S-1/A: Specificity Inc. Files Amendment No. 1 to Form S-1 Registration Statement

Specificity, Inc. updates its S-1 registration statement with current information on executive compensation, corporate governance, security ownership, and related transactions, while also including an updated consent from its independent auditor.

Summary

• Specificity, Inc. has filed a pre-effective amendment to its Form S-1 registration statement.
• The amendment updates information regarding executive compensation, corporate governance, security ownership, and related transactions to reflect data as of December 31, 2023, or a more current date.
• The filing includes a current-dated consent from the independent registered public accounting firm regarding the inclusion of audited financial statements for the years ended December 31, 2022, and December 31, 2021.
• No additional shares are being registered, and no additional registration fees are anticipated.
• The prospectus relates to the offer and resale of 2,000,000 shares of common stock by ClearThink Capital Partners LLC pursuant to a Strata Purchase Agreement.
• Specificity has the right to sell up to $5,000,000 worth of shares to ClearThink under the agreement.
• The company will not receive any proceeds from the sales of shares by ClearThink, but will receive proceeds from the initial sale of shares to ClearThink.
• The company's independent registered public accountant has issued an audit opinion that includes a statement expressing substantial doubt as to the company's ability to continue as a going concern.
• The company's CEO holds preferred stock with 80% of the voting rights, giving him over 92% control on all matters presented to shareholders.
• The company's common stock is listed on OTCMarkets as an OTCQB member since March 2022 with the trading symbol SPTY.

Sentiment

Score: 3

Explanation: The document presents a mixed picture. While it outlines a potential capital raise through the Strata Purchase Agreement, the going concern warning from the auditor and the concentration of voting power in the CEO are significant concerns. The company's competitive landscape and limited operating history further contribute to a negative sentiment.

Positives

• The company has the option to sell up to $5,000,000 worth of its common stock to ClearThink over 24 months.
• The company's common stock is listed on OTCMarkets as an OTCQB member since March 2022 with the trading symbol SPTY.

Negatives

• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company's CEO, Jason Wood, controls over 92% of the voting rights, limiting shareholders ability to affect decision making.

Risks

• The company's independent auditors have issued an audit opinion that includes a statement describing the company's going concern status.
• The company lacks an operating history and has losses that are expected to continue into the future.
• The company competes for clients in highly competitive industries.
• The company possesses minimal capital, which may severely restrict its ability to develop its services.
• The company's business could be adversely affected if it loses or fails to attract or retain key executives or employees.
• The company is exposed to the risk of client defaults.
• The company is subject to regulations and litigation risk that could restrict its activities or negatively impact its revenues.
• The company relies extensively on information technology systems and cybersecurity incidents could adversely affect it.
• The company is dependent upon its current officers.
• The company's controlling stockholder has significant influence over the company.
• The company's existing stockholders may experience significant dilution from the sale of its common stock pursuant to the Strata Purchase Agreement with ClearThink.
• ClearThink will pay less than the then-prevailing market price of the company's common stock, which could cause the price of the company's common stock to decline.
• The company may not have access to the full amount available under the Strata Purchase Agreement.
• The shares being offered are defined as penny stock, the rules imposed on the sale of the shares may affect your ability to resell any shares you may purchase, if at all.
• The market for penny stock has suffered in recent years from patterns of fraud and abuse.
• The company's status as an emerging growth company under the JOBS Act Of 2012 may make it more difficult to raise capital when it needs to do it.
• The company will not be required to comply with certain provisions of the Sarbanes-Oxley Act for as long as it remains an emerging growth company.
• Reduced disclosure requirements applicable to emerging growth companies may make the company's common stock less attractive to investors.
• The company will incur ongoing costs and expenses for SEC reporting and compliance, with minimal revenues and operations at a net loss it may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.
• The company's chairman and chief executive officer will control and make corporate decisions that may differ from those that might be made by the other shareholders.
• The company's future results may vary significantly in the future, which may adversely affect the price of its common stock.
• The company is unlikely to pay dividends.
• If the company has less than 300 record shareholders at the beginning of any fiscal year, other than the fiscal year within which this registration statement becomes effective, its reporting obligations under section 15(d) of the Exchange Act will be suspended.

Future Outlook

The company intends to use the net proceeds received from the sale of common stock to ClearThink under the Strata Purchase Agreement for working capital or general corporate needs.

Industry Context

The company operates in a highly competitive environment in an industry characterized by numerous advertising and marketing agencies of varying sizes, with no single advertising and marketing agency or group of agencies having a dominant position in the marketplace.

Comparison to Industry Standards

• Specificity competes with large global holding companies such as Omnicom Group Inc., Interpublic Group of Companies, Inc., WPP plc, Publicis Groupe SA, Dentsu Inc. and Havas SA, as well as with numerous independent agencies that operate in multiple markets.
• The company also faces competition from consultancies, like Accenture and Deloitte, tech platforms, media companies and other services firms that offer related services.

Legal Proceedings

• We are not involved in any pending legal proceedings nor are we aware of any pending or threatened litigation against us.

Related Party Transactions

• On January 13, 2021, the Company and Jason Wood, as holder of 100% ownership of Pickpocket, Inc., entered into an agreement whereby the Company purchased exactly 80% of the total issued and outstanding stock of Pickpocket, Inc. in exchange for a 5-year 5% promissory note in the amount of $1,000,000.
• On January 13, 2021, the Company sold exactly 260,000 shares of Series B Preferred Stock.
• Pursuant to the Registration Statement on Form S-1 as filed on May 20, 2022, and deemed effective on June 1, 2022, Jason Wood registered for resale exactly 500,000 shares of common stock of the Company at a price of $1.50 per share.
• For the year ending December 31, 2023, Jason Wood loaned the company cash in the total amount of $60,000.00 for various operating expenses.
• Between January 27, 2023, through December 28, 2023, William Anderson made various payments via personal credit for various operating and administrative expenses owed by the Company on behalf of the Company.

Stakeholder Impact

• Shareholders may experience dilution from the sale of common stock pursuant to the Strata Purchase Agreement.
• The company's ability to continue as a going concern is uncertain, which could impact employees and other stakeholders.
• The concentration of voting power in the CEO may limit shareholders ability to affect decision making.

Next Steps

• The company will conduct the Offering contemplated hereby, and anticipate raising sufficient capital from this Offering to market and grow our Company.
• The company will seek out financing as necessary to allow the Company to continue to grow our business operations, and to cover such cost, excluding professional fees, associated with being a reporting Company with the Securities and Exchange Commission (SEC).

Key Dates

Keywords

S-1 Registration Statement, ClearThink Capital Partners LLC, Strata Purchase Agreement, Common Stock, Going Concern, Digital Marketing, SPTY, OTCQB, Emerging Growth Company, Penny Stock