Cyberloq Technologies, Inc.: Form 10-K for the period ended Dec 31, 2024

Company History

CyberloQ Technologies Inc. (“CLOQ”, ‘We” or the “Company”) was incorporated in Nevada on February 5, 2008 as Advanced Credit Technologies, Inc. The Company changed its name to CyberloQ Technologies, Inc. on November 20, 2019. 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, CyberloQ Technologies LTD had no activity, operational or otherwise, and is now dissolved.

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 MFA (Multi Factor Authentication) protocol technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer accounts and or any digital asset. 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 has also updated the entire infrastructure, UI/UX and streamlined the deliverable services per strategic partnerships with clients in multiple channels in order to increase the scalability of the original platform.

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.

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 providing an added level of security for companies that collect, store, process and transmit their customers’ personal data, including financial information. In the event that the Company’s added 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.

The Company has engaged an outside contractor to assist it in developing an information security policy and include an incident response plan. The Company is in the process of developing and implementing such policies and obtaining Service Organization Control Type 2 (SOC 2) compliance certification. The SOC II certification process involves a comprehensive assessment conducted by independent auditors to evaluate our systems and controls against established industry standards. As part of the certification process, the effectiveness of the Company’s information security policies and procedures to protect against unauthorized access, breaches, and data theft are assessed. The Company expects to achieve SOC 2 certification in the second quarter of 2025.

The Company’s corporate office is located at 4837 Swift Road Suite 210-1 Sarasota, FL 34231, and our telephone number is 612-961-4536. Rent is $804 per month including phone and internet.

The Company does not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.

The Company is not currently a party to any legal proceedings, nor is the Company a party to any administrative proceedings. On February 13, 2024, the Superior Court of New Jersey entered an order granting the request of Cyberloq Technologies, Inc., a Nevada corporation (the “Company”) to dismiss the matter of Mark Carten v. Cyberloq Technologies, Inc. (UNN-L-3456-22). The litigation has now been dismissed without prejudice and is no longer pending.

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.

Liquidity, Capital Resources and Material Changes in Financial Condition

As of December 31, 2024, total assets were $1,842,701 compared to $1,458,565 in assets as of December 31, 2023. The Company’s fixed assets increased from $1,096,827 to $1,552,871 due to the capitalization of the CyberloQ Platform, and website development, while the Company’s prepaid expense did not change. In addition, the Company’s cash assets were $282,866 as of December 31, 2024 as opposed to $307,174 as of December 31, 2023.

As of December 31, 2024, liabilities were $2,831,229 compared to $1,021,359 in liabilities as of December 31, 2023. This increase in the Company’s liabilities was due to an increase in the Company’s convertible debt of $1,662,141, including $1,352,500 which was due to a change in accounting principal, an increase in accrued interest of $229,522, and decrease in accounts payable and accrued expenses of $34,454.

Net cash used in operating activities for 2024 was $715,123 compared to net cash used in operating activities for 2023 of $340,779. Cash used by operating activities is driven by our net loss, which was approximately $37,078 less than in 2023, and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments for 2024 include stock compensation of $79,000 and bad debt of $25,000.

Net cash used by investing activities for 2024 was $456,044 and was due to the Company capitalizing development costs for the CyberloQ platform as well as website development costs.

Net cash provided by financing activities was $1,146,859 for 2024 as compared to $1,449,250 for 2023. Proceeds from convertible debt were $876,859 in 2024 as compared to $1,300,000 for 2023. Conversely, proceeds from common stock issuance were $250,000 for 2024 as compared to $149,250 for 2023, and proceeds from common stock to be issued was $20,000 for 2024 as compared to $0 for 2023.

The Company had operating revenue of $15,000 in 2024 and is currently reliant on its ability to raise additional capital and/or debt 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 2023. Unless the Company begins to generate operation revenue, it will be reliant on its ability to raise additional debt and/or capital in order to continue its operations.

Results of Operations for the Years Ended December 31, 2024 and 2023

The Company experienced a net loss of $989,452 for 2024 compared to net loss of $1,026,530 for 2023. This decrease in the Company’s net loss was primarily due to a change in accounting principle for amortization of debt discount offset by an increase in interest expense. The Company experienced an increase in loss from operations in 2024 as compared to 2023. Specifically, the Company experienced a loss from operations of $752,929 for 2024 compared to a loss from operations of $367,250 for 2023.

Service revenue was $15,000 for 2024 in comparison to $15,993 for 2023.

The increase in the Company’s loss from operations was primarily due to increases in all expense categories.

Professional fees were $299,504 in 2024, compared to $86,778 in 2023. This increase in professional fees was due to an increase in consulting services related to software development costs associated with upgrading the source code and infrastructure of its software to accommodate increased capacity demands, and the undertaking of SOC 2 compliance.

Officers’ compensation expense was $335,500 in 2024 as compared to $210,000 in 2023. This increase was due to an increase in officers’ compensation, and bonuses paid.

Computer and internet expenses were $51,893 in 2024 as compared to $18,927 in 2023. This increase was due to an increase in hosting costs associated with the Company’s web services.

Other operating expenses were $50,509 in 2024 as compared to $29,798 in 2023. This increase was due to an increase in bad debt.

Travel and entertainment expenses were $8,952 in 2024 as compared to $7,818 in 2023.

Office supplies and equipment were $11,715 in 2024 as compared to $9,313 in 2023.

For 2024, there were no material change in rent expense, as compared to 2023.

Although the Company’s loss from operations was $752,929 for 2024, the overall net loss of the Company was $989,452 for 2024.

In summary, total revenue was $15,000 for 2024, and the Company is currently reliant on its ability to raise additional debt and/or capital to continue execution of its business plan to move forward towards profitability. Whether or not there are any material changes in operational revenues or expenses in 2025 will be highly-dependent upon the Company’s ability to enter into material revenue contracts with customers.

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates and assumptions on an ongoing basis. The results of our analysis form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and the impact of such differences may be material to our consolidated financial statements. We do not currently have any critical accounting estimates.

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.

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 December 31, 2024 in accordance with the 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 December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.