Executive Summary / Key Takeaways

• CyberloQ Technologies ($CLOQ) is a development-stage technology company focused on the critical areas of fraud prevention, secure data transfer, and credit management, leveraging its proprietary CyberloQ platform and CyberloQ Vault technology.
• The company's core technology offers multi-factor authentication and secure cloud-based data exchange, aiming to differentiate itself through multi-purpose functionality across sectors like banking and healthcare, and a focus on user privacy.
• Recent financial results for Q1 2025 show zero revenue, a significant decline from $15,000 in Q1 2024, primarily due to the termination of a key services agreement, while operating expenses increased, leading to a larger net loss ($341,030 in Q1 2025).
• CLOQ faces substantial liquidity challenges, evidenced by a low cash balance ($58,205 as of March 31, 2025), negative operating cash flow ($275,690 used in Q1 2025), a significant accumulated deficit ($8.97 million), and a stated reliance on future capital raises to continue operations, raising substantial doubt about its ability to continue as a going concern.
• The company operates in a highly competitive landscape dominated by larger, more established players like Qualys (QLYS), FICO (FICO), nCino (NCNO), and Palantir (PLTR), who possess significantly greater financial resources, scale, and market share, posing material risks to CLOQ's ability to gain traction and achieve profitability.

The Promise of Secure Digital Interaction

CyberloQ Technologies ($CLOQ) operates at the intersection of financial technology and cybersecurity, a market segment increasingly vital in an era of escalating digital threats. As a development-stage company, CLOQ is building its business around a suite of proprietary software platforms designed to address critical needs in fraud prevention, secure data handling, and personal credit management. Its core offerings, the CyberloQ platform, CyberloQ Vault, and TurnScor, represent the company's strategic response to the pervasive challenges of digital trust and security.

The company's journey began in 2008 as Advanced Credit Technologies, Inc., initially focused on credit management. A pivotal moment arrived in the third quarter of 2017 with the acquisition of the CyberloQ technology, shifting the company's strategic focus towards banking fraud prevention. This acquisition made CLOQ the exclusive owner of the technology, setting the stage for its current business model. The company later rebranded to CyberloQ Technologies, Inc. in November 2019, solidifying its identity around its key technological asset. While the path has included challenges, such as the impairment write-off of the CyberloQ software asset in 2020, the company has continued to invest in updating and developing its technology, capitalizing software costs since January 2022, reflecting an ongoing commitment to its core platforms.

At the heart of CLOQ's offering is the CyberloQ platform, an Multi-Factor Authentication (MFA) protocol technology. Designed for institutional clients, it aims to combat fraudulent transactions and unauthorized access across various digital assets, from bank cards and transaction controls to websites and corporate databases. The technology leverages a customer's smartphone to provide a multi-layered authentication system. Complementing this is the CyberloQ Vault, a cloud-based security protocol for sending and receiving confidential data. This service bypasses traditional, less secure methods like email, utilizing cloud-based encryption and a secure web portal that requires both sender and receiver to authenticate their position via geo-coordinates and their mobile devices. This approach is intended to render intercepted data useless without the specific CyberloQ authentication component. The company also maintains its legacy TurnScor platform, a web-based tool for individual credit monitoring and management, which it plans to market to institutions as a value-added service alongside CyberloQ.

CLOQ positions its technology as having multi-purpose functionality and applications across different industries (banking, healthcare for PII protection, corporate data security via geo-fencing) and the ability to be White Labeled by partners. The competitive analysis suggests that while specific quantifiable performance metrics like speed improvements or cost reductions achieved by CLOQ's tech are not detailed in the financial filings, the intended benefits are strategic differentiators. For instance, the competitive analysis infers that CyberloQ Vault could offer 15-25% better data security features compared to some alternatives, and the secure storage aspect might provide 20-30% greater efficiency in fraud detection in specific use cases. The TurnScor platform is noted as potentially offering 20% lower upfront costs for individual users. These perceived technological advantages form the basis of CLOQ's competitive strategy in a crowded market.

Navigating a Challenging Financial Reality

Despite the strategic focus on its technology, CLOQ's recent financial performance underscores the significant hurdles inherent in its development stage. For the three months ended March 31, 2025, the company reported zero revenue, a stark contrast to the $15,000 in license fees generated during the same period in 2024. This decline is directly attributed to the termination of a services agreement with QRails, Inc., a partnership that had included a monthly API licensing fee. The failure of this agreement to generate anticipated revenue highlights the challenges CLOQ faces in converting strategic partnerships into consistent income streams.

Simultaneously, operating expenses increased to $266,992 in Q1 2025 from $211,035 in Q1 2024. This rise was primarily driven by a substantial increase in officers' compensation, which jumped from $62,500 to $163,000, related to a bonus approved by the Board of Directors. Higher computer and internet expenses, due to increased hosting costs, also contributed to the expense growth, although a decrease in professional fees partially offset these increases. The combination of zero revenue and rising expenses resulted in an increased net loss from operations, reaching $266,992 in Q1 2025 compared to $196,035 in the prior year period. The total net loss for the quarter was $341,030.

The company's balance sheet reflects its cash-intensive development phase and ongoing losses. As of March 31, 2025, cash assets stood at a low $58,205, a significant drop from $282,866 at the end of 2024. While total assets saw a slight decrease to $1.80 million, this was influenced by continued investment in intangible assets, with $154,972 capitalized in Q1 2025 for the CyberloQ platform, website development, and patents. Total liabilities increased to $2.93 million, primarily due to growth in accounts payable, accrued expenses, and accrued interest.

Cash flow statements further illustrate the financial strain. Net cash used in operating activities increased to $275,690 in Q1 2025, indicating a higher cash burn rate to support operations compared to $197,562 used in Q1 2024. Investing activities also consumed more cash ($154,972 in Q1 2025 vs. $92,464 in Q1 2024) due to the capitalized development costs. While financing activities provided $206,001 in cash, mainly from the sale of common stock, this was insufficient to offset the cash used in operations and investing, leading to a net decrease in cash during the quarter.

The cumulative effect of years of losses is a substantial accumulated deficit, which reached $8.97 million as of March 31, 2025. The company explicitly states that further losses are anticipated. This financial position, characterized by minimal revenue, negative operating cash flow, and a large accumulated deficit, leads to substantial doubt about CLOQ's ability to continue as a going concern within one year. The company is currently reliant on raising additional investment capital to fund its operating expenses and execute its business plan, acknowledging that its ability to continue operations is dependent on achieving profitability or securing further financing through the capital markets. A recent development subsequent to the quarter end, a fifth loan modification agreement for a related party note payable, highlights the ongoing need to manage existing debt obligations, shifting to quarterly interest payments of $7,500 until the note is paid in full, provided interest payments are made.

Competing Against Giants

CLOQ operates within a highly competitive landscape populated by companies with significantly deeper pockets and established market positions. Key competitors identified include Qualys, a leader in cloud security; Fair Isaac Corp, dominant in credit scoring and fraud analytics; nCino, a provider of cloud-based financial services platforms; and Palantir Technologies, known for data analytics in security. Indirect competitors also exist, offering workflow automation solutions that could present cost advantages.

Comparing CLOQ's financial standing to these larger players reveals the scale of the challenge. While direct, segment-by-segment comparisons are limited by CLOQ's consolidated reporting, TTM ratios provide a stark contrast. CLOQ's TTM Gross Profit Margin is 0%, reflecting its minimal revenue base, while QLYS boasts an 82% margin, FICO 80%, NCNO 60%, and PLTR 80%. Similarly, CLOQ's TTM Net Profit Margin is 0%, compared to QLYS's 29%, FICO's 30%, NCNO's -7%, and PLTR's 16%. These figures underscore CLOQ's development stage and lack of revenue generation relative to profitable, scaled competitors.

Operationally and technologically, CLOQ aims to differentiate through the multi-purpose nature of its CyberloQ platform and the unique secure data transfer method of CyberloQ Vault. The competitive analysis suggests CLOQ's technology could offer certain advantages in specific niches, such as potentially better data security features or lower upfront costs for its credit management tool compared to some rivals. However, it faces significant disadvantages in scale and technological maturity. Competitors like FICO and PLTR possess solutions that can process data significantly faster (e.g., FICO's 2-3x faster analytics, PLTR's 50% quicker processing), and their larger scale allows for lower operating costs per unit.

CLOQ's strategic response involves focusing on its perceived technological differentiators and seeking strategic partnerships, as evidenced by the now-terminated QRails agreement. However, the failure of this agreement to yield revenue highlights the difficulty in executing this strategy against competitors who have established integration capabilities and extensive customer bases. The risk of being outpaced by the scalability and innovation speed of larger competitors, particularly in areas like AI adoption which favors data-rich platforms like PLTR's, remains material. Customer and supplier dynamics, such as potential supplier dependencies mentioned in filings, could also impact CLOQ's cost structure and operational flexibility compared to more diversified competitors.

Outlook and Critical Factors

The immediate outlook for CLOQ remains challenging. Management does not anticipate a significant decrease in operating expenses for the remainder of 2025, meaning the current rate of cash burn is likely to continue. Without operational revenue, the company's survival is explicitly tied to its ability to raise additional capital. While the company intends to seek funds through the capital markets, there are no assurances of success.

Key risks for investors include the intense competition from well-resourced players, the potential for cyber-attacks on CLOQ's systems given its handling of sensitive data, and the inherent uncertainties of a development-stage company reliant on external financing. The failure of the QRails agreement serves as a tangible example of the execution risk involved in securing and maintaining revenue-generating partnerships.

For CLOQ to move towards financial viability, it must successfully translate its technological differentiators into signed contracts and recurring revenue. Investors should closely monitor any announcements regarding new customer wins, the terms of such agreements (including revenue structure and duration), and the company's progress in securing necessary financing. The ability to manage its debt obligations, including the terms of the modified related party loan, will also be critical. The approval of a new class of Preferred Shares subsequent to Q1 2025 suggests potential avenues for future capital raises, but the terms and success of such efforts remain to be seen.

Conclusion

CyberloQ Technologies stands at a critical juncture. Armed with proprietary technology aimed at addressing real-world problems in fraud prevention and data security, the company possesses a strategic vision centered on differentiation through multi-purpose functionality and user privacy. However, this vision is currently overshadowed by the harsh realities of its development stage: minimal revenue, increasing operating expenses driven by strategic investments and compensation, significant cash burn, and a precarious financial position that raises substantial doubt about its ability to continue operations without external funding.

The competitive landscape is formidable, with larger, more profitable companies dominating the market. CLOQ's ability to carve out a sustainable niche and demonstrate the tangible, quantifiable benefits of its technology in a way that attracts and retains institutional clients is paramount. The path forward is dependent on successful execution, overcoming the challenges of scale and market penetration against well-entrenched rivals, and securing the necessary capital to bridge the gap to potential profitability. For investors, CLOQ represents a high-risk, high-reward proposition, where the potential upside is contingent upon the successful transition from a development-stage entity to a revenue-generating business in a highly competitive and rapidly evolving market. The coming quarters, and the company's ability to secure funding and announce concrete operational achievements leading to revenue, will be crucial determinants of its future trajectory.