10-Q: CyberloQ Reports Zero Revenue, Deepening Losses

CyberloQ Technologies, Inc. reported no revenue for the first half of 2025, with net losses widening and a significant decline in cash, raising substantial doubt about its ability to continue as a going concern.

Summary

• CyberloQ Technologies, Inc. (CLOQ) is a development-stage technology company focused on fraud prevention (CyberloQ) and credit management (TurnScor).
• The company reported zero revenue for the three and six months ended June 30, 2025, a decrease from $15,000 in license fees for the six months ended June 30, 2024.
• Net loss for the six months ended June 30, 2025, increased to $(584,133) from $(464,796) in the prior year period.
• Total operating expenses rose to $430,262 for the six months ended June 30, 2025, up from $373,055 in the same period last year, primarily due to increased officers' compensation and computer/internet expenses.
• Cash and equivalents decreased significantly to $86,454 as of June 30, 2025, from $282,866 at December 31, 2024.
• Total liabilities increased to $3,354,405 as of June 30, 2025, from $2,831,229 at December 31, 2024, driven by an increase in convertible debt and accrued interest.
• The accumulated deficit grew to $(9,216,018) as of June 30, 2025.
• Management explicitly stated substantial doubt about the company's ability to continue as a going concern.
• The company continues to invest in its CyberloQ platform, capitalizing $291,200 in development costs during the first six months of 2025.
• A new class of stock, Series B Convertible Preferred Stock, was created on May 29, 2025, with no voting rights and conversion to common stock upon a company sale.

Sentiment

Score: 2

Explanation: The company reported zero revenue, increased losses, a significant decline in cash, and explicitly stated going concern doubt. This indicates severe financial distress and high reliance on external funding without a clear path to profitability, leading to a very negative outlook.

Positives

• Continued investment in product development, with $291,200 capitalized for the CyberloQ platform, $6,745 for website development, and $21,497 for patents during the first half of 2025.
• The CyberloQ platform has been successfully integrated into the banking ecosystem, with updated infrastructure and UI/UX.
• Management believes the multi-purpose functionality of CyberloQ (banking, healthcare PII, corporate databases) and its White Labeling capability provide a distinct market advantage.
• The company is not in default on any financing arrangements at this time.

Negatives

• Zero revenue reported for the six months ended June 30, 2025, a significant decline from $15,000 in the prior year period due to the termination of a services agreement with QRails, Inc.
• Net loss increased to $(584,133) for the six months ended June 30, 2025, compared to $(464,796) for the same period in 2024.
• Cash and equivalents decreased by approximately 69% to $86,454 as of June 30, 2025, from $282,866 at December 31, 2024.
• Total liabilities increased by over $523,000 to $3,354,405, primarily due to increased convertible debt and accrued interest.
• The accumulated deficit deepened to $(9,216,018), indicating a history of significant losses.
• Management explicitly stated substantial doubt about the company's ability to continue as a going concern.
• Material weaknesses in internal controls were identified, including a lack of segregation of duties and formal written policies and procedures for financial close and reporting.
• Officers' compensation increased to $226,000 for the six months ended June 30, 2025, from $122,500 in the prior year, including a bonus, despite zero revenue.

Risks

• History of losses, accumulated deficits, and negative operating cash flows, raising substantial doubt about the ability to continue as a going concern.
• Limited operating history, making it difficult to evaluate future prospects.
• Intense competition from companies with significantly greater financial, technical, marketing, and other resources (e.g., Wells Fargo, Discover Card, Ondot Systems).
• Potential for increased costs, decreased revenue, or reputational damage in the event of a cyber-attack, given the handling of sensitive customer data.
• Reliance on the ability to attract and retain key personnel.
• Inability to attract and retain a large customer base for its products.
• Challenges in protecting and defending intellectual property rights.
• Exposure to environmental and governmental regulations.
• Material weaknesses in internal controls over financial reporting, including lack of segregation of duties and formal policies.

Future Outlook

The company anticipates further losses in the development of its business and will be dependent on additional investment capital to fund operating expenses for the near future. It intends to position itself to raise additional funds through the capital markets and does not foresee a significant decrease in operating expenses for the remainder of 2025. Continued operations are reliant on the ability to raise additional capital unless operational revenue begins.

Management Comments

• "Management anticipates that the Company will be dependent, for the near future, on additional 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."
• "Unless the Company begins to generate operational revenue, it will be reliant on its ability to raise additional capital in order to continue its operations."
• "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."
• "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."

Industry Context

The company operates in the highly competitive fraud prevention and credit management technology sectors. Its CyberloQ platform offers multi-factor authentication for banking, healthcare PII, and corporate databases, while TurnScor provides web-based credit monitoring. The industry includes larger, established players such as Wells Fargo, Discover Card, and Ondot Systems, which offer similar card security features. The company aims to differentiate itself through CyberloQ's multi-purpose functionality and white-labeling capabilities.

Comparison to Industry Standards

• Wells Fargo has introduced an on/off feature for their customers' cards.
• Discover Card offers 'Freeze It' functionality for card security.
• Ondot Systems has been operating in the mobile card security space for a considerable time.
• CyberloQ aims to differentiate with its multi-purpose functionality, applicable to banking, healthcare PII protection, and corporate database security via geo-fencing, along with the ability to White Label the technology for marketing partners.

Corporate Governance

Legal Proceedings

• Not currently a party to any legal or administrative proceedings.
• Previous litigation, Mark Carten v. CyberloQ Technologies, Inc., related to a separation agreement, was dismissed without prejudice on February 13, 2024, and is no longer pending.

Related Party Transactions

• Notes payable to stockholders: $35,000 as of June 30, 2025.
• Convertible debt stockholders: $2,540,000 as of June 30, 2025.
• Notes payable related parties: $150,000 as of June 30, 2025, with a fifth loan modification agreement signed on May 6, 2025, for quarterly interest payments.
• Commission agreements with a shareholder and director (2.5% of gross revenue) and two sales managers (1% each of gross revenue), payable quarterly upon receipt of customer revenues.
• The President of the company entered into a $25,000 convertible note payable on July 8, 2025, with zero interest and a conversion rate of $0.05.
• A shareholder entered into a $100,000 convertible note payable on July 30, 2025, with 12% interest and a conversion rate of $0.05.

Stakeholder Impact

• Shareholders face significant dilution risk from ongoing and future convertible debt and common stock issuances for capital raises. The deepening accumulated deficit and explicit going concern warning pose substantial risk to investment value. The creation of Series B Preferred Stock with no voting rights and no liquidation preference over common stock could further impact common shareholders' rights in a sale scenario.
• Employees (currently only two full-time: President and VP) have incentive stock options tied to revenue milestones that have not been achieved, impacting potential compensation.
• Creditors, particularly those holding convertible debt and related party notes, face elevated risk given the company's lack of revenue, increasing losses, and reliance on future capital raises for repayment.

Next Steps

• Continue development and integration of the CyberloQ platform.
• Market TurnScor to institutional clients in conjunction with CyberloQ.
• Raise additional capital through capital markets to fund ongoing operations.
• Address identified material weaknesses in internal controls by adding sufficient staff and formalizing processes as the company grows.

Key Dates

Recommendation

The company is in a precarious financial position, marked by zero revenue, escalating losses, and a rapidly dwindling cash balance, leading to an explicit 'going concern' warning. Its continued operations are entirely dependent on securing additional capital, which carries significant dilution risk for existing shareholders. The identified material weaknesses in internal controls further compound the operational and financial risks. Given the severe financial distress and lack of a clear path to profitability, the stock represents a highly speculative and high-risk investment.

Keywords

Cybersecurity, Fraud Prevention, FinTech, Multi-Factor Authentication, Credit Management, Software Development, Development Stage Company, Going Concern, SEC Filing, 10-Q, CyberloQ, TurnScor