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

Stack is building the first multiplayer internet browser built for collaborations across the Internet.

We see the $200B industry of internet browsers shifting at dramatically increasing speeds. In 5 years from now, browsers will not look anything like they do today as they become more spatial and multiplayer. Stack aims to be the most used internet browser on the planet among creative teams and solo professionals for whom the majority of work is done on the internet. Projections cannot be guaranteed.

Milestones

Stackers Inc. was incorporated in the State of Delaware in July 2019.

Since then, we have:

• Disrupting a $213B global market of internet browsers and collaboration software.
• Rethinking product that is used by 4 Billion people.
• Raised a total of $2.5M in previous rounds from 9 VCs and 2 angels.
• 45% of total users use Stack as their main browser every workday.
• 15% of daily active users upgraded to lifetime paid membership.
• N1 product of the day on Product Hunt at launch date.

The Company is subject to risks and uncertainties common to early-stage companies. Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended Dec 31, 2022, the Company had revenues of $12,364 compared to the year ended Dec 31, 2021, when the Company had revenues of $17,145. Our gross margin was 93.44% in fiscal year 2022, compared to 96.33% in 2021.
• Assets. As of Dec 31, 2022, the Company had total assets of -$20,007, including $3,868 in cash. As of Dec 31, 2021, the Company had $1,185,015 in total assets, including $929,404 in cash.
• Net Loss. The Company has had net losses of $1,062,556 and net losses of $646,743 for the fiscal years ended Dec 31, 2022 and Dec 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled -$132,305 for the fiscal year ended Dec 31, 2022 and $11 for the fiscal year ended Dec 31, 2021.

Liquidity & Capital Resources

To-date, the company has been financed with $1,500,000 in equity, $200,000 in convertibles, $615,000 in SAFEs, $100,000 in KISS agreements, and $250,000 in grants.

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 8 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

Stackers Inc. cash in hand is $89,750, as of November 2023. Over the last three months, revenues have averaged $1,700/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $88,200/month, for an average burn rate of $86,500 per month. Our intent is to be profitable in 24 months.

The financials are up to the 31st of December 2022. It covers Stackers Inc with its two subsidiaries: Stackers BV (Netherlands) and Stack LLC (Georgia). There have been no material changes in financials since then.  

In the next 3 to 6 months, we are expecting to average our burn rate at $90,000 a month. We do not plan to become recurring revenue-generating. 

However, we are launching a one-time campaign of selling 5000 Lifetime Licenses of the premium version of Stack in Early November. We expect to generate up to 1 million USD in sales through that campaign. 

We plan to start recurring revenue generation 6 to 9 months from now, after releasing the primary paid feature - live collaboration for teams. To reach that point we need capital of up to $600K

We do not aim to become profitable in the short run. But we plan to reach break-even in the next 18 to 24 months. For reaching that point we need funding of up to $1.6m. 
For more context, we are VC backed startup, and our primary focus is explosive user growth. Meanwhile, while in the process of discovering product-market fit, we have tested a couple of revenue models in the past, and identified the one that worked the best - collaboration for teams. We have managed to generate one-time revenue of up to $100K in 2020 as an experiment through that channel. 

Right now, our focus is on releasing the final version of the product and starting explosive growth. We plan to implement our well-tested recurring revenue-generating feature in the next 9 to 12 months. Based on that, we expect to reach the break-even point in 18 to 24 months. 

We can easily cover the short-term burn through the campaign with our existing funding. We are backed by 11 investors, of which 9 are institutional (including leading Dutch VC fund - Peak Capital, and German VC fund - Lunar Ventures) and 2 Angels. 

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