CLOQ 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, total assets were $1,842,701$2,525,110 compared to $1,458,565$1,842,701 in assets as of December 31, 2023.2024. The Company’s fixed fixed assets increased from $1,096,827$1,552,871 to $1,552,871$2,228,503 due to the capitalization of the CyberloQ Platform, website development and website development, whilepatents, the Company’s prepaid expense didand notdeposits change.increased from $6,964 to $34,620 due to paying draws on commissions. In addition, the Company’s cash assets were $261,987 as of December 31, 2025 as opposed to $282,866 as of December 31, 2024 as opposed to $307,174 as of December 31, 2023.2024.

As of December 31, 2024,2025, current liabilities were $2,831,229$4,160,391 compared to $1,021,359$2,800,867 in liabilities as of December 31, 2023.2024. This increase in the Company’s liabilities was due to an increase in the Company’s convertible debt of $1,662,141,$823,141, includingan $1,352,500 which was due to a changeincrease in accountingnote principal,payable-related party and shareholders of $125,000, an increase in accrued interest of $229,522,$277,222, and decreaseincrease in accounts payable and accrued expenses of $34,454.$134,161.

Net cash used in operating activities for 20242025 was $715,123$775,051 compared to net cash used in operating activities for 20232024 of $340,779.$715,123. Cash used by operating activities is driven by our net loss, which was approximately $37,078$138,437 lessmore than in 2023,2024, and adjusted by non-cash items items as well as changes in operating assets and liabilities. Non-cash adjustments , for 20242025 include stock compensation of $79,000$56,275,amortization of $1,454 and badloss debt on prepaids of $25,000.$4,849.

Net cash used by investing activities for 20242025 was $456,044$588,469 and was due to the Company capitalizing development costs for the CyberloQ platform as well as website development costs and patent costs.

Net cash provided by financing activities was $1,146,859$1,342,641 for 20242025 as compared to $1,449,250$1,146,859 for 2023.2024. Proceeds from convertible debt were were $876,859$903,141 in 20242025, and proceeds from notes payable – related party of $125,000 offset by payments on convertible debt of $80,000, as compared to $1,300,000$876,859 in proceeds from convertible debt with no offsetting payments for 2023.2024. Conversely, proceeds from common stock issuance were $394,500 for 2025 as compared to $250,000 for 2024 as compared to $149,250 for 2023,2024, and proceeds from common stock to be issued was $20,000 $0 for 20242025 as compared to $0$20,000 for 2023.2024.

The Company had no operating revenue ofin 2025 and $15,000 in 2024 and is currently reliant on its ability to raise additional capital and/or debt to continue execution of its business plan to move the Company forward towards profitability. The Company does not anticipate any significant decrease in its operating expenses for 2023.2026. Unless the Company begins to generate operationoperating revenue, it will be reliant on its ability to raise additional debt and/or capital in order to continue its operations.

The Company experienced a net loss of $989,452$1,127,889 for 20242025 compared to net loss of $1,026,530$989,452 for 2023.2024. This decreaseincrease in the Company’s net loss was primarily due to a change in accounting principle for amortization of debt discount offset by an increase in interest expense. The Company experienced anno increasematerial change in loss from operations in 2024 2025 as compared to 2023.2024. Specifically, the Company experienced a loss from operations of $752,929$771,616 for 20242025 compared to a loss from operations of $367,250$752,929 for 2023.2024.

The increase in the Company’s loss from operations was primarily due to increases in allmost expense categories.categories offset by a decrease in professional fees.

Professional fees were $299,504$215,370 in 2024,2025, compared to $86,778$299,504 in 2023.2024. This increasedecrease in professional fees was due to an increasedecrease in consulting services related to software development costs associated with upgrading the source code and infrastructure of its software to accommodate increased capacity demands, and the undertakingcompletion of SOC 2 compliance. Additionally, there was a decrease in legal fees Computer and internet expenses were $105,999 in 2025 as compared to $51,893 in 2024. This increase was due to an increase in hosting costs associated with the Company’s web services.

ForTravel 2024,and thereentertainment expenses were no material change$10,705 in rent expense,2025 as compared to 2023.$8,952 in 2024.

As of MarchJune 31,30, 2026, the Company’s assets were $2,421,258$2,610,840 compared to $2,525,109 in assets as of December 31, 2025.

This change in the Company’s financial condition can be primarily attributed to a decrease in cash from $261,987 as of December 31, 2025 to $10,098 as of March 31, 2026. This reduction in current assets was partially offset by an increase in intangible assets of $149,602 $288,997 due to the capitalization of the CyberloQ Platform, website development, the acquisition of patents, and aan decreaseincrease in the Company’s prepaid expense from $34,620 to $33,783.$45,366. This increase in current assets was partially offset by a decrease in cash from $261,987 as of December 31, 2025 to $49,975 as of June 30, 2026.

As of MarchJune 3130 2026, the Company’s liabilities were $4,235,762$4,635,249 compared to $4,190,752 in liabilities as of December 31, 2025. This change in the Company’s financial condition can be primarily attributed to aan decreaseincrease of $43,714$33,646 in accounts payable and accrued expenses, along with an increase of $88,724$185,851 in accrued interest.interest and an increase in notes payable stockholders of $225,000.

Net cash used in operating activities for the three-monthsix-month period ending MarchJune 31,30, 2026, was $232,287$289,261 compared to $275,690$403,612 for 2025. Cash provided by or used by operating activities is driven by our net loss and adjusted by noncash items as well as changes in operating assets assets and liabilities. At MarchJune 31,30, 2026, there is a negative $44,801$40,797 in stock compensation resulting from preferred shares issued for services of $4,516 and preferred stock issued for services interest of $3,018$1,459 and by a correcting entry for the reduction in valuation of preferred shares issued for interest in Quarter 4, 2025 of $47,819 $47,032 and a positive $727$1,454 in amortization in non cash adjustments.

Net cash used by investing activities was $149,602$288,451 for the threesix months ended MarchJune 31,30, 2026 as compared to $154,972$319,442 for 2025.

Net cash provided by financing activities was $130,000$365,700 for the threesix months ended MarchJune 31,30, 2026 as compared to $206,001$526,642 for 2025.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025

The Company had no revenue for the three months ended MarchJune 31,30, 2026 and 2025 The Company’s operating expenses were $185,008$115,283 for the three months ended MarchJune 31,30, 2026 as compared to $266,992$163,269 for the three months ended MarchJune 31,30, 2025. This decrease in operating expenses was primarily due to ana increasedecrease in professional fees which was $80,932$26,966 for the three months ended June 30, 2026 compared to $62,014 for the three months ended MarchJune 31,30, 20262025, and a decrease in computer and internet comparedexpense towhich $51,552was $10,412 for the three months ended MarchJune 31,30, 2025.2026 Thisas increase in professional fees was relatedcompared to the Company’s issuance of Series B Preferred shares issued for services. This was partially offset by a decrease in officers’ compensation which was $63,000$27,195 for the three months ended MarchJune 31, 2026 as compared to $163,000 for the three months ended March 31,30, 2025 which was due to one-timea bonuses that were paid to officers’difference in theweb first quarter of 2025.services.

OfficeTravel supplies and expenses were $4,263$2,115 for the three months ended MarchJune 31,30, 2026 as compared to $6,904$220 for the three months ended MarchJune 31, 30, 2025.

Finally,Other operating thereexpenses were no$5,275 material changes in the Company’s rent and amortization expenses infor the three months ended MarchJune 31,30, 2026 as compared to $5,153 for the three months ended MarchJune 31, 30, 2025.

AsOffice supplies aand resultexpenses ofwere the$4,124 foregoing, the Company experienced a net loss from operations of $185,008 infor the three months ended MarchJune 31,30, 2026 as compared to a$3,075 net loss from operations of $266,992 infor the three months ended MarchJune 31, 30, 2025.