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

We create African American content for an under-served community. Our focus is comics, manga, and animations, with an emphasis on history prior to slavery. Every person deserves a legacy they can be proud of.

We want to successfully launch our animated properties, distributed through our mobile app, and have 4 million users. If this is achieved, we hope to have a monthly income of 1.2 million USD prior to licensing, micro transactions, and merchandising.

Milestones

Black Sands Entertainment Inc. was incorporated in the State of New York in November 2016.

Since then, we have:

• Endorsed by the Schomburg Center, and ReedPOP.
• Senior Animators from Disney, Sony, Pixar, Bron, Amazon Studios, Nickelodeon, and Rainmaker among others
• Concept design from a veteran of major brands like Assassin’s Creed, Watch Dogs, Tekken, Terminator, and Star Wars.
• 60,000 units sold
• If you think Hollywood shouldn't dictate what is produced in the black community.
• If you think we should invest in history before slavery.
• 370 five star reviews on Facebook.

Historical Results of Operations

Our company was organized in November 2016 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $100,048 compared to the year ended December 31, 2018, when the Company had revenues of $123,843. Our gross margin was 58.0% in fiscal year 2019, compared to 39.05% in 2018.
• Assets. As of December 31, 2019, the Company had total assets of $74,009, including $6,273 in cash. As of December 31, 2018, the Company had $74,372 in total assets, including $22,922 in cash.
• Net Income. The Company has had net income of $22,098 and net income of $874 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
• Liabilities. The Company's liabilities totaled $0 for the fiscal year ended December 31, 2019 and $17,256 for the fiscal year ended December 31, 2018.

Related Party Transaction

Refer to Question 26 of this Form C for disclosure of all related party transactions.

Liquidity & Capital Resources

To date, the company has been financed with $11,413 in debt and $480,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 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

Black Sands Entertainment Inc. cash in hand is $98,000, as of October 2020. Over the last three months, revenues have averaged $37,665/month, cost of goods sold has averaged $13,000/month, and operational expenses have averaged $28,000/month, for an average burn rate of $3,335 per month. Our intent is to be profitable in 3 months.

Since the date our financials cover, sales have increased by 300% and inventory is becoming a problem. We are also ramping up production causing R & D costs to go up.

In the next 6 months, we hope (but not guarantee) to generate $500,000 in revenue and $100,000 in expenses. This is with the assumption that we maintain our historical ad spend.

We do not have additional sources of capital at this time. We focus heavily on running without debt. It is important to our company health.