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

We develop sustainable cleaning products in effervescent tablet form. Now consumers can make their own cleaner at home using plain tap water and the same bottle over-and-over again. DAZZ ends the use-and-discard cycle associated with traditional ready to use cleaners, and by eliminating the bottle & water, DAZZ has created a cleaning product that can easily be mailed; opening up a world of opportunity for direct to consumer / eCommerce sales.

We hope (although cannot guarantee) that DAZZ will be purchased by an international Consumer Packaged Goods (CPG) company that can scale DAZZ to become a global brand and a global solution to plastic waste. We're on-track with this goal as we have already begun distribution in South Africa and Singapore. We are currently in discussions with distributors from 16 additional foreign markets, eager to bring DAZZ to their countries. Additionally, we have interest from home shopping channels in Japan, Germany, and the UK. 

Milestones

SunState Laboratories, Inc. was incorporated in the State of Colorado in January 2020.  We were originally organized as SunState Laboratories, LLC in 2012.  In 2020 the LLC was fully dissolved and the Corporation assumed all assets and liabilities.

Since 2012, we have:

• Disruptive new consumer brand that is changing the household cleaner industry.
• Strong team of seasoned professionals driven to build a successful, non-concessionary impact company.
• We believe we have a clear exit strategy in 3-5 years
• Support a creative new eco-brand that has a direct and measurable environmental impact.
• Rockies Venture Club (RVC) has committed to being our lead investor in our next round. RVC is the oldest Angel Club in America.
• Proof of Concept - sold 12,000 units in <11 minutes on the Home Shopping Network (U.S. home shopping channel).
• Award - Winning products. DAZZ was awarded a Global Innovation Award from the IHH Assoc, and an Addy award for our brand and packaging.

Historical Results of Operations

Our company was organized in January 2020 and has limited operations upon which prospective investors may base an evaluation of its performance.

• Revenues & Gross Margin. For the period ended December 31, 2019, the Company had revenues of $20,354. For the period ended December 31, 2018, the Company had revenues of $10,623.
• Assets. As of December 31, 2019, the Company had total assets of $66381, including $7,952 in cash. As of December 31, 2018, the Company had total assets of $72,262, including $6,271 in cash.
• Net Loss. The Company has had net losses of $49,824 for 2019 and net losses of $40,562 in 2018.
• Liabilities. The Company's liabilities totaled $18,607 for 2019 and $3,460 for 2018.

Liquidity & Capital Resources

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 9 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

SunState Laboratories, Inc. cash in hand is $7,900, as of January 2020. Over the last three months, revenues have averaged $4,300/month, cost of goods sold has averaged $1,032/month, and operational expenses have averaged $4,395/month, for an average burn rate of $1,127 per month. Our intent is to be profitable in 22 months.

For Sales, we've noticed a significant increase in Amazon and website sales since beginning our digital marketing campaign. Additionally, we have begun our wholesale distribution to South Africa and Singapore.  For Expenses, we've entered a lease for our new office and manufacturing facility.

We anticipate significant increases in sales and expenses over the next 3-6 months. On the sales side, we're already seeing a 152% increase over December numbers. As we continue to grow our digital campaign, we believe this trend will continue to increase. We also plan to begin our retail distribution program starting with 130 Camping World Stores in March, which we hope will boost our revenue. With our plant expansion, we also plan on growing our international distribution to include Australia, New Zealand, France, Spain, and India in the next 6 months. And finally, our goal is to launch our next 3 products before 3rd quarter 2020. For expenses, we will be scaling our manufacturing capabilities with new equipment and packaging labor. We also plan on hiring 1 sales position, 1 admin, and 1 production person. Additionally, we will be refreshing the DAZZ brand, website, and packaging material.