Trutankless Narrows Loss Amid Revenue Surge, But Cash Dries Up

TL;DR

**TKLS is burning cash faster than it's growing revenue, making it a high-risk bet despite top-line gains.**

AI Summary

Trutankless, Inc. (TKLS) reported a net loss of $3,758,712 for the nine months ended September 30, 2025, a 23.4% improvement from the $4,908,865 net loss in the prior year period. Revenue significantly increased to $748,491 for the nine months ended September 30, 2025, up from $191,285 in the same period of 2024, representing a 291.3% increase. However, the company's cash position drastically declined from $1,004,190 at December 31, 2024, to $32,622 by September 30, 2025. Total liabilities surged to $12,668,576 from $9,743,750, driven largely by an increase in related-party notes payable to $6,076,887 from $4,013,439. Operating expenses decreased by 6% to $3,212,834 from $3,416,851, primarily due to a substantial reduction in professional fees and research and development costs. The company continues to focus on its smart electric tankless water heater, but faces significant liquidity challenges and a growing accumulated deficit of $80,860,681.

Why It Matters

For investors, Trutankless's substantial revenue growth of 291.3% is a positive signal, but it's overshadowed by a critical cash crunch, with cash dropping from over $1 million to just $32,622. The increasing reliance on related-party debt, now at $6,076,887, raises concerns about financial independence and potential conflicts of interest. This precarious financial state could impact the company's ability to fund future operations, product development, and compete effectively in the home automation market against larger, better-capitalized players, potentially affecting employees and customers through instability.

Risk Assessment

Risk Level: high — Trutankless's cash balance plummeted from $1,004,190 to $32,622 in nine months, indicating severe liquidity issues. Total liabilities increased by 30% to $12,668,576, with related-party notes payable growing by over $2 million, highlighting a heavy reliance on insider funding and a significant accumulated deficit of $80,860,681.

Analyst Insight

Investors should exercise extreme caution and consider avoiding TKLS given its critical cash shortage and ballooning liabilities, particularly related-party debt. The company's ability to continue as a going concern is questionable without significant new, non-related-party financing.

Financial Highlights

debt To Equity

N/A

revenue

$748,491

operating Margin

N/A

total Assets

N/A

total Debt

$12,668,576

net Income

-$3,758,712

eps

N/A

gross Margin

N/A

cash Position

$32,622

revenue Growth

+291.3%

Revenue Breakdown

Key Numbers

• $3,758,712 — Net Loss (Improved from $4,908,865 in prior year period for nine months ended Sept 30, 2025.)
• $748,491 — Net Sales (Increased 291.3% from $191,285 in prior year period for nine months ended Sept 30, 2025.)
• $32,622 — Cash and Cash Equivalents (Decreased from $1,004,190 at December 31, 2024, indicating severe liquidity issues.)
• $12,668,576 — Total Liabilities (Increased from $9,743,750 at December 31, 2024, reflecting growing debt burden.)
• $6,076,887 — Notes Payable - Related Parties (Increased from $4,013,439 at December 31, 2024, showing increased reliance on related-party financing.)
• $80,860,681 — Accumulated Deficit (Increased from $77,101,969 at December 31, 2024, indicating continued unprofitability.)
• 132,108,178 — Common Stock Shares Outstanding (Increased from 128,608,178 at December 31, 2024, indicating dilution.)
• $2,396,845 — Net Cash Used in Operating Activities (Increased from $1,668,634 in prior year period, showing higher cash burn from operations.)
• $1,706,148 — Net Cash Provided by Financing Activities (Primarily from related-party notes, essential for funding operations given negative operating cash flow.)
• 23.4% — Net Loss Improvement (Percentage improvement in net loss for the nine months ended September 30, 2025, compared to 2024.)

Key Players & Entities

• Trutankless, Inc. (company) — registrant
• Notation Labs, Inc. (company) — wholly owned subsidiary spun off
• Tankless 365, Inc. (company) — wholly owned subsidiary, spin-off cancelled
• $3,758,712 (dollar_amount) — net loss for nine months ended Sept 30, 2025
• $748,491 (dollar_amount) — net sales for nine months ended Sept 30, 2025
• $32,622 (dollar_amount) — cash at Sept 30, 2025
• $1,004,190 (dollar_amount) — cash at Dec 31, 2024
• $12,668,576 (dollar_amount) — total liabilities at Sept 30, 2025
• $6,076,887 (dollar_amount) — notes payable - related parties at Sept 30, 2025
• $80,860,681 (dollar_amount) — accumulated deficit at Sept 30, 2025

FAQ

Risk Factors

• Severe Liquidity Constraints [high — financial]: Cash and cash equivalents have plummeted from $1,004,190 at December 31, 2024, to $32,622 by September 30, 2025. This drastic reduction, coupled with increasing liabilities and a substantial accumulated deficit of $80,860,681, poses a significant threat to the company's ability to meet its obligations and fund ongoing operations.
• Growing Reliance on Related-Party Debt [medium — financial]: Notes payable to related parties have increased to $6,076,887 from $4,013,439, indicating a growing dependence on financing from insiders. This concentration of debt could present conflicts of interest and limit future financing options.
• Continued Unprofitability [high — operational]: Despite a significant revenue increase, the company reported a net loss of $3,758,712 for the nine months ended September 30, 2025. The accumulated deficit has grown to $80,860,681, highlighting persistent challenges in achieving sustainable profitability.
• Dilution from Stock Issuance [medium — financial]: The number of common stock shares outstanding has increased to 132,108,178 from 128,608,178. This indicates potential dilution for existing shareholders, which could negatively impact per-share metrics.
• Negative Operating Cash Flow [high — operational]: Net cash used in operating activities increased to $2,396,845 from $1,668,634 in the prior year period. This trend suggests that the core business operations are consuming cash, necessitating external funding to sustain activities.

Industry Context

The smart electric tankless water heater market is a niche but growing segment within the broader home appliance industry. Companies in this space compete on energy efficiency, technological innovation, and installation convenience. Trutankless appears to be focusing on this specialized area, but faces competition from established appliance manufacturers and other emerging technology firms.

Regulatory Implications

As a publicly traded company, Trutankless must adhere to SEC reporting requirements and accounting standards. Any misstatements or failures in disclosure could lead to regulatory scrutiny and penalties. The company's financial condition may also attract attention from regulators concerning its ability to continue as a going concern.

What Investors Should Do

1. Monitor cash burn and liquidity closely.
2. Evaluate the sustainability of revenue growth.
3. Assess the terms and risks associated with related-party debt.
4. Scrutinize the path to profitability.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. It represents the total amount of money a company has lost over its lifetime. (Indicates Trutankless's long-term unprofitability, with a deficit of $80,860,681.)

Notes Payable - Related Parties

Money owed by the company to individuals or entities that have a close relationship with the company, such as officers, directors, or major shareholders. (Shows an increasing reliance on financing from insiders, which has grown to $6,076,887.)

Net Cash Used in Operating Activities

The net amount of cash spent by a company to conduct its normal business operations during a period. (Trutankless used $2,396,845 in operating activities, an increase from the prior year, highlighting cash burn from core business.)

Year-Over-Year Comparison

Compared to the prior year period, Trutankless has demonstrated impressive revenue growth of 291.3%, increasing from $191,285 to $748,491 for the nine months ended September 30, 2025. The net loss has also improved by 23.4%. However, this growth has come at the cost of severe liquidity erosion, with cash reserves plummeting by over 96%. Total liabilities have increased, driven by a significant rise in related-party debt, and the accumulated deficit continues to grow, indicating ongoing unprofitability despite top-line expansion.

Key Financial Figures

• $0.001 — The number of shares of Common Stock, $0.001 par value, outstanding on November 19,
• $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) — 892KB
• tkls_ex311.htm (EX-31.1) — 10KB
• tkls_ex321.htm (EX-32.1) — 6KB
• 0001477932-25-008519.txt ( ) — 4301KB
• tkls-20250930.xsd (EX-101.SCH) — 53KB
• tkls-20250930_lab.xml (EX-101.LAB) — 285KB
• tkls-20250930_cal.xml (EX-101.CAL) — 48KB
• tkls-20250930_pre.xml (EX-101.PRE) — 228KB
• tkls-20250930_def.xml (EX-101.DEF) — 121KB
• tkls_10q_htm.xml (XML) — 606KB

- 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 September 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets Cash $ 32,622 $ 1,004,190 Accounts receivable 118,015 43,523 Prepaid expenses 16,137 1,232,930 Inventory 1,693,218 350,866 Vendor deposits 137,175 375,652 Total current assets 1,997,167 3,007,161 Other assets Property, plant and equipment, net 412,773 188,072 Right-to-use asset 859,826 171,016 Trademarks 11,914 11,914 Other assets 61,531 18,947 Total other assets 1,346,044 389,949 Total assets $ 3,343,211 $ 3,397,110 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities $ 1,473,108 $ 1,232,483 Advances payable - related parties 7,500 7,500 Lease liability 193,792 72,799 Accrued interest payable 439,127 373,998 Accrued interest payable - related parties 932,482 637,365 Royalty liabilities payable 596,542 547,500 Notes payable, net of discounts 765,000 995,000 Notes payable, net of discounts - related parties 6,076,887 4,013,439 Convertible notes payable, net of discounts 742,000 308,500 Convertible notes payable, net of discounts - related parties 750,000 750,000 Total current liabilities 11,976,438 8,938,584 Long-term liabilities Deferred warranty revenue 6,972 249 Lease liability - long-term 685,166 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 - 451,500 Total long-term liabilities 692,138 805,166 Total liabilities 12,668,576 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

View Full Filing

View this 10-Q filing on SEC EDGAR