# Cyberloq Technologies, Inc.: Form 10-Q for the period ended Sep 30, 2021

- Company: [Cyberloq Technologies, Inc.](/companies/cloq.md) (CIK 1437517)
- Form: 10-Q
- Filed: 2021-11-15
- Accepted by EDGAR: Nov 15, 2021, 20:41 ET
- Period: 2021-09-30
- Accession: 0001493152-21-028532
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1437517/000149315221028532/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1437517/000149315221028532/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2021-07-01 to 2021-09-30 | $47.9k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2021-01-01 to 2021-09-30 | $50.0k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2021-07-01 to 2021-09-30 | $3.5k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2021-01-01 to 2021-09-30 | $8.2k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2021-07-01 to 2021-09-30 | −$278.3k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2021-01-01 to 2021-09-30 | −$568.3k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2021-07-01 to 2021-09-30 | $5.3k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2021-01-01 to 2021-09-30 | $15.7k | us-gaap:InterestExpense |
| Net income | 3 months, 2021-07-01 to 2021-09-30 | −$285.7k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2021-01-01 to 2021-09-30 | −$590.4k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2021-07-01 to 2021-09-30 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Diluted EPS | 9 months, 2021-01-01 to 2021-09-30 | −$0.01 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 9 months, 2021-01-01 to 2021-09-30 | −$418.4k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2021-09-30 | $3.4k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2021-09-30 | $346.2k | us-gaap:AssetsCurrent |
| Total assets | at 2021-09-30 | $346.2k | us-gaap:Assets |
| Current liabilities | at 2021-09-30 | $287.1k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2021-09-30 | $322.0k | us-gaap:Liabilities |
| Long-term debt | at 2021-09-30 | $34.9k | us-gaap:LongTermDebt |
| Shareholders' equity | at 2021-09-30 | $24.2k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 13,652 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, 2020. 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 September 30, 2021, the Company’s assets were $346,201 compared to $27,441 in assets as of December 31, 2020. The change in the Company’s financial condition can be attributed primarily to an increase in prepaid expense of $342,532.

As of September 30, 2021, the Company’s liabilities were $322,048 compared to $337,464 in liabilities as of December 31, 2020. This change in the Company’s financial condition was due to decreases of $52,922 in accounts payable and accrued expenses, partially offset by an increase of $15,706 in accrued interest and $22,500 in loan payable.

Net cash used in operating activities for the nine-month period ending September 30, 2021 was $418,372 compared to $222,907 for 2020. 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. The non-cash adjustments at September 30, 2021 were loss on settlement of payable of $6,343 and stock compensation of $198,168 as compared to September 30, 2020 stock compensation of $36,140, depreciation of $92,006 and loss on extinguishment of debt of $120,000.

Net cash used by investing activities was $0 for the nine months ended September 30, 2021 as compared to $0 for 2020.

Net cash provided by financing activities was $395,000 for the nine months ended September 30, 2021 as compared to $307,266 for 2020.

The Company had gross revenue of $900 for the nine months ended September 30, 2021 compared to gross revenue of $19,916 for the nine months ended September 30, 2020, 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 2021. 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, 2021 and 2020

Company revenue was $900 for the nine months ended September 30, 2021 as opposed to $19,916 for the nine months ended September 30, 2020.

The Company’s operating expenses were $569,217 for the nine months ended September 30, 2021 as opposed to $437,522 for the nine months ended September 30, 2020. Although there was no material change in the Company’s operating expenses overall, the Company notes the following changes in certain operating expenses as noted below.

Professional fees were $284,822 for the nine months ended September 30, 2021, compared to $43,164 for the nine months ended September 30, 2020. This increase in professional fees was due to increased consulting services as a result of new products being developed and accounting fees during the period.

Depreciation expense was $0 for the nine months ended September 30, 2021, compared to $92,006 for the nine months ended September 30, 2020. This decrease in depreciation expense was due to a one-time software impairment expense in 2020.

Research expenses were $50,009 for the nine months ended September 30, 2021, compared to $2,100 for the nine months ended September 30, 2020. This increase in research expenses was due to increased development costs associated with the Company’s re-factoring of the Cyberloq technology for scalability.

Stock compensation expenses were $0 for the nine months ended September 30, 2021, compared to $36,140 for the nine months ended September 30, 2020. Stock compensation for services was recognized in the appropriate expense category.

Bad debt expense was $0 for the nine months ended September 30, 2021, compared to $40,000 for the nine months ended September 30, 2020. This decrease in bad debt expense was due to the Company deeming $40,000 uncollectible and recording this amount was recorded as bad debt expense in the third quarter of 2020.

Rent expenses were $6,842 for the nine months ended September 30, 2021, compared to$2,307 for the nine months ended September 30, 2020. This increase in rent expenses was due to the Company entering into a new lease for office space in 2021.

Other operating expenses were $9,128 for the nine months ended September 30, 2021 as compared to $5,000 for the nine months ended September 30, 2020. This increase was due to higher advertising costs.

Sales commissions were $131 for the nine months ended September 30, 2021, compared to $2,011 for the nine months ended September 30, 2020.

Computer and internet expenses were $8,236 for the nine months ended September 30, 2021 as compared to $6,376 for the nine months ended September 30, 2020. This increase was due to additional hosting costs associated with the Company’s private blockchain product.

Office supplies and expenses were $5,783 for the nine months ended September 30, 2021, compared to $4,134 for the nine months ended September 30, 2020.

Finally, there were no material changes in the Company’s officer compensation and travel and entertainment expenses in the first nine months of 2021 as compared to the first nine months of 2020.

As a result of the foregoing, the Company experienced a net loss from operations of $568,317 in the nine months ended September 30, 2021 compared to a net loss from operations of $417,606 in the nine months ended September 30, 2020.

### Results of Operations for the Three Months Ended September 30, 2021 and 2020

Company revenue was $954 for the three months ended September 30, 2021 as opposed to $3,807 for the three months ended September 30, 2020.

The Company’s operating expenses were $279,261 for the three months ended September 30, 2021 as opposed to $190,145 for the three months ended September 30, 2020. The majority of this decrease in operating expenses was due to decreases in stock compensation and depreciation as noted in further detail below.

Depreciation expense was $0 for the three months ended September 30, 2021, compared to $31,338 for the three months ended September 30, 2020. This decrease in depreciation expense was due to a one-time software impairment expense in 2020.

Stock compensation expenses were $0 for the three months ended September 30, 2021, compared to $28,140 for the three months ended September 30, 2020. Stock compensation for services was recognized in the appropriate expense category.

Travel and entertainment expenses were $0 for the three months ended September 30, 2021, compared to $1,705 for the three months ended September 30, 2020. This decrease in travel and entertainment expenses was due to decreased business travel during the 2021.

In addition, certain operating expenses of the Company increased in the third quarter of 2021 as compared to the third quarter of 2020 as noted below.

Research expenses were $47,854 for the three months ended September 30, 2021, compared to $0 for the three months ended September 30, 2020. This increase in research expenses was due to increased development costs associated with the Company’s re-factoring of the Cyberloq technology for scalability.

Bad debt expense was $0 for the three months ended September 30, 2021, compared to $40,000 for the three months ended September 30, 2020. This decrease in bad debt expense was due to the Company deeming $40,000 uncollectible and recording this amount was recorded as bad debt expense in the third quarter of 2020.

Computer and internet expenses were $3,508 for the three months ended September 30, 2021 as compared to $1,696 for the three months ended September 30, 2020. This increase was due to additional hosting costs associated with the Company’s private blockchain product.

Office supplies and expenses were $1,635 for the three months ended September 30, 2021, compared to $646 for the three months ended September 30, 2020.

Professional fees were $153,511 for the three months ended September 30, 2021, compared to $14,795 for the three months ended September 30, 2020. This increase in professional fees was due to increased consulting services and accounting fees during the period.

Other operating expenses were $3,064 for the three months ended September 30, 2021 as compared to $2,408 for the three months ended September 30, 2020. This increase was due to higher advertising costs.

Rent expenses were $2,189 for the three months ended September 30, 2021, compared to $1,917 for the three months ended September 30, 2020. This increase in rent expenses was due to the Company entering into a new lease for office space in 2021.

Finally, there were no material changes in the Company’s sales commission and officer’s compensation expenses in the third quarter of 2021 as compared to the third quarter of 2020.

As a result of the foregoing, the Company experienced a net loss from operations of $278,307 in the three-month period ended September 30, 2021 compared to a net loss from operations of $186,338 in the three-month period ended September 30, 2020.

## 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, 2,583 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 September 30, 2021 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 September 30, 2021 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, 2,956 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 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.

Filed Nov 15, 2021.
Source: SEC EDGAR, the filing index for accession 0001493152-21-028532. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.