Factmata

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

Factmata works with brands, platforms, and organizations to help them detect and deal with harmful and threatening online content. Our mission is to give everyone a better understanding of online content and its risks.

In 5 years, we want to be the company every person and business uses to know if they can trust a piece of online content or not, helping organizations deal with fake news about themselves in real time, auto-adjusting their messaging, PR and marketing and automatically taking down fake news from the internet.

Milestones

Factmata Inc was incorporated in the State of Delaware in August 2017.

Factmata owns all patents mentioned in the offering.

Since then, we have:

• ☑️ On a mission to give everyone a better understanding of online content
• 🚀 Raised from Mark Cuban, Biz Stone (co-founder of Twitter), Craig Newmark (Founder, Craigslist)
• 🤝 Built by top PhDs from the University of Cambridge, Amazon, Microsoft, UCL, Google, and more
• 👨‍💻 The first startup to block fake news in the ad tech market both for SSPs and DSPs
• 🧠First UK government-approved tool to detect disinformation (G-Cloud 11 framework)
• 🔖 10 US patents pending on methods to score content for reliability and safety using experts +. AI

Historical Results of Operations

Factmata, Inc. was incorporated in Delaware on March 2017. In May 2017, the Company was assigned full ownership of its operating company, Factmata Limited, which was registered as a private limited company in England U.K. on January 2017. Factmata Inc. and its wholly-owned subsidiary, Factmata Limited. (collectively referred to as “the Company”). develops an artificial intelligence text reading software for claims made in digital media content. The Company engages people in the process of correcting news articles, identifying fallible claims, and supporting more accurate information on the Web. It detects fake news and tracks rumors and hoaxes. The company has limited operations upon which prospective investors may base an evaluation of its performance. 

• Revenues & Gross Margin. For the period ended December 31, 2020, the Company had revenues of $0 compared to the year ended December 31, 2019, when the Company had revenues of $0.
• Assets. As of December 31, 2020, the Company had total assets of $988,737, including $1,030 in cash. As of December 31, 2019, the Company had $715,623 in total assets, including $290,599 in cash.
• Net Loss. The Company has had net losses of $306,401 and net losses of $1,470,956 for the fiscal years ended December 31, 2020 and December 31, 2019, respectively.
• Liabilities. The Company's liabilities totaled $4,284,311 for the fiscal year ended December 31, 2020 and $3,862,267 for the fiscal year ended December 31, 2019.

Liquidity & Capital Resources

To date, the company has been financed with $3,682,558 in convertible notes and $25,000 in debt.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 5 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 6 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

Factmata Inc cash in hand is $128,016.31, as of March 2021. Over the last three months, revenues have averaged $2,283/month, cost of goods sold has averaged $1,179/month, and operational expenses have averaged $24,570/month, for an average burn rate of $23,466 per month. Our intent is to be profitable in 8 months.

Since the date our financials cover, we've received a major R&D tax credit from the UK government, worth $257,534. This boost has allowed us to cover runway from 24 March 2021 until July 2021.

We expect revenues to be at $30k MRR within 6 months or less. We expect expenses to slightly increase to $40k per month within 6 months. Based on current projections for sales we expect to be breaking even in six months, meaning based on current monthly expenditure we require $270k to reach this point. These projections can not be guaranteed.

In terms of new revenue, our product is now ready for market (albeit with plenty more we can add to increase the value of our proposition) and over the last 4 weeks we've started our outreach to new clients which has yielded multiple paid for and non-paid for trials with market leading brands. Without crowdfunding we will continue with our organic outreach program, however, with crowdfunding we believe we can radically scale our outreach and increase our pipeline dramatically. With our first client giving us positive feedback and being worth $6,000 MRR we do not need many clients to reach break even before the end of the year. In addition, two revenue share partnerships are waiting on our partners to go live in Q3 with significant potential revenues without commensurate supporting costs, which will make a disproportionately positive impact on our break even trajectory. These projections cannot be guaranteed.

We plan to cover short term burn through a combination of revenue from clients, VAT return, and the Innovate UK Grant rebate, which will cover us for the next quarter. Outside of funds we are raising in this offering, we are speaking to a number of angel investors and VC funds in parallel who are interested in investing.