Business Context and Reporting Period
This Form 8-K is filed by Thumzup Media Corporation (not Datacentrex, Inc.) on August 9, 2023. The report addresses a non-reliance on previously issued financial statements for the fiscal year ended December 31, 2022, and the fiscal quarter ended March 31, 2023, due to accounting errors identified during the preparation of interim statements for the period ended June 30, 2023.
Key Financial Metrics and Restatement Impact
The filing details specific adjustments to net loss and liabilities resulting from the misclassification of liquidated damages provisions in equity transactions. These items should have been recorded as liabilities and losses.
| Period | Original Net Loss | Restated Net Loss | Original Liabilities | Restated Liabilities |
|---|---|---|---|---|
| Fiscal Year Ended Dec 31, 2022 | $1.22 million | $1.50 million | $91,359 | $374,275 |
| Quarter Ended Mar 31, 2023 | $0.72 million | $0.91 million | $69,532 | $540,934 |
Unaffected Metrics: The restatement has no impact on net revenue, gross profit, or cash flows from operations for the restated periods.
Material Changes and Accounting Errors
The material change involves the reclassification of liquidated damages from equity transactions to liabilities and operating losses. This error was identified as inadvertent. Consequently, the Company's previously issued audited 10-K and unaudited 10-Q for the specified periods are no longer reliable. The Company intends to file amended reports as soon as practicable.
Management Commentary, Risks, and Internal Controls
Management and the Board of Directors, in consultation with the independent registered public accounting firm (Haynie & Company), concluded that the errors necessitate a restatement. Management had previously determined that internal controls over financial reporting and disclosure controls and procedures were not effective as of the end of the respective restatement periods. The filing does not provide specific forward-looking guidance or outlook beyond the intent to amend prior reports.
Investor Verification Checklist
- Verify the filing of amended Form 10-K (for 2022) and Form 10-Q (for Q1 2023) to obtain the restated financial statements.
- Confirm the updated liability balances and net loss figures in the amended reports.
- Review the Company's disclosure regarding the status of internal control over financial reporting remediation.
- Note that revenue and cash flow figures remain unchanged despite the restatement.