UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For quarterly period ended
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Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol | Name of each exchange on which registered |
| OTCQB |
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| Large Accelerated Filer ☐ | Accelerated Filer ☐ | |
| Small Reporting Company | ||
| Emerging Growth Company |
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As of May 15, 2025 the issuer had shares of common stock issued and outstanding.
KWIKCLICK, INC.
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KWIKCLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Total current assets | ||||||||
| Other receivable | ||||||||
| Equipment, net | ||||||||
| Intellectual property, net | ||||||||
| Right of use asset | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Lease obligation | ||||||||
| Deferred revenue | ||||||||
| Related party loans | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Lease obligation, net of current portion | ||||||||
| Total liabilities | ||||||||
| Stockholders' deficit: | ||||||||
| Preferred stock, $ par value; shares authorized and issued and outstanding | ||||||||
| Common stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
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KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Brand services | $ | $ | ||||||
| Custom design services | ||||||||
| Net revenue | ||||||||
| Operating costs and expenses: | ||||||||
| Cost of Sales | ||||||||
| Management and payroll | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Total operating costs and expenses | ||||||||
| Other income (expense) | ||||||||
| Interest expense - related party | ( | ) | ( | ) | ||||
| Gain on liability settlement | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| 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.
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KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(Unaudited)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock based compensation | – | |||||||||||||||||||
| Net Loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Balance December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock based compensation | – | |||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
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KWIKCLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Depreciation and amortization | ||||||||
| Amortization of right-to-use assets | ||||||||
| Stock based compensation | ||||||||
| Gain on liability settlement | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Other receivable | ( | ) | ||||||
| Security deposit | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ||||||
| Lease obligation | ( | ) | ( | ) | ||||
| Deferred revenue | ||||||||
| Accrued interest - related party | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from shareholders loans | ||||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
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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 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-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.
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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 March 31, 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 does not carry any of the seller’s inventory. The Company’s revenue is based on a percentage of the transaction value between the third-party seller and buyer and can be subject to minimum monthly fees.
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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 is generally when the transaction is processed on the Company’s software platform as that is the point-in-time the promise to facilitate the transaction has been completed. It is the responsibility of the third-party seller to ship products to the buyer.
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. 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
The Company records any 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 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:
| Schedule of contract assets/liabilities | March 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||
| Accounts receivable | $ | $ | $ | |||||||||
| Deferred revenue | ||||||||||||
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 months ended March 31, 2025 and 2024 the Company did not incur material sales commissions.
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
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 financial statements.
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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 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.
NOTE 3. RELATED PARTY TRANSACTIONS
The Company’s related party loans consist of the following:
March 31, 2025 | December 31, 2024 | |||||||
| Related party note payable with a nominal interest rate of 10% per annum due on demand | $ | $ | ||||||
| Accrued interest | ||||||||
| Total related party loans | $ | $ | ||||||
During the three months ended March 31, 2025 and 2024,
the Company recognized total interest expense of $
NOTE 4. STOCKHOLDERS' DEFICIT
The Company did not issue any equity or equity-linked
instruments during the three months ended March 31, 2025. For the three months ended March 31, 2025 and 2024, the Company recognized stock-based
compensation totaling $ and $, respectively. All previously issued equity and equity-linked awards were fully vested as of March
31, 2025. As of March 31, 2025, the outstanding equity awards, consisting of SARs and
As of March 31, 2025, the Company has committed shares of stock for the fulfillment of the 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 undiscounted cash payment obligations 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 | $ |
The Company recognized lease expense associated
with its non-cancelable operating lease totaling $
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NOTE 6. 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 $1.3 million at March 31, 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 consolidated statements of financial position, results of operations, or cash flows as of and for the three months ended March 31, 2025.
NOTE 7. SEGMENT INFORMATION
The Company has one 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 all the custom design services revenue recognized during the three months ended March 31, 2025. No other material revenue was recognized from a single customer for the three months ended March 31, 2025 and 2024.
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 March 31:
| 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.
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NOTE 8. REVERSE STOCK SPLIT
On March 5, 2025, by consent of approximately 54.83% of its outstanding voting stock, the Company’s Certificate of Incorporation was amended to reduce the number of shares of common stock authorized for issuance from 400,000,000 to 50,000,000 with no adjustment to the par value of $0.0001 per share. In conjunction with the Amendment, the shareholders approved recapitalization plan involving a reverse stock split on a 1-for-40 basis, whereby shareholders will receive one share of Common Stock for every 40 shares currently held. The reverse split is to be effected no later than December 31, 2025. Fractional shares will not be issued in connection with the reverse split; any fractional shares will be rounded down to the nearest whole share. As of March 31, 2025, the reverse stock split had been approved by shareholders, but not yet effected.
The following provides an unaudited pro forma presentation of the impact of the approved 1-for-40 reverse stock split as if it had taken place at the beginning of the earliest period presented in the accompanying consolidated financial statements:
| Proforma information | ||||||||||||||||||||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||
As Reported | Pro Forma Adjustment | Unaudited Pro Forma | As Reported | Pro Forma Adjustment | Unaudited Pro Forma | |||||||||||||||||||||||
| Balance Sheets: | ||||||||||||||||||||||||||||
| 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 pre-reverse split; 50,000,000 shares authorized post-split | ( | ) | A | ( | ) | A | ||||||||||||||||||||||
| Additional paid-in-capital | A | A | ||||||||||||||||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Total stockholders' deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| A) | To adjust the par value of the stock outstanding on March 31, 2025 and December 31, 2024 on a pre-split basis of 155,648,705 shares outstanding to 3,891,218 on a post-split basis. |
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||
As Reported | Pro Forma Adjustment | Unaudited Pro Forma | As Reported | Pro Forma Adjustment | Unaudited Pro Forma | |||||||||||||||||||
| Statements of Operations: | ||||||||||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||
| Weighted average shares outstanding - basic and diluted | ( | ) | ( | ) | ||||||||||||||||||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
Additionally, on a post-split adjusted basis the Company would have 231,355 SARs and 40,062 warrants with a weighted average exercise of $13.20 and $1.60, respectively, outstanding convertible into shares of common stock at March 31, 2025.
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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.
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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. 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.
Comparison of operations for the Three Months ended March 31, 2025 and March 31, 2024
Revenues
During the three months ended March 31, 2025 and 2024, we recognized net revenues of $206,870 and $30,891, respectively. The $175,979 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 part of 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 $67,258 to $69,023 for the three months ended March 31, 2025 as compared to $1,765 for the three months ended March 31, 2024. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to 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.
Other Operating Expenses
During the three months ended March 31, 2025 and 2024, we incurred total other operating expenses of $315,470 and $748,291 respectively. The majority of the $432,821 decrease resulted from non-recurring stock-based compensation of $406,772 recognized in the three months ended March 31, 2024. Additionally, we have reduced our research and development costs as we have been able to focus on implementing and operating our software platform.
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.
Other Income (Expense)
During the three months ended March 31, 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 three months ended March 31, 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 $62,672 from $47,211. 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.
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Liquidity and capital resources
At March 31, 2025, we had a working capital deficit of $3,638,896. Approximately 78% of our liabilities as of March 31, 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.
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 March 31, 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 March 31, 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.
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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 March
31, 2025, no director or officer
Item 6. Exhibit
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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, 2025 | ||
| By: | /s/ Jeffrey Yates | |
| Jeffrey Yates | ||
| Principal Financial Officer | ||
| Date: May 15, 2025 | ||
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