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

Paragon Motorcycles, Inc. operates a retail and manufacturing business under the trade name Janus Motorcycles and is located in Goshen, Indiana. Customers order their custom motorcycles primarily online, and the company offers two different types of engine displacements, the 250cc and the 450cc, and also can order apparel and gear online or by visiting their retail store. Paragon Motorcycles, Inc. also provides repair, parts and service as well as delivery to customers.

Milestones

Paragon Motorcycles, Inc. was formed in the State of Indiana in December 2011. The Company was a limited liability company but effectuated a change of structure effective January 1st, 2023 to a Corporation under the name Paragon Motorcycles Inc.

Since then, we have:

• Well-established, 14 yr-old company with expansive vision
• Raised more than $3 million in new equity capital over the last 3 years
• C-Corporation with experienced Board of Directors
• Direct-to-consumer business model eliminates dealers and facilitates excellent customer experience
• Tiny percentage of market in growing industry segment (< 450 cc)
• Predominately U.S. made product line, with new product launch opportunities to expand
• Enthusiastic, cult-like owner base and following

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2024, the Company had revenues of $4,057,702 compared to the year ended December 31, 2023, when the Company had revenues of $3,082,031. Our gross margin was 31.89% in fiscal year 2024, and 35.44% in 2023.
• Assets. As of December 31, 2024, the Company had total assets of $2,066,617, including $28,826 in cash. As of December 31, 2023, the Company had $1,193,508 in total assets, including $26,851 in cash.
• Net Loss. The Company has had net losses of $899,391 and net losses of $926,354 for the fiscal years ended December 31, 2024 and December 31, 2023, respectively.
• Liabilities. The Company's liabilities totaled $2,708,549 for the fiscal year ended December 31, 2024 and $1,698,328 for the fiscal year ended December 31, 2023.

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 $3,011,421 in debt, $3,623,850 in equity, and $167,000 in SAFEs.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 2 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. 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

Paragon Motorcycles, Inc. cash in hand is $63,367, as of November 2025. Over the last three months, revenues have averaged $324,514/month, cost of goods sold has averaged $252,385/month, and operational expenses have averaged $164,829/month, for an average burn rate of $92,700 per month. Our intent is to be profitable in 6 months.

Since the date our financials cover, there have been multiple changes. Grant Longenbaugh, is no longer with us, as well as Jordan Swartzendruber.  New marketing consultants have been hired along with one of our BOD and shareholder's companies will be assisting with marketing.  Bill Seals has been promoted to general manager.  

Over the next 3-6 months, revenues will probably be in the range of $300K-400K per month with expenses in the range of $400K-500K per month until enough parts are on hand to raise revenue to $500K per month.  When we get those parts is dependent in large part of the success of the Wefunder campaign.  

We are not currently profitable. We need to achieve our max $1 mill raise to be confident we can become profitable in six months.  Parts.  We need a lot of them in order to be able to consistently turn out 10-12 bikes per week.  More working capital will allow us to not just buy enough parts to know we won't run out and not hit our production goals but will also allow us to pay for tooling at new vendors where unit prices will be much less and shipping costs per part will also go down due to ordering higher quantities.  Enough parts to build 10-12 bikes per week consistently should allow us to become profitable as unit costs will go down as well as overhead allocation per bike.  

We have historically had our board members and shareholders who will either put more cash in as equity or lend us money to get us through any shortfalls.  There is no reason to expect this to change.

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