SKYX Platforms Corp. (NASDAQ:SKYX) Q4 2024 Earnings Conference Call March 24, 2025 4:30 PM ET Company Participants Rani Kohen - Founder, Inventor and Executive Chairman Steven Schmidt - President Leonard Sokolow - Co-Chief Executive Officer Conference Call Participants Patrick McCann - Noble Capital Jack Vander Aarde - Maxim Group Brandon Rogers - ROTH Capital Operator Good day, and welcome to the SKYX Platforms Corporation Fourth Quarter 2024 Earnings Call. All participants’ will be in a listen-only mode. ...

Financial Position - As of December 31, 2024, the company had approximately $15.5 million in cash and cash equivalents, including restricted cash[112]. - As of March 13, 2025, the company has $15.6 million in convertible notes outstanding, which could lead to significant dilution of existing shareholders if converted[195]. - The company does not anticipate paying cash dividends on common stock in the foreseeable future, with capital appreciation being the sole source of gain for stockholders[205]. Financing and Capital Raising - The company raised aggregate net proceeds of $4.3 million from at-the-market offerings of common stock and total gross proceeds of $11.0 million from the sale of newly authorized preferred stock during 2024[112]. - The company may face significant risks if it fails to obtain additional financing, which could adversely affect its business and future prospects[113]. Operational Risks - The company relies on a limited number of third-party manufacturers, which could impact its growth and profitability objectives if relationships deteriorate[118]. - The company experienced shortages in obtaining necessary integrated circuit chips but was able to find additional suppliers[117]. - The company is subject to risks associated with shipping products across borders, including potential tariffs and trade restrictions[121]. - The company relies on less than 10 major vendors that accounted for a majority of its cost of sales during 2024[120]. - The company may face challenges in hiring and training a significant workforce for its planned commercial production of smart products[119]. - The company may face significant risks related to competitive bidding processes for contracts, which could impact a substantial portion of its product revenues[128]. - Failure to consistently win new contract awards could materially and adversely affect the company's growth strategy and financial condition[129]. Acquisitions and Strategic Alliances - The company acquired Belami, an e-commerce platform, in 2023 as part of its business strategy[126]. - The company issued convertible notes and warrants and common stock as consideration for the acquisition of Belami during 2023[127]. - The company may incur significant expenses from acquisitions or strategic alliances, which could negatively affect profitability[126]. Intellectual Property and Compliance - The company relies on a combination of patent, trademark, copyright, and trade secret laws to protect its intellectual property, which if not adequately protected, could adversely affect its business[131]. - The company does not own all intellectual property used in its products and technologies, which could materially affect its ability to manufacture and sell[132]. - The expiration or loss of patent protection may negatively impact future revenues and operating income[137]. - The company is subject to substantial regulation related to quality and safety standards, and failure to comply could adversely affect its business[138]. Taxation and Legal Risks - Changes to tax laws or exposure to additional tax liabilities may negatively impact the company's operating results[148]. - The company may face tax audits that could materially affect its operating results and cash flows[149]. - There is a risk of additional state and local income taxation, which could adversely impact the company's financial condition[150]. - The company has significant U.S. net operating loss (NOL) carryforwards, but their use may be limited due to ownership changes[152]. - Under the Tax Cuts and Jobs Act, NOLs from tax years beginning after December 31, 2017 can offset no more than 80% of current taxable income annually[154]. - The company incurs significant legal and compliance costs as a public entity, which could adversely affect its financial condition[158]. Market and Economic Conditions - The company faces risks from unstable market conditions, including high inflation and interest rates, which may adversely affect operating results and capital raising efforts[168]. - Economic downturns or recessions could hinder the company's growth strategy and financial performance, making financing more difficult and costly[168]. - Ongoing geopolitical tensions, particularly in Israel, could disrupt operations and negatively impact revenues and cash flows[171]. - Economic instability due to inflation, high interest rates, and geopolitical issues may adversely affect the company's financial condition and share price[204]. Regulatory and Compliance Challenges - Increased regulatory focus on environmental, social, and governance practices may raise compliance costs and impact the company's reputation[160]. - The company must maintain effective internal controls over financial reporting, and any deficiencies could affect investor confidence[164]. - Failure to comply with Sarbanes-Oxley Act requirements could lead to a decline in stock price and regulatory sanctions[166]. - The legal and regulatory landscape surrounding AI technologies is rapidly evolving, which may impose significant operational costs and compliance challenges for the company[179]. - The company faces potential costs related to compliance with evolving data privacy and cybersecurity regulations, which may increase operational expenses[185]. Cybersecurity and Technology Risks - Security breaches or failures in information technology systems could lead to significant legal and financial exposure, damaging the company's reputation and financial condition[173]. - The company may face challenges in maintaining adequate cybersecurity measures, especially with evolving threats and reliance on third-party vendors[176]. - The reliance on third-party cloud-based infrastructure, such as Amazon Web Services, poses risks of service disruptions that could adversely affect business operations and customer access[182]. - The company relies on AWS for cloud computing infrastructure, and any disruption could negatively impact operations and customer access to the platform[183]. Shareholder and Stock Market Considerations - Approximately 30.1% of the company's common stock is owned by executive officers, directors, and principal stockholders, which may limit other shareholders' influence on corporate matters[197]. - The company is subject to Nasdaq continued listing requirements, and failure to meet these could adversely affect stock liquidity and price[192]. - The stock price has been volatile, influenced by various factors, including market conditions and analyst evaluations, which could lead to significant fluctuations[193]. - Sales of a substantial number of shares by stockholders could depress the market price of the company's common stock[202]. - The company qualifies as a "smaller reporting company," which may make its stock less attractive to investors due to reduced disclosure requirements[203]. - Anti-takeover provisions in the company's charter and Florida law may discourage or delay changes in control, potentially affecting the trading price of common stock[206]. - As a "smaller reporting company," the company is not required to provide detailed market risk disclosures[283].

Financial Results - SKYX Platforms Corp. announced preliminary selected unaudited financial results for Q4 2024, with specific figures to be disclosed in the final report[5] - The financial results are subject to adjustments due to ongoing internal and external audit reviews, indicating potential material differences from preliminary estimates[6] Company Classification - The company is classified as an emerging growth company under SEC regulations, which may affect its financial reporting and compliance[4]

Core Insights - SKYX Platforms Corp. reported a significant surge in sales of its advanced and smart home products, with an increase of over 1,000% expected to reach 20,000 units/homes by Q1 2025 and tens of thousands more throughout 2025 [1] - The company achieved revenue growth for four consecutive quarters in 2024, culminating in record sales of $23.7 million in Q4 2024 [1][5] - Management anticipates becoming cash flow positive in the second half of 2025, supported by significant projects and orders [1][5] Financial Performance - SKYX's revenue grew by 48% in 2024, from $58.8 million in 2023 to $86.3 million in 2024, with Q4 2024 revenue of $23.7 million compared to $22.2 million in Q4 2023 [5][7] - The company reported a gross profit of $24.6 million in 2024, representing 28% of revenue, positively impacted by the acquisition of the Belami e-commerce platform [7] - As of December 31, 2024, cash and cash equivalents amounted to $15.5 million, up from $13.0 million as of September 30, 2024 [5][8] Strategic Partnerships and Market Expansion - SKYX collaborates with major retailers such as Home Depot and Wayfair to expand its advanced and smart plug & play product offerings [7] - The company has secured partnerships with leading lighting companies and prefabricated home manufacturers to integrate its technologies into new developments [7] - A strategic partnership with JIT Electrical Supply aims to enhance SKYX's distribution in the electrical and lighting markets, targeting over 100,000 U.S. homes [7] Safety and Standardization Efforts - SKYX's safety code standardization team is working towards mandatory safety standards for its ceiling technology, with expectations of support from additional safety organizations [1][6] - The company believes its products can significantly reduce risks such as fires and electrocutions, potentially saving insurance companies billions annually [6]

Core Insights - SKYX Platforms Corp. reported consistent revenue growth throughout 2024, with revenues increasing from $19 million in Q1 to $23.7 million in Q4 [1][5] - The company secured a total of $12 million in preferred funding, including a recent $1 million announcement, led by The Shaner Group [1][10] - SKYX aims to have its smart plug & play products in 20,000 homes/units by the end of Q1 2025 across the U.S. and Canada [2][6] Financial Performance - Revenues for 2024 were as follows: $19 million in Q1, $21.4 million in Q2, $22.2 million in Q3, and $23.7 million in Q4, indicating a steady increase [1][5] - The strategic funding of $11 million was secured in October 2024, with a focus on enhancing growth strategies and achieving cash flow positivity in 2025 [10] Strategic Partnerships and Collaborations - Collaborations with Cavco Homes and Forte Developments will integrate SKYX's technologies into high-end homes and luxury developments, respectively [6][10] - A partnership with Wayfair will introduce smart plug & play lighting and ceiling fan products to the retail market [10] - JIT Electrical Supply will distribute SKYX's lighting solutions, expanding its footprint in the electrical and lighting markets [10] Leadership and Market Expansion - The appointment of industry veterans, including Huey Long and Greg St. John, aims to strengthen market penetration and expand product offerings [6][7] - The company continues to enhance its market presence and strategic partnerships to accelerate the adoption of its technologies [3][7]

Core Insights - SKYX Platforms Corp. has appointed Huey Long, a seasoned e-commerce executive with extensive experience at Amazon, Walmart, and Ashley Furniture, to lead its e-commerce platform [1][3][4] - The company aims to leverage Long's expertise to enhance sales and market penetration of its advanced and smart home plug & play technologies in the U.S. and Canadian markets [2][4] Company Overview - SKYX Platforms Corp. is a technology company focused on advanced and smart home solutions, holding over 97 issued and pending patents globally and managing a portfolio of more than 60 lighting and home décor websites [1][5] - The company's mission is to establish its technologies as a standard in homes and buildings, emphasizing safety, quality, and ease of use [5] Leadership and Strategy - Huey Long is recognized for his strategic vision and operational excellence, bringing 28 years of experience in e-commerce and omnichannel retail to SKYX [3] - Long's previous roles include Director at Amazon, where he led the development of Amazon Basics, and Senior Vice President at Walmart, indicating a strong background in driving innovation and growth [3][4] - The founder of SKYX, Rani Kohen, expressed confidence in Long's ability to lead the next phase of growth for the company's technologies [4]

Core Insights - SKYX Platforms Corp. has appointed Huey Long, a seasoned e-commerce executive with extensive experience at Amazon, Walmart, and Ashley Furniture, to lead its e-commerce platform [1][3][4] - The company aims to leverage Long's expertise to enhance sales and market penetration of its advanced and smart home plug & play technologies in the U.S. and Canadian markets [2][4] Company Overview - SKYX Platforms Corp. is a technology company focused on advanced and smart home solutions, holding over 97 issued and pending patents globally and managing a portfolio of more than 60 lighting and home décor websites [1][5] - The company's mission is to establish its technologies as a standard in homes and buildings, emphasizing safety, quality, and ease of use [5] Leadership and Strategy - Huey Long is recognized for his strategic vision and operational excellence, bringing 28 years of experience in e-commerce and omnichannel retail to SKYX [3] - Long's previous roles include Director at Amazon, where he led the development of Amazon Basics, and Senior Vice President at Walmart, showcasing his capability to drive innovation and growth [3][4] - The collaboration between Long and the existing e-commerce management team is expected to propel the next phase of growth for SKYX's technologies [4]

Core Insights - SKYX Platforms Corp. will collaborate with Cavco Industries to integrate its advanced smart plug & play technologies into Cavco's premium manufactured homes during the International Builders' Show in Las Vegas from February 25-27, 2025 [1][4] - Cavco is a leading U.S. manufacturer of prefabricated homes, having sold nearly 1 million homes since its inception, with annual sales approaching 20,000 units [3] Company Overview - SKYX Platforms Corp. focuses on making homes and buildings advanced, safe, and smart through its innovative technologies, holding over 97 patents globally [5] - Cavco Industries specializes in factory-built housing products and is recognized for its high-quality, premium designs, distributed through a wide network of retailers [3] Technology Impact - The integration of SKYX's technologies is expected to enhance safety, save time, and add significant value to both developers and homeowners [2][4] - The collaboration aims to set a new standard for construction by making homes smarter and safer instantly [4]

Core Insights - SKYX Platforms Corp. will supply over 12,000 smart and plug & play products to Forte Developments for three luxury projects, including an 80-story building in Miami and two buildings in Clearwater Beach [1][2] - The projects will total over 400 high-end luxury units, showcasing the collaboration between a leading luxury developer and a disruptive technology company [1][2] - SKYX's technologies are designed to provide recurring revenue opportunities through upgrades, interchangeability, monitoring, and subscriptions [1] Company Overview - SKYX Platforms Corp. holds more than 97 issued and pending patents globally and operates over 60 lighting and home décor websites [4] - The company's mission is to make homes and buildings advanced, safe, and smart, emphasizing high quality and ease of use [4] - SKYX's products are positioned as essential for enhancing safety and lifestyle in both residential and commercial buildings [4] Industry Context - Forte Developments is recognized for its high-end luxury condo and home developments, with notable projects in Palm Beach, Miami, and The Hamptons [2] - The collaboration with SKYX is expected to set a new standard in construction, integrating advanced smart technologies into luxury real estate [3] - The partnership reflects a growing trend in the real estate industry towards incorporating smart technologies to enhance property value and safety [3]

Core Insights - SKYX Platforms Corp. will supply its smart technologies to Forte Developments for three luxury projects, including an 80-story building in Miami and two buildings in Clearwater Beach, totaling over 400 high-end luxury units [1][2][3] - The company is expected to deliver over 12,000 smart and plug & play products, enhancing safety and lifestyle in homes and buildings [2][3][5] Company Overview - SKYX is a technology company with over 97 issued and pending patents globally, focusing on advanced smart platform technologies for homes and buildings [2][5] - The company operates over 60 lighting and home décor websites, emphasizing high quality and ease of use [5] Project Details - The projects include an 80-story high-rise in Miami's Brickell district, two buildings in Clearwater Beach, and a project in Jupiter, Florida [1][2][3] - SKYX is expected to start supplying its products during the second half of 2025 [3] Industry Impact - The collaboration with Forte Developments is seen as a step towards establishing SKYX's technologies as the standard for new construction, providing smart capabilities and significant value [4] - The technologies are designed to enhance safety and efficiency, potentially transforming the construction and real estate sectors [4][5]