Datacentrex, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sections of this Form 10-Q, 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 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. Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1). CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offerings geographically or through new marketing applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this quarterly report on , those results may not be indicative of results or developments in subsequent periods. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following: · risks related to the impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays and cancellations of projects, supply chain disruptions and other impacts to the business; · our ability to raise capital when needed and on acceptable terms and conditions; · our ability to manage credit and debt structures from debt holders; · our ability to generate revenues and manage the growth of our business; · competitive pressures; · general economic conditions; · our ability to attract and retain management, and to integrate and maintain technical information and management information systems. · compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations. 11 Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. Investors, potential investors and other readers are urged to consider the above-mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance. INTRODUCTION 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 is a pre-revenue software company dedicated to building an influencer community around its mobile app (“App”). Once fully developed, the App will generate scalable word-of-mouth product posts and recommendations for advertiser on social media and is designed to connect advertisers with individuals who are willing to promote their products online. The Thumzup App will enable users to select a brand they want to post about on social media. Once the Thumzup user selects the 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. The Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, have elected to comply with certain reduced public company reporting requirements. OVERVIEW We were formed in October 2020 and have not yet established profitable operations or generated revenue. For the three months ended September 30, 2021, we incurred $295,994 in net losses due to $268,118 in software research and development expenses, $1,882 in marketing expenses, $19,448 in general and administrative expenses, $5,829 in interest expense and $720 in depreciation expense. For the nine months September 30, 2021, we incurred $529,758 in net losses due to $474,445 in software research and development expenses, $4,003 in marketing expenses, $37,071 in general and administrative expenses, $13,043 in interest expense and $1,196 in depreciation expense. SUBSEQUENT EVENTS The Company 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. GOING CONCERN 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. However, the Company was only recently formed, has not yet established profitable operations and has incurred losses since inception. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise additional funds not provided by operations through loans or through sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The accompanying financial statements do not include any adjustments that might result 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. At September 30, 2021 and December 31, 2020, the Company had a cash balance (net of restricted cash) of $243,914 and $101,317, and the Company used $573,356 to fund operating activities for the nine months ended September 30, 2021. 12 The Company may need to raise additional funding and manage expenses in order to continue as a going concern. RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2021 The following table set forth certain selected unaudited statement of operations data for the three months ended September 30, 2021 (the Company was formed in October 2020). Operating expenses $ 290,165 Loss from operations (290,165 ) Net loss from continuing operations (295,994 ) Net loss per common share $ (0.06 ) Operating expenses For the three months ended September 30, 2021, the Company recognized a total of $290,165 in operating expenses. The operating expenses were comprised of $268,115 in software research and development expenses, $1,882 in marketing expenses, $19,448 in general and administrative expenses and $720 in depreciation expense. Other expenses For the three months ended September 30, 2021, the Company had $5,829 in interest expense related to the senior secured convertible promissory notes. Net Loss from operations The Company realized a net loss from operations of $290,165 for the three months ended September 30, 2021. RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2021 The following table set forth certain selected unaudited statement of operations data for the nine months ended September 30, 2021 (the Company was formed in October 2020). Operating expenses $ 516,715 Loss from operations (516,715 ) Net loss from continuing operations (529,758 ) Net loss per common share $ (0.09 ) Operating expenses For the nine months ended September 30, 2021, the Company recognized a total of $516,715 in operating expenses. The operating expenses were comprised of $474,445 in software research and development expenses, $4,003 in marketing expenses, $37,071 in general and administrative expenses and $1,196 in depreciation expense. Other expenses For the nine months ended September 30, 2021, the Company had $13,043 in interest expense related to the senior secured convertible promissory notes. 13 Net Loss from operations The Company realized a net loss from operations of $516,715 for the nine months ended September 30, 2021. Liquidity and capital resources As of September 30, 2021, the Company had cash in the amount of $327,414, of which $83,500 was restricted, compared to cash in the amount of $201,317, of which $100,000 was restricted, as of December 31, 2020. As of September 30, 2021, the Company had a stockholders’ equity of $189,055 compared to a stockholders’ deficit of $5,687, as of December 31, 2020. The Company’s accumulated deficit was $535,445 and $5,687 as of September 30, 2021 and December 31, 2020, respectively. For the nine months ending September 30, 2021, the Company’s operations resulted in net cash used of $573,356. Net cash used in in investing activities for the nine months ending September 30, 2021 was $6,449, used to purchase computer equipment and to acquire intangible assets, Trademark, of $2,098. Inflation 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. Item 3. Quantitative and Qualitative Disclosures about Market Risk Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1). 14