The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") is intended to help the reader understand US
Nuclear Corp, our operations and our present business environment. MD&A is
provided as a supplement to-and should be read in conjunction with-our
consolidated financial statements and the accompanying notes included in this
Quarterly Report on Form 10-Q. The audited financial statements for our fiscal
year ended December 31, 2018 filed with the Securities Exchange Commission on
Form 10-K on April 17, 2019 should be read in conjunction with the discussion
below. This discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results may differ materially from
those anticipated in these forward-looking statements. In the opinion of
management, all material adjustments necessary to present fairly the results of
operations for such periods have been included in these unaudited financial
statements.



We were incorporated in Delaware on February 14, 2012, and on March 2, 2012, we
filed a registration statement on Form 10 to register with the U.S. Securities
and Exchange Commission as a public company.  We were originally organized as a
vehicle to investigate and, if such investigation warrants, acquire a target
company or business seeking the perceived advantages of being a publicly held
corporation.



On April 18, 2012, Richard Chiang, then our sole director and shareholder,
entered into a Stock Purchase Agreement whereby Mr. Goldstein of US Nuclear Corp
purchased 10,000,000 shares of our common stock from Mr. Chiang, which
constituted 100% of our issued and outstanding shares of common stock. Mr.
Chiang then resigned from all positions. Subsequently, on May 18, 2012, the
Registrant appointed Mr. Chiang to serve as a member of the Board of Directors.
He resigned from this position on March 31, 2013.



Since our acquisition of Overhoff Technology in 2006, we have had discussions
with other companies in our industry for an acquisition. While we targeted
Overhoff due to its unique position in the tritium market, we had not commenced
an acquisition since our Overhoff Technology acquisition; we believe in part the
reason was due to lack of additional capital, our status as a privately-held
entity at the time, and focus on developing our own products. We will seek out
companies whom our management believes will provide value to our customers and
will complement our business. We will focus on diversifying our product line
into a larger range so that our customers and vendors may have a more expansive
experience in type, choice, options, price and selection. We also believe that
with a more diverse product line we will become more competitive as our industry
is intensely competitive.



Generally, our product concentration places a heavy reliance on our Overhoff
Technology division; however, during the nine months ended September 30, 2019 we
derived 26.7% of our total revenues from sales made by Optron to one customer.
We expect to encounter a continuation of this trend unless we are successful in
diversifying our client base, executing our acquisition strategy and experience
increases in business from our Technical Associates division.



Our international revenues were 65% of our total revenue in 2019. We expect this
to increase over time as we continue to field new orders inquires and engage new
customers overseas. We believe that Korea and China will likely be a larger
contributor to revenue within the next few years. While we maintain steady
growth domestically, the international side of our business may be a larger
component as nuclear technology and rapid development for clean energy grows
abroad. Additionally, the Company relies on continued growth and orders from
CANDU reactors (Canada Deuterium Uranium), and rapid development of the next
generation of nuclear reactors called Molten Salt Reactors, (MSR) and
Liquid-Fluoride Thorium Reactors (LFTR), all of which purchase tritium detection
and monitor products. There can be no assurances as to our growth projections
and our risk profile as we depend upon increased foreign customers for business.



For the next twelve months, we anticipate we will need approximately $5,000,000
in additional capital to fund our business plans. If we do not raise the
required capital we may not meet our expenses and there can be no assurance that
we will be able to do so and if we do, we may find the cost of such financing to
be burdensome on the Company. Additionally, we may not be able to execute on our
business plans due to unforeseen market forces such as lower natural gas prices,
difficulty attracting qualified executive staff, general downturn in our sector
or by competition as we operate in an extremely competitive market for all

of
our product offerings.



                                       16




Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the
Board of Directors also maintains a position as President of Gold Team Inc., a
Delaware company that invests in industrial real estate properties for
investment purposes. He holds an 8% interest in Gold Team Inc. and spends
approximately 5 hours per week with affairs related to Gold Team Inc. The
Company leases its current facilities from Gold Team Inc. which owns both the
Canoga Park, CA and Milford, Ohio properties at an expense of $7,000 for each
facility per month.



On May 31, 2016, we entered into an Asset Purchase Agreement with Electronic
Control Concepts ("ECC") whereby the Company purchased certain tangible and
intangible assets of ECC.  ECC a small manufacturer of test and maintenance
meters for x-ray machines both medical and industrial. We acquired ECC to give a
boost to our current x-ray related product and hospital/medical product sales.



On August 3, 2018, we closed an agreement by and among, MIFTEC Laboratories,
Inc. ("MIFTEC"), a licensee of Magneto-Inertial Fusion Technologies, Inc.,
("MIFTI"), and us. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC
will engage us to manufacture equipment pursuant to MIFTEC's specifications and
designs and have us as a sales representative for the manufactured equipment. We
will be the exclusive manufacturer and supplier to MIFTEC of equipment in North
America and Asia. In addition, we received a 10% ownership interest in MIFTEC.
The consideration for the exclusive manufacturing rights and a 10% ownership
interest in MIFTEC was $500,000 and 300,000 shares of our common stock.



On April 22, 2019 the Company entered into a Cooperative Agreement with MIFTI
whereby the Company acquired certain exclusive manufacturing and supply rights
in return for $500,000, of which $100,000 is payable upon signing, $200,000
within four months of the agreement and $200,000 within nine months of the
agreement. The Company also has the option to purchase 10% of MIFTI for
$2,700,000.



Results of Operations



For the three months ended September 30, 2019 compared to the three months ended
September 30, 2018



                                                    Three Months Ended
                                                       September 30,                      Change
                                                   2019             2018             $              %

Sales                                          $    659,325     $  1,145,480     $ (486,155 )       -42.4 %
Cost of goods sold                                  336,882          633,384       (296,502 )       -46.8 %
Gross profit                                        322,443          512,096       (189,653 )       -37.0 %
Selling, general and administrative expenses      1,729,246        1,918,685       (189,439 )        -9.9 %
Loss from operations                             (1,406,803 )     (1,406,589 )         (214 )         0.0 %
Other expense                                        (3,103 )         (8,126 )        5,023         -61.8 %
Loss before provision for income taxes           (1,409,906 )     (1,414,715 )        4,809          -0.3 %
Provision for income taxes                                -                -              -
Net loss                                       $ (1,409,906 )   $ (1,414,715 )   $    4,809          -0.3 %




Sales for the three months ended September 30, 2019 were $659,325 compared to
$1,145,480 for the same period in 2018. The decrease of $486,155 or 42.4% is a
result of a decrease in sales from both our Overhoff and Optron subsidiaries of
$180,999 and $305,156, respectively. The decrease in sales from our Overhoff
subsidiary was due to several large orders not shipping within the quarter. The
decrease in sales from our Optron subsidiary was due to a decrease in large
purchase orders. We recognize revenue from the sale of our products when the
orders are completed, and we ship the product to our customer. The sales
breakdown for the three months ended September 30, 2019 is as follows:


North America 29%

Middle East 0%

Asia (Including Japan) 65%

South America 0%

Other 6%



                                       17





Our gross margins for the three months ended September 30, 2019 were 48.9% as
compared to 44.7% for the same period in 2018. The increase in gross margin

is
due to lower overhead costs.



Selling, general and administrative expense for the three months ended September
30, 2019 were $1,729,246 compared to $1,918,685 for the same period in 2018. The
decrease of $189,439 or 9.9% was due to the acquisition of manufacturing and
supply rights in 2018 of $1,084,000 offset by higher stock-based compensation in
2019. During the three months ended September 30, 2019, stock-based compensation
was $1,150,321 compared to $448,740 during the same period in 2018.



Other expense for the three months ended September 30, 2019 was $3,103, a decrease of $5,023 from $8,126 for the same period in 2018. The decrease was due to lower interest expense due to less debt outstanding.





Net loss for the three months ended September 30, 2019 was $1,409,906 compared
to $1,414,715 for the same period in 2018. The change was principally attributed
to the factors described above.



For the nine months ended September 30, 2019 compared to the nine months ended
September 30, 2018



                                                     Nine Months Ended
                                                       September 30,                      Change
                                                   2019             2018             $              %

Sales                                          $  2,818,901     $  2,706,785     $  112,116           4.1 %
Cost of goods sold                                1,392,608        1,429,606        (36,998 )        -2.6 %
Gross profit                                      1,426,293        1,277,179        149,114          11.7 %
Selling, general and administrative expenses      3,474,788        3,629,379       (154,591 )        -4.3 %
Loss from operations                             (2,048,495 )     (2,352,200 )      303,705         -12.9 %
Other expense                                       (14,849 )        (21,910 )        7,061         -32.2 %
Loss before provision for income taxes           (2,063,344 )     (2,374,110 )      310,766         -13.1 %
Provision for income taxes                                0                0              0
Net loss                                       $ (2,063,344 )   $ (2,374,110 )   $  310,766         -13.1 %




Sales for the nine months ended September 30, 2019 were $2,818,901 compared to
$2,706,785 for the same period in 2018. The increase of $112,116 or 4.1% is a
result of an increase in sales from our Optron subsidiary of $282,004; offset by
a decrease in sales from our Overhoff subsidiary of $169,888. The increase in
sales from our Optron subsidiary was due to the fulfillment of a large order of
drone detector instruments shipped in May 2019. The decrease in sales from our
Overhoff subsidiary was due to several large orders not shipping during the
third quarter. We recognize revenue from the sale of our products when the
orders are completed, and we ship the product to our customer. The sales
breakdown for the nine months ended September 30, 2019 is as follows:


North America 35%

Middle East 27%

Asia (Including Japan) 35%

South America 0%

Other 3%



                                       18





Our gross margins for the nine months ended September 30, 2019 were 50.6% as
compared to 47.2% for the same period in 2018. The increase in gross margin

is
due to lower overhead costs.



Selling, general and administrative expense for the nine months ended September
30, 2019 were $3,474,788 compared to $3,629,379 for the same period in 2018. The
decrease of $154,591 or 4.3% was due to the acquisition of manufacturing and
supply rights in 2018 of $1,084,000 offset by higher stock-based compensation in
2019. During the nine months ended September 30, 2019, stock-based compensation
was $2,073,019 compared to $1,410,016 during the same period in 2018.



Other expense for the nine months ended September 30, 2019 was $14,849, a decrease of $7,061 from $21,910 for the same period in 2018. The decrease was due to lower interest expense due to less debt outstanding.





Net loss for the nine months ended September 30, 2019 was $2,063,344 compared to
$2,374,110 for the same period in 2018. The change was principally attributed to
the factors described above.


Liquidity and Capital Resources


Our operations have historically been financed by our majority shareholder and
more recently from proceeds from the sale of our common stock. As funds were
needed for working capital purposes, our majority shareholder would loan us the
needed funds. During the nine months ended September 30, 2019, our majority
shareholder loaned the Company an additional $15,155 and was repaid $30,159. We
anticipate funding the growth of our business through the sales of additional
shares of our common stock and loans from our majority stockholder if necessary.



At September 30, 2019, total assets increased by 15.3% to $3,847,956 from $3,335,931 at December 31, 2018 principally related to an increase in cash, acquisition deposit and right-of use assets offset by a decrease in inventory.

At September 30, 2019, total liabilities increased by 13.3% to $1,507,687 from $1,330,337 at December 31, 2018. The increase is principally related to the lease obligation associated with the right-of-use assets.





Net cash provided by operating activities for the nine months ended September
30, 2019 was $92,007 compared to cash used in operating activities of $525,311
for the same period in 2018. The change in cash from operations was principally
due to a decrease in the net loss and the changes in working capital accounts,
principally inventory and accounts receivable.



Net cash used in investing activities for the nine months ended September 30,
2019 was $300,000 compared to $15,777 for the same period in 2018. The increase
in cash used in investing activities was principally due to an acquisition
deposit paid in 2019 of $300,000.



Net cash provided by financing activities for the nine months ended September
30, 2019 was $290,406 compared to $990,118 for the same period in 2018. The
change in cash from financing activities was principally due to the sale of
1,730,000 shares of our common stock for proceeds of $1,068,750 during the nine
months ended September 30, 2018 compared to the sale of 730,393 shares of our
common stock for proceeds of $325,000 during the same period in 2019.



Critical Accounting Policies



Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expenses amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial

statements.



Income Taxes



The Company accounts for income taxes in accordance with ASC Topic 740, Income
Taxes. ASC 740 requires a company to use the asset and liability method of
accounting for income taxes, whereby deferred tax assets are recognized for
deductible temporary differences, and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion, or all of, the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.



                                       19





Under ASC 740, a tax position is recognized as a benefit only if it is "more
likely than not" that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur. The amount recognized is the
largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the "more likely than not" test,
no tax benefit is recorded. The adoption had no effect on the Company's
consolidated financial statements.



We believe the following is among the most critical accounting policies that
impact our consolidated financial statements. We suggest that our significant
accounting policies, as described in our financial statements in the Summary of
Significant Accounting Policies, be read in conjunction with this Management's
Discussion and Analysis of Financial Condition and Results of Operations.



We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to, rely on exemptions from certain disclosure
requirements. For so long as we are an emerging growth company, we will not

be
required to:


? have an auditor report on our internal controls over financial reporting

pursuant to Section 404(b) of the Sarbanes-Oxley Act;

? comply with any requirement that may be adopted by the Public Company

Accounting Oversight Board regarding mandatory audit firm rotation or a

supplement to the auditor's report providing additional information about the

audit and the financial statements (i.e., an auditor discussion and analysis);

? submit certain executive compensation matters to shareholder advisory votes,

such as "say-on-pay" and "say-on-frequency;" and

? disclose certain executive compensation related items such as the correlation

between executive compensation and performance and comparisons of the CEO's


   compensation to median employee compensation.




In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this
extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards.



We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period.



As an emerging growth company, the company is exempt from Section 14A and B of
the Securities Exchange Act of 1934 which require the shareholder approval of
executive compensation and golden parachutes.



The Company is an Emerging Growth Company under the JOBS Act of 2012, but the
Company has irrevocably opted out of the extended transition period for
complying with new or revised accounting standards pursuant to Section 107(B) of
the JOBS Act.


Off-Balance Sheet Arrangements





We have not entered into any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.



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