Filing identity and reporting period
The supplied filing is Thumzup Media Corporation’s Form 10-K for the fiscal year ended December 31, 2021, filed March 17, 2022. This does not match the request metadata naming Datacentrex, Inc.; verify the intended issuer before relying on this summary.
Business context
Thumzup is an early-stage social-media marketing company developing an app that connects advertisers with everyday creators, who are paid for approved promotional posts. The company reported its first revenue in December 2021 and described the app as transitioning through beta testing, with commercial launch planned for 2022. It has one full-time employee, alongside part-time developers and outsourced support.
Key financial metrics
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $2,446 | $0 |
| Operating expenses | $842,215 | $3,783 |
| Operating loss | $839,769 | $3,783 |
| Interest expense | $17,486 | $1,904 |
| Net loss | $857,255 | $5,687 |
| Cash and cash equivalents at year-end | $424,445 | $101,317 |
| Net cash used in operating activities | $813,211* | $13,683* |
| Total assets | $429,158 | $211,317 |
| Total liabilities | $249,313 | $217,004 |
| Stockholders’ equity (deficit) | $179,845 | $(5,687) |
Revenue was minimal relative to expenses, so a meaningful operating margin is not established. At December 31, 2021, current assets were $424,445 and current liabilities were $249,313. The company had $215,000 of senior secured convertible notes outstanding, bearing 8% interest and extended to November 19, 2022. The notes are convertible at $0.11 per share, subject to a down-round adjustment, and are secured by intellectual property and founders’ shares.
Changes and financing
Revenue began in December 2021; none was reported for 2020. Net loss rose to $857,255 from $5,687, primarily reflecting $716,524 in software research and development expense. The company reported $1,042,788 of net cash from common-stock financing in 2021, after offering costs. Subsequent to year-end, it raised a further $123,500 from share sales. Accumulated deficit was $862,942 at December 31, 2021.
Outlook, risks, and unusual items
- Management said existing cash would not support operations beyond the next twelve months and that additional financing and expense management would be needed. There were no financing commitments; further funding is not assured and equity issuance could dilute shareholders.
- The auditor’s report and management disclosure identify substantial doubt about the company’s ability to continue as a going concern. The financial statements include no adjustments for the potential outcome of that uncertainty.
- Major risks include failure to attract advertisers and users, an unproven business model, continued losses, competition, reliance on third-party technology providers and key personnel, cybersecurity and privacy exposure, and COVID-19-related uncertainty.
- Disclosure controls were deemed ineffective. The filing identifies material weaknesses involving segregation of duties, IT access/security controls, and the precision of financial-reporting controls. The auditor did not attest to internal-control effectiveness.
- The common stock trades on OTC Markets and, according to the filing, trades by appointment or not at all. The filing reports concentrated ownership: the CEO and another founder together held 81.7% of common shares as of March 1, 2022. No cash dividends were anticipated in the foreseeable future.
- The company reported no pending legal proceedings. Its app workflow includes paid-post disclosures intended to address FTC endorsement requirements.
Important facts to verify
- Confirm the issuer: the requested company is Datacentrex, Inc., while the filing identifies Thumzup Media Corporation.
- Reconcile operating cash-flow figures: the cash-flow statement reports $813,211 used in 2021 and $13,683 in 2020, while MD&A and other narrative passages give $713,211 and $113,683, respectively.
- Confirm the extent of commercial launch, advertiser demand, active users, and revenue after the filing period; the filing provides little evidence of scale beyond $2,446 of 2021 revenue.
- Review available liquidity, the timing and terms of additional financing, and the convertible notes’ maturity, conversion, and collateral provisions.
- Check progress addressing the disclosed control weaknesses and any subsequent developments affecting going-concern risk.
*The audited cash-flow statement figures are shown; the filing’s narrative contains conflicting amounts.