SPECIFICITY, INC. (SPTY)

Specificity, Inc.: 2024 Form 10-K Review

In today’s fast-moving digital marketing landscape, niche players often leverage advanced technology to compete with bigger agencies. Specificity, Inc. (OTCQB: SPTY) is one such firm. Specializing in highly targeted digital campaigns for small and mid-sized businesses, the company also incubates marketing tech solutions. Below is a deep dive into Specificity’s 2024 annual report, covering its business model, financial performance, key risks, and outlook.

Warren.AI 💰 3.2 / 10

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Table of Contents

1. Business Overview
2. Service Offerings
3. Strategy & Growth Plans
4. Financial Highlights
5. Balance Sheet & Cash Flow Analysis
6. Going Concern & Liquidity
7. Key Risk Factors
8. Corporate Governance & Controls
9. Outlook & Investment Considerations

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1. Business Overview

Specificity, Inc. was founded in late 2020 and is headquartered in Lakewood Ranch, Florida. At its core, Specificity is a full-service digital marketing agency delivering real-time, behavior-based ad campaigns that filter out bot traffic and ad waste. Using mobile advertising identifiers (MAIDs), AI integrations, and audience sequencing, the firm places ads with surgical precision on mobile and web channels.

As a “tech incubator,” Specificity acquires or builds early-stage marketing platforms, dedicates internal resources to develop them, then spins them off as standalone offerings. This dual focus on agency services and incubation sets Specificity apart from traditional marketing shops.

Fiscal 2024 snapshot:

• Revenues: $991,143 (2023: $1.10 million)
• Gross profit: $468,428 (47% gross margin)
• Net loss: $(615,261) (2023: $(1.07 million))
• Total assets: $1.56 million
• Stockholders’ deficit: $(619,779)

2. Service Offerings

Specificity operates one reporting segment but offers three distinct solutions:

1. Tradigital Partners. White-label digital ad services for traditional agencies. Agencies can resell Specificity’s advanced platform under their brand, expanding their offerings without heavy tech build-out.
2. Put-Thru. An enterprise-grade stack scaled for SMBs, delivering behavior-based audience targeting, omnichannel ads, and CRM integration at a fraction of big-agency costs.
3. PickPocket. A DIY mobile-first platform for small business owners with $0.5 million–$5 million in revenue. PickPocket lets users identify competitor audiences by MAID and launch high-intent campaigns. Though fully built, PickPocket has yet to generate revenue; potential monetization includes subscriptions and performance fees.

Additional services include pay-per-click, SEO, content creation, SMS marketing, and more, all priced à la carte.

3. Strategy & Growth Plans

Specificity’s growth hinges on two core missions:

1. Bring advanced ad tech to SMBs. By leveraging advanced ID tech and AI, they aim to lower cost per acquisition for clients.
2. Incubate & spin off. They seek equity in fledgling marketing platforms in exchange for development and go-to-market support, later monetizing when these spinouts succeed.

The immediate marketing push targets the Tampa Bay and New England regions, focusing on companies spending an average of $5,100 per month on digital ads. A concentrated sales effort and planned capital infusion—powered by a 24-month “strata purchase” equity facility—should drive new client growth.

Hiring strategy for 2025:

• Expand sales teams in core regions
• Add support staff for new accounting and public-filing requirements
• Develop or acquire add-on tech modules (e.g., AI-powered analytics)

4. Financial Highlights

Revenue Trend (2023 vs. 2024): Decrease of 10% to $991K

• 2023: $1,096,575
• 2024: $991,143

Cost of Services: Slight drop to $522,715 (2023: $548,278), sustaining a ~47% gross margin.

Operating Expenses: Declined to $974,128 (2023: $1.32 M)

• Sales & Marketing: $179,616 vs. $450,500
• G&A: $746,080 vs. $687,394
• Share-based comp: $7,735 vs. $50,000
• Depreciation/amortization: $11,087 vs. $47,762
• Capital-raise promos: $29,610 vs. $86,951

Net Loss: $(615,261) vs. $(1,069,636)

• Other charges in ‘24: $11,409 on debt modification; $29,242 lease-termination charge
• In ‘23: $50,000 intangible-asset impairment; higher debt discount interest

Earnings per Share: $(0.05) in 2024 vs. $(0.10) in 2023

Key margin drivers:

• Lower revenue vs. 2023 targeting delays
• Cost discipline on media and staff
• Non-recurring charges that reversed year-over-year

5. Balance Sheet & Cash Flow Analysis

Assets: $1.56 M (down from $2.08 M in 2023)

• $1.55 M in intangibles (acquired tech stacks)
• $3K cash vs. $49K prior year

Liabilities: $2.18 M (up from $1.98 M)

• $1.18 M current liabilities
• $1.00 M related-party promissory note (PickPocket)

Stockholders’ Deficit: $(619,779)

Working Capital Deficit: $(1.17 M)

Operating Cash Flow: $(361,875) vs. $(603,658) Financing Cash Flow: +$316,139 vs. +$629,999

Major financing sources:

• Short-term secured advances
• Convertible note ($220K) with debt discount
• Private scholarships of common stock
• Related-party founder loans

Key Cash Flow Observations:

• Burn rate slowed but still negative
• Capital raises and short-term debt bridging financing required
• Cash on hand critically low going into 2025

6. Going Concern & Liquidity

Auditor opinion notes “substantial doubt” about Specificity’s ability to continue as a going concern. Reliance on founder capital, bridge notes, and the $5 million strata equity facility is paramount. No unencumbered sources of capital have been finalized beyond these short-term bridges.

Additional public-company costs (SEC filings, audit fees) will add ~$150K+ annually, further squeezing cash.

Liquidity quick hits:

• 2025 focus: file 10-K/10-Q, unlock strata facility, shore up cash
• Need six-figure monthly cash inflows to break even
• PickPocket revenue must ramp or be deferred if no near-term demand

7. Key Risk Factors

1. Limited operating history; no scale and recurring losses.
2. Going concern; negative cash flows and working capital deficit.
3. Capital dependency; uncertain equity facility draw and high dilution risk.
4. High competition; large agencies and consultancies pursuing AI.
5. Key person risk; founder/CEO controls 93% of votes.
6. Data privacy; GDPR, CCPA and technical challenges.
7. Cybersecurity; reliance on third-party ad platforms.
8. Weak internal controls; material control deficiencies.

8. Corporate Governance & Controls

Specificity is a smaller reporting company and an emerging growth company. Auditor identified material weaknesses in financial controls:

• Inadequate monitoring and segregation of duties (founder centric)
• Weak document retention
• Heavy reliance on external consultants for SEC compliance

No audit or compensation committees in place; no independent directors. Remediation planned via liaison CFO/finance team once capital raised.

9. Outlook & Investment Considerations

Bull Thesis:

• Unique behavior-based ID targeting to fight ad waste
• Three product lines capture white-label, SMB and DIY segments
• Tech incubation model may spawn valuable spinouts
• Early mover on granular, AI-driven ad sequencing

Bear Thesis:

• Sub-million revenues with persistent losses
• Funding gaps and ongoing dilution risk
• Founder control may deter external investors
• Tight ad market; big players moving into niche targeting

Net Profit or Loss:

• Net loss of $(615,261) for 2024

Investment Score: 3.2 out of 10

Bottom Line: Specificity, Inc. is a high-risk/high-potential micro-cap with strong ad-tech DNA. It generates traction in agency services but remains in early stage. Investors should watch capital raises, control remediation, revenue ramp on PickPocket, and progress on filing and audit compliance. If the funding facility unlocks and the sales model scales, the stock could recover—otherwise, dilution and cash crunch may set in.

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This review is for educational purposes and is not an endorsement. Always conduct your own due diligence.