Datacentrex (DTCX) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01The Company is a recently formed company with an unproven business plan, has not yet established profitable operations and has generated minimal revenue
2. 02The Company was formed in October 2020 and has not yet established profitable operations and has generated nominal revenue
3. 03The 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
4. 04Security breaches and other disruptions could compromise the Company’s information and expose it to liability, which would cause its business and reputation to suffer
5. 05The 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
6. 06Because 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
7. 07The Company is dependent on key personnel
8. 08The Company may not be able to successfully execute the business plan
9. 09The Company was formed in Nevada in October 2020 and will encounter difficulties, including unforeseen difficulties as an early-stage company in establishing the credibility of its brand and service
10. 10The Company has not yet established brand identity and customer loyalty
11. 11The Company cannot assure investors that the Thumzup® App will be accepted
12. 12A 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
13. 13Although the Company may own various intellectual property rights, these rights may not provide it with any competitive advantage
14. 14The 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
15. 15The Company’s ability to succeed will depend on the ability of its management to control costs
16. 16Key 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
17. 17The 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
18. 18Combination or “layering” of multiple risk factors may significantly increase the risk of loss on share of the Company’s common stock
19. 19Our business is sensitive to consumer spending, inflation and economic conditions
20. 20Russia’s Invasion of Ukraine may negatively impact our business
21. 21Several of our outsourced developers are based in Pakistan and our product development could be impacted by conflict in the Middle East
22. 22We 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
23. 23Cyber security breaches of our systems and information technology could adversely impact our ability to operate
24. 24Failures or security breaches of our networks or information technology systems could have an adverse effect on our business

Risks Related to the Common Stock

1. 25The Company is controlled by its Chairman/Board of Directors, Chief Executive Officer, President, and additional Officers of the Company
2. 26The Company’s common stock price may be volatile, which could result in substantial losses to investors and litigation
3. 27If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares
4. 28The sale or availability for sale of substantial amounts of the Company’s common stock could adversely affect the market price of the common stock
5. 29The 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
6. 30The 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
7. 31If 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
8. 32Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution
9. 33As a newly Nasdaq-listed company, we will incur material increased costs and become subject to additional regulations and requirements
10. 34You could lose some or all of your investment
11. 35We 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

1. 36Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin
2. 37Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty
3. 38We determine the fair value of our bitcoin based on quoted (unadjusted) prices on the Coinbase exchange (our principal market for bitcoin)
4. 39The availability of spot ETPs for bitcoin and other digital assets may adversely affect the market price of our listed securities
5. 40Our bitcoin strategy subjects us to enhanced regulatory oversight
6. 41The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin strategy
7. 42Our bitcoin strategy exposes us to risk of non-performance by counterparties