Trutankless, Inc. - Quarter Report: 2014 March (Form 10-Q)

form10q.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, 2014

¨ 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.)

8800 N. Gainey Dr., Suite 270
Scottsdale, Arizona		85258
(Address of principal executive offices)		(Zip Code)

(480) 275-7572

(Registrant’s telephone number, including area code)

Copies of Communication to:

Stoecklein Law Group, LLP

Columbia Center

401 West A Street

Suite 1150

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 15, 2014, was 14,551,620 shares.

BOLLENTE COMPANIES INC.

QUARTERLY PERIOD ENDED MARCH 31, 2014

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	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4T.	Controls and Procedures	16

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

	Signature	18

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BOLLENTE COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(unaudited)


	March 31,			December 31,
	2014			2013

ASSETS

Current assets:
Cash	$	325,589		$	4,329
Accounts receivable		17,068			-
Prepaid expenses		214,845			24,761
Prepaid stock compensation - current portion		521,343			1,228,201
Total current assets		1,078,845			1,257,291

Fixed assets, net		12,049			-

Other assets:
Security deposits		1,500			1,500
Trademarks		824			550
Prepaid stock compensation - long term portion		91,667			-
Website, net		55,343			58,598
Total other assets		149,334			60,648

Total assets	$	1,240,228		$	1,317,939


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	201,300		$	76,769
Customer deposits		600			-
Accrued salaries - related party		10,315			10,869
Accrued payroll taxes		11,891			11,891
Notes payable - related party		361,537			500,450
Accrued interest payable - related party		396			1,599
Line of credit - related party		-			49,051
Notes payable, net of unamortized debt discount of $0		3,000			30,250
Total current liabilities		589,039			680,879

Total liabilities		589,039			680,879

Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding
as of March 31, 2014 and December 31, 2013, respectively		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 11,980,366 and 10,242,460 shares issued and outstanding
as of March 31, 2014 and December 31, 2013, respectively		11,981			10,243
Additional paid-in capital		8,746,525			7,010,353
Subscriptions receivable		(40,000	)		-
Common stock payable		374,850			94,850
Deficit accumulated during development stage		(8,442,167	)		(6,478,386	)
Total stockholders' equity		651,189			637,060

Total liabilities and stockholders' equity	$	1,240,228		$	1,317,939

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,
	2014			2013			2014

Revenue	$	18,026		$	-		$	18,026

Cost of goods sold		(53,850	)		-			(53,850	)

Gross profit		(35,824	)		-			(35,824	)

Operating expenses:
General and administrative		290,913			11,230			548,102
General and administrative - related party		-			-			22,100
Executive compensation		68,250			29,271			589,552
Product development - related party		-			-			336,014
Research and development		331,530			103,080			738,411
Professional fees		1,228,373			355,214			6,005,959

Total operating expenses		1,919,066			498,795			8,240,138

Other expenses:
Interest expense - related party		(8,691	)		(10,206	)		(134,145	)
Interest expense		(200	)		(139	)		(32,060	)

Total other expenses		(8,891	)		(10,345	)		(166,205	)

Net loss	$	(1,963,781	)	$	(509,140	)	$	(8,442,167	)

Net loss per common share - basic	$	(0.18	)	$	(0.06	)

Weighted average number of common shares		11,113,647			8,152,460
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,
	2014			2013			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,963,781	)	$	(509,140	)	$	(8,442,167	)
Adjustments to reconcile net loss
to net cash used in operating activities:
Shares issued or payable for services		82,661			340,750			2,871,310
Shares issued or payable for employment agreement		65,000			26,250			506,700
Shares issued for prepaid stock compensation		815,191			-			2,029,191
Warrants issued for services		-			-			308,176
Write-off of inventory deposit		-			-			21,000
Non-cash financing cost		-			-			22,056
Amortization of website costs		3,255			-			3,255
Amortization of deferred financing cost		-			-			6,600
Amortization of debt discount		-			-			3,000
Accrued rent expense - related party line of credit		10,500			-			52,500
Changes in operating assets and liabilities:
(Increase) in accounts receivable		(17,068	)		-			(17,068	)
(Increase) decrease in prepaid expenses		(190,084	)		100,362			(221,845	)
(Increase) in other receivables		-			-			(14,000	)
(Increase) in security deposits		-			-			(1,500	)
Increase in accounts payable		124,531			14,266			286,222
Increase in accounts payable - related party		-			-			343
Increase in customer deposits		600			-			600
Increase (decrease) in accrued salaries - related party		(554	)		3,000			10,315
Increase in accrued payroll taxes		-			-			11,891
Increase in deferred revenue		-			-			14,235
Increase in accrued interest payable		-			54			621
Increase in accrued interest payable - related party		(1,203	)		10,206			937

Net cash used in operating activities		(1,070,952	)		(14,252	)		(2,547,628	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase trademarks		(274	)		-			(824	)
Purchase website costs		-			-			(58,598	)
Purchase fixed assets		(12,049	)		-			(12,049	)
Payments for due from related party		-			-			(44,372	)
Repayments from due from related party		-			-			40,000

Net cash used in investing activities		(12,323	)		-			(75,843	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party					-			145,622
Repayments of notes payable - related party		(138,913	)		-			(141,963	)
Proceeds from line of credit - related party		6,500			10,500			179,970
Repayments of line of credit - related party		(66,051	)		-			(232,470	)
(Repayments) proceeds from notes payable		(15,000	)		-			26,760
Repayments for notes payable		-			-			(2,750	)
Proceeds from sale of common stock, net of offering costs		1,617,999			-			2,966,781
Donated capital		-			-			7,110

Net cash provided by financing activities		1,404,535			10,500			2,949,060

NET CHANGE IN CASH		321,260			(3,752	)		325,589

CASH AT BEGINNING OF YEAR		4,329			3,872			-

CASH AT END OF YEAR	$	325,589		$	120		$	325,589


SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	-		$	75,497
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
Shares issued for prepaid stock compensation	$	200,000		$	-		$	3,147,576
Warrants issued for services	$	-		$	-		$	308,176
Deemed distribution to majority shareholder	$	-		$	-		$	(516,563	)
Shares issued for debt settlement	$	12,250		$	-		$	12,250

See accompanying notes to consolidated financial statements.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 years ended December 31, 2013 and 2012 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.

The Company has not yet commenced significant operations and, in accordance with ASC Topic 915, the Company is considered a development stage company. 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 subsidiaries. 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. On November 21, 2013, the Company formed a wholly owned subsidiary, Nuvola, Inc. 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.

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.

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Company’s fully operational website.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassifications

Certain reclassifications have been made to the prior quarters’ financial statements to conform to the current quarter presentation. These reclassifications had no effect on previously reported results of operations. The Company reclassified payroll and compensation to its executive from general and administrative expense to executive compensation. The company also reclassified interest payable – related party to interest payable, as the loan holder is no longer considered a related party.

Recent pronouncements

The Company has evaluated recent accounting pronouncements through May 2014 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, 2014 of ($8,442,167). 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.

NOTE 3 – WEBSITE

Website consists of the following at:

	March 31, 2014			December 31, 2013

Website	$	58,598		$	58,598

Less: Accumulated amortization		(3,255	)		-

Website, net	$	55,343		$	58,598

Amortization expense for the three months ended March 31, 2014 and 2013 was $3,255 and $0, respectively.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4 – NOTES PAYABLE – RELATED PARTY

Notes payable consist of the following at:

	March 31, 2014		December 31, 2013

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

Note payable with a shareholder, unsecured, 5% interest, due February 2015		361,087		500,000

Notes Payable – Current	$	361,537	$	500,450

	March 31, 2014		December 31, 2013
Line of credit for up to $150,000, from a shareholder, unsecured, 5% interest, due December 2014	$	-	$	49,051

Line of credit – Current	$	-	$	49,051

Interest expense for the three months ended March 31, 2014 and 2013 was $8,891 and $10,206, respectively.

NOTE 5 – NOTES PAYABLE

	March 31, 2014		December 31, 2013
Note payable to an unrelated third party, unsecured, due May 2012, in default as of March 31, 2014	$	3,000	$	30,250

Unamortized debt discount		-		-

Notes Payable – Current	$	3,000	$	30,250

During March 2014, the Company and the lender agreed to convert $12,250 of the principal balance into 12,250 shares of common stock. As of March 31, 2014, the shares have not been issued.

Interest expense, including the amortization of the debt discount and the amortization of the deferred financing cost for the three months ended March 31, 2014 and 2013 was $0 and $54, respectively.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 6 – 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, 2014, the Company issued a total of 1,428,999 of common stock for cash received of $1,428,999, of which $50,000 of the funds were received as of December 31, 2013 and recorded as stock payable. Additionally $239,000 were received in cash under subscription, however the shares were not issued as of March 31, 2014 and accordingly recorded as a stock payable.

During the three months ended March 31, 2014, the Company issued 40,000 shares of common stock for funds not yet received.

During the three months ended March 31, 2014, the Company recorded a stock payable totalling $65,000 for 65,000 shares of common stock owed to employees of the Company as part of their employment agreement. The shares were valued according to the fair value of the common stock as of March 1, 2014. The shares were unissued as of March 31, 2014 and are recorded in stock payable.

During the three months ended March 31, 2014, the Company issued 200,000 shares of common stock for consulting services totaling $200,000 to be performed over a period of two years. The shares were valued according to the fair value of the common stock.

During the three months ended March 31, 2014, the Company issued 68,911 shares of common stock for consulting services totaling $68,911. The shares were valued according to the fair value of the common stock.

During the three months ended March 31, 2014, the Company recorded a stock payable totalling $13,750 for 13,750 shares of common stock owed to consultants of the Company as part of their consulting agreement. The shares were valued according to the fair value of the common stock as of March 1, 2014. The shares were unissued as of March 31, 2014 and are recorded in stock payable.

During the three months ended March 31, 2014, the Company issued 12,250 shares of common stock in exchange for a settlement of debt for $12,250 with a related party. The shares were not yet issued as of March 31, 2014, as such these were treated as stock payable. The related party is a shareholder of the Company. The principal amount of the debt was $15,250. Since the settlement of debt was with a related party, the Company treated this as a capital transaction and no gain on the debt settlement was recorded.

NOTE 7 – PREPAID STOCK COMPENSATION

During the quarter ended September 30, 2013, the Company issued a total of 1,065,000 shares of common stock as part of a consulting agreement totaling $2,176,000. The shares were valued according to the fair value of the common stock. The value of the shares was recorded as prepaid expense and is being amortized over 6 months to one year which is the related service period of the respective agreement. For the three months ended March 31, 2014, the Company expensed $795,395 as professional fees with a remaining prepaid expense amount totaling $394,162 at March 31, 2014.

BOLLENTE COMPANIES INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 – PREPAID STOCK COMPENSATION (CONTINUED)

During the quarter ended December 31, 2013, the Company issued a total of 15,000 shares of common stock as part of a consulting agreement totaling $45,850. The shares were valued according to the fair value of the common stock. The value of the shares was recorded as prepaid expense and is being amortized over one year which is the related service period of the respective agreement. For the three months ended March 31, 2014, the Company expensed $11,463 as professional fees with a remaining prepaid expense amount totaling $27,181 at March 31, 2014.

During the quarter ended March 31, 2014, the Company issued a total of 200,000 shares of common stock as part of two consulting agreements totaling $200,000. The shares were valued according to the fair value of the common stock. The value of the shares was recorded as prepaid expense and is being amortized over one year which is the related service period of the respective agreements. For the three months ended March 31, 2014, the Company expensed $8,333 as professional fees with a remaining prepaid expense amount totaling $191,667 at March 31, 2014.

NOTE 8 – AGREEMENTS

Lease agreement

In January 2014, the Company executed a sublease agreement with Perigon Companies, LLC, a related party. The lease term is one year at a rate of $3,500 per month. The Company paid a refundable security deposit of $1,500. Rent expense for the three months ended March 31, 2014 and 2013 was $10,500 and $10,500, respectively.

Employment agreement

Effective January 2014, the Company executed a two year employment agreement with the Vice President of Sales. The individual will receive annual compensation of $125,000 per year. The individual will earn a bonus of $40,000 when the Company sells and receives payment for 1,500 tankless hot water systems during the twelve months ended January 31, 2015. The individual will earn a bonus of $40,000 when the Company sells and receives payment for 3,000 tankless hot water systems during the twelve months ended January 31, 2016. The individual is also eligible for a commission equal to 2% of gross sales of tankless hot water systems.

Additionally, there were 5,000 shares due upon execution of the agreement, 5,000 shares due on July 15, 2014, 5,000 shares due on February 1, 2015, and 5,000 shares due on July 1, 2015.

Effective March 1, 2014, the Company executed an employment agreement with the President of the Company. The officer will receive annual compensation of $75,000, paid $6,250 per month. The officer can choose to receive the compensation in cash or in shares of common stock at $1 per share. Additionally, the Company will issue 60,000 shares of common stock upon execution of the agreement and 30,000 shares of common stock per quarter starting from the three months ended May 31, 2014.

NOTE 9 – SUBSEQUENT EVENTS

In May 2014, the Company executed a software and services license agreement stating that the Company would pay a monthly fee based on unit usage of cloud diagnostic software.

During April 2014, the Company issued 229,000 shares towards stock payable, funds were paid during the three months ended March 31, 2014 totalling $229,000.

During April 2014, the Company issued 1,112,250 shares of common stock in exchange for a settlement of debt totaling $287,250, $12,250 were recorded as stock payable as of March 31, 2014.

During April 2014, the Company issued 80,000 shares under employee contracts. The shares were recorded as stock payable at $109,850 as of March 31, 2014. Additionally 275,000 shares were issued to an employee under a new employment agreement valued at $275,000.

During April 2014, the Company issued 480,000 shares of common stock for services totaling $480,000. $13,750 were recorded as stock payable as of March 31, 2014.

During May 2014, the Company issued 395,000 shares of common stock for cash totaling $395,000 under new subscription agreement at $1 per share.

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”, “BOLC”, “Bollente”, “the Company”, and similar terms refer to Bollente Companies Inc. unless otherwise expressly stated or the context otherwise requires.

AVAILABLE INFORMATION

We file annual, quarterly and other reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.bollentecompanies.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Bollente Companies, Inc., 8800 N. Gainey Dr., Suite 270, Scottsdale, Arizona 85258.

OVERVIEW AND OUTLOOK

Bollente Companies Inc. is a development stage company incorporated in the state of Nevada on March 7, 2008. On September 23, 2010, we changed our name from Alcantara Brands Corporation to Bollente Companies Inc.

On March 7, 2011, we entered into a reverse triangular merger (the “Merger”) by and among Woodmans Lumber and Millworks Peru (“Woodmans”), a Nevada corporation and our wholly-owned subsidiary, and Bollente, Inc., a Nevada corporation, Woodmans and Bollente, Inc. being the constituent entities in the Merger. On May 16, 2011, we completed the acquisition of 100% of the issued and outstanding common stock of Bollente, Inc. in exchange for 4,707,727 shares of our common stock. Pursuant to the terms of the Merger, Woodmans was merged with Bollente, Inc. wherein Woodmans ceased to exist and Bollente, Inc. became our wholly owned subsidiary.

As a result of the closing of the Merger, our main focus was redirected to the research and development of high quality, whole-house, electric tankless water heater that is more energy efficient than conventional products.

On November 21, 2013, we formed Nuvola, Inc. (“Nuvola”), a Nevada corporation, as a wholly owned subsidiary of the Company. Nuvola will serve as the next-generation home automation and intelligence division of the Bollente portfolio and will work in conjunction with other portfolio companies to provide technical integration, innovation and ongoing revenue streams after the sale of the individual product. As a B2B technology solutions service, Nuvola will provide cloud-based technology, diagnostics, lead generation and fulfillment to installers and service providers of smart home products and appliances.

On January 28, 2014, the Board of Directors approved moving forward with plans to spin-off Nuvola, Inc.

Business of Issuer

On February 24, 2011, Bollente, Inc. accepted an assignment of an engineering services contract from Perigon Companies, LLC, a Delaware limited liability company (“Perigon”), which is also a lender for Bollente, Inc. 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 was 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 February 2014, the Company and the lender agreed to extend the due date of the loan for $500,000 for an additional year and will be due in February 2015.

Bollente’s first product is a high quality, whole-house, electric tankless water heater. The residential whole-house version and commercial version have been in research and development since late 2009; with early modeling and design work completed the remaining development has begun. Several novel and patentable technologies have been tested and prototype work is nearly completed on the primary line of tankless water heating products. We anticipate development work on the whole-house residential and commercial tankless water heaters will be substantially completed by our current engineering consultants. Once the management’s testing and certification criteria have been met, our engineering consultants will transition the product line to a contract manufacturer, who will begin full-scale production at which point we will be able to commence shipments.

We are 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. We have 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.

For forty years, the Japanese have been manufacturing and using gas powered tankless water heaters for residential and commercial use. Companies that sell gas tankless brands in the U.S. are usually sourced from Japanese suppliers, such as Noritz, Rinnai, Takagi, and Paloma, none of which manufacture or sell electric tankless products. Gas tankless manufacturers have had an appreciable impact on the U.S. water heater market in recent years, gaining market share and partnering with well known companies in the space to further increase market share. Manufacturers of electric tankless water heaters have not achieved significant sales relative to gas tankless manufacturers despite the increased awareness for tankless water heaters in general due to many technical and market factors which we feel are addressed by our innovative products and marketing plan. We expect that Bollente’s tankless electric water heaters will fill the electric tankless market segment as the industry and consumers become aware of our improved technology. Bollente’s products are being engineered to provide quality, functionality, and performance at an attractive price point. The company expects to sell primarily through traditional plumbing wholesale distribution channels, as well as directly to national homebuilders and large plumbing wholesalers. Additionally, we believe licensing and co-branding opportunities are available in the industry.

Introduction to our Business Development Strategy

We have determined that as part of our growth strategy, we will seek to partner with or acquire entities operating in various fields, with a bias towards green and "clean-tech" sectors. Our management has experience in marketing, product launches, business development strategies, and certain other areas specific to the success of growth companies. We will operate with a view towards identifying acquisition candidates as we seek the rights to provide the market with products and services geared toward environmental responsibility.

We have identified several agents who are well suited to provide consulting to high-growth technology and consumer products companies. We are currently negotiating with several agents possessing technical expertise related to planning, structuring, and capitalizing growth companies in the green and "clean-tech" sectors who will be tasked with creating additional revenues and assist the Company with our own planning, structure, and capitalization.

We have identified several entities that fit our criteria. We are focused on adding value to these companies and acquiring either the entity or its business, maintaining and growing that business, and hiring and utilizing existing management where appropriate. We have begun the design of a website which we believe will help us attract relationships with possible acquisition targets.

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 and received a United States federal trademark registration for trutankless® and our logo design with the help of our outside marketing and branding experts and have acquired several unique domain registrations reflective of our online marketing strategy (www.bollentecompanies.com). During the year ended December 31, 2013, our patent agent filed ta provisional patent with the US Patent and Trademark Office with 37 claims based on our prototype design. Upon completion of our engineered prototype, we expect to file additional patents with additional claims. There is no guarantee that we will be able to obtain a formal patent for our tankless water heater. We will continue to protect our intellectual property through confidentiality agreements with vendors and consultants and trade secret protocols employed by employees, consultants, and contractors.

Product Overview

We are currently in a research and development phase to design a product line of tankless water heaters. We are strategizing a branding and marketing strategy for a tankless water heater product line. 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 our products will deliver increased functionality and energy efficiency to consumers, and that our products are superior to other competing products in the market, but at a lower cost to the end user. In addition, we are working to identify partners in the contract manufacturing space and believe we 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 our engineering contactors for use in our product lines.

Tankless Industry Overview

The U.S. gas tankless, whole-house, water heater market is dominated by five brands; Noritz, Rinnai, Takagi, Aqua Star by Bosch and Rheem by Paloma. The U.S. electric tankless, whole-house, water heater market is dominated by four brands; Seisco by Microtherm, Inc., Stiebel Eltron, Eemax and Power Star by Bosch. Until just a few years ago, there were only a few tankless water heater manufacturers with a presence in the United States, but that is changing. Now, several Japanese and European manufacturers have begun marketing products in the United States, and since 2003, gas tankless products have experienced dramatic growth. Electric tankless systems have not experienced comparable growth due to several factors, primarily product performance, capacity, product quality and electrical power supply and installation issues.

Manufacturers of tank heaters have a competitive advantage due largely to their product category’s long established use, name recognition, established distribution and brand position in the marketplace. Many plumbers and other building industry professionals were opposed to changing brands or to tankless systems because many tankless water heaters have been poorly designed in the past. As a result there is a perception among some contractors that these water heaters are more complicated and generally less dependable than traditional tank heaters. This perception is often passed along to consumers when making buying decisions or inquiring about switching to a tankless water heater. In recent years however, the industry has experienced a contraction in sales of products and services for new building projects. Consequently, higher ticket, higher margin products, such as tankless and solar water heating systems have become a primary growth driver for many plumbers and companies who had traditionally avoided emerging technologies.

While we believe that our products will have superior performance, such as endless hot water, superior longevity, greater efficiency and lower “life-cycle” costs than traditional tank water heaters, the Company’s success will depend to a large degree on the successful conversion of traditional water heater buyers to tankless water heater buyers. The acquisition price of tankless water heaters (both gas and electric) is greater than traditional tank water heaters, but the overall cost of ownership will be less than that of traditional tank technologies under typical circumstances. Although the public’s awareness of tankless systems has not been strong historically, sales growth in the sector is suggestive of increasing awareness.

Our marketing and promotion plans have been developed to increase the awareness of the Company’s brand as the preferred option to traditional tank systems. Bollente intends to position itself and its brand to capitalize on the paradigm shift to green-conscious living and development.

Target Markets

The United States market for residential tank water heaters in 2010 was approximately 7.65 million units according to data released by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). Almost 50% of those shipments were electric water heaters, and the company has found in comparing those statistics with government data, that over 90% of tank water heaters shipped in 2010 were intended for “replacement” installations.

Bollente will initially market its products to builders, remodelers and distributors in the southern and western U.S. These areas of the country have been selected because of generally higher ground water temperatures, which improves the effects of the performance and capacity of all brands of tankless water heaters. This area of the country also traditionally has the largest share of population growth and new housing starts, accounting for almost two-thirds of all housing starts in 2010, according to government data. Additionally, the southern U.S., and specifically the southeastern U.S., has the highest usage of electric water heaters.

Overview of Potential Markets and Summary of Marketing Plan

Management intends to focus on the United States residential market initially. For decades Americans have used only tank type water heaters. For most homes, the units hold an average of 40 to 80 gallons of water in a storage tank, are gas or electric fueled and consume excessive energy to keep water hot continuously. In fact, water heaters expend up to 25% of the total energy used by a typical household representing the second largest use of energy in most homes. Depending on household usage, approximately 25 – 50% of the heat created is lost through the walls of the tank and connecting pipes.

There are other problems inherent with traditional tank water heaters:

·	Due to the high temperatures and corrosive aspects of water, a typical water heater has a life span of 10.7 years.
·	Unless replaced beforehand, more than two thirds of water heaters eventually corrode and leak or burst, often resulting in extensive and costly water and mold related damage.
·	Due to the large size and other installation requirements often result in the units being installed in garages and utility rooms on the opposite side of the home from the bathroom fixtures. Because of this, an estimated 10,000 gallons of water per household goes down the drain while users wait on the water to get hot at the faucet.
·	Traditional tank water heaters take up to 6 to 9 square feet of floor space, which can be especially valuable in multi-family or commercial applications.
·	To reduce operating costs, many people adjust the temperature on their water heaters down. Unfortunately, lower temperatures increase the possibility of unhealthy, water born bacteria growth.
·	To increase water heating capacity, many people will adjust the temperature of their water heaters up. In addition to using more energy, this practice can be dangerous by posing a greater risk of scalding.

Tankless water heaters are becoming increasingly popular in America because they:

·	Produce a continuous, unlimited supply of hot water
·	Expend only the energy needed to heat the water used with no “standby” energy loss
·	Can last more than twice as long as tank heaters
·	Are small and require very little space.
·	Are not conducive to bacterial growth
·	Are considered very “green” by green conscious builders and consumers.

Electric tankless water heaters have additional benefits over gas powered models because they can be installed almost anywhere in a home (closets, attics, utility rooms, etc.) where hot water is needed which improves flexibility of floor plan design for builders, architects, and remodelers. In addition, gas tankless water heaters may not be suitable for many applications due to challenges with adequate fuel supply, the need for exhaust vents with specific requirements, and other code-related requirements. In spite of these issues, gas tankless water heaters have enjoyed significant growth in North America because of the efficiency and performance they provide.

Distribution Plan

Initially, we will be distributing our first product line throughout the southern and western U.S. using an existing network of plumbing and electrical wholesalers (distributors), manufacturers’ representatives and dealers. We believe that once the product has been launched, we will be able to partner with major companies in the building and plumbing industries to rapidly expand awareness of Bollente and our products in the water heater market in the U.S and Canada.

Sales will be pursued through the following channels:

1.	Regional and national plumbing and electrical wholesalers (also called “distributors”);
2.	Plumbers and electricians on a direct basis, in those areas where wholesalers have not yet been set up; and,

3.	Builders on a direct basis, in those areas where wholesalers & mechanical contractors have not yet been set up.

We will expand sales of the product further by marketing the product directly to consumers over the internet with a series of aggressive and ongoing marketing initiatives. We intend to market to industry professionals and end-users through more traditional marketing efforts as well, including print advertising, attendance of select national trade shows, and attendance of select regional consumer shows. We also expect Bollente will be successful in providing education, training, and support to our sales and installer networks as part of our distribution and marketing efforts.

We believe our products will be a differentiating factor for industry professionals and builders as they market to their customers. Additionally, our electric tankless products are expected to provide these professionals and their companies with a mechanism to increase revenue and improve gross margin as compared to more traditional water heating products.

Employees

Currently, we have three part-time employees, including Robertson James Orr, who is also our sole officer and director. We are using and will continue to use independent consultants and contractors to perform various professional services. We believe that this use of third-party service providers may enhance our ability to contain operating and general expenses, and capital costs.

RESULTS OF OPERATIONS

Revenues

In the three months ended March 31, 2014 we generated $18,026 in revenues, as compared to $0 revenues in the prior year. Cost of goods sold was $53,850, as compared to $0 in the prior year.

Expenses

Operating expenses totaled $1,919,066 during the three months ended March 31, 2014 as compared to $498,795 in the prior year. In the three month period ended March 31, 2014, our expenses primarily consisted of General and Administrative of $290,913, Executive Compensation of $68,250, Research and Development of $331,530, and Professional fees of $1,228,373.

General and administrative fees increased $279,683, from the three months ended March 31, 2013 to the three months ended March 31, 2014. This increase was primarily due to an increase in rent expense.

Executive Compensation increased $38,979 from the three months ended March 31, 2013 to the three months ended March 31, 2014. Executive Compensation increased due to an increase in compensation to the President of the Company.

Research and development expenses totaled $331,530 during the three months ended March 31, 2014 as compared to $103,080 during the three months ended March 31, 2013. This increase is attributed primarily to the Company spending more towards developing its technology.

Professional fees increased $873,159 from the three months ended March 31, 2013 to the three months ended March 31, 2014. Professional fees increased due to an increase in legal and accounting fees associated with public company filings and the amortization of the prepaid stock compensation.

Other Expenses

Interest expense – related party decreased $1,515 to $8,691 in the three months ended March 31, 2014 from $10,206 for the three months ended March 31, 2013. The decrease was the result of a decrease in notes payable with interest accruals.

Interest expense increased $61 to $200 in the three months ended March 31, 2014 from $139 for the three months ended March 31, 2013. The increase was the result of an increase in interest accruals from note payables.

Net Loss

In the three months ended March 31, 2014, we generated a net loss of $1,963,781, an increase of $1,454,641 from $509,140 for the three months ended March 31, 2013. This increase was attributable to increased accounting and legal fees as well as professional fees from share based consulting contracts.

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, 2014, we had $325,589 in cash, $17,068 in accounts receivable, $214,845 in prepaid expenses and $521,343 in prepaid stock compensation. 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, 2014 and 2013:

	Three months ended March 31,
	2014			2013
Net cash used in operating activities	$	(1,070,952	)	$	(14,252	)
Net cash used in investing activities		(12,323	)		-
Net cash provided by financing activities		1,404,535			10,500
Net increase/(decrease) in Cash		321,260			(3,752	)
Cash, beginning		4,329			3,872
Cash, ending	$	325,589		$	120

Operating activities

Net cash used in operating activities was $1,070,952 for the period ended March 31, 2014, as compared to $14,252 used in operating activities for the same period in 2013. The increase in net cash used in operating activities was primarily due to an increase legal, accounting, research and development and consulting contract cost.

Investing activities

Net cash used in investing activities was $12,323 for the period ended March 31, 2014, as compared to $0 used in investing activities for the same period in 2013. The net cash used in investing activities for the current period was primarily due to the purchase of computer equipment.

Financing activities

Net cash provided by financing activities for the period ended March 31, 2014 was $1,404,535, as compared to $10,500 for the same period of 2013. The increase of net cash provided by financing activities was mainly attributable more equity financing net of repayment of related party liabilities.

As of March 31, 2014, we continue to use traditional and/or debt financing to provide the capital we need to run the business.

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 not designed at a reasonable assurance level and are not 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.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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 2013 Form 10-K on pages 10 to 16, filed with the Securities Exchange Commission on April 14, 2014, are hereby incorporated by reference.

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

Stock Issuances

During the three months ended March 31, 2014, we issued 40,000 shares of common stock for funds not yet received.

During the three months ended March 31, 2014, we recorded a stock payable totaling $80,000 for 80,000 shares of common stock owed to employees of the Company as part of their employment agreement. The shares were valued according to the fair value of the common stock as of March 1, 2014. The shares were unissued as of March 31, 2014 and are recorded in stock payable.

During the three months ended March 31, 2014, we issued 200,000 shares of common stock for consulting services totaling $200,000 to be performed over a period of two years. The shares were valued according to the fair value of the common stock.

During the three months ended March 31, 2014, we issued 68,911 shares of common stock for consulting services totaling $68,911. The shares were valued according to the fair value of the common stock.

During the three months ended March 31, 2014, we recorded a stock payable totaling $13,750 for 13,750 shares of common stock owed to consultants of the Company as part of their consulting agreement. The shares were valued according to the fair value of the common stock as of March 1, 2014. The shares were unissued as of March 31, 2014 and are recorded in stock payable.

During the three months ended March 31, 2014, we issued 12,250 shares of common stock in exchange for a settlement of debt for $12,250 with a related party. The related party is a shareholder of the Company. The principal amount of the debt was $15,250. Since the settlement of debt was with a related party, we treated this as a capital transaction and no gain on the debt settlement was recorded.

We made the above common stock issuance in reliance upon the exemption from registration under Section 4(2) of the Securities Act for private offerings not involving a public distribution.

Subsequent Sales & Issuances of Unregistered Securities

During April 2014, we issued 229,000 shares towards stock payable; funds were paid during the three months ended March 31, 2014 totaling $229,000.

During April 2014, we issued 1,112,250 shares of common stock in exchange for a settlement of debt totaling $287,250.

During April 2014, we issued 480,000 shares of common stock for services totaling $480,000.

During May 2014, we issued 395,000 shares of common stock for cash totaling $395,000.

We made the above common stock issuance in reliance upon the exemption from registration under Section 4(2) of the Securities Act for private offerings not involving a public distribution.

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, 2014.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

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 20, 2014