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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-17 · 94 added, 87 removed, 33 unchanged (85% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Sections of this Form 10-K, including the Management’s

Discussion and Analysis or Plan of Operation, contain “forward-looking statements”.

These forward-looking statements are subject

to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different

from the results, performance or achievements expressed or implied by the forward-looking statements.

You should not unduly rely on these

Forward-looking statements involve assumptions and describe our plans, strategies, and expectations.

You can generally identify

a forward-looking statement by words such as “may,” “will,” “should,” “would,” “could,”

“plans,” “goal,” “potential,” “expect,” “anticipate,” “estimate,”

“believe,” “intent,” “project,” and similar words and variations thereof.

Thumzup™ Media Corporation (“Thumzup™”

or “Company”) was incorporated October 27, 2020, under the laws of the State of Nevada, and its headquarters are located in

Carson City, Nevada.

The Company recognized its first revenues in December 2021 as a software company dedicated to building an influencer

community around its mobile app (“App”).

Once fully developed, the Company anticipates that the App will generate scalable

posts and recommendations for advertisers on social media and is designed to connect advertisers with individuals who are willing to promote

advertiser’s products online.

The Thumzup™ App will enable creators

to select brands they want to post about on social media.

Once a Thumzup™ creator selects a brand and takes a photo (using the App),

the App will post the photo and a caption to the user’s social media accounts.

For the advertiser, the Thumzup™ system enables

brands to get real people to promote their products to their friends, rather than displaying banner ads that people are tuning out.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

of this Form 10-K, including the Management’s Discussion and Analysis or Plan of Operation, contain “forward-looking statements”.

These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance

or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking

You should not unduly rely on these statements.

Forward-looking statements involve assumptions and describe our plans, strategies,

and expectations.

You can generally identify a forward-looking statement by words such as “may,” “will,” “should,”

“would,” “could,” “plans,” “goal,” “potential,” “expect,” “anticipate,”

“estimate,” “believe,” “intent,” “project,” and similar words and variations thereof.

Company was incorporated on October 27, 2020, under the laws of the State of Nevada.

Its headquarters are located in Los Angeles, CA.

The Company has never been the subject of any bankruptcy or receivership.

The Company has never engaged in any material reclassification,

merger, or consolidation of the Company.

The Company has not acquired or disposed of any material amount of assets except in the normal

course of business.

February 2022, the Company was admitted to the Over-The-Counter Venture Market quotation system (OTCQB) under the symbol TZUP.

Products and Services

Company operates in a single business segment which is social media marketing.

The Thumzup® App works on both iPhone and Android

mobile operating systems and connects brands and people who use and love these brands.

For the Advertiser, Thumzup® incentivizes

real people to become content Creators and post authentic valuable posts on social media about the Advertiser and its products.

Company seeks to capitalize on industry-wide gig economy and business democratization trends.

Immense value and opportunity have been

created through the democratization of ride sharing, hospitality, finance and other industries.

The Thumzup® tools are designed to

facilitate this democratization trend for the consumer and the Advertiser within the online advertising space.

Company has built the technology to support an influencer and “gig” economy community around its Thumzup® App.

This technology

and community are designed to generate scalable authentic product posts and recommendations for Advertisers on social media.

It is designed

to connect Advertisers with individuals who are willing to tell their friends about the Advertisers’ products online and offline.

Growth Company

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We shall continue to be deemed an emerging growth company until the earliest of:

last day of the fiscal year of the issuer during which it had total annual gross revenues of $1.07 billion (as such amount is indexed

for inflation every five years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published

by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of

the issuer pursuant to an effective IPO registration statement;

date on which such issuer has, during the previous three-year period, issued more than $1.0 billion in nonconvertible debt;

date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code

of Federal Regulations, or any successor thereto.’

last day of the fiscal year of the issuer during which it had total annual gross revenues

of $1.07 billion (as such amount is indexed for inflation every five years by the Commission

to reflect the change in the Consumer Price Index for All Urban Consumers published by the

Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

last day of the fiscal year of the issuer following the fifth anniversary of the date of

the first sale of common equity securities of the issuer pursuant to an effective IPO registration

date on which such issuer has, during the previous three-year period, issued more than $1.0

billion in nonconvertible debt;

date on which such issuer is deemed to be a ‘large accelerated filer’, as defined

in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’

Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting

8 unchanged sentences

were formed in October 2020 and have not yet established profitable operations.

For the year ended December 31, 2021, we incurred $857,255

in net losses due to $716,524 in software research and development expenses, $21,257 in marketing expenses, $102,698 in general and administrative

expenses, $17,486 in interest expense and $1,736 in depreciation expense.

The Company recognized its first revenues in December 2021

the year ended December 31, 2020, we incurred $5,687 in net losses due to $2,732 in software research and development expenses and $1,051

in general and administrative expenses.

The Company was organized in October 2020 resulting in limited time for operating activities.

The Company had no revenues for the year ending December 31, 2020.

The Company has raised $123,500 from the sale of 72,335

shares of unregistered common stock subsequent to December 31, 2021 and has evaluated subsequent events from the balance sheet date through

the date which the financial statements were available to be issued and determined there are no other events to disclose.

For the year ended December 31, 2022, we incurred a net

loss of $1,221,765, primarily due to software research and development expenses of $567,408, marketing expenses of $224,088, and general

and administrative expenses of $418,940.

For the year ended December 31, 2021, we incurred $857,255 in net losses primarily due to $716,524

in software research and development expenses, $21,257 in marketing expenses, $102,698 in general and administrative expenses, $17,486

in interest expense and $1,736 in depreciation expense.

accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States

10 unchanged sentences

from the outcome of these uncertainties.

The Company is a pre-revenue, software and

services company that relies on short-term debt and equity funding for its operations.

The Company recognized its first revenues during

December 2021.

At December 31, 2021 and 2020, the Company had a cash balance (net of restricted cash) of $424,445 and $101,317, respectively.

The Company used $713,211 and $113,683 to fund operating activities for the years ending December 31, 2021 and 2020, respectively.

Company expects that it will need to raise additional funding and manage expenses in order to continue as a going concern.

Company is a software and services company that relies primarily on equity funding for its operations.

The Company generated its first

revenues during December 2021.

As of December 31, 2022 and 2021, the Company had a cash balance of $1,155,343 and $424,445, respectively.

The Company used $1,083,960 and $813,211 in cash for operating activities during years ending December 31, 2022 and 2021, respectively.

The Company expects that it will need to raise additional funding and manage expenses in order to continue as a going concern.

No assurances

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THE YEARS ENDED DECEMBER 31, 2022 and 2021

The Company recorded its first revenues in

December 2021 in the net amount of $2,446.

The Company was a pre-revenue software development company, which still relies on raising capital

to fund its operations.

No revenues were recorded in 2020.

For the Fiscal Year ended

Operating Expenses

For the years ended December 31, 2021 and 2020 the

Company recognized a total of $842,215 and $3,783, respectively, in operating expenses.

The operating expenses were comprised of $716,524

in software research and development expenses ($2,732 in 2020), $21,257 in marketing expenses ($0 in 2020), $102,698 in general and administrative

expenses ($1,051 in 2020) and $1,736 in depreciation expense ($0 in 2020).

Other expenses

For the years ended December 31, 2021 and

2020, the Company had $17,486 and $1,904 in interest expense related to the senior secured convertible promissory notes, respectively.

Net Loss from operations

The Company realized a net loss from operations

of $839,769 and $5,687 for the years ended December 31, 2021 and 2020, respectively.

The Company was organized in October 2020 and had

limited operations in 2020.

Liquidity and capital resources

As of December 31, 2021 and 2020, the Company

had cash in the amount of $424,445 and $101,317, respectively, of which $0 and $100,000 was restricted.

As of December 31, 2021, the Company

had stockholders’ equity of $179,845 compared to a stockholders’ deficit of $5,687, as of December 31, 2020.

The Company’s accumulated deficit was

$862,942 and $5,687 as of December 31, 2021 and 2020, respectively.

The Company used net cash in operations of

$713,211 and $113,683 for the years ending December 31, 2021 and 2020, respectively.

Net cash used in investing activities for

years ending December 31, 2021 and 2020 was $6,449 and $0, respectively, used to purchase computer equipment.

Net cash provided by financing activities

or capital raise efforts was $1,042,788 net of offering costs of $106,713 for the year ended December 31, 2021 as compared to $0 in 2020.

The Company received proceeds from the issuance of senior convertible promissory notes of $215,000 in 2020 and $0 proceeds from loans

The Company’s results of operations

have not been affected by inflation and management cannot predict the impact, if any, inflation might have on its operations in the future.

Loss from Operations

Other Income (Expense)

Net Income (Loss) Applicable to Common Stockholders

$ (1,221,765 )

Company generated revenues of $2,421 and $2,446 for the years ended December 31, 2022 and 2021, respectively, a decrease of $25.

Company updated its revenue recognition policy for the year ended December 31, 2022, resulting in the Company reporting net revenue,

which caused revenue to remain materially the same despite a significant increase in advertiser activity during fiscal year 2022.

the years ended December 31, 2022 and 2021, the Company incurred operating expenses of $1,213,035 and $842,215, respectively, an increase

The increase in operating expenses was caused by costs of revenues increasing by $439 from $0 during the year ended December

31, 2021 to $439 during the year ended December 31, 2022, marketing expenses increasing $202,831 from $21,257 during the year ended December

31, 2021 to $224,088 during the year ended December 31, 2022, general and administrative expenses increasing $316,242 from $102,698 during

the year ended December 31, 2021 to $418,940 during the year ended December 31, 2022, depreciation expenses increasing

$424 from $1,736 during the year ended December 31, 2021 to $2,160 during the year ended December 31, 2022, offset by a decrease

in software research development expenses of $149,116 from $716,524 during the year ended December 31, 2021 to $567,408 during the year

ended December 31, 2022.

The decline in software research and development expenses is attributable to the Company focusing on gaining adoption, while the increases in the remaining operating expenses was caused by the Company expanding operations in fiscal year

2022 to accelerate the platform’s growth.

Loss from operations

Company realized a net loss from operations of $1,210,614 and $839,769 for the years ended December 31, 2022 and 2021, respectively, an

increase of $370,845 for the reasons stated above.

the years ended December 31, 2022 and 2021, the Company had $11,151 and $17,486 in interest expense, respectively, related to debt notes.

Loss applicable to common shareholders

Company realized a net loss applicable to shareholders of $1,221,765 and $857,255 for the years ended December 31, 2022 and 2021, respectively,

an increase of $364,510 for the reasons stated above.

and capital resources

of December 31, 2022 and 2021, the Company had cash in the amount of $1,155,343 and $424,445, respectively.

As of December 31, 2022 and

2021, the Company had stockholders’ equity of $1,069,440 and $179,845, respectively.

Company’s accumulated deficit was $2,084,707 and $862,942 as of December 31, 2022 and 2021, respectively.

Company used net cash in operations of $1,083,960 and $813,211 for the years ending December 31, 2022 and 2021, respectively.

cash used in investing activities for years ending December 31, 2022 and 2021 was $0 and $6,449, respectively, used to purchase computer equipment.

cash provided by financing activities was $1,814,858 for the year ended December 31, 2022, comprised of proceeds from the sale of

common and preferred stock of approximately $737,000 and $1,260,000, respectively, offset by costs incurred for equity sales of

$149,137 and subscriptions receivable of $33,000.

Net cash provided by financing activities was $1,042,788 net of offering costs of $106,713 for the year ended December

Company’s results of operations have not been affected by inflation and management cannot predict the impact, if any, inflation

might have on its operations in the future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis