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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, 2021

☐	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

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 has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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

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

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

Yes ☐ No ☒

The number of shares of Common Stock, $0.001 par value, outstanding on February 14, 2022 was 37,888,658 shares.

	TABLE OF CONTENTS	Page

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
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	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	14
Item 3A.	Off Balance Sheet Arrangements	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5.	Other Information	14
Item 6.	Exhibits	14

ITEM 1. FINANCIAL STATEMENTS

TRIBUS ENTERPRISES, INC.

UNADUITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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, 2021			March 31, 2021
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	424,278		$	390,197
Accounts receivable (Note 5)		52,974		$	3,374
Inventory, net of inventory valuation of $41,931 and $3,891, respectively (Note 6)		654,749			403,951
Prepaid expenses		11,396			270
Deposits, current (Note 7)		-			100,000
Total current assets		1,143,397			897,792

Deposits		14,240			10,240
Right of use asset, operating leases		34,508			93,929
Equipment and intangibles, net of accumulated depreciation of $552,930 and $368,180, respectively (Note 8)		2,364,288			1,625,022

Total assets	$	3,556,433		$	2,626,983

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	252,049		$	291,144
Deferred revenue (Note 9)		3,385			12,249
Operating lease liability, current (Note 10)		27,937			86,495
Finance lease, current (Note 11)		139,302			137,213
Loans payable, current (Note 12)		1,037,160			273,528
Total current liabilities		1,459,833			800,629

Operating lease liability, net of current portion (Note 10)		-			4,233
Finance lease, net of current portion (Note 11)		5,696			110,435
Loans payable, net of current portion (Note 12)		17,274			255,887
Other long-term liabilities		6,642			6,255

Total liabilities		1,489,445			1,177,439

Commitments and contingencies

Stockholders’ equity
Series A convertible preferred stock, $0.001 par; 20,000,000 authorized; 6,666,666 issued and outstanding at December 31, 2021 and March 31, 2021 (Note 13)		6,667			6,667
Series B convertible preferred stock, $0.001 par; 5,000,000 authorized; 4,999,800 issued and outstanding at December 31, 2021 and March 31, 2021 (Note 13)		5,000			5,000
Common stock, $0.001 par value; 100,000,000 authorized; 36,549,358 and 34,421,158 issued and outstanding at December 31, 2021 and March 31, 2021, respectively (Note 13)		36,549			34,421
Additional paid in capital		8,015,006			6,249,834
Accumulated deficit		(5,996,234	)		(4,846,378	)
Total stockholders' equity		2,066,988			1,449,544

Total liabilities and stockholders’ equity	$	3,556,433		$	2,626,983

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

TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three months ended December 31,						Nine months ended December 31,
	2021			2020			2021			2020
Revenue	$	156,556		$	68,162		$	206,677		$	80,961
Cost of goods sold		203,379			53,092			499,922			138,567
Gross margin		(46,823	)		15,070			(293,245	)		(57,606	)

Operating expenses
Employee costs		163,169			107,627			553,614			237,378
Professional fees		17,774			40,114			104,050			70,508
General and administrative		98,352			42,499			285,316			124,632
Facilities		15,895			21,184			65,048			74,380
Research and development		-			-			-			12,781
Depreciation expense		13,185			19,825			59,800			124,376
Total operating expenses		308,375			231,249			1,067,828			644,055

Net loss from operations		(355,198	)		(216,179	)		(1,361,073	)		(701,661	)

Other income (expense)
Other income/(expense), net		2,621			14,282			19,333			57,031
Gain/(loss) on sale of equipment		-			-			-			(34,147	)
Interest expense		(2,392	)		(5,654	)		(8,116	)		(43,224	)
Total other income (expense)		229			8,628			11,217			(20,340	)

Income tax		-			-			-			-
Net and comprehensive loss	$	(354,969	)	$	(207,551	)	$	(1,349,856	)	$	(722,001	)

Net loss per share, basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.06	)

Weighted average shares outstanding, basic and diluted		36,269,836			13,545,658			35,805,541			12,914,220

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

TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


	Series A Convertible Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		In Capital			Deficit			Total
																				-
Balance, March 31, 2020		19,999,998	$	20,000		3,910,000	$	3,910		7,360,858	$	7,361	$	3,600,752		$	(3,718,479	)	$	(86,456	)
Series B preferred stock issued for cash		-		-		739,800		740						517,120						517,860
Common stock issued for cash		-		-		-		-		6,184,800		6,185		1,540,016						1,546,201
Direct incremental costs		-		-		-		-		-		-		(200,000	)					(200,000	)
Net loss, three months ended June 30, 2020		-		-		-		-		-		-		-			(316,283	)		(316,283	)
Balance, June 30, 2020		19,999,998		20,000		4,649,800		4,650		13,545,658		13,546		5,457,888			(4,034,762	)		1,461,322

Net loss, three months ended September 30, 2020		-		-		-		-		-		-		-			(198,167	)		(198,167	)
Balance, September 30, 2020		19,999,998	$	20,000		4,649,800	$	4,650		13,545,658	$	13,546	$	5,457,888		$	(4,232,929	)	$	1,263,155

Net loss, three months ended December 31, 2020		-		-		-		-		-		-		-			(207,551	)		(207,551	)
Balance, December 31, 2020		19,999,998	$	20,000		4,649,800	$	4,650		13,545,658	$	13,546	$	5,457,888		$	(4,440,480	)	$	1,055,604


Balance, March 31, 2021		6,666,666	$	6,667		4,999,800		5,000		34,421,158		34,421		6,249,834			(4,846,378	)		1,449,544
Common stock issued for cash		-		-		-		-		1,130,700		1,131		1,129,569			-			1,130,700
Direct incremental costs														(70,000	)					(70,000	)
Net loss, three months ended June 30, 2021		-		-		-		-		-		-		-			(451,387	)		(451,387	)
Balance, June 30, 2021		6,666,666	$	6,667		4,999,800	$	5,000		35,551,858	$	35,552	$	7,309,403		$	(5,297,765	)	$	2,058,857

Common stock issued for cash		-		-		-		-		632,000		632		631,368						632,000
Direct incremental costs														(50,900	)					(50,900	)
Reclass of prior years' incremental costs														(200,000	)		200,000			-
Net loss, three months ended September 30, 2021																	(543,500	)		(543,500	)
Balance, September 30, 2021		6,666,666	$	6,667		4,999,800	$	5,000		36,183,858	$	36,184	$	7,689,871		$	(5,641,265	)	$	2,096,457

Common stock issued for cash		-		-		-		-		365,500		365		365,135						365,500
Direct incremental costs														(40,000	)					(40,000	)
Net loss, three months ended December 31, 2021																	(354,969	)		(354,969	)
Balance, December 31, 2021		6,666,666	$	6,667		4,999,800	$	5,000		36,549,358	$	36,549	$	8,015,006		$	(5,996,234	)	$	2,066,988

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

TRIBUS ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine months ended December 31,
	2021			2020
Cash flows from operating activities
Net loss	$	(1,349,856	)	$	(722,001	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		184,750			156,123
Change in right of use assets		59,421			45,822
Inventory allowance		10,347			8,604
(Gain)/loss on sale of equipment		-			34,562
Changes in operating assets and liabilities:
Accounts receivable		(49,600	)		(2,411	)
Prepaid expenses		(11,126	)		15,511
Deposits, current		100,000			-
Deposits		(4,000	)		31,097
Inventory		(261,145	)		(358,303	)
Accounts payable and accrued liabilities		(39,095	)		34,189
Interest payable		-			(61,938	)
Deferred rent		-			1,247
Estimated warranty liability		387			-
Deferred revenue		(8,864	)		(3,429	)
Sub lease security deposit		-			3,200
Payments of operating lease liability		(62,791	)		(48,056	)
Forgiveness of CARES act loan		(14,304	)
Net cash used in operating activities		(1,445,876	)		(865,783	)

Cash flows from investing activities
Purchase of equipment		(321,417	)		(438,303	)
Sale of equipment		-			370,000
Net cash used in investing activities		(321,417	)		(68,303	)

Cash flows from financing activities
Repayments of finance leases		(102,651	)		(447,671	)
Repayments of loans payable		(87,994	)		(412,566	)
Proceeds from loan payable		24,719			-
Proceeds from CARES act loan		-			14,304
Shareholder contribution		-			(3,200	)
Proceeds from sale of common stock		2,128,200			1,546,200
Proceeds from the sale of series B preferred stock		-			517,860
Payments of direct incremental costs associated with the sale of stock		(160,900	)		(200,000	)
Net cash provided by financing activities		1,801,374			1,014,927

Cash, beginning of period		390,197			150,741
Net change in cash		34,081			80,841
Cash, end of period	$	424,278		$	231,582

Supplemental cash flow information
Cash paid for interest	$	8,116		$	105,162
Cash paid for income taxes	$	-		$	-

Supplemental disclosure of non-cash financing activities
Returned equipment purchased through a finance lease	$	(497,302	)	$	-
Finance leases entered into for purchase of equipment					280,012
Loan entered into for purchase of equipment	$	1,099,900		$	146,340

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

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2021

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.

Tribus Enterprises, Inc. was formed to develop, manufacture, and market a compelling product line of innovative ratcheting flare nut wrenches which have been issued a Patent Number 10,414,029. The Company’s ratcheting flare nut wrench product line, which includes line and O2/NOx sensor wrenches, are being sold in the hand tool industry. Historically there have been limited designs for the ratcheting flare nut wrench or the traditional non-ratcheting flare nut wrench. These designs do not allow for small incremental movement in confined spaces, whereas Tribus’ version of the ratcheting flare nut wrench breaks new ground in this market.

Due to the wide application of Tribus Tools, Tribus has extensive marketing opportunities. Currently, Tribus has been selling its tools through on-line sales that include Facebook and Google ads, mobile tool trucks and Amazon. In addition, Tribus is working with different distributors to increase sales.

In addition to manufacturing tools, the Company has been working on a software (web-based application) marketed under Mobile Tool Network to allow Mobile Tool Trucks to not only purchase Tribus products but also products from other manufacturers. The development was done in two phases. The first phase which was completed in September 2021 allows for on-line purchases. The second phase which will be marketed to Mobile Tool Trucks for purchase will include features to interface with their own customers, as well as have inventory management and reporting capabilities.

NOTE 2 – UNAUDITED CONDENSED CONSOLIDATED 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, 2021 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, 2021 audited financial statements. The results of operations for the period ended December 31, 2021 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.

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. 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 operations. 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.

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2021

NOTE 4 – 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 the 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 lifetime warranty for manufacturing defects on products sold. The Company has estimated future costs that will be incurred under its lifetime warranty program based on its historical defect rate. The amount of estimated warranty liability was $3,442 and $3,055 as of December 31, 2021 and March 31, 2021, respectively.

The Company recognized revenues of $156,556 and $68,162 during the three months ended December 31, 2021 and 2020, respectively and $206,677 and $80,961 during the nine months ended December 31, 2021 and 2020, respectively.

NOTE 5 - ACCOUNTS RECEIVABLE

Accounts receivable represents money due to the Company for products sold and delivered but not yet paid. The accounts receivable balance was $52,974 and $3,374 as of December 31, 2021 and March 31, 2021, respectively.

NOTE 6 - INVENTORY

The Company recognizes the cost of inventory through cost of goods sold as product is shipped to customers on an average cost basis. The value of inventory is carried at the lower of cost or market of raw materials purchased to manufacture the finished goods, direct labor associated with manufacturing and certain overhead related to the manufacturing facility.

As of December 31, 2021, the Company’s finished goods inventory balance was $63,593. This balance is recorded net of inventory valuation of $14,238 in order to bring the value of finished goods inventory to the lower of cost or market. In addition, the Company had $381,395 in work in process inventory, $43,595 in raw material inventory, $59,940 in tooling inventory and $8,803 in packaging inventory as of December 31, 2021.

In addition to the above, the Company had $111,661 of inventory related to other manufacturer’s tools and supplies as of December 31, 2021. The Company sells these items through Amazon and Mobile Tool Network.

As of March 31, 2021, the Company’s finished goods inventory balance was $26,887. This balance is recorded net of inventory valuation of $3,891 in order to bring the value of finished goods inventory to the lower of cost or market. In addition, the Company had $291,930 in work in process inventory, $30,842 in raw material inventory, $48,362 in tooling inventory and $9,821 in packaging inventory as of March 31, 2021.

NOTE 7 - CURRENT DEPOSITS

During the year ended March 31, 2021, the Company made a deposit of $100,000 on five new pieces of equipment. That equipment was subsequently delivered in April 2021. Thus, the balance at December 31, 2021 was $0.

NOTE 8 – EQUIPMENT AND INTANGIBLES

Property and equipment are stated at cost. Depreciation is computed using the average cost method over the estimated useful lives of the assets, which range from 3 to 10 years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period.

During the period ended September 30, 2021, the Company capitalized costs related to internal use software following guidance in ASC 350-40, Internal-Use Software. This software was placed into service with amortization beginning in September 2021. In addition, the Company is capitalizing costs associated with software to be marketed following guidance in ASC 985-20, Software – Costs of Software to Be Sold, Leased or Marketed. Amortization will begin once the software is completed. Certain costs totaling $69,624 associated with the software, that were previously expensed to professional fees in the quarter ended June 30, 2021, were capitalized in the current quarter.

As of December 31, 2021, the Company’s equipment and intangibles net of accumulated depreciation and amortization was $2,364,288 and $1,625,022 as of March 31, 2021.

NOTE 9 - DEFERRED REVENUE

Deferred revenue represents revenues collected but not earned as of December 31, 2021. This is primarily composed of rent or sales revenue received in advance of goods or services being delivered. The balance of deferred revenue was $3,385 and $12,249 as of December 31, 2021 and March 31, 2021, respectively.

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2021

NOTE 10 – OPERATING LEASES

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes guidance in ASC 840, Leases, which the Company adopted for the year ended March 31, 2020 under the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application Results and disclosure requirements for reporting periods beginning after March 31, 2019 are presented under Topic 842 while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under Topic 840.

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, 2021, the Company made total principal payments on operating leases of $62,792. There was a total operating lease liability of $27,937 as of December 31, 2021, all of which was current.

On July 27, 2021, the Company entered into a short-term lease for the rent of an additional warehouse that terminates on March 31, 2022. The future minimum payments associated with this lease are $12,000 and are included in the table below. The Company has elected not to apply the recognition requirements of ASC 842 because the lease is short-term. As such, the Company is not recording a right of use asset and operating liability for this lease.

On December 16, 2021, the Company entered into a short-term lease for the rent of a warehouse that begins on January 1, 2022 and terminates on December 31, 2022. The future minimum payments associated with this lease are $57,600 and are included in the table below. The Company has elected not to apply the recognition requirements of ASC 842 because the lease is short-term. As such, the Company is not recording a right of use asset and operating liability for this lease.

The lease payments for these two short-term leases are recognized in net income on a straight-line basis over the lease term. As a result, the difference between the operating lease liability total reflected in the table below and the operating lease liability on the balance sheet relates to future minimum payments of these short-term leases.

The leases require future minimum payments as shown below:

Year Ending March 31,
2022		51,363
2023		47,521
future minimum payments		98,884
Less imputed interest		(1,347	)
Operating lease liability, total	$	97,537

On May 8, 2019, the Company entered into a sublease agreement whereby it 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 of $1,800 for May 2019 followed by eleven monthly payments of $4,100 through April 2020. On May 28, 2020, a new sublease agreement was entered into for a period of 23 months commencing on June 1, 2020. The sublease requires monthly rental payments of $1,200.

On May 11, 2020, the Company entered into a separate sublease agreement whereby it will sublet a portion of its space for a period of 24 months commencing on May 1, 2020. The sublease requires monthly rental payments of $1,875. In addition, a verbal agreement was entered into on a month-to-month basis for additional space to sublet as needed for a monthly rental payment of $1,510.

The Company records sublease payments received as other income in the statement of operations. Sublease income of $41,265 and $31,540 was recognized during the nine months ended December 31, 2021 and 2020, respectively. 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. As of December 31, 2021, the sublease did not impair the right of use asset recorded as part of the master lease agreement.

The subleases provide future income as shown below:

Year Ending March 31,
2022		9,225
2023		3,075
Other income from subleases, total	$	12,300

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2021

NOTE 11 – FINANCING LEASES PAYABLE

In February 206, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes guidance in ASC 840, Leases, which the Company adopted for the year ended March 31, 2020 under the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application Results and disclosure requirements for reporting periods beginning after March 31, 2019 are presented under Topic 842 while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under Topic 840.

The Company accounts for financing leases in accordance with ASC 842. As of December 31, 2021, the Company had two separate long-term leases for equipment that grants the Company the option to purchase the underlying asset at lease termination that the Company is reasonably certain to exercise. The Company determined these were financing leases based on the reasonable certainty the Company will exercise its right to purchase the underlying assets and capitalized the net present value of the leases which totaled $347,512 as equipment. The leases require total monthly payments of $11,764.

As of December 31, 2021, there was a total of $147,116 of future payments due through April 2024 of which $2,118 are financing charges leaving a total principal balance of $144,998. Of the total principal balance due, $139,302 was current and $5,696 was long term as of December 31, 2021.

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

Year Ending March 31,	Principal		Interest		Total

2022		34,562		731		35,293
2023		105,773		1,221		106,994
2024		4,293		164		4,457
2025		370		2		372
	$	144,998	$	2,118	$	147,116

As of March 31, 2021, there was a total of $252,996 of future payments due through April 2024 of which $5,348 are financing charges leaving a total principal balance of $247,648. Of the total principal balance due, $137,213 was current and $110,435 was long term as of March 31, 2021.

NOTE 12 – LOANS PAYABLE

As of December 31, 2021, the Company had outstanding three separate loan agreements and one loan that was forgiven.

●

June 1, 2019, the Company entered into a loan to borrow $34,222 to purchase a vehicle. The loan carried interest at a rate of 6.59% per annum and matured in September 2025. On May 7, 2021, the Company refinanced this loan in the amount of $24,720. The new loan carries interest at 2.890% per annum and matures May 7, 2026.

●

On January 20, 2021, the Company entered into a short-term loan with a related party in the amount of $150,000. The agreement requires eleven monthly payments of $2,500 and the remaining balance due thereafter. The loan was secured by Company assets and by a personal guarantee by the CEO. The note bears an interest rate 4.017%.

●

On February 18, 2021, the Company entered into a verbal loan for equipment valued at $352,696. In April 2021 this verbal loan was modified to include an additional loan for equipment valued at $1,199,900. In September this verbal loan was further modified due to the return of 2 pieces of equipment. The modified amount of the verbal loan is $946,766. The combined loan requires twelve monthly payments of $30,000 with the balance due thereafter unless otherwise negotiated prior to maturity. The payments are due once the installation of the equipment has been completed. The loan has no interest.

●

On May 1, 2020, the Company received loan proceeds in the amount of $14,304 under the Paycheck Protection Program. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. On June 16, 2021, the loan was fully forgiven.

Total loans outstanding as of December 31, 2021, were $1,054,434 of which $1,037,160 was current and $17,274 was long term.

Total loans outstanding as of March 31, 2021, were $529,415 of which $273,528 was current and $255,887 was long term.

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2021

NOTE 13 – CAPITAL STOCK

Authorized

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

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

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

Issued

During the three months ended December 31, 2021, the Company accepted stock subscriptions to issue a total of 365,500 shares of common stock at $1.00 per share resulting in total cash proceeds of $365,500. Of this amount, all shares of common stock were issued to related parties. Additionally, the Company paid approximately $10,000 to a related party as a finders’ fee in conjunction with the sale of equity investments. In addition, the Company accrued $30,000 in finders’ fees during the quarter ended December 31, 2021 which was subsequently paid to a related party. The finder’s fee is considered a direct incremental cost associated with the sale of the stock and as such is treated as a reduction to the proceeds and, accordingly as an offset to additional paid in capital.

During the nine months ended December 31, 2021, the Company accepted stock subscriptions to issue a total of 2,128,200 shares of common stock at $1.00 per share resulting in total cash proceeds of $2,128,200. Of this amount, 1,400,000 shares of common stock were issued to related parties for total cash proceeds of $1,400,000. Additionally, the Company paid approximately $130,000 to a related party as a finders’ fee in conjunction with the sale of equity investments. In addition, the Company accrued $30,000 in finders’ fees during the quarter ended December 31, 2021 which was subsequently paid to a related party. The finder’s fee is considered a direct incremental cost associated with the sale of the stock and as such is treated as a reduction to the proceeds and, accordingly as an offset to additional paid in capital.

During the three and nine months ended December 31, 2021, the Company did not issue any preferred stock.

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Consolidated Condensed Financial Statements

December 31, 2021

NOTE 13 – CAPITAL STOCK (CONTINUED)

There were 6,666,666; 4,999,800 and 36,549,358 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of December 31, 2021.

There were 6,666,666; 4,999,800 and 34,421,158 shares of Series A Convertible Preferred Stock, Series B Preferred Stock and Common Stock issued and outstanding as of March 31, 2021.

During the quarter ended September 30, 2021, $200,000 in finder fees were identified as being classified incorrectly in prior years. As a result, an entry was made to reclass $200,000 from Retained Earnings to Additional Paid in Capital. As both Retained Earnings and Additional Paid in Capital are included in Total Stockholder’s Equity there was no effect on the total nor did the entry have any effect on previously reported results of operations. The finder fees were paid to the same related party as paid in current and previous periods.

Basic Net Loss Per Share

Basic net loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. The weighted average number of common shares during the three and nine months ended December 31, 2021 were 36,269,836 and 35,805,541, respectively. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are approximately 86,666,000 of potentially issuable shares through the conversion of preferred stock. These shares are excluded from the calculation as the impact of those shares are anti-dilutive in the current period.

NOTE 14 – SUBSEQUENT EVENTS

Subsequent to December 31, 2021, the Company issued an additional 1,339,300 shares of common stock of which 376,100 was issued to a related party. In addition, the Company paid $180,000 in finders fees to a related party.

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

Tribus Enterprises Inc. was formed on March 29, 2017 in the State of Washington. Throughout this report references to “we”, “our”, “us”, “the company”, “Tribus” and similar terms refer to Tribus Enterprises, Inc.

Upon incorporation, the Company entered into a share exchange agreement with Tribus Innovations, LLC and acquired all of the outstanding ownership interests of Tribus Innovations, LLC. Tribus Innovations, LLC 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, LLC from its inception and include the financial information of the Company from the completion of the share exchange agreement on March 29, 2017. 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, LLC is currently a 100% owned subsidiary of the Company.

Tribus was formed to develop, manufacture, and market a compelling product line of innovative ratcheting flare nut wrenches which have been issued a Patent 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.

Products

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

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

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

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

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

Tribus’ ratcheting flare nut wrench product line, which includes line and O2/NOx sensor wrenches, are being sold in the hand tool industry. Historically there have been limited designs for the ratcheting flare nut and the traditional non-ratcheting flare nut wrench. These designs do not allow for small incremental movement in confined spaces, whereas Tribus’ version of the ratcheting flare nut wrench breaks new ground in this market.

Business/Marketing Strategy

Mobile Tool Network (MTN) has three main areas of focus which include increasing the functionality of the software, building relationships with manufacturers to obtain advantageous product selections and pricing and grow the number of Mobile Tool Truck customers.

Liquidity and Capital Resources

As of December 31, 2021, Tribus had $1,143,397 in total current assets and total current liabilities of $1,459,833. Current assets consisted mainly of $424,278 of cash and $654,749 of inventory. Current liabilities consisted mainly of $252,049 of accounts payable and accrued liabilities, finance lease liabilities of $139,302, operating lease liabilities of $27,937 and current loans payable of $1,037,160.

Net cash used in operating activities was $1,445,876 compared to $865,783 for the nine months ended December 31, 2021 and 2020, respectively. The increase in net cash used in operating activities was the result of our net loss increasing. See results of operations for further information.

Net cash used in investing activities was $321,417 and $68,303 for the nine months ended December 31, 2021 and 2020, respectively. The majority of the difference is related to the Company selling equipment in the nine months ended December 31, 2020, which provided net cash in the amount of $370,000.

Net cash provided by financing activities was $1,801,374 and $1,014,927 for the nine months ended December 31, 2021 and 2020, respectively. Compared to the nine months ended December 31, 2020 repayments of finance leases and loans payable were approximately $670,000 lower in the nine months ended December 31, 2021.

Going Concern

The future of Tribus is dependent upon its ability to obtain financing and upon future profitable operations. Management is currently seeking additional capital through a private placement offering. See Note 3 to the financial statements for additional information.

Results of Operations

Tribus generated revenues totaling $206,677 during the nine months ended December 31, 2021 and $80,961 during the nine months ended December 31, 2020. The majority of the revenue generated during this period in 2021 occurred during the three months ended December 31, 2021 with the introduction of Mobile Tool Network. Of the $206,677 revenue generated, $126,423 was generated by MTN in the three months ended December 31, 2021.

Total operating expenses were $1,067,828 and $644,055 during the nine months ended December 31, 2021 and 2020, respectively. Net loss for the nine months ended December 31, 2021 was $1,349,856 compared to $722,001 for the same period in 2020. Most of the increase in net loss was the result of increased employee costs of approximately $316,000, an increase in general and administrative costs of $161,000 and inventory of $275,000 being written off to scrap or loss on obsolete inventory.

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 finance 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. In addition, certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations.

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 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 March 31, 2021, 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 March 31, 2021.

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

While significant work is being done to improve the Company’s internal controls, there have been no significant 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

None.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors set forth in the Company’s Form 10K for the period ended March 31, 2021 filed July 12, 2021.

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 3A. OFF BALANCE SHEET ARRANGEMENTS

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.

(b) REPORTS ON FORM 8-K

None.

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, 2022.

	Tribus Enterprises, Inc.
	Registrant

	By:	/s/ Kendall Bertagnole
		Kendall Bertagnole
		Chief Executive Officer

Tribus Enterprises, Inc. 10-Q