Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

Forward-Looking Statements

As used in this Form 10-Q, references to the "Company," "KwikClick," "KWIK," "we," "our" or "us" refer to KwikClick, Inc. and KwikClick, LLC, unless the context otherwise indicates.

This Management's Discussion and Analysis ("MD&A") section discusses our results of operations, liquidity and financial condition and certain factors that may affect our future results. You should read this MD&A in conjunction with our financial statements and accompanying notes included elsewhere in this report.

This Quarterly Report on Form 10-Q contains statements that are considered forward-looking statements. Forward-looking statements give the Company's current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company's future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "plan," and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on the Company's current plans, and the Company's actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this quarterly report.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 31, 2025. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include the "Risk Factors" included in our annual report on Form 10-K filed with the SEC on March 31, 2025, that can be read at www.sec.gov.

Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized, nor can there be any assurance that we have identified all possible issues which we might face. For all of these reasons, the reader is cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date hereof. We assume no responsibility to update any forward-looking statements as a result of new information, future events, or otherwise except as required by law.

Overview

The Company was organized pursuant to the laws of the State of Delaware on November 16, 1993. Beginning in 2020, the Company commenced its Kwik business operations to allow sellers to make products or services available on the Kwik platform, at Kwik.com, offering a self-determined incentive budget on goods or services in exchange for exposure and substantially increased sales volume. Kwik is a social interaction, selling, and referral software platform. Stores and manufacturers ("Brands") wishing to promote their products or services on the Kwik software platform are connected to promoters, influencers, and customers.

Comparison of operations for the Three Months ended September 30, 2025 and September 30, 2024

Revenues

During the three months ended September 30, 2025 and 2024, we recognized net revenues of $242,497 and $32,532, respectively. The $209,965 increase is primarily the result of the expansion of our custom design services in which we build custom software features for customers that is generally done in addition to embedding our transaction platform into a customer's website. We intend to continue to pursue providing these products and services which we expect to drive increases in our brand services on a perpetual basis.

Cost of Sales

Our costs of sales increased $74,073 to $106,043 for the three months ended September 30, 2025 as compared to $31,970 for the three months ended September 30, 2024. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to increase as sales increase, but at a slower pace if we are successful in the expansion of the custom design services. Additionally, we would expect our sales volume and cost of sales to correspondingly increase as more brands launch our platform within their own website. The underlying products and services sold through our platform is currently unpredictable.

Operating Expenses

During the three months ended September 30, 2025 and 2024, we incurred total operating expenses of $355,049 and $306,297 respectively. The $48,752 increase resulted from an increase in management and payroll of $127,890, offset by a decrease in research and development of $69,393 and a decrease in general and administrative expenses of $9,745.

Other Income (Expense)

During the three months ended September 30, 2025, other expenses increased by $4,625 to $67,468 from $62,843. The increase was the result of continued compounding (at a rate of 10% per annum) of our unpaid related party loan outstanding. If we are successful in increasing our customer base, we do not expect an increase the principal balance of the loan over the next twelve months to fund expenses required for an expansion of our customer base.

Comparison of operations for the nine Months ended September 30, 2025 and September 30, 2024

Revenues

During the nine months ended September 30, 2025 and 2024, we recognized net revenues of $681,077 and $76,569, respectively. The $604,508 increase is primarily the result of the expansion of our custom design services in which we build custom software features for customers that is generally done in addition to embedding our transaction platform into a customer's website. We intend to continue to pursue providing these products and services which we expect to drive increases in our brand services on a perpetual basis.

Cost of Sales

Our costs of sales increased $200,857 to $263,604 for the nine months ended September 30, 2025 as compared to $62,747 for the nine months ended September 30, 2024. The expansion of our custom design business requires higher labor costs than our brand services. We expect the costs of revenue to increase as sales increase, but at a slower pace if we are successful in the expansion of the custom design services. Additionally, we would expect our sales volume and cost of sales to correspondingly increase as more brands launch our platform within their own website. The underlying products and services sold through our platform is currently unpredictable.

Operating Expenses

During the nine months ended September 30, 2025 and 2024, we incurred total operating expenses of $995,840 and $1,322,536 respectively. The $326,696 decrease primarily resulted from non-recurring stock-based compensation of $407,858 recognized in the nine months ended September 30, 2024 and a reduction in research and development of $176,310, offset by increases in management and payroll and general and administrative to support the growth of the business.

In the event we are able to raise additional capital, we would anticipate our total operating expenses will trend upward as we add additional employees and consultants to work on the execution of our business plan, which includes activities such as design and coding of our website and app, customer acquisition, cybersecurity, and user acquisition. We anticipate that much of this work will be done by outside consultants.

Other Income (Expense)

During the nine months ended September 30, 2025, the Company negotiated settlements with previous brands surrounding previously accrued commissions payable on their behalf for no additional consideration resulting in a gain on settlement totaling $147,527 ($30,000 for similarly settled vendor obligations for the nine months ended September 30, 2024). We do not expect these settlements to occur on a frequent basis in the future.

Other income was offset by an increase in related party interest to $194,844 from $163,201. The increase was the result of continued compounding (at a rate of 10% per annum) of our unpaid related party loan outstanding. If we are successful in increasing our customer base, we do not expect an increase the principal balance of the loan over the next twelve months to fund expenses required for an expansion of our customer base.

Liquidity and capital resources

At September 30, 2025, we had a working capital deficit of $3,821,083. Approximately 81% of our liabilities as of September 30, 2025 are due to our founder, majority shareholder, and CEO Mr. Fred Cooper under a note payable arrangement carrying an interest rate of 10% per annum. Mr. Cooper has informally agreed to defer repayment of the note until the Company has achieved a more stable liquidity position, however, he is not legally obligated to continue to do so.

We require additional capital to continue to operate our business, and to develop and expand our business. Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Critical Accounting Estimates

There has been no change in our critical accounting estimates from those disclosed in our annual report on Form 10-K filed with the SEC on March 31, 2025.