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. 12 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, 2019, 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 Thumzup App was launched in November 2021 in a limited capacity. To date our clients have paid more than 75 creators between $5.00 and $10.00 each to post about our initial advertisers. More than 500 posts have been made by our creators. As of May 4, 2022, the Company has sufficient funds to operate for six months. The Company anticipates raising additional capital to expand sales to new advertisers, expand acquiring new creators and to improve and further develop the technology. 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 and have generated minimal revenue. For the three months ended March 31, 2022 and 2021, we incurred $224,372 and $101,248 in net losses due primarily to software research and development expenses in both periods. 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. 13 The Company is a beginning revenue, software and services company that relies on short-term debt and equity funding for its operations. At March 31, 2022 and December 31, 2021, the Company had a cash balance of $325,276 and $424,445, and the Company used $222,969 to fund operating activities for the three months ended March 31, 2022. The Company may need to raise additional funding and manage expenses in order to continue as a going concern. 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 MARCH 31, 2022 AND 2021 The following table set forth certain selected unaudited statement of operations data for the three months ended March 31, 2022 and 2021. 2022 2021 Operating expenses $ 223,423 $ 96,948 Loss from operations (219,929 ) (96,948 ) Net loss from continuing operations (234,372 ) (101,248 ) Net loss per common share $ (0.04 ) $ (0.02 ) Operating expenses For the three months ended March 31, 2022, the Company recognized a total of $223,423 in operating expenses. The operating expenses were comprised of $146,046 in software research and development expenses, $14,861 in marketing expenses, $61,976 in general and administrative expenses and $540 in depreciation expense. For the three months ended March 31, 2021, the Company recognized a total of $96,948 in operating expenses. The operating expenses were comprised of $89,588 in software research and development expenses, $970 in marketing expenses, $6,274 in general and administrative expenses and $116 in depreciation expense. The Company was in the beginning of its operations as the inception date was in October 2020. Other expenses For the three months ended March 31, 2022 the Company had $4,443 in interest expense related to the senior secured convertible promissory notes. For the same period in 2021 the Company recorded interest expense of $4,300 related to the senior secured convertible promissory notes. Net Loss and net loss from operations The Company realized a net loss from operations of $219,929 and $96,948 for the three months ended March 31, 2022 and 2021, respectively. The net loss for the same periods was $224,372 and $101,248, respectively due to minimal revenues recognized and increased operating expenses in 2022 compared to startup operating costs in 2021. 14 Liquidity and capital resources As of March 31, 2022, the Company had cash in the amount of $325,276 compared to cash of $424,445 as of December 31, 2021. As of March 31, 2022 and December 31, 2021, the Company had an accumulated deficit of $1,087,313 and $862,942, respectively. For the three months ending March 31, 2022 and 2021, the Company’s operations resulted in net cash used of $222,969 and $112,332, respectively. Net cash used in in investing activities for the three months ending March 31, 2022 and 2021 was $0 and $7,947 used to purchase computer equipment and to acquire intangible assets, Trademark. Net cash provided by financing activities was $123,800 and 453,500 for the three months ended March 31, 2022 and 2021, respectively, due mainly to capital raised from accredited investors for both periods. 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). 15