# Cyberloq Technologies, Inc.: Form 10-Q for the period ended Jun 30, 2020

- Company: [Cyberloq Technologies, Inc.](/companies/cloq.md) (CIK 1437517)
- Form: 10-Q
- Filed: 2020-08-14
- Accepted by EDGAR: Aug 14, 2020, 21:18 ET
- Period: 2020-06-30
- Accession: 0001493152-20-015955
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1437517/000149315220015955/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1437517/000149315220015955/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2020-04-01 to 2020-06-30 | $8.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2020-01-01 to 2020-06-30 | $16.1k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 6 months, 2020-01-01 to 2020-06-30 | $2.1k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2020-04-01 to 2020-06-30 | $1.7k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2020-01-01 to 2020-06-30 | $4.7k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2020-04-01 to 2020-06-30 | −$108.9k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2020-01-01 to 2020-06-30 | −$231.3k | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2020-04-01 to 2020-06-30 | −$105.9k | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2020-01-01 to 2020-06-30 | −$228.3k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-04-01 to 2020-06-30 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Diluted EPS | 6 months, 2020-01-01 to 2020-06-30 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 6 months, 2020-01-01 to 2020-06-30 | −$165.9k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2020-06-30 | $7.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2020-06-30 | $47.9k | us-gaap:AssetsCurrent |
| Total assets | at 2020-06-30 | $431.6k | us-gaap:Assets |
| Current liabilities | at 2020-06-30 | $149.2k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2020-06-30 | $184.8k | us-gaap:Liabilities |
| Long-term debt | at 2020-06-30 | $35.6k | us-gaap:LongTermDebt |
| Shareholders' equity | at 2020-06-30 | $258.1k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 9,868 characters.

*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, 2019. 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

CyberloQ Technologies Inc. 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 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 Company also has a product named CyberloQ Vault which 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 breach. This service uses cloud-based encryption and a secure web portal to send/receive confidential data. Both the sender and receiver must have authenticated their position within the prescribed geo-coordinates as well as authenticate their mobile devices prior to sending/receiving any data, rendering a hack or breach utterly useless since the encrypted data is unusable without the CyberloQ authentication component.

Moreover, the Company is able to develop secure databases for clients by developing and attaching a private blockchain to the SQL database and further securing the database through use of the Company’s CyberloQ technology. The blockchain being developed by the Company is a private blockchain and is an invitation-only network governed by a single entity. Entrants to the network require permission to read, write or audit the blockchain.

Finally 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.

The Company currently has three officers — its President, Vice-President and Chief Technology Officer. The Company does not have other employees of the Company at this time.

### Liquidity, Capital Resources and Material Changes in Financial Condition

As of June 30, 2020, the Company’s assets were $431,628 compared to $485,346 in assets as of December 31, 2019. The change in the Company’s financial condition can be attributed to $60,668 in depreciation expense which reduced the Company’s fixed assets from $444,410 to $383,742 along with an increase in current assets from $40,936 to $47,886.

As of June 30, 2020, the Company’s liabilities were $184,790 compared to $144,904 in liabilities as of December 31, 2019. This change in the Company’s financial condition was due to a decrease of $15,716 in accounts payable and accrued expenses, along with a decrease of $12,498 in customer prepayments, and an increase in Note payable from related parties from $30,000 to $40,000. Additionally, the Company received an Economic Injury Disaster Loan payment in the amount of $35,600 that was recorded as a Long-Term Loan payable

Net cash used in operating activities for the six month period ending June 30, 2020 was $165,942 compared to $189,436 for 2019. 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. Non-cash adjustments for the six months ended June 30, 2020 include depreciation of $60,669 and stock compensation of $8,000.

Net cash used by investing activities was $0 for the six months ended June 30, 2020 as compared to $15,750 for 2019.

Net cash provided by financing activities was $172,266 for the six months ended June 30, 2020 as compared to $235,000 for 2019.

The Company had gross revenue of $7,968 and $16,108 for the three and six months ended June 30, 2020 compared to gross revenue of $56,873 and 63,122 for the three and six months ended June 30, 2019, 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 2020. 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 Three and Six Months Ended June 30, 2020 and 2019

Company revenue was $7,968 and $16,108 in the three and six months ended June 30, 2020 as compared to $56,873 and 63,122 for the three and six months ended June 30, 2019, and the Company’s operating expenses were $116,840 and $247,377 for the three and six months ended June 30, 2020 as compared to $163,768 and 312,916 for the three and six months ended June 30, 2019.

The decrease in operating expenses for the three and six months ended June 30, 2020 as compared to June 30, 2019 was due to a decrease in all but two expense categories, officer’s compensation and depreciation. The Company experienced changes in expense categories as noted below.

Professional fees were $15,509 and $28,369 for the three and six months ended June 30, 2020, compared to $16,486 and $44,191 for the three and six months ended June 30, 2019. This decrease in professional fees was due to decreased audit fees during the quarter.

Research expenses were $0 and $2,100 for the three and six months ended June 30, 2020, compared to $5,165 and $6,193 for the three and six months ended June 30, 2019. This decrease in research was due to costs incurred in 2019 associated with updates to the Company’s website.

Stock compensation expenses were $0 and 8,000 for the three and six months ended June 30, 2020, compared to $9,285 and $18,570 for the three and six months ended June 30, 2019.

Travel and entertainment expenses were $0 and $79 for the three and six months ended June 30, 2020, compared to $19,578 and $25,055 for the three and six months ended June 30, 2019. This decrease in travel and entertainment expenses was due to decreased business travel during the 2020 .

Computer and internet expenses were $1,725 and $4,680 for the three and six months ended June 30, 2020 as compared to $6,300 and $9,774 for the three and six months ended June 30, 2019. This decrease was due to lower hosting costs associated with the Company’s private blockchain product

Other operating expenses were $1,711 and $2,592 for the three and six months ended June 30, 2020 as compared to $6,381 and 10,114 for the three and six months ended June 30, 2019. This decrease was due to lower advertising costs.

Office supplies and expenses were $200 and $3,487 for the three and six months ended June 30, 2020, compared to $6,381 and $10,114 for the three and six months ended June 30, 2019.

Sales commissions were $0 and $2,011 for the three and six months ended June 30, 2020, compared to $208 and $208 for the three and six months ended June 30, 2019. This increase in sales commissions during 2020 was due to the payment of commissions on revenue generated from the CyberloQ platform.

As a result of the foregoing, the Company experienced a net loss from operations of $108,872 and $231,269 in the three and six months ended June 30, 2020 compared to a net loss from operations of $106,895 and $249,794 in the three and six months ended June 30, 2019.

## Market risk

As filed, 160 characters.

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.

## Controls and procedures

As filed, 2,573 characters.

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 June 30, 2020 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 three-month period ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### PART II

### OTHER INFORMATION

## Risk factors

As filed, 2,957 characters.

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 staty-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 affect 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.

Filed Aug 14, 2020.
Source: SEC EDGAR, the filing index for accession 0001493152-20-015955. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.