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

We are a developing company andany only recently started generating revenue

We are a relatively new company and not anwell established in company.the markets we serve. We currently generate only small amounts of revenue from platform operations.operations and from custom development projects. Prior to that, our activities were substantially limited to internal development activities. Even though we have designed our platform, done much of the development and intellectual property protection work, we currently do not have a meaningful share of our market.

The U.S. Securities and Exchange Commission (“SEC”) has adopted regulations which generally define “penny stock” to be an equity security that has a market or exercise price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock mayis bemore often than not less than $5.00 per share and, therefore, may be designated as a “penny stock” according to SEC rules. This designation requires any broker or dealer selling these securities to disclose certain information concerning the transaction, to obtain a written agreement from the purchaser, and to determine that the purchaser is reasonably suitable to purchase the securities. These rules may restrict the ability of brokers or dealers to sell our common stock and may adversely affect the ability of investors to sell our common stock and may materially adversely affect our business and the trading price of our common stock. For example, many brokers refuse to clear or trade in penny stocks. As part of a settlement with the SEC in September 2019, COR Clearing, a large clearing firm in the U.S., agreed to exit a key penny stock clearing business by significantly limiting the sale of penny stocks deposited at COR.

Our common stock is expected to be subject to significant dilution as a result of fund raisingfundraising and issuance of employee, director and consultant incentive shares

In the United States, rules and regulations governing data privacy and security include those promulgated under the authority of the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s CCPA (effective January 1, 2020) and CPRA (effective January 1, 2023), and other state and federal laws relating to privacy, consumer protection, and data security. The CCPA and CPRA introduce new requirements regarding the handling of personal information of California consumers and households, including compliance and record keepingrecordkeeping obligations, the right to request access to and deletion of their personal information, and the right to opt out of the sale of their personal information and provides a private right of action and statutory damages for data breaches.

In addition, E.U. data protection laws, including including the GDPR, also generally prohibit the transfer of personal information from Europe to the United States and most other countries unless the recipient country has been deemed to have adequate privacy protections in place to protect the personal information. Parties transferring protected personal data to jurisdictions deemed inadequate must establish a legal basis for, and implement specific safeguards for, such intra-party or inter-party transfers. A recent judgment of the Court of Justice of the European Union found a common basis for such transfers, the E.U.-U.S. Privacy Shield, insufficient, and a parallel arrangement with Switzerland may similarly be deemed insufficient. While KwikClick did not rely upon Privacy Shield for cross-border transfers, Reverb previously had done so. While effective solutions may be available to permit these transfers, such as Standard Contractual Clauses (“SCCs”) continuing changes to the rules related to cross-border transfers may nonetheless impede KwikClick and Reverb’s ability to effectively transfer data between jurisdictions with parties such as partners, vendors and users, or may make such transfers of personal data more costly. Another recent decision and related European Commission guidance and updates to the SCCs may impose additional obligations on companies seeking to rely on the SCCs and may require significant expense and resources associated with compliance. For example, transfers with the United Kingdom might be deemed inadequate after its departure from the European Union and European Economic Area and require substantial expense and resources to comply with based upon adequacy mechanisms such as SCCs. Transfers by us or our vendors of personal information from Europe pursuant to SCCs may not comply with with E.U. data protection law, may increase our exposure to the GDPR’s heightened sanctions for violations of its cross-border data transfer restrictions, and may result in lower sales on our platform because of the difficulty of establishing a lawful basis for personal personal information transfers out of Europe.

The Company’s revenues are primarily sourced from the Company’s KwikClick platform. The Company generates revenues by being a software as a service (SAAS) platform via loyalty and reward programs tailored for a particular brand, retailer or influencer. With the program, the brand, retailer or influencer can offer products with loyalty incentives, discounts, or other benefits to induce sales and brand loyalty. The Company provides expertise in attracting new customers through these loyalty programs and provides unique affiliate commission payment services with its patented waves of pay and revenue sharing technology. The Company currently integrates with Shopify, which facilitates over $200 Billion Gross Merchandise Volume (GMV) annually for other ecommerce platforms. The Company is currently planning integrations with WooCommerce, BigCommerce, Magento and others. Additionally, some brands prefer a more integrated branding view of the KWIK software into their own website, requiring additional design and programming. This enables a more uniquely branded user experience within the brand’s website. In December,December 2024, the Company entered into an arrangement with a brand to provide programming services to integrate the KWIK software into their website. The arrangement provides for a monthly payment of service fees of $50,000 for the nextfollowing 18 months, including monitoring, updates and maintenance. In October 2025, the Company also entered into an arrangement with another brand to provide programming services to integrate the KWIK software into their website. The arrangement provides for a monthly payment of service fees of $125,000 for the following 12 months, including monitoring, updates and maintenance. The Company is noting increasing interest with thisits capability and anticipates more brands will opt for this type of custom design. The Company recognizes additional revenue for these integrations which is noted as Custom Design Services in the Company’s StatementConsolidated Statements of Operations. Brand Services revenues for the current year decreased $180,858 from $288,229 in the prior year to $107,371 this year due to a decrease in small retailer and a reduced number of influencer campaigns. This reduction was offset by Custom Design Services which will likely increase in coming quarters as noted above. With the recent enrollment of some significant retailadditional brands on the KWIK platform, and additional custom design projects under review, we believe the Company will be able to generate increasing revenues during fiscal 20252026 with an expectation for positive cash flows during fiscal 2026.flows.

Operating expenses for the fiscal year ended December 31, 20242025 were $1,914,551$2,487,389 as compared to $4,194,407$1,914,551 for the comparable prior period, aan decreaseincrease of $2,279,856. $572,838. The decreaseincrease is primarily the result of an increase in loss on disposal of long-lived assets of $712,433 offset by a decrease in management and payroll of $258,768 driven by a reduction in payrollstock-based costscompensation ofyear approximatelyover $1,100,000 and a reduction in research and development expenses of $450,000.year. Cost of sales decreasedincreased by $172,100$305,838 in line with the decrease increase in brand services revenue of $180,858.$1,130,106. The expenses in connection with the Company’s revenue sources are expected to consist primarily of charges for programming services and commission payments made to influencers, users and other affiliates of the Kwik platform. We anticipate operating expenses to increase as revenues increase.

As of December 31, 2024,2025, we had cash and cash equivalents of $192,996$106,468 compared to $64,186$192,996 of cash and cash equivalents at December 31, 2023.2024. BasedDuring onthe currentlyfourth availablequarter, capitalthe resourcesCompany started (generating positive cash), weflows estimate that we would not be ablesufficient to conductfund ourits plannedcurrent operations withoutprimarily immediatedue to two customer contracts which provide $50,000 monthly for 18 months starting December 2024 and $125,000 monthly for 12 months starting October 2025. If the Company doesn’t continue to generate sufficient revenue or raise additional funding.funds Giventhrough financing, the currentCompany ratemay atneed whichto we use cash, we cannot survive unless we increase revenues or obtainincur additional equityliabilities with orcertain debtoutside financing.and related parties to sustain the Company’s existence. While our majority shareholder has committed to continue to provide funding for the foreseeable future, there is no assurance that we can increase revenues and/or obtain additional necessary financing, much less on reasonable terms.

Our current liabilities as of December 31, 2024,2025, totaled totaled $3,720,580,$4,077,735, compared to $2,819,669$3,720,580 on December 31, 2023.2024. If the Company doesn’t begincontinue to generate sufficient revenue or raise additional funds through financing, the Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. Currently, there can be no assurance that the Company will be able to raise additional funds necessary to further develop or operate its business or that such funding can be at commercially reasonable terms. The Company intends to increasingly utilize stock or stock-based awards to compensate people and organizations who are or will be providing services or investment to the Company.

During the year ended 2024,2025, Fred Cooper provided funding of $861,272$232,000 with a repayment of $50,000 in principal under a promissory note originated in 2022. While we do not anticipate any default on the loan, in the event that we do default, Mr. Cooper may take possession of our intellectual property and patents.other assets. This could have a material adverse effect on our business and operations. During 2025, the Company’s CFO also advanced an unsecured operations.$5,000 loan to the Company with no repayment of this amount in 2025.

Management hasmay determineddetermine that additional capital will will be required in the form of equity or debt securities. There is no assurance that management will be able to raise capital on terms acceptable acceptable to the Company. If we are unable to obtain enough additional capital, we may have to cease filing the required reports and cease operations completely. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our shareholders will be reduced, shareholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock.

As reflected in the accompanying consolidated financial statements, the Company has a net loss of $1,956,424 for the year ended December 31, 2024.2025, the Company had a net loss of $1,316,827, used cash in operations of $202,102 and as of December 31, 2025, had negative working capital of $3,771,219 and an accumulated deficit of $13,675,781. If the Company doesn’tdoes not begin to generate sufficient revenue or raise additional funds through financing, the Company may need to incur additional liabilities with certain outsiderelated and related parties to sustain the Company’sCompany's existence. There are currently no plans or agreements in place to provide such funding. The Company will require additional funding to finance the growth of its future operations as well as to achieve its strategic objectives. The Company mayhas experienceconcluded difficultiesthat these circumstances and the uncertainties associated with the Company’s ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in raisingits thesefuture fundsoperations, due to inflationary economicraise impacts on funding sources. 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.

The Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed on MarchJune 31,30, 2026, continue to represent the most significant risks to the Company’s future results of operations and financial condition.

Comparison of operations for the Three Months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

During the three months ended endedJune March 31,30, 2026 and 2025, we recognized net revenues of $675,161$972,469 and $206,870,$231,710, respectively. TheCustom $468,291design services increased $274,958, increasefrom is$203,000 primarilyin the three months ended June 30, 2025, to $477,958 in the three months ended June 30, 2026, as a result of the expansion of our custom design services in which we build custom software features for customers that are generally done in addition to embedding our transaction platform into a customer’s website. Additionally, brand services revenue increased $114,116, $465,801, from $22,370$28,710 in the three months ended March 31,June 30, 2025, to $136,486$494,511 in the three months ended MarchJune 31,30, 2026. The increase is due due to a broadening adoption of the sales platform by new brands and influencers. 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.

Our costs of sales increased $124,684$110,356 to $193,707$198,894 for the three months ended MarchJune 31,30, 2026 as compared to $69,023$88,538 for the three months ended MarchJune 31,30, 2025. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to increase as sales increase, but at a slower pace if we are successful in the expansion of the custom design services. Additionally, we would expect our sales volume and cost of sales to correspondingly increase as more brands launch our platform within their own website. The underlying products and services sold through our platform are currently unpredictable.

During the three months ended endedJune March 31,30, 2026  and 2025, we incurred total other operating expenses of $441,201$951,618 and $315,470$325,321, respectively. The $626,297 increase $125,731primarily related to an increase resultedin fromloss on abandonment of long-lived assets of $256,941 and an increase in marketing expenses of $216,982 as the Company contracted with a call center to assist with selling third-party sellers’ products through the Kwik platform. Other operating expenses also were affected by an increase in management and payroll of $112,635,$96,700, an increase in general and administrative expenses expenses of $22,787,$62,626, and offset by a decrease in research and development of $9,691.$6,952.

During the three months ended March 31,June 30, 2026, other income (expense) was made up entirely of interest expense of $67,498.$68,029. Interest expense increased by $4,826 $3,135 during the three months ended June 30, 2026 compared to the three months ended MarchJune 31,30, 2026,2025, of which related-party interest increased by $4,612$3,325 and to $67,284 and non-related-party interest increaseddecreased by $214 to $214.$190. The increase in related-party interest was the result of continued compounding compounding (at a rate of 10% per annum) of our unpaid related-party notes payable outstanding. If we are successful in increasing our customer base, we do not expect an increase in the principal balance of the notes payable over the next twelve months to fund expenses required for an expansion of our customer base.

During the threesix months ended endedJune March 31,30, 2025, the Company negotiated settlements with previous brands surrounding previously accrued commissions payable on their behalf for no additional consideration resulting in a gain on settlement totaling $147,527. We do not expect these settlements to occur on a frequent basis in the future.

At MarchJune 31,30, 2026, we had a a working capital deficit of $3,725,388.$3,659,499. Approximately 83%81% of our liabilities as of MarchJune 31,30, 2026 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 to continue to do so.