UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the fiscal year ended
or
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
(Commission File Number) |
(IRS Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| 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
☐
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
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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.
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).
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.
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 ☐ | |
| 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
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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 shares of the Issuer’s common stock issued and outstanding and held by approximately 129 shareholders, six 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.
The
aggregate market value of the 71,479,853 shares of voting common equity held by non-affiliates of the registrant, computed by reference
to the closing price as reported as of the last business day of the registrant’s most recently completed second fiscal quarter
(June 30, 2021) was approximately $
CyberloQ Technologies, Inc.
FORM 10-K
For The Year Ended December 31, 2021
INDEX
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PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K 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 Annual 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 Annual 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 annual report on Form 10-K and our incorporated documents. |
You should keep in mind that any forward-looking statement made by us in this annual 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 annual report on Form 10-K, the terms “CLOQ,” “Company,” “we,” “us” and “our” refer to CyberloQ Technologies, Inc. and its wholly-owned subsidiary CyberloQ Technologies, LTD.
| ITEM 1. | BUSINESS |
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 CyblerloQ 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, 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 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.
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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..
| 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.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
None.
| ITEM 2. | PROPERTIES |
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 $730 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.
| ITEM 3. | LEGAL PROCEEDINGS |
The Company is not currently a party to any legal proceedings, nor is the Company a party to 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.
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| ITEM 4. | MINE SAFETY DISCLOSURES |
None.
PART II
| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Our common stock currently trades on the OTC Bulletin Board under the symbol “CLOQ.” The following table states the range of the high and low bid-prices per share of our common stock for each of the calendar quarters for fiscal years 2021 and 2020, as reported by the OTC Bulletin Board. These quotations represent inter-dealer prices, without retail mark-up, markdown, or commission, and may not represent actual transactions. The last price of our common stock as reported on the OTC Bulletin Board on December 31, 2021 was $0.1055 per share. As of December 31, 2021, there were 129 shareholders of record of our common stock. This number does not include beneficial owners from whom shares are held by nominees in street name.
| Fiscal Year 2021 | Fiscal Year 2020 | |||||||||||||||
| High | Low | High | Low | |||||||||||||
| First Quarter | $ | 0.50 | $ | 0.05 | $ | 0.13 | $ | 0.08 | ||||||||
| Second Quarter | $ | 0.49 | $ | 0..13 | $ | 0.17 | $ | 0.05 | ||||||||
| Third Quarter | $ | 0.32 | $ | 0.09 | $ | 0.11 | $ | 0.08 | ||||||||
| Fourth Quarter | $ | 0..20 | $ | 0.08 | $ | 0.10 | $ | 0.05 | ||||||||
Dividend Policy and Holders
No dividends have been paid to date on our common stock and no change of this policy is under consideration by our board of directors. Our board of directors is not required to declare or pay dividends on our securities. The payment of dividends in the future will be determined by our board of directors in light of conditions then existing, including our earnings, financial requirements, general business conditions, reinvestment opportunities, and other factors. There are otherwise no restrictions on the payment of dividends existing at this time.
| ITEM 6. | SELECTED FINANCIAL DATA |
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 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Liquidity, Capital Resources and Material Changes in Financial Condition
As of December 31, 2021, our total assets were $264,503 compared to $27,441 in assets as of December 31, 2020. This increase in the total assets is primarily attributed to an increase in prepaid expense and cash. Prepaid expense increased due to the issuance of 1,250,000 shares of stock to consultants valued at $537,500 per consulting agreements entered into by the Company. The amount is being amortized over the one-year length of the contracts on a straight-line basis.
As of December 31, 2021, our liabilities were $299,530 compared to $337,464 in liabilities as of December 31, 2020. This change in the Company’s financial condition was due to decreases in accounts payable and accrued expenses of $67,780, and long term note payable of $1,050 partially offset by an increase of $10,000 in loans from stockholders, and an increase in accrued interest of $20,896.
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Net cash used in operating activities for the year ending December 31, 2021 was $664,596 compared to net cash used in operating activities for the year ended December 31, 2020 of $306,161. 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 year ended December 31, 2021 include stock compensation of $460,708 and loss on settlement of payables of $6,343.
Net cash used by investing activities for the years ended December 31, 2021 and 2020 was $0.
Net cash provided by financing activities was $692,150 for the year ended December 31, 2021 as compared to $332,266 for the year ending December 31, 2020. Specifically, proceeds from common stock issuance were $490,200 for the year ended December 31, 2021as compared to $76,666 for the year ended December 31, 2020, and proceeds from common stock to be issued was $193,000 for the year ended December 31, 2021 as compared to $60,000 for the year ended December 31, 2020. Conversely, proceeds from notes payable were $22,500 for the year ended December 31, 2021compared to $232,100 for the year ended December 31, 2020.
The Company had operating revenue of $197 in 2021 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 2022. 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, 2021 and 2020
The Company experienced a net loss of $1,087,712 for the year ended December 31, 2021 compared to net loss of $983,271 for the year ended December 31, 2020.
This increase in the Company’s net loss was primarily due to a substantial increase in professional fees as well as research and development fees, partially offset by substantial decreases in software impairment expenses and depreciation expenses.
Service revenue was $197 for 2021 in comparison to $19,944 for 2020. This decrease in revenue was due to the Company recognizing $14,589 of revenue from a customer’s non-refundable two-year (beginning August 28, 2018) service contract that ended in the third quarter of 2020.
Professional fees were $468,449 in 2021, compared to $56,483 in 2020. 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 and higher accounting fees during the period.
Research and development expenses were $180,063 in 2021, compared to $2,100 in 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.
Officers’ compensation expense was $370,400 in 2021 as compared to $306,140 in 2020. This increase was due to an increase in stock price attributed to Officers’ share issuances.
In addition to the foregoing, rent expense was $9,031 for 2021, compared to $3,585 for 2020. This increase was due to the Company signing a new lease agreement in 2020.
The foregoing drivers of the increase in the Company’s net loss for the year ended December 31, 2021 were partially offset by decreases in the Company’s other operating expenses.
Software impairment expense was $0 in 2021, compared to $321,735 in 2020. This decrease in software impairment expense is due to the one-time write-off of the book value of the Cyberloq technology software fixed asset in 2020.
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Depreciation expense was $0 in 2021, compared to $122,675 in 2020. This decrease in depreciation expense was due to a one-time software impairment expense in 2020. Since the write-off occurred in 2020, it could no longer be depreciated in 2021.
The Company had recognition of bad debt expense of $40,000 in 2020, as opposed to no recognition of bad debt in 2021.
Computer and internet expenses were $10,859 in 2021 as compared to $7,759 in 2020. This increase was due to additional hosting costs associated with the Company’s private blockchain product.
Office supplies and expenses were $6,608 in 2021, compared to $4,369 in 2020.
Sales commissions were $0 in 2021, compared to $2,011 in 2020.
For 2021, there were no material changes in travel and entertainment and other operating expenses as compared to 2020.
In summary, total revenue was $197 for 2021, 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 2022 will be highly-dependent upon the Company’s ability to enter into material revenue contracts with customers.
| ITEM 7A. | 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 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
The Company’s Financial Statements are set forth below beginning on page F-1 of this Form 10-K.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
| ITEM 9A. | 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 December 31, 2021 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, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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| ITEM 9B. | OTHER INFORMATION |
There exists no information required to be disclosed in a report on Form 8-K during the three-month period ended December 31, 2021, but not reported.
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Our directors and officers, as of the date of this filing, are set forth below. The directors hold office for their respective term and until their successors are duly elected and qualified. Vacancies in the existing Board are filled by a majority vote of the remaining directors. The officers serve at the will of the Board of Directors.
(a) (b) Directors and executive officers:
| Name | Age | Position | Director Since | |||
| Enrico Giordano | 63 | Vice President Director | Inception | |||
| Leon Hurst | 54 | Director | February 2020 | |||
| Christopher Jackson | 57 | President, Sec., Treas. Director | Inception | |||
| Rex Schuette | 72 | Director | September 2017 |
The directors of the Company are elected to serve until the next annual shareholders’ meeting or until their respective successors are elected and qualified. Officers of the Company hold office until the meeting of the Board of Directors immediately following the next annual shareholders’ meeting or until removal by the Board of Directors.
(c) Identification of certain significant employees.
As of December 31, 2021, there were no persons who were not directors and/or executive officers that were expected to make significant contributions to the business of the Company.
(d) Family relationships.
There are no family relationships between any directors and/or executive officers.
(e) The business experience of the directors and executive officers.
Enrico Giordano. Mr. Giordano is a founder and holds a BA degree in Mass Communications from the University of South Florida and has excelled in Mass Communication Law as his elective studies. Mr. Giordano has been a consultant for over 20 years and has worked with various types of deal structures, from helping structure the proposed sale and relocation of an NBA franchise to working with a structure on e-business companies and the web integration field that included associations with executives of corporations such as Compaq, Digital Equipment Corp., Apple Computer, VisiCorp, Fortress Technologies and IBM. From 2006 through 2007, Mr. Giordano worked on a consulting basis for SellaVision, Inc., a company involved with the infomercial and electronic retailing industry. From 2008 until present, has also been instrumental in structuring and negotiating on behalf of the Company. Mr. Giordano has already been successful in creating alliances that can be significant to the Company’s future growth potential. Mr. Giordano will devote most of his time to this effort, thus helping ensure the success of the Company. For the past two years all of Mr. Giordano’s time and efforts have been solely concentrated on the Company. From price point to structure as well as the marketing of the product to affiliate programs which are now ready to be rolled out. These are all part of the vision along with Mr. Jackson in order to bring to market a product that is reliable, affordable and one that can help thousands upon thousands of people in today’s economy.
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Leon Hurst. Mr. Hurst owns and operates a tire distribution, installation and repair business. He also owns a towing and asset recovery business. Mr. Hurst has been a Gideon member of the Lancaster northeast camp for over twenty years, serving as President, Vice-President and Treasurer over that time. He is currently serving as the Treasurer of ROFM drug and alcohol treatment ministry as well.
Christopher Jackson. Mr. Jackson is a founder and has served as the President and Chief Operating Officer since inception. Mr. Jackson attended Texas Lutheran University while seeking a degree in Marketing. He has been in sales and management for the better part of 25 years. Mr. Jackson was instrumental in the Company’s original software development platform, TurnScor. Mr. Jackson’s main focus will be the implementation of a scalable CyberloQ platform, alongside sales strategies for growing the Company’s revenues. Mr. Jackson devotes 100% of his time to day to day operations, financial disclosures and reporting along with sales support within the Company.
Rex Schuette. Mr. Schuette’s vast experience and knowledge in the financial services sector will be instrumental in guiding the Company forward with its banking relationships. Mr. Schuette was an Executive Vice President and Chief Financial Officer of United Community Banks, Inc. (“United”) for 16 years until his recent retirement in May of 2017. United is one of the largest full-service banks in the Southeast region of the United States, with over 168 offices and over $11 billion in assets. While at United, Mr. Schuette managed and directed all accounting, financial and reporting activities for the bank, and was also responsible for mergers and acquisitions, investor relations, strategic and capital planning. Prior to his time at United, Mr. Schuette spent 16 years at State Street Corporation, a global financial services company, where he served as the company’s Senior Vice President and Chief Accounting Officer. Mr. Schuette has also served as the Chief Financial Officer of Bank One (Lead Bank), Deputy Comptroller of Harris Trust Savings Bank, and Assistant Controller of the National Bank of Detroit. The knowledge and experience that Mr. Schuette brings to the Board will be an important and strategic component of the Company’s continued growth in the banking industry, both domestically and abroad.
(f) Involvement in certain legal proceedings.
None.
(g) Promoters and control persons.
None.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and furnish us with copies of all Section 16(a) forms they file. Based on our review of the EDGAR database, we believe that there are no persons that are delinquent in filing the required forms for the year ended December 31, 2021.
Code of Ethics
We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Ethics is designed to deter wrongdoing and promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of our Code of Ethics to an appropriate person or persons identified in the code; and (v) accountability for adherence to our Code of Ethics. We will provide any person without charge a copy of our code of ethics upon receiving a written request which may be mailed to our office at 4837 Swift Road Suite 210-1 Sarasota, FL 34231
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| ITEM 11. | EXECUTIVE COMPENSATION |
Summary Compensation of Officers
The following table sets forth certain information with respect to compensation paid to the Company’s executive officers.
| Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non- Equity Inctv. Plan Comp | Change in pension value nonqualified deferred comp.earnings | All Other Comp | Total | |||||||||||||||||||||||||||
| Christopher Jackson | 2021 | $ | 90,000 | $ | 8,000 | $ | 30,800 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 128,800 | ||||||||||||||||||
| President, Secretary, Treasurer Director (PEO PFO) | 2020 | $ | 90,000 | $ | - | $ | 8,500 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 98,500 | ||||||||||||||||||
| Mark Carten | 2021 | $ | 90,000 | $ | - | $ | 30,800 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 120,800 | ||||||||||||||||||
| CTO Director | 2020 | $ | 90,000 | $ | - | $ | 8,500 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 98,500 | ||||||||||||||||||
| Enrico Giordano | 2021 | $ | 90,000 | $ | - | $ | 30,800 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 120,800 | ||||||||||||||||||
| VP Director | 2020 | $ | 90,000 | $ | - | $ | 8,500 | (1) | $ | - | $ | - | $ | - | $ | - | $ | 98,500 | ||||||||||||||||||
(1) The employment contracts for Mark Carten, Enrico Giordano and Christopher Jackson all provide that so long as they are in continuous service to the Company, on each annual anniversary date of their employment agreements they shall be issued 100,000 shares of the Company’s common stock as an annual bonus.
(2) On February 28, 2022, Mark Carten resigned from his officer position with the Company.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect to outstanding equity awards for the Company’s executive officers as of December 31, 2021.
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | There are No Incentive-Based Stock Awards Outstanding | ||||||||||||||||||
| Mark Carten Chief Technical Officer | - | - | 5,000,000 | (1) | * | # | - | |||||||||||||||||
| Enrico Giordano Vice President | - | - | 5,000,000 | (1) | * | # | - | |||||||||||||||||
| Christopher Jackson President, Secretary and Treasurer | - | - | 5,000,000 | (1) | * | # | - | |||||||||||||||||
* at 110% of the average of the closing bid price for the ten days preceding the Company’s achievement of each performance goal.
# All of the options set forth in the above table are performance based and must be exercised within five(5) years of the date that they vest with the executive.
(1) The employment contracts for Mark Carten, Enrico Giordano and Christopher Jackson all include performance incentive stock options based upon the Company meeting certain performance conditions that can potentially result in the issuance of stock option awards of up to 5,000,000 shares each in the event that the Company reaches certain performance goals. Specifically, Mark Carten, Enrico Giordano and Christopher Jackson each shall be entitled to receive ten (10) stock option awards of 500,000 shares of the Company’s common stock each, upon the Company achieving certain milestones (the “ISO Awards”). The first ISO Award will vest upon the Company achieving (cumulatively) $1,000,000 in Gross Revenues, and each additional ISO Award will vest upon the Company achieving the next $1,000,000 increment in cumulative Gross Revenue up to a total of 5,000,000 shares each.
(2) On February 28, 2022, Mark Carten resigned from his officer position with the Company.
| 10 |
Compensation of Directors
The Company has not compensated any Board members for their participation on the Board and does not have any standard or other arrangements for compensating them for such services. The Company may issue shares of common stock or options to acquire shares of the Company’s common stock to members of the Board in consideration for their services as members of the Board. The Company reimburses Directors for expenses incurred in connection with their attendance at meetings of the Board.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Security Ownership of Management and Certain Beneficial Owners
The following table indicates the number of shares of both our common and preferred stock that were beneficially owned as of the date of filing, by (1) each person known by us to be the owner of more than 5% of our outstanding shares of preferred stock, (2) our directors, (3) our executive officers, and (4) our directors and executive officers as a group. In general, “beneficial ownership” includes those shares a director or executive officer has sole or shared power to vote or transfer (whether or not owned directly) and rights to acquire common stock through the exercise of stock options or warrants exercisable currently or that become exercisable within 60 days. Except as indicated otherwise, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. We based our calculation of the percentage owned on 91,003,216 beneficially owned shares of common stock outstanding as of the date of filing, and 20,000 beneficially owned shares of preferred stock outstanding on the date of filing. The address of each director and executive officer listed below is c/o CyberloQ Technologies, Inc., 4837 Swift Road Suite 210-1 Sarasota, FL 34231.
| Title of Class | Name | Number of Common Shares Beneficially Owned | Percentage of Common Class | Number of Preferred Shares Beneficially Owned | Percentage of Preferred Class | |||||||||||||
| Directors Officers | Leon Hurst | 2,648,363 | 2.9 | % | 0 | 0 | % | |||||||||||
| Directors Officers | Enrico Giordano(2) | 5,300,000 | 5.8 | % | 10,000 | 50.00 | % | |||||||||||
| Directors Officers | Christopher Jackson(2) | 5,800,000 | 6.3 | % | 10,000 | 50.00 | % | |||||||||||
| Directors Officers | Rex Schuette | 5,775,000 | 6.3 | % | 0 | 0 | % | |||||||||||
| Officers Directors as a group (4 persons) | 19,523,363 | 21.4 | % | 20,000 | 100 | % | ||||||||||||
| 5% Shareholders | Peter Lacey 81 Burnwaite Rd London SW65BQ United Kingdom | 4,500,000 | 4.9 | % | 0 | 0 | % | |||||||||||
| 5% Shareholders | Mark Carten(1)(2) | 4,800,000 | 5.2 | % | 0 | 0 | % | |||||||||||
The preferred shareholders vote together with the common stock as a single class and the holders of the preferred stock are entitled to 5,000 votes per share.
(1) Includes 4,000,000 shares of Common Stock held by Carten Tech LLC, of which Mark Carten has voting and dispositive control.
| 11 |
(2) The employment contracts for Enrico Giordano and Christopher Jackson include performance incentive stock options based upon the Company meeting certain performance conditions that can potentially result in the issuance of stock option awards of up to 5,000,000 shares each in the event that the Company reaches certain performance goals. Specifically, Enrico Giordano and Christopher Jackson each shall be entitled to receive ten (10) stock option awards of 500,000 shares of the Company’s common stock each, upon the Company achieving certain milestones (the “ISO Awards”). The first ISO Award will vest upon the Company achieving (cumulatively) $1,000,000 in Gross Revenues, and each additional ISO Award will vest upon the Company achieving the next $1,000,000 increment in cumulative Gross Revenue up to a total of 5,000,000 shares each. The shares vest at 110% of the average closing bid price and must be exercised within five (5) years of the vesting date.
Securities Authorized for Issuance Under Executive Compensation Plans
As of December 31, 2021, the Company had equity compensation plans with Mark Carten, Enrico Giordano and Christopher Jackson. A summary table of the potential share issuances based upon these plans is set forth below:
| Equity Compensation Plan Information | ||||||||||||
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity Compensation Plans Approved by Security Holders | 15,000,000 | * | 700,000 | |||||||||
| Equity Compensation Plans Not Approved by Security Holders | 0 | n/a | 0 | |||||||||
| Total | 15,000,000 | * | 700,000 | |||||||||
* The 15,000,000 in options set forth in the above table are exercisable at 110% of the average of the closing bid price for the ten days preceding the Company’s achievement of each performance goal and must be exercised within five(5) years of the vesting date.
The employment contracts for Enrico Giordano, Christopher Jackson and Mark Carten, all included performance incentive stock options based upon the Company meeting certain performance conditions. These performance incentive stock options were approved by the Company’s Shareholders. The Company did not meet the requisite performance conditions in 2019, 2020 or 2021, and it is unknown whether or not the Company will meet the requisite performance conditions in 2022. The options are exercisable in 500,000 increments upon the Company initially achieving (cumulatively) $1,000,000 in Gross Revenues, and each additional incentive stock option award will vest upon the Company achieving the next $1,000,000 increment in cumulative Gross Revenue. On February 28, 2022, Mark Carten resigned from his officer position with the Company and is no longer eligible for the equity compensation plan.
| 12 |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
Transactions with Related Persons
On October 29, 2019, the Company approved a loan of $30,000 from a director to the Company. The interest rate was 0% and the maturity date was December 2, 2019. The Company paid this loan in full in February of 2020.
On August 8, 2020, the Company approved a loan of $25,000 from a director to the Company. The interest rate is 12.5% and the maturity date is December 31, 2023.
On September 9, 2020, the Company approved a loan of $100,000 from a director to the Company. The interest rate is 12.5% and the maturity date is December 31, 2023.
On December 28, 2020, the Company approved a loan of $25,000 from a director to the Company. The interest rate is 12.5% and the maturity date is December 31, 2023.
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. Payments of $25,000 plus interest are due to be paid each calendar quarter beginning on July 1, 2022.
On September 20, 2021, the Company approved a loan of $12,500 from a director to the Company. The interest rate is 0% and the maturity date is October 1, 2021. The Company paid this loan in full in October 2021.
Promoters and Certain Control Persons
The Company has not had a promoter at any time during the last five fiscal years.
In addition, there are no parents of the Company.
Director Independence
The directors of the Company, which also include the executive officers of the Company, are not independent directors. Members of the Company’s management may become associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of the Company. Insofar as the officers and directors are engaged in other business activities, management anticipates they will devote as much time to the Company’s affairs as is reasonably needed.
The officers and directors are, so long as they are officers or directors of the Company, subject to the restriction that all opportunities contemplated by the Company’s plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to the Company and the companies that they are affiliated with on an equal basis. A breach of this requirement will be a breach of the fiduciary duties of the officer or director. If the Company or the companies in which the officers and directors are affiliated with both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if the Company should decline to do so.
In addition, the Company has a Related-Party Transactions Policy whereby the officers and directors of the Company are required to report to the Board of Directors any activity that would cause or appear to cause a conflict of interest on his or her part. All related-party transactions are subject to review, approval or ratification in accordance with the Related-Party Transactions Policy.
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
The following table sets forth fees billed to us for principal accountant fees and services during the years ended December 31, 2020 and December 31, 2021. All services provided by the Company’s independent registered accounting firm have been reviewed and approved by the Company’s Board of Directors.
| 2020 | 2021 | |||||||
| Audit Fees | $ | 19,500 | $ | 25,250 | ||||
| Audit-Related Fees | $ | 0 | $ | 0 | ||||
| Tax Fees | $ | 0 | $ | 0 | ||||
| All Other Fees | $ | 0 | $ | 0 | ||||
| Total | $ | 19.500 | $ | 25,250 | ||||
| 13 |
PART IV
| ITEM 15. | EXHIBITS |
Exhibits have been filed separately with the United States Securities and Exchange Commission in connection with the Annual Report on Form 10-K 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. |
| 14 |
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: March 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: March 31, 2022 | Enrico Giordano, Director | |
| By: | /s/ Leon Hurst | |
| Date: March 31, 2022 | Leon Hurst, Director | |
| By: | /s/ Christopher Jackson | |
| Date: March 31, 2022 | Christopher Jackson, Director | |
| By: | /s/ Rex Schuette | |
| Date: March 31, 2022 | Rex Schuette, Director | |
| 15 |
ITEM 1. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Cyberloq Technologies, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Cyberloq Technologies, Inc. (“the Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has a growing accumulated deficit since inception and continuing significant net losses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
We have served as the Company’s auditor since 2017.
March 31, 2022
| F-1 |
CyberloQ Technologies, Inc.
CONSOLIDATED BALANCE SHEETS
| December 31, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Deposits and prepaids | ||||||||
| Total Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable and Accrued Expenses | $ | $ | ||||||
| Accrued interest | ||||||||
| Loans Payable – Stockholders | ||||||||
| Loans Payable–Related Party | ||||||||
| Total Current Liabilities | ||||||||
| Long Term Liabilities | ||||||||
| SBA Loan Payable | ||||||||
| Total Long Term Liabilities | - | |||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | - | - | ||||||
| Stockholders’ Equity | ||||||||
| Common stock: $ par value, shares authorized; and shares issued and outstanding, respectively | $ | $ | ||||||
| Preferred Stock $ per value - shares authorized; issued and outstanding, respectively | ||||||||
| Shares to be Issued: and common shares, respectively | ||||||||
| Additional Paid in Capital | $ | $ | ||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to financial statements
| F-2 |
CyberloQ Technologies, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Years Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenue | ||||||||
| Service Revenue | $ | $ | ||||||
| Total Revenue | ||||||||
| Operating Expenses | ||||||||
| Sales Commissions | ||||||||
| Professional Fees | ||||||||
| Research | ||||||||
| Officer’s Compensation | ||||||||
| Travel and Entertainment | ||||||||
| Rent | ||||||||
| Depreciation | ||||||||
| Computer and Internet | ||||||||
| Office Supplies and Expenses | ||||||||
| Bad Debt | ||||||||
| Software Impairment | ||||||||
| Other Operating Expenses | ||||||||
| Total Operating Expenses | ||||||||
| Loss from Operations | ( | ) | ( | ) | ||||
| Other Income (Expense) | ||||||||
| Interest | ( | ) | ( | ) | ||||
| SBA Grant | ||||||||
| Loss on extinguishment of debt | ( | ) | ||||||
| Loss on settlement of payables | ( | ) | ||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ||||
| Provision for Income Taxes | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Loss per common share-Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Number of Common Shares Outstanding Basic and diluted | ||||||||
See accompanying notes to financial statements
| F-3 |
CyberloQ Technologies, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the Years Ended December 31, 2021 and December 31, 2020
| Common (Issued) | Common (Unissued) | Preferred Stock | Add’l Paid-In | Accum. | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance as of December 31, 2019 | $ | - | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Proceeds from Issuance of Common Stock | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for stock subscription | ( | ) | - | |||||||||||||||||||||||||||||||||
| Common stock issued for note payable | ||||||||||||||||||||||||||||||||||||
| Common stock for officers’ fees | ||||||||||||||||||||||||||||||||||||
| Net loss for period ended December 31, 2020 | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Proceeds from Issuance of Common Stock | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for stock subscription | ( | ) | - | |||||||||||||||||||||||||||||||||
| Common stock for officers’ fees | ( | ) | - | |||||||||||||||||||||||||||||||||
| Common stock to be issued for services | ||||||||||||||||||||||||||||||||||||
| Stock subscription | ||||||||||||||||||||||||||||||||||||
| Common stock to be issued for officers’ fees | ||||||||||||||||||||||||||||||||||||
| Net loss for period ended December 31, 2021 | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
See accompanying notes to financial statements
| F-4 |
CyberloQ Technologies, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021 and December 31, 2020
| 2021 | 2020 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Stock Compensation | ||||||||
| Loss on Extinguishment of Debt | ||||||||
| Bad Debt | ||||||||
| Software Impairment | ||||||||
| Loss on Settlement of Payables | ||||||||
| Change in Operating Assets and Liabilities: | ||||||||
| Accounts Receivable | ||||||||
| Deposits and prepaids | ( | ) | ||||||
| Accounts Payable and Accrued Expenses | ( | ) | ||||||
| Accrued Interest | ||||||||
| Customer Prepayments | ( | ) | ||||||
| Net Cash Used by Operating Activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Net Cash Used by Investing Activities | ||||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from Common Stock Issuance | ||||||||
| Proceeds from Common Stock to be Issued | ||||||||
| Repayment of Note Principal | ( | ) | ( | ) | ||||
| Proceeds from note payable | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net Increase (Decrease) in Cash and Equivalents | ||||||||
| Cash and Equivalents at Beginning of the Period | ||||||||
| Cash and Equivalents at End of the Period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Interest Paid | $ | $ | ||||||
| Income Taxes Paid | $ | $ | ||||||
| NON-CASH DISCLOSURES | ||||||||
| Common stock issued for note payable | $ | $ | ||||||
| Stock issued from to be issued | $ | $ | ||||||
| Common stock issued for prepaid expense | $ | $ | ||||||
| Common stock issued for accounts payable | $ | $ | ||||||
See accompanying notes to financial statements
| F-5 |
CyberloQ Technologies, Inc.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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.
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-6 |
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 December 31, 2021, and December 31, 2020, 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 cancelled 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.
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. During the periods ended December 31, 2021 and 2020, we expensed $
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 $
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.
| F-7 |
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 December 31, 2021, the Company had $
| Contract Asset | Contract Liability | |||||||
| December 31, 2019 | $ | $ | ||||||
| Less: revenue earned and recognized | ( | ) | ||||||
| December 31, 2020 | $ | $ | ||||||
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 the probable credit losses related to 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. As of December 31, 2020, management deemed $
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.
| F-8 |
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 year ended December 31, 2021 and 2020 was $
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.
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 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.
| F-9 |
At December 31, 2021 and 2020 the Company had no warrants or options outstanding that could have been exercised and could have been dilutive to the existing number of shares issued and 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.
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 $
In
April, 2021, the Company entered into a 12-month lease for office space at a rate of $
Recent Accounting Pronouncements
None.
Reclassification
Certain reclassifications have been made to conform previously reported data to the current presentation. These reclassifications have no effect on our net income (loss) or financial position as previously reported.
NOTE 2 – FIXED ASSETS
Software and computer equipment, recorded at cost, consisted of the following:
| December 31, 2021 | December 31, 2020 | |||||||
| Software and computer equipment | $ | $ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Impairment expense | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expense was $ and
$
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NOTE 3 – GOING CONCERN
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
Company has incurred losses since Inception resulting in an accumulated deficit of $
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 debt and/or 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 – STOCKHOLDERS’ EQUITY
Common Stock
The Company has shares of $ par value common stock authorized as of December 31, 2021 and December 31, 2020.
During
2021, the Company received $
During
2020, the Company received $
Additionally,
the Company had an agreement to issue common shares for $
Also,
the Company issued shares of common stock in settlement of a promissory note in the amount
of $40,000 to a related party, resulting in a loss on extinguishment of debt of $
At
December 31, 2020, the “shares to be issued” is comprised of shares issuable to officers of the Company valued at
$
Preferred Stock
| F-11 |
NOTE 5 – SBA EIDL Loan and Grant
On
June 9, 2020, the Company received an Economic Injury Disaster Loan from the Small Business Administration in the amount of $
| Payment Obligations | ||||
| Amount | ||||
| 2022 | $ | |||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 to 2050 | ||||
| Total | $ | |||
On
April 30, 2020 the Company received a grant from the Small Business Administration in the amount of $
NOTE 6 – COMMITMENTS
In
June 2020, the Company entered into a 12-month lease for office space at 871 Venetia Bay Blvd Suite #228Venice, FL 34285. The monthly
rent is $
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 $
The Company has commission agreements as follows:
| ● | ||
| ● | An
agreement with two sales managers granting each manager a |
NOTE 7 – RELATED PARTY TRANSACTIONS
Issuance of Warrants/Options
All outstanding warrants and options are fully vested and exercisable.
The following is a summary of the warrants issued and outstanding in connection with common stock:
| Weighted Avg Price | Weighted Avg Life | |||||||||||
| January 1, 2020 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| December 31, 2020 | $ | - | - | |||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Forfeited | ||||||||||||
| December 31, 2021 | ||||||||||||
| F-12 |
Related Party Notes Payable
The following is a summary of related party notes payable:
| For the Years Ended | ||||||||
| December 31, 2021 | December 31, 2020 | |||||||
| Notes payable – stockholders | $ | $ | ||||||
| Notes - related parties | $ | $ | ||||||
Notes Payable - Stockholders
On
April 26,2021,
On
December 29, 2014, the Company entered into a partially-convertible promissory note with a stockholder in the amount of $
Notes Payable - Related Parties
On
November 7, 2019, the Company received a loan from a director in the amount of $
On
March 24, 2020, the Company received a loan from a director in the amount of $
On
September 20, 2021, the Company received a promissory note from a director in the amount of $
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 $
As
of December 31, 2021, accrued interest is $
| F-13 |
NOTE 8 – INCOME TAXES
At
December 31, 2021, the Company had available federal net operating loss carry forwards to reduce future taxable income. The amount available
was approximately $
FASB ASC Topic 740 – Income Taxes (formerly SFAS 109) requires that the Company establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Due to restrictions imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with net operating loss carry forwards, the utilization of the Company’s net operating loss carry-forward will likely be limited as a result of cumulative changes in stock ownership. The Company has not recognized a deferred asset and, as a result, the change in stock ownership will not result in any change to the valuation allowances. Upon the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the use of the carry forwards and will recognize a deferred tax asset at that time.
The provision for Federal income tax consists of the following:
| For the Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Federal income tax benefit attributable to: | ||||||||
| Net operating loss | $ | $ | ||||||
| Less: valuation allowance | $ | ( | ) | $ | ( | ) | ||
| Provision for Federal tax benefit | $ | $ | ||||||
The
Tax Cuts and Jobs Act of 2018 will reduce the dollar value of the net operating loss carry-forwards due to the corporate tax rate decrease
to
| For the Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Deferred tax assets attributable to: | ||||||||
| Net operating loss carryover | $ | $ | ||||||
| Less: valuation allowance | $ | ( |
) | $ | ( |
) | ||
| Net deferred tax assets | $ | $ | ||||||
The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is current on all income tax filings. The Company is subject to U.S. federal or state income tax examinations by tax authorities for three years following the filing of such returns. During the periods open to examination, the Company has net operating loss and tax credit carry forwards for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOL’s and tax credit carry forwards may be utilized in future periods, they remain subject to examination.
NOTE 9 – SUBSEQUENT EVENTS
On
February 23, 2022, the Company received a promissory note from a director in the amount of $
On
February 23, 2022, the Company received a promissory note from a director in the amount of $
On February 28, 2022, the Company and Mark Carten entered into a separation agreement as a result of which Mr. Carten is no longer an employee of the Company. In addition, the separation agreement includes resignations of Mr. Carten from his positions as the Chief Technology Officer of Company and as a director of the Company effective February 28, 2022. Pursuant to the separation agreement, the Company is redeeming all of Mr. Carten’s common and preferred shares ( and , respectively) in the Company at a set redemption price of $ per share.
On February 28, 2022 the Board of Directors of the Company (the “Board”) decided to reduce the number of directors of the Company to four.
Subsequent to December 31, 2021, the Company issued shares of common stock for cash and shares that had previously been recorded as “shares to be issued”.
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-14 |