CYBERLOQ TECHNOLOGIES, INC. - Quarter Report: 2019 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File Number: 333-170132

Advanced Credit Technologies, Inc.

(Exact name of registrant as specified in its charter)

Nevada		26-2118480
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

871 Venetia Bay Boulevard, #202 Venice, Florida		34285
(Address of principal executive offices)		(Zip Code)

(612)961-4536

(Registrant’s telephone number, including area code)

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 preceding 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.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”“accelerated filer”and “smaller reporting company”in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [X]	Smaller reporting company [X]

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 [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]

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

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common		ACRT		OTC Pink

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of the date of this filing, there were 68,130,515 shares of the Issuer’s common stock issued and outstanding and held by approximately 115 shareholders, six of which are deemed affiliates within the meaning of Rule 12b-2 under the Exchange Act.

As of the date of this filing, there were 30,000 shares of the Issuer’s preferred stock issued and outstanding.

Advanced Credit Technologies, Inc.

FORM 10-Q

For The Fiscal Quarter Ended September 30, 2019

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	3
Item 1. Condensed Financial Statements.	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4. Controls and Procedures.	21
PART II — OTHER INFORMATION	22
Item 1. Legal Proceedings.	22
Item 1A. Risk Factors.	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	23
Item 3. Defaults Upon Senior Securities.	23
Item 4. Other Information.	23
Item 5. Exhibits.	23
SIGNATURES	24

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements related to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this quarterly report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Annual Report to conform these statements to actual results.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

	●	General economic and industry conditions;
	●	Out history of losses, deficits and negative operating cash flows;
	●	Our limited operating history;
	●	Industry competition;
	●	Environmental and governmental regulation;
	●	Protection and defense of our intellectual property rights;
	●	Reliance on, and the ability to attract, key personnel;
	●	Other factors including those discussed in “Risk Factors” in this quarterly report on Form 10-Q and our incorporated documents.

You should keep in mind that any forward-looking statement made by us in this quarterly report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this annual report after the date of filing, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this annual report or elsewhere might not occur.

In this annual report on Form 10-Q, the terms “ACRT,” “Company,” “we,” “us” and “our” refer to Advanced Credit Technologies, Inc. and its wholly-owned subsidiary CyberloQ Technologies, LTD.

Item 1.

FINANCIAL STATEMENTS

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

	September 30, 2019			December 31, 2018
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	22,837		$	21,009
Accounts Receivable		50,000			-
Commitment Receivable		-			9,000
Total Current Assets		72,837			30,009

Fixed Assets
Software and Computer Equipment, Net		475,079			550,679
Total Fixed Assets		475,079			550,679

Total Assets	$	547,917		$	580,688

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts Payable and Accrued Expenses	$	27,371		$	9,851
Deposits	$	10,000		$	-
Customer Prepayments		20,838			39,585
Loans Payable – Stockholders		35,000			45,000
Total Current Liabilities		93,209			94,436

Total Liabilities		93,209			94,436

Commitments and Contingencies		-			-

Stockholders’ Equity

Common stock: $0.001 par value,100,000,000 shares authorized; 68,130,515 and 65,830,515 shares issued and outstanding as of September 30, 2019 and December 31, 2018 respectively	$	68,131		$	65,831

Preferred Stock $0.001 per value - 30,000 shares authorized; issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		30			30

Shares to be Issued: 3,333,333 and 3,483,333 common shares as of September 30, 2019 and December 31, 2018, respectively		300,000			348,000

Stock Subscription Receivable		(35,000	)		(150,000	)

Additional Paid in Capital	$	4,148,372		$	3,884,102

Accumulated Deficit		(4,026,826	)		(3,661,711	)

Total Stockholders’ Equity		454,707			486,252

Total Liabilities and Stockholders’ Equity	$	547,917		$	580,688

See accompanying notes to financial statements

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue
Service Revenue	$	22,814		$	4,166		$	95,699		$	4,166
Total Revenue		22,814			4,166			95,699			4,166

Operational Expense
Sales Commissions		18,763			-			28,704			-
Professional Fees		9,711			9,173			53,393			53,996
Research		0			25,592			6,193			27,092
Stock Compensation		0			296,120			18,570			355,623
Officer’s Compensation		68,796			83,000			203,796			250,489
Travel and Entertainment		2,480			8,169			27,535			32,080
Rent		150			150			450			525
Depreciation		30,669			30,012			91,350			90,037
Computer and Internet		5,096			2,101			14,870			5,758
Office Supplies and Expenses		1,119			21,137			4,489			24,456
Other Operating Expenses		1,235			2,099			11,349			17,183
Total Operating Expenses		138,019			477,553			460,699			827,239

Loss from Operations		(115,205	)		(473,387	)		(365,000	)		(823,073	)

Other Income (Expense)
Gain (Loss) of Settlement of Debt		-			-			-			(12,000	)
Interest		(15	)		(236	)		(115	)		(550	)

Total Other Income (Interest Expenses)		(15	)		(236	)		(115	)		(12,550	)

Provision for Income Taxes		-			-			-			-

Net Loss	$	(115,220	)	$	(473,623	)	$	(365,115	)	$	(835,623	)

Loss per common share-Basic and diluted	$	(0.002	)	$	(0.007	)	$	(0.005	)	$	(0.013	)

Weighted Average Number of Common Shares Outstanding Basic and diluted		67,647,182			65,369,348			67,016,626			64,162,570

See accompanying notes to financial statements

Advanced Credit Technologies, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

From January 1, 2017 to September 30, 2019

	Common (Issued)				Common (Unissued)						Preferred Stock				Add’l Paid-In		Accum.
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Total
Balance as of December 31, 2017		61,982,181	$	61,982		150,000		$	12,000			30,000	$	30	$	3,141,639	$	(2,621,252	)	$	594,399

Proceeds from Issuance of Common Stock		1,000,000		1,000		-			-			-		-		99,000		-			100,000

Warrants Issued for Services		-		-		-			-			-		-		29,753		-			29,753

Shares issued for conversion of debt		60,000		61								-		-		17,939		-			18,000

Net loss for quarter ended March 31, 2018		-		-		-			-			-		-		-		(204,348	)		(204,348	)

Balance as of March 31, 2018		63,042,181	$	63,043		150,000		$	12,000			30,000	$	30	$	3,288,331	$	(2,825,600	)	$	537,804

Proceeds from Issuance of Common Stock		183,334		182		-			-			-		-		19,817		-			19,999

Warrants Issued for Services		-		-		-			-			-		-		29,751		-			29,751

Shares issued for conversion of debt		150,000		150		(150,000	)		(12,000	)		-		-		11,850		-			-

Net loss for quarter ended June 30, 2018		-		-		-			-			-		-		-		(157,377	)		(157,377	)

Balance as of June 30, 2018		63,375,515	$	63,375		-		$	-			30,000	$	30	$	3,349,749	$	(2,982,977	)	$	430,177

Proceeds from Issuance of Common Stock		2,020,000		2,020		-			-			-		-		199,980		-			202,000

Unissued Common Stock		-		-		-			100,000			-		-		-		-			100,000

Warrants Issued for Services		-		-		-			-			-		-		9,285		-			9,285

Shares issued for services		435,000		436		-			-			-		-		82,864		-			83,300

Options Isssued for Services		-		-		-			-			-		-		203,536		-			203,536

Net loss for quarter ended September 30, 2018		-		-		-			-			-		-		-		(473,623	)		(473,623	)

Balance as of September 30, 2018		65,830,515	$	65,831		-		$	100,000			30,000	$	30	$	3,845,414	$	(3,456,600	)	$	554,675

Unissued Common Stock		-		-		-			(150,000	)		-		-		-		-			(150,000	)

Warrants Issued for Services		-		-		-			-			-		-		9,285		-			9,285

Shares issued for services		-		-		-			48,000			-		-		-		-			48,000

Options Isssued for Services		-		-		-			-			-		-		29,403		-			29,403

Stock subscriptions		-		-		-			200,000			-		-		-		-			200,000

Shares issued for conversion of debt		-		-		-			-			-		-		-		-			-

Net loss for quarter ended December 31, 2018		-		-		-			-			-		-		-		(205,111	)		(205,111	)

Balance as of December 31, 2018		65,830,515	$	65,831		-		$	198,000			30,000	$	30	$	3,884,102	$	(3,661,711	)	$	486,252

Proceeds from Issuance of Common Stock		200,000		200												19,800		-			20,000

Warrants Issued for Services																9,285		-			9,285

Stock subscriptions									75,000									-			75,000

Net loss for quarter ended March 31, 2019		-		-		-			-			-		-		-		(142,984	)		(142,984	)

Balance as of March 31, 2019		66,030,515		66,031		-			273,000			30,000		30		3,913,187		(3,804,695	)		447,553

Proceeds from Issuance of Common Stock		1,250,000		1,250												123,750		-			125,000

Stock Issued for Services		300,000		300					(48,000	)						47,700		-			-

Warrants Issued for Services																9,285		-			9,285

Stock subscriptions									25,000									-			25,000

Net loss for quarter ended June 30, 2019		-		-		-			-			-		-		-		(106,910	)		(106,910	)

Balance as of June 30, 2019		67,580,515		67,581		-			250,000			30,000		30		4,093,922		(3,911,605	)		499,928

Proceeds from Issuance of Common Stock		150,000		150												14,850		-			15,000
		400,000		400												39,600					40,000
Stock Issued for Services																		-			-

Warrants Issued for Services																		-

Stock subscriptions									15,000									-			15,000

Net loss for quarter ended September 30, 2019		-		-		-			-			-		-		-		(115,221	)		(115,221	)

Balance as of September 30, 2019		68,130,515		68,131		-			265000			30,000		30		4,148,372		(4,026,826	)		454,707

See accompanying notes to financial statements

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2019

	2019			2018
	(unaudited)			(unaudited)

OPERATING ACTIVITIES
Net loss	$	(365,115	)	$	(835,623	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain (Loss) of Settlement of Debt		-			12,000
Depreciation		91,350			90,037
Stock Compensation		18,570			355,623
Change in Operating Assets and Liabilities:
Accounts Receivable		(41,000	)		16,000

Accounts Payable and Accrued Expenses		17,520			11,705
Deposits		10,000			10,833
Customer Prepayments		(18,747	)		204
Net Cash Used in Operating Activities		(287,422	)		(339,221	)

INVESTING ACTIVITIES
Software		(15,750	)		-
Net cash provided by (used) in investing activities		(15,750	)		-

FINANCING ACTIVITIES
Proceeds from Common Stock Issuance		200,000			322,000
Proceeds from Common Stock to be Issued		115,000			100,000
Repayment of Note Principal		(10,000	)		(150,000	)
Net Cash Provided by Financing Activities		305.000			272.000

Net Increase (Decrease) in Cash and Equivalents		1,828			(67,221	)
Cash and Equivalents at Beginning of the Period		21,009			112,799
Cash and Equivalents at End of the Period	$	22,837		$	45,578

SUPPLEMENTAL CASH FLOW INFORMATION
Interest Paid	$	(200	)	$	550
Income Taxes Paid	$	-		$	-

NON-CASH DISCLOSURES
Company issued 60,000 shares of Stock for payment of $6,000 accrued expenses	$	-		$	6,000

Company issued 150,000 shares of stock for payment of $12,000				$	12,000

See accompanying notes to financial statements

Advanced Credit Technologies, Inc.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

ACRT (“the Company’s TurnScor® and CyberloQ® products”, “We” or the “Company”) is a development-stage technology company focused on fraud prevention and credit management. The Company was incorporated in the State of Nevada on February 25, 2008.

The Company offers a proprietary software platform branded as CyberloQ® . While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure DATA without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses cloud based encryption and a secure web portal to send/receive confidential data, the sender and receiver both must have authenticated their position within the prescribed geo coordinates as well as authenticate their mobile devices prior to sending/receiving any data. Thus rendering a hack or breach utterly useless for the encrypted data is unusable without the CyberloQ authentication component.

In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.

On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has not had any operating activity or generated any revenue for the Company.

Basis of Presentation

The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and the rules of the Securities and Exchange Commission. All amounts are presented in U.S. dollars. The Company has adopted a December 31 fiscal year end.

Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on From 10-K for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. As of September 30, 2019 and December 31, 2018, the Company had no deposits in excess of federally-insured limits.

Research and Development, Software Development Costs, and Internal Use Software Development Costs

Software development costs are accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology; and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific products for which the costs relate.

Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality.

In accounting for website software development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training costs incurred in the development of website software be expensed as incurred, while application development stage costs are to be capitalized. During the quarters ended September 30, 2019 and 2018, we expensed $6,193 and $27,092, respectively, for expenditures on research and development. None was paid to related parties.

Fixed Assets, Intangibles and Long-Lived Assets

The Company records its fixed assets at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from three to fifteen years.

The Company follows FASB ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. As of September 30, 2019 and December 31, 2018, the Company had not experienced impairment losses on its long-lived assets.

Revenue Recognition

Effective January 1, 2018, the Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09 or ASC 606). The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 (Legacy GAAP), as detailed below. However, since the Company had not earned any revenue prior to adopting ASC 606, this policy change had no effect on any financial statements from prior periods, thus no adjustments have been made to any prior periods related to the adoption of ASC 606.

Revenue Recognition Policy

Under ASC 606, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps:

1) Identify the contract(s) with a customer;

2) Identify the performance obligations in the contract;

3) Determine the transaction price;

4) Allocate the transaction price to the performance obligations in the contract; and

5) Recognize revenue when (or as) we satisfy a performance obligation.

The Company derives its revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s TurnScor®, CyberloQ™ and CyberloQ Vault products and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services and other revenue, which consists primarily of certain performance obligations related to set-up, ingestion, consulting and training fees. The Company’s subscription arrangements provide customers the right to access the Company’s hosted software applications. Customers do not have the right to take possession of the Company’s software during the hosting arrangement.

As of September 30, 2019, the Company had $0 in contract assets, as well as a contract liability of $20,838 to perform on contracts. As of December 31, 2018, the Company has $0 in contract assets, however there was a commitment receivable of $9,000 from a customer’s non-refundable two year (beginning August 28, 2018) service contract, as well as a contract liability of $39,585 to perform on that contract as of December 31, 2018. The contract liability will be reduced by $2,083 per month as the Company provides a non-exclusive, non-transferable license to use the CyberloQ Vault Services for the customer’s internal purposes and earns and recognizes related revenue.

	Contract Asset		Contract Liability
December 31, 2018	$	0	$	39,585
Less: revenue earned and recognized		-		(18,747	)
September 30, 2019	$	0	$	20,838

Fair Value Measurements

For certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

The Company has adopted FASB ASC 820-10, “Fair Value Measurements and Disclosures.” FASB ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with FASB ASC 815.

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now known as ASC Topic 825-10 “Financial Instruments.” ASC Topic 825-10 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

Segment Reporting

FASB ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment.

Advertising

Advertising costs are expensed as incurred. Advertising expense for the periods ended September 30, 2019 and 2018 were $4,769 and $11,418, respectively.

Income Taxes

Deferred income taxes are provided using the liability method (in accordance with ASC 740) whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all-of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. The Company is not aware of uncertain tax positions.

Earnings (Loss) Per Share

Earnings per share is calculated in accordance with the FASB ASC 260-10, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

At September 30, 2019 and December 31, 2018 the Company has 500,000 and 1,125,000 warrants as well as 1,200,000 and 1,200,000 options issued (respectively) that can be exercised and could be dilutive to the existing number of shares issued and outstanding. However, due to the Company’s periods of losses, the basic weighted average is equal to the diluted weighted average shares outstanding.

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.

Stock Based Compensation

The Company adopted FASB ASC Topic 718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value-based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock-based compensation, the Company recognizes an expense in accordance with FASB ASC Topic 718 and values the equity securities based on the fair value of the security on the date of grant. Stock option and warrant awards are valued using the Black-Scholes option-pricing model, which according to ASC 820-10 is a level 3 value on the hierarchy. Black Scholes assumptions were calculated using stock price at grant date between $0.29 to $0.149; exercise prices between $0.15 to $0.20: life expectancy between ½ year to 5 years; and volatility ranging from 163% to 68%.

Recent Accounting Pronouncements

In July 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments expand the scope of ASC 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees and to supersede the guidance in ASC 505-50, Equity-Based Payments to Non-Employees. The accounting for nonemployee awards will now be substantially the same as current guidance for employee awards. ASU 2018-07 impacts all entities that issue awards to nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations, as well as to nonemployees of an equity method investee that provide goods or services to the investee that are used or consumed in the investee’s operations. ASU 2018-07 aligns the measurement-date guidance for employee and nonemployee awards using the current employee model, meaning that the measurement date for nonemployee equity-classified awards generally will be the grant date, while liability-classified awards generally will be the settlement date. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company has determined that there is no retroactive effect on its financial reports from the adoption of this standard. The Company adopted ASU 2018-07 on January 1, 2019.

NOTE 2 – FIXED ASSETS

Software and computer equipment, recorded at cost, consisted of the following:

	September 30, 2019			December 31, 2018
Software and computer equipment	$	736,500		$	720,750
Less: accumulated depreciation		(261,421	)		(170,071	)
Property and equipment, net	$	475,079		$	550,679

Depreciation expense was $30,669 and $91,350; $30,012 and $90,037 for the three and nine month periods ended September 30, 2019 and 2018, respectively.

NOTE 3 – GOING CONCERN

The Company has incurred losses since Inception resulting in an accumulated deficit of $4,026,826 as of September 30, 2019 that includes a loss of $115,205 for the quarter ended September 30, 2019. Further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

NOTE 4 – DEPOSITS

The Company holds $10,000 down payment from a customer to secure future services.

NOTE 5 – STOCKHOLDERS’ EQUITY

Common Stock

The Company has 100,000,000 shares of $.001 par value common stock authorized as of September 30, 2019 and December 31, 2018.

The Company has an agreement to issue 3,333,333 common shares for $300,000 by June 30, 2019. Currently, the Company has collected $265,000 towards that agreement, and is disclosing the full amount and the related 3,333,333 common shares as “To be Issued”. Once the remaining stock subscription of $35.000 is collected, the Company will issue the entire 3,333,333 common shares.

During 2018, the Company received $322,000 in payment for 3,203,334 shares of common stock; received $83,300 in services for 435,000 shares of common stock. Also during 2018: the Company issued 60,000 shares of common stock in payment of $6,000 of accrued legal fees, recognizing a loss on settlement of debt of $12,000; and the Company converted $12,000 of debt into 150,000 shares, these shares were previously recorded as “Shares to be Issued” in the Balance Sheet. There were 65,830,515 shares of common stock issued and outstanding as of December 31, 2018.

During 2019, the Company received $200,000 in payment for 2,000,000 shares of common stock and issued 300,000 shares to officers in conjunction with their 2018 service agreement, which were previously recorded as “Shares to be Issued” in the balance sheet. There were 68,130,515 shares of common stock issued and outstanding as of September 30, 2019.

Preferred Stock

The Company did not have any preferred stock prior to 2017. In April of 2017, the Company amended its articles of incorporation to create a new class of stock designated Series A Super Voting Preferred Stock consisting of thirty-thousand (30,000) shares at par value of $0.001 per share. Certain rights, preferences, privileges and restrictions were established for the Series A Preferred Stock as follows: (a) the amount to be represented in stated capital at all times for each share of Series A Preferred Stock shall be its par value of $0.001 per share; (b) except as otherwise required by law, holders of shares of Series A Preferred Stock shall vote together with the common stock as a single class and the holders of Series A Preferred Stock shall be entitled to five-thousand (5,000) votes per share of Series A Preferred Stock; and (c) in the event of any liquidation, dissolution or winding-up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of assets of the Corporation to the holders of the common stock, the original purchase price paid for the Series A Preferred Stock. All 30,000 shares of the Series A Super Voting Preferred Stock were issued in 2017.

NOTE 6 – COMMITMENTS

The Company rents office space on a month to month basis for its main office at 871 Venetia Bay Blvd Suite #202 Venice, FL 34285. Monthly rent for this space is $50. All conditions have been met and paid by the Company.

In 2015, in conjunction with a proposed TurnScor Card platform, the Company signed Investor Royalty and Warrant Agreements with four parties. In exchange for the funds contributed by the four parties, the Company agreed to:

1.	Pay the investors monthly residuals of 2.0% to 5% per month on the gross revenue after expenses generated by the Company’s primary platform in conjunction with the Company’s TurnScor Card;

2.	Pay the investors a residual in perpetuity on 2% to 5% of all TurnScor Card sub-platform revenue generated; and

3.	Issue warrants to investors all of which have either been exercised or expired.

The Company does not plan to proceed with the TurnScor Card at this time.

During fiscal year 2018, the Company wrote off $17,646 in advanced commissions paid to a sales person who dissolved their contractor agreement with the Company.

The Company has commission agreements as follows:

An agreement with a shareholder and director of the Company stating that the executive will be entitled to a two-and-a half-percent (2.5%) commission of the gross revenue recorded by the Company for any customer contracts that are closed by the Company at the time of and during the duration of the agreement. These commissions are payable quarterly upon receipt of customer revenues.

An agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault Services to its customers and the revenues derived will be divided 50/50 between that independent company and Advanced Credit Technologies Inc.

An agreement with two sales managers granting each manager a 1% commission on the gross revenue of the Company. These commissions are payable quarterly upon receipt of customer revenues.

A one year renewable agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault Services to a certain territory and for a defined term.

The independent company will pay Advanced Credit Technologies, Inc. a monthly fee of $100. Advanced Credit Technologies will pay a commission of 90% less transaction fees.

NOTE 7 – RELATED PARTY TRANSACTIONS

Acquisition of Cyberloq™

During 2017, the Company acquired the CyberloQ™ banking fraud prevention technology. (the “Technology”) Pursuant to the asset purchase agreement, the prior license agreement between the Company and CartenTech LLC was terminated, and the Company is now the exclusive owner of the CyberloQ™ banking fraud prevention technology along with all intellectual property rights associated with the Technology which is copyrighted with the United States Copyright Office. The owner of CartenTech LLC is Mark Carten, who is also a director of ACRT and its Chief Technology Officer. On July 28, 2017, the Company purchased the Technology with a value of $720,000. As consideration for the acquisition of and all rights to the Technology, CartenTech LLC received: (a) payment of $50,000, (b) a note for $150,000, and (c) 4,000,000 shares of the Company’s common stock. The software is being depreciated over its useful life of six-years in conjunction with the Company’s depreciation policy.

Issuance of Warrants/Options

All warrants and options are fully vested and exercisable.

The following is a summary of the warrants issued in connection with common stock:

Date	11/30/15		11/30/15		6/28/16		Wtd. Avg. Life	Wtd. Avg.Price
Warrants		250,000		250,000		625,000			-
Exercise price	$	0.15	$	0.20	$	0.20			-
Expected life		4 year		5 year		3 year			-
Unexpired 12/31/18		250,000		250,000		625,000	3.11 years	$	0.1889
Unexpired 9/30/19		250,000		250,000		-	4.5 years	$	0.1750

The following is a summary of the options issued in connection with common stock:

Date	FY 2017		FY2018		Wtd. Avg. Life		Wtd. Avg. Price
Options		100,000		1,100,000		-
Exercise price	$	0.15	$	0.15		-
Expected life		5 year		5 year		-
Unexpired 12/31/18		100,000		1,100,000		5 years	$	0.15

Unexpired 9/30/19		100,000		1,100,000		2.25 years	$	0.15

In 2016 and 2017, Rex Schuette, one of the Company’s directors, was issued two warrants to potentially acquire a total of 1,250,000 additional shares of common stock. One warrant to potentially acquire an additional 625,000 shares of common stock expired on June 19, 2018, and the other warrant to potentially acquire an additional 625,000 shares of common stock expired on June 28, 2019. Both warrants are exercisable at $0.20 per share. The Company revalued the warrants based on information that has come forward that caused a recalculation of the 1,250,000 warrants value from the $51,592 (as disclosed in the December 31, 2017 footnote) to the corrected amount $96,643. This re-valuation had no material impact on 2017, given that the majority of expense was recorded in 2018 and 2019. The Company has issued non-qualified options to an independent contractor, during 2018 there have been 1,200,000 options issued to this contractor. All options are exercisable at $0.15 per share and have a 5 year life. All non-expired warrants are being expensed ratably through expiration; all non-expired options are expensed as stock compensation is vested. As of September 30, 2019, the remaining non-expired warrant amount to be expensed is $0; the amount expensed during the first, second, and third Quarter of 2019 for these warrants is $27,855 and for options is $0. The total number of warrants and options outstanding as of September 30, 2019 is 500,000 and 1,200,000 respectively.

Related Party Loans Payable

The following is a summary of related party loans payable:

	For the Periods Ended
	September 30, 2019		December 31, 2018
Loans payable – stockholders	$	35,000	$	45,000
Loans from related parties	$	0	$	0

Loans Payable - Stockholders

On December 29, 2014, the Company entered into a partially-convertible promissory note with a shareholder in the amount of $35,000. In January of 2015, the shareholder partially-exercised its conversion option, and in May of 2016 the shareholder exercised the remainder of its conversion option. In December 2017, the remaining unpaid principal and interest due on the note was settled in full for a $50,000 note and the Company recognized $151,324 in gain on settlement of debt. The $50,000 note has a current principle balance of $35,000, a stated interest rate of 0%, required payments of $5,000 on or before June 10, 2019, $5,000 on or before August 10, 2019 and the remainder due by the extended due date of September 15, 2019. As of September 30, 2019 the payments due have not been extended, the Company is in default of its obligation.

Loans from Related Parties

There are no loans from related parties at this time.

NOTE 8 – SUBSEQUENT EVENTS

The Company is not aware of any subsequent events through the date of this filing that require disclosure or recognition in these financial statements. In addition, there exists no information required to be disclosed by the Company in a report on Form 8-K during the three-month period ended September 30, 2019, but not already reported.

Item 2.

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

The following discussion is intended to assist you in understanding our business and the results of our operations. It should be read in conjunction with the Condensed Financial Statements and the related notes that appear elsewhere in this report as well as our Report on Form 10K filed with the Securities and Exchange Commission for the period ending December 31, 2018. Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements”. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Company History

Advanced Credit Technologies Inc. (“ACRT”, ‘We” or the “Company”) was incorporated in Nevada on February 5, 2008. The Company has never been the subject of any bankruptcy, receivership or similar proceeding. The Company has never been involved in any material reclassification, merger, or consolidation.

Current Overview of the Company

ACRT is a development-stage technology company focused on fraud prevention and credit management.

The Company offers a proprietary software platform branded as CyberloQ®. While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

CyberloQ is a banking fraud prevention technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer accounts. Through the use of a customer’s smart-phone, CyberloQ uses a multi-factor authentication system to control access to a bank card, transaction type or amount, website, database or digital service. The mobile applications for CyberloQ have been built, and have been successfully integrated into the banking ecosystem.

Furthermore, in 2018 the Company introduced CyberloQ Vault, a secure cloud-based storage solution which allows users to store, retrieve and share content securely.

Finally, the Company is able to develop secure databases for clients by developing and attaching a private blockchain to the SQL database and further securing the database through use of the Company’s CyberloQ technology. The blockchain being developed by the Company is a private blockchain and is an invitation-only network governed by a single entity. Entrants to the network require permission to read, write or audit the blockchain.

The Company currently has three officers — its President, Vice-President and Chief Technology Officer. The Company does not have any employees of the Company at this time.

Liquidity, Capital Resources and Material Changes in Financial Condition

As of September 30, 2019, the Company’s assets were $547,917 compared to $580,688 in assets as of December 31, 2018. The change in the Company’s financial condition can be attributed to an depreciation of $75,600 which reduced the Company’s long-lived assets from $550,679 to $475,079, which was partially offset by an increase of $50,000 in the Company’s accounts receivable.

As of September 30, 2019, the Company’s liabilities were $93,209 compared to $94,436 in liabilities as of December 31, 2018.

Net cash used in operating activities for the nine month period ending September 30, 2019 was $287,422 compared to net cash used in operating activities for the nine month period ending September 30, 2018 of $339,221. Cash provided by or used by operating activities is driven by our net loss and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments for the nine months ended September 30, 2019 include depreciation of $91,350 and stock compensation of $18,570.

Net cash provided by financing activities was $305,000 for the nine month period ending September 30, 2019 as opposed to $95,000 for the six month period ending September 30, 2018.

The Company only had gross revenue of $95,699 in the first nine months of 2019 and is currently reliant on its ability to raise additional capital to continue execution of its business plan to move the Company forward towards profitability. The Company does not anticipate any significant decrease in its operating expenses for the remainder of 2019. Unless the Company begins to generate increased operational revenue, it will be reliant on its ability to raise additional capital in order to continue its operations.

Results of Operations for the Nine Months Ended September 30, 2018 and 2019

Company revenue was $95,699 for the nine months ended September 30, 2019 as opposed to $4,166 for the nine months ended September 30, 2018. This increase in revenue was due to the Company earning service revenue of $26,952 from its Turnscor platform along with $18,747 in recognition of revenue from a customer’s non-refundable two-year (beginning August 28, 2018) service contract and $50,000 in accounts receivable for unpaid amounts due in conjunction with developing and securing a customer’s data with a private blockchain and Cyberloq.

The Company’s operating expenses were $460,699 for the nine months ended September 30, 2019 as opposed to $827,239 for the nine months ended September 30, 2018. This vast majority of this decrease in operating expenses was due to a $337,053 decrease in stock compensation which was only $18,570 for the nine month period ended September 30, 2019, compared to $355,623 for the nine month period ended September 30, 2018. This decrease was the result of a one-time accrual adjustment for prior period issuances of stock options to an independent contractor of the Company that was made in the third-quarter of 2018.

In addition to the decrease in stock compensation, the Company also had the following decreases in expenses.

The Company paid officer’s compensation of $203,796 for the nine month period ended September 30, 2019, compared to $250,489 in officer’s compensation for the nine month period ended September 30, 2018. This decrease in officer’s compensation was the result of one-time bonuses paid to certain officers of the Company in the third quarter of 2018.

The Company incurred research expenses of $6,193 for the nine month period ended September 30, 2019, compared to $27,092 in research expenses for the nine month period ended September 30, 2018.

The Company only paid $4,489 in office supplies and expenses for the nine months ended September 30, 2019 as opposed to $24,456 in office supplies and expenses for the nine months ended September 30, 2018. This decrease in office supplies and expenses was due to a one-time write-off of uncollectable advanced commissions.

Finally, the Company paid $11,349 in other operating expenses for the nine months ended September 30, 2019 compared to $17,183 for the nine-month period ended September 30, 2018.

These decreases in the Company’s expenses were partially offset by the following increased expenses.

The Company paid sales commissions of $28,704 for the nine month period ended September 30, 2019, compared to $0 in sales commissions for the nine month period ended September 30, 2018. This increase in sales commissions was the result of increased revenue generated from the Company’s Turnscor platform which resulted in increased commission paid on such revenue.

The Company paid computer and internet expenses of $14,870 during the nine month period ended September 30, 2019 as opposed to $5,758 during the nine month period ended September 30, 2018. This increase in computer and internet expenses was primarily due to the Company’s development of its blockchain technology which requires increased data storage.

Finally, there were no material changes in the Company’s professional fees, travel and entertainment expenses, rent, and depreciation expenses in the first nine months of 2019 as compared to the first six months of 2018.

As a result of the foregoing, the Company experienced a net loss from operations of $365,000 in the nine months ended September 30, 2019 compared to a net loss from operations of $823,073 in the nine months ended September 30, 2018.

Results of Operations for the Three Months Ended September 30, 2018 and 2019

Company revenue was $22,814 for the three months ended September 30, 2019 as opposed to $4,166 for the three months ended September 30, 2018. This increase in revenue was due to the Company earning increased service revenue from its Turnscor platform as well as recognition of revenue from a customer’s non-refundable two-year (beginning August 28, 2018) service contract.

The Company’s operating expenses were $138,019 for the three months ended September 30, 2019 as opposed to $477,553 for the three months ended September 30, 2018. This vast majority of this decrease in operating expenses was due to a $296,120 decrease in stock compensation which was only $0 for the three month period ended September 30, 2019, compared to $296,120 for the three month period ended September 30, 2018. This decrease was the result of a one-time accrual adjustment for prior period issuances of stock options to an independent contractor of the Company that was made in the third-quarter of 2018.

In addition to the decrease in stock compensation, the Company also had the following decreases in expenses.

The Company paid officer’s compensation of $68,796 for the three month period ended September 30, 2019, compared to $83,000 in officer’s compensation for the three month period ended September 30, 2018. This decrease in officer’s compensation was the result of one-time bonuses paid to certain officers of the Company in the third quarter of 2018.

The Company incurred research expenses of $0 for the three month period ended September 30, 2019, compared to $25,592 in research expenses for the nine month period ended September 30, 2018.

In addition, the Company only paid $1,119 in office supplies and expenses for the three months ended September 30, 2019 as opposed to $21,137 in office supplies and expenses for the three months ended September 30, 2018. This decrease in office supplies and expenses was due to a one-time write-off of uncollectable advanced commissions.

Finally, the Company paid $2,480 in travel and entertainment expenses for the three months ended September 30, 2019 compared to $8,169 for the three month period ended September 30, 2018. This decrease in travel and entertainment expenses was due to decreased business travel during the quarter.

These decreases in the Company’s expenses were partially offset by the following increased expenses.

The Company paid sales commissions of $18,763 for the three month period ended September 30, 2019, compared to $0 in sales commissions for the three month period ended September 30, 2018. This increase in sales commissions was the result of increased revenue generated from the Company’s Turnscor platform which resulted in increased commission paid on such revenue.

The Company paid computer and internet expenses of $5,096 during the three month period ended September 30, 2019 as opposed to $2,101 during the three month period ended September 30, 2018. This increase in computer and internet expenses was primarily due to the Company’s development of its blockchain technology which requires increased data storage.

Finally, there were no material changes in the Company’s professional fees, rent, depreciation expenses, and other expenses in the third quarter of 2019 as compared to the third quarter of 2018.

As a result of the foregoing, the Company experienced a net loss from operations of $115,205 in the three-month period ended September 30, 2019 compared to a net loss from operations of $473,387 in the three-month period ended September 30, 2018.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item.

ITEM 4.

CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2019 in accordance with Committee of Sponsoring Organizations of the Treadway Commission’s 2013 Integrated Framework. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. In addition, due to its current size, the Company currently does not have sufficient staff to maintain appropriate segregation of duties, as it pertains to application and oversight of internal control processes. Material weaknesses have previously been identified, including lack of segregation of duties and lack of formal written policies and procedures surrounding financial close and reporting. However, the Company anticipates that as it grows and formalizes its internal control processes and procedures, it will add sufficient staff to perform internal control processes, as well as adequately provided oversight to ensure processes are working as designed. Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

The Company is not currently a party to any legal proceedings or any administrative proceedings.

In addition, ACRT’s officers and directors have not been convicted in any criminal proceedings nor have they been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of securities or banking activities.

Item 1A.

Risk Factors

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item. However, the Company does acknowledge that there are risks associated with the business of the Company.

We will be competing with a variety of companies, many of which have significantly greater financial, technical, marketing and other resources than us. If we fail to attract and retain a large base of customers for our products, or if our competitors establish a more prominent market position relative to ours, this will inhibit our ability to grow and successfully execute our business plan. For example, Wells Fargo has introduced an “on/off” feature for their customers, Discover Card has “Freeze It” functionality, and Ondot Systems has already been operating in the mobile card security space for quite some time. However, the Company believes that the multi-purpose functionality of CyberloQ, along with its multi-purpose applications will give the Company a distinct advantage by comparison. CyberloQ can be used in the banking system to protect debit/credit cards, in the Health Care industry to protect PII ( Personal Identifying Information ) now that medical records are kept digitally, and can protect corporate data bases in any industry from outside intrusion via geo-fencing. The Company believes that these distinct features, along with the ability to “White Label” the technology for marketing partners, give the Company a distinction in the marketplace. However, there can be no assurance that we will be able to successfully compete with other companies in the marketplace.

In addition, the Company could incur increased costs, decreased revenue, or suffer reputational damage in the event of a cyber-attack. The Company’s business involves the collection, storage, processing and transmission of customers’ personal data, including financial information. In the event that the Company’s security measures are breached due to human error, malfeasance, system errors or vulnerabilities, or other irregularities, such breach could adversely affect our business through possible interruption of the Company’s operations, improper disclosure of data, damage to the Company’s reputation, and/or legal exposure.

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three-month period ended September 30, 2019, the Company raised $55,000 for the operations of the Company through the unregistered sale of 550,000 shares of restricted common stock.

Furthermore, the Company has an agreement to issue 3,333,333 common shares for $300,000 by September 30, 2019. Currently, the Company has collected $265,000 towards that agreement, and is disclosing the full amount and the related 3,333,333 common shares as “To be Issued”. Once the remaining stock subscription of $35,000 is collected, the Company will issue the entire 3,333,333 common shares.

All of the shares described above were issued by the Company in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2). All of the purchasers of the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standing business associates, friends, and employees. All purchasers were provided access to all public material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

The Company was to have paid a note in full on or before September 15, 2019 as per the revised terms of the note. The balance due on the note is $35,000. As of September 30, 2019, the note has not yet been paid and the Company is in default.

ITEM 4.

OTHER INFORMATION

There exists no information required to be disclosed by the Company in a report on Form 8-K during the three-month period ended September 30, 2019, but not already reported.

ITEM 5.

EXHIBITS

Exhibits have been filed separately with the United States Securities and Exchange Commission in connection with the quarterly report on Form 10-Q or have been incorporated into the report by reference.

Exhibit		Description
3.1(i)		Articles of Incorporation*
3.2(i)		Amended Articles of Incorporation dated May 4, 2010*
3.3(i)		Amended Articles of Incorporation dated May 5, 2017**
3.4(ii)		By-Laws***
14.1		Code of Ethics***
14.2		Related-Party Transactions Policy***
14.3		Anti-Corruption Policy***
16.1		Letter re Change in Certifying Accountant ****
31.1		Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer & Principal Financial Officer.*****
32.1		Section 1350 Certification of the Principal Executive Officer & Principal Financial Officer.*****
101.1		Interactive data files pursuant to Rule 405 of Regulation S-T.******

*	Incorporated by reference through the Registration Statement on form S-1 filed with the Commission on October 26, 2010. (101141203)
**	Incorporated by reference through the Quarterly Report on form 10-Q filed with the Commission on May 11, 2017. (17832815)
***	Incorporated by reference through the Current Report on form 8-K filed with the Commission on November 6, 2017.
****	Incorporated by reference through the Current Report on form 8-K filed with the Commission on May 19, 2017.
*****	Filed herewith. In addition, in accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.
******	Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ADVANCED CREDIT TECHNOLOGIES, INC.

	By:	/s/ Christopher Jackson
		Christopher Jackson
Date: November 19, 2019		President, Secretary, Treasurer and Director
		Principal Executive Officer
		Principal Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons in the capacities and on the dates indicated.

	ADVANCED CREDIT TECHNOLOGIES, INC.

	By:	/s/ Mark Carten
Date: November 19, 2019		Mark Carten, Director

	By:	/s/ Frederick Andreini
Date: November 19, 2019		Frederick Andreini, Director

	By:	/s/ Enrico Giordano
Date: November 19, 2019		Enrico Giordano, Director

	By:	/s/ Christopher Jackson
Date: November 19, 2019		Christopher Jackson, Director

	By:	/s/ Rex Schuette
Date: November 19, 2019		Rex Schuette, Director