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

In the retail and restaurant industries, yearly employee turnover rates are incredible, sometimes as high as 100%. In these low-margin businesses, turnover is the silent killer of profitability. We make it easy for hourly employers to find, screen, and interview applicants through text-to-apply software, mobile functionality, and video resumes. This connects quality candidates to the right jobs quickly, saving both employers and applicants thousands of dollars and hours a year. 

We've helped over 100,000 people get hired in less than 3 years. By initially focusing on entry-level retail and restaurant positions, we've proved our model and market presence and are ready to explode. In the next 3-5 years, we see HigherMe's software replacing not only traditional resumes, but the need for a worker to even have to apply for a job. If we can limit how frustrating the process can be by instantly matching employees to applicants, HigherMe could change the entire hiring system.

Milestones

HigherMe was incorporated in the State of Delaware in March 2014.

Since then, we have:

• Earning close to $1.6 million in annual recurring revenue.
• Have partnerships with well-known brands like McDonald's, Dunkin Donuts, Domino's, Panera, Burger King, and more.
• Monthly recurring revenue has grown from $30k in August 2016 to $135k in April 2018.
• Our customer lifetime value, $19,917, is more than 6X our customer acquisition cost of $3,154.
• We've received more than 1,000,000 job applications and gotten over 100,000 people hired in 43 states.
• Candidate volume has grown 350% in the last 12 months.
• The current economic cost of service sector employment is $219 billion (50 million workers x 73% turnover x $6,000+ / hire = $219 billion).

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $933,695 compared to the year ended December 31, 2017, when the Company had revenues of $421,569. Our gross margin was 63.1% in fiscal year 2018, compared to 33.97% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $444,910, including $375,921 in cash. As of December 31, 2017, the Company had $636,001 in total assets, including $630,576 in cash.
• Net Loss. The Company has had net losses of $1,008,002 and net losses of $474,464 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $74,600 for the fiscal year ended December 31, 2018 and $77,609 for the fiscal year ended December 31, 2017.

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 $70,000 in convertibles and $2,249,045 in SAFEs.

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

HigherMe cash in hand is $350,000, as of April 2018. Over the last three months, revenues have averaged $140,000/month, cost of goods sold has averaged $25,000/month, and operational expenses have averaged $170,000/month, for an average burn rate of $55,000 per month. Our intent is to be profitable in 6 months.

We do not anticipate any major increases in costs of expenses in the immediate future.  

We have been consistently growing at between 10%-20% per quarter and expect that rate to continue.

We accessed $500,000 in venture debt at the end of 2018 and have another $250,000 we can tap into.

We anticipate using more venture debt in the future to fuel growth.