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

Quirktastic is the social networking and group live streaming platform for geeks and hobbyists. We are a one stop for anyone exploring or creating the fandom community.

There are a few key features within our app:
Podchats: group livestreaming rooms for creators/panel organizers

Clubs: interest-based voice and text chat channels

Swipe: search community profiles

Screen: watch video content with friends and host screenings

Quirktastic hopes be the one stop for anyone exploring or creating fandom (anime, gaming, k-pop). With that as our goal, we will naturally be shaping and creating the platform for VR connections and friendships. Imagine being able to go to a virtual convention with your friends. Also, our in-app currency, Qoin, will also have partnerships with many different retailers and food delivery services that allow users to cash in the qoins that they've earned for tangibles or high quality virtual goods.

Milestones

Quirktastic, Inc. was incorporated in the State of Delaware in October 2018.

Since then, we have:

• 25,000+ users in US, Canada, and Europe since March 2019
• 25% month-over-month growth
• $175.1K revenue since app launch (merch)

Historical Results of Operations

Our company was organized in October 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $118,250.45 compared to the year ended December 31, 2018, when the Company had revenues of $36,383.78. Our gross margin was 98.3% in fiscal year 2019, compared to 88.64% in 2018.
• Assets. As of December 31, 2019, the Company had total assets of $47,554.42, including $31,034.27 in cash. As of December 31, 2018, the Company had $2,724.09 in total assets, including -$13,796.06 in cash.
• Net Loss. The Company has had net losses of $21,415.64 and net losses of $63.88 for the fiscal years ended December 31, 2019 and December 31, 2018, respectively.
• Liabilities. The Company's liabilities totaled $18,293.44 for the fiscal year ended December 31, 2019 and $2,938.63 for the fiscal year ended December 31, 2018.

Liquidity & Capital Resources

To-date, the company has been financed with $250,000 in equity and $25,000 in SAFEs.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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

Quirktastic, Inc. cash in hand is $16,499.30, as of August 2020. Over the last three months, revenues have averaged $3,980/month, cost of goods sold has averaged $147/month, and operational expenses have averaged $1,578/month, for an average net margin of $2,255 per month. Our intent is to be profitable in 12 months.

We built out our in-app monetization product that would have allowed us to monetize from convention ticket fees, but then the COVID pandemic happened and conventions were cancelled. So we had to scrap any partnerships with conventions and thus change our business plan to focus on e-commerce. Additionally, due to limited international flights, our ecommerce is currently taking 2-4 weeks for orders, which in turn also had an effect on the amount of product that we could ship out.

We are in the process of creating our in-app currency “qoins” that allows for in-app tipping for livestreamers and digital goods (similar to Twitch “flare”). 1 qoin = $0.03 + processing fee and are sold with a starting unit of 100. With this launch, our expected revenue starting November 2020 is projected (but not guaranteed) at $10,500. Starting November, our expected cost of goods sold is averaged at $147/month, and operational expenses have averaged $4,728/month, for an average net margin of $5,625 per month. Though, our main focus is on community growth at this time. Revenue will be our focus Q2 of 2021.

E-commerce and pitch competitions have been our main capital source during the pandemic. We also have around $16.5K in accounts receivable from our partnerships with HBO and Warner Bros.