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

Project M is a portfolio of brands across multiple genres (currently focusing on heavy metal and tattoo). We operate both digital and print media properties to serve content to passionate fans. We sell D2C products — merchandise, events, studio content, and more.
We hope to grow to $25M+ in e-commerce revenue and become a dominant global player in media and e-commerce in our very large end markets. Our exit strategy is to be acquired by Warner Music Group or Live Nation. These projections cannot be guaranteed.

Milestones

Project M Group LLC was incorporated in the State of Delaware in November 2016.

Since then, we have:

• Owner of the #1 brands in tattooing (Inked), heavy metal (REVOLVER) & music comedy (The Hard Times).
• Management prev. raised $2.5B+ from investors. Team incl. former Head of Digital @ Rolling Stone.
• 20-years working with top talent incl. Metallica, Post Malone, Roman Reigns, DMX, Tool, Linkin Park.
• 47M+ followers on social media and 10M+ monthly unique users.
• Raised $7M to date from Wall Street and media executives.
• Profitable, run-rate revenues of $8M+. 85% e-commerce. +50% YoY growth and accelerating.
• Launching investor membership tier with artist access, discounts on merchandise, and even tattoos.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $922,745 compared to the year ended December 31, 2018, when the Company had revenues of $742,220. Our gross margin was 29.09% in fiscal year 2019, compared to 9.58% in 2018.
• Assets. As of December 31, 2019, the Company had total assets of $684,572, including $60,313 in cash. As of December 31, 2018, the Company had $715,727 in total assets, including $47,239 in cash.
• Net Loss. The Company has had net losses of $1,186,497 and net losses of $2,021,563 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
• Liabilities. The Company's liabilities totaled $5,947,040 for the fiscal year ended December 31, 2019 and $4,791,698 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 $1,750,000 in debt, $333,104 in convertibles, and $5,071,420 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

Project M Group LLC cash in hand is $295,013, as of November 2020. Over the last three months, revenues have averaged $468,700/month, cost of goods sold has averaged $256,900/month, and operational expenses have averaged $549,960/month, for an average burn rate of $338,160 per month. Our intent is to be profitable in 3 months.

In 2020 we acquired Inked and The Hard Times as well as restructured our capital structure, converting the SAFE to common units and debt to debt+equity. 

We currently forecast Q4 of 2020 to have $2.7mm revenues and $2.2mm in expenses. As an e-commerce business that these figures are seasonal. Those forecasts cannot be guaranteed.

In addition to vendor financing we expect to be able to open a revolving line of credit with our bank should we be in need of additional capital.  We are about cash flow even at the moment and may not need to access those funds.