Treefort Music Fest

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. Actual results may differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Treefort Music Fest is a five-day indie music festival, held at numerous venues throughout downtown Boise, Idaho every year in March. Over the first nine years it has expanded to also include Alefort, Artfort, Comedyfort, Dragfort, Filmfort, Foodfort, Hackfort, Kidfort, Skatefort, Storyfort, and Yogafort. Treefort is now a full-fledged multi-disciplinary event with dynamic collaboration and community engagement throughout the Boise area. Treefort is very active year round as an important champion for creatives.

Our primary goal continues to be building a diverse, immersive, and sustainable event through thoughtful growth and community collaboration. Thoughtful growth will lead to more unique experiences for attendees, more full-time careers for our passionate team, and eventually a brick-and-mortar music venue under the Treefort brand. We also aim to expand our capability to provide opportunities for creative individuals in Boise to pursue their passion for music, art, and innovation.

Milestones

Treefort, LLC was incorporated in the State of Idaho in July 2014.

Since then, we have:

• Established the annual Treefort festival, a 5-day music + multi-disciplinary festival of discovery in Downtown Boise, ID
• Become a dynamic hub for creatives that energizes the cultural and economic ecosystem in Boise and beyond
• Sold more than 40,000 full festival passes and had 133,000 total attendees over 8 years.
• Featured 1000s of bands from all over the world, such as Lizzo, George Clinton, Liz Phair, CHAI
• Generated $1.8 million in annual revenue, growing at 17% every year (before the pandemic)

• Provided free educational and collaborative opportunities for the community

Historical Results of Operations

• Revenues. For the period ended December 31, 2021, the Company had revenues of $1,726,972 compared to the year ended December 31, 2020, when the Company had revenues of $60,232. This large difference represents the stretch of time during which we were unable to host a festival.
• Assets. As of December 31, 2021, the Company had total assets of $1,018,893, including $833,770 in cash. As of December 31, 2020, the Company had $454,999 in total assets, including $155,505 in cash.
• Net Profit/Loss. The Company had net profits of $979,185 in the year ending December 31, 2021. This amount includes $1,218,150 received as a Shuttered Venue Operators Grant. The Company had a net loss of (401,446) during the year ending December 31, 2020. As stated above, and elsewhere in the financial statements, this period represents the stretch of time during which the Company was unable to host the Treefort festival due to the global pandemic.
• Liabilities. The Company's liabilities totaled $376,780 for the year ended December 31, 2021 and $1,130,038 for the fiscal year ended December 31, 2020. 

Liquidity & Capital Resources

To-date, the company has been financed with $218,000 in debt. $150,000 of that is an Economic Injury Disaster Loan from the SBA, and the remaining $68,000 is a Paycheck Protection Program loan administered by the SBA. The Company received confirmation that the PPP loan was fully forgiven, and it is now treated as non-taxable income on the financial statements.

We will likely require additional financing in excess of the proceeds from the WeFunder Offering in order to perform operations over the lifetime of the Company. Except as otherwise described, 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.

State of the Company & Short/Mid Term Expenses

Treefort, LLC's cash in hand is $1,212,340, as of April 2022. That is due to successfully hosting two festivals in September 2021 and March 2022, as well as receiving a Shuttered Venue Operators Grant in July 2021.

Our fiscal year runs from July 1 to June 30. The reason for this is that our festival occurs in March. We start taking in pass sale revenue immediately after each festival for the next year's festival. We also start receiving sponsorship income in the Fall of the year before the festival. We use that cash flow to build the March festival. The majority of our expenses through the month before the festival is staff costs and benefits. One month before the festival, we send our artists' deposits, which is 50% of the amount due for artists that are performing. We were three weeks before the March 2020 festival when it became apparent that we could not hold it in March due to the COVID-19 pandemic. 

Our state declared a stay-at-home order the very week of the festival. We initially postponed the festival until September 2020 and honored the refund requests we received. It became very clear that holding the festival in September 2020 or March 2021 was too risky. We continued to honor refund requests, as well as sponsorship requests. We continued to pay staff costs up until we could have the Treefort Music Fest in September of 2021. We were also awarded a Shuttered Venues Operating Grant by the SBA, which helped fill those gaps.