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 Hotels are massively underutilized despite significant fixed costs!  Over 50% of their day amenities are sitting idle all day. From day rooms, to meeting rooms, pool chairs, spa, gyms, representing billions of dollars left on the table & wasted away.  In today’s on-demand & sharing economy, tech-enabled, this issue is completely anachronistic and runs the risk of turning hospitality inhospitable!    

Originally, HotelsByDay was created with the single focus in mind: optimize the inventory of day rooms by creating a marketplace for guests to book a room for few hours, as a cure to a red eye flight, nap, early check-in, late check-out, work &/or meet in privacy.

But Dec. 2019, HotelsByDay acquired the long sought-out startup DayAxe.com, a North American Marketplace leader in optimizing day-time amenities at hotels, such as pool chairs, cabanas, spa, gyms, parking.

Together, HotelsByDay + DayAxe form a unique alliance unseen anywhere else in the hospitality space: a single company able to offer a panoply of services for a hotel to monetize every idle corner of their property: from day rooms to pool passes, and everything in between!    This is a massive opportunity to broaden the relevance of our company by increasing the relevance of the partner hotel to the general public, through our platform.

Milestones
Hospitality Innovated, LLC was organized in the State of New York in July 2014, and now runs both web-apps HotelsByDay.com and DayAxe.com.

Our company in numbers:
- 580,000+ web visits a year
- 150,000+ bookings total
- 60,000+ guests
- $12,000,000+ total Gross Booking Volumes
- 300+ cities in North America, as well as London, Tel Aviv - 1000+ hotels

- $50,000 average net Monthly Recurring Revenue
- 50% guests are repeat users
- Featured in ABC’s Shark Tank, as well as over 180 press articles and multiple podcasts

Historical Results of Operations

Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $383,896 compared to the year ended December 31, 2017, when the company had revenues of $316,574. 

Assets. As of December 31, 2018, the Company had total assets of $98,375, including $64,847 in cash compared to December 31, 2017, the Company had total assets of $246,210, including $9,474 in cash. 

Net Income. The Company had a net income of $37,860 for the fiscal year ended December 31, 2018, compared to a net loss of $7,470 for the fiscal year ended December 31, 2017 .

Liabilities. The Company's liabilities totaled $7,630 for the fiscal year ended December 31, 2018 compared to $2,686 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with just about $750,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 20 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 20 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 technology complexities and strategic 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 investment firms, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses
Hospitality Innovated, LLC cash in hand is $20,000, as of January 2020. Over the last three months, revenues have averaged $30,000/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $35,000/month for a burn rate of $5,000/month. Our intent is to be back to profitability by end of 2020. Recently, we have:

- opened the Israeli market with about 20 properties

- signed 38% more hotels in 2019 than 2018

- increased memberships sign-ups by 20% in 2019 than 2018, demonstrating greater loyalty and relevance to our guests

- broke our floor of $6.50 per new guest in digital cost of acquisition with a blended CAC at $4 per booking (on revenues of about $13.50 per booking)

- increase our website conversion rate to 7.7% in 2019 from 6.4% in 2018

- acquired the amenity startup DayAxe.com.  We expect our revenues to grow by 30% in the next 6 months thanks to the acquisition and blending of services. We hope to raise another $2M from accredited investors by the end of 2020.