Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results

This quarterly report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations and prospects. The Securities and Exchange Commission (the "SEC") encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This quarterly report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management's plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. Factors that could cause our actual results of operations and financial condition to differ materially are set forth in the "Risk Factors" section of our Form S-1 filed with the Commission on September 13, 2022.

We caution that these factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this quarterly report on Form 10-Q.

Business Overview

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. This discussion should be read in conjunction with the other sections of this Form 10-Q, including "Risk Factors" as described in our Form S-1 as filed with the Commission on September 13, 2022, and the Financial Statements. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout our Annual Report on Form 10-K and our Form S-1 as filed with the Commission on September 13, 2022. See "Forward-Looking Statements." Our actual results may differ materially. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operation," except where the context otherwise requires, the term "we," "us," "our," or "the Company," refers to the business of Specificity, Inc.

Organizational Overview

Specificity, Inc. ("Specificity" or the "Company") was incorporated in the State of Nevada on November 25, 2020.




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The Problem We Endeavor to Solve

Big Tech and the Social Media giants have all evolved away from client advocacy and moved into a new paradigm of fear and hyper political correctness. They no longer endeavor to do what is right for their marketing clients. Instead, they have made marketing to targeted audiences exponentially more difficult and dramatically more expensive.

After the fallout from the social media giants getting caught misusing user supplied data (for example Cambridge Analytica) they pulled most of the targeting mechanisms out of their platforms to avoid additional congressional oversight and regulation. They have since gone a step further by claiming the rationale for these changes is to stop discrimination.

We believe the real motivation for this policy change is not anti-discrimination, rather it is revenue driven. They are forcing ad delivery to consumers unlikely to buy. They are also forcing increased quantities of ads to be placed in order to hit an impactful number of targeted buyers. As a result, businesses are deploying the same budget with diminished results or are forced to increase their spend to keep the net results the same. Their claim is that using peoples' interests and behavior to identify suitable audiences to market to is suddenly discriminatory. These companies have used these practices for well over a decade. Targeting buyers with incomes that suggest they can afford a six-figure sports car isn't discrimination; it's the responsible deployment of advertising spend. Conversely, delivery of ads for low-income housing opportunities to wealthy people makes just as little sense as well.

At best its political correctness run amuck at worst it's a ploy to drive ad spend up by forcing people to spend more to get the same. And not only will we take no part in this, we are building Specificity specifically to help businesses get the very most for their ad spend. Our marketing tools will target those most likely to buy the product being solicited. We would never allow nor condone discrimination of any kind. But delivering advertising to people actively looking for products and services is NOT discrimination; it's intelligent marketing.

Company Overview

Specificity, Inc. is a technology company with 2 core missions:



  1) First, we endeavor to deliver the latest digital marketing technology to
     companies of all sizes making them nationally, regionally, and locally
     competitive. In this capacity, we come to the table already vertically
     integrated and capable of executing any size campaign flawlessly.



  2) Secondarily, Specificity is a tech incubator. We identify technology-based
     marketing solutions, take an equity share position in return for utilizing
     our internal resources to complete the buildout of technology-based
     solutions, and then using our marketing prowess to draw clients to these
     businesses. We have the internal personnel to successfully complete these
     projects and our marketing capabilities will deliver lower advertising costs
     to launch new projects making growth faster to attain.

We are currently a development stage company with minimal revenues, though we had a significant increase in revenues for the year ended December 31, 2021. Accordingly, management has concluded that there is substantial doubt in our ability to continue as a going concern (please refer to the footnotes to the financial statements). As of September 30, 2022, the Company is still unable to establish a consistent flow of revenues from our operations which is sufficient to sustain our operating needs, management intends to rely primarily upon debt financing to supplement cash flows, if any, generated by our services. We will seek out such 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"). The Company has included such costs to become a publicly reporting company in its targeted expenses for working capital expenses and intends to seek out reasonable loans from friends, family, and business acquaintances if it becomes necessary. At this point we have been funded by our founders and initial shareholders and have not received any firm commitments or indications from any family, friends, or business acquaintances regarding any potential investment in the Company except those shareholders listed herein.




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Results of Operations - Three Months Ended September 30, 2022, vs 2021 (as restated)

Revenues

For the quarter ended September 30, 2022, and the quarter ended September 30, 2021, we generated $284,311 and $214,106 in revenues, respectively. The increase in revenues was due to the continued focus on the expansion of our operations.

Operating Expenses

For the quarter ended September 30, 2022, and the quarter ended September 30, 2021, we incurred $1,843,774 and $284,229 in operating expenses, respectively. The increase in Operating Expenses was due primarily to an increase in general and administrative expenses, an increase in sales and marketing expenses, and an increase in officer compensation due to the continued expansion of our operations. In addition, during the quarter ended September 30, 2022 we recorded a significant amount of stock-based compensation.

Results of Operations - Nine Months Ended September 30, 2022, vs 2021 (as restated)

Revenues

For the nine months ended September 30, 2022, and the nine months ended September 30, 2021, we generated $933,821 and $540,412 in revenues, respectively. The increase in revenues was due to the continued focus on the expansion of our operations.

Operating Expenses

For the nine months ended September 30, 2022, and the nine months ended September 30, 2021, we incurred $3,915,749 and $1,891,715 in operating expenses, respectively. The increase in operating expenses was due primarily to an increase in our operations which resulted in an increase in general and administrative expenses, an increase in sales and marketing expenses, with a decrease in officer compensation due to recording a significant amount of compensation related to PickPocket in the prior comparable period. In addition, during the nine months ended September 30, 2022 we recorded a significant amount of stock-based compensation.

Liquidity, Capital Resources, and Off-Balance Sheet Arrangements

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had available cash on hand of $172,594 as of September 30, 2022, as compared to $637,841 as of December 31, 2021. The decrease in capital was directly related to funding our operations in 2022.

Cash flows for the nine months ended September 30, 2022.

Net cash flow derived from operating activities was $(1,712,994) for the nine months ended September 30, 2022. This is due primarily to a net loss of $3,507,168, offset by $1,637,831 in the stock-based compensation and $43,839 in accounts payable. The increase is primarily due to the expansion of our operations.

Net cash flow used in investing activities was $(10,281) for the nine months ended September 30, 2022, and $0 for the nine months ended September 30, 2021.

Net cash provided by financing activities was $1,258,028 for the nine months ended September 30, 2022 and consisted of $1,263,713 from the proceeds from the sale of common stock, $33,000 from advances, $(10,000) from payments on notes payable, and $(28,685) from the payment of deferred offering costs. The Company continues to raise capital to fund operations.




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Cash Requirements

Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for much more than 12 months. At the date hereof, we have minimal cash at hand. We require additional capital to implement our business and fund our operations.

Since inception we have funded our operations primarily through equity financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund our business by way of equity or debt financing until natural revenues can support the Company. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. We cannot assure you that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all.

If we are unable to raise capital as needed, we are required to reduce the scope of our business development activities, which could harm our business plans, financial condition, and operating results, or cease our operations entirely, in which case, you will lose all of your investment.

Off-Balance Sheet Arrangements

Not applicable.

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