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 are one of the largest and fastest-growing poker clubs in the State of Texas!

While we cannot guarantee this, our plan is to open 5 more clubs in the State of Texas over the next 2 years and sell the company to a major casino chain, gaming, or entertainment chain.

Milestones

Freerolls Entertainment, Inc. was incorporated in the State of Utah in September 2017.

Since then, we have:

• Over $1M in revenue in less than 10 months (Dec 2018 – Sept. 2019).
• Held the largest poker tournament in Texas history with a record-breaking $790,000 prize pool.
• Over 4,000 customers in 9 months.
• Over $63K in profitability by the end of Q3 2019.
• 100% compliant with Texas State Laws.

Historical Results of Operations

Our company was organized in September 2017 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $65,185 compared to the year ended December 31, 2017, when the Company had revenues of $0. Our gross margin was 100.0% in fiscal year 2018.
• Assets. As of December 31, 2018, the Company had total assets of $641,560, including $4,569 in cash. As of December 31, 2017, the Company had $1,019 in total assets, including $19 in cash.
• Net Loss. The Company has had net losses of $659,161 and net losses of $1,896 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $746,099 for the fiscal year ended December 31, 2018 and $1,415 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with $1,062,734 in debt and $390,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 3 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

Freerolls Entertainment, Inc. cash in hand is $43,000, as of October 2019. Over the last three months, revenues have averaged $180,000/month, cost of goods sold has averaged $15,000/month, and operational expenses have averaged $120,000/month, for an average net margin of $45,000 per month

The primary change in the business is that we have opened our flagship location and the revenue generated has exceeded over $1 million in sales since Jane 2019. The primary reason for the increase in revenues is the median income of the area the club is located in. Katy, Texas boasts a median income of over $88,000 which comes inherent a larger base of poker players. 

Our expectations for revenues come from the expansion and new construction of homes in the immediate area. This area covers a radius of fewer than 10 miles from the club and at current, there are 5 new development projects at various stages of completion. By the end of the year, we will have two loans reach maturity. Our plan is to use this raise to help pay off said loans. If our raise is not sufficient, we will pursue refinancing to procure more favorable terms, especially given our recent increase in revenue.

Many of our convertible notes are due on demand. In the event of a large and unexpected call on capital, the Company's Founders will infuse capital to cover the demand, assuming the Company does not have enough operating capital to use instead.

Over the next two years, we plan on opening 5 more poker clubs in Texas. Each location will cost approximate $40,000.