 

 

$ i 4

 

 

 

 i 290,397

 

 

$ i 30

 

 

$ i 11,427,087

 

 

$ i 336,584

 

 

$ i 17,838

 

 

$( i 15,661,969)

 

$( i 3,837,841)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for conversion of debt

 

 

 i 295,898,288

 

 

 

 i 2,959

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 1,087,086

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 1,090,045

 

Derivative associated with early debt retirement

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 650,208

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 650,208

 

Shares issued for services

 

 

 i 214,125,000

 

 

 

 i 2,141

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 2,116,384

 

 

 

( i 2,111,400)

 

 

 i -

 

 

 

 i -

 

 

 

 i 7,125

 

Shares issued as enticement for loan

 

 

 i 6,600,000

 

 

 

 i 66

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 56,749

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 56,815

 

Shares issued to convert Series D preferred to common

 

 

 i 1,379,510,380

 

 

 

 i 13,795

 

 

 

( i 13,795,104)

 

 

( i 1,380)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( i 12,415)

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

Shares retired by Chief Executive Officer

 

 

( i 150,000,000)

 

 

( i 1,500)

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 1,500

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

Stock payable for services

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 2,415,400

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 2,415,400

 

Imputed interest

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 10,701

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 10,701

 

Effect of foreign currency exchange

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 53,444

 

 

 

 i -

 

 

 

 i 53,444

 

Net loss

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

( i 5,080,191)

 

 

( i 5,080,191)

Balance, December 31, 2021

 

 

 i 5,866,608,915

 

 

$ i 58,666

 

 

 

-

 

 

$ i -

 

 

 

 i 40,000

 

 

 

 i 4

 

 

 

 i 290,397

 

 

 

 i 30

 

 

$ i 15,337,300

 

 

$ i 640,584

 

 

$ i 71,282

 

 

$( i 20,742,160)

 

$( i 4,634,294)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for conversion of debt

 

 

 i 94,614,156

 

 

 

 i 946

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 88,017

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 88,963

 

Derivative associated with early debt retirement

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 45,351

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 45,351

 

Shares issued as enticement for loan

 

 

 i 1,600,000

 

 

 

 i 16

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 3,184

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 3,200

 

Stock payable for services

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 87,175

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 87,175

 

Imputed interest

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i 4,729

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 4,729

 

Effect of foreign currency exchange

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i 45,006

 

 

 

 i -

 

 

 

 i 45,006

 

Net loss

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

 i -

 

 

 

( i 419,460)

 

 

( i 419,460)

Balance, June 30, 2022

 

 

 i 5,962,823,071

 

 

$ i 59,628

 

 

 

-

 

 

$ i -

 

 

 

 i 40,000

 

 

$ i 4

 

 

 

 i 290,397

 

 

$ i 30

 

 

$ i 15,478,581

 

 

$ i 727,759

 

 

$ i 116,288

 

 

$( i 21,161,620)

 

$( i 4,779,337)

 

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

 

 
5

Table of Contents

 

TAUTACHROME, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net Loss

 

$( i 419,460)

 

$( i 5,965,958)

Stock-based compensation

 

 

 i 87,175

 

 

 

 i 2,233,425

 

Depreciation, depletion and amortization

 

 

 i 7,242

 

 

 

 i 7,242

 

Change in fair value of derivative

 

 

( i 597,073)

 

 

 i 2,262,283

 

Amortization of discounts on notes payable

 

 

 i 351,950

 

 

 

 i 591,510

 

Imputed interest

 

 

 i 4,729

 

 

 

 i 2,830

 

Bad debt expense

 

 

 i -

 

 

 

 i 150,760

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

 i -

 

 

 

( i 760)

Accounts payable and accrued expenses

 

 

 i 220,594

 

 

 

 i 31,266

 

Accounts payable - related party

 

 

 i 113,000

 

 

 

 i 112,365

 

Net cash used in operating activities

 

 

( i 231,843)

 

 

( i 575,037)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Investment in note receivable

 

 

 i -

 

 

 

( i 150,000)

Net cash used in investing activities

 

 

 i -

 

 

 

( i 150,000)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

 

 i 100,000

 

 

 

 i 708,000

 

Proceeds from convertible notes payable, related party

 

 

 i -

 

 

 

 i 40,000

 

Payment of expenses by related parties

 

 

 i -

 

 

 

 i 6,000

 

Proceeds from notes payable

 

 

 i 50,000

 

 

 

 i -

 

Principal payments on related-party loans

 

 

 i -

 

 

 

( i 21,348)

Net cash provided by financing activities

 

 

 i 150,000

 

 

 

 i 732,652

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

( i 37,500)

 

 

( i 1,184)

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash

 

 

( i 119,343)

 

 

 i 6,431

 

Cash and equivalents - beginning of period

 

 

 i 119,466

 

 

 

 i 114,527

 

Cash and equivalents - end of period

 

$ i 123

 

 

$ i 120,958

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTARY INFORMATION

 

 

 

 

 

 

 

 

Cash paid for interest

 

$ i -

 

 

$ i -

 

Cash paid for income taxes

 

$ i -

 

 

$ i -

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS

Discounts on convertible notes

 

$ i 7,200

 

 

$ i 623,573

 

Conversion of debt and interest to common stock

 

$ i 88,963

 

 

$ i 660,000

 

Settlement of derivative liability

 

$ i 45,351

 

 

$ i 376,913

 

 

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

 

 
6

Table of Contents

 

TAUTACHROME, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2022

 

 i 

Note 1 – Organization and Nature of Business

 

History

 

Tautachrome, Inc. was formed in Delaware on June 5, 2006 as Caddystats, Inc., and subsequently renamed Roadships Holdings Inc. and on November 5, 2015 renamed to its current name Tautachrome Inc. (and hereinafter referred to as “Tautachrome”, the “Company”, “we’ or “us”).

 

The Company adopted the accounting acquirer’s year end, December 31.

 

Our Business

 

Tautachrome operates in the internet applications space, uniquely exploiting the technologies of the Augmented Reality sector, the blockchain/cryptocurrency sector and the smartphone picture and video technology sector. We have high-speed blockchain concepts under development aiming to couple with the Company’s revolutionary patents and licensing in augmented reality, smartphone-image authentication and imagery-based social networking interaction.

 

Tautachrome is currently pursuing three main avenues of business activity based on our patented activated imaging technology, our blockchain cryptocurrency products, and our licensing of the patent pending ARk technology (together banded “KlickZie” technology):

 

 

1.

KlickZie ARk technology business: The Company has licensed and is developing a new KlickZie augmented reality (“AR”) platform branded ARknet. ARknet enables goods and services providers to establish geolocated augmented reality interfaces, called ARks, allowing consumers to purchase the provider’s products and take advantage of is specials and discounts, using the ARk. A provider’s ARk may be located anywhere in the world, from a store location to anyplace else the provider may desire. The ARknet is a fintech platform connecting consumers to providers in the global $48 trillion household goods market, using augmented reality as the medium of interaction.

 

2.

KlickZie’s blockchain cryptocurrency-based ecosystem: The Company has developed its own digital currency (“KLK”), smart contracts using KLKs, and high speed blockchain concepts aimed at supporting fast frictionless transactions within the ARknet as well as incentivizing user download and use of KlickZie products.

 

3.

KlickZie Activated Digital Imagery business: The Company is developing downloadable apps based on our patented KlickZie trusted imaging technology and based on our patented trusted image-based social interactions using the pictures and videos that smartphone users create. Trusted imagery and user imagery-based interaction is expected to be widely used within the ARknet.

 

Additional discussion of the business can be found in our Form 10-K filing as of December 31, 2021 and filed with the Securities and Exchange Commission.

 

Since its public announcement on September 25, 2017 (via SEC form 8-K) that it would be using its Twitter site (@Tautachrome_Inc) (https://twitter.com/tautachrome_inc) to post important Company information, and finding this method of publicizing important Company information both fast and effective, the Company has continued to use this means of public communication almost exclusively, supplemented occasionally with Current Reports via SEC Form 8-Ks. Shareholders are advised to follow us on Twitter to be current on the Company’s disclosures in conformity with Regulation FD.

 

 
7

Table of Contents

 

 i 

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies

 

Consolidated Financial Statements

 

 i 

In the opinion of management, the accompanying financial statements includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ended June 30, 2022. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our audited financial statements for the period ended December 31, 2021, as reported in Form 10-K filed with the SEC on March 24, 2022.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

Principles of Consolidation

 

 i 

Our consolidated financial statements include the accounts of Tautachrome, Inc. and all majority-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation.

 

Long-Lived Assets, Intangible Assets and Impairment

 

 i 

The Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value.

 

Revenue Recognition

 

 i 

The Company has two revenue streams: (1) sales of merchandise online on its own account for promotion of the Company and (2) the online sales platform which is an internet shopping place where businesses can create a store and place items for sale that other ARknet users can buy. Tautachrome takes a percentage fee of the sale.

 

The company recognizes revenues in accordance with ASC 606 – Revenue From Contracts with Customers which proscribes a five-step process in evaluating the revenue recognition process:

 

Step 1: Identify the contract with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

 / 

 

 
8

Table of Contents

 

Use of Estimates

 

 i 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Net Loss Per Share

 

 i 

Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income.

 

Recent Accounting Pronouncements

 

 i 

We have reviewed the FASB issue Accounting Standards Update, (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

 i 

Note 3 – Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, we had negative cash flows from operations and have experienced recurring losses, and negative working capital at June 30, 2022. These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. Management believes that actions presently being taken to obtain additional funding may provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.

 

 i 

Note 4 – Related Party Transactions

 

Accounts payable – related party consists of $ i 105,000 accrued to our CEO and Director, Dr. Jon Leonard for unpaid salary, $ i 700,000 owed in accrued license fees to Arknet,  i 37,398 of interest and $ i 13,783 owed to various members of the Nugent family.

 

Loans from Related Parties consists of $ i 97,713 owed to Michael Nugent and $ i 5,000 owed to David LaMountain, a Director.

 

Convertible Notes Payable, Related Party, Net consists of $ i 70,392 that are owed to officers and directors of the company.

 / 

 

 
9

Table of Contents

 

Long-term Convertible Notes Payable, Related Party consists of $ i 40,000 due to Arknet with unamortized discounts of $ i 13,254.

 

 i According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%.

 

Convertible note payable, related party

 

On May 5, 2013 (and on August 8, 2013 with an enlargement amendment) the Company entered into a no interest demand-loan agreement with our current Chairman, Jon N. Leonard under which the Company may borrow such money from Dr. Leonard as Dr. Leonard in his sole discretion is willing to loan.

 

The terms of the note provide that at the Company’s option, the Company may make repayments in stock, at a fixed share price of $ i 1.00 per share. Also, because this loan is a no-interest loan, an imputed interest expense of $ i 8 was recorded as additional paid-in capital for the six months ended June 30, 2022. The Company evaluated Dr. Leonard’s note for the existence of a beneficial conversion feature and determined that none existed.

 

At June 30, 2022, the balanced owed Dr. Leonard is $ i 419.

 

 i 

Note 5 – Capital

 

During the year ended December 31, 2021 we issued a net of  i 1,746,133,668 in common shares. The explanation of the nature of those issuances can be found in Note 4 of the financial statements included in our Form 10-K filed with the Securities and Exchange Commission as of December 31, 2021 and filed on March 24, 2022 and herewith included by reference.

 

During the six months ended June 30, 2022, we issued the following common shares:

 

 

·

 i 94,614,156 shares converting $ i 83,171 of principal and $ i 5,792 in interest for convertible debt into equity. We recognized no gain or loss on the transactions.

 

·

 i 1,600,000 shares an enticement for a convertible promissory note. We valued the shares at the grant date fair value and included $ i 3,200 into equity. We accounted for the cost of these shares as a debt discount to be amortized over the life of the loan.

 

 

 

Stock Payable

 

For the six months ended June 30, 2022 we recorded stock payable to consultants of $ i 87,175 pursuant to our contracts with them.

 

Other than the above, there was no change in stock payable from December 31, 2021 to June 30, 2022. The explanation of the changes and balances for the year ended December 31, 2021 can be found in Note 4 of the financial statements included in our Form 10-K filed with the Securities and Exchange Commission as of December 31, 2021 and filed on March 24, 2021 and herewith included by reference.

 / 

 

 
10

Table of Contents

 

Preferred Stock

 

In October, 2016 we issued  i 13,795,104 shares of Series D preferred stock to our (then) directors in exchange for  i 1,379,510,380 shares of common stock. This series of preferred stock was subject to two separate rights to convert to common stock. The first could be elected by the shareholder if the stock sold for greater than $3 per share. The second was automatic and would not be trigger until October 5, 2021. On that date, the original  i 1,379,510,380 common shares were issued retiring the Series D preferred stock. There was no gain or loss on the conversion because the value of the common shares issued equaled the value of the Series D Preferred shares.

 

Imputed Interest

 

Certain of our promissory notes bear no nominal interest. We therefore imputed interest expense and increased Additional Paid in Capital. For the six months ended June 30, 2022, we imputed $ i 4,722 of such interest. For the same period in 2021, we imputed $ i 2,830.

 

 i 

Note 6 – Debt

 

Our debt in certain categories went from $ i 3,259,604 at December 31, 2021 to $ i 3,403,308 at June 30, 2022 as follows:

 

 i 

 

 

06/30/22

 

 

12/31/21

 

Loans from related parties

 

$ i 102,713

 

 

$ i 103,640

 

Convertible notes payable, related party

 

 

 i 70,392

 

 

 

 i 70,392

 

Short-term convertible notes payable, net

 

 

 i 1,543,923

 

 

 

 i 1,637,812

 

Convertible notes payable in default

 

 

 i 341,000

 

 

 

 i 32,000

 

Short-term notes payable, net

 

 

 i 64,174

 

 

 

 i 15,989

 

Derivative liability

 

 

 i 803,874

 

 

 

 i 1,384,775

 

Long-term convertible notes payable, net

 

 

 i 49,029

 

 

 

 i -

 

Long-term convertible notes payable, related party

 

 

 i 26,746

 

 

 

 i 14,996

 

Totals

 

$ i 3,001,851

 

 

$ i 3,259,604

 

 / 

 

Loans from related parties

 

At June 30, 2022 we owed $ i 102,713 in related-party loans consisting of $ i 97,713 to Michael Nugent and $ i 5,000 owed to a related-party Board member .

 

Short-Term Convertible Notes Payable – Related Party

 

At June 30, 2022, we owed $ i 70,392 in convertible notes payable consisting of $ i 419 to Dr. Jon Leonard, our Chief Executive Officer and $ i 69,973 to David LaMountain, our Chief Operating Officer.

 

Short-Term Convertible Notes Payable – Third-Party, Net

 

Unpaid principal on short-term convertible notes payable at June 30, 2022 was $ i 1,826,182, net of discounts of $ i 238,245 (or $ i 1,587,937).

 

We have three convertible promissory notes which are in default at June 30, 2022 totaling $ i 341,000. There are no discount balances on these notes.

 / 

 

 
11

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Short-term notes payable

 

At June 30,2022, we owed AU$22,000 (US$ i 15,189) to three Australian investors on promissory notes which contain no conversion privileges.

 

In addition, during the six months ended June 30, 2022 we issued a promissory note in the amount of $ i 54,000, receiving proceeds of $ i 50,000 and incurring an original issue discount of $ i 4,000. On this note, we also issued  i 1,600,000 common shares as an enticement for this loan which we valued at $ i 3,200, also recorded as a debt discount (for a total initial discount of $ i 7,200). During the six months ended June 30, 2022, we amortized $ i 2,185 of this discount.

 

Derivative liabilities

 

The above-referenced convertible promissory notes were analyzed in accordance with EITF 07–05 and ASC 815. EITF 07–5, which is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. The objective of EITF 07–5 is to provide guidance for determining whether an equity–linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception under Paragraph 11(a) of ASC 815 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non–derivative instrument that falls within the scope of EITF 00–19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non–derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a two–step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions.

 

Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (“FASB”) as “the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion”. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59–60.

 

The Company issued certain fixed-rate convertible Subscription Notes from 2015 through June 30, 2022 in the United States and Australia These convertible notes have become tainted (“The Tainted Notes”) as a result of the issuance of convertible promissory notes issued in the United States since there is a possibility (however remote) that the Company would not have enough shares in the Treasury to satisfy all possible conversions.

 

 
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The Convertible Note derivatives were valued as of issuance; conversion; redemption/settlement; and each quarterly period from March 31, 2018 through June 30, 2022. The following assumptions were used for the valuation of the derivative liability related to the Notes:

 

 

·

The stock price of $ i 0.00310 at June 30, 2022 which decreased to $ i 0.00070 by June 30, 2022 and would fluctuate with the Company projected volatility.

 

·

 i The notes convert with variable conversion prices based on the percentages of the low or average trades or bids over 20 to 25 trading days.

 

·

The effective discounts rates estimated throughout the periods range are  i 37%.

 

·

The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default.

 

·

The projected annual volatility for each valuation period was based on the historic volatility of the company are  i 140% –  i 191% (annualized over the term remaining for each valuation).

 

·

 i An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20%.

 

·

 i The Holders would redeem the notes (with penalties up to 50% depending on the date and full–partial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%.

 

·

The Holder would automatically convert the note at the maximum of 2 times the conversion price or the stock price on the date of valuation.

 

·

The Holder would automatically convert the note based on ownership or trading volume limitations.

 

We recorded the initial derivative as both a derivative liability and a debt discount (or initial reduction in carrying value of the debt). We then amortized the debt discounts using the Effective Interest Method which recognizes the cost of borrowing at a constant interest rate throughout the contractual term of the obligation. The effective interest rate on the only convertible instrument issued during the six months ended June 30, 2022 range was  i 112%.

 

At each reporting date, we determine the fair market value for each derivative associated with each of the above instruments.

 

Changes in outstanding derivative liabilities are as follows:

 

 i 

Balance, December 31, 2021

 

$ i 1,384,775

 

Changes due to new issuances

 

 

 i 61,523

 

Changes due to extinguishments

 

 

( i 45,351)

Changes due to adjustment to fair value

 

 

( i 597,073)

Balance,  June 30, 2022

 

$ i 803,874

 

 / 

 

 
13

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 i 

Note 7 – Income Taxes

 

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

 

 i 

 

 

06/30/22

 

 

12/31/21

 

 

 

 

 

 

 

 

Net operating loss carry-forward

 

 

 i 8,667,777

 

 

 

 i 8,095,091

 

Deferred tax asset

 

$ i 1,820,233

 

 

$ i 1,699,969

 

Valuation allowance

 

 

( i 1,820,233)

 

 

( i 1,699,969)

Net future income taxes

 

$ i -

 

 

$ i -

 

 / 

 

In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has provided for a valuation allowance on all of its losses as there is no assurance that future tax benefits will be realized.

 

Our tax loss carry-forwards will  i begin to expire in 2030.

 / 

 

 i 

Note 8 – Subsequent Events

 

On July 5, 2022, we issues a convertible promissory note in the amount of $ i 81,000. We received proceeds of $ i 75,000 and recorded an original issue discount in the amount of $ i 6,000 and committed to issuing  i 6,250,000 shares as an additional enticement.

 

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

 / 

 

 
14

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Item 2- Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

 

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

 

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

 

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

 

Overview

 

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

 

 
15

Table of Contents

 

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

 

Results of Operations – Six months ended June 30, 2022 versus 2021

 

Revenues were de minimis in both periods in 2022 and 2021.

 

General and administrative expenses went from $2,456,469 in 2021 to $393,851 in the current year for a decrease of $2,062,618. The vast majority of the change was 198,000,000 shares of stock issued in June, 2021 for advertisements. This did not occur in the current year.

 

Depreciation expense did not change from last year to this since we depreciate our only asset using the straight line method which causes depreciation expense to be the same from period to period.

 

Research and development expenses fell from $430,109 last year to $178,377 in the current year due to a decrease in development activities.

 

Interest expense fell from $659,052 in 2021 to $437,094 in 2022 ( decrease of $221,958), mostly because there were several large early payoffs of debt (in the form of conversion to common stock) occurring in the previous year requiring the full amortization of existing discount balances. Fewer such early payoffs occurred in the current year.

 

The change in value of our derivative liability resulted in a loss of $2,262,282 in 2021 versus a gain of $597,073 in 2022. See Note 6 to the financial statements for a calculation of these values.

 

During the current year we had foreign exchange gain of $44,999 versus a gain of $28,320 in the previous year, all of which are caused by fluctuations in the exchange rate differences between the U.S. and Australian dollars.

 

Our net comprehensive losses of $374,461 in the current year versus $5,937,638 in the previous year are a result of the above items.

 

Results of Operations - Three months ended June 30, 2022 versus 2021

 

Revenues were de minimis in both periods in 2022 and 2021.

 

General and administrative expenses went from $2,302,093 in 2021 to $185,471 in the current year for a decrease of $2,116,622. The vast majority of the change was 198,000,000 shares of stock issued in June, 2021 for advertisements. This did not occur in the current year.

 

 
16

Table of Contents

 

We had bad debt expense of $150,760 in 2021 related to a loan we made which was ultimately not repaid. We had no such occurrence in the current year.

 

Depreciation expense did not change from last year to this since we depreciate our only asset using the straight line method which causes depreciation expense to be the same from period to period.

 

Research and development expenses fell from $229,334 last year to $91,495 in the current year due to a decrease in development activities.

 

Interest expense fell from $235,282 in 2021 to $211,734 in 2022 ( decrease of $23,548), mostly because there were several large early payoffs of debt (in the form of conversion to common stock) occurring in the previous year requiring the full amortization of existing discount balances. Fewer such early payoffs occurred in the current year.

 

The value of our derivative liability resulted in a loss of $358,835 in 2021 versus a gain of $564,639 in 2022. See Note 6 to the financial statements for a calculation of these values.

 

During the current year we had foreign exchange gain of $73,165 versus a gain of $16,941 in the previous year, all of which are caused by fluctuations in the exchange rate differences between the U.S. and Australian dollars.

 

Our net comprehensive gain and losses of a $145,485 in the current year versus $3,263,123 in the previous year are a result of the above items.

 

Liquidity and Capital Resources

 

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

 

At June 30, 2022, the Company had $123 in current assets and current liabilities totaling $4,765,801. We are currently seeking financing to attain our business goals, but there is no guarantee that we will obtain such financing or, upon obtaining it, that we will be able to invest in productive assets that will result in positive cash flows from operations.

 

 
17

Table of Contents

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, we had negative cash flows from operations, recurring losses, and negative working capital at June 30, 2022. These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Management intends to finance these deficits by making additional shareholder notes and seeking additional outside financing through either debt or sales of its common stock.

 

Plan of Operation

 

Our immediate term plans for operations is discussed extensively in Item 7 – Management’s Discussion and Analysis or Plan of Operation included in our Form 10-K as of December 31, 2021, filed with the Securities and Exchange Commission on March 24, 2021 and is herein incorporated by reference.

 

Item 3 - Quantitive And Qualitative Disclosures About Market Risk

 

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

 

Item 4 – Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures.

 

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

 

Based upon the evaluation of our officers and directors of our disclosure controls and procedures as of June 30, 2022, the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"), our Chief Executive Officer has concluded that as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure. Our management concluded that our disclosure controls and procedures were not effective as a result of material weaknesses in our internal control over financial reporting. We are a small organization with only a few employees. Under these circumstances it is impossible to completely segregate duties. We do not expect our internal controls to be effective until such time as we are able to begin full operations and even then, there are no assurances that our disclosure controls will be adequate in future periods.

 

Change In Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
18

Table of Contents

 

PART II – OTHER INFORMATION

 

Item 1 – Legal Proceedings

 

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

 

Item 2 – Unregistered Sale of Equity Securities

 

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

 

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

 

Item 3 – Defaults Upon Senior Securities

 

None

 

Item 4 – Mine Safety Disclosures

 

Not applicable.

 

Item 5 – Other Information

 

Not applicable.

 

 
19

Table of Contents

 

Item 6 - Exhibits

 

Exhibit No.

 

Description of Exhibit

31.1*

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1**

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS*

 

XBRL Instance Document

101.SCH*

 

XBRL Taxonomy Extension Schema Document

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

** Furnished herewith

 

 
20

Table of Contents

 

SIGNATURES

 

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

 

 

Tautachrome, Inc

 

 

 

 

 

Date: August 1, 2022

By:

/s/ Dr. Jon Leonard

 

 

 

Dr. Jon Leonard

Chief Executive Officer

 

 

 
21

 


Dates Referenced Herein   and   Documents Incorporated by Reference

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3/24/21
12/31/2010-K
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