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

Q4 2023 was a strong quarter for us in terms of revenue.  We exceeded our goal with total revenue of $2.4M for the quarter. Building off a strong Q3, Q4 marks another all-time high in revenue for a quarter in company history.  

While we are still very much in growth mode, we would have liked to see our profitability in a better spot in 2023.  In 2024, we plan to grow revenues while becoming more efficient and profitable with a 7% EBITDA target.
We finished the year (2023) at $6.5M+ in net revenue and are bullish on a profitable 2024.  With investments in operations and new sales hires for growth, we are targeting $9.5M in top-line revenue as the golf industry remains very strong.  In the US, according to Golf Datatech, golf rounds were up 18% in 2023 when compared to 2019 (pre-Covid).
Milestones

Galvin and Mathews FBA Inc. was incorporated in the State of California in May 2019.

Since then, we have:

• Proven Traction: Reached $6.5M+ revenue in 2023.
• Huge Growth Outlook: $9.5M Projected Revenue in 2024.
• Sold in all major retailers: Dicks Sporting Goods, Golf Galaxy, World Wide Golf, Scheels.
• Featured in: Golf.com, Golf Digest, Forbes, CBS Sports, & Sports Illustrated and many more!
• Huge Social: 70,000+ Followers on TikTok + Instagram.
• Sunday Golf bags can be found in 600+ golf courses nationwide.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $6,543,933.25 compared to the year ended December 31, 2022, when the Company had revenues of $4,574,404.12. Our gross margin was 68.6% in fiscal year 2023, compared to 63.0% in 2022.
• Assets. As of December 31, 2023, the Company had total assets of $2,704,501.09, including $647,010.75 in cash. As of December 31, 2022, the Company had $1,670,408.23 in total assets, including $206,779.78 in cash.
• Net Income. The Company has had a net income of $35,191 and a net income of $82,116.11 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
• Liabilities. The Company's liabilities totaled $1,235,263.08 for the fiscal year ended December 31, 2023 and $1,318,173.73 for the fiscal year ended December 31, 2022.

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 $1,029,400 in debt.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 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 will likely require additional financing in excess of the proceeds from the Offering in order to perform operations and inventory over the lifetime of the Company. Except as otherwise described in this Form C, we currently 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

GALVIN AND MATHEWS FBA INC. cash in hand is $552,367, as of April 2024. Over the last three months, revenues have averaged $564,000/month, cost of goods sold has averaged $191,555/month, and operational expenses have averaged $364,271/month, for an average net margin of $8,174 per month. Our intent is to be profitable in 0 months.

The Company has successfully launched a Cart Bag, accessories, and new colorways and materials in all previously launched bag types.

Sunday Golf experienced a significant increase in its wholesale, promotional, and international sales opportunities as a result of its successful participation in the PPAI and PGA Trade Shows. The Company was able to leverage these events to showcase our products to potential customers and as a result, we added 70+ new accounts. In addition to increased revenue, the new accounts that we acquired as a result of the trade shows provide Sunday Golf with a great opportunity to establish long-term relationships and recurring revenue streams.

As the Company has grown, the average monthly recurring software subscription costs have increased for the Company's CRM, Email Marketing, Customer Support, Website, Project Manager, and Inventory Management software.

The Company is currently holding $1.6 million in inventory to ensure sales forecasts can be met.


Sunday Golf expects over $5.8 million in revenue over the next 6 months and around $5 million in COGS and Operating Expenses

Sunday Golf's business operations are seasonal and revenues are partially tied to the golf season, which generally runs from March to August. During the historically low revenue months of January, February, September, and October the company typically experiences a net loss or low percentage net gain. These months also have the highest cash flow demands due to the need to stock up for the holiday selling season and ensure enough inventory is available to sell at the beginning of the upcoming golf season. On the other hand, November and December are still strong sales months due to Black Friday and holiday gifting.

The company is historically profitable and doesn't need additional funding to achieve profitability, but requires debt financing to meet the cash flow needed for inventory demands. The company had an EBITDA of $185,228.35 in 2022 and $96,355.74 in 2023 and a Net Income of $82,116.11 in 2022 and $35,191 in 2023. - $250,000 line of credit from Chase Bank that can be increased as the company continues to grow.
- $100,000 of American Express Credit Card limit for shorter-term needs.
- $300,000 of Inventory Financing is currently available from a previous debt provider.
- $200,000 of additional personal savings from the company founders if needed.
It is important to note that while these sources of capital are available, the company will carefully consider the terms, interest rates, and repayment schedules of each option before accessing them. Additionally, the company will explore other funding options to diversify its sources of capital and minimize risk.

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