Advanced Credit Technologies, Inc.

Advanced Credit Technologies, Inc. details

Advanced Credit Technologies, Inc. operates as a development stage company, which focuses on fraud prevention and credit management. It offers CyberloQ, a banking fraud prevention technology that combat unauthorized access to customer accounts. The company was founded by Christopher Jackson and Enrico Giordano on February 5, 2008 and is headquartered in Venice, FL.

Ticker:ACRT
Employees: 3

Filing

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
September
30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 333-170132 CYBERLOQ TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation ) 333-170132 26-2118480 (Commission (IRS Employer File Number) Identification No.) 4837 Swift Road Suite 210-1 Sarasota FL 34231 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (612)961-4536 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock CLOQ OTC Pink Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this form 10-K. Yes ☒ No ☐ 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging Growth Company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of the date of this filing, there were 1
15,039
,754 shares of the Issuer’s common stock issued and outstanding and held by approximately 13
8
shareholders,
four
of which are deemed affiliates within the meaning of Rule 12b-2 under the Exchange Act. As of the date of this filing, there were 20,000 shares of the Issuer’s preferred stock issued and outstanding. CyberloQ Technologies, Inc. FORM 10-Q For The Fiscal Quarter Ended
September
30, 2022 TABLE OF CONTENTS PART I — FINANCIAL INFORMATION Item 1. Consolidated Condensed Financial Statements. F-1 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 4 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 7 Item 4. Controls and Procedures. 7 PART II — OTHER INFORMATION Item 1. Legal Proceedings. 8 Item 1A. Risk Factors. 8 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 8 Item 3. Defaults Upon Senior Securities. 9 Item 4. Other Information. 9 Item 5. Exhibits. 9 SIGNATURES 10 PART I SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements related to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this quarterly report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this quarterly report to conform these statements to actual results. The following factors are among those that may cause actual results to differ materially from our forward-looking statements: ● General economic and industry conditions; ● Out history of losses, deficits and negative operating cash flows; ● Our limited operating history; ● Industry competition; ● Environmental and governmental regulation; ● Protection and defense of our intellectual property rights; ● Reliance on, and the ability to attract, key personnel; ● Other factors including those discussed in “Risk Factors” in this quarterly report on Form 10-Q and our incorporated documents. You should keep in mind that any forward-looking statement made by us in this quarterly report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this annual report after the date of filing, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this annual report or elsewhere might not occur. In this quarterly report on Form 10-Q, the terms “CLOQ,” “Company,” “we,” “us” and “our” refer to CyberloQ Technologies, Inc. and its wholly-owned subsidiary CyberloQ Technologies, LTD. Item 1. FINANCIAL STATEMENTS CyberloQ Technologies, Inc. CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 2022 December 31, 2021 (unaudited) ASSETS Current Assets Cash $ 38,671 $ 54,295 Deposits and prepaids 61,515 210,208 Total Current Assets 100,186 264,503 Fixed Assets Cyberloq platform 211,760 - Total Fixed Assets 211,760 - Total Assets $ 311,946 $ 264,503 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts Payable and Accrued Expenses $ 40,039 $ 43,560 Accrued interest 45,864 26,420 Note Payable – Stockholders 35,000 45,000 Note Payable – Related Party 100,000 150,000 Loan payable – SBA 2,088 - Common stock settlement liability - - Total Current Liabilities 222,991 264,980 Long Term Liabilities SBA Loan Payable 30,887 34,550 Note payable – Related Party 100,000 - Total Long Term Liabilities 130,887 34,550 Total Liabilities $ 353,878 $ 299,530 Commitments and Contingencies - - Stockholders’ Equity Common stock: $0.001 par value, 200,000,000 shares authorized; 109,889,754 and 82,754,515 shares issued and outstanding, respectively $ 109,890 $ 82,755 Preferred Stock $0.001 per value – 30,000 shares authorized; 20,000 and 30,000 issued and outstanding, respectively 20 30 Treasury stock (50,000 ) - Shares to be Issued: 4,325,000 and 8,200,000 common shares respectively 211,686 392,900 Additional Paid in Capital $ 6,726,602 $ 5,743,362 Stock subscription receivable (12,500 ) - Accumulated Deficit (7,027,630 ) (6,254,074 ) Total Stockholders’ Equity (41,932 ) (35,027 ) Total Liabilities and Stockholders’ Equity $ 311,946 $ 264,503 See accompanying notes to financial statements F- CyberloQ Technologies, Inc. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS For the For the Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Revenue Service Revenue $ 1,683 $ 954 $ 3,087 $ 900 Total Revenue 1,683 954 3,087 900 Operational Expense Sales Commissions - - - 131 Professional Fees 34,192 153,511 374,589 284,822 Research - 47,854 - 50,009 Officer’s Compensation 57,000 67,500 162,000 202,500 Travel and Entertainment 126 - 877 1,766 Rent 2,298 2,189 6,819 6,842 Computer and Internet 6,679 3,508 18,316 8,236 Office Supplies and Expenses 2,643 1,635 4,918 5,783 Other Operating Expenses 9,726 3,064 11,910 9,128 Total Operating Expenses 112,664 279,261 579,429 569,217 Loss from Operations (110,981 ) (278,307 ) (576,342 ) (568,317 ) Other Income (Expense) Interest (6,848 ) (5,306 ) (24,129 ) (15,705 ) Loss on settlement of payables - (2,125 ) - (6,343 ) Loss on settlement with officer - - (18,086 ) - Loss on settlement of debt - - (105,000 ) - Amortization of debt discount - - (50,000 ) - Total Other Income (Expenses) (6,848 ) (7,431 ) (197,215 ) (22,048 ) Provision for Income Taxes - - - - Net Loss $ (117,829 ) $ (285,738 ) $ (773,557 ) $ (590,365 ) Loss per common share-Basic and diluted $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.01 ) Weighted Average Number of Common Shares Outstanding Basic and diluted 104,639,754 75,594,515 95,069,241 73,701,182 See accompanying notes to financial statements F- CyberloQ Technologies, Inc. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited) From January 1, 2021 to September 30, 2022 Common (Issued) Common (Unissued) Preferred Stock Add’l Paid-In Treasury Common Stock to be Accum. Shares Amount Shares Amount Shares Amount Capital Stock Redeemed Deficit Total Balance as of December 31, 2020 74,044,515 $ 74,046 $ 130,140 30,000 $ 30 $ 4,652,123 $ $ - $ ( 5,166,362 ) $ ( 310,023 ) Common stock for cash 250,000 250 19,750 20,000 Common stock subscribed 1,600,000 1,600 ( 62,640 ) 70,258 9,218 Common stock for officer’s fees 600,000 600 ( 67,500 ) 66,900 - Stock subscription 93,000 93,000 Net loss for the quarter ended March 31, 2021 ( 102,653 ) ( 102,653 ) Balance as of March 31, 2021 76,494,515 $ 76,496 - $ 93,000 30,000 $ 30 $ 4,809,031 $ ( 5,269,016 ) $ ( 290,459 ) Common stock issued for cash 2,050,000 2,050 207,950 210,000 Common stock issued for services 1,000,000 1,000 429,000 430,000 Common stock to be issued for services 107,500 107,500 Net loss for quarter ending June 30, 2021 ( 201,975 ) ( 201,975 ) Balance June 30, 2021 79,544,515 79,546 200,500 30,000 30 5,445,981 ( 5,470,991 ) 255,066 Common stock issued for cash 435,000 435 49,765 50,200 Common stock issued for services 25,000 25 4,600 4,625 Net loss for quarter ending September 30, 2021 ( 285,738 ) ( 285,738 ) Balance September 30, 2021 80,004,515 80,006 200,500 30,000 30 5,500,346 ( 5,756,729 ) 24,153 Common stock issued for cash 2,600,000 2,600 207,400 210,000 Common stock issued for services 150,000 150 35,615 35,765 Common stock to be issued 100,000 100,000 Common stock to be issued for officers’ fees 92,400 92,400 Net loss from quarter ending December 31, 2021 ( 497,345 ) ( 497,345 ) Balance December 31, 2021 82,754,515 82,756 392,900 30,000 30 5,743,361 ( 6,254,074 ) ( 35,027 ) Common stock issued for cash 1,150,000 1,150 60,000 36,350 97,500 Common stock issued for services 1,298,701 1,298 98,702 100,000 Common stock to be issued 6,000,000 6,000 ( 100,000 ) 144,000 50,000 Common stock issued for officer’s fees 300,000 300 ( 92,400 ) 92,100 Stock redeemed for officers’ settlement ( 50,000 ) ( 490,000 ) ( 540,000 ) Preferred stock redeemed for officers settlement ( 10,000 ) ( 10 ) ( 10 ) Net loss for quarter ending March 31, 2022 ( 302,921 ) ( 302,921 ) Balance March 31, 2022 91,503,216 $ 91,504 260,500 $ 20,000 $ 20 $ 6,114,513 $ ( 50,000 ) $ ( 490,000 ) $ ( 6,556,995 ) $ ( 630,458 ) Common stock issued for cash 4,161,538 4,161 ( 113,000 ) 163,814 54,975 Common stock issued for settlement of debt 2,000,000 2,000 138,000 140,000 Common stock to be issued for convertible debt 52,186 52,186 Retirement of convertible debt 50,000 50,000 Net loss for quarter ending June 30, 2022 ( 352,806 ) ( 352,806 ) Balance, June 30, 2022 97,664,754 97,665 - 199,686 20,000 20 6,466,327 ( 50,000 ) ( 490,000 ) ( 6,909,801 ) ( 686,103 ) Common stock issued for cash 12,225,000 12,225 ( 62,500 ) 260,275 210,000 Common stock to be issued 50,000 50,000 Common stock to be issued for officers’ fees 12,000 12,000 Reversal of common stock redeemed for officers settlement 490,000 490,000 Net loss for quarter ending September 30, 2022 ( 117,829 ) ( 117,829 ) Balance, September 30, 2022 109,889,754 $ 109,890 - $ 199,186 20,000 $ 20 $ 6,726,602 $ ( 50,000 ) $ - $ ( 7,027,630 ) $ ( 41,932 )
See accompanying notes to financial statements F- CyberloQ Technologies, Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September
30, 2022 2021 (unaudited) (unaudited) OPERATING ACTIVITIES Net loss $ (
773,557
) $ (
590,365
) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of debt discount 50,000 - Stock Compensation
318,042
198,168
Loss on settlement of payables -
6,343
Loss on settlement with officer and director 18,086 - Loss on settlement of debt 105,000 - Change in Operating Assets and Liabilities: Decrease (increase) in accounts receivable - (300 ) Decrease (increase) in deposits and prepaids
(57,349 ) - Increase (decrease) in accounts payable and accrued expenses (21,617 ) (47,924 ) Increase (decrease) in accrued interest 21,631 15,706 Net Cash Used in Operating Activities (339,764 ) (418,372 ) INVESTING ACTIVITIES Internal Software Development (211,760 ) - Net cash provided by (used) in investing activities (211,760 ) - FINANCING ACTIVITIES Proceeds from Common Stock Issuance 412,475 280,200 Proceeds from Common Stock to be Issued 50,000 93,000 Repayment of Note Principal (1,575 ) (700 ) Proceeds from Note Payable 125,000 22,500 Repurchase of common stock (50,000 ) - Net Cash Provided by Financing Activities 535,900 395,000 Net Increase (Decrease) in Cash and Equivalents (15,624 ) (23,372 ) Cash and Equivalents at Beginning of the Period 54,295 26,741 Cash and Equivalents at End of the Period $ 38,671 $ 3,369
SUPPLEMENTAL CASH FLOW INFORMATION Interest Paid $ - $ - Income Taxes Paid $ - $ - NON-CASH DISCLOSURES Common stock issued for prepaid expense $ 100,000 $ 537,500 Common stock issued for accrued expense $ - $ 5,000 Common stock
issued for accounts payable $ - $ 2,500 Common stock to be redeemed $ -
$ - Common stock issued for note payable $ 35,000 $ - Common stock to be issued for note payable $ 52,186 $ - See accompanying notes to financial statements F- CyberloQ Technologies, Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Business CyberloQ Technologies Inc. (“CLOQ”, ‘We” or the “Company”) is a development-stage technology company focused on fraud prevention and credit management. The Company was originally incorporated as Advanced Credit Technologies, Inc. in the State of Nevada on February 25, 2008. On November 20, 2019, the Company changed its name from Advanced Credit Technologies, Inc. to CyberloQ Technologies, Inc. The Company offers a proprietary software platform branded as CyberloQ®. While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ. CyberloQ is a banking fraud prevention technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer accounts. Through the use of a customer’s smart-phone, CyberloQ uses a multi-factor authentication system to control access to a bank card, transaction type or amount, website, database or digital service. The mobile applications for CyberloQ have been built, and have been successfully integrated into the banking ecosystem. The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure data without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses cloud-based encryption and a secure web portal to send/receive confidential data, the sender and receiver both must have authenticated their position within the prescribed geo coordinates as well as authenticate their mobile devices prior to sending/receiving any data. Thus, rendering a hack or breach utterly useless for the encrypted data is unusable without the CyberloQ authentication component. In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers. Basis of Presentation The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and the rules of the Securities and Exchange Commission. All amounts are presented in U.S. dollars. The Company has adopted a December 31 fiscal year end. Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission. Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. F- Cash and Cash Equivalents Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. As of
September
30, 2022, and December 31, 2021, the Company had no deposits in excess of federally-insured limits. Research and Development, Software Development Costs, and Internal Use Software Development Costs Software development costs are accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology; and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific products for which the costs relate. During the
nine
months ended
September
30, 2022 and 2021, we capitalized $
211,76
0 and zero , respectively, of development costs for the CyberloQ platform and we expensed zero and $ 2,155 , respectively, for expenditures on research and development. None was paid to related parties. Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. In accounting for website software development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training costs incurred in the development of website software be expensed as incurred, while application development stage costs are to be capitalized. Fixed Assets, Intangibles and Long-Lived Assets The Company records its fixed assets at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from three to fifteen years. The Company follows FASB ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. As of December 31, 2020, the Company wrote-off the book value of the Cyberloq technology software fixed asset and recorded software impairment expense of $ 321,725 . Even though the software asset was written-off as impaired as of December 31, 2020, the software asset continued to be functionable but required updating the software programming code to current technology standards. During 2021, the Company developed and implemented a business plan to fully update the Cyberloq Secure Solution and feasibility of the software to meet the demands of the market. As of January 1, 2022, the Company’s began capitalizing software costs which totaled $
211,760 as of September
30, 2022. F- Revenue Recognition Effective January 1, 2018, the Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09 or ASC 606). The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 (Legacy GAAP), as detailed below. However, since the Company had not earned any revenue prior to adopting ASC 606, this policy change had no effect on any financial statements from prior periods, thus no adjustments have been made to any prior periods related to the adoption of ASC 606. Revenue Recognition Policy Under ASC 606, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) we satisfy a performance obligation. The Company derives its revenue from development, customization and user fees for the CyberloQ banking fraud technology products, including CyberloQ Vault, and from licensing fees for the TurnScor product. The revenue derived from the CyberloQ banking fraud technology products are comprised of two components. First, there is a development and customization fee paid to the Company to integrate CyberloQ with the banking institution or program manager’s ecosystem in order to add the CyberloQ authentication to the bank’s payment cards, website or digital service. This fee is customarily paid in multiple payments based upon the Company reaching certain milestones as set forth in the scope of work for each customer. Since completion of a milestone is subject to each customer’s approval, there are significant judgments involved in the determination of timing and satisfaction of performance obligations and the payments are recognized as revenue upon the completion of each milestone. Second, revenue from user fees are accrued monthly based over the number of individual card users each month. The revenue derived from CyberloQ Vault is also comprised of two components. First, there is a development and customization fee paid to the Company to build a customized cloud-based encryption and a secure web portal to send/receive confidential data. This fee is customarily paid in multiple payments based upon the Company reaching certain milestones as set forth in the scope of work for each customer. Since completion of a milestone is subject to each customer’s approval, there are significant judgments involved in the determination of timing and satisfaction of performance obligations and the payments are recognized as revenue over the completion of each milestone. Second, revenue from a monthly user fee is accrued monthly based upon the number of individual users of the product each month. License fees generated by the nonexclusive licensing of the Company’s TurnScor product are accrued monthly. As of
September
30, 2022, and December 31, 2021, the Company had $ 0 in contract assets and contract liabilities. Accounts Receivable The Company extends credit to customers in the normal course of business. The allowance for doubtful accounts represents the Company’s best estimate of the amount of profitable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on specific customer information, historical write-off experience and current industry and economic data. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Management believes that there are no concentrations of credit risk for which an allowance has not been established. Although management believes that the allowance is adequate, it is possible that the estimated amount of cash collections with respect to accounts receivable could change. F- Fair Value Measurements For certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities. The Company has adopted FASB ASC 820-10, “Fair Value Measurements and Disclosures.” FASB ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with FASB ASC 815. In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now known as ASC Topic 825-10 “Financial Instruments.” ASC Topic 825-10 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities. Segment Reporting FASB ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment. Advertising Advertising costs are expensed as incurred. Advertising expense for the
nine-months ended September 30, 2022 and 2021 were $ 8,418 and $ 4,4
20 , respectively. Income Taxes Deferred income taxes are provided using the liability method (in accordance with ASC 740) whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all-of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. F- When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. The Company is not aware of uncertain tax positions. Earnings (Loss) Per Share Earnings per share is calculated in accordance with the FASB ASC 260-10, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. At
September
30, 2022 and December 31, 2021, the Company has no warrants or options outstanding. The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements. Stock Based Compensation The Company adopted FASB ASC Topic 718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value-based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock-based compensation, the Company recognizes an expense in accordance with FASB ASC Topic 718 and values the equity securities based on the fair value of the security on the date of grant. Stock option and warrant awards are valued using the Black-Scholes option-pricing model, which according to ASC 820-10 is a level 3 value on the hierarchy. Leases FASB issued ASU No. 2016-02, Leases (Topic 842) , which establishes a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and, (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases. The standard became effective for calendar years beginning after December 15, 2018. The Company has made an accounting policy election not to recognize right of use assets and lease liabilities that arise from short term leases for any class of asset. In June, 2020, the Company entered into a 12-month lease for office space at a rate of $ 426 per month, and paid a deposit of $ 500 . In September 2020, the Company moved to a different suite, the lease was amended to a rate of $ 639 per month, beginning on October 1, 2020. The Company paid an additional deposit of $ 200 . In April, 2021, the Company entered into a 12-month lease for office space at a rate of $ 730 per month, and paid a deposit of $ 1,415 . In May, 2022, the Company signed an addendum to the 12-month lease above to extend it for an additional year at a rate of $
719 per month. F- NOTE 2 – FIXED ASSETS Software and computer equipment, recorded at cost, consisted of the following: September 30, 2022 December 31, 2021 Cyberloq platform $ 211,760 $ - Software and computer equipment - - Less: accumulated amortization - - Impairment expense - - Fixed assets, net $ 211,760 $ - Amortization expense was $ 0 and $ 0 for the nine months ended September 30, 2022 and 2021, respectively. NOTE 3 – GOING CONCERN The Company has incurred losses since Inception resulting in an accumulated deficit of $ 7,027,630 as of September 30, 2022 that includes a loss of $ 773,557 for the nine months ended September
30, 2022. Further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. NOTE 4 – SETTLEMENT AGREEMENT On February 28, 2022, the Company signed a Separation and Release of Claims Agreement with an employee, officer and director of the Company. The terms of the agreement are as follows: ● The employee resigned from the Company’s Board of Directors ● The employee resigned his position as an officer of the Company, and his employment agreement was terminated ● The employee assigned and transferred 10,000 shares of preferred stock to be canceled and extinguished by the Company. A loss of $ 10 was recorded ● The Company will pay the $ 50,000 as a severance payment. This was paid on the date of the agreement and a loss of $ 18,076 was recorded ● The Company and the employee entered into a Common Stock Redemption Agreement by which the Company will purchase 5,400,000 shares of the Company’s common stock owned by the employee at $ 0.10 per share for a total of $ 540,000 . The Company repurchased 500,000 for $ 50,000 at the date of the agreement and recorded a settlement liability of $ 490,000 .
◌ Payments under the Common Stock Redemption Agreement are as follows: Date Amount Shares Redeemed 02/28/22 $ 50,000 500,000 09/01/22 163,333 1,633,333 03/01/23 163,333 1,633,333 09/01/23 163,333 1,633,334 09/13/22 Termination of Agreement $ (540,000 ) (5,400,000 ) Balance as of 09/30/22 $ - - On September 1, 2022, the Company failed to make the stock redemption payment of $ 163,333 due under the agreement. Thereafter on September 13, 2022, as provided for by the agreement, the employee elected to declare the agreement terminated and null and void. As a result of the termination, all of the not-yet-redeemed shares became immediately freely transferable by the employee without restriction. The Company then released the restriction on the shares and eliminated the liabilities and shares to be redeemed on the balance sheet. F- NOTE 5 – STOCKHOLDERS’ EQUITY Common Stock The Company has 200,000,000 shares of $ .001 par value common stock authorized as of September 30, 2022 and December 31, 2021. During the quarter ended September 30, 2022, the Company received $ 210,000 in payment for 9,000,000 shares of common stock; recorded as “shares to be issued” 2,500,000 shares of common stock for cash of $ 50,000 ; issued 625,000 for a subscription receivable in the amount of $ 12,500 and recorded 100,000 shares for officers’ fees. During the quarter ended September 30, 2021, the Company received $ 50,200 in payment for 435,000 shares of common stock and issued 25,000 shares of common stock for services in the amount of $ 4,625
. Treasury Stock The Company entered into a settlement agreement with a prior employee, officer and director resulting in treasury stock of 500,000 shares valued at $ 50,000 . See Note 4 Preferred Stock The Company did not have any preferred stock prior to 2017. In April of 2017, the Company amended its articles of incorporation to create a new class of stock designated Series A Super Voting Preferred Stock consisting of thirty-thousand ( 30,000 ) shares at par value of $ 0.001 per share. Certain rights, preferences, privileges and restrictions were established for the Series A Preferred Stock as follows: (a) the amount to be represented in stated capital at all times for each share of Series A Preferred Stock shall be its par value of $ 0.001 per share; (b) except as otherwise required by law, holders of shares of Series A Preferred Stock shall vote together with the common stock as a single class and the holders of Series A Preferred Stock shall be entitled to five-thousand (5,000) votes per share of Series A Preferred Stock ; and (c) in the event of any liquidation, dissolution or winding-up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of assets of the Corporation to the holders of the common stock, the original purchase price paid for the Series A Preferred Stock. All 30,000 shares of the Series A Super Voting Preferred Stock were issued in 2017. During the quarter ended March 31, 2022, the Company cancelled and extinguished 10,000 shares of preferred stock pursuant to a settlement agreement with a prior employee, officer and director. See Note 4 F- NOTE 6 – SBA EIDL Loan On June 9, 2020, the Company received an Economic Injury Disaster Loan from the Small Business Administration in the amount of $ 35,600 . The loan has a term of thirty years and an interest rate of 3.75 % per annum. Payments in the amount of $174 monthly will begin twelve months from the date of the note . During the
nine month period ended September 30, 2022 the Company repaid $ 1,57
5 . Payment Obligations Amount 2022 $ 1,
0
38 2023 2,088 2024 2,088 2025 2,088 2026 2,088 2027 to 2050 24,110 Total $ 33,5
0
0 NOTE 7 – COMMITMENTS In June 2020, the Company entered into a 12-month lease for office space at 871 Venetia Bay Blvd Suite #202 Venice, FL 34285. The monthly rent is $ 426 per month. The Company paid a deposit of $ 500 and the first month rent of $ 426 for July in June 2020. All conditions have been met and paid by the Company. In September 2020, the lease was amended as the Company moved to Suite #228. The amended monthly rent is $ 639 per month. The Company paid an additional deposit of $ 200 for the new suite. In April, 2021, the Company entered into a 12-month lease for office space at 4837 Swift Rd Sarasota, FL 34231 at a rate of $ 730 per month. The Company paid a deposit of $ 685 , first month rent of $ 730 and last month’s rent of $ 730 . In May, 2022, the Company signed an addendum to the 12-month lease above to extend it for an additional year at a rate of $ 719 per month The Company has commission agreements as follows: ● An agreement with a shareholder and director of the Company stating that the executive will be entitled to a two-and-a half-percent ( 2.5 %) commission of the gross revenue recorded by the Company for any customer contracts that are closed by the Company at the time of and during the duration of the agreement. These commissions are payable quarterly upon receipt of customer revenues. ● An agreement with two sales managers granting each manager a 1 % commission on the gross revenue of the Company. These commissions are payable quarterly upon receipt of customer revenues. NOTE 8 – RELATED PARTY TRANSACTIONS Related Parties and Stockholders Notes Payable The following is a summary of related party notes payable: For the Periods Ended
September
30, 2022 December 31, 2021 Notes payable – stockholders $ 35,000 $ 45,000 Notes payable – related parties $ 200,000 $ 150,000 F- Notes Payable - Stockholders On April 26, 2021, the Company entered into a promissory note with a stockholder in the amount of $ 10,000 with a maturity date of May 1, 2023 . The note bears interest of 12.5 % computed on a 365-day year. The Company is required to begin making monthly payments in the amount of $ 937.50 on May 1, 2022, continuing through April 1, 2023. The Company may prepay the note on or before May 1, 2022 by paying a prepayment penalty of $ 1,250 . On June 1, 2022, the Company entered into a promissory note with a stockholder in the amount of $ 25,000 with a maturity date of June 3, 2023 . The note bears interest of 12 % computed on a 365-day year. The Company may prepay the note at any time. On June 28, 2022, the stockholder settled that note, as well a prior note in the amount of $ 10,000 into 2,000,000 shares of common stock. On December 29, 2014, the Company entered into a partially-convertible promissory note with a stockholder in the amount of $ 35,000 . In January of 2015, the stockholder partially-exercised its conversion option, and in May of 2016 the stockholder exercised the remainder of its conversion option. In December 2017, the remaining unpaid principal and interest due on the note was settled in full for a $ 50,000 note and the Company recognized $ 151,324 in gain on settlement of debt. The $ 50,000 note has a current principal balance of $ 35,000 , a stated interest rate of 0 %, required payments of $5,000 on or before June 10, 2019, $5,000 on or before August 10, 2019 and the remainder due by the extended due date of September 15, 2019 . As of December 31, 2021, the payments due have not been extended and the Company plans to repay the notes in 2022. Notes Payable - Related Parties On November 7, 2019, the Company received a loan from a director in the amount of $ 30,000 , with an interest rate of 0 %. The loan was repaid in February 2020. On March 24, 2020, the Company received a loan from a director in the amount of $ 40,000 , with an interest rate of 0 %. The maturity date for the loan is June 30, 2020 . On July 7, 2020, 2,000,000 shares of stock were issued to retire the loan resulting in a loss on extinguishment of debt of $ 120,000 . On September 20, 2021, the Company received a promissory note from a director in the amount of $ 12,500 , with an interest rate of 0 % and a maturity date of October 20, 2021 . This note was repaid on October 8, 2021. On December 31, 2021, the Company entered into a loan modification agreement with a director which consolidated three outstanding promissory notes dated August 8, 2020, September 9, 2020, and December 28, 2020 into one loan. The total amount borrowed is $ 150,000 , with an interest rate of 12.5 % and a maturity date of April 1, 2023 . The Company was required to pay an extension penalty in the amount of $ 2,500 .
On September 30, 2022, the Company entered into a second loan modification agreement with the director extending the maturity date to January 1, 2024 . Additionally, the Company will begin paying quarterly installments in the amount of $ 50,000 plus accrued interest beginning July 1, 2023. On February 23, 2022, the Company received a loan from a director in the amount of $ 50,000 , with an interest rate of 12 %. The maturity date for the loan is April 9, 2022 . On September 30, 2022 the Company entered into a Loan Modification Agreement with the director extending the maturity date of this note to January 2, 2023 . On February 23, 2022, the Company received a convertible debt note from a different director in the amount of $ 50,000 , with an interest rate of 12 %, because of the convertible nature of the note a beneficial conversion was recorded as a debt discount in the amount of $ 50,000 . The maturity date for the loan is July 5, 2022 . On June 25, 2022, this note was converted into 2,600,000 shares of common stock, which were recorded as “shares to be issued” and the debt discount was fully amortized.The 2,600,000 shares were issued during the quarter ended September 30, 2022. NOTE 9 – SUBSEQUENT EVENTS On October 5, 2022, the Company issued 2,500,000 shares of common stock for cash of $ 50,000 . On October 19, 2022 the Company issued 650,000 shares of common stock for services rendered with a value of $ 27,300 . On October 19, 2022 the Company issued 1,500,000 shares of common stock for cash of $ 1,500 . On October 25, 2022 the Company issued 1,000,000 shares of common stock for $ 100.00
. The Company is not aware of any other subsequent events through the date of this filing that require disclosure or recognition in these financial statements. F- Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to assist you in understanding our business and the results of our operations. It should be read in conjunction with the Condensed Financial Statements and the related notes that appear elsewhere in this report as well as our Report on Form 10K filed with the Securities and Exchange Commission for the period ending December 31, 2021. Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements”. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. Company History CyberloQ Technologies Inc. (“CLOQ”, ‘We” or the “Company”) was incorporated in Nevada on February 25, 2008 as Advanced Credit Technologies, Inc. On November 20, 2019, the Company changed its name from Advanced Credit Technologies, Inc. to CyberloQ Technologies, Inc. The Company has never been the subject of any bankruptcy, receivership or similar proceeding. The Company has never been involved in any material reclassification, merger, or consolidation. On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has had no activity, operational or otherwise. Current Overview of the Company The Company is a development-stage technology company focused on fraud prevention and credit management. The Company offers a proprietary software platform branded as CyberloQ®. While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ. CyberloQ is a multi-factor authentication (MFA) fraud prevention technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer (digital assets) accounts. Through the use of a customer’s smart-phone, CyberloQ uses its proprietary MFA system to control access to a bank card(s), websites, databases, or other digital services. The API applications for CyberloQ are being developed, and will be implemented during our initial launch sequence. In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name TurnScor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for TurnScor on their own, the Company also intends to market TurnScor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.
The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure data without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses cloud-based encryption and a secure web portal to send/receive confidential data, the sender and receiver both must have authenticated their position within the prescribed geo coordinates as well as authenticate their mobile devices prior to sending/receiving any data. Thus, rendering a hack or breach utterly useless for the encrypted data is unusable without the CyberloQ authentication component. The Company currently has two full-time employees — its President and Vice-President. There are no other employees of the Company at this time. The Company also has a Board of Advisors comprised of individuals from the banking, business development, and technical sectors to advise the Company as it moves forward with its business strategy. The Board of Advisors does not have any decision-making authority. Liquidity, Capital Resources and Material Changes in Financial Condition As of
September 30, 2022, the Company’s assets were $311,946 compared to $264,503 in assets as of December 31, 2021. The change in the Company’s financial condition can be attributed to an increase in fixed assets of $211,760 offset by a decrease in prepaid expense from $210,208 to $61,515 as well as a decrease in cash from $54,295 to $38,671. . As of September 30, 2022, the Company’s liabilities were $353,878 compared to $299,530 in liabilities as of December 31, 2021. This change in the Company’s financial condition was due to an increase in loan payable related party of $50,000, along with an increase of $19,444 in accrued interest, and was partially offset by a decrease in loan payable stockholders of $10,000, a decrease of $3,521 in accounts payable and accrued expenses, a decrease of $1,575 in loan payable SBA. Net cash used in operating activities for the nine-month period ending September 30, 2022 was $339,764 compared to $418,372 for 2021. Cash provided by or used by operating activities is driven by our net loss and adjusted by non-cash items as well as changes in operating assets and liabilities. At September 30, 2022, there was $318,042 in stock compensation; $18,086 in loss on settlement with an officer and director; $50,000 in amortization of debt discount and $105,000 in loss on settlement of debt. Net cash used by investing activities was $211,760 for the nine months ended September 30, 2022 as compared to $0 for 2021. Net cash provided by financing activities was $535,900 for the nine months ended September 30, 2022 as compared to $395,000 for 2021. The Company had gross revenue of $3,087 for the nine months ended September 30, 2022 compared to gross revenue of $900 for the nine months ended September 30, 2021, and is currently reliant on its ability to raise additional capital to continue execution of its business plan to move the Company forward towards profitability. The Company does not anticipate any significant decrease in its operating expenses for the remainder of 2022. Unless the Company begins to generate operational revenue, it will be reliant on its ability to raise additional capital in order to continue its operations. Results of Operations for the Nine Months Ended September 30, 2022 and 2021 Company revenue was $3,087 for the nine months ended September 30, 2022 as opposed to $900 for the nine months ended September 30, 2021. The Company’s operating expenses were $579,429 for the nine months ended September 30, 2022 as opposed to $569,217 for the nine months ended September 30, 2021. This increase in operating expenses was primarily driven by an increase in professional fees along with an increases in computer and internet expenses and operating expenses. Professional fees were $374,589 for the nine months ended September 30, 2022, compared to $284,822 for the nine months ended September 30, 2021. This increase in professional fees was due to increased consulting services as a result of increased software development costs associated with upgrading the source code and infrastructure to accommodate increased capacity demands. Computer and internet expenses were $18,316 for the nine months ended September 30, 2022 as compared to $8,236 for the nine months ended September 30, 2021. This increase was due to increased web hosting costs. Other operating expenses were $11,910 for the nine months ended September 30, 2022 as compared to $9,128 for the nine months ended September 30, 2021. The Company also experienced decreases in certain categories of expenses as follows. Research was $0 for the nine months ended September 30, 2022 as compared to $50,009 for the nine months ended September 30, 2021. Research was $0 for the nine months ended September 30, 2022 as the Company began capitalizing costs. Officers’ compensation was $162,000 for the nine months ended September 30, 2022 as compared to $202,500 for the nine months ended September 30, 2021. This decrease was due to the Company only having two officers as of February 28, 2022 instead of three. Office supplies and expenses were $4,918 for the nine months ended September 30, 2022, compared to $5,783 for the nine months ended September 30, 2021. There were no material changes in the Company’s rent, sales commission, travel and entertainment, and office supplies expenses in the first nine months of 2022 as compared to the first nine months of 2022. As a result of the foregoing, the Company experienced a net loss from operations of $576,342 in the nine months ended September 30, 2022 compared to a net loss from operations of $568,317 in the nine months ended September 30, 2021. Results of Operations for the Three Months Ended September 30, 2022 and 2021 Company revenue was $1,683 for the three months ended September 30, 2022 as opposed to $954 for the three months ended September 30, 2021. The Company’s operating expenses were $112,664 for the three months ended September 30, 2022 as opposed to $279,261 for the three months ended September 30, 2021. This decrease in operating expenses was primarily due to a decrease in professional fees. Professional fees were $34,192 for the three months ended September 30, 2022, compared to $153,511 for the three months ended September 30, 2021. This decrease in professional fees is due to the timing of the payment due dates for the software development costs associated with upgrading the source code. Research expenses were $0 for the three months ended September 30, 2022, compared to $47,854 for the three months ended September 30, 2021. This is due to the Company capitalizing research and development. Officers’ compensation was $57,000 for the three months ended September 30, 2022 as compared to $67,500 for the three months ended September 30, 2021. This decrease was due to the Company only having two officers as of February 28, 2022 instead of three. The Company also experienced increases in certain categories of expenses as follows. Other operating expenses were $9,726 for the three months ended September 30, 2022 as compared to $3,064 for the three months ended September 30, 2021. Computer and internet expenses were $6,679 for the three months ended September 30, 2022 as compared to $3,508 for the three months ended September 30, 2021. This increase was due to increased web hosting costs. Office supplies and expenses were $2,643 for the three months ended September 30, 2022, compared to $1,635 for the three months ended September 30, 2021. Finally, there were no material changes in the Company’s rent, sales commission, and travel and entertainment expenses in the three months ended September 30, 2022 as opposed to the three months ended September 30, 2021. As a result of the foregoing, the Company experienced a net loss from operations of $110,981 in the three months ended September 30, 2022 compared to a net loss from operations of $278,307 in the three months ended September 30, 2021. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item. ITEM 4. CONTROLS AND PROCEDURES Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us 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 Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022 in accordance with Committee of Sponsoring Organizations of the Treadway Commission’s 2013 Integrated Framework. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. In addition, due to its current size, the Company currently does not have sufficient staff to maintain appropriate segregation of duties, as it pertains to application and oversight of internal control processes. Material weaknesses have previously been identified, including lack of segregation of duties and lack of formal written policies and procedures surrounding financial close and reporting. However, the Company anticipates that as it grows and formalizes its internal control processes and procedures, it will add sufficient staff to perform internal control processes, as well as adequately provided oversight to ensure processes are working as designed. Such officer also confirmed that there was no change in our internal control over financial reporting during the nine-month period ended September
30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II OTHER INFORMATION Item 1. Legal Proceedings The Company is not currently a party to any legal proceedings or any administrative proceedings. In addition, the Company’s officers and directors have not been convicted in any criminal proceedings nor have they been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of securities or banking activities. Item 1A. Risk Factors The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item. However, the Company does acknowledge that there are risks associated with the business of the Company. We will be competing with a variety of companies, many of which have significantly greater financial, technical, marketing and other resources than us. If we fail to attract and retain a large base of customers for our products, or if our competitors establish a more prominent market position relative to ours, this will inhibit our ability to grow and successfully execute our business plan. For example, Wells Fargo has introduced an “on/off” feature for their customers, Discover Card has “Freeze It” functionality, and Ondot Systems has already been operating in the mobile card security space for quite some time. However, the Company believes that the multi-purpose functionality of CyberloQ, along with its multi-purpose applications will give the Company a distinct advantage by comparison. CyberloQ can be used in the banking system to protect debit/credit cards, in the health care industry to protect PII (Personal Identifying Information) now that medical records are kept digitally, and can protect corporate data bases in any industry from outside intrusion via geo-fencing. The Company believes that these distinct features, along with the ability to “White Label” the technology for marketing partners, give the Company a distinction in the marketplace. However, there can be no assurance that we will be able to successfully compete with other companies in the marketplace. In addition, the Company could incur increased costs, decreased revenue, or suffer reputational damage in the event of a cyber-attack. The Company’s business involves the collection, storage, processing and transmission of customers’ personal data, including financial information. In the event that the Company’s security measures are breached due to human error, malfeasance, system errors or vulnerabilities, or other irregularities, such breach could adversely affect our business through possible interruption of the Company’s operations, improper disclosure of data, damage to the Company’s reputation, and/or legal exposure. Finally, management has evaluated whether or not COVID-19 has had any material impact on the Company. The Company is a technology-based company with personnel already working remotely prior to COVID-19. Therefore, the Company has not been impacted by any stay-at-home orders or travel restrictions. Likewise, the Company has continued to have access to capital and funding sources, and COVID-19 has had no material effect on the demand for the Company’s services. Consequently, to date COVID-19 has not impacted the Company’s financial condition or the results of its operations, and the Company does not anticipate that there be any material impact in the future.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS During the third three months of 2022, the Company raised $210,000 for the operations of the Company through the unregistered sale of 9,000,000 shares of restricted common stock
. All of the shares described above were issued by the Company in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2). All of the purchasers of the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standing business associates, friends, and employees. All purchasers were provided access to all public material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition. ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Company is not in default on any financing arrangements at this time. ITEM 4. OTHER INFORMATION There exists no information required to be disclosed by us in a report on Form 8-K during the three-months ended
September
30, 2022, but not reported. ITEM 5. EXHIBITS Exhibits have been filed separately with the United States Securities and Exchange Commission in connection with the quarterly report on Form 10-Q or have been incorporated into the report by reference. Exhibit Description 3.1(i) Articles of Incorporation* 3.2(i) Amended Articles of Incorporation dated May 4, 2010* 3.3(i) Amended Articles of Incorporation dated May 5, 2017** 3.4(i) Amended Articles of Incorporation dated November 20, 2019*** 3.4(ii) By-Laws**** 14.1 Code of Ethics**** 14.2 Related-Party Transactions Policy**** 14.3 Anti-Corruption Policy**** 16.1 Letter re Change in Certifying Accountant ***** 31.1 Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer & Principal Financial Officer.****** 32.1 Section 1350 Certification of the Principal Executive Officer & Principal Financial Officer.****** 101.1 Interactive data files pursuant to Rule 405 of Regulation S-T.******* 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Incorporated by reference through the Registration Statement on form S-1 filed with the Commission on October 26, 2010. (101141203) ** Incorporated by reference through the Quarterly Report on form 10-Q filed with the Commission on May 11, 2017. (17832815) *** Incorporated by reference through the Current Report on form 8-K filed with the Commission on November 1, 2019. **** Incorporated by reference through the Current Report on form 8-K filed with the Commission on November 6, 2017. ***** Incorporated by reference through the Current Report on form 8-K filed with the Commission on May 19, 2017. ****** Filed herewith. In addition, in accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed. ******* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed 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 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CYBERLOQ TECHNOLOGIES, INC. By: /s/ Christopher Jackson Christopher Jackson Date:
October 31,
2022 President, Secretary, Treasurer and Director Principal Executive Officer Principal Financial Officer Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons in the capacities and on the dates indicated. CYBERLOQ TECHNOLOGIES, INC. By: /s/ Enrico Giordano Date:
October 31,2022 Enrico Giordano, Director By: /s/ Leon Hurst Date: October 31,2022 Leon Hurst, Director By: /s/ Christopher Jackson Date: October 31,
2022 Christopher Jackson, Director By: /s/ Rex Schuette Date:
October 31,
2022 Rex Schuette, Director