UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from __________ to __________
Commission
File Number: 001-42388
ThumzupTM
Media Corporation
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
(800)403-6150
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Common
Stock, $0.001 per share
Securities
registered pursuant to Section 12(g) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value per share TZUP The Nasdaq Stock Market, LLC
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☒ Yes ☐
No
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. ☒ Yes ☐ No
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted 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). ☒ Yes ☐ No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ☐
Non-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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The
aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant was $11,794,114 as of June 30,
2024.
As
of March 10, 2025, there were 9,426,502 shares of the registrant’s common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the Company’s Proxy Statement for our 2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this
report.
THUMZUP
MEDIA CORPORATION
FORM
10-K
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2024
INDEX
Page
PART I
Item 1. Business 6
Item 1A. Risk Factors 13
Item 1B. Unresolved Staff Comments 34
Item 1C. Cybersecurity 34
Item 2. Properties 35
Item 3. Legal Proceedings 35
Item 4. Mine Safety Disclosure 35
PART II
Item 6. [RESERVED] 36
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 39
Item 8. Financial Statements and Supplementary Data 39
Item 9A. Controls and Procedures 40
Item 9B. Other Information 41
PART III
Item 10. Directors, Executive Officers and Corporate Governance 41
Item 11. Executive Compensation 41
Item 14. Principal Accountant Fees and Services 41
PART IV
Item 15. Exhibits, Financial Statement Schedules 42
Index to Financial Statements 42
Signatures 44
PART
I
In
this Annual Report on Form 10-K, “we,” “our,” “us,” “ThumzupTM,” and “the
Company” refer to ThumzupTM Media Corporation, unless the context requires otherwise.
Forward-Looking
and Cautionary Statements
This
Annual Report contains forward-looking statements that involve risks, uncertainties and assumptions that, if they never materialize or
prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The
statements contained in this Annual Report that are not purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 2IE of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited
to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,”
“should,” “target, would” and similar expressions or variations intended to identify forward-looking statements.
Examples of forward-looking statements include, among others, statements we make regarding:
● future financial position;
● business strategy;
● budgets, projected costs, and plans;
● future industry growth;
● financing sources;
● the impact of litigation, government inquiries and investigations; and
These
statements are based on the beliefs and assumptions of our management, which are in turn based on information currently available to
management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results
and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Risk
Factors” included under Part I, Item 1A below. Furthermore, such forward-looking statements speak only as of the date of this report.
Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after
the date of such statements.
Incorporation
by Reference
The
Commission allows us to incorporate by reference the information we file with it. This means that we can disclose information to you
by referring you to those documents. The documents that have been incorporated by reference are an important part of this annual report,
and you should review that information in order to understand the nature of any investment by you in our common shares.
RISK
FACTOR SUMMARY
Our
business operations are subject to numerous risks and uncertainties, including the risks described in the section titled “Risk
Factors” included under Part I, Item 1A of this Annual Report on Form 10-K, that could cause our business, financial condition
or operating results to be harmed, including risks regarding the following:
Risks
Relating to Our Business
The
Company is a recently formed company with an unproven business plan, has not yet established profitable operations and has generated
minimal revenue.
The
Company was formed in October 2020 and has not yet established profitable operations and has generated nominal revenue.
The
Company may not generate sufficient cash flows to cover its operating expenses.
Security
breaches and other disruptions could compromise the Company’s information and expose it to liability, which would cause its business
and reputation to suffer.
The
Company is dependent on third parties to, among other things, maintain its servers, provide the bandwidth necessary to transmit content,
and utilize the content derived therefrom for the potential generation of revenues.
Because
the Company does not intend to pay any cash dividends on its shares of common stock in the near future, shareholders will not be able
to receive a return on their shares unless and until they sell them.
The
Company is dependent on key personnel.
The
Company may not be able to successfully execute the business plan.
The
Company is a new company with a brief operating history, no revenue and an untested business plan which may not be accepted in the markets
in which it intends to operate.
The
Company has not yet established brand identity and customer loyalty.
The
Company cannot assure investors that the Thumzup® App will be accepted.
A
better financed competitor may enter the marketplace, cause the Company’s market share or acceptance rates to plummet and adversely
affect its ability to sustain viable operations.
Although
the Company may own various intellectual property rights, these rights may not provide it with any competitive advantage.
The
Company’s future financial results are uncertain and its operating results may fluctuate, due to, among other things, consumer
trends, the impact of COVID on advertising budgets and App user activity, competition, and changing social media behaviors.
The
Company’s ability to succeed will depend on the ability of its management to control costs.
Key
personnel of the Company do not devote full time to the affairs of the Company and could allocate their time and attention to other business
ventures which may not benefit the Company.
The
Company’s Officers, Directors, and employees are entitled to receive compensation, payments and reimbursements, regardless of whether
it operates at a profit or a loss.
Combination
or “layering” of multiple risk factors may significantly increase the risk of loss on shares of the Company’s common
stock.
Our
business is sensitive to consumer spending, inflation and economic conditions.
Russia’s
Invasion of Ukraine may negatively impact our business.
Several
of our outsourced developers are based in Pakistan and our product development could be impacted by conflict in the Middle East.
We
rely on third-party internal and outsourced software to run our critical development and information systems. As a result, any sudden
loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense and disrupt the management
of our business operations.
Cyber
security breaches of our systems and information technology could adversely impact our ability to operate.
Failures
or security breaches of our networks or information technology systems could have an adverse effect on our business.
Risks
Related to our Common Stock
The
Company is controlled by its Chairman/Board of Directors, Chief Executive Officer, President, and additional Officers of the Company.
The
Company’s common stock price may be volatile, which could result in substantial losses to investors and litigation.
If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.
The
sale or availability for sale of substantial amounts of the Company’s common stock could adversely affect the market price of the
common stock.
The
Company is controlled by a small group of existing shareholders, whose interests may differ from other shareholders. The Company’s
Officers and Directors will significantly influence its activities, and their interests may differ from an investor’s interests
as a shareholder.
The
Company is an “emerging growth company” under the JOBS Act and it cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make the Company’s common stock less attractive to investors.
If
equity research analysts do not publish research or reports about the Company, or if they issue unfavorable commentary or downgrade its
common stock, the market price of its common stock will likely decline.
Because
we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution.
As
a newly Nasdaq-listed company, we will incur material increased costs and become subject to additional regulations and requirements.
You
could lose some or all of your investment.
We
are a “smaller reporting company” within the meaning of the Securities Act, and if we decide to take advantage of certain
exemptions from various reporting requirements applicable to smaller reporting companies, our common stock could be less attractive to
investors.
Risks
Related to Our Bitcoin Strategy and Holdings
Our
bitcoin strategy exposes us to various risks, including risks associated with bitcoin.
Bitcoin
is a highly volatile asset, and fluctuations in the price of bitcoin are likely to influence our financial results and the market price
of our listed securities.
Bitcoin
and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty
Our
historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to
our bitcoin holdings.
The
availability of spot exchange-traded products (“ETPs”) for bitcoin and other digital assets may adversely affect the market
price of our listed securities.
Our
bitcoin strategy subjects us to enhanced regulatory oversight.
Bitcoin
trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established
asset classes.
The
concentration of our bitcoin holdings enhances the risks inherent in our bitcoin strategy.
Our
bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for
us to the same extent as cash and cash equivalents.
If
we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin,
or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our bitcoin
and our financial condition and results of operations could be materially adversely affected.
We
face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and
cyberattacks or other data loss relating to our bitcoin.
Regulatory
change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment
Company Act of 1940 and could adversely affect the market price of bitcoin and the market price of our listed securities.
We
are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds,
or to obligations applicable to investment advisers.
Our
bitcoin strategy exposes us to risk of non-performance by counterparties.
ITEM
1. BUSINESS.
Overview
General
As
used herein, “we,” “us,” “our,” the “Company,” “ThumzupTM,” means ThumzupTM
Media Corporation unless otherwise indicated. ThumzupTM operates in a single business segment which is social media marketing. ThumzupTM
has a mobile iPhone and Android applications called “ThumzupTM” that connects brands and people who use and love these
brands. For the advertiser, ThumzupTM incentivizes real people to become content creators and post authentic valuable posts on social
media about the advertiser and its products.
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 (“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
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 year ended December 31, 2023
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.
Thumzup®
Products and Services
The
Company operates in a single business segment which is social media marketing and advertising. The Thumzup® App works on both iPhone
and Android mobile operating systems and connects brands and people who use and love these brands. For the Advertiser, Thumzup® incentivizes
ordinary people to become paid content Creators and post authentic valuable posts on social media about the Advertiser and its products.
The
Company seeks to capitalize on nationwide-wide gig economy and business democratization trends. Immense value and opportunity have been
created through the democratization of ride sharing, hospitality, finance and other industries. The Thumzup® tools are designed to
facilitate this democratization trend for the consumer and the Advertiser within the online marketing and advertising space.
The
Company has built the technology to support an influencer and “gig” economy community around its Thumzup® App. This technology
and community are designed to generate scalable authentic product posts and recommendations for advertisers on social media. It is designed
to connect advertisers with individuals who are willing to tell their friends about the advertisers’ products online and offline.
Social
Media Marketing Software Technology
The
Thumzup® mobile App enables Creators, to select from brands advertising on the App and get paid to post about the advertiser on social
media. Once the Thumzup® Creator selects the brand and takes a photo using the Thumzup® App, the Thumzup® App posts the photo
and a caption to the Creator’s social media accounts. The advertiser then reviews and approves the post for payment and the Creator
can cash out whenever they choose through popular digital payment systems. For the advertiser, the Thumzup® system enables brands
to get real people to promote their products to their friends. In 2023, $148 billion was spent on digital display ads in the United States
and while 43% of marketers consider display ads to be the least effective channel, 84% of marketers were still investing in them(1).
We feel this demonstrates a significant need among advertisers for new methods of messaging to potential customers. We believe
Thumzup’s ability to scale brand messages from the general population on social media could be part of addressing this substantial
need in the market.
(1) https://meetanshi.com/blog/display-advertising-statistics/)
A
recent Nielsen report found 81% of consumers believe friends and family are the most reliable sources of information about products(2).
According to a Emplifi article, 64% of millennials recommend a product at least once a month(3), and according to a
2019 Morning Consult survey, 86% of Gen Z and millennials would post content for monetary compensation(4). Further, according
to a 2020 IZEA Insights Study, 67% of social media consumers aspire to be paid social media influencers(5). According to a
2023 Bankrate, 48% of social media users have impulsively purchased a product seen on social media(6). Lastly, 85% of Gen
Z says social media impacts purchase decisions according to a 2023 Retail Dive Survey(7).
The
average American adult spent 7 hours and 58 minutes per day using digital media in 2020 according to a 2020 eMarketer Report(8).
The amount of daily usage has increased significantly since 2019, again according to an eMarketer Report(8),, and the
Company believes such usage will continue to accelerate. The Company empowers businesses that want to interact with these Creators and
provides tools and data so they can increase consumer awareness and expand their customer bases.
In
the past decade, social media platforms like Instagram, Facebook, Twitter, Pinterest, and TikTok have achieved mass worldwide consumer
acceptance and created hundreds of billions of dollars in shareholder value. This worldwide viral growth demonstrates that compelling
new social media platforms which present the right combination of experience and value, will attract Creators who will invest significant
amounts of time on the platforms.
For
this reason, Thumzup recently announced its integration with X and TikTok into its proprietary platform(9). Thumzup’s
launch on X Corp signifies a quantum leap in Thumzup’s mission to revolutionize advertising. By merging Thumzup’s innovative
tools with X’s massive audience, the Company believes they can deliver strong opportunities for brands to scale their visibility
and engagement at new levels.
With
over 1.5 billion monthly active users, TikTok’s explosive engagement metrics position it as a premier venue for impactful brand
visibility and customer connection. These statistics illustrate TikTok’s effectiveness in brand discovery and user action, with
61% of users reporting discovering new brands and products, and 92% taking action such as sharing, commenting, following, or liking content.
Once implemented, Thumzup’s integration with TikTok is poised to significantly broaden its addressable market, leveraging TikTok’s
unparalleled reach and engagement to drive enhanced advertiser access(10),.
Additionally,
Thumzup announced the beta launch of its highly anticipated video capabilities, including integration
with Instagram Reels11),.The addition of the Company’s new video posting
feature provides users with multiple ways to engage and share content, building upon its successful track record with single-photo posts.
The
Company is an early-stage entity building a new real-time platform which enables Advertisers to pay their customers and fans cash for
their positive social media posts about their products and services, which in turn supports those people who earn money from various
gig economy opportunities. The Company believes that acceptance of its App and subsequent revenue growth can be driven by empowering
everyday people to make money by posting about brands and services that they already find enjoyable and attractive on social media. The
Company believes that the Thumzup® App is a conduit for Advertisers to connect directly with consumers. The Company will need to
secure enough advertisers to make the App an attractive platform for adoption and scalability, and to ensure that the platform is interesting
enough for the Creators to return to on a regular basis. No assurance can be given that the Company will be able to achieve these results.
(5) https://www.cnn.com/business/newsfeeds/globenewswire/7812666.html
(6) https://www.bankrate.com/personal-finance/social-media-survey/
(8) https://www.emarketer.com/content/us-time-spent-with-media-2021-update
The
Industry - Social Media Marketing and Advertising
The
Company believes that it is developing a new form of social media marketing that does not currently exist, therefore existing descriptions
of market size and penetration are not directly applicable. As Thumzup® matures, the Company believes there will be other competitors
in this new market of paying non-professional advocates to tell their friends about products they love on social media at the point-of-sale.
The closest existing market that is similar to Thumzup’s market is the rapidly growing subset of online advertising called “influencer
marketing.” More than 75% of brands have a dedicated budget for influencer marketing according to a 2022 Harvard Business Review
Study (9). As social media influencers become more plentiful and proven, advertising spending has increased in this space.
According to Allied Research, the influencer marketing market generated $16.5 billion in 2022 and is estimated to reach $199.6 billion
by 2032, exhibiting a CAGR of 28.6% from 2023 to 2032(10). Influencer marketing is new but it is here to stay, Harvard Business
Review did a study to prove this and stated “the strategy can in fact yield positive ROI(9).”
Most
existing paid influencer marketing platforms were designed for professional and semi-professional online personalities. Some of these
platforms have expanded to accommodate “micro-influencers” - people with 5,000 to 30,000 social media followers. In the Company’s
opinion, none of these influencer platforms has entered the public consciousness and found mass adoption.
The
Company has designed Thumzup® “from the ground up” to make it easy for brands and service providers to activate people
who are not professional influencers but who are passionate about the products, services, or establishments they enjoy or frequent and
then are willing to relate those experiences to their friends and other social media followers. The Company has designed the Thumzup
App and Advertiser dashboard with “Apple-style” simplicity and intuitive features to make participation by all individuals
seamless with their existing use of social media.
The
Company’s first product-Thumzup® App
The
Company operates in a single business segment, which is social media marketing. The Company’s mobile iPhone and Android applications
called “Thumzup®” connects brands, products, and services to the people who use and love these brands, products,
and services. For Advertisers, Thumzup® activates real people to post real product reviews and testimonials on social media with
the intention of enhancing brand awareness and reaching targeted consumers more directly and effectively while driving profitable traffic
to the Advertisers’ products and services.
The
Company is building an influencer and gig economy community around the Thumzup® mobile App that will generate scalable authentic
product posts and recommendations for Advertisers on social media and create a technology platform making person-to-person advertising
easy, cost-effective, and scalable. The App and Advertiser dashboard are designed to connect Advertisers with individuals who are willing
to promote their products and services online and offline.
(9) https://hbr.org/2022/11/does-influencer-marketing-really-pay-off
Social
Media Marketing Software Technology
The
Company’s Services
The
Thumzup® mobile App enables Creators to select from brands advertising on the App and get paid to post about the Advertiser on social
media. Once the Thumzup® Creator selects the brand and takes a photo using the Thumzup® App, the Thumzup® App posts the photo
and a caption to the Creator’s social media accounts. The Advertiser then reviews and approves the post for payment and the Creator
can cash out whenever they choose through popular digital payment systems. For the Advertiser, the Thumzup® system enables brands
to get the general public who are not professional influencers to promote their products and services to their friends, rather than display
ads which marketers realize are less effective.
With
the Thumzup® App, the Company is targeting and signing up the general public and gig economy workers who like specific brands and
present them with opportunities to be paid for posting about the brands on social media. The Company believes that its management team
has the sales relationships, legal, and technology expertise for its current level of development. The Company will need to add additional
staff to rapidly grow the business. All source code, development work, and intellectual property performed under independent development
or employment contracts paid for by the Company are assigned to and owned by Thumzup®.
Intellectual
Property
The
Company owns the copyrights to the source code for the Thumzup® App on the iPhone iOS and Android operating mobile operating systems
as used on the majority of mobile phone and tablet devices. The Company also owns the source code for the “backend” system
that administrates the Thumzup® App, tracks payments and advertising campaigns.
The
Thumzup® thumb logo “ ” is a registered trademark owned by Thumzup® Media Corporation,
Reg. No. 6,842,424, registered Sep. 13, 2022. On April 13, 2021, the Company filed a trademark application ser. No. 90642789 with the
U.S. Patent and Trademark Office (“USPTO”) for the word mark THUMZUP, which was granted registration on June 21, 2022, resulting
in reg. no. 6764158. Also on April 13, 2021, the Company filed a trademark application ser. No. 90642848 for the Thumzup® logo, featuring
a stylized hand with an upwardly extended thumb. Meta Platforms, Inc. (which owns and operates Facebook and Instagram) initially filed
opposition to the logo on June 30, 2022. Thumzup® agreed to not use the logo as a reaction to a post and Meta Platforms, Inc. subsequently
withdrew their opposition on August 5, 2022 and it was dismissed without prejudice.
Business
Model
Advertisers
purchase an ad campaign on the Thumzup® advertiser dashboard website. Once the Advertiser approves a post for payment, the platform
facilitates the payment to Creators’ a monetary amount per screened post which may range from $1.00 to $1,000.00. The Thumzup®
platform enables the Advertiser to screen posts so that the Advertiser only pays for posts that are commercially valuable and rewards
Creators for posts that have images and text that represent the Advertiser in a positive manner.
Per
Post Fee. Thumzup® Advertisers are charged a “Per Post Fee.” By way of illustration, an Advertiser that buys 100,000
posts from Thumzup®, to pay out $10 per post to Thumzup® Creators, would purchase the posts for $13.00 each or $1,300,000. The
Creators in this illustration would receive a total of $1,000,000 and Thumzup® would retain $300,000 for its services. The Thumzup®
platform would facilitate 100,000 posts for the Advertiser from Thumzup® Creators sharing with their friends about their endorsed
products on social media.
Value
Proposition
The
Thumzup® App is designed to generate scalable social media authentic social media content for Advertisers. It is designed to connect
Advertisers with individuals who are willing to authentically promote their products online. The Company envisions that many gig economy
workers will be ideal candidates to become Creators posting on Thumzup®. Imagine a gig economy driver waiting for their next fare
who takes a moment to post about the good experience they had at their lunch spot where they are waiting. Imagine a gig economy worker
on a laptop at a coffee shop doing a graphic design project from a gig economy site who takes a moment to post about the coffee shop
where they are working on Thumzup®. The Company believes that Thumzup® can readily provide extra income for this existing pool
of gig economy workers. The Company believes these gig economy workers will be able to provide quality Thumzup® posts on social media
for which Advertisers will be willing to pay.
This
past year, Thumzup announced it will soon offer payments in Bitcoin to its gig economy workforce
through its recently launched Account Specialist Program (ASP)(1). This move
reflects Thumzup’s commitment to innovative compensation solutions and its recognition of the growing demand for cryptocurrency
payments among gig workers. Furthermore, the Company’s Board of Directors approved the purchase of up to $1 million in Bitcoin(2).
The
Thumzup® App can also facilitate digital word of mouth recommendations of products and services from people who do not need to make
extra money doing gigs, who are in fact quite affluent. The Company believes that many people who are well off may also use the App to
recommend products and services to their network of friends on social media, many of whom may also be affluent.
Key
Metrics as of March 4, 2025
Thumzup
has paid out on 28,082 approved posts to 1,592 Thumzup users regarding 746 advertisers since inception.
Thumzup
advertisers have grown by a 238% CAGR since March 4, 2024.
Regulatory
Compliance
The
Federal Trade Commission regulates and requires certain disclosures by social media influencers, specifying when disclosure is required,
and how the disclosure should be presented. These rules are codified in the Code of Federal Regulations, 16 CFR Part 255. Specifically,
the FTC requires that influencers disclose any financial, employment, personal, or family relationship with a brand. Influencers must
disclose financial relationships and consideration paid including any money, discounted products or other benefits paid to the influencer.
Creators on the Thumzup® platform are being paid to post about Thumzup® advertisers. Thumzup® puts #ad in each post made
on its platform to disclose that the creator has been paid to make the post.
The
Company does not believe its compliance with existing FTC regulations will have a material effect on capital expenditures, earnings and
competitive position of the Company and its subsidiaries, for the current fiscal year and any other material future period.
Competition
The
Company has competitors in influencer marketing software companies as GRIN, #paid, CreatorIQ, Mavrck, Popular Pays, Tribe Dynamics, Aspire,
Influenster, Traackr, and Skeepers. All of the above-named competitor influencer marketing software is focused on influencers who see
themselves as professional influencers. To the best of the Company’s knowledge, these competitors are not building platforms designed
to turn social media creators into micro-influencers in the manner that the Company seeks to accomplish. Rep is also an app that connects
brands with influencers who are interesting in promoting brands. Rep’s app is different from Thumzup® because it is targeting
people who consider themselves influencers.
The
Company does not currently know of another business that is seeking to build a community of everyday people and empowering them to post
about brands that they love.
Nevertheless,
the influencer marketing industry segments are rapidly evolving and competitive, and the Company expects competition to intensify in
the future with the emergence of new technologies and market entrants. The Company’s competitors may enjoy competitive advantages,
such as greater name recognition, longer operating histories, substantially greater market share, established marketing relationships
with, and access to, large existing advertisers and user bases, and substantially greater financial, technical and other resources. These
competitors may use these advantages to offer apps or other products similar to the Company’s at a lower price, develop different
products to compete with the Company’s current solutions and respond more quickly and effectively than the Company does to new
or changing opportunities, technologies, standards or client requirements particularly across different cities and geographical regions.
Certain competitors could also use strong or dominant positions in one or more markets to gain competitive advantage against the Company
in markets in which it operates in the future. The Company believes its ability to compete successfully for users, content, and advertising
and other customers depends upon many factors both within and beyond the Company’s control, including:
● the Company’s marketing and selling efforts, and those of its competitors;
● the Company’s reputation and brand strength relative to its competitors.
As
of March 1, 2025, The Company has nine (9) full-time employees, as well as eighteen (18) marketing, sales, and operations independent
contractors. The Company also utilizes the services of approximately eight (8) contract software developers. Seven (7) of these software
developers are third-party contractors and are located outside the United States.
Legal
Proceedings
From
time to time, the Company may become involved in litigation or other legal proceedings. The Company is not currently a party to any litigation
or legal proceedings. Regardless of outcome, litigation can have an adverse impact on the Company because of defense and settlement costs,
diversion of management resources and other factors.
Available
Information:
ThumzupTM
is located at 11845 W. Olympic Blvd, Ste 1100W #13, Los Angeles, CA 90064. 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 Annual
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.
Item
1A. Risk Factors.
An
investment in our in our common stock involves a high degree of risk. The risks described below include the principal material risks
to our company or to investors that are known to our company. You should carefully consider the risks described below together with the
other information contained in this Form 10-K. If any of the following risks actually occur, our business, financial condition and results
of operations could be materially harmed. As a result, should a trading market develop, as to which no assurance can be given, the trading
price of our common stock could decline, and investors might lose all or part of their investment.
Risks
Relating to Our Business
In
addition to the other information in this Annual Report, you should carefully consider the following factors in evaluating us and our
business. This Annual Report on Form 10-K contains, in addition to historical information, forward-looking statements that involve risks
and uncertainties, some of which are beyond our control. Should one or more of these risks and uncertainties materialize or should underlying
assumptions prove incorrect, our actual results could differ materially. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed below, as well as those discussed elsewhere in this Form 10-K, including the documents incorporated
by reference.
There
are risks associated with investing in companies such as ours who are primarily engaged in research and development. In addition to risks
which could apply to any company or business, you should also consider the business we are in and the following:
The
Company is a recently formed company with an unproven business plan, has not yet established profitable operations and has generated
minimal revenue.
The
Company has principally funded its operations through the sale of equity and equity instruments, including sales of common stock of $7,339,477
and $1,573,891, net offering costs, along with sales of preferred stock of $805,000 and $0, during the years ended December 31, 2024
and 2023, respectively. As the Company moves forward in developing its technology and commercializing the Thumzup® mobile application
(the “Thumzup® App” or “App”), or as it responds to potential opportunities and/or adverse events, the Company’s
working capital needs may change. Pending its ability to generate adequate cash flow, as to which no assurance can be given, the Company
likely will continue to incur significant losses in the foreseeable future for various reasons, including unforeseen expenses, difficulties,
complications, and delays, and other unknown events. As a result, the Company will require additional funding to sustain its ongoing
operations and to continue its research and development activities. The Company cannot assure that its available funds will be sufficient
to meet its anticipated needs for working capital and capital expenditures through any period of twelve months.
The
Company’s ability to generate positive cash flow will be dependent upon its ability to recruit and retain Advertisers and Creators.
The Company can give no assurances it will generate sufficient cash flows in the future to satisfy its liquidity requirements or sustain
continuing operations, or that additional funding, if required, will be available when needed or, if available, on favorable terms.
The
Company’s ability to generate positive cash flow will be dependent upon its ability to recruit and retain Advertisers and Creators.
The Company can give no assurances it will generate sufficient cash flows in the future to satisfy its liquidity requirements or sustain
continuing operations, or that additional funding, if required, will be available when needed or, if available, on favorable terms.
The
Company was formed in October 2020 and has not yet established profitable operations and has generated nominal revenue.
For