EDGAR 10-K Filing

Company CIK: 1853825
Filing Year: 2022
Filename: 1853825_10-K_2022_0001903596-22-000067.json

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ITEM 1. BUSINESS
Item 1.
Business

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ITEM 1A. RISK FACTORS
Item 1A.
Risk Factors

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES.
The Company does not own any real estate. The Company does not maintain a formal executive office. All work is conducted remotely.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS.
None.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
The Company’s common stock is not quoted on a national exchange. As of the date of this filing, Company’s common stock is listed on the OTC Markets with a trading symbol of “TZUP” but trades by appointment or not at all.
As of March 17, 2022, there were 6,120,171 shares of the registrant’s common stock outstanding, of which 754,500 are registered shares that may become available for trading should a market develop. Market value of these shares is currently deemed to be $1,131,750 based on recent private transactions at $1.50 per share, although actual prices per share may vary when and if a trading market develops.
Holders of Record
We are authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock. As of December 31, 2021 and the date of this filing, there were 6,037,836 shares of common stock issued and outstanding and 64 shareholders of record and 6,120,171 shares of common stock issued and outstanding and 68 shareholders of record respectively. The number of record holders does not include persons who held shares of our common stock in “street name” accounts through brokers, banks and other financial institutions. As of December 31, 2021, there were no shares of our Preferred Stock issued and outstanding.
Dividend Policy
We have not declared or paid any cash dividends on our common stock during the fiscal year and do not currently anticipate paying cash dividends in the foreseeable future.
Recent Sales of Unregistered Securities
During the months of February, March and April 2021 the company sold an aggregate of 724,500 shares to 55 persons for an aggregate of $724,500. During the month of December 2021, the company sold an aggregate of 283,336 shares to 7 persons for an aggregate of $425,000. The offers and sales were made in reliance on the exemption from registration provided by Section 4(a)(2). Each beneficial note holder was an “accredited investor” and/or “sophisticated investor” pursuant to Rule 501(a) of Regulation D under the Securities Act, who provided the Company with representations, warranties and information concerning their respective qualifications as an “sophisticated investor” and/or “accredited investor.” The Company provided and made available to each purchaser full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. The purchasers acquired the restricted common stock for their own account, for investment purposes and not with a view to public resale or distribution thereof. The Company’s use of proceeds was for corporate and products development and general working capital.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA.
As a smaller reporting company, we are not required to provide the information required by this item.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. 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 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.
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 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.
Emerging Growth Company
We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
(a) the 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;
(b) the 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;
(c) the date on which such issuer has, during the previous three-year period, issued more than $1.0 billion in nonconvertible debt; or
(d) the 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.’
The Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting standards and such election is irrevocable if made. As such, we have made the election to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
OVERVIEW
We 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 of $2,446.
For 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.
SUBSEQUENT EVENTS
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.
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. 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. The Company expects that it will need to raise additional funding and manage expenses in order to continue as a going concern. No assurances can be given that it will be able to raise funds on acceptable terms or at all.
RESULTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020
Revenues
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.
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 in 2021.
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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. 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).

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and supplementary data required by this item are included after Part IV of this Annual Report on Form 10-K beginning on page.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
We have not had any disagreements with our accountants or auditors that would need to be disclosed pursuant to Item 304 of Regulation S-K promulgated under the Securities Act of 1933.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company is committed to improving financial organization. As part of this commitment, management and the Board perform reviews of the Company’s policies and procedures as they relate to financial reporting in an effort to mitigate future risks of potential misstatements. The Company will continue to focus on developing and documenting internal controls and procedures surrounding the financial reporting process, primarily through the use of account reconciliations, and supervision.
Management’s Annual Report on Internal Control Over Financial Reporting
This annual report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2020 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION.
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Management
Set forth below is information regarding our directors and executive officers as of the date of this annual report to the Form 10-K.
Name
Age
Title
Executive Officers
Robert Steele
Chairman & Chief Executive Officer
All directors serve for one year and until their successors are elected and qualified. All officers serve at the pleasure of the Board of Directors. There are no family relationships among any of our officers and directors.
Information concerning our executive officers and directors is set forth below.
Executive Officers
Robert Steele. Mr. Steele is the Chief Executive Officer and sole director of Thumzup™ Media Corporation. From October 2019 until present Mr. Steele has operated a consulting business that has provided investor relations, financial, sales and marketing consulting services to various clients. Mr. Steele was the Director of Client Positioning at IRTH Communications, LLC from January 2017 to September 2019. From May 2016 through December 2016 Mr. Steele was an independent consultant rendering sales, marketing and investor relations services. From January 2010 to May 2016 Mr. Steele was the President of Rightscorp, Inc. While at Rightscorp, Mr. Steele designed and deployed patented intellectual property software as a service (SaaS) tools that were used by major brands like Warner Bros. to protect their intellectual property. As President of Rightscorp, Mr. Steele led the design of the software used by clients like Sony/ATV and BMG. BMG successfully used Mr. Steele’s technology to win a landmark $25 million judgment against Cox Communications for copyright infringement. Mr. Steele holds a BS in Electronic and Computer Engineering from George Mason University.
We use independent contractors, software developers and consultants and have no full-time employees, other than Mr. Steele who devotes the majority of his time on Thumzup™ matters.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth information regarding compensation earned during fiscal 2021 and 2020 by our principal executive officer and our other most highly compensated executive officers, or the named executive officers, as of the end of the 2021 fiscal year.
Compensation Table
Annual Compensation
Long-Term
Compensation Awards
Name and Principal Position
Fiscal
Year
Salary
Bonus
Other
Compensation
Options
Restricted
Stock Awards
Robert Steele
$ -
$ -
$ -
$ -
$ -
Chief Executive Officer
$ -
$ -
$ -
$ -
$ -

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information as of March 1, 2022, regarding beneficial ownership of our capital stock by:
● each person, or group of affiliated persons, known by us to beneficially own more than 5% of any class of
our voting securities;
● each of our directors;
● each of our named executive officers; and
● all of our current executive officers and directors as a group.
The table lists applicable percentage ownership based on 6,120,171 shares of common stock outstanding as of March 1, 2022.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
Except as otherwise noted below, the address for each person or entity listed in the table is c/o Thumzup™ Media Corporation and as denoted by state
Name of Beneficial Owner
Number of
Shares
and Nature
of Beneficial
Ownership(1)
Percent of
Common Stock
Outstanding(2)
State
Robert Steele
3,500,000
57.2 %
CA
Danny Lupinelli
1,500,000
24.5 %
CA
All directors and executive officers as a group
5,000,000
81.7 %
(1) A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.
The table above excludes 2,010,938 shares issuable upon conversion of the senior secured convertible promissory notes issued in November 2020. A note holder is not entitled to convert any portion of the senior secured convertible promissory note in excess of that portion of the note upon conversion of which the sum of (1) the number of shares of common stock beneficially owned by the note holder and its affiliates and (2) the number of conversion shares issuable upon the conversion would result in beneficial ownership by a note holder and its affiliates of more than 4.50% of the then outstanding shares of common stock.
From time to time, the number of our shares held in the “street name” accounts of various securities dealers for the benefit of their clients or in centralized securities depositories may exceed 5% of the total shares of our common stock outstanding.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We have not been a party to any transaction or arrangement in which the amount involved in the transaction exceeded 1% of the average of our total assets at December 31, 2021 and 2020 and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table sets forth fees billed to us by our independent auditors for the years ended December 31, 2021 and 2020 for (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.
Haynie & Company
SERVICES
Audit fees $ 25,000 $ -
Audit-related fees - -
Tax fees 1,050 -
All other fees - -
Total fees $ 26,050 $ -
Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual financial statements and the review of our interim financial statements. Before our independent accountants were engaged to render these services, their engagement was approved by our Directors.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)(1) Financial statements.
The financial statements and supplementary data required by this item begin on page.
(a)(2) Financial Statement Schedules.
All schedules are omitted because the required information is inapplicable, or the information is presented in the financial statements and the related notes.
(a)(3) Exhibits.
Exhibit No.
Exhibit Description
3.1
Articles of Incorporation; Incorporated by reference from the Company’s Form S-1 filed June 23, 2021
3.2
Bylaws; Incorporated by reference from the Company’s Form S-1 filed June 23, 2021
10.1
Form of Stock Purchase Agreement*
10.2
Form of Common Stock Financing Term Sheet*
10.3
Form of Registration Rights Agreement*
31.1*
Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certificate of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
32.2*
Certificate of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
* Filed herewith.