UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For quarterly period ended
Commission file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(I.R.S. 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:
NONE
Securities registered pursuant to Section 12(g) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
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OTCQB |
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
past 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 every Interactive Data File required to be submitted 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
such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | |
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Small Reporting Company
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Emerging Growth Company
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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
As of November 14, 2025 the issuer had shares of common stock issued and outstanding.
KWIKCLICK, INC.
TABLE OF CONTENTS
| 2 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KWIKCLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
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$ |
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| Accounts receivable, net |
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| Costs capitalized to obtain revenue contracts |
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| Prepaid expenses |
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| Other receivable |
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| Total current assets |
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| Equipment, net |
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| Intellectual property, net |
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| Right-of-use asset |
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| Security deposit |
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| Total assets | $ |
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$ |
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| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
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$ |
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| Accrued expenses |
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| Operating lease liability |
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| Deferred revenue |
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| Related-party loans |
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| Total current liabilities |
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| Long-term liabilities: | ||||||||
| Operating lease liability, net of current portion |
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| Total liabilities |
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| Stockholders' deficit | ||||||||
| Preferred stock, $ par value; shares authorized and issued and outstanding |
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| Common stock, $ par value; shares authorized and and shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively |
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| Additional paid-in capital |
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| Accumulated deficit |
(
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) |
(
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) | ||||
| Total stockholders' deficit |
(
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) |
(
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) | ||||
| Total liabilities and stockholders' deficit | $ |
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$ |
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The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues: | ||||||||||||||||
| Brand services | $ |
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$ |
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$ |
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$ |
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| Custom design services |
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| Net revenue |
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| Operating costs and expenses: | ||||||||||||||||
| Cost of sales |
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| Management and payroll |
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| Research and development |
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| Loss on abandonment of long-lived assets |
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| General and administrative |
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| Total operating costs and expenses |
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| Other income (expense) | ||||||||||||||||
| Interest expense - related party |
(
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) |
(
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) |
(
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(
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) | ||||||||
| Interest expense - other |
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(
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) |
(
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(
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| Gain on liability settlement |
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| Total other income (expense) |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||
| Loss before income taxes |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||
| Provision for income taxes |
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| Net loss | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Basic and diluted loss per share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding - basic and diluted | ||||||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(Unaudited)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance December 31, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
| Stock-based compensation | – |
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| Net Loss | – |
(
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) |
(
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) | |||||||||||||||
| Balance March 31, 2025 |
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$ |
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$ |
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$ |
(
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$ |
(
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) | ||||||||||
| Stock-based compensation | – |
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| Issuance of common stock for warrants exercised |
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| SARs issued to settle accrued compensation | – |
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| Net Loss | – |
(
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) |
(
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) | |||||||||||||||
| Balance June 30, 2025 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
| Stock-based compensation | – |
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| SARs issued to settle accrued compensation | – |
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| Warrants issued for services | – |
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| Net Loss | – |
(
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(
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) | ||||||||||||||||
| Balance September 30, 2025 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
| Balance December 31, 2023 |
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$ |
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$ |
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$ |
(
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$ |
(
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) | ||||||||||
| Stock-based compensation | – |
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| Net Loss | – |
(
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) |
(
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) | |||||||||||||||
| Balance March 31, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
| Stock-based compensation | – |
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| Net loss | – |
(
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) |
(
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) | |||||||||||||||
| Balance June 30, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
| SARs issued for services | – |
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| Issuance of Common Stock |
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| Net Loss | – |
(
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(
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) | ||||||||||||||||
| Balance September 30, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | |||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(
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) | $ |
(
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) | ||
| Depreciation and amortization |
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| Amortization of right-of-use asset |
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| Stock-based compensation |
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| Gain on liability settlement |
(
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) |
(
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| Loss on abandonment of long-lived assets |
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| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
(
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) |
(
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) | ||||
| Other receivable |
(
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(
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| Prepaid expenses |
(
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) |
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| Security deposit |
(
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) |
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| Accounts payable |
(
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(
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| Accrued expenses |
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(
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| Operating lease liability |
(
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(
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| Deferred revenue |
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| Accrued interest added to related-party loans |
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| Net cash used in operating activities |
(
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(
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| Cash flows from investing activities: | ||||||||
| Purchase of intellectual property |
(
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| Net cash used in investing activities |
(
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| Cash flows from financing activities: | ||||||||
| Proceeds from shareholders loans |
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| Proceeds from exercise of common stock warrants |
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| Proceeds from issuance of common stock |
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| Net cash provided by financing activities |
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| Net (decrease) increase in cash and cash equivalents |
(
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) |
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| Cash and cash equivalents at beginning of period |
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| Cash and cash equivalents at end of period | $ |
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$ |
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| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for income taxes | $ |
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$ |
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| Cash paid for interest | $ |
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$ |
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| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Warrants issued for services to obtain revenue contract | $ |
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$ |
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| SARs issued to settle accrued compensation | $ |
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$ |
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| Right-of-use asset obtained in exchange for operating lease liability | $ |
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$ |
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The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
KWIKCLICK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BUSINESS
KwikClick, Inc., (the “Company” or “Kwik”) was organized pursuant to the laws of the State of Delaware on November 16, 1993. Beginning in 2020, the Company commenced its Kwik business operations to allow sellers to make products or services available on the Kwik platform, at Kwik.com, offering a self-determined incentive budget on goods or services in exchange for exposure and substantially increased sales volume. Kwik is a social interaction, selling, referral, and loyalty rewards software platform.
Going Concern
Since the commencement of the Kwik platform, the Company has accumulated deficits; experienced negative operating cash flows; and has a working capital deficit. The Company will require additional funding to finance the growth of its future operations as well as to achieve its strategic objectives. This raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and generate revenue. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations, and its cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the full fiscal year or any other period.
Reclassifications
Certain amounts in the 2024 condensed consolidated balance sheet and condensed consolidated statement of operations have been reclassified to conform with the current period presentation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
| 7 |
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Kwik LLC. Intercompany transactions and balances have been eliminated in consolidation.
Segments
The Company has one reportable operating segment.
Cash and Cash Equivalents
Cash equivalents include all highly liquid investments
with an original maturity of three months or less when purchased. The Company did
The Company presents both basic and diluted earnings per share (EPS) on the face of the statements of operations. Basic EPS is computed by dividing net loss by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period under the treasury stock method using the if-converted method. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive. As of September 30, 2025, the Company had approximately stock appreciation rights (“SARs”) and approximately warrants outstanding and exercisable into shares of common stock that were potentially dilutive.
Revenue Recognition
The Company determines the measurement of revenue and the timing of revenue recognition utilizing the following core principles:
| · | Step 1: Identify the contract with the customer | |
| · | Step 2: Identify the performance obligations in the contract | |
| · | Step 3: Determine the transaction price | |
| · | Step 4: Allocate the transaction price to the performance obligations in the contract | |
| · | Step 5: Recognize revenue when the Company satisfies a performance obligation |
Revenue is measured based on the amount of consideration that the Company expects to receive, reduced by estimates for return allowances, promotional discounts, and rebates. Revenue excludes any amounts collected on behalf of third parties and indirect taxes.
A description of the Company’s revenue generating activities is as follows:
Third-Party Seller Services (Brand Services Revenue):
The Company offers programs that provide sellers a software platform to sell their products. For some contracts the Company provides payment processing and order fulfillment facilitation. The Company is not the seller of record in these transactions and acts as an agent in the facilitation of the transaction, recognizing the net revenue as our processing fee. For other contracts, the Company provides a more robust promotional and campaign management service whereby the Company controls discounts, rebates, commission rates and cross-selling features to the seller. Under this arrangement the Company invoices for the “incentive budget” from which these services are funded and for which the Company recognizes gross revenue acting as principal in this transaction.
The Company generally determines stand-alone revenue based on a percentage of the prices charged by the seller to deliver products sold. The commissions and any related fulfillment, shipping, and transaction processing fees the Company earns from these arrangements are recognized when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier or to the product purchaser. The Company generally does not incur material costs in obtaining third party seller contracts.
| 8 |
Custom Design Services
The Company provides custom-brand programming services in which it builds features for the third-party sellers. Such services often include building a shopping cart integration, revised or updated affiliate commission tracking system, and reporting functionality. These custom programming features, when built by the Company, are designed to integrate into the Company’s software platform; however, the custom design features can be used without the Company’s platform. The Company has determined custom design services are distinct in the context of the contract as the customer can benefit from the custom design services on its own as the features do not require the Company’s software platform for the customer to derive value, and they are separately identifiable promises in the contract. These custom design services are performed over a specified term for a fixed monthly fee. Revenue under these arrangements is recognized ratably over the custom design period, which generally is the contract term. Additionally, the customer simultaneously receives and consumes the benefit provided by the Company as the performance of the custom design services enhances and/or creates assets that the customer controls, while the assets are being enhanced or created – i.e. the features enhanced or created by the Company (e.g. shopping cart integration, revised or updated affiliate commission tracking system, and reporting functionality) are built into the customer’s existing IT infrastructure for ongoing use without the Company’s required ongoing involvement or its software platform.
Contract Assets and Contract Liabilities
The Company records any amounts due or payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue. The timing of revenue recognition, billings and cash collections results in billed accounts receivable (contract assets) and deferred revenue (contract liabilities) on the condensed consolidated balance sheets. Deferred revenue is for sales where the right to payment exists or payment has been received, but control has not been transferred.
The beginning and ending contract balances were as follows:
|
September 30,
2025 |
December 31,
2024 |
December 31,
2023 |
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| Accounts receivable | $ |
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$ |
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$ |
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| Deferred revenue | $ |
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$ |
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$ |
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Cost to Obtain Revenue Contracts
Applicable sales commissions paid in connection
with contracts exceeding one year are capitalized and amortized over the period of benefit, which has been determined to be the contract
term. During the three and nine months ended September 30, 2025, the Company capitalized the fair value of a warrant issued in connection
with securing a new customer contract of $
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.
New Accounting Pronouncements, Adopted
In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, “ Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement ,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Company’s condensed consolidated financial statements.
| 9 |
On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which amends the guidance in ASC 740, Income Taxes. The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued or made available for issuance.” Adoption is either prospectively or retrospectively; the Company adopted this ASU on a prospective basis effective January 1, 2025 and there was not a material impact to the Company’s condensed consolidated financial statements and related disclosures.
New Accounting Pronouncements, Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , which modifies the disclosure or presentation requirements related to variety of FASB Accounting Standard Codification topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K is effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the associated amendment will be removed from the Codification and will not become effective for any entities. The Company is currently evaluating the effect of adopting this ASU on its condensed consolidated financial statements and related disclosures.
On November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . The ASU requires more detailed disclosures about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative expenses and research and development expenses. This includes separate footnote disclosure for expenses such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. Public business entities are required to apply the guidance prospectively and may apply it retrospectively. The ASU's amendments are effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Public business entities are required to apply the guidance prospectively and may apply it retrospectively. The Company is currently evaluating the effect of adopting this ASU on its condensed consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new guidance will first be effective in our annual disclosures for the year ending December 31, 2026, and can be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU on its condensed consolidated financial statements and related disclosures.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (ASC Topic 718) and Revenue from Contracts with Customers (ASC Topic 606), which clarifies the accounting for share-based payments granted to customers, including classification of performance conditions, treatment of forfeitures, and application of the variable consideration constraint. The guidance will first be effective in annual disclosures for the year ending December 31, 2027, and may be applied prospectively or retrospectively. Early adoption is permitted. The Company has not granted any share-based payments to customers. As such, the Company does not expect ASU 2025-04 to have a material impact on the condensed consolidated financial statements or related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . This guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. Under the new standard, cost capitalization should only commence when an entity has committed to funding a software project and it is probable the project will be completed and the software will be used for its intended function. The amendments are effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its condensed consolidated financial statements.
| 10 |
NOTE 3. RELATED PARTY TRANSACTIONS
The Company’s related party loans consist of the following:
|
September 30,
2025 |
December 31,
2024 |
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| Related party note payable with a nominal interest rate of 10% per annum due on demand | $ |
|
$ |
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| Accrued interest |
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|
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| Total related party loans | $ |
|
$ |
|
||||
During the three and nine months ended September
30, 2025, the Company recognized interest expense of $
NOTE 4. STOCKHOLDERS' DEFICIT
Stock Based Compensation
Stock Appreciation Rights
During the three months ended September 30, 2025, the Company issued fully vested stock appreciation rights (“SARs”), of which settled compensation due to an employee totaling $ . During the nine months ended September 30, 2025, the Company issued fully vested stock appreciation rights (“SARs”), of which settled compensation due to an employee totaling $ . As of September 30, 2025, all outstanding SARs were fully vested.
The Company estimated the fair values of the SARs on the grant dates using a Black-Scholes options pricing model using the quoted market prices of the Company’s stock on the grant dates; exercise prices ranging from $1.75 to $2.90 per share; expected volatilities ranging from % to %; the contractual term of seven years; and a risk-free interest rates ranging from % to %.
A summary of the stock appreciation rights activity is as follows:
| Weighted | ||||||||||||
| Average | ||||||||||||
| Stock | Weighted | Remaining | ||||||||||
| Appreciation | Average | Contractual | ||||||||||
| Rights | Exercise Price | Term (Years) | ||||||||||
| Outstanding at January 1, 2025 |
|
$ | ||||||||||
| Granted |
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| Exercised | ||||||||||||
| Forfeited, cancelled or expired | ||||||||||||
| Outstanding at September 30, 2025 |
|
$ | ||||||||||
| Exercisable at September 30 2025 | $ | |||||||||||
| 11 |
Warrants
During the three months ended September 30, 2025,
the Company issued
fully vested warrants to purchase shares of common stock at an exercise price of $
The Company estimated the fair values of the two warrants issuances on the grant date using a Black-Scholes options pricing model using the quoted market prices of the Company’s stock on the grant dates; exercise prices of $2.60 and $2.90 per share; expected volatilities of approximately % and %; contractual terms of and .0 years, and risk-free interest rates of % and %.
A summary of the common stock warrant activity is as follows:
| Weighted | ||||||||||||
| Average | ||||||||||||
| Weighted | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Warrants | Exercise Price | Term (Years) | ||||||||||
| Outstanding at January 1, 2025 |
|
$ |
|
|||||||||
| Granted | ||||||||||||
| Exercised | ) | |||||||||||
| Forfeited, cancelled or expired | ) | |||||||||||
| Outstanding at September 30, 2025 |
|
$ |
|
|||||||||
| Exercisable at September 30 2025 | $ | |||||||||||
For the three months ended September 30, 2025 and 2024, the Company recognized stock-based compensation totaling $ and $ , respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized stock-based compensation totaling $ and $ , respectively.
As of September 30, 2025, the Company has committed shares of stock for the fulfillment for all of its outstanding equity and equity-linked awards.
NOTE 5. OPERATING LEASE
On February 1, 2025, the Company entered into
an operating lease for its Bountiful, Utah corporate headquarters under a non-cancellable lease arrangement.
The following table summarizes the Company’s future undiscounted cash payment obligations for each calendar year as of September 30, 2025, for its non-cancelable lease liabilities through the end of the expected term of the lease:
| 2025 | $ |
|
||
| 2026 |
|
|||
| 2027 |
|
|||
| Total undiscounted cash payments |
|
|||
| Less imputed interest |
(
|
) | ||
| Present value of payments | $ |
|
||
| 12 |
For the three months ended September 30, 2025
and 2024, the Company recognized lease expense associated with its non-cancelable operating lease totaling $
NOTE 6. COMMITMENTS AND CONTINGENCIES
On May 31, 2023, NAI Liquidation Trust, the successor in interest to the defunct NewAge, Inc. (NewAge) by and through its Liquidation Trustee, Steven Balasiano, filed an adversary proceeding against the Company in the NewAge Chapter 11 bankruptcy case (Delaware Case #22-10819). The Company licensed some of its technology to NewAge pursuant to a license agreement that started in September 2021 and terminated in late 2022. A prior adversarial action was brought by NewAge in the same bankruptcy case but was never served and was dismissed on June 1, 2023. Like the prior dismissed action, NAI Liquidation Trust contends that they are the rightful owner of KwikClick’s intellectual property. NAI Liquidation Trust brings several causes of action related to that contention.
The Company believes that the code base and functionality of its software platform differs materially from any intellectual property owned by NewAge. The Company intends to vigorously defend and assert its intellectual property rights. In the event the Company does not prevail it may be required to impair substantially all of its intangible assets with a carrying value of approximately $1.2 million at September 30, 2025 and may be forced to discontinue its on-going fee-based sales platform. The litigation has been delayed and an estimate of a reasonably possible loss cannot be made at this time. As such, there has been no further adjustment to the accompanying condensed consolidated financial position, results of operations, or cash flows as of and for the three and nine months ended September 30, 2025.
NOTE 7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued and has determined that there are no material events that need to be disclosed, except as follows:
Subsequent to September 30, 2025, the Company repaid $50,000 in principal of the outstanding note payable to Mr. Fred W. Cooper, Chairman and CEO. The principal balance of working capital advances outstanding through November 14, 2025 totaled $2,728,677. These advances bear interest of 10% per annum and are due on demand. Mr. Cooper has informally agreed to defer repayment of these loans until the Company has achieved a more stable liquidity position, however, he is not legally obligated to continue to do so.
NOTE 8. SEGMENT INFORMATION
The Company has reportable and operating segment which provides customers the platform to sell their products or services. The accounting policies of this operating segment are the same as those described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”) is its President and CEO.
The CODM’s measure of segment profit or loss is net income or loss. For purposes of evaluating performance and allocating resources, the CODM reviews the financial information and evaluates net income against comparable prior periods and the Company’s forecast. The Company derives nearly all of its revenue from United States of America (“US”) based customers with an immaterial amount coming from foreign based customers. Additionally, one US-based customer provided the majority of the custom design services revenue recognized during the three and nine months ended September 30, 2025. No other material revenue was recognized from a single customer for the three months and nine months ended September 30, 2025 and 2024.
| 13 |
In addition to the significant expense categories included within net income or loss presented on the Company's condensed consolidated statements of operations, the following is disaggregated research and development expenses for the three months ended September 30:
| 2025 | 2024 | |||||||
| Platform coding and development | $ |
|
$ |
|
||||
| Other third-party engineering |
|
|
||||||
| Total research and development expense | $ |
|
$ |
|
||||
The following is disaggregated research and development expenses for the nine months ended September 30:
| 2025 | 2024 | |||||||
| Platform coding and development | $ |
|
$ |
|
||||
| Other third-party engineering |
|
|
||||||
| Total research and development expense | $ |
|
$ |
|
||||
The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets. All the Company's long-lived assets are located in the United States. The Company does not have intra-entity sales or transfers.
| 14 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
As used in this Form 10-Q, references to the “Company,” “KwikClick,” “KWIK,” “we,” “our” or “us” refer to KwikClick, Inc. and KwikClick, LLC, unless the context otherwise indicates.
This Management’s Discussion and Analysis (“MD&A”) section discusses our results of operations, liquidity and financial condition and certain factors that may affect our future results. You should read this MD&A in conjunction with our financial statements and accompanying notes included elsewhere in this report.
This Quarterly Report on Form 10-Q contains statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on the Company’s current plans, and the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this quarterly report.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2025. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include the “Risk Factors” included in our annual report on Form 10-K filed with the SEC on March 31, 2025, that can be read at www.sec.gov.
Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized, nor can there be any assurance that we have identified all possible issues which we might face. For all of these reasons, the reader is cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date hereof. We assume no responsibility to update any forward-looking statements as a result of new information, future events, or otherwise except as required by law.
| 15 |
Overview
The Company was organized pursuant to the laws of the State of Delaware on November 16, 1993. Beginning in 2020, the Company commenced its Kwik business operations to allow sellers to make products or services available on the Kwik platform, at Kwik.com, offering a self-determined incentive budget on goods or services in exchange for exposure and substantially increased sales volume. Kwik is a social interaction, selling, and referral software platform. Stores and manufacturers (“Brands”) wishing to promote their products or services on the Kwik software platform are connected to promoters, influencers, and customers.
Comparison of operations for the Three Months ended September 30, 2025 and September 30, 2024
Revenues
During the three months ended September 30, 2025 and 2024, we recognized net revenues of $242,497 and $32,532, respectively. The $209,965 increase is primarily the result of the expansion of our custom design services in which we build custom software features for customers that is generally done in addition to embedding our transaction platform into a customer’s website. We intend to continue to pursue providing these products and services which we expect to drive increases in our brand services on a perpetual basis.
Cost of Sales
Our costs of sales increased $74,073 to $106,043 for the three months ended September 30, 2025 as compared to $31,970 for the three months ended September 30, 2024. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to increase as sales increase, but at a slower pace if we are successful in the expansion of the custom design services. Additionally, we would expect our sales volume and cost of sales to correspondingly increase as more brands launch our platform within their own website. The underlying products and services sold through our platform is currently unpredictable.
Operating Expenses
During the three months ended September 30, 2025 and 2024, we incurred total operating expenses of $355,049 and $306,297 respectively. The $48,752 increase resulted from an increase in management and payroll of $127,890, offset by a decrease in research and development of $69,393 and a decrease in general and administrative expenses of $9,745.
Other Income (Expense)
During the three months ended September 30, 2025, other expenses increased by $4,625 to $67,468 from $62,843. The increase was the result of continued compounding (at a rate of 10% per annum) of our unpaid related party loan outstanding. If we are successful in increasing our customer base, we do not expect an increase the principal balance of the loan over the next twelve months to fund expenses required for an expansion of our customer base.
Comparison of operations for the nine Months ended September 30, 2025 and September 30, 2024
Revenues
During the nine months ended September 30, 2025 and 2024, we recognized net revenues of $681,077 and $76,569, respectively. The $604,508 increase is primarily the result of the expansion of our custom design services in which we build custom software features for customers that is generally done in addition to embedding our transaction platform into a customer’s website. We intend to continue to pursue providing these products and services which we expect to drive increases in our brand services on a perpetual basis.
| 16 |
Cost of Sales
Our costs of sales increased $200,857 to $263,604 for the nine months ended September 30, 2025 as compared to $62,747 for the nine months ended September 30, 2024. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to increase as sales increase, but at a slower pace if we are successful in the expansion of the custom design services. Additionally, we would expect our sales volume and cost of sales to correspondingly increase as more brands launch our platform within their own website. The underlying products and services sold through our platform is currently unpredictable.
Operating Expenses
During the nine months ended September 30, 2025 and 2024, we incurred total operating expenses of $995,840 and $1,322,536 respectively. The $326,696 decrease primarily resulted from non-recurring stock-based compensation of $407,858 recognized in the nine months ended September 30, 2024 and a reduction in research and development of $176,310, offset by increases in management and payroll and general and administrative to support the growth of the business.
In the event we are able to raise additional capital, we would anticipate our total operating expenses will trend upward as we add additional employees and consultants to work on the execution of our business plan, which includes activities such as design and coding of our website and app, customer acquisition, cybersecurity, and user acquisition. We anticipate that much of this work will be done by outside consultants.
Other Income (Expense)
During the nine months ended September 30, 2025, the Company negotiated settlements with previous brands surrounding previously accrued commissions payable on their behalf for no additional consideration resulting in a gain on settlement totaling $147,527 ($30,000 for similarly settled vendor obligations for the nine months ended September 30, 2024). We do not expect these settlements to occur on a frequent basis in the future.
Other income was offset by an increase in related party interest to $194,844 from $163,201. The increase was the result of continued compounding (at a rate of 10% per annum) of our unpaid related party loan outstanding. If we are successful in increasing our customer base, we do not expect an increase the principal balance of the loan over the next twelve months to fund expenses required for an expansion of our customer base.
Liquidity and capital resources
At September 30, 2025, we had a working capital deficit of $3,821,083. Approximately 81% of our liabilities as of September 30, 2025 are due to our founder, majority shareholder, and CEO Mr. Fred Cooper under a note payable arrangement carrying an interest rate of 10% per annum. Mr. Cooper has informally agreed to defer repayment of the note until the Company has achieved a more stable liquidity position, however, he is not legally obligated to continue to do so.
We require additional capital to continue to operate our business, and to develop and expand our business. Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
| 17 |
Critical Accounting Estimates
There has been no change in our critical accounting estimates from those disclosed in our annual report on Form 10-K filed with the SEC on March 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2025 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our management concluded that, as of September 30, 2025, our internal control over financial reporting was not effective due to (i) insufficient segregation of duties in the finance and accounting functions due to limited personnel; and (ii) inadequate corporate governance policies. In the future, subject to working capital limitations, we intend to take appropriate and reasonable steps to make improvements to remediate these deficiencies.
Changes in Internal Control Over Financial Reporting
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations of the Effectiveness of Internal Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
| 18 |
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There has been no change in our legal proceedings as disclosed in our annual report on Form 10-K as filed with the Securities and Exchange Commission on March 31, 2025.
Item 1A. Risk Factors
The Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed on March 31, 2025, continue to represent the most significant risks to the Company’s future results of operations and financial condition.
Item 2. Unregistered Sales of Equity Securities
There were no unregistered sales of equity securities not previously disclosed.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the quarter ended September
30, 2025, no director or officer
Item 6. Exhibit
| 19 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| KwikClick, Inc. | ||
| By: | /s/ Fred Cooper | |
| Fred Cooper | ||
| Chief Executive Officer | ||
| Principal Executive Officer | ||
| Date: November 14, 2025 | ||
| By: | /s/ Jeffrey Yates | |
| Jeffrey Yates | ||
| Principal Financial Officer | ||
| Date: November 14, 2025 | ||