Trutankless, Inc. - Quarter Report: 2012 March (Form 10-Q)

bolc10q.htm

UNITED STATES

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 March 31, 2012

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

Commission file number 000-54219

BOLLENTE COMPANIES INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2137574
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Gainey Center II
8501 North Scottsdale Road, Suite 165
Scottsdale, Arizona		85253-2740
(Address of principal executive offices)		(Zip Code)

(480) 275-7572

(Registrant’s telephone number, including area code)

Copies of Communication to:

Stoecklein Law Group

Emerald Plaza

402 West Broadway

Suite 690

San Diego, CA 92101

(619) 704-1310

Fax (619) 704-0556

Indicate by check mark whether the issuer (1) 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

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 Common Stock, $0.001 par value, outstanding on May 2, 2012, was 6,817,460 shares.

BOLLENTE COMPANIES, INC.

QUARTERLY PERIOD ENDED MARCH 31, 2012

Index to Report on Form 10-Q

		Page No.
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4T.	Controls and Procedures	21

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	23

Item 4.	(Removed and Reserved)

Item 5.	Other Information	23

Item 6.	Exhibits	23

	Signature	25

PART I – FINANCIAL INFORMATION Item 1. Financial Statements. BOLLENTE COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	March 31,	December 31,
	2012	2011

ASSETS

Current assets:
Cash	$ 7,114	$ 864
Prepaid expenses	163	163
Prepaid stock compensation	230,625	369,375
Total current assets	237,902	370,402

Other assets:
Deferred financing cost, net	660	1,980
Security deposits	1,500	1,500
Trademarks	550	550
Total other assets	2,710	4,030

Total assets	$ 240,612	$ 374,432

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$ 66,965	$ 66,103
Accrued salaries - related party	34,521	26,521
Accrued payroll taxes	19,469	3,060
Notes payable - related party	450	250
Accrued Interest	456	-
Accrued interest payable - related party	13,672	3,284
Line of credit - related party	57,381	51,881
Notes payable, net of unamortized debt discount of $300	41,710	41,110
Total current liabilities	234,624	192,209

Long-term liabilities:
Notes payable - related party	500,000	500,000
Total long-term liabilities	500,000	500,000

Total liabilities	734,624	692,209

Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding
as of March 31, 2012 and December 31, 2011, respectively	-	-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 6,697,460 and 6,497,460 shares issued and outstanding
as of March 31, 2012 and December 31, 2011, respectively	6,698	6,498
Additional paid-in capital	1,849,932	1,610,632
Subscriptions payable	10,000	164,000
Deficit accumulated during development stage	(2,344,232)	(2,098,907)
Total stockholders' deficit	(494,012)	(317,777)

Total liabilities and stockholders' deficit	$ 240,612	$ 374,432

See accompanying notes to consolidated financial statements.

BOLLENTE COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)


							Inception
							(March 7, 2008)
	For the three months ended						to
	March 31,						March 31,
	2012			2011			2012
				(restated)
Revenue	$	-		$	-		$	-

Operating expenses:
General and administrative		28,192			10,386			107,161
Executive compensation		58,500			-			301,426
Product development - related party		-			-			336,014
Research and development		2,913			6,547			62,443
Professional fees		159,365			13,041			1,474,660

Total operating expenses		248,970			29,974			2,281,704

Other expenses:
Interest expense - related party		(10,790	)		(269	)		(48,515	)
Interest expense		(1,975	)		(22,742	)		(30,422	)

Total other expenses		(12,765	)		(23,011	)		(78,937	)

Net loss	$	(261,735	)	$	(52,985	)	$	(2,360,641	)

Net loss per common share - basic	$	(0.04	)	$	(0.13	)

Weighted average number of common shares		6,529,012			399,733
outstanding - basic

See accompanying notes to consolidated financial statements.

BOLLENTE COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
							Inception
							(March 7, 2008)
	For the three months ended						to
	March 31,						March 31,
	2012			2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES				(restated)
Net loss	$	(261,735	)	$	(52,985	)	$	(2,360,641	)
Adjustments to reconcile net loss
to net cash used in operating activities:
Shares issued for services		-			-			50,000
Shares issued for employment agreement		50,500			-			254,500
Shares issued for prepaid stock compensation		138,750			-			799,375
Warrants issued for services		-			-			308,176
Write-off of inventory deposit		-			-			21,000
Non-cash financing cost		-			21,732			22,056
Amortization of deferred financing cost		1,320			660			5,940
Amortization of debt discount		600			300			2,700
Changes in operating assets and liabilities:
(Increase) in prepaid expenses		-			(500	)		(7,163	)
Decrease in other receivables		-			-			(14,000	)
(Increase) in security deposits		-			(1,500	)		(1,500	)
Increase (decrease) in accounts payable		862			(1,654	)		151,542
Increase in accounts payable - related party		-			-			343
Increase in accrued salaries - related party		8,000			-			34,521
Increase in accrued payroll taxes		16,409			-			19,469
Increase in deferred revenue		-			-			14,235
Increase in accrued interest payable		55			-			456
Increase in accrued interest payable - related party		10,789			270			13,672

Net cash used in operating activities		(34,450	)		(33,677	)		(685,319	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase trademarks		-			-			(550	)
Payments for due from related party		-			-			(44,372	)
Repayments for due from related party		-			-			40,000

Net cash used in investing activities		-			-			(4,922	)

CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		-			(81	)		-
Proceeds from notes payable - related party		200			600			14,122
Repayments of notes payable - related party		-			(1,300	)		(1,550	)
Proceeds from line of credit - related party		5,500			6,000			64,270
Repayments of line of credit - related party		-			-			(6,889	)
Proceeds from notes payable		-			30,000			41,760
Repayments for notes payable		-			-			(2,750	)
Proceeds from sale of common stock, net of offering costs		35,000			-			581,282
Donated capital		-			-			7,110

Net cash provided by financing activities		40,700			35,219			697,355

NET CHANGE IN CASH		6,250			1,542			7,114

CASH AT BEGINNING OF YEAR		864			48			-

CASH AT END OF PERIOD	$	7,114		$	1,590		$	7,114


SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

Non-cash investing and financing activities:
Reclass accounts payable related party to accounts payable	$	-		$	-		$	343
Reclass notes payable related party to notes payable	$	-		$	-		$	11,760
Shares issued as settlement of accounts payable	$	-		$	115,718		$	115,718
Shares issued for prepaid stock compensation	$	-		$	-		$	369,375
Warrants issued for services	$	-		$	-		$	308,176
Deemed distribution to majority shareholder	$	-		$	(500,000	)	$	(516,563	)

See accompanying notes to consolidated financial statements.

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for a fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2011 and notes thereto included in the Company’s 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim period are not indicative of annual results.

Principles of consolidation

The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiary. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. All significant inter-company transactions and balances have been eliminated.

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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Recent pronouncements

The Company has evaluated recent accounting pronouncements through April 2012 and believes that none of them will have a material effect on the Company’s financial statements.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (March 7, 2008) through the period ended March 31, 2012 of ($2,344,233). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – RESTATEMENT

In May 2011, the Company completed its acquisition of Bollente, Inc. and the Company was required to record the transaction as a pooling of entities and the prior year financial statements were restated as a result of the acquisition. The prior year consolidated financial statements include Bollente Companies, Inc. and Bollente, Inc.

The following is a summary of the impact of these restatements on the Company’s consolidated statement of operations for the three months ended March 31, 2011:

	As Previously Reported			Adjustments for Pooling with Bollente, Inc.			As Restated
Revenue	$	-		$	-		$	-

General and Administrative		10,323			63			10,386
Product Development - Related Party		-			6,547			6,547
Professional Fees		11,541			1,500			13,041
Total Operating Expenses		21,864			8,110			29,974

Interest Expense - Related Party		(269	)		-			(269	)
Interest Expense		(22,742	)		-			(22,742	)
Total Other Expenses		(23,011	)		-			(23,011	)

Net Loss	$	(44,875	)	$	(8,110	)	$	(52,985	)

Net Loss per Common Share - Basic	$	(0.11	)	$			$	(0.13	)
Weighted Average Number of Common
Shares Outstanding - Basic		399,733						399,733

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – RESTATEMENT (CONTINUED)

The following is a summary of the impact of these restatements on the Company’s consolidated statement of cash flows for the three months ended March 31, 2011:

	As Previously Reported			Adjustments for Pooling with Bollente, Inc.			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(44,875	)	$	(110	)	$	(52,985	)
Adjustments to reconcile net loss
to net cash used in operating activities:
Non-cash financing cost		21,732			-			21,732
Amortization of financing cost		660			-			660
Amortization of debt discount		300			-			300
Changes in operating assets and liabilities:
(Increase) in prepaid compensation		(500	)		-			(500	)
(Increase) in security deposits		(1,500	)		-			(1,500	)
Increase (decrease) in accounts payable		(1,654	)		-			(1,654	)
Increase in accrued interest payable – related party		270			-			270

Net cash used in operating activities		(25,697	)		(8,110	)		(33,677	)

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for due from related party		(5,175	)		5,175			-
Payments from due from related party		560			(560	)		-

Net cash used in investing activities		(4,615	)		4,615			-

CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		-			(81	)		(81	)
Proceeds from notes payable – related party		-			600			600
Repayments of notes payable – related party		(4,372	)		3,072			(1,300	)
Proceeds from line of credit – related party		6,000			-			6,000
Proceeds from notes payable		30,000			-			30,000

Net cash used in financing activities		(31,628	)		3,591			(35,219	)

NET CHANGE IN CASH		1,496			46			1,542

CASH AT BEGINNING OF YEAR		48			-			48

CASH AT END OF YEAR	$	1,544		$	96		$	1,590

NOTE 4 –NOTES PAYABLE – RELATED PARTY

Notes payable consist of the following at:

	March 31, 2012		December 31, 2011

Note payable to an officer, director and shareholder, unsecured, 0% interest, due upon demand	$	450	$	250

Notes Payable – Current	$	450	$	250

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 –NOTES PAYABLE – RELATED PARTY (CONTINUED)

	March 31, 2012		December 31, 2011
Line of credit for up to $150,000, from a shareholder, unsecured, 5% interest, due December 2012	$	57,381	$	51,881

Line of credit – Current	$	57,381	$	51,881

Interest Expense for the three months ended March 31, 2012 and 2011 was $678 and $220, respectively.

NOTE 5 –NOTES PAYABLE

	March 31, 2012			December 31, 2011
Note payable to an entity owned and controlled by a former officer and director of the Company, unsecured, 0% interest, due upon demand	$	9,400		$	9,400

Note payable to a former officer, director and shareholder, unsecured, 0% interest, due upon demand		160			160

Note payable to an entity owned and controlled by a former officer and director of the Company, unsecured, 10% interest, due July 2010, in default as of March 31, 2012		800			800

Note payable to an entity owned and controlled by a former officer and director of the Company, unsecured, 10% interest, due August 2010, in default as of March 31, 2012		1,400			1,400

Note payable to an unrelated third party, unsecured, $3,000 in debt discount, due May 2012		30,250			30,250

Unamortized debt discount		(300	)		(900	)

Notes Payable – Current	$	41,710		$	41,110

Interest expense for the three months ended March 31, 2012 and 2011 was $1,975 and $19,011, respectively.

NOTE 6 – LONG TERM NOTES PAYABLE – RELATED PARTY

Notes payable consists of the following at:

	March 31, 2012		December 31, 2011
Note payable with a shareholder, unsecured, due February 2014	$	500,000	$	500,000

Notes Payable – Long Term	$	500,000	$	500,000

Interest expense for the three months ended March 31, 2012 and 2011 was $10,790 and $4,000, respectively.

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7– STOCKHOLDERS’ EQUITY

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.

On May 11, 2009, the Company effected a 10-for-1 forward stock split of its $0.001 par value common stock. On October 22, 2010, the Company effected a 1-for-50 reverse stock split of its $0.001 par value common stock.

All shares and per share amounts have been retroactively restated to reflect the split discussed above.

Common Stock

During the three months ended March 31, 2012 the Company entered into the following transactions to issue common stock:

On February 29, 2012, the Company recorded a stock payable totaling $50,500 for 50,000 shares of common stock owed to an officer, director and shareholder of the Company as part of his employment agreement. The shares were valued according to the fair value of the common stock as of February 29, 2012. The shares were issued on March 31, 2012, along with the 100,000 shares valued at $164,000 recorded as payable in during 2011.

During the three months ended March 31, 2012, the Company sold a total of 70,000 shares of common stock to three investors for cash totaling $35,000. Of the total, the Company issued a total of 50,000 shares of common stock. The remaining 20,000 shares have not been issued and recorded as a stock payable.

NOTE 8 – WARRANTS

The following is a summary of the status of all of the Company’s stock warrants as of March 31, 2012 and changes during the three months ended on that date:

	Number of Warrants		Weighted-Average Exercise Price
Outstanding at January 1, 2012		20,000	$	15.50
Granted		-	$	0.00
Exercised		-	$	0.00
Cancelled		-	$	0.00
Outstanding at March 31, 2012		20,000	$	15.50
Warrants exercisable at March 31, 2012		20,000	$	15.50

The following table summarizes information about stock warrants outstanding and exercisable at March 31, 2012:

	STOCK WARRANTS OUTSTANDING AND EXERCISABLE
Exercise Price	Number of Warrants Outstanding	Weighted-Average Remaining Contractual Life in Years	Weighted- Average Exercise Price
$ 15.50	20,000	0.92	$ 15.50

BOLLENTE COMPANIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – AGREEMENTS

Lease Agreement

On January 3, 2011, the Company executed a sublease agreement with Perigon Companies, LLC, a related party. The lease term is month to month at a rate of $1,500 per month. The Company paid a refundable security deposit of $1,500. During January 2012, the Company renegotiated its sublease agreement with Perigon Companies, LLC for a period of one year at a rate of $3,500 per month. Rent expense for the three months ended March 31, 2012 and 2011 was $10,500 and $4,500, respectively.

Employment Agreement

Effective March 1, 2012, the Company entered into an amended employment agreement with the President of the Company. The officer will receive annual compensation of $12,000 due monthly. Compensation expense for the three months ended March 31, 2012 was $8,000 and is recorded in general and administrative expenses. Compensation expense for the three months ended March 31, 2011 was $24,500 which was included in general and administrative expenses.

NOTE 10 – SUBSEQUENT EVENTS

Subsequent to period end March 31, 2012, In April 2012, the company sold 100,000 shares of restricted common stock to an accredited investors for a total purchase price of $50,000 all of which was paid in cash.

The 10,000 shares recorded as payable as of March 31, 2012 and the shares purchased with cash in April 2012 were both issued on April 30, 2012.

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

This Quarterly Report on Form 10-Q contains forward-looking statements. These statements include, among other things, statements regarding:

·	our ability to diversify our operations;

·	inability to raise additional financing for working capital;

·	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;

·	our ability to attract key personnel;

·	our ability to operate profitably;

·	deterioration in general or regional economic conditions;

·	adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

·	changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

·	the inability of management to effectively implement our strategies and business plan;

·	inability to achieve future sales levels or other operating results;

·	the unavailability of funds for capital expenditures;

·	other risks and uncertainties detailed in this report;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

References in the following discussion and throughout this Quarterly Report to “we”, “our”, “us”, “Bollente”, “the Company”, and similar terms refer to Bollente Companies, Inc. unless otherwise expressly stated or the context otherwise requires.

OVERVIEW AND OUTLOOK

Bollente Companies, Inc. (“BOLC”) was formed as a Nevada corporation in March 2008. On September 23, 2010, BOLC changed its name from Alcantara Brands Corporation to Bollente Companies, Inc. Effective May 16, 2011, BOLC completed the acquisition of Bollente, Inc (“Bollente”) through the acquisition of 100% of the issued and outstanding common stock of Bollente.

As a result of the closing of the Merger, BOLC is now involved in research and development of a new high quality, whole-house, electric tankless water heater that is more energy efficient than conventional products.

On February 24, 2011, Bollente accepted an assignment of an engineering services contract from Perigon Companies, LLC, a Delaware limited liability company that is also a lender for Bollente. Perigon started to create an electric tankless water heater and the technology is in research and development. Perigon is owned and controlled by an individual who is a family member of one of the stockholders of the Company. Bollente agreed to accept the assignment for a promissory note of $500,000. The promissory note is due on February 24, 2014 and bears interest at 8% per annum. There are quarterly interest payments of $10,000 with a balloon payment of the principal balance and any accrued interest at the maturity date. In the event of default, the interest rate increases to 18% per annum. In addition, the Company agreed to acquire accounts payable related to the in-process research and development totaling $16,562.

On March 7, 2011, we entered into a reverse triangular merger by and among Woodmans Lumber and Millworks Peru (“Woodmans”), a Nevada corporation and our wholly-owned subsidiary, Bollente, Inc., a Nevada corporation. Woodmans and Bollente, Inc. being the constituent entities in the merger, whereby we intend to issue 4,707,727 shares of our 144 restricted common stock in exchange for 100% of Bollente, Inc.’s issued and outstanding common stock. Pursuant to the terms of the merger, Woodmans will be merged with Bollente, Inc. wherein Woodmans shall cease to exist and Bollente, Inc. will become our wholly owned subsidiary. Subject to the terms and conditions set forth in the Merger Agreement, the Merger was anticipated to become effective on April 15, 2011.

On April 20, 2011, the Company’s OTC-QB ticker symbol changed from ACBR to BOLC.

On May 16, 2011, we filed Articles of Merger with the Secretary of State, State of Nevada which completed the reverse triangular merger by and among Woodmans, a wholly-owned subsidiary of the Registrant, and Bollente, Inc. Pursuant to the merger agreement Woodmans ceased to exist and Bollente, Inc. became a wholly owned subsidiary of the Registrant.

On June 28, 2011, we entered into eight (8) consulting agreements for various services relating to the Company’s new business model, in exchange for a total of 425,000 shares registered on Form S-8 filed on June 28, 2011.

Bollente, Inc.’s Electric Tankless Water Heaters

In December of 2009 Bollente, Inc. (“Bollente”) was formed to market and sell various green and sustainable technologies, especially consumer goods and building materials. The company has invested considerable time and resources into the development of its brand, including website development and various public relations strategies.

Bollente is committed to manufacturing and distributing a new, high-quality, highly efficient electric tankless water heater that will exceed American consumer performance expectations for large quantities of hot water and delivery of hot water at consistent temperatures with an affordable, durable and reliable design. Bollente, Inc. has several features and design innovations which are new to the electric tankless water heater market that we believe will give our products a sustainable competitive advantage over our rivals in the market.

Our tankless water heaters will be designed to provide an endless hot water supply because they are designed to heat water as it flows through the system. We believe that our products are capable of higher temperature rise than competitive units at given flow rates because of its improved design and greater efficiency. Our tankless water heaters can save energy and reduce operating costs compared to tank systems because unlike tanks, if there is no hot water demand, no energy is being used. In addition, we intend to improve life-cycle costs with an improved design conceived not only to increase efficiency, but also the longevity of our products versus competitive units. Generally, a typical tank water heater lasts about 11 years, whereas gas tankless systems may last longer, but require routine maintenance. Our product line is designed to last longer than tank water heaters without any routine maintenance required under most conditions.

Intellectual Property & Proprietary Rights

Upon completion of our brand development, we will regard substantial elements of our brands and underlying intellectual property as proprietary and attempt to protect them by relying on trademark, service mark and trade secret laws, restrictions on disclosure and transferring title and other methods.

Our plans are to actively pursue patent and trademark protection for all of newly developed products, both domestically and abroad. We have novel and proprietary technologies related to our product line and the central focus of our patent counsel has been to work with our engineers to build a defensible patent portfolio. To date, we have filed several trademark applications through our outside marketing and branding experts and have acquired several unique domain registrations reflective of our online marketing strategy. We anticipate obtaining patent and trademark protection on all of our newly developed, proprietary products. We also plan to continue protecting our intellectual property through confidentiality agreements with vendors and consultants and trade secret protocols employed by employees, consultants, and contractors.

Product Overview

Bollente is currently in a research and development phase to design a product line of tankless water heaters. The company has been strategizing a branding and marketing strategy for a tankless water heater product line since January of 2010. The whole-house and commercial series of water heaters will be marketed by the Company when the research and development is substantially completed. Management believes the company’s products will deliver increased functionality and energy efficiency to consumers, and that its products are superior to other competing products in the market, but at a lower cost to the end user. In addition, the Company has been working to identify partners in the contract manufacturing space and believes the company will enter production through one of these contract manufacturing firms in the next 12 months. There are currently several prototypes, components, and various assemblies and technologies being examined and tested by the company’s engineering consultants for use in the Company’s product lines.

Operation Plan

Our plan is to focus on continued research and development to improve the performance of our electric tankless water heater line, finishing the main elements of our branding strategy, launching a website introducing the features and benefits of tankless water heaters to the market. Subject to availability of capital and once we have substantially completed research and development of the tankless line, we will implement a marketing and sales program in order to begin filling the sales pipeline with potential customers, outside sales companies, and identify candidates within the plumbing and construction industries who will be interested in utilizing our electric tankless technology.

In order to increase production and increase returns for our stockholders, we will also be seeking licensing partners and private label opportunities. Depending on availability of capital, and other constraints, our goal is to increase stockholder value by acquiring stakes in companies, product licenses, and/or joint ventures which will yield additional products or services related to our tankless water heater line which we will offer to our customers or which will yield additional customers to whom we can offer our tankless water heater line.

We expect to achieve these results by:

·	Testing new, proprietary technologies for integration into our electric tankless water heating products;

·	Filing for patent and trademark protection for our electric tankless water heater line,

·	Launching our product website to educate retail consumers about our products;

·	Installing and testing prototype water heaters in the field in a variety of applications;

·	Designing a secondary website geared towards providing service and technical guidance to industry professionals, trade persons, and wholesale sales companies on the benefits of offering our products to their customers; and,

·	Identifying candidates in the plumbing and building industry in select markets to support our initial marketing and sales efforts.

In addition to raising additional capital we plan to begin discussions with various acquisition targets whose technologies and product offerings may augment our planned product offerings. This economic strategy may allow us to acquire or license green product lines and generally expand our existing operations.

Because of our limited operating history we have yet to generate any revenues. Our activities have been limited to raising capital, closing the recent merger, negotiating with consultants, and finalizing our consumer website design, and conducting research and testing on competitive technologies in the market place.

Our future financial results will depend primarily on: (i) our ability to raise necessary capital; (ii) obtaining required certifications to sell our products in the domestic market place; (iii) our success in obtaining patent protection for our intellectual property; and (iv) our ability to monetize our intellectual property. There can be no assurance that we will be successful in any of these respects, or that we will be able to obtain additional funding to increase our currently limited capital resources.

Results of Operations

Revenues

In this period ended March 31, 2012, we did not generate any revenues. Since our inception on March 7, 2008 through March 31, 2012, we have not generated any revenues.

Expenses

Operating expenses totaled $232,561 during the three months ended March 31, 2012 as compared to $29,974 in the prior year. In the three month period ended March 31, 2012, our expenses primarily consisted of General and Administrative of $11,783, Professional fees of $159,365 and $58,500 of Executive Compensation.

Research and development expenses totaled $2,913 during the three months ended March 31, 2012 as compared to $6,547 during the three months ended March 31, 2011. This decrease is attributed primarily to an increased focus on product testing and marketing, and testing, research and development will continue to be the Company’s primary focus.

Professional fees increased $146,324 from the three months ended March 31, 2011 to the three months ended March 31, 2012. The professional fees increased due an increase in general business activity.

General and administrative fees increased $1,397, from the three months ended March 31, 2011 to the three months ended March 31, 2012. This increase was primarily attributed to an increase in the cost of our lease.

Going Concern

The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern. The Company may not have a sufficient amount of cash required to pay all of the costs associated with operating and marketing of its products. Management intends to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.

Liquidity and Capital Resources

As of March 31, 2012, we had $7,114 in cash and cash equivalents. The following table provides detailed information about our net cash flow for all financial statement periods presented in this Quarterly Report. To date, we have financed our operations through the issuance of stock and borrowings.

The following table sets forth a summary of our cash flows for the three months ended March 31, 2012 and 2011:

	Three months Ended March 31,
	2012			2011
Net cash provided by (used in) operating activities	$	(34,450	)	$	(33,677	)
Net cash provided by (used in) investing activities		-			-
Net cash provided by (used in) financing activities		40,700			35,219
Net increase/(decrease) in Cash		6,250			1,542
Cash, beginning		864			48
Cash, ending	$	7,114		$	1,590

Operating activities

Net cash used in operating activities was $(34,450) for the period ended March 31, 2012, as compared to $(33,677) used in operating activities for the same period in 2011. The increase in net cash used in operating activities was primarily due to an increase in general and administrative expenses.

Investing activities

Net cash used in investing activities was $-0- for the period ended March 31, 2012, as compared to $-0- used in investing activities for the same period in 2011.

Financing activities

Net cash provided by financing activities for the period ended March 31, 2012 was $40,700, as compared to $35,219 for the same period of 2011. The increase of net cash provided by financing activities was mainly attributable to proceeds from an equity offering and our revolving credit facility.

As of March 31, 2012 we continue to use traditional and/or debt financing to provide the capital we need to run the business.

Liquidity is a measure of a company’s ability to meet potential cash requirements. We have historically met our capital requirements through the issuance of stock, by borrowings. In the future, we anticipate we will be able to provide the necessary liquidity we need by the revenues generated from the sales of our products.

Since inception, we have financed our cash flow requirements through issuance of common stock and debt financing. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of product sales. Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. In the future we need to generate sufficient revenues from product sales in order to eliminate or reduce the need to sell additional stock or obtain additional loans. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop our line of products, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. See Note 1 – Summary of Significant Accounting Policies in our Notes to Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

This item in not applicable as we are currently considered a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, Robertson J. Orr, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based on that evaluation and assessment, Mr. Orr concluded that our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors

The risk factors listed in our 2011 Form 10-K on pages 8 to 12, filed with the Securities Exchange Commission on April 16, 2012, are hereby incorporated by reference.

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

Issuance Pursuant to Subscription Agreement

We believe that the issuance and sale of the above shares and warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares were sold directly and did not involve a public offering or general solicitation. The recipients of the shares and warrants were afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decisions, including the financial statements and 34 Act reports. We reasonably believed that the recipients, immediately prior to the sale of the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investments. The recipients had the opportunity to speak with the Company’s management on several occasions prior to their investment decision. There were no commissions paid on the issuance and sale of the shares.

Issuance of Registered Stock

On March 19, 2012, the company issued 150,000 shares of our common stock to Mr. Orr pursuant to his employment agreement. The shares issued were registered in a Registration Statement on Form S-8 filed on June 28, 2011.

Subsequent Events

Issuance Pursuant to Subscription Agreement

Subsequent to period end March 31, 2012, In April 2012, we sold 100,000 shares of our restricted common stock to one accredited investors for a total purchase price of $50,000 all of which was paid in cash.

We believe that the issuance and sale of the above shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule. The shares were sold directly by us and did not involve a public offering or general solicitation. The recipients of the shares were afforded an opportunity for effective access to files and records of the Registrant that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipient, immediately prior to the sale of the shares, was an accredited investor and had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The management of the recipients had the opportunity to speak with our management on several occasions prior to their investment decision. There were no commissions paid on the issuance and sale of the shares.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities from the time of our inception on March 7, 2008 through the period ended March 31, 2012.

Item 3. Defaults Upon Senior Securities.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.		Description

31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase

101.DEF*		XBRL Taxonomy Extension Definition Linkbase

101.LAB*		XBRL Taxonomy Extension Label Linkbase

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BOLLENTE COMPANIES INC.

(Registrant)

By: /S/ Robertson J. Orr

Robertson J. Orr, President, Principal Financial Officer

and Principal Executive Officer

Date: May 14, 2012