ITEM 1. FINANCIAL STATEMENTS

TRIBUS ENTERPRISES, INC.

UNADUITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30,September 30, 2019

TRIBUS ENTERPRISES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

JuneSeptember 30, 2019

On November 5, 2018, the Company entered into an agreement to sublet a portion of its office space on a month to month basis. The sublease will continue on a month to month basis until the sublessor provides notice to execute a long term lease or will have the option to assume the Company’s lease. The sublease requires monthly rental payments of $5,700 with the first month being prorated accordingly.

On May 8, 2019, the Company entered into a separate sublease agreement whereby it will 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 total $1,800 for May 2019 followed by eleven monthly payments of $4,100 through April 2020.

The Company records sublease payments received as other income in the statement of operations resulting in other income of $9,000$12,300 and $21,300 being recognized during the three and six months ended JuneSeptember 30, 2019. 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.

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

The Company was formed on March 29, 2017 in the State of Washington.

Business Strategy

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. The Company has not yet realized revenues from its planned business activities. 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 is currently a 100% owned subsidiary of the Company.

Tribus LLC was formed in December 2015 to develop, manufacture, and market a compelling product line of innovative ratcheting flare nut wrenches which have been issued a Patent Pending since April of 2016,under application number: 15/092,056 Duration ofwhich was issued on September 17, 2019 under Patent should be a standard of 20 years once the patent is granted by the USPTO. TheirNumber 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. Tribus LLC has made several plastic resin prototypes in 2016.

Tribus has produced several wrenches already and is setting up the production line for full production this year.

Products

Tribus LLC’s 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 2°- 4° to get the ratchet to click. This is crucial in tight spaces where there is very little room to swing the ratchet.

Tribus Innovations’ ratcheting flare nut wrench will be produced for sale in the hand tool industry. Historically there have been limited designs in the ratcheting flare nut wrench sales market such as; Gear Wrench part number 89100 (UPC 099575891007) and the traditional non-ratcheting flare nut wrench. These designs do not allow for small incremental movement in confined spaces, whereas Tribus Innovations’ version of the ratcheting flare nut wrench breaks new ground in this market.

Liquidity and Capital Resources

As of JuneSeptember 30, 2019, we had $48,115$102,043 in cash, total current assets of $457,033$564,934 and total current liabilities of $927,778.$1,107,898. Current liabilities consisted mainly of $175,159$156,965 of accounts payable, a capital lease liability of $288,570,$315,443, an operating lease liability of $55,933$61,878 and current loans payable of $346,913.$486,635.

As of March 31, 2019, we had current assets totaling $455,981 consisting of $33,970 of cash, $402,222$402,000 of current deposits and $20,011 of prepaid expenses. Current liabilities totaled $437,680 as of March 31, 2019. As of March 31, 2018, we had current assets of $913,958, consisting solely of cash, and current liabilities totaling $47,251.

Net cash used in operating activities was $157,644$328,484 compared to $425,057$574,120 for the threesix months ended JuneSeptember 30, 2019 and 2018, respectively.

Net cash used in investing activities was $30,918$428 compared to $0$58,840 the threesix months ended JuneSeptember 30, 2019 and 2018 respectively.

Net cash provided by financing activities was $202,707 and $8,420$396,985 for the threesix months ended JuneSeptember 30, 2019 and $1,653 used in financing activities for the six months ended September 30, 2018, respectively.

Going Concern

The future of our company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. See Note 3 to the financial statements for additional information.

Results of Operations

We did not generate revenues during the three or six months ended JuneSeptember 30, 2019 or 2018. Total operating expenses were $301,550$294,946 during the three months ended JuneSeptember 30, 2019 and $168,127$195,701 for the three months ended JuneSeptember 30, 2018. Total operating expenses were $596,496 during the six months ended September 30, 2019 and $363,828 for the six months ended September 30, 2018. The increase in operating expenses for the three and six months ended September 30, 2019 when compared to the same periods in 2018 were due to an increase in the company’s operations and preparation therefore.in the current year. Net loss for the three months ended JuneSeptember 30, 2019 was $355,398$344,755 compared to $172,651$215,371 for the same period in 2018 due2018. Net loss for the six months ended September 30, 2019 was $700,153 compared to an increase$388,022 for the same period in the company’s operations and preparation therefore.2018.

CRITICAL ACCOUNTING POLICIES

In Financial Reporting release No. 60, “CAUTIONARY"CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES” (“POLICIES" ("FRR 60”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, prepaid inventory and capital 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.

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 3A. OFF BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off balance sheet arrangements.

CONTROLS AND PROCEDURES

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 JuneSeptember 30, 2019, 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 JuneSeptember 30, 2019.

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

There have been no 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

The Company is not a party to any legal proceedings.

There are currently two lawsuits pending in Montgomery County, Ohio involving Tribus. The first is Tribus Enterprises, Inc. v. Dynamic Machine Works, LLC, et al., Montgomery County common Pleas Case No. CV 1393 (“Tribus Lawsuit”). The second is Dynamic Machine Works, LLC v Clark Trost, et al., Montgomery County Common Please Case No. 2019 CV 1753 (“Trost Lawsuit”). There has also been additional litigation threatened by Dynamic Machine Works, LLC (“DMV”)

A.            Tribus Lawsuit

Tribus filed the Tribus Lawsuit against DMW on April 1, 2019 and filed an amended complaint against DMW and one of its owners, Nathan Hake, on May 15, 2019. Those complaints assert numerous claims against DMW and Hake arising from their manufacturing relationship. Tribus’s claims against DMW are for breach of contract, unjust enrichment, and promissory estoppel. Tribus’s claims against Hake are for unjust enrichment, fraud, promissory estoppel, conversion, and tortious interference.

Tribus’s claims in the Tribus Lawsuit allege that Hake and DMW misrepresented their expertise and ability in order to obtain the contract to manufacture Tribus’s wrenches. DMW then received $402,000 from Tribus as part of that contract, and ultimately failed to produce any functional wrenches. Tribus’s claims seek the return of the $402,000 paid to DMW, together with any equipment and tooling purchased by Tribus or with Tribus’s funds that continues to be held by DMW or Hake.

DMV has filed counterclaims against Tribus in the Tribus Lawsuit. DMW has sued Tribus for breach of contract, promissory estoppel/detrimental reliance, breach of ND/NCA, theft of trade secrets, tortious interference with prospective and actual business relationships, unjust enrichment, conversion, breach of duty of loyalty or fiduciary duty, unfair competition, deceptive trade practices, and breach of lease agreement.

DMW’s claims against Tribus primarily assert that Tribus stole DMW’s confidential information and trade secrets. Namely, the programming and manufacturing process for the wrenches. DMW also asserts that it was Tribus who breached the contract with DMW. DMW’s counterclaims against Tribus center on Tribus’s decision to terminate its relationship with DMW and enter into an agreement with Clark Trost for the manufacture of the wrenches instead. Trost had been an independent contractor hired by DMW to help DMW manufacture Tribus’s wrenches. DMW’s counterclaims request judgement in excess of $2millon. 

To date, the Tribus Lawsuit has seen considerable activity for its nascent stage. It was filed primarily to compel the return of nearly $1.2 million in manufacturing equipment purchased or leased by Tribus and being held at DMW’s facility in Englewood, Ohio. That objective was largely accomplished with the return of the vast majority of the equipment on April 24th, 2019, following a motion for temporary restraining order and preliminary injunction filed on Tribus’s behalf. Certain miscellaneous pieces of equipment remain to be returned however. Those pieces (or their value), and the monetary portion of Tribus’s claims remain to litigated, as do DMW’s counterclaims against Tribus.

Tribus has vigorously prosecuted its claims and defended against DMW’s counterclaims to date. The Compny believes there is a good chance that Tribus will prevail on its claims against DMW, and that DMW will not be successfully on its claims against Tribus will prevail on its claims against DMW, and that DMW will not be successful on its claims against Tribus. Given the range and variety of claims against Tribus by DMW however, it is impossible to provide a range of potential loss with any specificity.

There are additional considerations involving the Tribus Lawsuit. First, DMW has filed a motion with the court to stay that lawsuit and compel arbitration. Tribus has opposed that motion and we are awaiting a decision from the court. Second, Hake has filed bankruptcy in the United States Bankruptcy Court for the Southern District of Ohio, which will necessitate the dismissal of Tribus’s claims against Hake personally. Tribus does not intend to pursue a judgement or claim against Hake in the bankruptcy matter, given the low likelihood of collection and the cost of such pursuit.

None of the above actions name the officers or directors individually.

B.            Trost Lawsuit

In addition to its counterclaims against Tribus, DMW filed a separate lawsuit against Clark Trost and two companies he owns, Troust Technologies, Inc. and CNC Holster, LLC (collectively “Trost”). Tribus has signed and engagement letter with McNamee & McNamee, PLL agreeing to be responsible for the attorneys’ fees and costs of representing Trost in the Trost Lawsuit as well.

DMW’s claims against Trost are for breach of ND/NCA, theft of trade secrets, tortious interference with prospective and actual business relations, unjust enrichment, conversion, breach of duty of loyalty or fiduciary duty, unfair competition, deceptive trade practices, and breach of oral sub-lease agreement. DMW’s complaint in the Trost Lawsuit seeks damages in excess of $2 million.

The crux of DMW’s claims in the Trost Lawsuit mirror its counterclaims in the Tribus Lawsuit. In essence, DMW maintains that Tribus and Trost conspired to steal the programming and manufacturing information for Tribus’s wrenches----which DMW claims to be its confidential information and trade secrets----to terminate their relationships with DMW and enter into business together to manufacture the wrenches without DMW.

The Trost Lawsuit has seen considerable activity to date as well. In addition to substantial motion practice, DMW has filed a motion for temporary restraining order and preliminary injuction, seeking to prevent Trost from doing any business with Tribus. A hearing on that motion began on May 13th, 2019, and is scheduled to be concluded on June 26th, 2019.

Here too, I believethe Company believes there is a good chance that DMW will not be successful on its claims against Trost, nor on its motion for preliminary injunction. I amThe Company is confident that, ultimately, it will be determined that the manufacturing and programming information that form the core of DMW’s claims against both Tribus and Trost is not in fact confidential information or trade secrets belonging to DMW.

C.            Threatened Litigation

DMW has threatened to initiate arbitration proceedings for all claims and counterclaims involved in the Tribus Lawsuit. The basis for this is an arbitration provision in the contract between the parties. As mentioned previously, DMW has in fact filed a motion with the court in the Tribus Lawsuit to compel arbitration, with Tribus has opposed. That motion is awaiting a decision by the court.

ITEM 1A. RISK FACTORS

There has been no material changes in the risk factors set forth in the Company’s Form 10K for the period ended March 31, 2019 filed July 19, 2019.

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

There were no salesDuring the six months ended September 30, 2019, the Company accepted stock subscriptions to issue a total of unregistered equity securities during92,000 shares of common stock at $0.25 per share resulting in total cash proceeds of $23,000.

During the covered time period.six months ended September 30, 2019, the Company issued a total of 686,875 shares of Series B Convertible Preferred Stock for total cash proceeds of $549,500.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

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:

(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: August 19,November 14, 2019.

14