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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
Grow Source Technologies, Inc. (formerly Lively Root Technologies, Inc.) delivers a broad range of the highest quality plant products directly to the modern consumer’s doorstep through their engaging digital platform, sophisticated business model, cutting-edge packaging, optimized logistics, and highly experienced management team.

Grow Source Technologies, Inc. (formerly Lively Root Technologies, Inc.) launched in 2020 and has generated over $2.3 million in revenues in the first eight months of existence from customers in all 50 states. The Company is preparing to supercharge its already fast-paced growth. Their evolving technology and model are well-positioned to take advantage of the seismic shift toward the digital garden center for all demographics.  On July 1, 2023,  the company was restructured and reconstituted into a new entity called Grow Source Technologies, Inc.

Milestones
On July 1st, 2023, Lively Root Technologies Inc. was restructured and reconstituted into a new entity called Grow Source
Technologies, Inc. The equity ownership was substantially changed and most of the previous shareholders are no
longer a part of the new restructured entity, and the debt was substantially reduced by approximately $3M. All of the
assets, employees, and management are identical moving forward. Business operations and customers were not
impacted, and they continue to operate on a day-to-day basis as they did previously. Grow Source Technologies, Inc.
is still authorized to issue 10,000,000 Common Stock at a par value of $0.00001 per share. There is no preferred stock
authorized as of yet.
Since then, we have:

• $12.2M Lifetime Rev
• Gross Rev doubling YoY; 113% CAGR
• Americans spend $56B annually on plants — an increase of 50% over the last 3 years.
• 250,000 customers across all 48 contiguous states.
• Current clients include Apple, Airbnb, LinkedIn, Oracle, and more.
• Channel provider for Petco's entire Pet-Friendly plant category.
• Founders are ex-YC (S16), and experienced in building horticulture and e-Commerce brands.

Historical Results of Operations

Our company was organized in June 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $1,917,945 compared to the year ended December 31, 2022, when the Company had revenues of $4,687,290. Our gross margin was 47.5% in fiscal year 2023, compared to 25.15% in 2022.
• Assets. As of December 31, 2023, the Company had total assets of $435,825, including $14,703 in cash. As of December 31, 2022, the Company had $776,259 in total assets, including $48,006 in cash.
• Net Loss. The Company has had net losses of $2,791,406 and net losses of $3,830,330 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
• Liabilities. The Company's liabilities totaled $3,227,232 for the fiscal year ended December 31, 2023 and $7,100,488 for the fiscal year ended December 31, 2022.
• 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 $1,639,198 in debt and $250,000 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

Grow Source Technologies, Inc. cash in hand is $205,000, as of November 2023. Over the last three months, revenues have averaged $225,000/month, cost of goods sold has averaged $200,000/month, and operational expenses have averaged $125,000/month, for an average burn rate of $100,000 per month. Our intent is to be profitable in 2 months.

On July 1, 2023,  the company was restructured and reconstituted into a new entity called Grow Source Technologies, Inc.  The equity ownership was substantially changed, and the debt was substantially reduced.  All of the assets, employees, and management are identical and moving forward.  Business operations and customers were not impacted, and we continue to operate on a day-to-day basis as we did previously.

We are anticipating for the next 3 months, $1.6M in revenues, $600K in COGS, and $800K in Overhead and G&A expenses.

We plan to be profitable for the first time this month (November) as the increased holiday retail demand kicks in.

We have additional capital from working capital loans and cash from the company's founders.  We have additional access to lines of credit to fund the business.

All projections in the above narrative are forward-looking and not guaranteed.