US LIGHTING GROUP, EASTLAKE, OHIO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018

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1 US LIGHTING GROUP, EASTLAKE, OHIO INC. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018

2 TABLE OF CONTENTS Page Number Accountants' Compilation Report 3 Consolidated Financial Statements: Consolidated Balance Sheet Consolidated Statement of Income Consolidated Statement of Shareholder's Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements

3 .1EINMS CERTIFIED PUBLIC ACCOUNTANTS 5o/ut/onS /'or C( z'axin3 tuor/d Accountants' Compilation Report To the Board of Directors US Lighting Group, Inc. Eastlake, Ohio Management is responsible for the accompanying consolidated financial statements of US Lighting Group, Inc. (a corporation) and its subsidiary, which comprise the consolidated balance sheet as of December 31, 2018, and the related consolidated statements of income, shareholders' equity and cash flows for the year then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements of Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the financial statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements. We are not independent with respect to US Lighting Group, Inc. As discussed in the notes to the financial statements, certain errors resulting in an overstatement of amounts previously reported for goodwill and certain liabilities as of December 31, 2017, were discovered by management of the company during the current year. Accordingly, amounts reported for goodwill, liabilities and retained deficits have been restated in the 2017 financial statements. Mentor, Ohio April 12, 2019 CHARDON OFFICE: 121 South Street Chardon, OH (440) Phone (888) Toll Free (440) Fax CHARDON SQUARE: 102 East Park Street, Unit B Chardon. OH (440) Phone (440) Fax MENTOR OFFICE: 8383 Mentor Avenue Mentor. OH (440) Phone (440) Fax TWINSBURG OFFICE: 8880 Darrow Road Twinsburg, OH (330) Phone (330) Fax

4 CONSOLIDATED BALANCE SHEET DECEMBER 31, 2018 (SEE ACCOUNTANTS' COMPILATION REPORT) ASSETS CURRENT ASSETS Cash Trade accounts receivable, Inventory Prepaids Total current assets net 2018 $ 245,833 70, ,638 59, ,804 PROPERTY AND EQUIPMENT Furniture and fixtures Office equipment Equipment Others Total Less accumulated depreciation Net property and equipment OTHER ASSETS Patents Total other assets Total assets LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accounts payable Deferred territory revenue Accrued expense Customer advance payments Payroll liabilities Current portion of related party loans Current portion of long term debt Total current liabilities LONG TERM LIABILITIES Long-term portion of related party loans Long-term debt Total long term liabilities SHAREHOLDER'S EQUITY Common stock, 100,000,000 shares authorized 55,320,998 shares issued and outstanding, no par value Paid-in capital Retained deficit Total shareholder's equity Total liabilities and shareholder's equity The accompanying notes are an integral part of the financial statements. 6,578 24, ,239 13, , , ,204 23,575 23,575 $ 866,583 $ 225,028 4,375 2,725 36,918 7, , ,668 1,312,718 2,054,208 40,272 2,094,480 6,594, ,596 (9,293, 780) (2,540,615) $ 866,583 4

5 CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2018 (SEE ACCOUNTANTS' COMPILATION REPORT) GROSS SALES 2018 $ 2,552,299 Sales Discounts (79,637) NET SALES 2,472,662 COST OF GOODS SOLD 1,405,414 Gross profit 1,067,248 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,387,359 RESEARCH AND DEVELOPMENT EXPENSES 204,249 Net loss from operations (2,524,360) OTHER INCOME I (EXPENSE) Interest income 1,882 Interest expense (179,973) Total other income/expense (178,091) Net loss $ (2,702,451) The accompanying notes are an integral part of the financial statements. 5

6 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2018 (SEE ACCOUNTANTS' COMPILATION REPORT) COMMON PAID-IN RETAINED STOCK CAPITAL DEFICIT TOTAL Balance at January 1, 2018, as restated $ 2,746,520 $ 158,596 $ (6,591,329) $ (3,686,213) Net Loss (2, 702,451) (2,702,451) Par Value of Shares Issued 3,848,049 3,848,049 Balance at December 31, 2018 $ 6,594,569 $ 158,596 $ (9,293, 780) $ (2,540,615) The accompanying notes are an integral part of the financial statements. 6

7 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2018 (SEE ACCOUNTANTS' COMPILATION REPORT) CASH FLOWS FROM OPERA TING ACTIVITIES Net loss Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation (Increase) decrease in assets Accounts receivable, net Inventory Prepaid expenses Patents Increase (decrease) in liabilities: Accounts payable Accrued expense Customer advance payments Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuing common stock Additional borrowing from shareholder Proceeds from additional borrowing Repayments on loans Repayments on related party loans Net cash provided by financing activities Net increase in cash and cash equivalents CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR CASH AND CASH EQUIVALENTS-END OF YEAR SUPPLEMENTAL INFORMATION Interest paid 2018 $ (2,702,451) 50,986 26, 109 (16,802) (59,810) (23,575) 62,224 2, 161 (34,614) (2,695, 772) (82,533) (82,533) 3,848,049 88, ,000 (301,398) {777,204) 2,954, ,337 69,496 $ 245,833 $ 179,973 The accompanying notes are an integral part of the financial statements. 7

8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business US Lighting Group, Inc. (the Company) was founded in 2013 in accordance with the laws of Wyoming and is located in Eastlake, Ohio. The Company is engaged in the business of LED lighting tubes and bulbs for the commercial and industrial customers in the United States and internationally. On July 13, 2016 ("Closing"), the Luxurious Travel Corp. acquired all of the issued and outstanding capital stock of the Company and changed its name to US Lighting Group, Inc. At Closing, the Luxurious Travel Corp. also issued 24,500,000 shares of its common stock to the shareholders of US Lighting Group, Inc. Acquisition of lntellitronix Corp. On December 1, 2016, the Company completed the acquisition of lntellitronix Corp., a provider of LED digital gauges and automotive electronics and accessories. The Company agreed to pay $ 4,000,000 in exchange for all the shares of lntellitronix Corp. The affiliate is consolidated with the Company due to common control. A five percent deposit of $ 200,000 was paid in January The balance of $ 3,800,000 is under a sixty-month loan with an interest rate of 6.25%. The loan matures December 2021 and the monthly payment is$ 73,907. Basis of Accounting The accompanying consolidated financial statements have been prepared under the accrual basis of accounting which recognizes income when earned and expenses when incurred rather than when cash is received or disbursed. Revenue Recognition On January 1, 2018 the Company adopted ASU No "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard".) The adoption of ASC 606 had no impact on total reported revenues, costs and net income for the year ended December 31, The Company records revenue based on a five-step model in accordance with ASC 606. ASC 606 defines contracts as written, oral and through customary business practice. Under this definition, the Company considers contracts to be created at the time an order to purchase the product is agreed upon regardless of whether or not there is a written contract. With respect to revenue from product sales, revenue is recognized only upon shipment of products to customers. Policy of Cash Equivalents For purposes of the consolidated financial statements, cash equivalents include time deposits, certificates of deposit and all highly-liquid debt instruments with original maturities of three months or less when purchased. Accounts Receivable Accounts receivable is shown net of an allowance for doubtful accounts, which amounted to $ 70,523 as of December 31, The allowance represents an estimate of probable losses resulting from nonpayment of receivables, which is determined based on historical experience as well as specific allowances for known troubled accounts and other currently available evidence. The Company does not require collateral from its customers. No allowance was deemed necessary by the Company in See Accountant's Compilation Report. 8

9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment Property and equipment are stated at cost at date of acquisition. Maintenance and repairs are charged to operations as incurred. Depreciation on physical property and equipment is computed over the estimated useful lives of the assets using the straight-line method. The following useful lives are assigned to the various assets: Furniture and equipment Vehicle Life Depreciation expense was$ 50,986 for the year ended December 31, Impairments Assets are evaluated for impairment when events change or a change in circumstances indicates that the carrying amounts of the assets may not be recoverable. When any such impairment exists, the related assets are written down to fair value. Intangible Assets The Company adopted the provisions of ASC Topic 350 "Goodwill and Other Intangible Assets" which states that intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment annually. The Company has filed for patents for its proprietary products. and amortized over 15 years on a straight-line basis. The costs incurred will be capitalized Deferred Territory Revenue Fee The Company grants to distributors the sole exclusive right to distribute certain products and the distributor is required to pay an initial distributor fee. The distributor fee is booked as deferred territory revenue when the Company receives the cash, and the revenue is recognized against deferred territory revenue over the term of the contracts. The deferred territory revenue fee balance as of December 31, 2018 was $ 4,375. The territory revenues recognized for the year 2018 was $ 40,000. Sales/Customers Sales are shown net of discounts of$ 79,637 for the year Sales are recorded when shipments are made from the Company's distribution center and adjusted up or down as discrepancies are discovered. Advertising Costs Advertising costs of$ 240,786 for the years 2018 were charged to selling expenses when incurred. See Accountant's Compilation Report. 9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Research and Development Costs Research and development costs are charged to

10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Research and Development Costs Research and development costs are charged to operations when incurred. the year ended December 31, 2018 was$ 204,249. The amounts charged for Inventory Inventory is carried at the lower of cost or estimated net realizable value. Costs for finished goods, components, packaging, and work in process are determined under the first-in, first-out method. Inventory at December 31, 2018 was$ 246,638. Shipping and handling costs for products sold are included in cost of goods sold when incurred. The Company will continue its policy of regularly reviewing inventory quantities on hand based on related service levels and functionality. Carrying cost will be reduced to estimated net realizable value for inventories in which their cost exceeds their utility due to changes in marketing and sales strategies, obsolescence, changes in price levels or other causes. Furthermore, if future demand or market conditions for the Company's products are less favorable than forecasted or if unforeseen technological changes negatively impact the utility of certain products or component inventory, the Company may be required to record inventory reserves, which would negatively affect its results of operations in the period when the inventory reserve adjustments are recorded. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Income Taxes/ Deferred Taxes A provision {benefit) for federal, state, and local income taxes is made to reflect applicable tax rates on reported income (loss). The tax effects of transactions are recognized in the year in which they enter into the determination of net income (loss), regardless of when they are recognized for tax purposes. As a result, income tax expense (benefit) can differ from actual taxes payable. The accumulation of these differences, approximately $ 801,687 at December 31, 2018, are the calculated gross deferred tax assets available for future periods. Reserves against these tax assets of$ 801,687 was established in 2018 resulting in $ -0- of current year income tax provision (benefit) and net deferred tax assets of $ - 0- as of December 31, Significant components of the Company's deferred tax asset relate to approximately$ 3,817,555 of net operating loss carryforwards that will expire between 2026 and These tax assets are calculated assuming that the Company has future taxable income and is financially supported by its parent company until such time occurs. The ultimate realization of these assets is contingent on future taxable earnings, which may not occur. In the event the Company was to determine it would be able to realize deferred tax assets in the future in excess of the recorded amount, the valuation allowance would be adjusted which would reduce the provision for income taxes and increase the net deferred tax asset. See Accountant's Compilation Report. 10

11 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes/ Deferred Taxes (Continued) The Company accrues for interest and penalties associated with income tax liabilities in accordance with applicable tax laws. Any charges for interest and penalties related to income tax liabilities are recorded in the provision for income taxes on the income statement. The Company's tax years 2015 through 2018 remain subject to federal, state, and local audits from all jurisdictions from which they operated during those periods. There are no unrealized tax benefits as of December 31, 2018, nor does the Company anticipate any change in its unrealized tax benefits during the next twelve months. CONCENTRATION OF CREDIT RISK Bank balances as of December 31, 2018 consist of $ 266,552 in depository institutions. Federal depository insurance covers $ 250,000 per depositor and covered $ 266,552 at December 31, 2018 at depository institutions. For the year ended December 31, 2018, 35% of the Company's sales were derived from three major customers. Revenue generated from each of these customers represents 17%, 11 % and 7% of total revenue, respectively. At December 31, 2018, 70% of the Company's accounts receivable was due from two major customers. Amounts due from each of these customers were $ 20,908 and $ 10,352, which represents 47% and 23% of total accounts receivable, respectively. RELATED PARTY TRANSACTIONS Loans Related party loans consisted of the following at December 31: A loan payable to a shareholder with interest rate of 0%. The loan is payable on demand. $ 124,587 Sixty month loan with a shareholder with an interest rate of 6.25%. The loan matures December 2021 and monthly payment is $ 73,907. A loan payable to a related party company with an interest rate of 6%. Monthly payment is $ 1,000. Less current portion of related party loans Total 2,818, ,984, ,593 $ 2,054,208 See Accountant's Compilation Report. 11

12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) RELATED PARTY TRANSACTIONS (CONTINUED) Loans (Continued) Following are maturities of related party loans for each of the next five years: $ 930, , , ,051 26,666 $ Interest expense for related party loans was $175,584 for the year ended December 31, ISSUANCE OF COMMON STOCK In 2018, a total of 15,408, 196 new shares of common stock were issued to the public in the amount of $ 3,848,049. INTANGIBLE ASSETS As of December 31, 2018 Amortized intangible assets: Patents $ Estimated amortization expense: For year ending 12/31/19 $ For year ending 12/31/20 $ For year ending 12/31/21 $ For year ending 12/31/22 $ For year ending 12/31/23 $ Cost 23,575 1,572 1,572 1,572 1,572 1,572 Amortization At December 31, 2018 amortization of patents had not begun. PRIOR PERIOD ADJUSTMENT During the year ended December 31, 2018, management determined that goodwill and certain liability accounts in 2017 were overstated by$ 5,033,377. As a result, retained deficit at December 31, 2017 was understated. See Accountant's Compilation Report. 12

13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) LONG TERM DEBT Long-term debt consisted of the following at December 31: A loan payable with D& Y Financial, LLC, in the amount of$ 256,662 with interest included. The interest rate is 0.25%. Monthly payment is $ 5,000 from August 2017 to February 2018, and $ 10,000 beginning March, $ 66,980 Sixty month capital lease for a laser cut with Susquehanna Commercial Finance, Inc. with an interest rate of % and a one dollar buyout at the end of the term. The lease matures May 2020 and is secured by equipment. Monthly payment is $ 603. Seventy-two month note with The Huntington National Bank with an interest rate of 4.23%. The lease matures April 2022 and is secured by equipment. Monthly payment is$ 1, 147. Sixty month note with The Huntington National Bank with an interest rate of 4.04%. Monthly payment is$ 1,474. 9,780 38,095 31,085 PayPal working capital business loan with WebBank. payment is 15% of the monthly sales. Monthly Less current portion of long term debt Total 145, ,668 $ Following are maturities of long-term debt for each of the next five years: Total interest expense for long term debt was$ 4,389 for the year ended December 31, SUBSEQUENT EVENTS 2019 $ 105, , , s 145,940 Subsequent events have been evaluated through April 12, 2019, statements were available to be issued. the date the consolidated financial No events were identified that would require adjustment to or disclosure in the consolidated financial statements. See Accountant's Compilation Report. 13

US LIGHTING GROUP, INC. AND AFFILIATE EASTLAKE, OHIO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2017

US LIGHTING GROUP, INC. AND AFFILIATE EASTLAKE, OHIO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2017 EASTLAKE, OHIO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2017 TABLE OF CONTENTS Page Number Accountants' Compilation Report 3 Financial Statements: Consolidated Balance Sheet Consolidated Statement of