MTailor

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

What would the world look like if everyone could know the clothing they are buying will fit accurately before they place their order? And not just accurate, but perfect - using AI and advanced software algorithms, our patented technology scans measurement features of consumers and creates an identical digital clone of their body -- all using the phone in their hands?

Our larger vision is to become the sizing and visualization standard for every online business selling apparel.  This projection cannot be guaranteed. 

Milestones

Bit Body, Inc. was incorporated in the State of Delaware in September 2012.  All patents are held by Bit Body, Inc.

Since the date of our financials, we have:

• Ecommerce business is profitable with $5M+ in annual revenue
• Backed by Y Combinator and Khosla Ventures
• Utilizing 7+ years of data gathered to launch sizing and visualization as a service (SaaS)
• AI + computer graphics end online returns w/ the largest commercially tested fit database worldwide
• Over 20% more accurate measurements than a professional tailor - goal to become the sizing platform for all online retailers
• Metaverse implications by scanning your body and face to make ones appearance realistic

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $4,487,782 compared to the year ended December 31, 2021, when the Company had revenues of $5,106,805. Our gross margin was 58.33% in fiscal year 2022, compared to 61.21% in 2021.
• Assets. As of December 31, 2022, the Company had total assets of $1,828,056, including $772,500 in cash. As of December 31, 2021, the Company had $1,401,626 in total assets, including $428,908 in cash.
• Net Loss/Income. The Company has had net losses of $811,724 and net income of $49,188 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $2,587,562 for the fiscal year ended December 31, 2022 and $1,098,492 for the fiscal year ended December 31, 2021.

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 $3,400,000 in equity, $1,385,551 in debt and revenue share agreements and $2,069,995 in SAFEs.

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

Bit Body, Inc. cash in hand is $656,134.92, as of January 2023. Over the last six months, net revenues have averaged $350,000/month, cost of goods sold has averaged $140,000/month, and operational expenses have averaged $327,000/month, for an average burn rate of $117,000 per month. Our intent is to be break-even in 24 - 36 months.

Our revenues fell from 2020 to 2022 largely because of COVID and Apple's changes to IDFA and its impacts on digital advertising; we've used that time to focus on market efficiency rather than scale.

Our ecommerce business makes money. But we are investing those profits into groundbreaking new technology. Our plan is to increase our overhead as we build out technology and sales for the SaaS offering.  

In the mid to long term, we plan to sell our software to other companies as a SaaS product (MeasureUP).  That product is built and we have our first customer for it, but we'll use some of these proceeds to improve it to hopefully make it more sellable.  

If we raised our Reg CF maximum, we would probably do a future raise.  We believe we need $3M - $5M total to get our SaaS product fully built out.

If we were to raise $1M, we would expect monthly expense to increase by about $50k / mo.  In the short term (3 - 6 months), we would expect revenues to remain relatively flat.

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