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

Firelight Camps develops and operates luxury campgrounds that combine the best elements of a boutique hotel and a campground with plush beds, tended campfires, and resort amenities. Our pilot location in Ithaca has operated successfully for over six years and our second location, planned for 80 tents, is under contract in New York’s Catskill Mountains. Firelight has been featured in 75+ press outlets including the New York Times, the Wall Street Journal, and Vogue Magazine.
We are dedicated to making Firelight Camps the premier outdoor hospitality brand in the United States. Our 5-year goal is to have eight Firelight luxury campgrounds in operation, including both internally-developed properties and Firelight-branded camps we manage for others, and a growth pipeline of adding two to four campgrounds per year. These projections cannot be guaranteed.

Milestones

Luxury Camping Inc. was incorporated in the State of Delaware in March 2014.

Since then, we have:

• 💰 $3.5M+ in revenue. 35,000+ happy guests. 4.5/5 stars on Tripadvisor.
• 💸 Raised $1.5M+ from industry-leading angel investors.
• 💪 Team experience includes $230M+ of real estate development.
• 🏕 25% Return on Cost in our pilot location proves the profitability of our business model.
• 🗞 Featured in Vogue, the NYT, the WSJ, Forbes, Architectural Digest, Curbed, Thrillist, Jetsetter.
• 📈 40M+ Americans go camping each year; glamping is projected to grow at 12.5% annually through 2026 to $5B+.
• 👩‍🍳 Co-founder’s cookbook “Feast by Firelight” nationally distributed in Target, REI, L.L.Bean, Orvis.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $731,495 compared to the year ended December 31, 2018, when the Company had revenues of $727,236. Our gross margin was 92.26% in fiscal year 2019, compared to 92.94% in 2018.
• Assets. As of December 31, 2019, the Company had total assets of $592,962, including $179,152 in cash. As of December 31, 2018, the Company had $626,999 in total assets, including $166,351 in cash.
• Net Loss. The Company has had net losses of $512,366 and net losses of $202,853 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
• Liabilities. The Company's liabilities totaled $345,589 for the fiscal year ended December 31, 2019 and $119,085 for the fiscal year ended December 31, 2018.

Liquidity & Capital Resources

Luxury Camping Inc (“LCI”), is not an investment company, and we do not invest in the securities of other companies. Our primary business is the development and operation of luxury glamping campgrounds. For liability protection, we undertake development activities in single-purpose, wholly-owned subsidiary companies; please see attached organizational chart for all of the companies affiliated with LCI. At this time, all of these companies are wholly owned by LCI.

Some of the funds raised will be used by LCI for its direct operating expenses, including ongoing salaries and overhead. The balance of the funds will be used for pre-development costs, including land option payments and design costs, for new Firelight developments, including Firelight Phoenicia. Typically, at the time these pre-development costs are incurred the single-purpose subsidiary involved (e.g. – Firelight III, LLC, in the case of Firelight Phoenicia) will be wholly-owned and controlled by LCI. Once certain project milestones are achieved (e.g. – building permits), LCI intends to raise additional third-party capital into the single-purpose entities to build the project. At that point, those single-purpose entities will no longer be wholly-owned by LCI, but (in most cases) they will remain under its control. We may elect to pursue other fundraising structures as well in the future, as our company evolves.

Luxury Camping Inc. (DBA Firelight Camps) owns the Firelight Camps brand, and employs our Chief Executive Officer, Chief Development Officer, marketing manager, and content manager. It intends to receive management fees in exchange for management and branding services for future Firelight Camps locations.

Ithaca by Firelight, LLC is wholly owned and managed by Luxury Camping Inc. It owns and manages our Firelight Ithaca operation and employs a general manager, as well as seasonal employees in housekeeping, maintenance, and front desk positions. Ithaca by Firelight, LLC is the tenant under a lease with La Tourelle Hotel and Spa for the ~6-acre Firelight Ithaca land. The base term of this lease expires in October of 2022.

Firelight Properties, LLC is a real estate company wholly owned and managed by Luxury Camping Inc. and has no employees at this time. It may receive development fees in exchange for development services in the future.

Firelight II, LLC is wholly owned and managed by Firelight Properties, LLC, (and, by extension, Luxury Camping Inc.). It held the option agreement for our now-abandoned project in Sullivan County, NY. This entity is no longer active.

Firelight III, LLC is wholly owned and managed by Firelight Properties, LLC, (and, by extension, Luxury Camping Inc.). It holds an option agreement to purchase a campground in Phoenicia, NY for our proposed ‘Firelight Phoenicia’ location.

Firelight IV, LLC is wholly owned and managed by Firelight Properties, LLC, (and, by extension, Luxury Camping Inc.). It is pursuing a future Firelight Camps project in the Northeast region of the United States.

To-date, the company has been financed with $88,527 in debt, $976,610 in equity, and $588,992 in convertibles.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 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

Luxury Camping Inc. cash in hand is $422,398, as of September 2020. Over the last three months, revenues have averaged $192,366.38/month, cost of goods sold has averaged $4,781.96/month, and operational expenses have averaged $63,901.21/month, for an average net margin of $123,683.21 per month. We are currently profitable.

Our 2020 season has been our strongest yet with occupancy, rate, and revenues all up compared to our 2019 season. We received a Paycheck Protection Program Loan in early 2020 which we expect to be fully forgiven. 

We expect October revenues to be about $145,000. Our Ithaca operation is seasonal and we close down at the end of October, so we will not report revenue again until we open for the 2021 season in May, though our cash flow does continue through the winter from advance deposits. Our monthly operating expenses also significantly drop in the offseason, and average about $23,000 per month in the offseason. We will also be paying our yearly land lease in January which will be around $70,000.

The total estimated project cost of our first phase of Firelight Phoenicia is $6.61million. We have spent or have reserved $250K, so we need an additional $6.36million to build it.  Firelight Phoenicia is seeking approvals to construct 80 glamping units, but we only intend to construct ~47 of those units initially. After each season of operation, we will elect whether to add additional units. We believe we will be able to raise the funds for the buildout, but if we are unsuccessful then we will not be able to proceed with the Phoenicia project as envisioned. Our options in that case would include scaling back the development and seeking other deal structures, such as a sale / leaseback of the land or selling the project to another owner but retaining the management contract.

In terms of other forms of capital available, we have a $25,000 line of credit with our bank, M&T Bank. We also have an existing group of 17 private angel investors who have backed the company thus far.