Camp Gladiator (CG)

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

A Two-Sided Fitness & Nutrition Platform For Trainers & Consumers

Milestones

CG Consolidated, LLC was organized in the State of Texas in December 2016.   The company has several subsidiaries: CG Nation, LLC (dba Camp Gladiator), CG Growth Systems, LLC, CG IP Holdings, LLC, and CG Training,LLC.

Since then, we have:

• Over $350M Lifetime Revenue
• 900k Lifetime # of Participants
• 9-time Inc. 5000 Honoree from 2013-2021 & Inc. Top 100 Female Founders in 2020
• ️‍ 248% Increase In Launched Trainers Year-Over-Year
• Over 1.5M Views for Live-Streaming & On-Demand Online Workouts
• 89% Increase in Memberships for December '22 & January 23' Compared to December '21 & January '22
• $10M was previously raised during Series A

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2021, the Company had revenues of $53,223,084 compared to the year ended December 31, 2020, when the Company had revenues of $59,095,865. Our gross margin was 29.06% in fiscal year 2021, compared to 29.33% in 2020.
• Assets. As of December 31, 2021, the Company had total assets of $14,077,087, including $7,629,012 in cash. As of December 31, 2020, the Company had $9,335,778 in total assets, including $4,913,713 in cash.
• Net Loss. The Company has had net losses of $975,287 and net income of $2,553,757 for the fiscal years ended December 31, 2021 and December 31, 2020, respectively.
• Liabilities. The Company's liabilities totaled $7,722,469 for the fiscal year ended December 31, 2021 and $6,461,900 for the fiscal year ended December 31, 2020.

Liquidity & Capital Resources

To-date, the company has been financed with $5,346,900 in debt and $10,210,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 36 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 18 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

CG Consolidated, LLC cash in hand is $3,640,000, as of January 2023. Over the last three months, revenues have averaged $3,074,134/month, cost of goods sold has averaged $2,165,659/month, and operational expenses have averaged $1,597,792/month, for an average burn rate of $689,317 per month. Our intent is to be profitable in 12 months.

Since the date our financials cover (and due to COVID), in-person fitness activities declined, resulting in customer churn and slower acquisition of new customers. From an expense perspective, we have acquired the assets of two entities and we invested significantly in a new nutrition coaching product offering.  However, our operating expense run rate has also declined in recent months as we have simplified and reorganized business operations, including an exit from a large facility lease.

We expect our monthly revenues to average $2.6 to $2.8 million in the coming 3-6 months.  We expect to see about $3M to $3.2M in expenses during the same period.

We believe we can be profitable on a go-forward monthly run rate basis by the end of 2023 with a fundraise of $4-5 million.  This will allow us to build critical technology infrastructure to roll out "CG 2.0" with multiple new programs, continue to drive strong trainer recruiting, and grow customer awareness of our newest offerings leading to new program subscriptions.

Our current cash balance is sufficient to cover short-term burn throughout the campaign.  Our other sources of capital include our existing cash and potential capital available from our existing pool of private equity investors.

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