Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Atom Limbs is on a mission to revolutionize prosthetics. 

Backed by Moai Capital, J4 Ventures, Village Global, angels including Trevor Blackwell and Anthony Pompliano, and countless healthcare professionals, Atom Limbs’ pioneering approach to the world's first artificial human arm is on track to transform the $800B+ physical disability industry.

We're aiming to give 65M+ limb-different people their limbs back. With Atom Limbs, prosthetics aren’t just functional, they’re transformational

All future projections cannot be guaranteed.

Milestones

Atom Limbs Inc. was incorporated in the State of Delaware in April 2019.

Since then, we have:

• CEO sold last company Bebo to Amazon & has scaled companies to 1 billion users
• Led by world-class ex-leadership from Apple, Oculus, Zoox, IDEO, and Neuralink with 1,000+ patents
• Team’s track record includes bringing first iPhone & iMac to market
• Team has deep experience in FDA and regulatory, successfully commercialized multiple medical devices
• World’s first mind-controlled robotic wearable with individual finger control & basic sense of touch
• $180M+ pipeline of 9,000 qualified buyers
• Positioned to disrupt the fast-growing $800B physical disability market

The Company is subject to risks and uncertainties common to early-stage companies. Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $0 compared to the year ended December 31, 2021, when the Company had revenues of $0. 
• Assets. As of December 31, 2022, the Company had total assets of $1,990,558, including $1,611,770 in cash. As of December 31, 2021, the Company had $1,506,360 in total assets, including $1,453,448 in cash.
• Net Loss. The Company has had net losses of $3,718,607 and net losses of $1,941,209 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $505,372 for the fiscal year ended December 31, 2022 and $195,454 for the fiscal year ended December 31, 2021.

Liquidity & Capital Resources

To-date, the company has been financed with $17,000 in debt, $8,441,756 in SAFEs, and $331,000 in grants.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 3 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 12 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

Atom Limbs Inc. cash in hand is $100,000, as of October 2023. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $200,000/month, for an average burn rate of $200,000 per month. Our intent is to be profitable in 36 months.

Since the date of our financials, we have landed a production-intent design and gathered compelling pre-clinical research data from 30+ user tests. We hired a mechanical engineer and several engineering interns to speed up prototype builds to support our increased pacing of user tests. We also acquired a 5,000 sq ft lab space in Palo Alto, CA.

We expect to need $20M in total capital to go to market in late 2024/early 2025. In year 1, we aim to generate $16.6M in revenue from 1,384 units sold. These projections cannot be guaranteed.

We are not currently profitable. We aim to be cash-flow positive around end of year 2/start of year 3 of sales. Our breakeven point is $65M in revenue. In year 2, we aim to generate $75.2M in revenue from 6,197 units sold.

In terms of other sources of capital, we have also raised venture capital from multiple VC firms, as well as government grants, from NSF and Air Force, and may pursue similar sources of capital to cover short term burn.

All projections in the above narrative are forward-looking and not guaranteed.