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

RAD Technologies Inc. (‘the Company’), is a Delaware advertising technology corporation formed on July 6, 2018. The Company provides a content AI technology solution to digital marketing teams at various enterprises which aims to improve the performance of their articles, advertisements, emails, and product descriptions.

In August 2019, the Company acquired Zumby Media LLC, a venture funded technology startup that uses AI and machine learning to achieve influencer marketing automation. In July 2021, the Company acquired Atomic Reach Inc., a content AI technology company based in Toronto through its Canadian subsidiary, RAD Canada Inc.

Milestones

Rad Technologies, Inc. was incorporated in the State of Delaware in July 2018.

Since then, we have:

- YoY revenue has doubled from 2022; projecting 3X revenue growth w/ Q4 sales bookings for 2023

- Customers including Dignity Health, Sweetgreen, The Black Tux, Roman Health & more

- World-class team founders with 5 exits between them, Ph.D.s, & leaders from Wharton, Harvard and MIT

- Backed by the Adobe Fund for Design

- ~5k investors including VCs like Fidelity, Expert Dojo, MaRS, Execs from Google, Amazon, Live Nation

- Featured in Forbes, Bloomberg, TechCrunch, Entrepreneur, VentureBeat, Huffington Post, and NASDAQ

- Positioned to disrupt the Marketing Technology and Analytics industries — valued at $633 billion

- Recipient of AI Innovation Grant from Canada that covers up to 40% of annual product dev. costs

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $446,498 compared to the year ended December 31, 2021, when the Company had revenues of $515,854. Our gross margin was 28.64% in fiscal year 2022, compared to 73.55% in 2021.
• Assets. As of December 31, 2022, the Company had total assets of $4,653,779, including $203,235 in cash. As of December 31, 2021, the Company had $919,988 in total assets, including $280,149 in cash.
• Net Loss. The Company has had net losses of $3,752,371 and net losses of $1,044,968 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $691,828 for the fiscal year ended December 31, 2022 and $832,406 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 $1,480,000 in debt, $5,431,537 in equity, $760,000 in convertibles, and $1,075,617 in SAFEs.  An additional $4.1M was invested in a company acquired by RAD Technologies, Inc., Atomic Reach Inc., by the Lead Investor Joseph Freedman. 

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 4 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

Rad Technologies, Inc. cash in hand is $710,000, as of September 2023. Over the last three months, revenues have averaged $96,000/month, cost of goods sold has averaged $9,252.10/month, and operational expenses have averaged $251,000/month, for an average burn rate of $145,747.90 per month. Our intent is to be profitable in 8 months.

Over the next 6 months, a large material contract is expected to help produce a total of $3.8M in revenue on $3.91M in expenses. *In this context, our projected total expenses (next 6 months) don't include additional investment into technology, operations and marketing. We will be adjusting ongoing operating expenses based on the success of our planned fundraising efforts. 

RAD AI is not profitable as of Sep/2023. We believe we will be profitable within 8 months and as it stands today, given current clients under contract + signed agreements for budget/campaigns, we have ample funds for operating, marketing, sales and hiring expenditures. 

In terms of additional sources of capital, we have several enterprise clients both net new and renewal business, which contribute to our revenue.  If needed, we could easily pare down our investment into scaling our sales, product and marketing efforts (only) if revenue flattened out.  That said, our clients are growing, which in turn creates revenue growth.  We expect the combination of sales + fundraising to adequately finance growth + existing expenditures

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