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

Our mission is to infuse the art of whiteboarding into every creative, collaborative, and learning environment.

We make whiteboarding tools that help people think, that inspire team creativity, that foster learning, and that cultivate organizational collaboration.

Our vision is to create meaningful human connections in a time of increasing separation caused by technology.

We are building an ecosystem of collaboration tools that empower face-to-face communication, discovery, and innovation.

Milestones

Comsero, Inc. was incorporated in the State of Delaware in April 2013.  The company owns the brand mcSquares, as well as the associated patents.

Since then, we have:

• 30% Month over month growth last year
• Serial Entrepreneur founder with 4 successful exits
• Massive, MASSIVE media exposure coming up - a "shark" of an opportunity

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $184,761 compared to the year ended December 31, 2017, when the Company had revenues of $378,209. Our gross margin was 38.6% in fiscal year 2018, compared to 67.3% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $204,640, including $5,446 in cash. As of December 31, 2017, the Company had $323,296 in total assets, including $112,685 in cash.
• Net Loss. The Company has had net losses of $648,675 and net losses of $478,632 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $213,968 for the fiscal year ended December 31, 2018 and $278,949 for the fiscal year ended December 31, 2017.

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 $600,000 in debt and $1,655,959 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 120 months before we need to raise further capital, given that we hope to reach profitability in 2020.

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 24 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

Comsero, Inc. cash in hand is $200,000, as of February 2020. Over the last three months, revenues have averaged $100,000/month, cost of goods sold has averaged $18,000/month, and operational expenses have averaged $120,000/month, for an average burn rate of $38,000 per month. Our intent is to be profitable in 9 months.

We have some debt that we can draw down if needed.  We've raised a $500k seed round in 2019.  In 2019, June and July our revenues are about $80k / month and then dropped to $50k / month in August and September because we ran out of inventory (we could not keep up with the unexpected growth in Q3).  We've re-stocked and invested in production capacity and have seen our revenue grow to $100k per month through January of 2020. We now have enough produced inventory and raw material in-house to produce $800k of sales.

We're hoping to hit profitability in Q3 of 2020.  We're currently in growth mode.  If we hit our maximum on Wefunder, we do not have plans to raise capital in the immediate future.  We plan (although cannot guarantee) to reach $20,000,000 of revenue with the proceeds from this raise. 

2017 and 2018 were bad revenue years for the business as we transitioned from importing the product to manufacturing it ourselves. That caused us an 18-month hit of revenue.  In the first six months of 2019, we've grown 45% month over month.

We could operate the business profitably very quickly if we scaled back our growth efforts.