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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x

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

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

 

o

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: 333-141907

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

(Exact name of registrant as specified in its charter)

 

Delaware

20-5034780

(State or other Jurisdiction of
incorporation or organization)

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

 

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

(Address of principal executive offices)

 

(520) 318-5578

(Registrant's telephone number, including area code)

 

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. Yes x 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

¨

Non-accelerated filer

¨

Smaller reporting company

x

(do not check if a smaller reporting company)

 

 

 

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

 

The number of shares of the registrant's common stock outstanding as of November 19, 2015, was 2,987,633,430.

 

 

 

TAUTACHROME, INC.

FORM 10-Q

 

INDEX

 

PART I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

Item 1 –

Consolidated Financial Statements

 

 

3

 

 

 

 

 

 

 

Item 2 –

Management's Discussion And Analysis Of Financial Condition And Results Of Operations

 

 

19

 

 

 

 

 

 

 

Item 3 –

Quantitive And Qualitative Disclosures About Market Risk

 

 

21

 

 

 

 

 

 

 

Item 4 –

Controls and Procedures

 

 

21

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

 

 

 

 

Item 1 –

Legal Proceedings

 

 

22

 

 

 

 

 

 

 

Item 1A –

Risk Factors

 

 

22

 

 

 

 

 

 

 

Item 2 –

Unregistered Sale of Equity Securities

 

 

22

 

 

 

 

 

 

 

Item 3 –

Defaults Upon Senior Securities

 

 

22

 

 

 

 

 

 

 

Item 4 –

Mine Safety Disclosures

 

 

22

 

 

 

 

 

 

 

Item 5 –

Other Information

 

 

22

 

 

 

 

 

 

 

Item 6 –

Exhibits

 

 

23

 

 

 

 

 

 

 

 

Signatures

 

 

24

 

 

 
2
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 – CONSOLIDATED FINANCIAL STATEMENTS

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

CONSOLIDATED BALANCE SHEETS

 

 

 

09/30/15

 

 

12/31/14

 

 

 

(Unaudited)

 

 

(Audited)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$36,807

 

 

$23,705

 

Other current assets

 

 

2,000

 

 

 

-

 

Total current assets

 

 

38,807

 

 

 

23,705

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$38,807

 

 

$23,705

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$148,326

 

 

$5,016

 

Accounts payable – related party

 

 

638

 

 

 

-

 

Bank overdraft

 

 

89

 

 

 

-

 

Accrued interest - related party

 

 

5,063

 

 

 

-

 

Loans from related parties

 

 

147,023

 

 

 

-

 

Convertible note payable, related party

 

 

22,000

 

 

 

23,500

 

Short-term convertible notes payable

 

 

272,298

 

 

 

-

 

Short-term notes payable

 

 

15,352

 

 

 

-

 

Derivative liability

 

 

6,338

 

 

 

-

 

Total current liabilities

 

 

617,127

 

 

 

28,516

 

 

 

 

 

 

 

 

 

 

Long-term convertible notes payable, net of discounts of $2,259 and $0 at September 30, 2015 and December 31, 2014, respectively

 

 

57,741

 

 

 

-

 

Total non-current liabilities

 

 

57,741

 

 

 

-

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

674,868

 

 

 

28,516

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Common stock, $0.001 par value. Four billion shares authorized. 2,987,633,430 and 1,184,906,041 shares issued and outstanding at September 30, 2015 and December 31, 2014

 

$29,876

 

 

$11,848

 

Additional paid in capital

 

 

1,171,507

 

 

 

1,441,712

 

Common stock payable

 

 

-

 

 

 

26,667

 

Accumulated deficit

 

 

(1,976,042)

 

 

(1,485,038)

Other Comprehensive Income

 

 

138,598

 

 

 

-

 

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

 

 

(636,061)

 

 

(4,811)
 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

$38,807

 

 

$23,705

 

 

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

 

 
3
 

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

Three Months Ended
September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

Successor

 

 

Predecessor

 

 

Successor

 

 

Predecessor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$430,907

 

 

$14,320

 

 

$220,451

 

 

$7,599

 

Depreciation

 

 

807

 

 

 

-

 

 

 

538

 

 

 

-

 

Total operating expenses

 

 

431,714

 

 

 

14,320

 

 

 

220,989

 

 

 

7,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income / (loss)

 

 

(431,714)

 

 

(14,320)

 

 

(220,989)

 

 

(7,599)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME / (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(55,330)

 

 

(1,448)

 

 

(50,712)

 

 

(961)

Change in fair value of derivative

 

 

(3,960)

 

 

-

 

 

 

(3,960)

 

 

-

 

Total other

 

 

(59,290)

 

 

(1,448)

 

 

(54,672)

 

 

(961)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(491,004)

 

$(15,768)

 

$(275,661)

 

$(8,560)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency exchange

 

 

138,598

 

 

 

-

 

 

 

73,033

 

 

 

-

 

Net comprehensive loss

 

$(352,406)

 

$(15,768)

 

$(202,628)

 

$(8,560)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and diluted

 

$(0.00)

 

$(0.00)

 

$(0.00)

 

$(0.00)

Weighted average shares outstanding

 

 

2,987,633,430

 

 

 

1,167,382,296

 

 

 

2,987,633,430

 

 

 

1,122,670,741

 

 

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

 

 
4
 

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY / (DEFICIT)

(Unaudited)

 

 

 

Common Stock

 

 

Additional Paid in

 

 

Other Comprehensive

 

 

Stock

 

 

Accumulated

 

 

Total Stockholders' Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Payable

 

 

Deficit

 

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances, December 31, 2013

 

 

1,114,155,564

 

 

$11,140

 

 

$1,236,870

 

 

$-

 

 

$650

 

 

$(1,250,701)

 

$(2,041)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash, net of issue costs

 

 

1,463,765

 

 

 

15

 

 

 

24,610

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,625

 

Accrual of stock for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

26,667

 

 

 

-

 

 

 

26,667

 

Shares issued for services

 

 

69,286,712

 

 

 

693

 

 

 

178,312

 

 

 

-

 

 

 

(650)

 

 

-

 

 

 

178,355

 

Imputed interest

 

 

-

 

 

 

-

 

 

 

1,920

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

1,920

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

(234,337)

 

 

(234,337)

Balances, December 31, 2014

 

 

1,184,906,041

 

 

 

11,848

 

 

 

1,441,712

 

 

 

-

 

 

 

26,667

 

 

 

(1,485,038)

 

 

(4,811)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for services

 

 

6,156,179

 

 

 

62

 

 

 

73,539

 

 

 

-

 

 

 

(26,667)

 

 

-

 

 

 

46,934

 

Effect of reverse merger, May 21, 2015

 

 

1,796,571,210

 

 

 

17,966

 

 

 

(389,267)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(371,301)

Imputed interest

 

 

-

 

 

 

-

 

 

 

4,611

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,611

 

Effect of foreign currency exchange

 

 

-

 

 

 

-

 

 

 

-

 

 

 

138,598

 

 

 

-

 

 

 

-

 

 

 

138,598

 

Beneficial conversion feature of convertible notes

 

 

-

 

 

 

-

 

 

 

40,912

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

40,912

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(491,004)

 

 

(491,004)

Balances, September 30, 2015

 

 

2,987,633,430

 

 

$29,876

 

 

$1,171,507

 

 

$138,598

 

 

$-

 

 

$(1,976,042)

 

$(636,061)

 

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

 

 
5
 

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

2014

 

 

2015

 

 

Successor

 

 

Predecessor

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net Loss

 

$(491,004)

 

$(15,768)

Depreciation expense

 

 

807

 

 

 

-

 

Stock-based compensation

 

 

46,934

 

 

 

10,380

 

Change in fair value of derivative

 

 

3,960

 

 

 

-

 

Amortization of discounts on convertible notes

 

 

40,912

 

 

 

-

 

Imputed interest

 

 

4,611

 

 

 

1,448

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(2,000)

 

 

-

 

Accounts payable and accrued expenses

 

 

24,022

 

 

 

(870)

Net cash used in operating activities

 

 

(371,758)

 

 

(4,810)
 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Property, plant and equipment disposals

 

 

1,806

 

 

 

-

 

Cash acquired in reverse merger

 

 

38,719

 

 

 

-

 

Net cash used in investing activities

 

 

40,525

 

 

 

-

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

 

256,122

 

 

 

-

 

Cash proceeds from related-party loan

 

 

32,560

 

 

 

-

 

Principal payments on related-party loans

 

 

(82,945)

 

 

(1,000)

Net cash provided by financing activities

 

 

205,737

 

 

 

(1,000)
 

 

 

 

 

 

 

 

 

Effect of foreign exchange transactions

 

 

138,598

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash

 

 

13,102

 

 

 

(5,810)

Cash and equivalents - beginning of period

 

 

23,705

 

 

 

23,329

 

Cash and equivalents - end of period

 

$36,807

 

 

$17,519

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTARY INFORMATION

 

 

 

 

 

 

 

 

Cash paid for interest

 

$2,419

 

 

$-

 

Cash paid for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS

 

 

 

 

 

 

 

 

Discount due to derivative

 

$2,318

 

 

$-

 

Discount due to beneficial conversion feature

 

 

40,912

 

 

 

40,912

 

 

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

 

 
6
 

 

TAUTACHROME, INC.

(Formerly Roadships Holdings, Inc.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

 

Note 1 – Organization and Nature of Business

 

History

 

Tautachrome, Inc. (formerly Roadships Holdings, Inc.) was formed in Delaware on June 5, 2006 as Caddystats, Inc. (Tautachrome, Inc. and hereinafter be collectively referred to as "Tautachrome", the "Company", "we' or "us").

 

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

 

Our Business

 

The Division operates in the internet applications space, a space uniquely able to embrace fast growing and novel business. The iPhone, Google, Facebook, Amazon, Twitter, Android, Uber and numerous other examples are reminders of the ability of the internet applications space to surprise us with the arrival –seemingly from out of nowhere- of wholly new business universes.

 

Click is developing a system branded "KlickZie" aimed at turning smartphones, including iPhones, Android phones and other smartphones, into trustable imagers and advanced communicators. Trustable imagers means that the pictures and videos can be trusted to be the original, untampered, un-Photoshopped pictures and videos made by the smartphone. Advanced communicators means that the pictures and videos can be used as living, trusted portals to communicate with others.

 

The KlickZie system concept consists of downloadable software able to securitize the imaging process in the smartphone, together with an advanced cloud system to authenticate KlickZie pictures and videos and to make possible imagery based communication among people who happen upon KlickZie pictures and videos.

 

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

 

Consolidated Financial Statements

 

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 ending September 30, 2015. 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, 2014, as reported in Form 10-K filed with the Securities and Exchange Commission on July 9, 2015.

 

 
7
 

 

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

 

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.

 

Reverse Merger and Successor / Predecessor Presentation

 

On May 21, 2015, we acquired all the issued and outstanding shares of Click Evidence, Inc. ("Click"), an emerging growth company existing under the laws of the State of Arizona that has developed and owns a patent pending trustable imaging technology for smartphones (See Note 6). Because the shareholders of Click collectively control the Company immediately after the transaction, we deemed the transaction a reverse merger for accounting purposes. In a reverse merger, Click is considered the acquirer and Tautachrome is considered the acquiree. Therefore, financial history of Click is presented instead of that of Tautachrome, Inc. From May 21, 2015 forward, the financial statements are those of Tautachrome, Inc. with all previously reported subsidiary activity and including the activity of Click.

 

Property, Plant and Equipment

 

We record our property plant and equipment at historical cost. The estimated useful lives of these assets range from three to seven years and are depreciated using the straight-line method over the asset's useful life.

 

Foreign Currency Risk

 

We currently have two subsidiaries operating in Australia. At September 30, 2015 and December 31, 2014, we had $32,241 and $500 Australian Dollars, respectively ($22,497 and $407 US Dollars, respectively) deposited into Australian banks.

 

Use of Estimates

 

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

 

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. Basic and diluted loss per share is the same for the three and nine months ended September 30, 2015 as the effect of our potential common stock equivalents would be anti-dilutive.

 

 
8
 

 

Recent Accounting Pronouncements

 

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

 

Note 3 – Going Concern

 

We have not begun our core operations in the technology industry and have not yet acquired the assets to enter this markets and we will require additional capital to do so. There is no guarantee that we will acquire the capital to procure the assets to enter this markets or, upon doing so, that we will generate positive cash flows from operations. Substantial doubt exists as to Tautachrome's ability to continue as a going concern. No adjustment has been made to these financial statements for the outcome of this uncertainty.

 

Note 4 – Related Party Transactions

 

For the nine months ended September 30, 2015 and 2014, we had the following transactions with the Twenty Second Trust (the "Trust"), the trustee of whom is Tamara Nugent, the wife of our major shareholder and former Chief Executive Officer, Micheal Nugent:

 

 

·

We received $32,560 and $12,118, respectively, in cash loans to pay operating expenses and repaid $82,945 and $6,925, respectively, in principal.

 

 

 

 

·

We accrued $3,195 and $1,508, respectively, in interest payable to the Trust and paid $2,419 and $1,319, respectively, in interest payments.

 

 

 

 

·

On April 20, 2015, the Registrant and Tamara Nugent, as trustee for Twenty Second Trust, entered into a Common Stock Repurchase Agreement whereby the Trust agreed to sell 1,796,571,210 shares of the our common stock to the Company in exchange for the sum of $17,966 in the form a promissory note.

 

 
9
 

 

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%.

 

The outstanding balance at September 30, 2015 is $30,676 and $1,077, respectively, for principal and interest.

 

On December 9, 2014, we redeemed 39,312 shares of Series B Convertible Preferred Stock issued in 2013 to our then Chief Executive Officer, by issuing a promissory note in the amount of $98,281. The promissory note is due December 31, 2015 and bears interest at 5% (see Note 5). Through September 30, 2015, we have accrued $3,690 in interest and have paid no interest or principal payments.

 

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 ("Jon") under which the Company may borrow such money from Jon as Jon in his sole discretion is willing to loan. Under this agreement and its enlargement amendment (an amendment enlarging the amount of money that can be borrowed) the Company borrowed $28,000 from Jon between May 30, 2013 and October 31, 2013, and repaid Jon $3,500 of the $28,000 in cash between December 11, 2013 and December 31, 2013, leaving an unpaid balance on this note of $24,500 at December 31, 2013. On August 28, 2014, the Company repaid in cash an additional $1,000 on the note, and on January 5, 2015, an additional principal payment was made in the amount of $1,500, leaving an unpaid balance at September 30, 2015 of $22,000.

 

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 $1.00 per share. Also, because this loan is a no interest loan an imputed interest expense of $1,320 and $1,448 was recorded as additional paid-in capital for the nine months ended September 30, 2015 and 2014, respectively. The Company evaluated Dr. Leonard's note for the existence of a beneficial conversion feature and determined that none existed.

 

On September 18, 2015, we entered into an agreement with Novagen Ingenium Inc, a Nevada corporation ("Novagen") under which we agreed to sell to Novagen all of the transportation assets of Roadships which had, at the time of the exchange, carrying values of zero, for 2,000,000 shares of Novagen common stock. Shares of Novagen's common stock are quoted under the symbol "NOVZ" on the OTC Pink operated by OTC Markets Group, Inc. Novagen's controlling shareholder is Micheal Nugent who is on our Board of Directors and is a major shareholder. Since the shares represent a transaction with a related party, we recorded the value of these shares at zero.

 

On August 9, 2015, we issued a $5,000 convertible promissory note to the brother of our Board Chairman and Chief Executive Officer in return for cash. The terms of this note are provided in Note 7, subheading "Convertible Notes Payable".

 

Note 5 – Capital

 

At December 31, 2014, we had 1,184,906,041 common shares issued and outstanding from a total of four billion authorized.

 

On April 20, 2015, the Registrant and Tamara Nugent, as trustee for Twenty Second Trust, entered into a Common Stock Repurchase Agreement whereby the Trust agreed to sell 1,796,571,210 shares of the our common stock to the Company in exchange for the sum of $17,966 in the form a promissory note.

 

 
10
 

 

During the nine months ended September 30, 2015, we issued 6,156,179 shares for services to several consultants according to our agreements with them. We valued these shares at the pre-merger valuation which was based on private equity raises done in 2013 and 2014 ($0.012 per share) and recorded an increase in Capital Stock and Additional Paid in Capital of $73,601. Included in these shares were shares promised and accrued for before December 31, 2014. We therefore reduced Common Stock Payable by $26,667 to zero.

 

On May 21, 2015, we issued 1,796,571,210 common shares to the shareholders of Click Evidence, Inc. in exchange for all the issued and outstanding shares of that Company (see Note 6), effecting the merger between Click and Roadships.

 

Preferred Stock

 

On March 12, 2013, the Board of Directors authorized 4 shares of Class A Convertible Preferred Stock and 10,000,000 shares of Class B Convertible Preferred Stock. Class A and B Convertible Preferred Stock have the following attributes:

 

Series A Convertible Preferred Stock

 

The Series A Preferred Stock is convertible into the number of shares of Common Stock which equals 4 times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of conversion, plus ii) the total number of shares of Series B Preferred Stocks which are issued and outstanding at the time of conversion.

 

The Series A Preferred Stock voting rights are equal to the number of shares of Common Stock which equals 4 times the sum of: i) the total number of shares of Common Stock which are issued and outstanding, plus ii) the total number of shares of Series B Preferred Stocks which are issued and outstanding.

 

Series B Convertible Preferred Stock

 

Each share of Series B Preferred Stock is convertible at par value $0.0001 per share (the "Series B Preferred"), at any time, and/or from time to time, into the number of shares of the Corporation's common stock, par value $0.0001 per share (the "Common Stock") equal to the price of the Series B Preferred Stock ($2.50), divided by the par value of the Series B Preferred (par value of $0.0001 per share), subject to adjustment as may be determined by the Board of Directors from time to time (the "Conversion Rate").

 

Based on the $2.50 price per share of Series B Preferred Stock, and a par value of $0.0001 per share for Series B Preferred each share of Series B Preferred Stock is convertible into 250,000 shares of Common Stock.

 

Each share of Series B Preferred Stock has 10 votes for any election or other vote placed before the shareholders of the Common stock.

 

The Preferred A stock has a stated value of $0.0001 and no stated dividend rate and is non-participatory. The Series A and Series B has liquidation preference over common stock. The Voting Rights for each share of Series A is equal to 1 vote per share (equal to 4 times the number of common and Preferred B shares outstanding) and Series B Preferred Stock have 10 votes per shares.

 

 
11
 

 

The Holder has the right to convert the Preferred A and B to common shares of the Company with the Series A convertible to 4 times the number of common and Preferred B shares outstanding and Series B convertible to 250,000 common shares per Preferred B share. The Preferred Series A and Series B represents voting control based on management's interpretation of the Company bylaws and Certificate of Designation.

 

There are no Series A or B Convertible Preferred Stock outstanding at September 30, 2015.

 

Note 6 – Business Combination

 

Acquisition of Click Evidence, Inc.

 

On May 21, 2015, we acquired all the issued and outstanding shares of Click Evidence, Inc. ("Click"), an emerging growth company existing under the laws of the State of Arizona that has developed and owns a patent pending trustable imaging technology for smartphones. Under the terms of the Acquisition, we issued 1,796,571,209 shares of our common stock from treasury in exchange for 14,239,705 shares of Click common stock. As a result of the Acquisition, Click has become a wholly-owned subsidiary of the Registrant.

 

The Roadships shares were issued by the Registrant at a deemed price of $0.0012 per share to 16 Click shareholders (the "Click Shareholders") on the basis of 83.644 Roadships shares for each of the issued and then outstanding Click Shares. The number of Roadships shares issued for the Click Shares was determined by negotiation between the parties to the Acquisition and was approved by our board of directors as being fair and in the best interest of the Registrant.

 

As a result of the issuance of the Roadships shares, Dr. Jon N. Leonard, the President, Chief Executive Officer and a director of Click, has acquired sole voting and investment control over 1,387,829,545 shares of Roadships' common stock, representing 46.4% voting control of the Registrant. At the time of the Acquisition, Dr. Leonard directly owned 10,000,000 Click Shares and had sole voting and investment control over a further 1,000,000 Click Shares.

 

We deemed the transaction a reverse merger and recorded no goodwill.

 

Assets and liabilities of Click Evidence are as follows:

 

Fair value of assets and liabilities obtained from Click Evidence

 

 

 

Cash

 

$10,597

 

Other current assets

 

 

2,000

 

Shareholder note payable

 

 

(22,000)

Net liabilities acquired

 

$(9,403)

 

Upon merging the two companies, we closed all historical operating results prior to the reverse merger date of May 21, 2015 of Roadships and consolidated subsidiaries to Additional Paid in Capital. Operating results and cash flows and historical equity presented in this report and subsequent reports will be that of Click Evidence, Inc.

 

 
12
 

 

A summary of pro-forma financial information for the years ended December 31, 2014 and 2013 are as follows:

 

 

Year Ended December 31,

 

 

2014

 

 

2013

 

Total assets

 

$32,072

 

 

$26,746

 

Total liabilities

 

 

260,133

 

 

 

83,039

 

Total stockholders' deficit

 

 

(228,061)

 

 

(56,293)

Net loss

 

 

(311,477)

 

 

(27,286,649)

Other comprehensive income (loss)

 

 

6,423

 

 

 

(11,325)

Net comprehensive loss

 

 

(305,054)

 

 

(27,297,974)

Weighted average shares outstanding (basic and diluted)

 

 

2,987,633,430

 

 

 

2,412,838,909

 

Net loss per share (basic and diluted)

 

 

(0.00)

 

 

(0.01)

 

Sale of Roadships Holdings' Assets

 

On September 18, 2015, we entered into an agreement with Novagen Ingenium Inc, a Nevada corporation ("Novagen") under which we agreed to sell to Novagen all of the transportation assets of Roadships which had, at the time of the exchange, carrying values of zero, for 2,000,000 shares of Novagen common stock. Shares of Novagen's common stock are quoted under the symbol "NOVZ" on the OTC Pink operated by OTC Markets Group, Inc. Novagen's controlling shareholder is Micheal Nugent who is on our Board of Directors and is a major shareholder. Since the shares represent a transaction with a related party, we recorded the value of these shares at zero.

 

The description of the terms and conditions of the Share Exchange Agreement set forth herein does not purport to be complete and is qualified in its entirety by reference to the terms of the Share Exchange Agreement, which is filed as Exhibit 10.1 to this Current Report.

 

The sale of these assets to Novagen was completed on September 18, 2015. As a result, Novagen has acquired all of the Transport Assets and we have exited the transport and shipping business. Management intends to focus all the resources of the registrant on the development and commercialization of its smartphone imaging technology.

 

 
13
 


Note 7 – Debt

 

Our debt in certain debt categories went from $23,500 at December 31, 2014 to $514,414 at September 30, 2015 as follows:

 

 

 

12/31/14

 

 

09/30/15

 

Loans from related parties

 

$-

 

 

$147,023

 

Convertible notes payable, related party

 

 

23,500

 

 

 

22,000

 

Short-term convertible notes payable

 

 

-

 

 

 

272,298

 

Short-term notes payable

 

 

-

 

 

 

15,352

 

Long-term convertible notes payable

 

 

-

 

 

 

60,000

 

Discounts on long-term convertible notes payable

 

 

-

 

 

 

(2,259)

Totals

 

$23,500

 

 

 

514,414

 

 

Loans from related parties

 

On December 9, 2014, Tautachrome, Inc. redeemed 39,312 shares of Series B Convertible Preferred Stock issued in 2013 to our then Chief Executive Officer, by issuing a promissory note in the amount of $98,281. The promissory note is due December 31, 2015 and bears interest at 5%. We have accrued $3,986 and $296 in interest on this note through September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, the entire principal amount of $98,281 and interest of $3,986 remains unpaid.

 

On April 20, 2015, the Registrant and Tamara Nugent, as trustee for Twenty Second Trust, entered into a Common Stock Repurchase Agreement whereby the Trust agreed to sell 1,796,571,210 shares of the our common stock to the Company in exchange for the sum of $17,966 in the form a promissory note. The note bears no interest and is callable by the maker at any time. At September 30, 2015, we still owe $17,966 on this note.

 

During the nine months ended September 30, 2015, we borrowed $32,560 from the 22nd Trust and repaid $81,445 in principal. We also accrued $3,195 in interest to the 22nd Trust and made $2,419 in interest payments. At September 30, 2015, we are indebted to the 22nd Trust $30,676 and $1,077 in principal and interest, respectively.

 

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 ("Jon") under which the Company may borrow such money from Jon as Jon in his sole discretion is willing to loan. Under this agreement and its enlargement amendment (an amendment enlarging the amount of money that can be borrowed) the Company borrowed $28,000 from Jon between May 30, 2013 and October 31, 2013, and repaid Jon $3,500 of the $28,000 in cash between December 11, 2013 and December 31, 2013, leaving an unpaid balance on this note of $24,500 at December 31, 2013. On August 28, 2014, the Company repaid in cash an additional $1,000 on the note, and on January 5, 2015, an additional principal payment was made in the amount of $1,500, leaving an unpaid balance at September 30, 2015 of $22,000. We evaluated this instrument for the existence of a beneficial conversion feature and determined that none existed.

 

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 $1.00 per share. Also, because this loan is a no interest loan an imputed interest expense of $1,320 and $1,448 was recorded as additional paid-in capital for the nine months ended September 30, 2015 and 2014, respectively. The Company evaluated Dr. Leonard's note for the existence of a beneficial conversion feature and determined that none existed.

 

 
14
 

 

Convertible notes payable

 

During the six months ended June 30, 2015, we borrowed AU$176,225 (US$123,269) from 28 accredited investors in Australia. These promissory notes can be converted into shares of our common stock at the rate of $0.01 per share (the aggregate of which shares convertible is 17,622,500). These notes are callable by the makers at any time and contain no interest provision. We imputed interest of $148 to the date of the merger (May 21, 2015) and $3,271 from May 22, 2015 to September 30, 2015. We evaluated these instruments for the existence of beneficial conversion features and determine that none existed.

 

During the three months ended September 30, 2015, we borrowed AU$214,000 (about US$150,027) from 24 accredited investors in Australia. These promissory notes can be converted into shares of our common stock at the rate of AU$0.01 per share (the aggregate of which shares convertible is 21,400,000) . These notes are callable by the maker at any time and bear interest at 5%. As of September 30, 2015, we have accrued $1,651. No cash interest or principal payments have made, nor have any debt balances been converted to equity, through September 30, 2015. We evaluated these notes for beneficial conversion features and calculated a value of $40,792, all of which has been immediately expensed as interest expense as the notes are due on demand.

 

During the three months ended September 30, 2015, we borrowed $60,000 from seven accredited investors in the United States. These notes bear interest at 5% and are due eighteen months from the date of the note (all of which mature during the first quarter of 2017). Each note is convertible into a sum of shares which varies depending on the note date. The aggregate sum of the shares into which these notes are convertible is 11,403,657. We evaluated these notes for embedded derivates and determined that they contained such derivatives as set forth in the Statement of Financial Accounting Standard ASC 820–10–35–37 Fair Value in Financial Instruments ( herein referenced as "ASC 820"); Statement of Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities (herein referenced as "ASC 815"); and ASC 815–40 (formerly Emerging Issues Task Force ("EITF") Issue No. 00–19 and EITF 07–05).

 

Aggregate totals for these seven convertible notes payable are:

 

Derivative values at inception

 

$2,378

 

Change in value of derivative (a loss)

 

 

3,960

 

Derivative value at September 30, 2015

 

 

6,338

 

 

 

 

 

 

Debt discounts recorded

 

 

2,378

 

Amortization of derivative debt discounts to September 30, 2015

 

 

(120)

Balance of derivative debt discounts at September 30, 2015

 

 

2,259

 

 

 

 

 

 

Nominal interest accruals to September 30, 2015

 

 

277

 

 

One of the seven accredited investors included in the above paragraph is the brother of our Board Chairman and Chief Executive Officer, Dr. Jon Leonard. This $5,000 related-party convertible promissory note is dated August 9, 2015, matures on February 26, 2017, pays interest at 5%, and may convert into 1,020,408 common shares. The initial derivative recorded on this instrument was $226 with a value at September 30, 2015 of $481. The initial discount recorded on this instrument was $226, of which $11 has been amortized to interest expense.

 

 
15
 

 

Short-term notes payable

 

We borrowed AU$17,000 (about US$11,863) from two creditors in Australia. The debt is not evidenced by a promissory note and is callable by the maker at any time. These amounts are still outstanding at September 30, 2015.

 

Derivative liability

 

The above-referenced seven convertible promissory notes issued during the three months ended September 30, 2015 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.

 

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.

 

In valuing the derivatives, the following inputs were assumed:

 

 

·

The underlying stock price was used as the fair value of the common stock $0.0070 – $0.0121 as of 7/12/15 through 9/30/15;

 

 

 

 

·

The stock price projection was modeled such that it follows a geometric Brownian motion with constant drift and a constant volatility;

 

 

 

 

·

The stock projections are based on the Company historical annual volatilities using the term remaining for each Note and Valuation date:

 

Date

 

Volatility

 

07/12/15

 

 

341%

08/26/15

 

 

344%

08/27/15

 

 

344%

08/29/15

 

 

344%

09/03/15

 

 

341%

09/07/15

 

 

340%

09/08/15

 

 

340%

09/30/15

 

 

339%

 

 
16
 

 

 

·

An event of default would occur 0% of the time, increasing .50% per month to a maximum of 5.0%;

 

 

 

 

·

Capital raising events would occur quarterly at $150,000 per quarter through 2017 with potential dilutive resets for the Notes;

 

 

 

 

·

Discount rates were based on risk free rates in effect based on the remaining term and date of each valuation and instrument.

 

 

 

 

·

The Holder would redeem based on availability of alternative financing, 0% of the time increasing 0% monthly to a maximum of 0%;

 

 

 

 

·

The Holder would convert the note starting after 12 months to maturity (18 months from issuance) assuming the company was not in default subject to trading volume limits.

 

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 rates on these seven instruments range from 5.0% to 10.6%.

 

At each reporting date, we determine the fair market value for each derivative associated with each of the seven above instrument. At September 30, 2015, we determined the fair value of these derivatives were $6,338. We therefore included the difference in the Statement of Operations as "Change in Fair Value of Derivatives".

 

Changes in outstanding derivative liabilities are as follows:

 

Balance, December 31, 2014

 

$-

 

Changes due to new issuances

 

 

2,378

 

Changes due to debt extinguishments

 

 

-

 

Changes due to adjustments to fair value

 

 

3,960

 

Balance, September 30, 2015

 

$6,338

 

 

 
17
 

 

Note 8 – Income Taxes

 

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

 

 

 

09/30/15

 

 

12/31/14

 

 

 

 

 

 

 

 

Net operating loss carry-forward

 

 

1,976,706

 

 

 

1,003,419

 

 

 

 

 

 

 

 

 

 

Deferred tax asset at 39%

 

 

691,847

 

 

 

391,333

 

Valuation allowance

 

 

(691,847)

 

 

(391,333)

Net future income taxes

 

$-

 

 

$-

 

 

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 begin to expire in 2030.

 

Note 9 – Subsequent Events

 

We have evaluated subsequent events through the date of this report.

 

 
18
 

 

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," "will," "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

 

Tautachrome, Inc. is an emerging company in the short-sea and ground freight industry sectors operating through its wholly owned subsidiaries in the U.S. and Australia.

 

In the United States, Roadships Acquisitions US, Inc. is our subsidiary designated to identify and act upon synergistic acquisition targets throughout North America. Roadships America, Inc, was established to develop and accommodate organic growth within the North American markets.

 

Roadships is currently attempting to develop a High Speed (HS) Monohull ship design based on a vessel concept that was initially developed by Kvaerner Masa Yards - Technology (now STX Europe). The HS vessel design was conceived in the early 1990's for short sea shipping transportation throughout Europe using a hull form derived from a high speed ROPAX ferry built in Helsinki, Finland. This hull form was extensively tested and improved over a period of 5 years to optimize the hull form that offers the least resistance and allows the ship to maintain speed up to SS5.

 

 
19
 

 

Results of Operations - Nine months ended September 30, 2015 versus 2014

 

We had general and administrative expenses of $430,907 for the nine months ended September 30, 2015 versus $14,320 for the same period in 2014. The increase is due to the combination of Tautachrome in 2015 whereas general and administrative expenses in 2014 include only Click Evidence, Inc.

 

Depreciation expense is $807 during the nine months ended September 30, 2015 versus $0 for the same period in 2014. Some assets were acquired and capitalized with the reverse merger and we have recorded depreciation from the point of the merger (May 21, 2015) until September 30, 2015. Click Evidence had no depreciable assets in 2014.

 

Interest expense increased from $1,448 in the nine months ended September 30, 2014 to $55,330 in the nine months ended September 30, 2015. The increase is due to the inclusion of debts from Tautachrome which are not included in 2014.

 

During the nine months ended September 30, 2015, we also had Other Comprehensive Income items totaling $138,598 which consisted entirely of $138,598 of the effects of foreign currency translation resulting from the rising of the US Dollar in relation to the Australian dollar. We had no such foreign translation effect in the previous year.

 

Results of Operations - Three months ended September 30, 2015 versus 2014

 

We had general and administrative expenses of $220,451 for the three months ended September 30, 2015 versus $7,599 for the same period in 2014. The increase is due to the combination of Tautachrome in 2015 whereas general and administrative expenses in 2014 include only Click Evidence, Inc.

 

Depreciation expense is $538 during the three months ended September 30, 2015 versus $0 for the same period in 2014. Some assets were acquired and capitalized with the reverse merger and we have recorded depreciation from the point of the merger (May 21, 2015) until September 30, 2015. Click Evidence had no depreciable assets in 2014.

 

Interest expense increased from the previous year of $961 in the three month period ending September 30, 2014 to $50,712 in the three months ended September 30, 2015. The increase is due to the inclusion of debts from Tautachrome which are not included in 2014.

 

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.

 

The Company has virtually no liquid assets. 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.

 

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 September 30, 2015 and December 31, 2014. 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.

 

 
20
 

 

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, 2014, filed with the Commission on July 9, 2015 and is herein incorporated by reference, subject to the caveat that our transportation division has been sold and is no longer active within the company.

 

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 September 30, 2015, 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 September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
21
 

 

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 1A – RISK FACTORS

 

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

ITEM 2 – UNREGISTERED SALE OF EQUITY SECURITIES

 

None

 

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4 – MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 – OTHER INFORMATION

 

None

 

 
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ITEM 6 - EXHIBITS

 

Exhibit No.

 

Description of Exhibit

 

 

 

3.1

 

Articles of Incorporation, as filed June 5, 2007 (included as Exhibit 3.1 to the Form SB-2 filed April 5, 2007, and incorporated herein by reference).

 

 

 

3.2

 

Bylaws (included as Exhibit 3.2 to the Form SB-2 filed April 5, 2007, and incorporated herein by reference).

 

 

 

10.1

 

Amended and Restated Share Exchange Agreement (filed with our 8-K filed May 8, 2015 and herein incorporated by reference).

 

 

 

10.2

 

First amendment to Share Exchange Agreement (filed with our 8-K filed May 8, 2015 and herein incorporated by reference).

 

 

 

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

 

XBRL Interactive Data Files

 

 
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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: November 19, 2015

By:

/s/ Dr. Jon Leonard

 

 

Dr. Jon Leonard

 

 

Chief Executive Officer

 

 

 

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