SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

The following discussion and analysis should be read in conjunction with the
unaudited consolidated financial statements and related notes included elsewhere
in this Form 10-Q and our audited financial statements and related notes thereto
for the year ended December 31, 2021 included in our Annual Report on Form 10-K
for the year ended December 31, 2021. This discussion and analysis and other
parts of this Form 10-Q contain forward-looking statements based upon current
beliefs, plans and expectations that involve risks, uncertainties and
assumptions, such as statements regarding our plans, objectives, strategy,
expectations, outlook, intentions and projections. Our actual results and the
timing of events could differ materially from those anticipated in these
forward-looking statements as a result of several factors, including those set
forth in "Part I. Item 1A. Risk Factors" of our Annual Report on Form 10-K for
the year ended December 31, 2021 and in other filings with the Securities and
Exchange Commission (the "SEC"). Please also see the section entitled
"Cautionary Note Regarding Forward-Looking Statements" contained in this Form
10-Q.



Overview



We have a series of advanced-safe-smart platform technologies. Our
first-generation technologies enable light fixtures, ceiling fans and other
electrically wired products to be installed safely and plugged-in into a
ceiling's electrical outlet box within seconds, and without the need to touch
hazardous wires. The plug and play technology method is a universal power-plug
device that has a matching receptacle that is simply connected to the electrical
outlet box on the ceiling, enabling a safe and quick plug and play installation
of light fixtures and ceiling fans in just seconds. The plug and play power-plug
technology eliminates the need of touching hazardous electrical wires while
installing light fixtures, ceiling fans and other hard wired electrical
products. In recent years, we have expanded the capabilities of our power-plug
product to include advanced safe and quick universal installation methods, as
well as advanced smart capabilities. The smart features include control of light
fixtures and ceiling fans by the SkyHome App, through WIFI, BLE and voice
control. It allows scheduling, energy savings eco mode, dimming, back-up
emergency light, night light, light color changing and much more. Our
second-generation technology is an all-in-one safe and smart advanced platform
that is designed to enhance all-around safety and lifestyle of homes and other
buildings. Our products are designed to improve all around home and building
safety and lifestyle. While we have developed and created working prototypes of
our advanced and smart products, we are continuing to refine the product
prototypes and expect to begin commercial manufacturing and marketing in the
second half of 2022 for the advanced products and the smart universal
power-plug, ceiling fans and lighting products and for the Smart Sky Platform.
We hold over 60 U.S. and global patents and patent applications and have
received a variety of final electrical code approvals, including UL, United
Laboratories of Canada (cUL) and Conformité Européenne (CE), and 2017 and 2020
inclusion in the NEC Code Book.



On April 28, 2022, we entered into a sublease agreement, pursuant to which we
agreed to sublease approximately 3,400 square feet of office space located on
the 54th floor of Carnegie Hall Tower, located at 152 West 57th Street, New
York, New York, at a fixed monthly base rent starting at $26,893 for the first
year of the sublease. We plan to use the New York office space to support our
general and administrative functions, sales and marketing, and business
development. The sublease will commence upon the landlord signing a consent
to
the sublease agreement.



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Results of Operations


SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

Confronto dei tre mesi trascorsi 31 marzo 2022 e 2021




                                  For the Three Months Ended         Change Between the Months Ended
                                          March 31,                             March 31,
                                     2022              2021             2022                2021
Revenue                        $          6,971     $   100,185     $     (93,214 )             (93.0 )%
Cost of revenues                        (31,137 )       (82,508 )         (51,371 )             (62.3 )%
Gross (loss) income                     (24,166 )        17,677           (41,843 )            (236.7 )%
Selling, general and
administrative expenses              11,921,943         867,680        11,054,263                  NM
Loss from operations                (11,946,109 )      (850,003 )      11,096,106                  NM
Other income / (expense)
Interest expense                        (90,630 )      (136,958 )         (46,328 )             (33.8 )%
Other income, loan
forgiveness                             178,250               -           178,250                  NM
Interest income                             125              22               103               463.6 %
Total other income
(expense), net                           87,745        (136,936 )         244,681                  NM %
Net loss                            (11,858,364 )      (986,939 )      10,871,425                  NM




NM: Not meaningful



Revenue



The decrease in revenues was directly related to the planned reduction of
discontinued inventory as we continued to shift our focus to the development of
our new patented "Smart" platforms and technologies. During 2022 and 2021, we
opted to sell through our existing inventory of discontinued products to
facilitate our planned transition into our new patented product lines.



Cost of Revenues



The cost of revenues consists primarily of inspection fees related to certain
certifications. Revenues are mostly derived from the sale of a small number of
replacement parts and standard canopy kits. The inventory and related costs of
such products are not significant and are not reflected on our balance sheet nor
in the cost of revenues.The reduction in cost of revenues was related to the
decrease in sales, which resulted from our decision to discontinue our old
products and transition to our patented "Smart" platforms and technologies.


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SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

Vendite, spese generali ed amministrative

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

Le spese di vendita, generali e amministrative consistono principalmente in un’allocazione di sviluppo del prodotto, vendite, finanza, risorse legali e umane, inclusi stipendi, stipendi e benefici, e ammortamenti, inclusi compensi non monetari basati su azioni




The increase in selling, general, and administrative expenses during the three
months ended 2022 when compared to the prior year period was primarily due
to
the following:


SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

? Aumento di $ 8,6 milioni relativo alla compensazione basata su azioni che è

principalmente a causa di un maggior numero di azioni ordinarie emesse e opzioni

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

concessi per servizi nel trimestre concluso 31 marzo 2022 se confrontato

al periodo dell’anno precedente;

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

? Aumento di $ 1,5 milioni relative ai programmi di marketing e allo sviluppo del prodotto

in attesa del lancio delle nostre offerte di prodotti;

? Aumento delle altre spese relative al sostegno dell’ambito delle operazioni pianificate.





Other Income (Expense)



The decrease in interest expense in the three months ended March 31, 2022 when
compared to the prior year period resulted from the lower interest bearing rate
associated from the conversion of the Company's line of credit to secured notes
payable at the end of fiscal 2021.



L’aumento del condono di altri prestiti a reddito durante i tre mesi è terminato
31 marzo 2022 rispetto al periodo dell’anno precedente è stato il condono di un prestito PPP durante i tre mesi conclusi 31 marzo 2022che non si è verificato nello stesso periodo nel 2021.

Liquidità e risorse di capitale

As we develop our revenue base, we have raised additional funds through the sale
of our common stock and issuance of debt, including completing our initial
public offering in February 2022 for gross proceeds of $23.1 million. We believe
that our existing cash will be sufficient to support our working capital and
capital expenditure requirements for at least the next 12 months. Our future
capital requirements will depend on many factors, including our revenue growth
rate, expenditures related to our headcount growth, the timing and the amount of
cash received from customers, the expansion of sales and marketing activities,
the timing and extent of spending to support development efforts, the price at
which we are able to purchase parts to incorporate in our product offerings, the
introduction of platform enhancements, and the continuing market adoption of our
platforms. We may continue to enter into arrangements to acquire or invest in
complementary businesses, products, and technologies. We may, as a result of
those arrangements or the general expansion of our business, be required to seek
additional equity or debt financing. In the event that we require additional
financing, we may not be able to raise such financing on terms acceptable to us
or at all. If we are unable to raise additional capital or generate cash flows
necessary to expand our operations and invest in continued innovation, we may
not be able to compete successfully, which would harm our business, results of
operations, and financial condition.



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Il periodo di tre mesi è terminato 31 marzo 2022:

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

Abbiamo avuto 28 milioni di dollari in contanti e mezzi equivalenti a partire dal 31 marzo 2022.

Abbiamo usato $ 3,4 milioni nelle nostre attività operative che consiste in una perdita netta di
$ 12 milioni regolato per quanto segue:

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

? Compensazione basata su azioni di $ 8,8 milioni.

? Aumento di risconti attivi di $ 1,4 milioni e un aumento proporzionato di

SQL TECHNOLOGIES CORP. DISCUSSIONE E ANALISI DA PARTE DELLA DIREZIONE DELLA CONDIZIONE FINANZIARIA E DEI RISULTATI DELLA GESTIONE (modulo 10-Q) 2021

debiti che saranno sostanzialmente rilevati e pagati in sede fiscale

   2022.



Abbiamo usato $ 240.000 in attività di investimento che erano principalmente spese in conto capitale.




We generated $21 million in financing activities which were primarily related to
proceeds we generated from the issuance of shares of common stock pursuant
to
our initial public offering.


Il periodo di tre mesi è terminato 31 marzo 2021:

Abbiamo avuto $ 2,4 milioni in contanti e mezzi equivalenti a partire dal 31 marzo 2021.

Abbiamo usato $ 800.000 nelle nostre attività operative che consiste in una perdita netta di
$ 1,0 milioni regolato per quanto segue:

? Compensazione basata su azioni di $ 190.000;

? Aumento di risconti attivi di $ 180.000 e un aumento dei debiti di

   $320,000 which were recognized and paid during fiscal 2021.



Abbiamo usato $ 55.000 in attività di investimento che erano principalmente legate ai brevetti.




We generated $1.0 million in financing activities which were primarily related
to proceeds we generated from the issuance of shares of common stock pursuant to
a private placement of $800,000.



A majority of our sales do not require us to take delivery of inventory.
Production of the Sky technology and products will commence upon receipt of FOB
(free on board) purchase contracts from customers. Upon the completion of each
purchase contract, the finished products will be transported from the
manufacturer directly to the designated destination, upon which the products
become the property of the customer.



Future Impact of COVID-19


The negative impact of the COVID-19 pandemic on companies continues and we are
currently unable to assess with certainty the broad effects of COVID-19 on our
future business. As of March 31, 2022, we had no material assets that would be
subject to impairment or change in valuation due to COVID-19.



Critical Accounting Policies



Our significant accounting policies are disclosed in Note 2 to our consolidated
financial statements for the year ended December 31, 2021 contained in our
Annual Report on Form 10-K for the year ended December 31, 2021. The following
is a summary of those accounting policies that involve significant estimates and
judgment of management.



Use of Estimates


La preparazione del bilancio in conformità con i GAAP richiede alla direzione di effettuare stime e ipotesi che influiscano sugli importi riportati nel nostro bilancio e nelle note di accompagnamento.




Such estimates and assumptions impact both assets and liabilities, including but
not limited to: net realizable value of accounts receivable and inventory,
estimated useful lives and potential impairment of property and equipment, the
valuation of intangible assets, estimate of fair value of share based payments
and derivative liabilities, estimates of fair value of warrants issued and
recorded as debt discount, estimates of tax liabilities and estimates of the
probability and potential magnitude of contingent liabilities.



Making estimates requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate could change
in the near term due to one or more future non-conforming events. Accordingly,
actual results could differ significantly from estimates.



Valore equo degli strumenti finanziari

Disclosures about fair value of financial instruments require disclosure of the
fair value information, whether or not recognized in the balance sheet, where it
is practicable to estimate that value. As of March 31, 2022 and December 31,
2021, we believe the amounts reported for cash, prepaid expenses, accounts
payable, accounts payable - related party, accrued expenses and other current
liabilities, accrued interest, notes payable and convertible note payable
approximate fair value because of their short maturities.



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Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. ASC Topic 820 established a three-tier
fair value hierarchy, which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurements) and the
lowest priority to unobservable inputs (level 3 measurements). These tiers
include:



? Livello 1, definito come input osservabili come prezzi quotati per identici

strumenti in mercati attivi;

? Livello 2, definito come input diversi dai prezzi quotati in mercati attivi che sono

osservabili direttamente o indirettamente come i prezzi quotati per simili

strumenti in mercati attivi o prezzi quotati per identici o simili

strumenti in mercati non attivi; e

? Livello 3, definito come input non osservabili in cui scarsi o nessun dato di mercato

esiste, richiedendo quindi a un’entità di sviluppare le proprie ipotesi, come ad esempio

valutazioni derivate da tecniche di valutazione in cui una o più significative

    inputs or significant value drivers are unobservable.




Stock-Based Compensation



Stock-based compensation is accounted for based on the requirements of ASC 718 -
"Compensation-Stock Compensation", which requires recognition in the financial
statements of the cost of employee, non-employee and director services received
in exchange for an award of equity instruments over the period the employee or
director is required to perform the services in exchange for the award
(presumptively, the vesting period). The ASC also requires measurement of the
cost of employee and director services received in exchange for an award based
on the grant-date fair value of the award.



Stock-based compensation is measured at the grant date based on the value of the
award granted using the Black- Scholes option pricing model based on projections
of various potential future outcomes and recognized over the period in which the
award vests. For stock awards no longer expected to vest, any previously
recognized stock compensation expense is reversed in the period of termination.
The stock-based compensation expense is included in general and administrative
expenses.



Revenue Recognition


Contiguiamo i ricavi in ​​conformità con l’aggiornamento dei principi contabili n. 2014-09, “Ricavi da contratti con i clienti” (Tema 606).

In base all’argomento 606, i ricavi sono rilevati quando il controllo dei beni o servizi Promessi viene trasferito ai nostri clienti, in un importo che riflette il corrispettivo che ci aspettiamo di avere diritto in cambio di tali beni o servizi.

Determiniamo il riconoscimento dei ricavi attraverso i seguenti passaggi:



  ? identification of the contract, or contracts, with a customer;

  ? identification of the performance obligations in the contract;

  ? determination of the transaction price;

? allocazione del prezzo della transazione alle performance obligation in

contrarre; e

? riconoscimento dei ricavi quando, o come, adempiamo un’obbligazione di fare.

Dichiarazioni contabili recenti

Although there are several new accounting pronouncements issued or proposed by
the Financial Accounting Standards Board, which we have adopted or will adopt,
as applicable, we do not believe any of these accounting pronouncements has had
or will have a material impact on our financial position or results of
operations.



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