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

The Breakfast Application, Inc. (“the Company”) was formed in Delaware on August 4th, 2025. Through its operating subsidiary, the Company plans to earn revenue via an application which allows its members to meet offline over breakfast. The Company’s headquarters is in Dover, Delaware. The subsidiary company’s customers will be located in globally, primarily in major cities across North America, Europe, and the Middle East.

Milestones

The Breakfast Application, Lda. was formed in Portugal on November 21st, 2018. On August 4th, 2025, The Breakfast Application Inc. was incorporated in the State of Delaware, which is now the parent company of The Breakfast Application, Lda.

Since our formation, we have:

• Pilot Phase results: 6.5× revenue growth in 2 years ($45K → $169K → $300K), $600K+ total revenue
• Product validated: 34 cities / 20 countries with 100K+ global registrations
• Growth Phase target: $7.2M in projected ARR within 18 months (not guaranteed)
• Investments: $850K+ raised — half of investors were members before investing
• Lean team: just 6 people building and scaling
• Unit economics: 10 of 34 cities have positive unit economics
• Technology: BRIOCHE — proprietary matchmaking & moderation AI

Historical Results of Operations

The Breakfast Application Inc. (the entity issuing securities in this offering) was incorporated in the State of Delaware on August 4th, 2025. Its financial performance as of August 25th, 2025 is summarized below:

- Revenues. For the period ended August 25, 2025, the Company had revenues of $0.
- Assets. As of August 25, 2025, the Company had total assets of $0.
- Net Loss. The Company has had net losses of $11,842 for the period ending on August 25, 2025.
- Liabilities. The Company's liabilities totaled $11,842 for the period ending on August 25, 2025.

The Breakfast Application, Lda. was formed in Portugal on November 21st, 2018. Its financial performance as of the last two fiscal years is summarized below:

- Revenues & Gross Margin. For the period ended December 31, 2024, the Company had revenues of $229,599 compared to the year ended December 31, 2023, when the Company had revenues of $88,707. Gross profit was $148,467 in 2024 and $52,401 in 2023, representing gross margins of 64.67% and 59.08%, respectively.
- Assets. As of December 31, 2024, the Company had total assets of $97,793, including $86,636 in cash. As of December 31, 2023, the Company had $50,742 in total assets, including $44,204 in cash.
- Net Loss. The Company has had net losses of $273,184 and net losses of $242,355 for the fiscal years ended December 31, 2024 and December 31, 2023, respectively.
- Liabilities. The Company's liabilities totaled $74,513 for the fiscal year ended December 31, 2024 and $63,004 for the fiscal year ended December 31, 2023.

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 $227,500 in debt, $20,000 in equity, and $850,700 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

The Breakfast Application Inc. cash in hand is $53,324, as of September 2025. Over the last three months, revenues have averaged $23,466/month, cost of goods sold has averaged $8,447/month, and operational expenses have averaged $41,161/month, for an average burn rate of $20,872 per month. Our intent is to be profitable in 6 months.

Since the date of our financial statements, we have:
- Gathered more data on unit city economics and user retention, identifying a 15–20% retention gap between new and mature cities.
- Refocused marketing budgets on profitable cities to cover monthly expenses and generate surplus for expansion into new ones.
- Improved onboarding activation efficiency 2x.
- Initiated pilot partnership projects in three cities.
- Developed social features that improved both activation and reactivation rates.

We expect to reach approximately $90K in monthly recurring revenue (MRR) in 6 months, with monthly expenses of around $70K. This positions us to operate at or near break-even while continuing to expand into new cities.

We are not yet profitable today. We project needing approximately $150-180K in funding over the next 6 months to cover our path to profitability. By that point, we expect to reach ~$90K in monthly recurring revenue while keeping monthly expenses around $70K, positioning us to operate profitably going forward.

We are covering current operations with funds previously raised from our investors and, if needed, may bridge short-term burn with a founder loan until the Wefunder campaign closes. In parallel, we are actively building relationships with VCs and angels to strengthen our capital base and accelerate growth beyond profitability.

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