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

Historically, hotels have been unwilling to offer rooms just for the day, sticking instead to rigid check-in and -out times. We created HotelsByDay to make it easy for customers to find and book single day stays. We designed the platform to make it easy for hoteliers to add this new revenue stream and protocol to their current booking system. Intuitively, it makes sense. Financially, it does too – we've brought in $8M+ in gross booking revenues. 

Booking hotel rooms just for the day is a win-win situation for all parties: hotel owners get 50% net revenue of a day room when it would otherwise be empty, guests have flexible options to relax during the day, and we make a 15% commission on each room. We're the day room leaders in North America; we plan to bring our easy-to-use platform to the millions of travelers and hoteliers across the globe. 

Milestones

Hospitality Innovated, LLC was incorporated in the State of New York in July 2014.

Since then, we have:

• $8M+ in gross bookings revenue to date.
• 84K+ bookings.
• 49k+ guests 
• 148% YOY ITD ave. growth

- 40k ave. monthly unique visitors

• 30% customers are repeat users
• 800+ hotels in North America, London, Israel.
• Featured in over 150 press articles, TV shows, and multiple podcasts

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $383,895.65 compared to the year ended December 31, 2017, when the Company had revenues of $238,110.40. Our gross margin was 13.85% in fiscal year 2018, compared to 14% in 2017.
• Assets. As of December 31, 2018, the Company had total assets of $235,732.36, including $65,206.06 in cash. As of December 31, 2017, the Company had $222,775 in total assets, including $7,555 in cash.
• Net Income. The Company has had net income of $24,617.12 and net losses of $7,500 for the fiscal years ended December 31, 2018 and December 31, 2017, respectively.
• Liabilities. The Company's liabilities totaled $1,999 for the fiscal year ended December 31, 2018 and $30,744 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with $652,000 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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 12 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

Hospitality Innovated, LLC cash in hand is $49,679.86, as of March 2019. Over the last three months, revenues have averaged $107,995.59/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $108,737.66/month, for an average burn rate of $742.07 per month. Our intent is to be profitable in 12 months.

- one time frivolous lawsuit settlement for $10k
- imminent opening of Israel market with over 17 properties
- signed 45 new hotels in Canada
- stabilized our cost of acquisition rate at $6.50 per new guest (revenue is $13.64)
- increased the lifetime value of an average guest from $22.86 in 2017 to $23.19 in 2018
- clocked a 2018 growth of 35% YOY
- registering about 3 new loyalty sign-ups per day since August launch
- achieved a 6.4% conversion rate from our website
- launched a consistent email newsletter campaign  

We expect our revenues to grow by 50% in the next 6 months thanks to the addition of night stays + day stays