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

Built by collectors for collectors (and now owned by collectors), hobbyDB is the ultimate home for collectors and fans worldwide. With a powerful and detailed database of collectibles super-powered with a price guide, you can explore any fandom, track your collection, and use our secure marketplace to safely buy and sell.
In five years, we hope to have more than 100 million items in the database and 20 million price points in our price guide we’ll be the Wikipedia/Kelly Blue Book of collecting. The default place everyone goes for information on collectibles and fandoms - and the most trusted collectors’ marketplace for 10 million users. With our user base growing fast and $911m worth of items in their collections already, we’re well on our way.  These projections cannot be guaranteed.

Milestones

Hobbydb Corp was incorporated in the State of Delaware in September 2013.

Since then, we have:

• We hope to conquer an underserved, $450 billion market comprised of 75 million collectors
• hobbyDB is home to 480,000 collectors who have collections worth $911 million
• $4 million in capital raised from Producer Adam Goldberg, Techstars, & 680 collectors just like you
• We power the databases and price guides behind brands such as Funko and Hard Rock International
• Funko is profitable for us, representing an annual contribution of $250,000 and growing
• CEO ran the largest set of collector forums & founded the biggest European eBay business w/ $40 million GMV
• User wish lists house 8.6 million items worth $767 million

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $430,582 compared to the year ended December 31, 2018, when the Company had revenues of $313,961. Our gross margin was 70.37% in fiscal year 2019, compared to 72.25% in 2018.
• Assets. As of December 31, 2019, the Company had total assets of $369,077, including $103,068 in cash. As of December 31, 2018, the Company had $428,277 in total assets, including $155,950 in cash.
• Net Loss. The Company has had net losses of $650,788 and net losses of $723,631 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
• Liabilities. The Company's liabilities totaled $317,808 for the fiscal year ended December 31, 2019 and $168,643 for the fiscal year ended December 31, 2018.

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 $336,839 in debt and $4,296,406 in equity.

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 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

Hobbydb Corp cash in hand is $123,000, as of September 2020. Over the last three months, revenues have averaged $42,300/month, cost of goods sold has averaged $7,800/month, and operational expenses have averaged $45,600/month, for an average burn rate of $11,100 per month. 

Since the start of 2020, we have significantly reduced our cost base by half by further integrating our 3 main websites and building tools that allow our contributors to maintain many more parts of the site. We are continuing on this path and this crowdfunding is part of this strategy (we want the site to be owned by the people that build the hobbyDB database).

We have almost reached our ongoing cost basis (we still need to migrate the hosting of one of our sites) and expect to now focus on traffic growth (which automatically increases revenues through advertising and affiliate income) and serve more commercial seller and brands through our Shopify integration and data offerings.

Our assumption is that we do not need to raise further funding but will continue to do so as this is part of our vision of being owned by our most important users, our contributors.  We now have 682 shareholders that we could approach in the case need to (we have a very loyal shareholder following as you can see from our past fundraising history further above).  We hope to reach break even in Q1 2021, with about $170k in monthly revenues and expenses.