Trutankless Sales Surge 4400%, But Net Loss Doubles Amid Soaring Costs

TL;DR

**TKLS is burning cash faster than it's growing, avoid this hot water heater company until they can prove profitability.**

AI Summary

Trutankless, Inc. (TKLS) reported a significant increase in net sales for the six months ended June 30, 2025, reaching $524,541, a substantial rise from $11,584 in the same period of 2024. Despite this revenue growth, the company's net loss widened to $2,840,602 for the six months ended June 30, 2025, compared to a net loss of $1,488,753 in the prior year, primarily due to a surge in professional fees to $1,964,218 from $35,065. Cash and cash equivalents plummeted from $1,004,190 at December 31, 2024, to $12,047 by June 30, 2025. Total current liabilities increased to $11,265,068 from $8,938,584, driven by higher accounts payable and accrued liabilities, and related party notes payable. The company also saw a significant increase in inventory to $1,200,319 from $350,866, and property, plant and equipment, net, grew to $409,243 from $188,072. Strategic outlook includes continued focus on its smart electric tankless water heater, but the company faces substantial financial challenges with a growing accumulated deficit of $79,942,571.

Why It Matters

For investors, Trutankless's dramatic increase in sales, while positive, is overshadowed by a doubling of net losses and a near depletion of cash, signaling severe liquidity issues. This financial instability could impact the company's ability to fund operations, retain employees, and deliver on product development, potentially hindering its competitive position against larger, more stable home automation and appliance manufacturers. The significant reliance on related-party debt also raises concerns about governance and potential conflicts of interest, making it a high-risk proposition for new investment and a critical watch for existing shareholders.

Risk Assessment

Risk Level: high — The company's cash balance dropped from $1,004,190 to $12,047 in six months, indicating severe liquidity issues. The accumulated deficit increased to $79,942,571, and total current liabilities of $11,265,068 far exceed current assets of $2,239,866, highlighting a precarious financial position.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in Trutankless, Inc. The rapid cash burn and increasing net loss, despite revenue growth, suggest an unsustainable business model without significant capital infusion. Wait for clear evidence of sustained profitability and improved cash flow before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$524,541

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$(2,840,602)

eps

N/A

gross Margin

N/A

cash Position

$12,047

revenue Growth

+4428%

Key Numbers

• $524,541 — Net Sales (Increased from $11,584 in prior year, a 4428% increase for the six months ended June 30, 2025.)
• $(2,840,602) — Net Loss (Widened from $(1,488,753) in prior year, a 90.8% increase for the six months ended June 30, 2025.)
• $12,047 — Cash and Cash Equivalents (Decreased from $1,004,190 at December 31, 2024, a 98.8% drop.)
• $1,964,218 — Professional Fees (Increased from $35,065 in prior year, a 5500% increase for the six months ended June 30, 2025.)
• $11,265,068 — Total Current Liabilities (Increased from $8,938,584 at December 31, 2024, a 26% increase.)
• $79,942,571 — Accumulated Deficit (Increased from $77,101,969 at December 31, 2024, indicating continued losses.)
• 131,708,178 — Common Shares Outstanding (Increased from 128,608,178 at December 31, 2024, indicating dilution.)
• $1,200,319 — Inventory (Increased from $350,866 at December 31, 2024, a 242% increase.)

Key Players & Entities

• Trutankless, Inc. (company) — registrant
• Bollente Companies, Inc. (company) — previous company name
• Notation Labs, Inc. (company) — former subsidiary
• Tankless 365, Inc. (company) — wholly-owned subsidiary
• SEC (regulator) — Securities and Exchange Commission
• $524,541 (dollar_amount) — net sales for six months ended June 30, 2025
• $11,584 (dollar_amount) — net sales for six months ended June 30, 2024
• $2,840,602 (dollar_amount) — net loss for six months ended June 30, 2025
• $1,964,218 (dollar_amount) — professional fees for six months ended June 30, 2025
• $12,047 (dollar_amount) — cash and cash equivalents as of June 30, 2025

FAQ

Risk Factors

• Substantial Cash Burn and Liquidity Concerns [high — financial]: The company's cash and cash equivalents have drastically decreased from $1,004,190 at December 31, 2024, to $12,047 by June 30, 2025. This represents a 98.8% reduction, indicating a significant burn rate that raises serious concerns about the company's ability to fund its operations and future growth.
• Increasing Net Losses and Accumulated Deficit [high — financial]: Trutankless reported a net loss of $2,840,602 for the six months ended June 30, 2025, an increase from $1,488,753 in the prior year. The accumulated deficit has grown to $79,942,571, highlighting persistent unprofitability and a substantial hole in the company's equity.
• Surge in Professional Fees [high — financial]: Professional fees increased dramatically from $35,065 to $1,964,218 for the six months ended June 30, 2025. This 5500% increase is a primary driver of the widened net loss and warrants scrutiny into the nature and necessity of these expenses.
• Rising Current Liabilities [medium — financial]: Total current liabilities have increased by 26% from $8,938,584 at December 31, 2024, to $11,265,068 by June 30, 2025. This increase is attributed to higher accounts payable, accrued liabilities, and related party notes payable, potentially straining short-term financial flexibility.
• Significant Inventory Build-up [medium — operational]: Inventory has more than tripled, increasing by 242% from $350,866 to $1,200,319. While this could support increased sales, it also ties up significant capital and carries risks of obsolescence or write-downs if demand does not materialize as expected.
• Dilution from Share Issuance [medium — financial]: The number of common shares outstanding has increased from 128,608,178 to 131,708,178. This dilution could negatively impact existing shareholders' proportional ownership and earnings per share.

Industry Context

The smart electric tankless water heater market is characterized by innovation and a push towards energy efficiency. Trutankless operates in a segment that benefits from growing consumer interest in sustainable and cost-effective home solutions. However, it faces competition from established appliance manufacturers and other emerging technology companies.

Regulatory Implications

As a company involved in manufacturing and selling consumer products, Trutankless is subject to product safety regulations and energy efficiency standards. Compliance with these regulations is crucial for market access and avoiding potential fines or recalls.

What Investors Should Do

1. Monitor the company's cash burn rate closely and assess its ability to secure additional funding to avoid insolvency.
2. Investigate the significant increase in professional fees to understand the underlying reasons and their impact on future profitability.
3. Evaluate the inventory levels against actual sales performance to determine if the build-up is justified or poses a risk of obsolescence.
4. Assess the company's strategy for addressing its substantial accumulated deficit and path to profitability.

Glossary

Accumulated Deficit

The total cumulative net losses of a company that have not been offset by net income or other gains since its inception. (Indicates the company's long-term unprofitability, with Trutankless having an accumulated deficit of $79,942,571.)

Related Party Notes Payable

Debt obligations owed to individuals or entities that have a close relationship with the company, such as major shareholders or management. (An increase in these liabilities to $11,265,068 contributes to the company's current liabilities and may indicate reliance on internal or closely connected financing.)

Accrued Liabilities

Expenses that have been incurred but not yet paid. These are typically short-term obligations. (A rise in accrued liabilities is a component of the increasing total current liabilities, suggesting growing operational expenses or obligations.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, Trutankless experienced a dramatic revenue increase of 4428% to $524,541, a significant improvement from $11,584 in the prior year. However, this top-line growth was overshadowed by a widening net loss of $2,840,602, up 90.8% from $1,488,753, largely driven by a 5500% surge in professional fees. The company's cash position has deteriorated severely, falling 98.8% to $12,047, while current liabilities have grown by 26%. New risks related to the substantial cash burn and increasing professional fees are now more prominent.

Key Financial Figures

• $0.001 — The number of shares of Common Stock, $0.001 par value, outstanding on October 31, 2
• $50 — ements require the Company to pay up to $50 per unit sold in royalties to these inv

Filing Documents

• tkls_10q.htm (10-Q) — 822KB
• tkls_ex311.htm (EX-31.1) — 15KB
• tkls_ex321.htm (EX-32.1) — 7KB
• 0001477932-25-007858.txt ( ) — 4206KB
• tkls-20250630.xsd (EX-101.SCH) — 53KB
• tkls-20250630_lab.xml (EX-101.LAB) — 282KB
• tkls-20250630_cal.xml (EX-101.CAL) — 48KB
• tkls-20250630_pre.xml (EX-101.PRE) — 227KB
• tkls-20250630_def.xml (EX-101.DEF) — 139KB
• tkls_10q_htm.xml (XML) — 583KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 19

Quantitative and Qualitative Disclosure About Market Risk

Item 3. Quantitative and Qualitative Disclosure About Market Risk 25

Controls and Procedures

Item 4. Controls and Procedures 25

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 26

Risk Factors

Item 1A. Risk Factors 26

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 26

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 27

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 27

Other Information

Item 5. Other Information. 27

Exhibits

Item 6. Exhibits. 28

SIGNATURES

SIGNATURES 29 2 Table of Contents TRUTANKLESS, INC CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets Cash $ 12,047 $ 1,004,190 Accounts receivable 37,630 43,523 Prepaid expenses 215,207 1,232,930 Inventory 1,200,319 350,866 Vendor deposits 774,663 375,652 Total current assets 2,239,866 3,007,161 Other assets Property, plant and equipment, net 409,243 188,072 Right-to-use asset 906,367 171,016 Trademarks 11,914 11,914 Other assets 61,531 18,947 Total other assets 1,389,055 389,949 Total assets $ 3,628,921 $ 3,397,110 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities $ 1,784,387 $ 1,232,483 Advances payable - related parties 7,500 7,500 Lease liability 182,915 72,799 Accrued interest payable 422,067 373,998 Accrued interest payable - related parties 803,560 637,365 Royalty liabilities payable 609,552 547,500 Notes payable, net of discounts 890,000 995,000 Notes payable, net of discounts - related parties 5,112,587 4,013,439 Convertible notes payable, net of discounts 702,500 308,500 Convertible notes payable, net of discounts - related parties 750,000 750,000 Total current liabilities 11,265,068 8,938,584 Long-term liabilities Deferred warranty revenue 2,988 249 Lease liability - long-term 739,120 98,217 Notes payable, net of discounts and current portion - 95,000 Notes payable, net of discounts and current portion - related parties - 160,200 Convertible notes payable, net of discounts and current portion 50,000 451,500 Total long-term liabilities 792,108 805,166 Total liabilities 12,057,176 9,743,750 Commitments and contingencies (Note 8) - - Stockholders' deficit Preferred stock, $ 0.001 par value, 9,990,000 shares authorized Preferred stock - Series B, $ 0.001 par value, 10,000 shares

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View this 10-Q filing on SEC EDGAR