0001096906-22-001983.txt : 20220822 0001096906-22-001983.hdr.sgml : 20220822 20220822143215 ACCESSION NUMBER: 0001096906-22-001983 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20220630 FILED AS OF DATE: 20220822 DATE AS OF CHANGE: 20220822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KwikClick, Inc. CENTRAL INDEX KEY: 0001884164 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 954463033 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-56349 FILM NUMBER: 221183422 BUSINESS ADDRESS: STREET 1: 585 WEST 500 SOUTH STREET 2: SUITE 130 CITY: BOUNTIFUL STATE: UT ZIP: 84010 BUSINESS PHONE: 8012434840 MAIL ADDRESS: STREET 1: 585 WEST 500 SOUTH STREET 2: SUITE 130 CITY: BOUNTIFUL STATE: UT ZIP: 84010 10-Q 1 kwik-20220630.htm KWIKCLICK, INC. - FORM 10-Q SEC FILING KwikClick, Inc. - Form 10-Q SEC filing
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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 June 30, 2022

 

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

95-4463033

(State or other jurisdiction of incorporation or organization)

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

 

 

585 West 500 South Suite 130

 

Bountiful, Utah

84010

(Address of principal executive offices)

(Zip Code)

 

(801) 243-4840

Registrant’s telephone number, including area code:

 

Securities registered pursuant to Section 12(b) of the Act:

 

                    NONE                 

 

 

Securities registered pursuant to Section 12(g) of the Act:

 

    Common Stock, par value $0.0001 per share    

(Title of Class)

 

                   KWIK                 

Trading Symbol

 

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. x 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). x 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 x

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 x No

 

Number of shares of issuer’s common stock outstanding at August 19, 2022:  127,967,606


 

KWIKCLICK, INC.

TABLE OF CONTENTS

 

 

Page

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

1

 

Balance Sheets, June 30, 2022 and December 31, 2021 (Unaudited)

2

 

Statements of Operations for the Three Months and Six Months ended June 30, 2022 and 2021 (Unaudited)

3

 

Statements of Stockholders’ Equity (Deficit) for the Three Months and Six Months ended June 30, 2022 and 2021 (Unaudited)

4

 

Statements of Cash Flows for the Six Months ended June 30, 2022 and 2021 (Unaudited)

5

.

Notes to Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9

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


PART I FINCANCIAL INFORMATION

 

Item 1 Financial Statements


1


 

KWIKCLICK, INC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

June 30,

 

December 31,

2022

 

2021

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

15,462

 

$

609,862

Accounts receivable, net

 

50,000

 

 

-

Total current assets

 

65,462

 

 

609,862

Equipment, net

 

6,177

 

 

2,635

Intellectual property, net

 

781,635

 

 

613,507

Right of use asset

 

144,323

 

 

-

Total assets

$

997,597

 

$

1,226,004

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

513,430

 

$

572,808

Accrued liabilities

 

41,435

 

 

345,059

Lease obligation

 

51,288

 

 

-

Shareholder loans

 

884,489

 

 

34,489

Stock issuable

 

4,010

 

 

1,086,042

Total current liabilities

 

1,494,652

 

 

2,038,398

Long-term liabilities:

 

 

 

 

 

Lease obligation, net of current portion

 

93,791

 

 

-

Total liabilities

 

1,588,443

 

 

2,038,398

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

Preferred stock; $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding

 

-

 

 

-

Common stock; $0.0001 par value; 250,000,000 shares authorized; 117,967,605 and 115,912,605 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

                  11,797

 

 

                   11,591

Additional paid-in-capital

 

4,222,867

 

 

1,728,675

Accumulated deficit

 

(4,825,510)

 

 

(2,552,660)

Total stockholders' deficit

 

(590,846)

 

 

(812,394)

Total liabilities and stockholders' deficit

$

997,597

 

$

1,226,004

 

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


2


KWIKCLICK, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

    

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

72,189

 

$

-

 

$

176,100

 

$

-

Licensing

 

 

150,000

 

 

-

 

 

300,000

 

 

-

Net revenue

 

 

222,189

 

 

-

 

 

476,100

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

32,912

 

 

-

 

 

80,030

 

 

-

Management and payroll

 

 

1,265,075

 

 

259,425

 

 

2,163,598

 

 

434,035

General and administrative

 

 

274,200

 

 

72,625

 

 

505,322

 

 

143,619

Total operating costs and expenses

 

 

1,572,187

 

 

332,050

 

 

2,748,950

 

 

577,654

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(1,349,998)

 

 

(332,050)

 

 

(2,272,850)

 

 

(577,654)

Provision for (benefit from) income taxes

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,349,998)

 

$

(332,050)

 

$

(2,272,850)

 

$

(577,654)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$

(0.01)

 

$

(0.00)

 

$

(0.02)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

 

117,240,353

 

 

110,542,516

 

 

116,580,147

 

 

113,183,063

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


3


KWIKCLICK, INC

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

Three and Six Months Ended June 30, 2022 and 2021

(Unaudited)

 

 

Preferred Stock

 

Common Stock

 

Paid-in

 

Accumulated

 

Total Stockholders'

     

Shares

     

Amount

     

Shares

     

Amount

     

Capital

     

Deficit

     

Equity (Deficit)

BALANCE, December 31, 2021

 

-

 

$

-

 

 115,912,605

 

$

 11,591

 

$

 1,728,675

 

$

 (2,552,660)

 

$

(812,394)

Net loss

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

 (922,852)

 

 

(922,852)

Balance March 31, 2022

 

-

 

 

-

 

 115,912,605

 

 

 11,591

 

 

 1,728,675

 

 

 (3,475,512)

 

 

(1,735,246)

Issuance of common stock for settlement of stock issuable

 

-

 

 

-

 

 730,000

 

 

 73

 

 

 1,041,127

 

 

-

 

 

1,041,200 

Issuance of common stock for accrued compensation

 

-

 

 

-

 

 333,334

 

 

 33

 

 

 333,301

 

 

-

 

 

333,334 

Issuance of common stock for services

 

-

 

 

-

 

 225,000

 

 

 23

 

 

 224,977

 

 

-

 

 

225,000 

Issuance of common stock for intellectual property acquisition

 

-

 

 

-

 

 100,000

 

 

 10

 

 

 99,990

 

 

-

 

 

100,000 

Stock based compensation

 

-

 

 

-

 

666,666

 

 

67

 

 

 794,797

 

 

-

 

 

794,864 

Net loss

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

 (1,349,998)

 

 

(1,349,998)

BALANCE, June 30, 2022

 

-

 

$

-

 

 117,967,605

 

$

 11,797

 

$

 4,222,867

 

$

 (4,825,510)

 

$

(590,846)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, December 31, 2020

 

 100,000

 

$

 10

 

 109,692,605

 

$

 10,969

 

$

 1,086,529

 

$

 (182,609)

 

$

914,899 

Net loss

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

 (245,604)

 

 

(245,604)

Balance March 31, 2021

 

 100,000

 

 

 10

 

 109,692,605

 

 

 10,969

 

 

 1,086,529

 

 

 (428,213)

 

 

669,295 

Issuance of common stock for cash

 

-

 

 

-

 

 6,207,500

 

 

 621

 

 

 295,389

 

 

-

 

 

296,010 

Net loss

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

 (332,050)

 

 

(332,050)

BALANCE, June 30, 2021

 

 100,000

 

$

 10

 

 115,900,105

 

$

 11,590

 

$

 1,381,918

 

$

 (760,263)

 

$

633,255 

 

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


4


 

KWIKCLICK, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

For the Six Months Ended

 

June 30,

 

June 30,

2022

     

2021

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(2,272,850)

 

$

(577,654)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

17,276

 

 

5,629

Stock based compensation

 

1,019,864

 

 

-

Loss on sale of equipment

 

560

 

 

-

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(50,000)

 

 

-

Operating leases

 

757

 

 

-

Accrued liabilities

 

18,876

 

 

-

Accounts payable

 

(59,378)

 

 

-

Net cash used in operating activities

 

(1,324,895)

 

 

(572,025)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of intellectual property

 

(84,769)

 

 

(82,959)

Proceeds from sale of equipment

 

1,920

 

 

-

Purchases of equipment

 

(6,656)

 

 

-

Net cash used in investing activities

 

(89,505)

 

 

(82,959)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Refund of stock payable

 

(30,000)

 

 

-

Proceeds from shareholders loans

 

850,000

 

 

4,000

Proceeds from issuance of common stock

 

-

 

 

296,010

Net cash provided by financing activities

 

820,000

 

 

300,010

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(594,400)

 

 

(354,974)

Cash and cash equivalents at beginning of period

 

609,862

 

 

772,458

Cash and cash equivalents at end of period

$

15,462

 

$

417,484

 

 

 

 

 

 

Cash paid for income taxes

$

-

 

$

-

Cash paid for interest

$

-

 

$

-

 

 

 

 

 

 

Non-Cash Supplemental Disclosures

 

 

 

 

 

Common stock issued for intellectual property

$

100,000

 

$

-

Common stock issued for stock issuable settlement

$

1,041,200

 

$

-

Common stock issued for accrued compensation

$

333,333

 

$

-

 

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


5


 

KWIKCLICK, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2022 and 2021

Unaudited

 

NOTE 1. BUSINESS

 

KwikClick, Inc., (the Company) was organized pursuant to the laws of the State of Delaware on November 16, 1993. Beginning in 2020, the Company commenced its KwikClick business operations to allow sellers to make products or services available on the KwikClick platform, at Kwik.com, offering a self-determined discount on goods or services in exchange for exposure and substantially increased sales volume.

 

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, 2021.

 

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 six-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 accounting principles generally accepted in the United States of America 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 KwikClick LLC. Intercompany transactions and balances have been eliminated in consolidation.

 


6


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 June 30, 2022 or December 31, 2021.

 

Revenue Recognition

 

The Company provides its customers a platform to sell their products and services in which it earns a fee based on a percentage of the products sold.  Additionally, the Company has licensed the use of the technology platform under a Software Licensing and Exclusivity Agreement (“SL Agreement”).  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 

 

The Company has two main revenue sources: sales of products on the KWIKClick app and technology licensing. The Company recognizes revenue at the completion of its applicable performance obligations.  

 

For product sales, the customer pays at the time of purchase and the Company’s performance obligations are complete at the time of shipment. Shipping and handling costs, if any, are recognized as revenue and recorded at gross when incurred.

 

Technology licensing revenue is recognized over time as the Company’s performance obligation is to provide the functionality over the contract period.  

 

Advertising

 

The Company expenses advertising as incurred. Advertising expense was $60,391 and $125,720 for the three and six months ended June 30, 2022, respectively.  The Company did not incur material advertising expense for the three and six months ended June 30, 2021.

 

NOTE 3. GOING CONCERN

 

As reflected in the accompanying unaudited consolidated financial statements, the Company has an accumulated deficit of $4,825,510 and working capital deficit of $1,429,190 as of June 30, 2022, and a net loss of $2,272,850 for the six months then ended. If the Company does not begin 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. 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. 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 4. STOCKHOLDERS' EQUITY

 

The Company is authorized to issue 5,000,000 shares of preferred stock and 250,000,000 shares of common stock each with a par value of $0.0001.  As of June 30, 2022 and December 31, 2021, the Company did not have any shares of preferred stock outstanding.  As of June 30, 2022 and December 2021 the Company had 117,967,605 and 115,912,605 shares of common stock issued and outstanding, respectively.

 

The following provides a description of the common stock issuances during the six months ended June 30, 2022.

 

In May 2022, the Company issued 75,000 shares of common stock valued at $225,000 to each of its three Board members (225,000 total shares) for services rendered.

 

In May 2022, the Company issued 100,000 shares of common stock valued at $100,000 to its former President for the acquisition of the kwik.com domain name.

 

In May 2022, the Company issued 1,000,000 shares of common stock valued at $1,000,000 for compensation to its former President.  Of this amount, $333,333 was for accrued compensation at December 31, 2021, while the remaining $666,667 was for services rendered during the six months ended June 30, 2022.

 

In April 2022, the Company issued 730,000 shares of common stock for cash proceeds totaling $1,041,200 that were received as of December 31, 2021.  At June 30, 2022, the Company had $4,010 of cash proceeds for which the stock


7


has not been issued and is presented as a stock issuable liability in the accompanying condensed consolidated balance sheet.

 

Common Stock Compensation

 

At the discretion of the compensation committee, the Company has granted common stock awards for various employees. The awards issued to date are earned and recognized over the requisite service period.  The fair value of the award is estimated on the grant date.  

 

A summary of the stock-based compensation associated with common stock awards is as follows:

 

 

 

Common Stock

 

 

Weighted
Average
Fair Value

Outstanding at January 1, 2022

 

 

-

 

 

$

-

Granted

 

 

5,797,550

 

 

 

0.22

Forfeited or cancelled

 

 

-

 

 

 

Vested

 

 

(981,549

)

 

 

0.82

Outstanding at June 30, 2022

 

 

4,816,001

 

 

 

0.10

 

For the three and six months ended June 30, 2022, the Company recognized total stock-based compensation of $250,000 and $1,019,864, respectively.  The Company did not incur any stock-based compensation during the three and six months ended June 30, 2021.

 

As of June 30, 2022, the Company has committed 5,130,884 shares of stock for the fulfillment of the unissued vested (314,383 shares) and unvested (4,816,001) awards.  

 

Stock Options

 

As of June 30, 2022, the Company had 400,000 fully vested stock options outstanding with a weighted average exercise price of $1.00 per share and a remaining term of two and a half years.  The Company did not issue any stock options during the three and six months ended June 30, 2022 or 2021.

 

NOTE 5. RELATED PARTY TRANSACTIONS

 

Shareholder Loans Payable

 

During the six months ended June 30, 2022, Fred Cooper, our majority shareholder, and CEO, loaned the Company $850,000 to fund operations.  The loans are non-interest-bearing and are due on demand.  As of June 30, 2022 and December 31, 2021, $884,489 and $34,489, respectively, was owed on the loans.  The Company has not repaid any portions of the loan and Mr. Cooper has not made any payment demand.

 

Licensing Agreement

 

The Company has entered into a licensing agreement with an entity controlled by Mr. Cooper.  During each of the three and six months ended June 30, 2022 the Company recognized $150,000, respectively, under the terms of the licensing agreement.  As of June 30, 2022, $50,000 was receivable from the licensing agreement.

 

The agreement became effective on September 2, 2021 with a base term of twelve months which may be extended in three month increments thereafter.

 

NOTE 6. SUBSEQUENT EVENTS

 

In July 2022, the Company received cash proceeds totaling $500,000 for the purchase of 5,000,000 shares of common stock.


8


 

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.

 

Prior to the acquisition of KwikClick, LLC on June 10, 2020, KwikClick, Inc., formerly known as FortecX, Inc., had no sources of revenue, and KwikClick, Inc. had a history of recurring losses, which has resulted in an accumulated deficit. As reflected in the accompanying financial statements, KwikClick, Inc. has a net loss of $2,272,850 year-to-date through June 30, 2022. These matters raise substantial doubt about our ability to continue as a going concern.

 

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.

 

Forward-Looking Statements

 

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, 2022. 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, 2022, 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.

 


9


 

Overview

 

KwikClick, Inc. was organized pursuant to the laws of the State of Delaware on November 16, 1993 under the name of CSL Lighting Manufacturing, Inc.  On February 5, 2001, the Company amended its Certificate of Incorporation with the Delaware Secretary of State to change its name to “TBDOne, Inc.”  On November 14, 2012, the Company amended its Certificate of Incorporation with the Delaware Secretary of State to change its name to “Fortecx, Inc.” to reflect the Company’s business of working with and acquiring and developing software platforms in the foreign exchange trading industry.

 

In 2020, the Company’s focus turned to its current KwikClick business by acquiring KwikClick, LLC on June 10, 2020. The Company commenced revenue generation in September 2021 in connection with its SL License with NewAge. Despite the SL License Agreement being the source of the Company’s initial revenue related to its recent business pivot, revenues are anticipated to be primarily sourced from the Company taking a portion of revenue generated through the KWIK platform. The platform is designed to allow sellers to make products or services available on the KWIK platform and offer a self-determined discount on goods or services or entire orders in exchange for exposure and substantially increased sales volume from KwikClick participants.  This discount provided by third-party sellers of products is divided among the purchaser (0-10%), KwikClick (15-25%) and the balance is paid in the form of commissions to other participants on social media who introduce the product to contacts, friends, followers etc. that result in additional purchases.

 

Comparison of the balance sheet at June 30, 2022 to December 31, 2021

 

Total current assets at June 30, 2022 of $65,462 were adequate for us to fund current operations, but are not adequate to fund our future operations without continued funding which is anticipated to come from sales of equity, such as our common stock shares. We do not currently anticipate raising capital from the sale of debt, but do not rule out the possibility. Total current assets primarily consisted of accounts receivable of $50,000, all from our SL License Agreement with Newage, and cash on hand of $15,462. In comparison, current assets of $609,862 at December 31, 2021 consisted solely of cash on hand of $609,862.

 

At June 30, 2022 and December 31, 2021, our other assets primarily included intellectual property, net of accumulated amortization, of $781,635 and $613,507 related substantially to the capitalized costs of dozens of patent applications and the acquisition of kwik.com. The Intellectual property increased by the acquisition of the kwik.com in exchange for the issuance of 100,000 shares of common stock with estimated fair value of $100,000 to our former President and approximately $84,800 of on-going patent application costs, exclusive of the current period amortization. At June 30, 2022 and December 31, 2021, we also had equipment of $6,177 and $2,635, respectively, net of accumulated depreciation, primarily consisting of office and computer equipment. At June 30, 2022, we also had a right-of-use asset of $144,323 associated with an operating lease with an expected term of three years that was entered into in February 2022

 

During the six months ended June 30, 2022 our current liabilities decreased by $543,746 from $2,038,398 at December 31, 2021 to $1,494,652 at June 30, 2022.  This decrease is primarily the result of issuance of 730,000 shares of common stock of which $1,041,200 in cash was received prior to December 31, 2021 and classified as a current liability as of December 31, 2021; and the settlement of accrued stock compensation due to our former President via the issuance of 1,000,000 shares of common stock with an estimated fair value of $1,000,000, of which $333,333 was accrued at December 31, 2021.  These reductions were off-set by due on demand shareholder loans in which the Company received cash proceeds totaling $850,000.  The Company’s only non-current liability at June 30, 2022 consists of operating lease liabilities totaling $93,791.

 

At June 30, 2022, current liabilities of $1,494,652 primarily consisted of accounts payable, accrued liabilities, shareholder loans, and lease obligations. In comparison, current liabilities as of December 31, 2021 of $2,038,398 consisted of accounts payable and accrued liabilities with a significant stock issuance liability of $1,086,042 that accounted for stock that had been sold for cash but not yet issued to the purchaser in addition to accrued stock compensation of $333,333.

 

Comparison of operations for the three and six months ended June 30, 2022 to June 30, 2021

 

Revenues

 

We had no revenues as of June 30, 2021. The Company’s SL License with NewAge commenced in September 2021 which has resulted in $50,000 per month in revenue.  For the three and six months ended June 30, 2022 we


10


recognized $150,000 and $300,000, respectively.  The base term of the agreement is set to expire in September 2022 and can be extended in three month increments beyond the expiration.  As of the date of this report we have not received formal notice from Newage regarding any intent to extend the licensing agreement.

 

In 2022, we commenced our consumer sales platform in which we earn a percentage of the customer products sold. During the three and six months ended June 30, 2022 and 2021 we recognized net revenues of $72,189 and $176,100, respectively related to the KWIK platform.  As of June 30, 2022, the product revenues have been trending upward. Management anticipates that these revenues will continue to increase as we continue to develop our KWIK platform, add vendors, and add users.  Our KWIK platform remains under development.  We have recently completed what we internally characterize as version 3.0.  We anticipate continued development of the platform in terms of technology and addition of features on the platform, however, there is no guarantee these upgrades, if fully implemented, will result in increased users or revenue.

 

Cost of Revenue

 

Our costs of revenue, totaling $32,912 and $80,030 for the three and six months ended June 30, 2022, respectively, primarily consist of product costs that are sold on our platform.  We expect the costs of revenue to fluctuate consist with our sales volume and future product mix which is currently unpredictable based on the early stages of the KWIK platform.

 

Other Operating Expenses

 

Since KwikClick, LLC’s inception in 2020, the Company has spent considerable time and effort developing its intellectual property and business plan. During the three and six months ended June 30, 2022, we incurred total other operating expenses of $1,539,275 and $2,668,920, approximately 80% of which related to management and payroll expenses and the remainder made up primarily of professional fee and other selling, general, and administrative expenses. Our other operating expenses continue to trend upward, and we anticipate will continue to do so, 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 and consulting firms. In the coming 12 months, we anticipate adding approximately one full-time employee per month.  We also expect these operating expenses to increase if we are successful in increasing our product sales and user volumes.

 

Liquidity and capital resources

 

Our current liabilities as of June 30, 2022 totaled $1,494,652. Since the acquisition of the KwikClick subsidiary in June 2020, the Company has been primarily funded by loans and sales of stock to third-party investors. In 2021, we raised an additional $220,000 by selling 220,000 shares of common stock and also received $1,086,042 for stock was issued in the second quarter of 2022.  

 

Since inception, Fred Cooper has loaned the Company in excess of $1,000,000 to fund its operations, which includes $850,000 in 2022 loaned by Mr. Cooper to the Company to fund our operations that remains outstanding. These loans are due on demand and are non-interest bearing.  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.

 

As of June 30, 2022, our cash on hand had depleted to $15,462 from $609,862 as compared to December 31, 2021. For the six months ended June 30, 2022 we used $1,324,895 of cash in operations primarily as the result of our operational costs being in excess of revenues that our current sales volumes generate.  Cash used in operations was partially off-set by stock based compensation of approximately $1,020,000.  Our increased cash used in operations has been due to a significantly larger number of employees and expanded business operations.

 

The anticipated revenues generated from our operations in the next 12 months may not be sufficient to fund our operations or planned growth. 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.


11


 

During the six months ended June 30, 2022 we used cash in investing activities of approximately $90,000 primarily as a result of our on-going patent application efforts.  We expect to continue to incur these intellectual property expenditures necessary to protect our proprietary technology and operating platforms.

 

We generated net cash of $820,000 from our financing activities as result of an $850,000 loan from our Founder and CEO, partially off-set by a refund of an investor subscription totaling $30,000.

 

Our significant working capital deficit and current revenue levels make continued operation of our business not viable without our accessing additional capital. Subsequent to June 30, 2022, we were able to raise $500,000 from the sale of our common stock. However, as our current monthly capital needs or “burn rate” is approximately $300,000, we estimate that we would be able to conduct our planned operations for only one or two months without more.  As a result, we cannot survive as a going concern for more than a month or two unless we continue to receive revenues from New Age pursuant to the SL Agreement, increase commission revenues and, most importantly, obtain millions in additional equity financing. On July 5, 2022, our board of directors authorized the sale of up to 30,000,000 shares of our common stock for a total of $5,000,000, or an average price of $0.166 per share, 5,000,000 shares of which was sold in July 2022 for total proceeds to us of $500,000, or $0.10 per share. That proposed financing would result in the issuance of an additional 30,000,000 shares of our common stock. We believe that we can raise the $4,500,000 balance in August and September 2022 from several sources. However, there is no assurance that it will occur. There is also no assurance that we can maintain revenues, increase revenues and/or obtain the necessary equity financing to fund our operations, much less on reasonable terms.

 

We have historically been funded primarily from private placements of stock and loans from Company affiliates and may continue to be so funded in for the foreseeable future. However, there is no assurance that we can obtain additional funds from any source. We have generated limited revenue though we have developed much of our technology in order to conduct business in the online, social media, consumer product marketing space. We have also been required to maintain our corporate existence and satisfy the requirements of being a public company since we have become a filer with the SEC. We will need to obtain capital to continue operations. There is no assurance that our Company will be able to secure such funding on acceptable (or any) terms.

 

Management has determined that additional capital 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 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.

 

Going Concern Risk

 

As reflected in the accompanying financial statements, the Company had a net loss of $2,272,850 for the six months ended June 30, 2022, and an accumulated deficit of $4,825,510 at June 30, 2022.  If the Company doesn’t begin to generate sufficient revenue or raise additional funds through equity financing, the Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.  There are currently plans, but no binding 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 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 ability of the Company to continue its operations in the future is dependent on the plans of the Company’s management, which will include the raising of capital through debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. There can be no assurance that the Company will be able to raise any additional capital.


12


 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Critical Accounting Policies

 

There has been no change in our critical accounting policies from those disclosed in our annual report on Form 10-K filed with the SEC on April 15, 2022.

 

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 June 30, 2022 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 June 30, 2022, 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

 

We are not the subject of any pending legal proceedings; and to the knowledge of management, no proceedings are presently contemplated against us by any federal, state or local governmental agency. Further, to the knowledge of management, no director or executive officer is party to any action in which any party has an interest adverse to us.

 

Item 1A. Risk Factors

 

The Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed on April 15, 2022, continue to represent the most significant risks to the Company’s future results of operations and financial conditions, without further modification or amendment.

 

Item 2. Unregistered Sales of Equity Securities

 

During the quarter ended June 30, 2022, we issued 730,000 shares of our common stock to ten persons who had paid a total of $1,041,200, or an average of $0.70 per share. The $1,041,200 of invested funds was substantially received in periods prior to the quarter ended June 30, 2022 and the shares were previously reflected as stock issuable in our financial statements.

 

Subsequent to the end of the quarter ended June 30, 2022, on or about July 14, 2022, we raised $500,000 by selling 5,000,000 shares of our common stock at $0.10 per share to three persons.

 

We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the following transactions under Section 4(a)(2) of the Securities Act and/or Regulations D and S promulgated thereunder, in that such sales and issuances (i) did not involve a public offering, or (ii) were made to non-U.S. Persons and otherwise complied with Rule 903 promulgated under the Securities Act, or (iii) were made pursuant to Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701. All of the purchasers of unregistered securities for which we relied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access, through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued in such transactions.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

On June 24, 2022, our board of directors and stockholders holding a majority of our outstanding common stock by written consent approved the amendment of our certificate of incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 400,000,000. However, as of the date of this report, the amendment of our certificate of incorporation has yet to be made. We anticipate executing that amendment in August 2022.

 

On July 5, 2022, our board of directors authorized the sale of up to 30,000,000 shares of our common stock for a total of $5,000,000, or an average price of $0.166 per share. As of the date of this report, 5,000,000 of these shares were sold in July 2022 for total proceeds to us of $500,000, or $0.10 per share. We have reserved in escrow at our transfer agent, 20,000,000 of the shares authorized by the Board for sale and issuance. Though not yet purchased or issued to third parties, the 20,000,000 reserved shares are not reflected in the 127,967,606 set out on page 1.


14


 

Item 6. Exhibit

 

Exhibit No.

 

Description

3.1*

 

Certificate of Incorporation and amendments

3.2*

 

Bylaws, as amended

10.1*

 

Software Licensing and Exclusivity Agreement dated September 2, 2021 between KwikClick, Inc. and NewAge, Inc.

10.2*

 

Employment Agreement dated September 21, 2021 – Matthew Williams

10.3**

 

2021 Equity Incentive Plan

10.4**

 

Incentive Stock Option Agreement

10.5**

 

Non-Qualified Stock Option Agreement

10.6**

 

2021 Stock Appreciation Rights Plan

10.7**

 

Stock Appreciation Rights Agreement

 

 

 

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 W. 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 Fred W. Cooper

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 W. 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 Fred W. Cooper

 

 

 

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

 

* Filed with the Registration Statement Form 10-12(g) on September 30, 2021 

** Filed with the Registration Statement Form 10-12(g)/A on December 14, 2021 


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 W. Cooper

 

Fred W. Cooper,

 

Chief Executive Officer and Director

 

Principal Executive Officer

 

Date: August 22, 2022

 

 

 

By: /s/ Fred W. Cooper

 

Fred W. Cooper,

 

Chief Executive Officer and Director

 

Principal Financial Officer

 

Date: August 22, 2022

 


16

EX-31.1 2 kwik_ex31z1.htm CERTIFICATION

 

 

 

 

Exhibit 31.1

 

CERTIFICATION

 

I, Fred W. Cooper, hereby certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of KwikClick, Inc. (the “Company”); 

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; 

 

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

 

c.Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

 

d.Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and 

 

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

 

a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

 

 

Date: August 22, 2022

 

 

 

/s/ Fred W. Cooper

 

Fred W. Cooper

 

Chief Executive Officer

(Principal Executive Officer)

 

 

EX-31.2 3 kwik_ex31z2.htm CERTIFICATION

 

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Fred W. Cooper, hereby certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of KwikClick, Inc. (the “Company”); 

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; 

 

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

 

c.Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

 

d.Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and 

 

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

 

a.All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

 

Date: August 22, 2022

 

 

 

/s/ Fred W. Cooper

 

Fred W. Cooper

 

Principal Financial Officer

 

(Principal Financial and Accounting Officer)

 

 

EX-32.1 4 kwik_ex32z1.htm CERTIFICATION

 

 

Exhibit 32.1

 

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 June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fred W. Cooper, Chief Executive 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: August 22, 2022

 

 

 

/s/ Fred W. Cooper

 

Fred W. Cooper

 

Chief Executive 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.

EX-32.2 5 kwik_ex32z2.htm CERTIFICATION

 

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 June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fred W. Cooper, Principal 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: August 22, 2022

 

 

 

/s/ Fred W. Cooper

 

Fred W. Cooper

 

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.

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2022
Aug. 19, 2022
Details    
Registrant CIK 0001884164  
Fiscal Year End --12-31  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2022  
Document Transition Report false  
Securities Act File Number 000-56349  
Entity Registrant Name KwikClick, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 95-4463033  
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 801  
Local Phone Number 243-4840  
Phone Fax Number Description Registrant’s telephone number, including area code:  
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   127,967,606
Amendment Flag false  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q2  
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Consolidated Balance Sheets - USD ($)
Jun. 30, 2022
Dec. 31, 2021
Current assets    
Cash and cash equivalents $ 15,462 $ 609,862
Accounts receivable, net 50,000 0
Total current assets 65,462 609,862
Equipment, net 6,177 2,635
Intellectual property, net 781,635 613,507
Right of use asset 144,323 0
Total assets 997,597 1,226,004
Current liabilities    
Accounts payable 513,430 572,808
Accrued liabilities 41,435 345,059
Lease obligation 51,288 0
Shareholder loans 884,489 34,489
Stock issuable 4,010 1,086,042
Total current liabilities 1,494,652 2,038,398
Long-term liabilities    
Lease obligation, net of current portion 93,791 0
Total liabilities 1,588,443 2,038,398
Stockholders' deficit    
Preferred shares 0 0
Common shares 11,797 11,591
Additional paid-in-capital 4,222,867 1,728,675
Accumulated deficit (4,825,510) (2,552,660)
Total stockholders' deficit (590,846) (812,394)
Total liabilities and stockholders' deficit $ 997,597 $ 1,226,004
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Consolidated Balance Sheets - Parenthetical - $ / shares
Jun. 30, 2022
Dec. 31, 2021
Details    
Preferred Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Preferred Stock, Shares Authorized 5,000,000 5,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Common Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 250,000,000 250,000,000
Common Stock, Shares, Issued 117,967,605 115,912,605
Common Stock, Shares, Outstanding 117,967,605 115,912,605
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Consolidated Statements of Operations - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Revenues        
Product sales $ 72,189 $ 0 $ 176,100 $ 0
Licensing 150,000 0 300,000 0
Net revenue 222,189 0 476,100 0
Operating costs and expenses        
Cost of revenues 32,912 0 80,030 0
Management and payroll 1,265,075 259,425 2,163,598 434,035
General and administrative 274,200 72,625 505,322 143,619
Total operating costs and expenses 1,572,187 332,050 2,748,950 577,654
Loss before income taxes (1,349,998) (332,050) (2,272,850) (577,654)
Provision for (benefit from) income taxes 0 0 0 0
Net loss $ (1,349,998) $ (332,050) $ (2,272,850) $ (577,654)
Basic and diluted loss per share $ (0.01) $ (0.00) $ (0.02) $ (0.01)
Weighted average shares outstanding - basic and diluted 117,240,353 110,542,516 116,580,147 113,183,063
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Consolidated Statement of Shareholders' Equity - USD ($)
Preferred Stock
Common Stock
Additional Paid-in Capital
Retained Earnings
Total
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2020 $ 10 $ 10,969 $ 1,086,529 $ (182,609) $ 914,899
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 100,000 109,692,605      
Net loss $ 0 $ 0 0 (245,604) (245,604)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2021 $ 10 $ 10,969 1,086,529 (428,213) 669,295
Shares, Outstanding, Ending Balance at Mar. 31, 2021 100,000 109,692,605      
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2020 $ 10 $ 10,969 1,086,529 (182,609) 914,899
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 100,000 109,692,605      
Net loss         (577,654)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2021 $ 10 $ 11,590 1,381,918 (760,263) 633,255
Shares, Outstanding, Ending Balance at Jun. 30, 2021 100,000 115,900,105      
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2021 $ 10 $ 10,969 1,086,529 (428,213) 669,295
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 100,000 109,692,605      
Net loss $ 0 $ 0 0 (332,050) (332,050)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2021 $ 10 $ 11,590 1,381,918 (760,263) 633,255
Shares, Outstanding, Ending Balance at Jun. 30, 2021 100,000 115,900,105      
Issuance of common stock for cash $ 0 $ 621 295,389 0 296,010
Issuance of common stock for cash   6,207,500      
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2021 $ 0 $ 11,591 1,728,675 (2,552,660) (812,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 0 115,912,605      
Net loss $ 0 $ 0 0 (922,852) (922,852)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2022 $ 0 $ 11,591 1,728,675 (3,475,512) (1,735,246)
Shares, Outstanding, Ending Balance at Mar. 31, 2022 0 115,912,605      
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2021 $ 0 $ 11,591 1,728,675 (2,552,660) (812,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 0 115,912,605      
Net loss         (2,272,850)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2022 $ 0 $ 11,797 4,222,867 (4,825,510) (590,846)
Shares, Outstanding, Ending Balance at Jun. 30, 2022 0 117,967,605      
Issuance of common stock for services   225,000      
Issuance of common stock for intellectual property acquisition   100,000      
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2022 $ 0 $ 11,591 1,728,675 (3,475,512) (1,735,246)
Shares, Outstanding, Beginning Balance at Mar. 31, 2022 0 115,912,605      
Net loss $ 0 $ 0 0 (1,349,998) (1,349,998)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2022 $ 0 $ 11,797 4,222,867 (4,825,510) (590,846)
Shares, Outstanding, Ending Balance at Jun. 30, 2022 0 117,967,605      
Issuance of common stock for settlement of stock issuable $ 0 $ 73 1,041,127 0 1,041,200
Issuance of common stock for settlement of stock issuable   730,000      
Issuance of common stock for accrued compensation 0 $ 33 333,301 0 333,334
Issuance of common stock for accrued compensation   333,334      
Issuance of common stock for services 0 $ 23 224,977 0 225,000
Issuance of common stock for services   225,000      
Issuance of common stock for intellectual property acquisition 0 $ 10 99,990 0 100,000
Issuance of common stock for intellectual property acquisition   100,000      
Stock based compensation $ 0 $ 67 $ 794,797 $ 0 $ 794,864
Stock based compensation   666,666      
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Consolidated Statements of Cash Flows - USD ($)
6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Cash flows from operating activities    
Net loss $ (2,272,850) $ (577,654)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 17,276 5,629
Stock based compensation 1,019,864 0
Loss on sale of equipment 560 0
Changes in operating assets and liabilities    
Accounts receivable (50,000) 0
Increase (Decrease) in Accounts Payable 757 0
Increase (Decrease) in Due to Other Related Parties 18,876 0
Accounts payable (59,378) 0
Net Cash Provided by (Used in) Operating Activities (1,324,895) (572,025)
Net Cash Provided by (Used in) Investing Activities    
Purchase of intellectual property (84,769) (82,959)
Proceeds from sale of equipment 1,920 0
Purchases of equipment (6,656) 0
Net Cash Provided by (Used in) Investing Activities (89,505) (82,959)
Net Cash Provided by (Used in) Financing Activities    
Refund of stock payable (30,000) 0
Proceeds from shareholders loans 850,000 4,000
Proceeds from issuance of common stock 0 296,010
Net Cash Provided by (Used in) Financing Activities 820,000 300,010
Net decrease in cash and cash equivalents (594,400) (354,974)
Cash and cash equivalents at beginning of period 609,862 772,458
Cash and cash equivalents at end of period 15,462 417,484
Cash paid for income taxes 0 0
Cash paid for interest 0 0
Non-Cash Supplemental Disclosures    
Common stock issued for intellectual property 100,000 0
Common stock issued for stock issuable settlement 1,041,200 0
Common stock issued for accrued compensation $ 333,333 $ 0
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NOTE 1. BUSINESS
6 Months Ended
Jun. 30, 2022
Notes  
NOTE 1. BUSINESS

NOTE 1. BUSINESS

 

KwikClick, Inc., (the Company) was organized pursuant to the laws of the State of Delaware on November 16, 1993. Beginning in 2020, the Company commenced its KwikClick business operations to allow sellers to make products or services available on the KwikClick platform, at Kwik.com, offering a self-determined discount on goods or services in exchange for exposure and substantially increased sales volume.

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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2022
Notes  
NOTE 2. 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, 2021.

 

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 six-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 accounting principles generally accepted in the United States of America 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 KwikClick 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 June 30, 2022 or December 31, 2021.

 

Revenue Recognition

 

The Company provides its customers a platform to sell their products and services in which it earns a fee based on a percentage of the products sold.  Additionally, the Company has licensed the use of the technology platform under a Software Licensing and Exclusivity Agreement (“SL Agreement”).  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 

 

The Company has two main revenue sources: sales of products on the KWIKClick app and technology licensing. The Company recognizes revenue at the completion of its applicable performance obligations.  

 

For product sales, the customer pays at the time of purchase and the Company’s performance obligations are complete at the time of shipment. Shipping and handling costs, if any, are recognized as revenue and recorded at gross when incurred.

 

Technology licensing revenue is recognized over time as the Company’s performance obligation is to provide the functionality over the contract period.  

 

Advertising

 

The Company expenses advertising as incurred. Advertising expense was $60,391 and $125,720 for the three and six months ended June 30, 2022, respectively.  The Company did not incur material advertising expense for the three and six months ended June 30, 2021.

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NOTE 3. GOING CONCERN
6 Months Ended
Jun. 30, 2022
Notes  
NOTE 3. GOING CONCERN

NOTE 3. GOING CONCERN

 

As reflected in the accompanying unaudited consolidated financial statements, the Company has an accumulated deficit of $4,825,510 and working capital deficit of $1,429,190 as of June 30, 2022, and a net loss of $2,272,850 for the six months then ended. If the Company does not begin 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. 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. 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.

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NOTE 4. STOCKHOLDERS' EQUITY
6 Months Ended
Jun. 30, 2022
Notes  
NOTE 4. STOCKHOLDERS' EQUITY

NOTE 4. STOCKHOLDERS' EQUITY

 

The Company is authorized to issue 5,000,000 shares of preferred stock and 250,000,000 shares of common stock each with a par value of $0.0001.  As of June 30, 2022 and December 31, 2021, the Company did not have any shares of preferred stock outstanding.  As of June 30, 2022 and December 2021 the Company had 117,967,605 and 115,912,605 shares of common stock issued and outstanding, respectively.

 

The following provides a description of the common stock issuances during the six months ended June 30, 2022.

 

In May 2022, the Company issued 75,000 shares of common stock valued at $225,000 to each of its three Board members (225,000 total shares) for services rendered.

 

In May 2022, the Company issued 100,000 shares of common stock valued at $100,000 to its former President for the acquisition of the kwik.com domain name.

 

In May 2022, the Company issued 1,000,000 shares of common stock valued at $1,000,000 for compensation to its former President.  Of this amount, $333,333 was for accrued compensation at December 31, 2021, while the remaining $666,667 was for services rendered during the six months ended June 30, 2022.

 

In April 2022, the Company issued 730,000 shares of common stock for cash proceeds totaling $1,041,200 that were received as of December 31, 2021.  At June 30, 2022, the Company had $4,010 of cash proceeds for which the stock

has not been issued and is presented as a stock issuable liability in the accompanying condensed consolidated balance sheet.

 

Common Stock Compensation

 

At the discretion of the compensation committee, the Company has granted common stock awards for various employees. The awards issued to date are earned and recognized over the requisite service period.  The fair value of the award is estimated on the grant date.  

 

A summary of the stock-based compensation associated with common stock awards is as follows:

 

 

 

Common Stock

 

 

Weighted
Average
Fair Value

Outstanding at January 1, 2022

 

 

-

 

 

$

-

Granted

 

 

5,797,550

 

 

 

0.22

Forfeited or cancelled

 

 

-

 

 

 

Vested

 

 

(981,549

)

 

 

0.82

Outstanding at June 30, 2022

 

 

4,816,001

 

 

 

0.10

 

For the three and six months ended June 30, 2022, the Company recognized total stock-based compensation of $250,000 and $1,019,864, respectively.  The Company did not incur any stock-based compensation during the three and six months ended June 30, 2021.

 

As of June 30, 2022, the Company has committed 5,130,884 shares of stock for the fulfillment of the unissued vested (314,383 shares) and unvested (4,816,001) awards.  

 

Stock Options

 

As of June 30, 2022, the Company had 400,000 fully vested stock options outstanding with a weighted average exercise price of $1.00 per share and a remaining term of two and a half years.  The Company did not issue any stock options during the three and six months ended June 30, 2022 or 2021.