THUMZUP MEDIA Corp

Thumzup Media Corporation

Notes to the Condensed Financial Statements (Unaudited)

September 30, 2024

Note 1 -Business Organization and Nature of Operations

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, 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 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 –Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company was only recently formed, has not yet established profitable operations and has incurred losses since inception. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise additional funds not provided by operations through loans or through sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company recognized its first revenues in December 2021. It has been reliant on equity funding for its operations. At September 30, 2024 and December 31, 2023, the Company had a cash balance of $110,246 and $259,212, respectively. For the nine months ended September 30, 2024 and 2023, the Company used $1,053,175 and $1,911,767 to fund operating activities, respectively. For the nine months ended September 30, 2024, the Company raised approximately $161,228, net of offering expenses of $1,628, from the sale of 36,256 shares of its common stock and approximately $805,000 from the sale of 16,100 shares of Preferred Series B stock, less issuance costs of $25,000. The Company may need to raise additional funding and manage expenses in order to continue as a going concern.

Note 3 –Summary of Significant Accounting Policies

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited condensed 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 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 or omitted from these interim unaudited condensed financial statements. Accordingly, these interim unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC on March 20, 2024 (the “Annual Report”). The December 31, 2023 balance sheet is derived from those restated 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 and capitalized software costs. Actual results may differ from these estimates.

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 September 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents consisted of $110,246 and $259,212, respectively. The Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At September 30, 2024 and December 31, 2023, the uninsured balances amounted to $0 and $1,850, respectively. There is a risk the Company may lose uninsured balances over the FDIC insurance limit.

Prepaid Expenses

As of September 30, 2024 and December 31, 2023, the Company had $52,072 and $6,321 in prepaid expenses, respectively. The Company’s prepaid expenses as of September 30, 2024 and December 31, 2023 were primarily for marketing, filing, and listing fees for services not yet rendered.

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 three years. We evaluate the appropriateness of remaining depreciable lives assigned to computer equipment at the end of each fiscal year. Depreciation expense for the three months ended September 30, 2024 and 2023 was $701 and $1,000, respectively. Depreciation expense for the nine months ended September 30, 2024 and 2023 was $2,426 and $2,293, respectively.

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 nine months ended September 30, 2024 and 2023, we capitalized $175,770 and $108,313 of costs related to the development of software applications, respectively. Amortization of capitalized software costs was $26,644 and $8,560 for the for the three months ended September 30, 2024 and 2023, respectively. Amortization of capitalized software costs was $65,082 and $14,364 for the for the nine months ended September 30, 2024 and 2023, respectively. The balance of capitalized software was $253,302 and $142,614, net of accumulated amortization of $90,981 and $25,899 at September 30, 2024 and December 31, 2023, respectively.

The Company evaluates its capitalized software costs for impairment annually, at year-end. As of December 31, 2023, the Company determinedno impairment of its capitalized software costs was warranted.

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.

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:

We derive our 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. Our 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). We have concluded that we are the agent in our current transactions as we arrange 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 we are 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 no tax positions as of September 30, 2024 and December 31, 2023 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes any interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. For the period ending September 30, 2024 and 2023, the Company recognizedno interest and penalties.

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 period. 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 nine months ended September 30, 2024 and 2023 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.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will add required disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the chief operating decision maker (“CODM”) evaluates segment expenses and operating results. The new standard will also allow disclosure of multiple measures of segment profitability, if those measures are used to allocate resources and assess performance. The amendments will be effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The standard will be effective for public companies for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our financial statements.

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 4 –Non-Convertible Notes

On August 26, 2024, the Company entered into a Promissory Note with a related-party, Westside Strategic Partners, LLC, which is controlled by one of the Company’s directors, Robert Haag. The note is in the principal amount of $60,000 and carries an interest rate of 10% per annum. The note matures on the earlier of (i) October 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. During the nine months ended September 30, 2024, the Company received $60,000 from the issuance of the note. During the three and nine months ended September 30, 2024, the note incurred interest of $575. As of September 30, 2024, the note had outstanding principal amount and accrued interest of $60,000 and $575, respectively. On October 30, 2024, the Company repaid principal of $60,000 together with accrued interest of $1,068. The note is retired.

On September 24, 2024, the Company entered into a Promissory Note with a related-party, Westside Strategic Partners, LLC, which is controlled by one of the Company’s directors, Robert Haag. The note is in the principal amount of $80,000 and carries an interest rate of 10% per annum. The note matures on the earlier of (i) October 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. During the nine months ended September 30, 2024, the Company received $80,000 from the issuance of the note. During the three and nine months ended September 30, 2024, the note incurred interest of $132. As of September 30, 2024, the note had outstanding principal amount and accrued interest of $80,000 and $132, respectively. On October 30, 2024, the Company repaid principal of $80,000 together with accrued interest of $789. The note is retired.

Note 5 –Shareholders’ Equity

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock, par value $0.001 per share.

Series A Preferred

On September 26, 2022, the Company submitted a Certificate of Designation to the Secretary of State of Nevada designating 1,000,000 shares of preferred stock as Series A Preferred (“Series A Preferred”). Each shareholder shall have 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 initially converts into 15 shares of Common Stock at a reference rate of $3.00 per share of Common Stock subject to adjustments.

The holders of Series A Preferred shall be entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $0.875 per share per quarter. If paid in kind, the dividend shall be in shares of Series A Preferred (the “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 Dividend Shares shall be valued at the Purchase Price adjusted pursuant to the formula set forth in Section 3 of the Certificate of Designations.

On January 18, 2024, a holder converted 556 shares of Series A preferred into 8,340 shares of common stock.

On March 15, 2024, the Company issued 2,765 Series A shares as a dividend.

On June 15, 2024, the Company issued 2,819 Series A shares as a dividend.

On September 15, 2024, the Company issued 2,874 Series A shares as a dividend.

On September 20, 2024, the Company converted 187 Series A shares into 2,809 common shares.

At September 30, 2024 and December 31, 2023, the Company had 150,485 and 142,769 Series A preferred shares issued and outstanding, respectively.

Series B Preferred

On March 5, 2024, the Company submitted a Certificate of Designation to the Secretary of State of Nevada designating 40,000 shares of preferred stock as Series B Preferred (“Series B Preferred”). Each shareholder shall have 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 initially converts into 10 shares of Common Stock at a reference rate of $5.00 per share of Common Stock subject to adjustments.

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.

The holders of Series B Preferred shall be 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 common shares 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.

During the nine months ended September 30, 2024, the Company issued 16,100 Series B shares for cash proceeds of $805,000, less issuance costs of $25,000

On June 15, 2024, issued 4,647 common shares with a value of $18,588 as a dividend for the Series B.

On September 15, 2024, issued 3,802 common shares with a value of $20,531 as a dividend for the Series B.

At September 30, 2024 and December 31, 2023, the Company had 16,100 and 0 Series B preferred shares issued and outstanding, respectively.

Common Stock

The Company is authorized to issue 250,000,000 million shares of common stock, par value $0.001 per share. At September 30, 2024 and December 31, 2023, the Company had 7,750,342 and 7,656,488 shares issued and outstanding, respectively.

During the nine months ended September 30, 2024, the Company issued 38,000 shares of common stock with a fair market value of $194,930 for services rendered and to be rendered to the Company.

During the nine months ended September 30, 2024, the Company issued 36,256 shares of common stock for proceeds of $160,218, net offering expenses of $1,789.

During the nine months ended September 30, 2024, the Company issued 11,149 shares of common stock for the conversion of 743 shares of Series A preferred.

During the nine months ended September 30, 2024, the Company issued 8,459 common shares with a value of $8,453 as a dividend for the Series B.

During the three months ended September 30, 2024 and 2023, the Company realized losses of $0 and $392,660 respectively, for liquidated damages contained in the Registration Rights Agreements in certain of the Company’s equity offerings for failing to file and maintain a Registration Statement covering the shares sold in those offerings. During the nine months ended September 30, 2024 and 2023, the Company realized losses of $0 and $392,660 respectively, for liquidated damages contained in the Registration Rights Agreements in certain of the Company’s equity offerings for failing to file and maintain a Registration Statement covering the shares sold in those offerings. From September 1 to 14, 2023, the Company entered into Waiver Agreements with certain investors pursuant to which the Investors waived certain liquidated damages owed to the Investors by the Company in exchange for the issuance to the Investors by the Company of 130,259 and 6,579 shares of common and Series A preferred stock, par value $0.001 and $0.001 per share, respectively. As of September 30, 2024 and December 31, 2023, the accrued liquidated damages with accrued interest is $0 and $0, respectively.

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.

Note 7 –Related Party Transactions

On March 14, 2024, Westside Strategic Partners, LLC, which is controlled by one of the Company’s directors, Robert Haag, acquired 1,000 shares of our Series B Preferred Stock at $50 per share for a subscription in the amount of $50,000.

On March 20, 2024, Joanna Massey, acquired 800 shares of our Series B Preferred Stock at $50 per share for a subscription in the amount of $40,000.

On March 15, 2024, Westside received a dividend of 580 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On March 15, 2024, Isaac Dietrich received a dividend of 14 shares of Series A Preferred Stock, per the terms of its Certificate of Designation.

On June 15, 2024, Westside received a dividend of 591 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On June 15, 2024, Joanna Massey received a dividend of 29 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On June 15, 2024, Westside received 289 common shares for a dividend for the Series B Preferred Stock, per the terms of the Company’s Certificate of Designation.

On June 15, 2024, Joanna Massey received 231 common shares for a dividend for the Series B Preferred Stock, per the terms of the Company’s Certificate of Designation.

On June 15, 2024, Isaac Dietrich received a dividend of 15 shares of Series A Preferred Stock, per the terms of its Certificate of Designation.

On June 15, 2024, Westside received a dividend of 591 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On August 26, 2024, Westside entered into a Promissory Note with the Company for $60,000 (“First Westside Note”). The First Westside Note carries an interest rate of 10% per annum andmatures on the earlier of (i) October 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. During the three months ended September 30, 2024, $575 in interest accrued on the First Westside Note. On October 30, 2024, the Company repaid principal of $60,000 together with accrued interest of $1,068. The First Westside Note is retired.

On September 15, 2024, Joanna Massey received a dividend of 30 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On September 15, 2024, Westside received a dividend of 603 shares of Series A Preferred Stock, per the terms of the Company’s Certificate of Designation.

On September 15, 2024, Westside received 236 common shares for a dividend for the Series B Preferred Stock, per the terms of the Company’s Certificate of Designation.

On September 15, 2024, Joanna Massey received 189 common shares for a dividend for the Series B Preferred Stock, per the terms of the Company’s Certificate of Designation.

On September 15, 2024, Isaac Dietrich received a dividend of 15 shares of Series A Preferred Stock, per the terms of its Certificate of Designation.

On September 24, 2024, Westside entered into a Promissory Note with the Company for $80,000 (“Second Westside Note”). The Second Westside Note carries an interest rate of 10% per annum andmatures on the earlier of (i) October 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. During the three months ended September 30, 2024, $132 in interest accrued on the Second Westside Note. On October 30, 2024, the Company repaid principal of $80,000 together with accrued interest of $789. The Second Westside Note is retired.

On October 21, 2024, Westside entered into a Promissory Note with the Company for $50,000 (“Third Westside Note”). The Third Westside Note carries an interest rate of 10% per annum andmatures on the earlier of (i) November 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. On October 30, 2024, the Company repaid principal of $50,000 together with accrued interest of $123. The Third Westside Note is retired

On October 28, 2024, Westside entered into a Promissory Note with the Company for $20,000 (“Fourth Westside Note”). The Fourth Westside Note carries an interest rate of 10% per annum andmatures on the earlier of (i) November 25, 2024, (ii) receipt of $1,000,000 or more in investment capital, or (iii) within 5 days of uplisting to Nasdaq. There is a default interest rate of 15% and the note can be prepaid without penalty. On October 30, 2024, the Company repaid principal of $20,000 together with accrued interest of $11. The Fourth Westside Note is retired

Note 8 –Stock Options

Our Stockholders approved our 2024 Equity Incentive Plan (the “Plan”) in May 2024. In July 2024, our Stockholders amended the Plan to increase the number of shares issuable thereunder to 2,000,000.

Note 9 –Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date which the financial statements were issued.

Director Appointments

Effective October 28, 2024, Dr. Joanna Massey, Paul Dickman and Isaac Dietrich were appointed to Thumzup’s Board of Directors. Dr. Massey and Mr. Dickman are independent, as defined inthe Nasdaq listing rules.

Entry into Underwriting Agreement

On October 28, 2024, Thumzup Media Corporation (the “Company”), entered into an underwriting agreement (the “Underwriting Agreement”) with Dawson James Securities, Inc., as representative (the “Representative”) of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters, in a firm commitment public offering (the “Offering”), an aggregate of 1,425,000 of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a public offering price of $5.00 per share. The Common Stock was offered pursuant to a registration statement on Form S-1, as amended (File No. 333-279828), originally filed with the U.S. Securities and Exchange Commission (the “Commission”) on May 30, 2024, as amended, and which was declared effective by the Commission on October 28, 2024.

The Underwriting Agreement contains customary representations and warranties that the parties thereto made to, and solely for the benefit of, the other party in the context of all of the terms and conditions of that Underwriting Agreement and in the context of the specific relationship between the parties. The provisions of the Underwriting Agreement and schedules and exhibits thereto, including the representations and warranties contained therein respectively, are not for the benefit of any party other than the parties to such documents and agreements and are not intended as documents for investors and the public to obtain factual information about the current state of affairs of the parties to those documents and agreements. Rather, investors and the public should look to other disclosures contained in the Company’s filings with the Commission.

On October 30, 2024, the Company closed the Offering. The total gross proceeds to the Company from the Offering, not including the exercise of the underwriter’s over-allotment option, and before deducting discounts and expenses, were approximately $7,125,000. A final prospectus relating to this Offering was filed with the Commission on October 30, 2024. The Common Stock was previously approved for listing on The Nasdaq Capital Market and commenced trading under the ticker symbol “TZUP” on October 29, 2024.

On November 1, 2024, Dawson James Securities, Inc., the underwriter of its previously announced public offering that closed on October 30, 2024, fully exercised its overallotment option to purchase an additional 213,750 shares at $5.00 per share, increasing the total shares sold to 1,638,750 and gross proceeds to approximately $8.2 million.

Bridge Note Repayment

On October 30, 2024, Thumzup repaid Westside Strategic Partners, LLC, of which a Company director Robert Haag, serves as managing member for four bridge notes in the aggregate principal amount of $210,000, together with accrued interest of $1,992. The bridge notes are retired.

Grant of Stock Options

On October 28, 2024, the Company issued Stock Option Agreements under its 2024 Equity Incentive Plan to two officers (“Officer Stock Option Agreements”). The Officer Stock Option Agreements are for an aggregate of 650,000 option shares and have a $5.00 strike price (“Option Shares”). The Officer Stock Option Agreements vest in four equal tranches, each consisting of 25% of the Option Shares, on the first day of each of January in 2025, 2026, 2027, and 2028.

On October 28, 2024, the Company issued Stock Option Agreements under its 2024 Equity Incentive Plan to three directors (“Directors Stock Option Agreements”). The Directors Stock Option Agreements are for an aggregate of 378,000 option shares, have a $5.00 strike price, and vested immediately (“Option Shares”). Should a Director resign or be removed prior to completing full 12 month term, the remaining portion of the options that the Director was entitled to shall be clawed back pursuant to the Company’s Compensation Recovery Policy and the discretion of the Board of Directors.

On October 30, 2024, Thumzup issued Stock Option Agreements under its 2024 Equity Incentive Plan to nine non-executive and non-director employees and contractors (“Employee Stock Option Agreements”). The Employee Stock Option Agreements are for an aggregate of 155,000 option shares and have a $5.47 strike price (“Option Shares”). The Employee Stock Option Agreements vest in four equal tranches, each consisting of 25% of the Option Shares, on the first day of each of January in 2025, 2026, 2027, and 2028.

Robert Steele, Executive Employment Agreement

On May 30, 2024, the Company and Mr. Steele entered into an Executive Employment Agreement, which, among other things, employs Mr. Steele as the Chief Executive Officer of the Company. Effective upon the listing of the Company’s common stock on a national stock exchange, Mr. Steele will be paid a salary of $168,000 in periodic installments in accordance with the Company’s customary payroll practices and applicable wage payment and withholdings laws and requirements. Additionally, the Executive’s Base Salary will increase from $168,000 to $250,000, effective upon the Company’s achievement of $100,000 net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, (ii) the Executive’s Base Salary will increase to $350,000 upon the Company achieving $250,000 in net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, and (iii) effective upon the Company’s receipt of an aggregate of $800,000 in net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, the Base Salary will increase to $500,000. The Company shall pay Executive a past performance bonus of $50,000 within 5 days of up-listing to a national stock exchange (i.e., Nasdaq), provided that Executive is employed by the Company at the time of the up-listing.

Isaac Dietrich, Executive Employment Agreement

On May 30, 2024, the Company and Mr. Dietrich entered into an Executive Employment Agreement, which, among other things, employes Mr. Dietrich as the Chief Financial Officer of the Company effective upon the listing of the Company’s common stock on a national stock exchange. Mr. Dietrich will be paid a salary of $168,000 in periodic installments in accordance with the Company’s customary payroll practices and applicable wage payment and withholdings laws and requirements. Additionally, the Executive’s Base Salary will increase from $168,000 to $250,000, effective upon the Company’s achievement of $100,000 net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, (ii) the Executive’s Base Salary will increase to $250,000 upon the Company achieving $250,000 in net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, and (iii) effective upon the Company’s receipt of an aggregate of $800,000 in net monthly ad revenue from Thumzup advertisers for paid posters for twelve consecutive months, the Base Salary will increase to $350,000. The Company shall pay Executive a past performance bonus of $25,000 within 5 days of up-listing to a national stock exchange (i.e., Nasdaq), provided that Executive is employed by the Company at the time of the up-listing.