Datacentrex, Inc. quarterly report, Q3 FY2023

Business context and reporting period

This is a Form 10-Q for the quarter and nine months ended September 30, 2023. The filing identifies the registrant as Thumzup Media Corporation, not Datacentrex, Inc.; confirm the issuer before relying on this summary. Thumzup is an early-stage social-media marketing software company whose app connects advertisers with users paid to post about products. The company reports minimal revenue and is still developing and marketing its platform.

Key financial results

Revenue was far too small to support operations; meaningful operating margins are not indicated. Q3 net loss attributable to common stockholders was $1,113,781 after preferred dividends. Basic and diluted loss per share were $0.15 for Q3 and $0.41 for the nine-month period.

At September 30, cash was $146,240, current assets were $154,553, current liabilities were $127,290, total assets were $255,089, and reported stockholders’ equity was $127,799. Liabilities consisted of accounts payable and accrued expenses; the balance sheet showed no debt or accrued liquidated damages at quarter-end. Cash decreased by $1,009,103 during the first nine months. Investing outflows were $114,640, including $108,313 of capitalized software costs; financing provided $1,017,304, primarily from common-stock sales.

Changes versus prior comparable periods

• Q3 revenue fell 95.6% from $1,632; nine-month revenue fell 62.9% from $6,524. Management attributes the reported decline partly to a change to net revenue presentation, while stating platform activity increased.
• Operating expenses rose 143.9% in Q3 and 172.1% for the nine months. Higher marketing and general and administrative costs were major contributors; management says spending increased to accelerate platform growth.
• Net loss increased to $1,111,110 in Q3 from $292,935, and to $2,941,836 for nine months from $792,445.
• Other expense included $731,652 of liquidated-damages expense and $63,161 of interest expense for the nine months. The company settled damages and interest through share issuances and waiver agreements; the period-end balance for accrued damages and interest was zero.
• Cash fell from $1,155,343 at December 31, 2022 to $146,240 at September 30, 2023. Common shares outstanding increased from 7,108,336 to 7,508,961; Series A preferred shares also increased.

Outlook, risks and unusual items

Management gives no quantified revenue, earnings, or cash-flow guidance. It states that additional capital may be needed and that there is no assurance it can raise funds or achieve profitable operations. The filing expressly identifies substantial doubt about the company’s ability to continue as a going concern. After quarter-end, the company closed subscriptions for 60,458 common shares for $239,108 net of offering costs; additional subscriptions remained in escrow as of November 7, 2023 and were not yet available to the company.

Disclosure controls and procedures were reported ineffective due to a material weakness: insufficient review of accounting and financial reporting, which caused the closing process to miss required adjustments and disclosures on a timely basis. Management plans to add qualified personnel, but remediation depends substantially on financing or significant revenue. The filing reports no material legal proceeding and no direct Russia-Ukraine exposure; it notes possible indirect effects if the conflict escalates. A director is affiliated with a media-relations vendor paid monthly and for marketing services, and director-affiliated Westside Strategic Partners participated in the stock offering and received shares under waiver agreements and preferred dividends.

Investor verification priorities

• Confirm issuer identity: the supplied metadata says Datacentrex, while the filing names Thumzup Media Corporation.
• Reconcile inconsistent MD&A figures with the financial statements: the MD&A overview gives different net-loss amounts, and its liquidity discussion gives a different 2022 operating-cash-use figure. The MD&A also states stockholders’ equity of $255,089, whereas the balance sheet reports $127,799; $255,089 is reported as total assets.
• Assess near-term funding needs and the status and proceeds of the Regulation A+ offering, including escrowed subscriptions and dilution.
• Review the causes and potential recurrence of registration-rights liquidated damages, related-party payments, and the material weakness and remediation plan.
• Evaluate whether platform activity can convert into material revenue and whether cash resources can support continued operations.