Deep End Fitness

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 Veteran Owned Aquatic Fitness Program that Helps You Find Your Calm. In 40+ Locations & Growing!

Water confidence directly correlates with real world confidence and stress management. Coming from a high stress and risks environment in Marine Special Operations, we have seen how stress and fear can play a role in decision making whether it be on the battlefield, in the office, on the field, or at home. Better stress management, better results.

Milestones

Deep End Fitness LLC was organized in 2018, then converted to UTL LLC in 2018. They converted to a corporation, UTL Inc. in the State of Delaware in June 2020.

Since then, we have:

• >40 locations, >12,000 athletes trained, >250 instructors certified & growing!
• Founded by former Marine Raiders & Water Survival Instructors.
• Featured on ESPN, Outside, GQ, Fox Sports, Sports Illustrated, Business Insider & more!
• Trained top athletes & military worldwide - including NFL & MLB players, UFC fighters & Olympians.
• Advisors include Former CEO of Active.com, President of GORUCK & Co-Founder of FightCamp
• “CrossFit meets the water” - unique combination of functional fitness and aquatic training.
• Pursuing partnerships with LifeTime, Los Angeles Athletic Club, Olympic Club & more

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2024, the Company had revenues of $587,472 compared to the year ended December 31, 2023, when the Company had revenues of $501,481. Our gross margin was 81.2% in fiscal year 2024, and 67.8% in 2023.
• Assets. As of December 31, 2024, the Company had total assets of $61,118, including $14,749 in cash. As of December 31, 2023, the Company had $44,427 in total assets, including $22,305 in cash.
• Net Loss. The Company has had net losses of $184,098 and net losses of $569,671 for the fiscal years ended December 31, 2024 and December 31, 2023, respectively.
• Liabilities. The Company's liabilities totaled $412,539 for the fiscal year ended December 31, 2024 and $1,111,750 for the fiscal year ended December 31, 2023.

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 $384,324 in debt, $445,000 in equity, and $825,000 in convertibles.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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

UTL Inc. cash in hand is $31,523, as of August 2024. Over the last three months, revenues have averaged $64,345/month, cost of goods sold has averaged $3,128/month, and operational expenses have averaged $49,231/month, for an average net margin of $11,986 per month. Our intent is to be profitable in 0 months.

We continue to drive profitability in 2024 in Q1, Q2, and plan to maintain that moving forward.

We are projected to make approx. $1M for total 2024 revenue with expenses coming in close to $800K. So far, we have made about $450K revenue and incurred $320K in expenses YTD.

We have had Q1 and Q2 or 2024 as profitable quarters and plan to continue the trend of profitability moving forward. 

We are profitable at this point but streams of revenue include; our licensing fees from our licensing partners, merchandise, sponsorship, and training revenue through contracts with local & federal government organizations and professional athletes & teams. We are also seeking outside funding sources, including plans to go on Shark Tank this year!

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