SKYX Platforms Corp.

Good day and welcome to SkyX Platform's fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a consent specialist by pressing the star key followed by zero. Before we begin, I would like to remind everyone that statements made during this conference call that are not historical facts are forward-looking statements. These statements are based on current expectations and assumptions. and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking statements may include but are not limited to statements regarding our anticipated financial performance, growth strategy, market opportunities, product development, commercialization efforts, regulatory developments, and expected future events. Additional risks and uncertainties are described in the company's filings with the U.S. Securities and Exchange Commission, including the most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. We undertake no obligation to update any forward-looking statements except as required by applicable law. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Ronnie Cohen, Founder and Executive Chairman. Please go ahead.

Good afternoon. Thank you for joining us, Sky X Platforms. We will give you today an overview starting with our President, Steve Schmidt. and then moving forward to our CEO, Lenny Sokolow. Steve, please go ahead. Thank you.

Great. Hey, Ronnie, thank you very much, and it's great to be with you here this afternoon. Let me start with, as we've mentioned and most industry experts know, the lighting and home decor markets, along with the new home building, have been in decline for the past few years. But despite this, Sky, through our technology and versatility of products, continues to grow. And so let's talk about the growth that we continue to demonstrate. First, on the financial side. First, we're reporting another record quarter revenue with $25 million in Q4, demonstrating eight consecutive quarters of year-over-year growth with annual record revenue of $92 million in 2025, compared to 86 million in 2024 as we continue to grow our market penetration. Gross profit increased to 28 million in 2025 compared to 25 million in 2024 representing a 3 million or 13% increase. Operating cash used in 2025 amounted to $13 million compared to 18 million in 2024 representing a 5 million or 27% reduction in cash used in operating activities. And as we've announced prior, we have raised $29 million in Q1, 2026 through investments from fundamental institutions. So now on the business front, a lot of initiatives and a lot of key things to report. We announced collaboration with NVIDIA AI Ecosystems Connect Program, which will grow our collaboration with NVIDIA into future smart home projects. We announced the launch of our Advanced Sky Fan and Turbo Heater on our e-commerce platform with 60 websites, iStopLighting.com, and U.S. leading retailers, including Home Depot, Target, Lowe's, and Walmart. Based on the growing sales of our patented Turbo Heater Fan, SkyX is expanding the category of the all-season ceiling fan heat in winter and cool in summer category, which will result in additional products in new design and larger sizes. Next, we expect to continue to grow all of this in 2026 to advance our path to becoming cash flow positive. As we've mentioned in prior calls, we're very excited on the hotel and building area, and we hope to share more on this in the next few quarters. Our enhanced safety code standardization team continues its progress towards its goal of a safety mandatory standardization in homes and buildings of its life-saving ceiling outlet receptacle technology. Next, we expect to supply our advanced and smart home technologies to upcoming and future key projects in the U.S. and globally, including in New York, North Carolina smart home community, Austin, Texas, San Antonio, Texas, South Florida, including Miami, Florida, the new $4 billion smart city, Saudi Arabia, Egypt, among other areas. Next, we expect to deploy over 1 million units of our advanced and smart home plug-and-play technologies during the course of these projects. We continue to grow our market penetration and expect to deploy over 100,000 of our products into homes and units by the end of 2026 through the retail and pro segments. Our technologies expansion provides additional opportunities for future recurring revenues through interchangeability, upgrades, AI services, monitoring, subscriptions, and more. Finally, we'll be launching a new AI-driven software in 2026 for our e-commerce platform of 60 websites, which is expected to increase our conversion rate and sales up to 30%. So a lot of progress on all fronts and a lot more to come. So with that, let me turn the call over to our CEO, Len Sokolow, who will give you more clarity on the financials and some of the business details. Len, all you.

Great. Thank you very much, Steve. Appreciate it. So, you know, we're very encouraged. You know, as Steve mentioned, you know, we've had growth in revenues eight consecutive quarters a year over year. You know, but that to reflect also over the last three years, we've had, you know, three years of consecutive growth in annual revenues. And again, to reiterate, all while the building, lighting, and home decor markets have been in a significant a slowdown in these past years. Our revenues increased 92 million from 87 million. Our gross profit increased 28 million from 25 million. And our gross margin increased 2% to 30% from 28%. You know, we're very focused and highly focused on all of these financial metrics and expect further improvements. in 2026 and beyond. We're further encouraged by the indications and the customer feedback on our turbo heater fan and the fact that we are creating a new category of all season fans. This is a new category that's important to understand. And this category is a precursor to the additional category of our all-in-one smart home platform and hub, which we expect to launch beginning in Q3, 2026. All in all, you know, this will be our third new category based on our plug and play razor and blade model. So the concept of our plug and play and a razor and blade model is now proving that the categories that we're creating are very impactful have a tremendous amount of potential and a lot of unlimited opportunities. And these lighting, all-season ceiling fans and our all-in-one platform and hub are reflective of this. So all of this is all quite promising as we are well-funded to accelerate our growth. So with that, if I could turn it back to Ronnie.

Yes, thank you, Lenny. As Steve and Lenny mentioned, we are in slow new builds, lighting and home decor market. We're expanding based on our unique technologies and also versatility of products in our e-commerce platform. And we are growing. You know, I think in the past 10 months, we showed significant growth in the builder segment. And we expect and hope to keep on growing on the builder segment. And we hope we can share more things on this in the near future. And very important also, we believe – we strongly believe that – We have significant, we add significant value for hotel renovations. We believe that with our technology, you can renovate a hotel when it comes to the electrical lighting segment in a few days rather than a few months. We've proven that case in the Marriott, during the Marriott renovation demo. And we had an investment of $16.5 million led by the Shainer Group that own 80 hotels with over 60 Marriotts. And our goal is to become – to grow in this hotel segment. And as Steve mentioned, we're progressing on this segment, and we expect – And we hope we can share some more on this in the near future or very near future. And we're also excited about starting to work with NVIDIA. We hope we can elaborate more on this. But we're getting great reaction with our all-in-one smart platform, smart home platform and hub. It solves many problems in one solution. And as Lenny mentioned, we hope to start production and launch it around mid to Q3 of this year. So I think we're making some progress on all fronts. Again, it's a razor-in-the-blade model. Sometimes we'll supply the razors before the blades. obviously the blades provide more revenue than the razor but the razor sets the stage you know if we were a Tesla had to put billions of dollars of charging point stations thank God it doesn't cost us too much to put our razors out there but it's a program and it's a model that we believe is working well for us and will work even better, and as Lenny said, it opens the door to create new categories like the lighting categories, now the ceiling fans and the heater, all-season ceiling fan that provides a solution for both winter and the heater. We're happy with the indications and the first sales we had, and we're growing nicely, and now it's already March and it's getting warm, but we still see nice sales here, so... We expect to go with this category significantly, add designs and add different sizes based on feedback and demand. We currently have the 24-inch that we launched. We expect to have the same version in 30-inch based on demand, and we expect to come with actually other designs that will provide totally different looks but are going to be more powerful for larger homes and rooms and up to 60 inches too. and some models that we expect to and we hope we can share soon and launch. With that being said, I can turn it to Q&A. And I think we have here, let's see who's on the list. And we have Jacob Steffen here with us from Lave Street. So please, Jacobs, go ahead.

Yeah. Hey, guys. Thanks for taking the questions. Just first, in the press release, you guys talked about a significant prominent leader in the safety code standardization timeline. I'm wondering if you could kind of touch on that a little bit. You know, what kind of specific milestones kind of remain to the overall kind of standardization?

Yeah. We have to get this open. Yeah, as we all know, we have leading our code division is Mark Early, who is the former head of the National Electrical Code and chief engineer of the National Fire Protective Association that really wrote the code books for 33 years in America with safety for electricity and joined him – A couple years ago, it was Eric Jacobson that was the former president and CEO of American Lighting Association. And those are great leaders to have with our entire team here. And we're progressing really nice with the 10 votes we already got in the National Electrical Code and the historical vote by ANSI and NEMA as specified that our receptacle specifications are the standard. And as we said, we're one step away from the mandatory. So in addition to this, we had recently a very senior member joining our team that's trying to help us move it through additional channels. So there are several safety organizations in the US that were established in the past 50 to 100 years with a very clear criteria of saving lives, mitigating injuries and property damages. And we believe that there's some of them are independent and nonprofit, but some of them are actually a part of the government and getting budgets of billions of dollars to literally find technologies like ours with the life-saving aspects and bring them to fruition to save lives. And remember, again, to remind everyone, there's approximately 500 million installations annually in the U.S. when people really risk their life to go on ladders, touch electrical wires, and hazard happen, including ladder falls. and we also got some indications that ladder falls tend to happen more often when you have big obstacles in your hands or you're doing unstable movements. So we're encouraged about this opportunity, and therefore we have engaged a very senior member that can help us with hopefully with some government safety organizations, And to remind everyone, you know, creating safety is key, but in our case, that's also going to enhance and help growth of products. Everything can be made here in the U.S., and our technology can be fully automated in here in the U.S., so there's no labor factor. And therefore, it's not only saving lives, it's enhancing an economy, creating many jobs, and we have some people that strongly believe that we can expedite this through other agencies. So, Jacobs, you know, I gave you a long answer here, but I know you like detailed information, so I hope that covers.

Yeah, no, I appreciate it. Very helpful. So, I guess, you know, when you kind of look at the path to cash flow positive that you guys are talking to, you know, I think, Looking at the cash OpEx kind of line, it looks like, you know, 13 million of kind of OpEx on a quarterly basis, you know, assuming kind of 30% gross margins. Is a good quarterly kind of revenue number that gets you to the cash flow break even? Is that like 35 million? If I'm backing into the numbers correctly?

I want to be careful with the numbers not to do a mistake here, but we have, you know, we're launching a few products, including the, uh, turbo heater fans and others and, and, and some big box orders. You know, we, we already started working with, uh, Home Depot and, and, and, uh, Target and Lowe's and Walmart. And we expect to go to other channels here. So if we land one product, okay. One skew out of those many skews we're coming up to, they're coming up with in, uh, in one of the big box retail, that can be a game changer towards our, an expedite very fast. Our path to cashflow positive. Meanwhile, as we're launching the new AI driven software and our e-commerce platform, it also, we mentioned helps us to increase conversion rates. And we can say that we already converted the, I would say 15% of our sites towards that new software and we do see the results there, an increase of not only conversion, in some cases, increases of gross margin. So we have several ways we're looking into this and we expect to launch additional products this year that will enhance. I'm giving you a big picture. I want to be careful what number we need to provide quarterly. But we actually, I think it will be lower than $35 million, but I just want to, quite lower than $35 million a quarter because we're actually blending in more and more products that have higher gross margins. and we're doing it through joint ventures that we announced last year globally that provide us much higher gross margins. So that's why you saw a jump Lenny mentioned from 28 gross margin in 2024 to 30, and we hope to, as Lenny mentioned, to continue, and we're very focused on continuing that path. And we hope to, you know, if one of the products that we are trying to we hope that in the right order it can, you know, create a spike that's going to turn our burn to a cash flow positive.

Okay, very helpful. Just one last one kind of quickly here. But, you know, the overall kind of hotel channel, and I know that's kind of an exciting opportunity for you guys, but I guess from a, you know, from an actual improvement standpoint, you know, how interest rate sensitive is that market? Repeat, how what? Sorry, how...

interest rate sensitive is that market uh you know i've got to imagine the the builds are financed and um just any kind of color you have there uh-huh are you talking about the the high interest rate effect here yeah yes you know i'm sure i've caught your product that you know the the time saving aspect if you're talking about the hotel segment right that's that's where I think the time-saving aspect creates a major labor cost-saving aspect. And we're having great reaction from that segment. And as Steve and Lenny mentioned, we're progressing there. And, you know, they didn't tell us specifically because of the interest rate, but definitely the time-saving will provide significant cost-saving and cutting costs on labor. that's quite expensive in hotels as you pay by an hour. So I'm sure it doesn't hurt us, but I didn't hear anyone in specific mentioning that and related to our products.

Okay. I appreciate it, guys. Congrats on a good year here.

Thank you. And then we have here Barry Sines from Whitfield. Hi, Barry.

Hey, good afternoon, gentlemen. A couple questions, if you don't mind. First, give us a rough breakdown. How much of the revenue in 2025 came from smart plug-related products, and how much from, you know, traditional lighting fixtures from all the websites you have?

So, obviously, over 90% of our business is still the legacy business. But we're growing month to month, day to day, actually, with our plug-and-play products. So we didn't publish those numbers, but, you know, it's a hockey stick chart for sure on the growth. And as we said, we hope to get, you know, into up to or maybe over, hopefully, 100,000 of our products into homes by the end of this year. we hope to keep on growing the percentage, and that's the path. The path is great, but obviously, as known, the legacy business is still the majority.

And then you've announced a number of major construction projects, either in new housing or hotels, and I'm having trouble keeping track of there's so many of them. If you could give us a recap, how many major projects are you going into now? You know, how many units would that be? And where are we in terms of construction? Which ones are actually, you know, ready to start taking smart plug products?

So, we have, you know, I think we announced around 12. in the past 10 months, and obviously the largest one is $4 billion. When we started with $3 billion, now we grew up to a $4 billion smart city project in Miami. They're already starting site work there, and that's probably towards the end of the year. We hope we can start supplying some of it And then there are other projects that we're working around South Florida. There's the Saudi project that is the joint venture we have with the U.S. group that's involved with the Saudi venture. That can also be a significant number of units for us. And that we hope will start also towards the end of this year in some capacity. That can include hotels, buildings, homes, and much more. And then we also announced a few projects in Texas and Austin. And actually the Austin, Texas, we hope to start supplying very soon. um and then afterwards uh the san antonio texas is us another project we hope to supply um in in the second half of this year or it may be even second quarter depends uh in the building arena you have delays at times uh we also announced in new york um a project recently that actually we believe that that's going to be also supplied very soon. So, and in general, we anticipate around a million products overall on those projects during the course of those projects we announced. That's our estimate. You know, things like this can change, but that's a rough estimate based on those projects.

Well, that's fantastic. So it sounds like given the visibility on all those projects, you said a minute ago, get smart plugs are about 10% of your revenue, it sounds like that's going to increase very dramatically this year. And then the implications for margins are quite positive. So the financial outlook for 2026, to me looks very different than 2025. Is that is that a fair characterization?

That's definitely our goal, and I think we're still, as I said, 90-plus of the legacy business, but I think to get to 10% of revenue is very feasible, and I think even more depends. The path we're growing now probably can be more than that, but, yeah, your assumption is correct with the fine-tuning I added.

Okay, and my last question, in the press release on the second page, there's a bullet point on the bottom about insurance companies, and you have a number of ways to drive, you know, mandatory usage of your products, and one would be through insurance companies mandating the usage. In the release, it said that you would expect this to happen once you complete an entire range and variations of the advanced plug-and-play products. What is your timeline to complete the entire range of smart plug products?

Well, we're close. I think we're 80%, and I think there's already discussions on this segment, and I think the all-in-one smart hub platform with all the smoke detectors, CO detectors that are all-in-one, and emergency lights and all the 911 calling aspects and everything. There's some quite significant excitement about this, and maybe we can start even working with insurance companies before the platform comes out there, but it's definitely – a play that I think will be significant and, right, you know, an insurance company can come inspect you on one day and it becomes faster than mandatory. So that's definitely something we're looking at and working on this angle. And we hope to be more open about what exactly is going on in the very near future.

Okay, thank you. Those are my questions. Really making great progress. Thank you.

Thank you, Barry. Hey, Patrick McCann. Pat, how are you? Noble. Hey, good afternoon, guys.

Thanks for taking my questions. I was curious about with the smart heater fan, you know, from your press releases and so forth, you know, I believe it really didn't – it didn't hit for the majority of Q4, so it wasn't able to have the full effect on your results. But I know that was expected to be a fairly significant catalyst when it came to breaking even on operating cash flow. So I was curious how that's going so far in Q1, how much of How much will that affect your path to cash flow positive here in Q1, especially with Q1 still having been largely in the winter months where there would be that demand for something like that? I was just wondering if you could have any thoughts on that. where that stands? Is it being well received? Is it meeting expectations now that it has you've gone to market with it for for a bit of time now?

Yeah, it actually we were seeing great signs and indication, as we mentioned earlier, and that and we're working now to expand the category. As I said earlier, We're getting feedback that some people want a larger one, the same product and 30 inches when this product is 24 and there's other demands for much larger projects with 54 inches or 60 inches with different designs and we have a great reception on this and we're very confident, our team is very confident in this creating a new category of all all-seasons ceiling fan that, as we all know, ceiling fans are, you know, mainly a summer product, although they sell all year. But, you know, the peak is definitely summertime. So what we're here seeing, the indications we see now, and I mentioned this earlier, although we're in March and it should be slower for heaters, but because of the, you know, all-season product, We actually are seeing good numbers for March as well. And again, we started late. Yes, we bought a few items in Q4 and we brought a few more now in Q1. And we can say that we're bringing more products and we believe eventually that's going to be one of the main catalysts for turning us to cash flow positive. So the signs are It's looking good. You know, I don't want to mess with our CFOs on exact timing, on cash flow positive, but we strongly believe that that's going to be a main catalyst towards that path.

Thank you. And then my other question is regarding the big box retailers like Home Depot and Walmart and so forth. I was wondering if you could give, just clarify what the current situation is between, you know, having the slate of products on their websites versus what tends to be available in store, you know, widely available in all or many locations.

Yeah, as mentioned in the past, first of all, with Home Depot, we got a branding page and Skype-plugged branding page, so... We can include a lot of products and channel a lot of customers toward that direction. And today, as we mentioned in previous calls, a lot of the big box, I think not all of the big box today rely on signals from online. And when online you can present five colors, you never know what the winning color is going to be. If it's brush nickel, it's chrome, or it's black. or gold, or you never know. So the indications on colors are very important to the big box. So therefore, we launched in the online segments, but there are already discussions in place that we're having on what colors will go into stores. And We hope to, and we're talking to several big boxes. Some of them we mentioned. Some of them we did not yet. And we feel confident that we're going to start landing them in stores. And once you land them in stores, that can... Although online is growing all across the market, all across the board, online keeps on growing, and more and more people, including builders, are buying online now. But... Still, the big box, an order on one color for a fan can be game-changing in numbers here for us, and that's something that's in works, and we expect to share more in the near future on this.

Thanks. That's helpful clarity. That's it for me. Thanks a lot, guys.

Okay. Thank you very much for everyone here. Appreciate your time. and questions, and Lenny, Steve, anything else? We covered it. Okay. Thank you all for joining. We look forward for our next call. It should be exciting with our path here, and it's actually just a couple months from now, even less. So looking forward to talk to all of you soon, and thank you for your time.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.