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Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For quarterly period ended March 31, 2024

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 000-56349

 

KwikClick, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation or organization)

 

95-4463033

(I.R.S. Employer Identification No.)

 

585 West 500 South, Suite 130

Bountiful, Utah

(Address of principal executive offices)

 

84010

(Zip Code)

 

Registrant’s telephone number, including area code:

(385) 301-2792

 

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
Common Stock, par value $0.0001 per share KWIK 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. ☒ Yes ☐ No

 

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). ☒ Yes ☐ No

 

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 ☐
  Non-Accelerated Filer ☒ Small 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 ☒  No

 

As of May 15, 2024 the issuer had 153,148,705 shares of common stock issued and outstanding.

 

   

 

 

KWIKCLICK, INC.

TABLE OF CONTENTS

 

 

    Page
PART I FINANCIAL INFORMATION  
Item 1. Financial Statements 3
  Balance Sheets, March 31, 2024 (Unaudited) and December 31, 2023 3
  Statements of Operations for the Three Months ended March 31, 2023 and 2022 (Unaudited) 4
  Statements of Stockholders’ Equity (Deficit) for the Three Months ended March 31, 2023 and 2022 (Unaudited) 5
  Statements of Cash Flows for the Three Months ended March 31, 2023 and 2022 (Unaudited) 6
  Notes to Financial Statements 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 13
     
PART II. OTHER INFORMATION  
Item 1. Legal Proceedings 14
Item 1A. Risk Factors 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Mine Safety Disclosures 14
Item 5. Other Information 14
Item 6. Exhibits 15
SIGNATURES   16

 

 

 

 2 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

KWIKCLICK, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   March 31   December 31, 
   2024   2023 
ASSETS          
Current assets:          
Cash and cash equivalents  $30,025   $64,186 
Accounts receivable, net   14,043    16,503 
Total current assets   44,068    80,689 
           
Equipment, net   4,239    4,515 
Intellectual property, net   1,383,277    1,406,491 
Right to use asset   49,883    64,194 
Total assets  $1,481,467   $1,555,889 
           
LIABILITIES AND STOCKHOLDERS' (DEFICIT)          
Current liabilities:          
Accounts payable  $755,074   $888,513 
Accrued liabilities   93,615    120,859 
Lease obligation   51,411    55,852 
Related party loans   2,184,925    1,754,445 
Total current liabilities   3,085,025    2,819,669 
Long-term liabilities:          
Lease obligation, net of current portion   –    10,174 
Total liabilities   3,085,025    2,829,843 
           
Stockholders' (deficit)          
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and none issued and outstanding   –    – 
Common stock, $0.0001 par value; 400,000,000 shares authorized and 153,148,705 shares issued and outstanding at March 31, 2024 and December 31, 2023   15,316    15,316 
Additional paid-in-capital   9,520,032    9,113,260 
Accumulated deficit   (11,138,906)   (10,402,530)
Total stockholders' (deficit)   (1,603,558)   (1,273,954)
Total liabilities and stockholders' (deficit)  $1,481,467   $1,555,889 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 3 

 

 

KWIKCLICK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

           
   For the Three Months Ended 
   March 31, 
    2024    2023 
           
Revenues:          
Brand Services  $30,891   $85,317 
           
Operating expenses:          
Cost of Sales   1,765    30,159 
Management and payroll   514,419    283,038 
Research and development   86,917    197,168 
General and administrative   146,955    432,039 
Total operating expenses   750,056    942,404 
           
Other income (expenses)          
Interest expense - related party   (47,211)   (284)
Gain on liability settlement   30,000    – 
Loss before income taxes   (736,376)   (857,371)
Provision for (benefit from) income taxes   –    – 
           
Net loss  $(736,376)  $(857,371)
           
Basic and diluted loss per share  $(0.00)  $(0.01)
           
Weighted average shares outstanding - basic and diluted   153,148,705    149,840,384 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 4 

 

 

KWIKCLICK, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

 

                                         
                   Additional           Total 
   Preferred Stock   Common Stock   Paid-in   Subscription   Accumulated   Stockholders'
Equity		 
   Shares   Amount   Shares   Amount   Capital   Receivable   Deficit   (Deficit) 
Balance December 31, 2023   –   $–    153,148,705   $15,316   $9,113,260   $–   $(10,402,530)  $(1,273,954)
Stock appreciation rights issued for services   –    –    –    –    406,772    –    –    406,772 
Net Loss   –    –    –    –    –    –    (736,376)   (736,376)
Balance March 31, 2024   –   $–    153,148,705   $15,316   $9,520,032   $–   $(11,138,906)  $(1,603,558)
                                         
                                         
                                         
Balance December 31, 2022   –   $–    149,442,605   $14,945   $7,430,721   $(520,261)  $(6,499,451)  $425,954 
Capital Contribution   –    –    –    –    4,010    –    –    4,010 
Issuance of common stock for services   –    –    600,000    60    59,940    –    –    60,000 
Proceeds from subscription receivable   –    –    –    –    –    520,261    –    520,261 
Net loss   –    –    –    –    –    –    (857,371)   (857,371)
Balance March 31, 2023   –   $–    150,042,605   $15,005   $7,494,671   $–   $(7,356,822)  $152,854 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 5 

 

 

KWIKCLICK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

           
   For the three Months Ended 
   March 31,   March 31, 
   2024   2023 
Cash flows from operating activities:          
Net loss  $(736,376)  $(857,371)
Depreciation and amortization   23,490    18,340 
Stock based compensation   406,772    60,000 
Gain on liability settlement   (30,000)   – 
Changes in operating assets and liabilities:          
Accounts receivable   2,460    – 
Operating leases   (304)   154 
Accrued interest - related party   46,391    – 
Accrued liabilities   (27,244)   (3,864)
Accounts payable   (103,439)   149,663 
Net cash used in operating activities   (418,250)   (633,078)
           
Cash flows from investing activities:          
Purchase of intellectual property   –    (248,973)
Net cash used in investing activities   –    (248,973)
           
Cash flows from financing activities:          
Proceeds from related party loans   384,089    129,739 
Proceeds from common stock issuable   –    300,000 
Proceeds from Subscription Receivable   –    520,261 
Net cash provided by financing activities   384,089    950,000 
           
Net increase (decrease) in cash and cash equivalents   (34,161)   67,949 
Cash and cash equivalents at beginning of period   64,186    30,583 
Cash and cash equivalents at end of period  $30,025   $98,532 
           
Cash paid for income taxes  $–   $– 
Cash paid for interest  $–   $– 
           
Non-Cash Supplemental Disclosures          
Capital contribution for settlement of stock issuable  $–   $4,010 

 

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 6 

 

 

KWIKCLICK, INC.

NOTES TO 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, and referral software platform.

 

Going Concern

 

Since the commencement of the Kwik platform, the Company has accumulated a deficit of $11,138,906 and working capital deficit of $3,040,957 as of March 31, 2024. 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, 2023.

 

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

 

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.

 

Principles of Consolidation

 

The accompanying 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.

 

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 not have any cash equivalents as of March 31, 2024 or December 31, 2023.

 

 

 

 7 

 

 

Loss Per Share

 

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 or if-converted method as applicable. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive.

 

Research and Development

 

Research and development costs primarily consist of internal and external engineering staff wages, coding, and related on-going activities associated with upgrading and enhancing the Company’s internally developed software platform. Research and development costs that do not meet the criteria for capitalization, including those costs determined to be probable to not result in additional functionality, are expensed as incurred. For the three months ended March 31, 2024 and 2023 the Company did not capitalize any research and development costs.

 

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, including product costs for goods not owned and indirect taxes.

 

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.

 

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 does not incur material costs in obtaining third party seller contracts.

 

Applicable sales commissions paid in connection with contracts exceeding one year are capitalized and amortized over the contract term. During the three months ended March 31, 2024 and 2023, the Company did not incur material sales commissions.

 

 

 

 8 

 

 

Return Allowances

 

The fees earned by the Company are subject to returns under similar terms as set by the third-party services using the Company’s software platform. The Company does not assume responsibility for refund or replacement of product costs. Return allowances are estimated using historical experience. During the three months ended March 31, 2024 and 2023, the Company did not incur material returns.

 

Reclassification

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications are not material and had no effect on the previously reported financial position, results of operations, or cash flows.

 

NOTE 3. STOCKHOLDERS' EQUITY

 

During the quarter ended March 31, 2024 the Company issued 20,000 fully vested stock appreciation rights (“SARs”), to purchase shares of common stock based on the fair market value in excess of the base price on the date of exercise for a period of seven years.

  

The Company estimated the fair value of the SARs on the grant date using a Black-Scholes options pricing model using the quoted market price on the grant date; exercise price of $0.44 per share; expected volatility of approximately 80%; the contractual term of seven years; and a risk-free interest rate of 3.0%.

 

During the three months ended March 31, 2024 and 2023, the Company recognized management and payroll expense totaling $406,772 and $60,000, respectively, associated with all outstanding equity and equity-linked instruments.

 

NOTE 4. RELATED PARTY LOANS

 

The Company’s related party loans consist of the following:

Schedule of Related Party Loans          
   March 31, 2024   December 31, 2023 
Related party note payable with a nominal interest rate of 10% per annum due on demand  $2,064,494   $1,680,405 
Accrued interest   120,431    74,040 
Total related party note payable  $2,184,925   $1,754,445 

 

During the three months ended March 31, 2024 and 2023 the Company recognized interest expense of $47,211 and $284, respectively.

 

 

 

 9 

 

 

NOTE 5. COMMITMENTS AND CONTINGENCIES

 

On May 31, 2023, NAI Liquidation Trust, the successor in interest to the defunct NewAge, Inc. 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 $1.4 million at March 31, 2024 and may be forced to discontinue its on-going fee-based sales platform. The litigation is in its early stages, an estimate of reasonably possible loss cannot be made at this time. As such, there has been no further adjustment to the accompanying consolidated statements of financial position, results of operations, or cash flows as of and for the three months ended March 31, 2024.

 

NOTE 6. SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the consolidated financial statements were issued and has determined that there are no material events that need to be disclosed, except as follows:

 

Subsequent to March 31, 2024, Mr. Cooper provided additional working capital advances totaling $79,092 to the Company. The balance of working capital advances through May 15, 2024 totaled $2,144,396. 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 10 

 

 

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 April 15, 2024. 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 April 15, 2024, 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.

 

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, which connects them to promoters, influencers, and customers. When the Brand is paid for the consumer purchases through the Kwik platform, the Brand pays an incentive budget to Kwik. Kwik receives the entire incentive budget as revenue for generating the sales through its platform, and recognizes cost of sales upon calculation and payment of the commissions paid to the wave of affiliates.

 

 

 

 11 

 

 

Comparison of operations for the three and Three Months ended March 31, 2024 to March 31, 2023

 

Revenues

 

During the three months ended March 31, 2024 and 2023, we recognized net revenues of $30,891 and $85,317, respectively. The decrease from the prior comparable three -month period of approximately 64% was the result of lower brand product sales on our platform. Management anticipates that Brand Services revenues will increase as we continue to develop our KWIK services, add vendors, and add users. The Company is currently in negotiations with several new brands, influencers, and influencer agencies, some of which have executed contracts, or who anticipate joining the platform within the next three to six months.

 

Cost of Sales

 

Our costs of revenue, totaling $1,765 and $30,159, respectively, for the three months ended March 31, 2024 and 2023, primarily consists of marketing incentives and services for products that are sold on brands using the Kwik platform. Additionally, costs of revenue decreased due to a one-time reversal of estimated commissions at December 31, 2023. We expect the costs of revenue to fluctuate consistently with our sales volume and future product mix which is currently unpredictable based on the early stages of the KWIK platform.

 

Other Operating Expenses

 

During the Three Months ended March 31, 2024 and 2023, we incurred total other operating expenses of $748,291 and $912,245, respectively. The majority of the approximate $200,000 decrease resulted from a decrease in headcount and corresponding management and payroll costs, marketing expenses, and declines in our research and development activities. We do not expect to see substantial increases in our research and development activities until we are able to generate the necessary funding from operations and / or the receipt of additional capital investment.

 

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, vendor acquisition, cybersecurity, and user acquisition. We anticipate that much of this work will be done by outside consultants. In the coming 12 months, we anticipate increasing our promotional and marketing activities which will increase our operating expenses in our efforts to increase our product sales and user volumes.

 

Liquidity and capital resources

 

At March 31, 2024, we had a working capital deficit of $3,040,957. Approximately 71% of our liabilities as of March 31, 2024 are due to our majority shareholder, Mr. Fred Cooper. Mr. Cooper has provided $2,064,494 (exclusive of accrued interest of $120,431) in working capital advances through March 31, 2024 and an additional $79,092 through the date of this report. These advances 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.

 

 

 

 12 

 

 

While the Company continues to incur negative operational cash flows, it does not expect to pursue significant investing activities with the exception of the costs defend and maintain its patents.

 

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.

 

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 April 15, 2024.

 

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 March 31, 2024 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 March 31, 2024, 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.

 

 

 

 13 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

On May 31, 2023, NAI Liquidation Trust, the successor in interest to the defunct NewAge, Inc. 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 $1.5 million at March 31, 2024 and may be forced to discontinue its on-going fee-based sales platform. The litigation is in its early stages, an estimate of reasonably possible loss cannot be made at this time. As such, there has been no further adjustment to the accompanying consolidated statements of financial position, results of operations, or cash flows as of and for the Three Months ended March 31, 2024.

 

Item 1A. Risk Factors

 

The Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed on April 15, 2024, 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 March 31, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

 

 

 

 14 

 

 

Item 6. Exhibit

 

Exhibit No.   Description
     
This Form 10-Q
 
31.1   Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 executed by Fred Cooper
31.2   Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 executed by Jeffrey Yates
32.1   Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed by Fred Cooper
32.2   Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed by Jeffrey Yates
     
101.INS   XBRL Instance Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase
101.LAB   XBRL Taxonomy Extension Label Linkbase
101.DEF   XBRL Taxonomy Extension Definition Linkbase
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
101.SCH   XBRL Taxonomy Extension Schema

 

 

 

 

 

 

 

 

 

 

 

 

 15 

 

 

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: May 15, 2024  
   
By: /s/ Jeffrey Yates  
Jeffrey Yates  
Principal Financial Officer  
Date: May 15, 2024  

 

 

 

  

 16 

nullnullnull

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of KwikClick, Inc., a Delaware corporation (the “Company”), on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey Yates, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 15, 2024

   

/s/ Jeffrey Yates                             

Jeffrey Yates

Chief Financial Officer (Principal Financial Officer)

 

This certification accompanies each report of the Company on Form 10-Q and Form 10-K pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

 

A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

 

 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 15, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 000-56349  
Entity Registrant Name KwikClick, Inc.  
Entity Central Index Key 0001884164  
Entity Tax Identification Number 95-4463033  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 585 West 500 South  
Entity Address, Address Line Two Suite 130  
Entity Address, City or Town Bountiful  
Entity Address, State or Province UT  
Entity Address, Postal Zip Code 84010  
City Area Code 385  
Local Phone Number 301-2792  
Trading Symbol KWIK  
Title of 12(g) Security Common Stock, par value $0.0001 per share  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   153,148,705
v3.24.1.1.u2
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 30,025 $ 64,186
Accounts receivable, net 14,043 16,503
Total current assets 44,068 80,689
Equipment, net 4,239 4,515
Intellectual property, net 1,383,277 1,406,491
Right to use asset 49,883 64,194
Total assets 1,481,467 1,555,889
Current liabilities:    
Accounts payable 755,074 888,513
Accrued liabilities 93,615 120,859
Lease obligation 51,411 55,852
Related party loans 2,184,925 1,754,445
Total current liabilities 3,085,025 2,819,669
Long-term liabilities:    
Lease obligation, net of current portion 0 10,174
Total liabilities 3,085,025 2,829,843
Stockholders' (deficit)    
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and none issued and outstanding 0 0
Common stock, $0.0001 par value; 400,000,000 shares authorized and 153,148,705 shares issued and outstanding at March 31, 2024 and December 31, 2023 15,316 15,316
Additional paid-in-capital 9,520,032 9,113,260
Accumulated deficit (11,138,906) (10,402,530)
Total stockholders' (deficit) (1,603,558) (1,273,954)
Total liabilities and stockholders' (deficit) $ 1,481,467 $ 1,555,889
v3.24.1.1.u2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenues:    
Brand Services $ 30,891 $ 85,317
Operating expenses:    
Cost of Sales 1,765 30,159
Management and payroll 514,419 283,038
Research and development 86,917 197,168
General and administrative 146,955 432,039
Total operating expenses 750,056 942,404
Other income (expenses)    
Interest expense - related party (47,211) (284)
Gain on liability settlement 30,000 0
Loss before income taxes (736,376) (857,371)
Provision for (benefit from) income taxes 0 0
Net loss $ (736,376) $ (857,371)
v3.24.1.1.u2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Basic loss per share $ (0.00) $ (0.01)
Diluted loss per share $ (0.00) $ (0.01)
Weighted average shares outstanding - basic 153,148,705 149,840,384
Weighted average shares outstanding - diluted 153,148,705 149,840,384
v3.24.1.1.u2
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Subscription Receivable [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2022 $ 0 $ 14,945 $ 7,430,721 $ (520,261) $ (6,499,451) $ 425,954
Shares, Outstanding, Beginning Balance at Dec. 31, 2022 0 149,442,605        
Net loss (857,371) (857,371)
Capital Contribution 4,010 4,010
Issuance of common stock for services $ 60 59,940 60,000
Stock Issued During Period, Shares, Issued for Services   600,000        
Proceeds from subscription receivable 520,261 520,261
Ending balance, value at Mar. 31, 2023 $ 0 $ 15,005 7,494,671 0 (7,356,822) 152,854
Shares, Outstanding, Ending Balance at Mar. 31, 2023 0 150,042,605        
Beginning balance, value at Dec. 31, 2023 $ 0 $ 15,316 9,113,260 0 (10,402,530) (1,273,954)
Shares, Outstanding, Beginning Balance at Dec. 31, 2023 0 153,148,705        
Stock appreciation rights issued for services 406,772 406,772
Net loss (736,376) (736,376)
Ending balance, value at Mar. 31, 2024 $ 0 $ 15,316 $ 9,520,032 $ 0 $ (11,138,906) $ (1,603,558)
Shares, Outstanding, Ending Balance at Mar. 31, 2024 0 153,148,705        
v3.24.1.1.u2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities:    
Net loss $ (736,376) $ (857,371)
Depreciation and amortization 23,490 18,340
Stock based compensation 406,772 60,000
Gain on liability settlement (30,000) 0
Changes in operating assets and liabilities:    
Accounts receivable 2,460 0
Operating leases (304) 154
Accrued interest - related party 46,391 0
Accrued liabilities (27,244) (3,864)
Accounts payable (103,439) 149,663
Net cash used in operating activities (418,250) (633,078)
Cash flows from investing activities:    
Purchase of intellectual property 0 (248,973)
Net cash used in investing activities 0 (248,973)
Cash flows from financing activities:    
Proceeds from related party loans 384,089 129,739
Proceeds from common stock issuable 0 300,000
Proceeds from Subscription Receivable 0 520,261
Net cash provided by financing activities 384,089 950,000
Net increase (decrease) in cash and cash equivalents (34,161) 67,949
Cash and cash equivalents at beginning of period 64,186 30,583
Cash and cash equivalents at end of period 30,025 98,532
Cash paid for income taxes 0 0
Cash paid for interest 0 0
Non-Cash Supplemental Disclosures    
Capital contribution for settlement of stock issuable $ 0 $ 4,010
v3.24.1.1.u2
Pay vs Performance Disclosure - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure [Table]    
Net Income (Loss) $ (736,376) $ (857,371)
v3.24.1.1.u2
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual [Table]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.1.u2
BUSINESS
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BUSINESS

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, and referral software platform.

 

Going Concern

 

Since the commencement of the Kwik platform, the Company has accumulated a deficit of $11,138,906 and working capital deficit of $3,040,957 as of March 31, 2024. 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.

 
v3.24.1.1.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, 2023.

 

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

 

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.

 

Principles of Consolidation

 

The accompanying 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.

 

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 not have any cash equivalents as of March 31, 2024 or December 31, 2023.

 

Loss Per Share

 

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 or if-converted method as applicable. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive.

 

Research and Development

 

Research and development costs primarily consist of internal and external engineering staff wages, coding, and related on-going activities associated with upgrading and enhancing the Company’s internally developed software platform. Research and development costs that do not meet the criteria for capitalization, including those costs determined to be probable to not result in additional functionality, are expensed as incurred. For the three months ended March 31, 2024 and 2023 the Company did not capitalize any research and development costs.

 

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, including product costs for goods not owned and indirect taxes.

 

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.

 

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 does not incur material costs in obtaining third party seller contracts.

 

Applicable sales commissions paid in connection with contracts exceeding one year are capitalized and amortized over the contract term. During the three months ended March 31, 2024 and 2023, the Company did not incur material sales commissions.

 

Return Allowances

 

The fees earned by the Company are subject to returns under similar terms as set by the third-party services using the Company’s software platform. The Company does not assume responsibility for refund or replacement of product costs. Return allowances are estimated using historical experience. During the three months ended March 31, 2024 and 2023, the Company did not incur material returns.

 

Reclassification

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications are not material and had no effect on the previously reported financial position, results of operations, or cash flows.

 
v3.24.1.1.u2
STOCKHOLDERS' EQUITY
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 3. STOCKHOLDERS' EQUITY

 

During the quarter ended March 31, 2024 the Company issued 20,000 fully vested stock appreciation rights (“SARs”), to purchase shares of common stock based on the fair market value in excess of the base price on the date of exercise for a period of seven years.

  

The Company estimated the fair value of the SARs on the grant date using a Black-Scholes options pricing model using the quoted market price on the grant date; exercise price of $0.44 per share; expected volatility of approximately 80%; the contractual term of seven years; and a risk-free interest rate of 3.0%.

 

During the three months ended March 31, 2024 and 2023, the Company recognized management and payroll expense totaling $406,772 and $60,000, respectively, associated with all outstanding equity and equity-linked instruments.

 
v3.24.1.1.u2
RELATED PARTY LOANS
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
RELATED PARTY LOANS

NOTE 4. RELATED PARTY LOANS

 

The Company’s related party loans consist of the following:

Schedule of Related Party Loans          
   March 31, 2024   December 31, 2023 
Related party note payable with a nominal interest rate of 10% per annum due on demand  $2,064,494   $1,680,405 
Accrued interest   120,431    74,040 
Total related party note payable  $2,184,925   $1,754,445 

 

During the three months ended March 31, 2024 and 2023 the Company recognized interest expense of $47,211 and $284, respectively.

 
v3.24.1.1.u2
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 5. COMMITMENTS AND CONTINGENCIES

 

On May 31, 2023, NAI Liquidation Trust, the successor in interest to the defunct NewAge, Inc. 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 $1.4 million at March 31, 2024 and may be forced to discontinue its on-going fee-based sales platform. The litigation is in its early stages, an estimate of reasonably possible loss cannot be made at this time. As such, there has been no further adjustment to the accompanying consolidated statements of financial position, results of operations, or cash flows as of and for the three months ended March 31, 2024.

 
v3.24.1.1.u2
SUBSEQUENT EVENTS
 3 Months Ended
Mar. 31, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 6. SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the consolidated financial statements were issued and has determined that there are no material events that need to be disclosed, except as follows:

 

Subsequent to March 31, 2024, Mr. Cooper provided additional working capital advances totaling $79,092 to the Company. The balance of working capital advances through May 15, 2024 totaled $2,144,396. 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.

 
v3.24.1.1.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation

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, 2023.

 

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

 
Use of Estimates

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.

 
Principles of Consolidation

Principles of Consolidation

 

The accompanying 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.

 
Cash and Cash Equivalents

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 not have any cash equivalents as of March 31, 2024 or December 31, 2023.

 
Loss Per Share

Loss Per Share

 

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 or if-converted method as applicable. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive.

 
Research and Development

Research and Development

 

Research and development costs primarily consist of internal and external engineering staff wages, coding, and related on-going activities associated with upgrading and enhancing the Company’s internally developed software platform. Research and development costs that do not meet the criteria for capitalization, including those costs determined to be probable to not result in additional functionality, are expensed as incurred. For the three months ended March 31, 2024 and 2023 the Company did not capitalize any research and development costs.

 
Revenue Recognition

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, including product costs for goods not owned and indirect taxes.

 

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.

 

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 does not incur material costs in obtaining third party seller contracts.

 

Applicable sales commissions paid in connection with contracts exceeding one year are capitalized and amortized over the contract term. During the three months ended March 31, 2024 and 2023, the Company did not incur material sales commissions.

 
Return Allowances

Return Allowances

 

The fees earned by the Company are subject to returns under similar terms as set by the third-party services using the Company’s software platform. The Company does not assume responsibility for refund or replacement of product costs. Return allowances are estimated using historical experience. During the three months ended March 31, 2024 and 2023, the Company did not incur material returns.

 

Reclassification

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications are not material and had no effect on the previously reported financial position, results of operations, or cash flows.

 
v3.24.1.1.u2
RELATED PARTY LOANS (Tables)
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Schedule of Related Party Loans
Schedule of Related Party Loans          
   March 31, 2024   December 31, 2023 
Related party note payable with a nominal interest rate of 10% per annum due on demand  $2,064,494   $1,680,405 
Accrued interest   120,431    74,040 
Total related party note payable  $2,184,925   $1,754,445 
v3.24.1.1.u2
BUSINESS (Details Narrative) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Retained Earnings (Accumulated Deficit) $ 11,138,906 $ 10,402,530
Working capital deficit $ 3,040,957  
v3.24.1.1.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Accounting Policies [Abstract]      
Cash Equivalents, at Carrying Value $ 0   $ 0
Capitalized Computer Software, Gross 0 $ 0  
Sales Commissions and Fees 0 0  
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0 $ 0  
v3.24.1.1.u2
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Share-Based Payment Arrangement, Noncash Expense $ 406,772 $ 60,000
Fully vested SARs [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period 20,000  
v3.24.1.1.u2
RELATED PARTY LOANS (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Related Party Transaction [Line Items]    
Due to related parties $ 2,184,925 $ 1,754,445
Related Party Note Payable [Member]    
Related Party Transaction [Line Items]    
Due to related parties 2,064,494 1,680,405
Accrued Interest [Member]    
Related Party Transaction [Line Items]    
Due to related parties $ 120,431 $ 74,040
v3.24.1.1.u2
RELATED PARTY LOANS (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Related Party Transactions [Abstract]    
Interest expense $ 47,211 $ 284
KwikClick (QB) (USOTC:KWIK)
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