UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the Period Ended
FOR THE TRANSITION PERIOD FROM ______ TO _________
Commission
File Number:
(Exact name of registrant as Specified in its Charter)
| 511210 | ||||
| (State or Other Jurisdiction of | (Primary Standard Industrial | (Internal Revenue Service | ||
| Incorporation or Organization) | Classification Code Number) | Employer Identification Number) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No
State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date:
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Thumzup Media Corporation
June 30, 2025
Index to the Condensed Consolidated Financial Statements
| 2 |
THUMZUP MEDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Receivables | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Digital assets, net | ||||||||
| Capitalized software costs, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued payroll and related | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (See Note 6) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock - shares authorized: | ||||||||
| Preferred stock - Series A, $ par value, $ | ||||||||
| Preferred stock - Series B, $ par value, $ | ||||||||
| Preferred stock - Series C, $ par value, $ | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Treasury stock, at cost; and shares of common stock, respectively | ( | ) | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
THUMZUP MEDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense): | ||||||||||||||||
| Unrealized gain on intangible asset (bitcoin) | ||||||||||||||||
| Impairment of intangible asset (bitcoin) | ( | ) | ( | ) | ||||||||||||
| Interest income (expense) | ( | ) | ||||||||||||||
| Total Other Income (Expense) | ||||||||||||||||
| Net Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for Income Taxes (Benefit) | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Dividends on preferred stock | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Loss Attributable to Common Stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Common Share: | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
THUMZUP MEDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024
(Unaudited)
| Preferred Stock | Preferred Stock | Preferred Stock | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Series C | Common Stock | Stock, | Paid In | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | at Cost | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||
| Equity issued for services rendered and to be rendered | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series B dividend | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series B conversion | - | ( | ) | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series A conversion | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Series A issued for dividends | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Series C | Common Stock | Stock, | Paid In | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | at Cost | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Common Stock issued for services rendered and to be rendered | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Refund of investment - Reg A+ | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for Series B dividend | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Preferred Series B issued for cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance costs - Preferred Series B | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Preferred Series A issued for dividends | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
THUMZUP MEDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(Unaudited)
| Preferred Stock | Preferred Stock | Preferred Stock | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Series C | Common Stock | Stock, | Paid In | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | at Cost | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Equity issued for services rendered and to be rendered | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series B dividend | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series B conversion | - | ( | ) | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Series A conversion | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Series A issued for dividends | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Purchases of Treasury Stock | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Treasury | Additional | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Series C | Common Stock | Stock, | Paid In | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | at Cost | Capital | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Common Stock issued for cash, net | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for services rendered and to be rendered | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for Preferred Series A conversion | ( | ) | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued for Series B dividend | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Preferred Series B issued for cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Preferred Series A issued for dividends | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Issuance costs - Preferred Series B | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
THUMZUP MEDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Equity issued for services | ||||||||
| Impairment of intangible asset (bitcoin) | ||||||||
| Unrealized gain on intangible asset (bitcoin) | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ||||||
| Accrued payroll and related | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of intangibles (Bitcoin) | ( | ) | ||||||
| Capitalized software costs | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from Coinbase BTC backed loan | ||||||||
| Purchases of treasury stock | ( | ) | ||||||
| Proceeds from sale of common stock | ||||||||
| Proceeds from sale of preferred stock - Series B | ||||||||
| Costs incurred for equity sales | ( | ) | ||||||
| Proceeds from loan - related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during period for interest | $ | $ | ||||||
| Cash paid during period for taxes | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Common shares issued for Series A conversion | $ | $ | ||||||
| Common shares issued for Series B conversion | $ | $ | ||||||
| Preferred Series A shares issued for dividends | $ | $ | ||||||
| Prepaid expenses paid for by issuance of common stock | $ | $ | ||||||
| Common shares issued for Preferred Series B dividends | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
Thumzup Media Corporation
Notes to the Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
Note 1 - Business Organization and Nature of Operations
Thumzup Media Corporation (“Thumzup” or the “Company”) was incorporated on October 27, 2020, under the laws of
the State of Nevada, and its headquarters is located in Los Angeles, California. The Company’s primary business is software as
a service provider dedicated to connecting businesses with consumers and allowing the business to incentivize consumers to post about
their experience on social media. Thumzup’s mission is to democratize social media marketing by connecting advertisers with non-professional
people, who can be paid for their posts about products and services they love through its technology which utilizes a proprietary mobile
app (“App”). The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and
is designed to connect advertisers with individuals who are willing to promote their products online.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Our unaudited condensed consolidated financial statements include the accounts of xBitcoin, LLC and Quantum Reach Corporation, our wholly owned subsidiaries. All intercompany transactions were eliminated during consolidation.
The Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, has elected to comply with certain reduced public company reporting requirements.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation - Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year.
Certain information and disclosures normally included in the notes to the annual financial statements have been condensed, consolidated or omitted from these interim unaudited condensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 11, 2025, as amended on Form 10-K/A on April 30, 2025 (the “Annual Report”). The December 31, 2024, balance sheet is derived from those financial statements.
Use of Estimates
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the financial statements and the reported amounts of expenses during the reported period. These assumptions and estimates could have a material effect on the financial statements. Actual results may differ materially from those estimates. The Company’s management periodically reviews estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause the Company to revise these estimates. Significant estimates include estimates used in the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
| 8 |
Alleviation of Going Concern
The
Company incurred losses of $
Cash and Cash Equivalents
Cash and cash equivalents include all cash on hand, demand deposits and short-term investments with original maturities of three months or less when purchased.
As
of June 30, 2025, and December 31, 2024, the Company’s cash and cash equivalents consisted of $
Digital Assets
The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. The Company has ownership of and control over its bitcoin and uses third-party custodial services to store its bitcoin. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition.
The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices on the active exchange, indicate that it is more likely than not that any of the assets are impaired. In determining if an impairment has occurred, the Company considers the lowest price of one bitcoin quoted on the active exchange at any time since acquiring the specific bitcoin held by the Company. If the carrying value of a bitcoin exceeds that lowest price, an impairment loss has occurred with respect to that bitcoin in the amount equal to the difference between its carrying value and such lowest price.
Impairment losses are recognized in the period in which the impairment occurs and are reflected within “Digital asset impairment losses (gains on sale), net” in the Company’s Statements of Operations. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains (if any) are not recorded until realized upon sale, at which point they are presented net of any impairment losses in the Company’s Statements of Operations. In determining the gain to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoins sold immediately prior to sale.
See Note 3, Digital Assets, to the Financial Statements for further information regarding the Company’s purchases of digital assets.
Prepaid Expenses
As
of June 30, 2025, and December 31, 2024, the Company had $
| 9 |
Property and Equipment
Property and equipment, which consists of computer equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives. Ordinary repair and maintenance costs are included in general and administrative expenses on our statement of operations. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the statements of operations in gains from sales of property and equipment, net.
The
estimated useful life for computer equipment is
Capitalized Software Development Costs
We
capitalize certain costs related to the development and enhancement of the Thumzup platform. In accordance with authoritative guidance,
including ASC 350-40, we began to capitalize these costs when the technological feasibility was established and preliminary development
efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would
be completed and the software would be used as intended. Such costs are amortized when placed in service, on a straight-line basis over
the estimated useful life of the related asset, generally estimated to be three years. Costs incurred prior to meeting these criteria
together with costs incurred for training and maintenance are expensed as incurred and recorded in product development expenses on our
statements of operations. Costs incurred for enhancements that were expected to result in additional features or functionality that would
generate additional revenue are capitalized and expensed over the estimated useful life of the enhancements, generally three years. The
Company does not capitalize any testing or maintenance costs. The accounting for these capitalized software costs requires us to make
significant judgments, assumptions and estimates related to the timing and amount of recognized capitalized software development costs.
For the six months ended June 30, 2025, and 2024, the Company capitalized $
The
Company evaluates its capitalized software costs for impairment annually, at year-end. As of December 31, 2024, the Company determined
Revenue Recognition
The Company recognizes revenue when services are realized.
The Company’s revenues are accounted for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”). The fees are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration.
| 10 |
In accordance with ASC 606, the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue in accordance with that core principle by applying the following:
| (i) | Identify the contract(s) with a customer; | |
| (ii) | Identify the performance obligation in the contract; | |
| (iii) | Determine the transaction price; | |
| (iv) | Allocate the transaction price to the performance obligations in the contract; and | |
| (v) | Recognize revenue when (or as) the Company satisfies a performance obligation. |
The Company derives its revenue principally from service fees paid by the client for the use of our platform in connection with our advertising technology platform which incentivizes users to leave reviews of our clients. The Company’s sole performance obligation in the transaction is to connect clients with end-users to facilitate the completion of a successful review on the user’s social media accounts.
Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether we control the service provided to the end-user and are the principal in the transaction (gross), or we arrange for other parties to provide the service to the end-user and are the agent in the transaction (net). The Company has concluded that it is the agent in its current transactions as it arranges for users to provide the service to the clients and the users post reviews on social media accounts controlled by the users. The assessment of whether the Company is considered the principal or the agent in a transaction could impact the accounting for these transactions and change the timing and amount of revenue recognized. The percentage fee the Company charges is not variable.
Cost of Goods Sold
The Company classifies its credit card transaction fees as cost of goods sold.
Client Deposits
Thumzup’s clients generally prepay to utilize the Company’s technology platform. All client deposits for services are recorded as a client deposit liability upon receipt. Upon a user leaving a qualified review for the client, as defined in Thumzup’s Mobile Terms and Conditions, the Company transfers the fee payable to the user to a user account balances liability account and realizes the fees payable to the Company as revenue. The Company holds all client deposits and user account balances in cash or cash-equivalents, including money market accounts.
Income Taxes
The Company utilizes the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with ASC 740. ASC 740 considers the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that rate.
The
Company has
The
Company recognizes any interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
For the three and six months ending June 30, 2025, and 2024, the Company recognized
| 11 |
The Company maintains its 2024 Equity Incentive Plan and 2025 Equity Incentive Plan (collectively, the “Equity Plans”), under which, the Company’s employees, officers, directors, and other eligible participants may be and have been awarded various types of share-based compensation, including options to purchase shares of the Company’s common stock, restricted stock units, and other stock-based awards. Additionally, under the Equity Plans, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s Board of Directors or a duly authorized committee thereof.
For options and other stock-based awards, the share-based compensation expense is based on the fair value of the awards on the date of grant, as estimated using the Black-Scholes valuation model. For restricted stock units, the share-based compensation expense is based on the fair value of the Company’s common stock on the date of grant. The fair value of liability-classified awards (e.g., the other stock-based awards and cash-settled restricted stock units) is remeasured at each reporting date.
The Company recognizes share-based compensation expense for service-conditioned awards granted under the Equity Plans on a straight-line basis over the requisite service period (generally, the vesting period for service-conditioned awards under the Equity Plans).
See Note 7, Stock Options, to the Financial Statements for further information regarding the Equity Plans, related share-based compensation expense, and assumptions used in determining fair value.
Treasury Stock
On
March 7, 2025, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $
The Company accounts for Treasury Stock at cost.
During
the six months ended June 30, 2025, the Company repurchased
shares of common stock for approximately $
As
of June 30, 2025, and December 31, 2024, the Company had $
Net Earnings (Loss) Per Common Share
The Company computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if
presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common
stock using the “treasury stock” and/or “if converted” methods, as applicable.
The computation of basic and diluted income (loss) per share, for the three and six months ended June 30, 2025, and 2024, excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.
| June 30, | June 30, | |||||||
| 2025 | 2024 | |||||||
| Common shares issuable upon exercise of options | ||||||||
| Common shares issuable upon exercise of warrants | ||||||||
| Common shares issuable upon conversion of preferred stock | ||||||||
| Total potentially dilutive shares | ||||||||
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Recent Accounting Pronouncements
Crypto Assets
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025, on a prospective basis.
The Company expects the adoption of ASU 2023-08 will have a material impact on its balance sheets, statements of operations, statements of cash flows and disclosures. The Company will initially record its bitcoin purchases at cost, upon adopting ASU 2023-08, any subsequent increases or decreases in fair value will be recognized as incurred in the Company’s Statements of Operations, and the fair value of the Company’s bitcoin will be reflected within the Company’s Balance Sheets each reporting period-end. Additionally, the Company will provide quantitative and qualitative disclosures to meet the new requirements under ASU 2023-08, including a roll-forward of its bitcoin holdings during the reporting period and period-end cost basis, fair value, number of units held, and restrictions.
The
U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022. Among other things, unless an exemption by statute
or regulation applies, a provision of the IRA imposes a 15% corporate alternative minimum tax (“CAMT”) on a corporation with
respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income for any consecutive
three-tax-year period preceding the initial tax year exceeds $
Income Taxes
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025, on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025, and is currently evaluating the impact of this guidance on its disclosures.
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Segment Reporting
In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures surrounding reportable segments, particularly (i) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included in the reported measure(s) of a segment’s profit and loss and (ii) other segment items that reconcile segment revenue and significant expenses to the reported measure(s) of a segment’s profit and loss, both on an annual and interim basis. Companies are also required to provide all annual disclosures currently required under Topic 280 in interim periods, in addition to disclosing the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit and loss in assessing segment performance and allocating resources. The Company adopted ASU 2023-07 for interim periods beginning January 1, 2025.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires specified information about certain costs and expenses be disclosed in the notes to the financial statements, including the expense caption on the face of the income statement in which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities will also be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standard is effective for the Company for annual periods beginning January 1, 2027, and for interim periods beginning January 1, 2028, with updates applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.
There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
NOTE 3 – Digital Assets
The following table summarizes the Company’s digital asset holdings, as of:
June 30, 2025 | December 31, 2024 | |||||||
| Approximate number of bitcoins held | ||||||||
| Digital assets carrying value | $ | $ | ||||||
| Cumulative digital asset impairment losses | $ | $ | ||||||
The carrying value on the Company’s Balance Sheet at each period-end represents the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoins at any time since their acquisition. Therefore, these fair value measurements were made during the period from their acquisition through June 30, 2025, and December 31, 2024, respectively, and not as of June 30, 2025, or December 31, 2024, respectively.
The following table summarizes the Company’s digital asset purchases, digital asset sales, digital asset impairment losses, and gains on sale of digital assets for the periods indicated:
June 30, 2025 | June 30, 2024 | |||||||
| Approximate number of bitcoins purchased | ||||||||
| Approximate number of bitcoins sold | ||||||||
| Digital asset purchases | $ | $ | ||||||
| Digital asset sales | $ | $ | ||||||
| Digital asset impairment losses | $ | ( | ) | $ | ||||
| Gains on sale of digital assets | $ | $ | ||||||
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Note 4 – Credit Facilities
On
May 12, 2025, the Company entered into that certain Master Loan Agreement (the “MLA”) with Coinbase Credit, Inc. (“Coinbase”)
and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into transactions (each such transaction, a “Loan”)
in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral (each as defined in the MLA).
Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan, and Coinbase shall confirm such Loan by sending a
confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase the Collateral with a market value at least
equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA). During the six months ended June 30,
2025, the Company received $
Note 5 – Shareholders’ Equity
Preferred Stock
The Company is authorized to issue shares of preferred stock, par value $ per share.
Series A Preferred Stock
Starting
on September 21, 2022, the Company entered into securities purchase agreements with four accredited investors, pursuant to which the
Company sold Shares of its Series A Preferred Convertible Voting Stock (the “Series A Preferred”) at a per share price
of $ per preferred share and received gross proceeds of $
On September 21, 2022, the Company filed a Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock with the Secretary of State of the State of Nevada designating shares of its preferred stock as Series A Preferred. On September 26, 2022, the Company submitted an Amended and Restated Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock with the Secretary of State of Nevada (as amended and restated, the “Series A Certificate of Designation”).
Pursuant
to the Series A Certificate of Designations, each holder of the Series A Preferred has the right, at any time and from time to time,
at the shareholder’s option to convert any or all of such holder’s shares of Series A Preferred into the number of shares
of common stock. Each share of Series A Preferred is initially convertible into shares of common stock at a reference rate of $
The holders of Series A Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $ per share per quarter. If paid in kind, the dividend shall be in shares of Series A Preferred (the “Dividend Shares”) valued at the $ per share of Series A Preferred (the “Purchase Price”) unless the closing price of the Common Stock on the Trading Day prior to the issuance of the dividend is below the Reference Rate, in which case the Dividend Shares shall be valued at the Purchase Price adjusted pursuant to the formula set forth in Section 3 of the Series A Certificate of Designations.
On March 15, 2025, the Company issued Dividend Shares.
On April 25, 2025, the Company issued shares of common stock in connection with the conversion of shares of Series A Preferred.
On June 15, 2025, the Company issued Dividend Shares to the holders of the Series A Preferred.
As June 30, 2025, and December 31, 2024, the Company had and shares of Series A Preferred issued and outstanding, respectively.
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Series B Preferred Stock
On March 5, 2024, the Company filed a Certificate of Designation (the “Series B Certificate of Designation”) with the Secretary of State of Nevada designating shares of preferred stock as Series B Preferred (“Series B Preferred”).
From
March 14 to March 28, 2024, the Company entered into securities purchase agreements with accredited investors, pursuant to which the
Company issued shares of Series B Preferred for cash proceeds of $
Pursuant
to the Series B Certificate of Designations, each holder of the Series B Preferred has the right, at any time and from time to time,
at the shareholder’s option to convert any or all of such holder’s shares of Series B Preferred into the number of shares
of Common Stock. Each share of Series B Preferred is initially convertible into shares of common stock at a reference rate of $
Upon
the Company’s up-listing to the Nasdaq Capital Market, the Series B Preferred became convertible at $
The holders of Series B Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $ per share per quarter. If paid in kind, the number of shares of common stock issued for the dividend shall be equal to the quotient of the dividend payable divided by the volume weighted average price on the dividend date.
On February 25, 2025, a holder converted shares of Series B Preferred into shares of common stock.
On March 15, 2025, the Company issued shares of common stock as a dividend for the Series B Preferred.
On April 24, 2025, a holder converted shares of Series B Preferred into shares of common stock.
On May 29, 2025, the automatic conversion provision of the Series B Preferred was triggered, which resulted in the automatic conversion of shares of Series B Preferred into shares of common stock.
On June 15, 2025, the Company issued shares of common stock as a dividend for the Series B Preferred.
As of June 30, 2025, and December 31, 2024, the Company had and shares of Series B Preferred issued and outstanding, respectively.
Subsequent to June 30, 2025, the shares of Series B Preferred were converted to shares of common stock. On July 18, 2025, the Company filed a Withdrawal of Designation (the “Withdrawal of Designation”) with the Secretary of State of the State of Nevada and terminated the designation of the Series B Preferred. At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred remained issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.
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Series C Preferred Stock
On June 17, 2025, the Company filed a Certificate of Designation (the “Series C Certificate of Designation”) with the Secretary of State of Nevada designating shares of preferred stock as Series C Preferred Stock (“Series C Preferred”).
On June 30, 2025, the Company filed an amendment to the Series C Certificate of Designation which provides that except as otherwise required by the Nevada Revised Statutes, the holders of Series C shall have no voting rights with respect to such shares.
General.
The Certificate of Designation for the Series C authorizes shares of Series C, par value of $. Each share of Series
C has a stated value of $
Exchange Listing. There is no trading market available for the Series C. We do not intend to list or quote the Series C on any securities exchange or nationally recognized trading system.
Ranking. The Series C ranks junior to the Company’s Series A Convertible Preferred Stock and Series B Convertible Preferred Stock, but ranks senior to the Company’s Common Stock and any preferred stock issued after the Series C. In the event of the merger or consolidation of the Company with or into another entity, the Series C shall maintain its relative rights, powers, designations, privileges and preferences provided for in the Certificate of Designations. In the event of a liquidation of the Company, the holders of Series C will share in the distribution of our net assets on an as-converted basis.
Voting. Except as otherwise required by the Nevada Revised Statutes, the holders of Series C shall have no voting rights with respect to such shares.
As June 30, 2025, and December 31, 2024, the Company had and shares of Series C Preferred issued and outstanding, respectively.
Common Stock
The Company is authorized to issue shares of common stock, par value $ per share.
During
the six months ended June 30, 2025, the Company issued shares
of common stock with a fair market value of $
During the six months ended June 30, 2025, the Company issued shares of common stock upon the conversion of shares of Series B Preferred.
During
the six months ended June 31, 2025, the Company issued shares of common stock with
a value of $
During the six months ended June 30, 2025, the Company issued shares of common stock
upon the conversion of shares of Series A Preferred.
As of June 30, 2025, and December 31, 2024, the Company had and shares of common stock issued and outstanding, respectively.
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Treasury Stock
On
March 7, 2025, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $
During
the six months ended June 30, 2025, the Company repurchased
shares of common stock for approximately $
As
of June 30, 2025, and December 31, 2024, the Company had $
Note 6 – Contingencies
Russia-Ukraine conflict
The Russian-Ukraine conflict is a global concern. The Company does not have any direct exposure to Russia or Ukraine through its operations, employee base, investments or sanctions. However, if the conflict escalates, it is unknown whether its direct or indirect effects may impact our business.
The Company’s stockholders approved our 2024 Equity Incentive Plan in May 2024, amending it in July 2024 to increase the number of shares issuable thereunder to , and approved our 2025 Equity Incentive Plan in April 2025 with an additional shares issuable thereunder (the “Plans”). As of June 30, 2025, the Company had shares of common stock available for future issuance under the Plans.
The Plans provide for the grant of incentive stock options to our employees and our subsidiaries’ employees, and for the grant of stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. The Plans also provides that the grant of performance stock awards may be paid out in cash as determined by the committee administering the Plans.
Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected life of options based on the contractual life of the options.
On January 15, 2025, the Company issued options to purchase shares of common stock with a $ exercise price with a fair value of $. The Company estimated the fair value of the options using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of %, (2) expected volatility of %, (3) risk-free interest rate of %, and (4) expected life of years.
There were no options exercised during the three and six months ended June 30, 2025, and 2024, respectively.
| Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
| Outstanding at January 1, 2025 | $ | $ | |||||||||||||||
| Granted | $ | ||||||||||||||||
| Exercised | |||||||||||||||||
| Cancelled/Exchanged | |||||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | |||||||||||||||
| Exercisable at June 30, 2025 | $ | $ | |||||||||||||||
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| Exercise Price | Options Outstanding | Weighted Avg. Remaining Life | Options Exercisable | |||||||||||
| $ | ||||||||||||||
The aggregate intrinsic value of outstanding stock options was $, based on options with an exercise price less than the Company’s stock price of $ as of June 30, 2025, which would have been received by the option holders had those option holders exercised their options as of that date.
The fair value of all options that vested during the three months ended June 30, 2025, and 2024 was $ and $, respectively. The fair value of all options that vested during the six months ended June 30, 2025, and 2024 was $ and $, respectively. Unrecognized compensation expense was $ as of June 30, 2025.
Note 8 – Warrants
A summary of the warrant activity for the six months ended June 30, 2025, is as follows:
| Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
| Outstanding at January 1, 2025 | $ | $ | |||||||||||||||
| Granted | |||||||||||||||||
| Exercised | - | - | |||||||||||||||
| Cancelled/Exchanged | |||||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | |||||||||||||||
| Exercisable at June 30, 2025 | $ | $ | |||||||||||||||
| Exercise Price | Warrants Outstanding | Weighted Avg. Remaining Life | Warrants Exercisable | |||||||||||
| $ | ||||||||||||||
The
aggregate intrinsic value of outstanding stock warrants was $ based on warrants with an exercise price less than the Company’s
stock price of $
Note 9- Segment Information
The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s software platform. The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The CODM uses the number of advertisers and users to assess the growth of the business on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and will allocate personnel and budget accordingly to maximize growth and revenues.
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Note 10 – Related Party Transactions
On March 15, 2025, Westside Strategic Partners, LLC (“Westside”), controlled by our director, Robert Haag, received a dividend of 627 shares of Series A Preferred, per the terms of the Company’s Series A Certificate of Designation.
On March 15, 2025, Westside received a dividend of shares of common stock pursuant to the Series B Certificate of Designation.
On March 15, 2025, Isaac Dietrich received a dividend of shares of Series A Preferred, per the terms of the Series A Certificate of Designation.
On March 15, 2025, Joanna Massey received a dividend of shares of Series A Preferred, per the terms of the Series A Certificate of Designation.
On March 15, 2025, Joanna Massey received a dividend of shares of common stock pursuant to the Series B Certificate of Designation.
On May 29, 2025, Joanna Massey received common shares for the automatic conversion of Series B Preferred shares, per the terms of the Series B Certificate of Designation.
On May 29, 2025, Westside received common shares for the automatic conversion of Series B Preferred shares, per the terms of the Series B Certificate of Designation.
On June 15, 2025, Isaac Dietrich received a dividend of shares of Series A Preferred, per the terms of the Series A Certificate of Designation.
On June 15, 2025, Joanna Massey received a dividend of shares of Series A Preferred, per the terms of the Series A Certificate of Designation.
On June 15, 2025, Westside received a dividend of shares of Series A Preferred, per the terms of the Series A Certificate of Designation.
Note 11 – Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through the date which the financial statements were issued.
Series C Offering
On
June 30, 2025, as part of a registered direct offering (the “Series C Offering”), the Company agreed to sell shares
of Company’s Series C Preferred, at a price of $
Robert Steele Private Transactions
On
July 8, 2025, simultaneously with the closing of the Series C Offering, Mr. Robert Steele, the Company’s Chief Executive Officer,
agreed to sell shares of common stock (the “Private Transaction Shares”) to certain accredited investors that participated
in the Series C Offering. The purchase price of the Private Transaction Shares was $ per share and Mr. Steele received $
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Option Assignment
On
July 8, 2025, simultaneously with the closing of the Series C Offering, pursuant to an option assignment agreement dated June 19, 2025
(the “Option Agreement”), Hampton Growth Resources, LLC (the “Assignor”) sold an option to purchase shares
of the Company’s common stock at an exercise price of $ per share (the “Option”) to certain accredited investors
who are anticipated to be purchasers in the Series C Offering (the “Assignees”). The sale price of the Option was $
From July 8 to August 8, 2025, the Company issued shares of common stock for the conversion of shares of Series C Preferred.
From
July 24 to August 12, 2025, the Company issued warrants
for proceeds of $
On July 17, 2025, the Company issued shares of common stock for the conversion of shares of Series B Preferred.
From July 17 to August 8, 2025, the Company issued shares of common stock from the Company’s 2024 Employee Incentive Plan, net rescissions of shares.
From July 15 to August 13, 2025, the Company issued shares of common stock for the cashless exercise of options.
On July 18, 2025, the Company filed a Withdrawal of Designation with the Secretary of State of the State of Nevada and terminated the designation of its Series B Preferred.
On August 4, 2025, the Company issued an aggregate of shares of common stock awards for past services rendered to the following officer and directors: Robert Haag ( shares), Isaac Dietrich ( shares), Joanna Massey ( shares), and Paul Dickman ( shares).
On August 4, 2025, the Company issued common for the conversion of shares of Series A Preferred.
On July 16, 2025, the Board approved an amendment (the “Amendment”) to its Amended and Restated Bylaws (the “Bylaws”). Pursuant to the Amendment, Section 2.5 of Article II of the Bylaws was amended to provide that except as limited by the Company’s Articles of Incorporation (as amended, the “Articles of Incorporation”) or by law, a director may be removed by the stockholders only at an annual meeting of stockholders or at a special meeting of stockholders called for such purpose and otherwise in conformity with the Bylaws, and only by the affirmative vote of the holders of two-thirds of the voting power of all the shares entitled to vote at such meeting.
American Ventures LLC Financial Advisory Agreement
On August 12, 2025, the Company entered into a Financial Advisory Agreement (the “American Ventures Advisory Agreement”) with American Ventures LLC, Series XVIII DOGE TREAS (the “Advisor”) pursuant to which the Advisor agreed to provide the Company with certain financial advisory services, including advising the Company on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, the Company agreed to issue the Advisor shares (the “American Ventures Advisory Shares”) of common stock, which such shares of common stock are subject to Stockholder Approval (as such term is defined in the American Ventures Advisory Agreement). The American Ventures Advisory Agreement may be terminated by either party upon five days prior written notice to the other party.
August 2025 Offering
On August 11, 2025, the Company entered into a placement agency agreement (the “August 2025 Dominari Agreement”) with Dominari Securities LLC (the “Dominari”) pursuant to which the Company agreed to issue and sell directly to certain investors (the “Investors”), in a best efforts offering (the “August 2025 Offering”), an aggregate of shares of our common stock. The Company issued shares of common stock for the August 2025 Offering on August 12, 2025.
The
closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to the Company were approximately $50 million, before
deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. Pursuant to the August 2025 Dominari
Agreement, the Company paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025
Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable
expensesm and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including
reasonable fees and expenses of its legal counsel in the amount of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q (this “Quarterly Report”), including this Management’s Discussion and Analysis of Financial Condition and Results of Operations 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, 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:
| ● | 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; |
| ● | our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market (“Nasdaq”); and |
| ● | compliance with laws and regulations, including those relating to corporate governance matters and tax matters, as well as any future changes to such laws and regulations. |
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.
OVERVIEW
Thumzup Media Corporation (“Thumzup” or “Company”) was incorporated on October 27, 2020, under the laws of the State of Nevada, and its headquarters is located in Los Angeles. The Company’s primary business is software as a service provider dedicated to connecting businesses with consumers and allowing the business to incentivize consumers to post about their experience on social media. Thumzup mission is to democratize social media marketing by connecting advertisers with non-professional people, who can be paid for their posts about products and services they love through its technology which utilizes a proprietary mobile app (the “App”). The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and is designed to connect advertisers with individuals who are willing to promote their products online.
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The Thumzup App enables 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 account(s). As of the date of this filing, Instagram is the Company’s initial social media platform that is being used, due to its wide acceptance and its great functionality using photographs. The Company expects to add other social media platforms in the future. For the advertiser, the Thumzup system enables brands to get real people to promote products to their friends, rather than displaying banner ads that consumers now mostly ignore, or contracting with expensive professional influencers. The Company has recorded nominal revenues during the three months ended June 30, 2025, and continues with the development of enhancements to its App and marketing efforts.
The Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, has elected to comply with certain reduced public company reporting requirements.
Recent Developments
American Ventures LLC Financial Advisory Agreement
On August 12, 2025, we entered into a Financial Advisory Agreement (the “American Ventures Advisory Agreement”) with American Ventures LLC, Series XVIII DOGE TREAS (the “Advisor”) pursuant to which the Advisor agreed to provide us with certain financial advisory services, including advising us on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, we agreed to issue the Advisor 750,000 shares (the “American Ventures Advisory Shares”) of common stock, which such shares of common stock are subject to Stockholder Approval (as defined in the American Ventures Advisory Agreement). The American Ventures Advisory Agreement may be terminated by either party upon five days prior written notice to the other party.
August 2025 Offering
On August 11, 2025, we entered into a placement agency agreement (the “August 2025 Dominari Agreement”) with Dominari Securities LLC (the “Dominari”) pursuant to which we agreed to issue and sell directly to certain investors (the “Investors”), in a best efforts offering (the “August 2025 Offering”), an aggregate of 5,000,000 shares of our common stock.
The closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to us were approximately $50 million, before deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. We currently intend to use the net proceeds received from the August 2025 Offering to explore the accumulation of cryptocurrencies and mining equipment, working capital and general corporate purposes.
Pursuant to the August 2025 Dominari Agreement, we paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025 Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable expenses, and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including reasonable fees and expenses of its legal counsel in the amount of $150,000. Additionally, we issued warrants (the “August 2025 Dominari Warrants”) to Dominari to purchase up to 350,000 shares of common at an exercise price of $10.00 per share. The August 2025 Dominari Warrant will be exercisable 180 days after the issuance date and has a term of exercise equal to five years from the date of issuance.
Amendment to Bylaws
To maintain compliance with the laws of the state of Nevada, on July 16, 2025, the Board of Directors approved an amendment (the “Amendment”) to our Amended and Restated Bylaws (the “Bylaws”). Pursuant to the Amendment, Section 2.5 of Article II of the Bylaws was amended to provide that except as limited by our Articles of Incorporation or by law, a director may be removed by the stockholders only at an annual meeting of stockholders or at a special meeting of stockholders called for such purpose and otherwise in conformity with the Bylaws, and only by the affirmative vote of the holders of two-thirds of the voting power of all the shares entitled to vote at such meeting.
Withdrawal of Designation of Series B Convertible Preferred Stock
On July 18, 2025, we filed a Withdrawal of Designation (the “Withdrawal of Designation”) with the Secretary of State of the State of Nevada and terminated the designation of our Series B Preferred Convertible Voting Stock, par value $0.001 per share (the “Series B Preferred Stock”). At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred Stock issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.
Series C Preferred Stock Offering and Related Transactions
Series C Offering
On June 30, 2025, as part of a registered direct offering (the “Series C Offering”), we agreed to sell, pursuant to a securities purchase agreement dated June 30, 2025, by and among us and the investors named therein, an aggregate of 108,336 shares of Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”), par value $0.001 per share, at a price of $60.00 per share for gross proceeds of $6,499,980. Each share of Series C Preferred Stock converts into 10 shares of common stock. The aggregate net proceeds to us from the Series C Offering were approximately $6.04 million after deducting placement agent fees and offering expenses payable by us.
In connection with the Series C Offering, on June 30, 2025, we entered into a Placement Agency Agreement (the “June 2025 Dominari Agreement”) with Dominari.
Pursuant to the June 2025 Dominari Agreement, we paid Dominari a cash fee equal to 6% of the gross cash proceeds received in the Series C Offering and a 1% non-accountable expense allowance. In addition, we issued to Dominari warrants to purchase up to 65,000 shares of common stock, such amount being equal to equal to 6% of the shares of common stock issuable upon conversion of the Series C Preferred Stock sold in the Series C Offering (the “June 2025 Dominari Warrants”). The June 2025 Dominari Warrants may be exercised on or after January 3, 2026, have an exercise price of $6.00 per share, are non-tradeable and expire on July 8, 2030.
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Related Series C Transactions
In connection with the Series C Offering, Robert Steele, our Chief Executive Officer, agreed to sell 2,500,000 shares of common stock (the “Private Transaction Shares”) in a private transaction to certain accredited investors who were purchasers in the Series C Offering. The purchase price of the Private Transaction Shares was $0.50 per share and Mr. Steele received $1,250,000 in aggregate net proceeds from the sale of the Private Transaction Shares.
Additionally, pursuant to an Option Assignment Agreement dated June 19, 2025 (the “Option Assignment Agreement”), for $150,000, Hampton Growth Resources, LLC (the “Assignor”) sold an option to purchase 750,000 shares of our common stock at an exercise price of $0.30 per share (the “Option”) to certain accredited investors who participated in the Series C Offering (the “Assignees”). Mr. Andrew Haag, the brother of a member of our Board of Directors, Robert Haag, is a stockholder of the Company and the Managing Member of the Assignor. The Assignor agreed to purchase the Option for $125,000 from Mr. Daniel Lupinelli, a principal stockholder of the Company beneficially owing 14.47% of the outstanding common stock of the Company. Subsequent to the sale and assignment of the Option, the Assignees are expected to exercise the Option, purchasing 750,000 shares for the purchase price of $225,000, which will be paid to Mr. Lupinelli.
In relation to the aforementioned private transactions, we are obligated to file within 30 days, a registration statement on Form S-3 to register the resale of up to an aggregate of 3,250,000 shares of common stock, consisting of (i) the 2,500,000 Private Transaction Shares and (ii) 750,000 shares of common stock issuable upon the exercise in full of the Option.
Coinbase Master Loan Agreement
On May 12, 2025, the Company entered into that certain Master Loan Agreement (the “MLA”) with Coinbase Credit, Inc. (“Coinbase”) and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into transactions (each such transaction, a “Loan”) in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral (each as defined in the MLA). Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan, and Coinbase shall confirm such Loan by sending a confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase the Collateral with a market value at least equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA). See “Liquidity and capital resources – Coinbase Master Loan Agreement” herein.
Available Information:
Thumzup™ is located at 10557-B Jefferson Blvd, Culver City, CA 90232. Our telephone number is (800) 403-6150 and our Internet website address is www.thumzupmedia.com.
We file or furnish electronically with the U.S. Securities and Exchange Commission (“SEC”) Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make copies of these reports available free of charge through our investor relations website as soon as reasonably practicable after we file or furnish them with the SEC. These reports are also accessible through the SEC website at www.sec.gov. Information contained on or accessible through our website, www.thumzupmedia.com, is not incorporated into, and does not form a part of, this Quarterly Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2025, AND 2024
The following table sets forth certain selected unaudited condensed consolidated statements of operations data for the three months ended June 30, 2025, and 2024.
| For the Three Months ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenues | $ | 15 | $ | 30 | $ | (15 | ) | (51.20 | )% | |||||||
| Operating Expenses | 1,658,893 | 529,091 | 1,129,802 | 213.54 | % | |||||||||||
| Loss from Operations | (1,658,878 | ) | (529,061 | ) | (1,129,817 | ) | 213.55 | % | ||||||||
| Other Income (Expense) | 465,638 | 1,288 | 464,350 | 36,052.02 | % | |||||||||||
| Net Loss Attributable to Common Stockholders | $ | (1,193,229 | ) | $ | (550,717 | ) | $ | (642,512 | ) | 116.69 | % | |||||
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Revenues
The Company generated revenues of $15 and $30 for the three months ended June 30, 2025, and 2024, respectively, a decrease of $15. The Company has prioritized expanding its footprint of listed businesses before focusing on converting them to paying clients.
Operating expenses
For the three months ended June 30, 2025, and 2024, the Company incurred operating expenses of $1,658,893 and $529,091, respectively, an increase of $1,129,802. The increase in operating expenses was caused by: marketing expenses increasing by $227,628 from $96,674 during the three months ended June 30, 2024, to $324,302 during the same period in 2025, general and administrative expenses increasing by $815,458 from $359,827 during the three months ended June 30, 2024, to $1,175,285 during the same period in 2025, depreciation and amortization expenses increasing by $19,201 from $22,925 during the three months ended June 30, 2024, to $42,126 during the same period in 2025, and an increase in research and development expenses of $67,515 from $49,665 during the three months ended June 30, 2024, to $117,180 during the same period in 2025.
Net Loss from operations
The Company realized a net loss from operations before income taxes of $1,658,878 and $529,061 for the three months ended June 30, 2025, and 2024, respectively, an increase of $1,129,817 for the reasons stated above in the section “Operating Expenses.”
Other income
For the three months ended June 30, 2025, and 2024, the Company had ($3,930) and $1,288 in interest (expense) and income, respectively. There was loss on the impairment on intangible assets (bitcoin) of $41,771 and $0 during the three months ended June 30, 2025, and 2024, respectively. Additionally, there was unrealized gains on intangible assets (bitcoin) of $511,339 and $0 during the three months ended June 30, 2025, and 2024, respectively.
Net Loss attributable to common stockholders
The Company realized a net loss attributable to common stockholders of $1,193,229 and $550,717 for the three months ended June 30, 2025, and 2024, respectively, an increase of $642,512 for the reasons stated above in the section “Operating Expenses.”
SIX MONTHS ENDED JUNE 30, 2025, AND 2024
The following table sets forth certain selected unaudited condensed consolidated statements of operations data for the six months ended June 30, 2025, and 2024.
| For the Six Months ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenues | $ | 166 | $ | 435 | $ | (269 | ) | (61.98 | )% | |||||||
| Operating Expenses | 3,394,956 | 857,445 | 2,537,511 | 295.94 | % | |||||||||||
| Loss from Operations | (3,394,790 | ) | (857,010 | ) | (2,537,780 | ) | 296.12 | % | ||||||||
| Other Income (Expense) | 67,374 | 1,288 | 66,086 | 5,130.90 | % | |||||||||||
| Net (Loss) Attributable to Common Stockholders | $ | (3,348,316 | ) | $ | (881,432 | ) | $ | (2,466,884 | ) | 279.87 | % | |||||
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Revenues
The Company generated revenues of $166 and $435 for the six months ended June 30, 2025, and 2024, respectively, a decrease of $269. The Company has prioritized expanding its footprint of listed businesses before focusing on converting them to paying clients.
Operating expenses
For the six months ended June 30, 2025, and 2024, the Company incurred operating expenses of $3,394,956 and $857,445, respectively, an increase of $2,537,511. The increase in operating expenses was caused by: marketing expenses increasing by $884,810 from $148,440 during the six months ended June 30, 2024, to $1,033,250 during the same period in 2025, general and administrative expenses increasing by $1,510,974 from $581,7555 during the six months ended June 30, 2024, to $2,092,729 during the same period in 2025, depreciation and amortization expenses increasing by $36,175 from $40,163 during the six months ended June 30, 2024, to $76,338 during the same period in 2025, and an increase in research and development expenses of $105,552 from $87,087during the six months ended June 30, 2024, to $192,639 during the same period in 2025.
Net Loss from operations
The Company realized a net loss from operations before income taxes of $3,394,790 and $857,010 for the six months ended June 30, 2025, and 2024, respectively, an increase of $2,537,780 for the reasons stated above in the section “Operating Expenses.”
Other income
For the six months ended June 30, 2025, and 2024, the Company had $21,678 and $1,288 in interest income, respectively. There was loss on the impairment on intangible assets (bitcoin) of $579,049 and $0 during the six months ended June 30, 2025, and 2024, respectively. Additionally, there was unrealized gains on intangible assets (bitcoin) of $624,745 and $0 during the six months ended June 30, 2025, and 2024, respectively.
Net Loss attributable to common stockholders
The Company realized a net loss attributable to common stockholders of $3,348,316 and $881,432 for the six months ended June 30, 2025 and 2024, respectively, an increase of $2,466,884 for the reasons stated above in the section “Operating Expenses.”
Liquidity and capital resources
As of June 30, 2025, and December 31, 2024, the Company had cash in the amount of $60,430 and $4,680,840, respectively. As of June 30, 2025, and December 31, 2024, the Company had stockholders’ equity of $1,823,045 and $4,767,261, respectively.
The Company’s accumulated deficit was $(13,040,024) and $(9,691,708) as of June 30, 2025, and December 31, 2024, respectively.
The Company used net cash in operating activities of $2,664,485 and $675,323 for six months ended June 30, 2025, and 2024, respectively.
Net cash used in investing activities for six months ending June 30, 2025, and 2024 was $2,157,718 and $126,665, respectively. During the six months ended June 30, 2025, we invested $2,001,246 and $156,471 in the purchase of intangible assets (bitcoin) and capitalized development costs, respectively. During the six months ended June 30, 2024, we invested $126,665 in capitalized development costs.
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There was cash used in financing activities for the six months ended June 30, 2025, of $201,793, comprised of cash used to repurchase treasury stock of $298,207 and cash provided by a Coinbase BTC loan of $500,000. Net cash provided by financing activities was $941,226 for the six months ended June 30, 2024, comprised of $805,000 from the sale of preferred stock and $161,226 from the sale of common stock, net offering expenses of $25,000.
Capital Resources
As of June 30, 2025, we had cash on hand of $60,430. We currently have minimal sources of liquidity such as arrangements with credit institutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
Series A Preferred Stock
On September 21, 2022, we entered into a Securities Purchase Agreement with four accredited investors (the “Series A Securities Purchase Agreement”). Pursuant to the Series A Securities Purchase Agreement, the company sold 16,446 Shares of its Series A Preferred Convertible Voting Stock (the “Series A Preferred”) at a per share price of $45.00 per preferred share and received gross proceeds of $740,000.
On September 21, 2022, the Company filed with the Secretary of State of Nevada the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock, which was amended and restated on September 26, 2022 (the “Series A Certificate of Designation”).
Pursuant to the Certificate of Designations, the Company designated 1,000,000 shares of preferred stock as Series A Preferred. The Series A Preferred votes together with the common stock of the Company on an as-converted basis, provided that each holder of Series A Preferred shall be limited to voting the number of votes that is 9.99% of all shares entitled to vote, except as required by law.
Subject to the provisions of Section 4 of the Series A Certificate of Designation, each holder shall have the right, at any time and from time to time, at such holder’s option, to convert any or all of such holder’s shares of Series A Preferred into the number of shares of common stock as set forth herein. Each share of Series A Preferred initially converts into 15 shares of common stock (the “Conversion Rate”) at a reference rate of $3.00 per share of common stock (the “Reference Rate”) subject to adjustments set forth in Sections 4(g) and (h) of the Series A Certificate of Designation.
The holders of Series A Preferred shall be entitled to receive, in cash or in-kind at Company’s election, in an amount equal to $3.50 per share. If paid in kind, the dividend shall be in shares of Series A Preferred (the “Series A Dividend Shares”) valued at the $45.00 per share of Series A Preferred (the “Purchase Price”) unless the closing price of the common stock on the trading day prior to the issuance of the dividend is below the Reference Rate, in which case the Series A Dividend Shares shall be valued at the Purchase Price adjusted pursuant to the formula set forth in Section 3 of the Series A Certificate of Designations.
The Series A Preferred was offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act.
Under the Series A Certificate of Designations, at no time may all or a portion of the Series A Preferred be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the Holder at such time, the number of shares of Common Stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the 1934 Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time (the “4.99% Beneficial Ownership Limitation”); provided, however, that, upon the holder providing the Company with sixty-one (61) days’ advance notice (the “4.99% Waiver Notice”) that the holder would like to waive Section 4(f) of the Series A Certificate of Designations with regard to any or all shares of common stock issuable upon conversion of the Series A Preferred, Section 4(f) will be of no force or effect with regard to all or a portion of the Series A Preferred referenced in the 4.99% Waiver Notice but shall in no event waive the 9.99% Beneficial Ownership Limitation.
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Series B Preferred Stock
On March 5, 2024, the Company filed a Certificate of Designation (the “Series B Certificate of Designation”) with the Secretary of State of Nevada designating 40,000 shares of preferred stock as Series B Preferred Stock (“Series B Preferred”).
The Company recently raised $805,000 in a Series B Preferred offering during the period March - May 2024. Each share of Series B Preferred cost $50 and initially converts into 10 shares of common stock and pays a 10% dividend on a quarterly basis and has downside price protection. Once the company up-lists on a National Stock Exchange, the Series B Preferred converts at a 20% discount to the price of the offering in this S-1 and the downside price protections are eliminated. There is a call provision that goes into effect six (6) months from the listing on a National Exchange, that if the common stock trades at a 100% premium to the conversion price for 10 days or more, the Company can force the conversion of the Series B Preferred into common stock. The Company has agreed to pay the costs of Rule 144 legal opinions for the holders of the Series B Preferred.
Pursuant to the Series B Certificate of Designations, each holder of the Series B Preferred has the right, at any time and from time to time, at the shareholder’s option to convert any or all of such holder’s shares of Series B Preferred into the number of shares of Common Stock. Each share of Series B Preferred is initially convertible into 10 shares of common stock at a reference rate of $5.00 per share of Common Stock, subject to adjustments to set forth in the Series B Certificate of Designations.
Upon the Company’s up-listing to Nasdaq, the Series B Preferred became convertible at $4.00 per share and the downside price protections were eliminated. On March 29, 2025, certain call protection provisions in the Series B Preferred went into effect, providing that if the common stock trades at a 100% premium to the conversion price of the Series B Preferred for 10 days or more, the Company can force the conversion of the Series B Preferred into shares of common stock. The Company has agreed to pay the costs of Rule 144 legal opinions for the holders of the Series B Preferred.
The holders of Series B Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $1.25 per share per quarter. If paid in kind, the number of shares of common stock issued for the dividend shall be equal to the quotient of the dividend payable divided by the volume weighted average price on the dividend date. The Series B Preferred was offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act.
On July 18, 2025, we filed the Withdrawal of Designation with the Secretary of State of the State of Nevada and terminated the designation of our Series B Preferred. At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred Stock issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.
Series C Preferred Stock
On June 17, 2025, the Company filed a Certificate of Designation (the “Series C Certificate of Designation”) with the Secretary of State of Nevada designating 200,000 shares of preferred stock as Series C Preferred Stock. On June 30, 2025, the Company filed an Amended Series C Certificate of Designation which provides that except as otherwise required by the Nevada Revised Statutes, the holders of Series C Preferred Stock shall have no voting rights with respect to such shares.
The Series C Preferred Stock is functionally the same as our common stock except for the inclusion of either, at the election of the holder, a 4.99% or 9.99% beneficial ownership equity blocker and a liquidation preference in the event of a Liquidation Event (as defined in the Series C Certificate of Designation) so that before any amount shall be paid to the holders of any of shares of junior stock, the holders of the Series C Preferred Stock shall receive a number of shares of Series C Preferred Stock equal to the amount per share such holder would receive if such holder converted such Series C Preferred Stock into common stock immediately prior to the date of such payment.
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General. The Series C Certificate of Designation for authorizes 200,000 shares of Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $60.00. Each share of Series C Preferred Stock is convertible into 10 shares of our common stock, subject to certain adjustments. The initial conversion price of the Series C Preferred Stock is $6.00 per share of common stock.
Exchange Listing. There is no trading market available for the Series C Preferred Stock. We do not intend to list or quote the Series C Preferred Stock on any securities exchange or nationally recognized trading system.
Ranking. The Series C Preferred Stock ranks junior to the Series A Preferred and Series B Preferred, but ranks senior to our common stock and any preferred stock issued after the Series C Preferred Stock. In the event of the merger or consolidation of the Company with or into another entity, the Series C Preferred Stock shall maintain its relative rights, powers, designations, privileges and preferences provided for in the Series C Certificate of Designation. In the event of a liquidation of the Company, the holders of Series C Preferred Stock will share in the distribution of our net assets on an as-converted basis.
Voting. Except as otherwise required by the Nevada Revised Statutes, the holders of Series C Preferred Stock shall have no voting rights with respect to such shares.
On July 8, 2025, in connection with the Series C Offering, we sold an aggregate of 108,333 shares of Series C Preferred Stock, convertible into 1,083,333 shares of our common stock, at $60.00 per share (each share of Series C is convertible into 10 shares of common stock) on a best-efforts basis for aggregate gross proceeds of $6,499,980 prior to deducting placement agent fees and offering expenses payable by us. The net proceeds to us from the Series C Offering were approximately $6.04 million after deducting placement agent fees and offering expenses payable by us. There is currently no established public market for the Series C Preferred Stock, and we do not expect a market to develop. The Series C Preferred Stock contains a beneficial ownership limitation, pursuant to which a holder may not convert the Series C Preferred Stock into common stock to the extent that, after such conversion, the holder (together with its affiliates) would beneficially own more than either 4.99% or 9.99% of our outstanding common stock, as initially elected by the holder.
Robert Steele Private Transactions
On July 8, 2025, simultaneously with the closing of the Series C Offering, Mr. Robert Steele, the Company’s Chief Executive Officer, agreed to sell 2,500,000 shares of common stock (the “Private Transaction Shares”) to certain accredited investors who participated in the Series C Offering. The purchase price of the Private Transaction Shares was $0.50 per share and Mr. Steele received $1,250,000 in aggregate net proceeds from the sale of the Private Transaction Shares. We have agreed to register the resale of the Private Transaction Shares with the Securities and Exchange Commission within 30 days of the closing of the offering of the Private Transaction Shares.
American Ventures LLC Financial Advisory Agreement
On August 12, 2025, we entered into the American Ventures Advisory Agreement with the Adivsor, pursuant to which the Advisor agreed to provide us with certain financial advisory services, including advising us on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, we agreed to issue the Advisor the American Ventures Advisory Shares, which such shares of common stock are subject to Stockholder Approval.
August 2025 Offering
On August 11, 2025, we entered into the August 2025 Dominari Agreement with Dominari, pursuant to which we agreed to issue and sell directly to the Investors in the August 2025 Offering, an aggregate of 5,000,000 shares of our common stock.
The closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to us were approximately $50 million, before deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. We currently intend to use the net proceeds received from the August 2025 Offering to explore the accumulation of cryptocurrencies and mining equipment, working capital and general corporate purposes.
Pursuant to the August 2025 Dominari Agreement, we paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025 Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable expenses, and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including reasonable fees and expenses of its legal counsel in the amount of $150,000. Additionally, we the August 2025 Dominari Warrants to Dominari to purchase up to 350,000 shares of common at an exercise price of $10.00 per share. The August 2025 Dominari Warrant will be exercisable 180 days after the issuance date and has a term of exercise equal to five years from the date of issuance.
Option Assignment
On July 8, 2025, simultaneously with the closing of the Series C Offering, pursuant to the Option Agreement, the Assignor sold the Option to the Assignees. The sale price of the Option was $150,000. Mr. Andrew Haag, the brother of Mr. Robert Haag, a member of our Board of Directors, is a stockholder of the Company and the Managing Member of the Assignor. The Assignor had previously purchased the Option for $125,000 from Mr. Daniel Lupinelli, a principal stockholder of the Company beneficially owing 14.47% of the outstanding Common Stock of the Company as of June 16, 2025. Within 30 days of the closing of the Option sale, the Company has agreed to register within 30 days, the resale of the underlying shares of common stock issuable upon the full exercise of the Option.
Coinbase Master Loan Agreement
On May 12, 2025, the Company entered into that certain MLA with Coinbase and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into Loans in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral. Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan (which terms may be amended by mutual agreement of the parties), including (i) the Digital Asset (as defined in the MLA) or currency of any Cash to be lent, (ii) the quantity of the Digital Asset or Cash to be lent, (iii) the Loan Fee Rate (as defined in the MLA) to be paid by the Company to Coinbase, (iv) the type and amount of fees to be charged (if any), (v) the type and amount of Collateral to be transferred by the Company to Coinbase, (vi) the day on which the Loan is to commence, (vii) whether the Loan is for a fixed term or open, and if for a fixed term the term and maturity date of the Loan, and (viii) any additional terms, and Coinbase shall confirm such Loan by sending a confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase Collateral with a market value at least equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA).
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The Company has agreed to pay Coinbase a loan fee (the “Loan Fee”) owed on each Loan, and Coinbase shall pay the Company any fee or amount owed, if applicable. Any Loan Fee payable hereunder will be calculated daily based on a 365-day year for the actual number of days a Loan is open, by reference to the Loaned Assets outstanding on each day under a Loan, based on the Loan Fee Rate and subject to the terms of the MLA. Additionally, Coinbase will be entitled to receive all Distributions (as defined in the MLA) made on or in respect of the Loaned Digital Assets (as defined in the MLA) which are not otherwise received by Coinbase, to the full extent it would be so entitled if the Loaned Digital Assets had not been lent to the Company.
Pursuant to the terms of the MLA, each of the Company and Coinbase have agreed that promptly upon (and in any event within five business after) demand by either party, the other party will furnish the demanding party with its most recent audited and unaudited financial statements and any other financial statements mutually agreed upon by the Company and Coinbase, and subject to certain conditions. The MLA additionally contains certain customary events of default, including but not limited to (i) if the Company fails to transfer any Loaned Assets to Coinbase upon termination of the Loan as required by the MLA, (ii) if Coinbase fails to transfer any Collateral to the Company upon termination of the Loan as required by the MLA, (iii) if an insolvency event occurs with respect to either the company or Coinbase, (iv) if either party notifies the other of its inability to or its intention not to perform its obligations pursuant to the MLA or otherwise disaffirms, rejects or repudiates any of its obligations pursuant to the MLA, and (v) If any representation made by either party in respect of the MLA or any Loan or Loans pursuant to the MLA is incorrect or untrue in any material respect during the term of any Loan made pursuant to the MLA. If such Events of Default occur, the Coinbase will have the right to, among others and in addition to any other remedies provided in the MLA (a) purchase a like amount of Loaned Digital Assets (“Replacement Digital Assets”) in a commercially reasonable manner, (b) to sell any Collateral in a commercially reasonable manner, (c) freeze or otherwise suspend access to the Collateral, Accounts and/or certain accounts and (d) to apply and set off the Collateral and any proceeds thereof against the payment of the purchase price for such Replacement Digital Assets and any amounts due to Coinbase pursuant to the MLA.
Shareholder Action by Majority Consent – April 2025
On April 29, 2025, holders of a majority of the outstanding voting securities of the Company approved the following actions by majority consent: (i) electing five directors to serve until our next annual meeting of Stockholders or until their successor is duly elected and qualified; (ii) approving the Company’s 2025 Equity Incentive Plan (the “2025 Plan”) and the reservation of up to 2,000,000 shares of the Company’s Common Stock, par value $0.001 (the “Common Stock”) for issuance thereunder, subject to certain conditions; (iii) ratifying the appointment of Haynie & Company as our independent registered public accounting firm for the fiscal year ending December 31, 2025; (iv) approving, on an advisory basis, the compensation paid to our named executive officers; (v) approving the issuance of securities in one or more non-public offerings where the maximum discount at which securities will be offered will be equivalent to a discount of 20% below the market price of our common stock, as required by and in accordance with Nasdaq Marketplace Rule 5635(d); and (vi) approving any change of control that could result from the potential issuance of securities in the non-public offerings following effectiveness of Action No. 5, as required by and in accordance with Nasdaq Marketplace Rule 5635(b). The foregoing actions will become effective no sooner than 20 days after a definitive Information Statement has been distributed to the shareholders of the Company.
Contractual Obligations
Our contractual obligations are included in our notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report. To the extent that funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings. No assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.
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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.
Cybersecurity
Risk Management and Strategy
We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.
Managing Material Risks & Integrated Overall Risk Management
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.
Oversee Third-party Risk
Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
Risks from Cybersecurity Threats
We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.
Known Trends, Events and Uncertainties
The Company is subject to risks and uncertainties common to companies in the technology and social media industry, including but not limited to, development by competitors of new products and applications, dependence on key personnel, protection of proprietary technology, and the ability to secure additional capital to fund operations. In addition, the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflict between Israel and Hamas, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. For a further discussion of factors that may affect future operating results see the sections entitled “Risk Factors.”
Other than as discussed above and elsewhere in this report, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is not required to provide the information required by this Item as it is a smaller reporting company.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e)) (the “Exchange Act”). Based on the foregoing evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in its reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2025, based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 Framework). Based on this evaluation, our principal executive officer and principal financial officer have concluded that our internal controls over financial reporting as of June 30, 2025, were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in internal controls over financial reporting during the three and six months ended June 30, 2025.
Inherent Limitations of the Effectiveness of Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.
Item 1A. Risk Factors.
The following description of risk factors includes any material changes to risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.
The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Quarterly Report. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report.
Our indebtedness could adversely affect our financial health and prevent us from fulfilling our debt obligations.
In May 2025, we entered into the MLA with Coinbase and Coinbase, Inc. pursuant to which Coinbase may lend us certain digital assets or cash. As of the date of this Quarterly Report, we have received $500,000 under the MLA and the principal amount outstanding as of the date of this Quarterly Report is $500,000. The borrowings under the Master Loan are collateralized by approximately $1.25 million of bitcoin as of the date of this Quarterly Report.
Our indebtedness could, among others:
| ● | increase our vulnerability to general adverse economic and industry conditions; |
| ● | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes; |
| ● | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
| ● | place us at a competitive disadvantage compared to our competitors that have less debt; |
| ● | result in greater interest rate risk and volatility; |
| ● | limit our ability to borrow additional funds; and |
| ● | make it more difficult for us to satisfy our obligations with respect to our debt, including our obligation to repay the MLA under certain circumstances, or refinance our indebtedness on favorable terms or at all. |
In addition, if the value of bitcoin declines precipitously, the value of our collateral under the MLA would also decline. In such case, we could be required to provide Coinbase with additional collateral. If we are unable to do so, we could default under the MLA, which could have a material adverse effect on our operations, liquidity, financial condition, and results of operations.
Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory, and other factors. We will be unable to control many of these factors, such as economic conditions. We cannot be certain that we will continue to have sufficient capital to allow us to pay the principal and interest on our outstanding debt and meet any other obligations. If we do not have enough money to service our debt, we may be required, but unable to refinance all or part of our existing debt, sell assets, borrow money, or raise equity on terms acceptable to us, if at all, and Coinbase could sell any collateral in a commercially reasonable manner and freeze certain of our accounts, among other measures.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended June 30, 2025, the Company issued 2,982 shares of its Series A Preferred as dividends pursuant to the terms of the Series A Certificate of Designation.
During the three months ended June 30, 2025, the Company issued 1,980 shares of common stock with a fair market value of $10,098 for services rendered and to be rendered to the Company, which such issuance was made in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder for transactions not involving a public offering.
During the three months ended June 30, 2025, the Company issued 183,750 shares of common stock upon the conversion of 14,700 shares of Series B Preferred at a conversion price of $4.00 per share.
During the three months ended June 30, 2025, the Company issued 176 shares of common stock with a value of $1,249 as a dividend for the Series B Preferred, pursuant to the terms of the Series B Certificate of Designation.
Share Repurchase Program
| Period | Total number of shares (or units) purchased | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | ||||||||||||
| January 1, 2025, to January 31, 2025 | - | $ | - | - | - | |||||||||||
| February 1, 2025, to February 28, 2025 | - | - | - | - | ||||||||||||
| March 1, 2025, to March 31, 2025 | 79,377 | 3.76 | 79,377 | 701,793 | ||||||||||||
| April 1, 2025, to April 30, 2025 | - | - | - | - | ||||||||||||
| May 1, 2025, to May 31, 2025 | - | - | - | - | ||||||||||||
| June 1, 2025, to June 30, 2025 | - | - | - | $ | - | |||||||||||
| Total | 79,377 | $ | 3.76 | 79,377 | $ | 701,793 | ||||||||||
On March 7, 2025, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $1 million of the Company’s common stock through December 31, 2025. The share repurchase program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Except as set forth under Item 2 above, there is no other information required to be disclosed under this item which has not been previously disclosed.
Item 6. ExhibitS
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Thumzup Media Corporation | ||
| By: | /s/ Robert Steele | |
| Robert Steele | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Date: August 14, 2025
| By: | /s/ Isaac Dietrich | |
| Isaac Dietrich | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Date: August 14, 2025
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