Measure warm water into a glass measuring cup or bowl. Stir in yeast and sugar, allow to stand for 10 minutes – it should get very bubbly.
In a large mixing bowl, combine flour and salt. Pour in yeast mixture, stir well to combine.
Dump dough out onto a floured surface, knead until soft and elastic, 5-10 minutes. Alternatively, use a stand mixer with a dough hook for about 7 minutes, or until dough is smooth and elastic. Once dough is fully kneaded, place in a greased bowl, cover with plastic wrap, and allow to rise for one hour, or until doubled in size.
Once dough has doubled, punch it down, and divide it out into 40 equal sized portions. Roll each dough portion into a tight ball.
Poke a finger through the middle of a dough ball, then stretch the ring of dough into a small bagel shape. Place on prepared baking sheet, repeat with remaining dough. Once you have all of your bagels formed, set them on a baking sheet to rise for another 10 minutes.
Preheat oven to 350F. Line a baking sheet with parchment paper. Add honey to a large pot of water , bring to a to a boil.
Once boiling, turn heat down a little, allowing water to simmer rather than boil.
4 or 5 at a time, drop your bagels into the simmering water, allow to cook for 20 seconds then flip each and allow to cook for 20 seconds.
Drain well, place on a lined baking sheet.
Whisk egg together with 1 tablespoon of water, brush over the tops and sides of each bagel. Sprinkle with any toppings you'd like to use. Bake for 18-22 minutes, until golden brown.