Good day and welcome to the SKYX Platforms Corp. Third Quarter 2024 Earnings Call. Today, all participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask your questions. Please note that today's event is being recorded. I would now like to turn the conference over to Rani Kohen, SKYX Founder. Please go ahead, sir.

Good afternoon. Thank you everyone for joining us for the third quarter update call. With me today we have our President, Steve Schmidt; and our Co-CEO, Lenny Sokolow, who will be joining this call. I will start by moving it to Steve Schmidt. I think we have the cautionary statement first. And after you take a brief look here, our President, Steve Schmidt will start the call.

Thank you, Rani. It's great to be with you here this afternoon. So let's get into it. We generated record third quarter revenues of $22.2 million compared to $21.6 million for the third quarter of 2023. Prior to the completion of the $11 million equity raise in October 2024, as of September 30, 2024, we reported over $13 million in cash, cash equivalents, and restricted cash compared to $15.6 million as of June 30, 2024. In October of 2024, we secured an $11 million equity preferred stock investment representing $2 per share of common stock with no warrants, led by a global Marriott hotel chain developer and owner of over 70 hotels, plus significant insider investing by myself at $500,000; Co-CEO Lenny Sokolow at $250,000, and Co-CEO John Campi at $250,000. Let me take a second to give you my perspective on why I remain so excited about the future of SKY Technologies. I invested originally in this company at $12 at the original offering for SKY, and I remain today in fact quite frankly more excited about the future of this company based on everything that we've accomplished and everything we have yet to do that we have in planning phases. There were eight or nine reasons that I invested at that time and remain excited today. First of all, Rani Kohen is a leader, extremely bright visionary and inventor of this product. The company team, the management team, and the Board all possess tremendous knowledge of this industry. The business strategy focuses on electricity being a standard in every home and building. Our mission is to make every home and building safe, advanced, and smart. Safety is a key factor; our products save lives and reduce injuries. Insurance companies need to be reminded that they have a fiduciary responsibility to support and report on these cases. Next, we have proprietary products and services. We now hold over 97 global patents and trademarks protecting our products and software, effectively making competition tougher. We have a global partnership with GE, a huge licensing group who believe in our product and its potential to become a U.S. and global standard. Additionally, the National Electrical Code has voted to include 10 segments into the NEC code book, which we believe to be game changing. Accreditation from the American National Standards Institute (ANSI) and the National Electrical Manufacturers Association (NEMA) has granted approvals on our SKY ceiling receptacle specifications. The total available market is over $500 billion in the U.S. alone, and over 30 countries are expected to adopt U.S. electrical standards. These key factors are why I invested then and continue to invest now. Net cash used in operating activities for the third quarter ending September 30, 2024, decreased sequentially by 39% to $2.6 million compared to $4.2 million in net cash used in the second quarter of 2024. The company gross profit for the third quarter ending September 30, 2024, increased sequentially by 4% to $6.8 million compared to the quarter ending June 30, 2024. As common with companies such as ours, when sales are converted into cash rapidly, often referred to as the Dell Working Capital Model, the company leverages its trades payable to finance operations and lower costs of capital. We have sufficient cash to achieve our goals, including being cash flow positive in 2025. Our advanced and smart plug-and-play products continue to penetrate the market, and we expect our products to be in close to 15,000 U.S. and Canadian homes by the end of 2024, with tens of thousands of incremental homes in 2025. We strongly believe our products can save many billions of dollars annually for insurance companies by reducing fires, ladder falls, electrocutions, among other risks. We expect to be recommended by insurance companies once we complete our entire range of safe plug-and-play products, which are in production and expected to arrive by the end of 2024. Our total addressable market is $500 billion in the U.S. alone, with over 4.2 billion ceiling applications. Expected revenue streams from both retail and professional segments include product sales, royalties, licensing, subscriptions, monitoring, and the sale of global country rights. We continue to utilize our e-commerce platform of over 60 websites for lighting and home decor to educate and enhance our market penetration to both retail and professional segments. Our Board and management team are world-class experts from proven industries, fundamental to our progress going forward. Our mission is to make homes and buildings safe and smart with products that save lives, reduce costs, save time, and ensure simplicity. We aim to influence the electrical, building, and safety regulators, as well as the insurance and lighting industries, saving both time and costs while enhancing safety. Financially, our sales continue to grow, as shown by our revenue from $19 million in Q1 2024 to $22.2 million in Q3 2024. We've managed to create collaborations with Home Depot, GE, Wayfair, and key collaborations with Kichler, a leading global brand, QOUIZEL, EGLO, and Ruee, among others, the largest lighting manufacturer in the world. We are excited about additional collaborations that we'll announce in the coming months. And with that, let me hand the presentation over to Lenny Sokolow, our Co-CEO.

Thank you, Steve, very much. I just wanted to reiterate the level of excitement we have, and the fact that not only do we see the future, we're living the future. We've invested and continue to invest in the company because we believe in it. To go through a very high-level overview, our revenues are up 3% to $22.2 million. Our gross profit is up 4% to $6.8 million. Our gross margin continues to increase by 1% to 30.9%. Our net cash used in operating activities decreased 39% to $2.6 million. Importantly, our interest-bearing debt net of any gross debt discount decreased by $3.1 million during the quarter. With that, I'd like to turn it back over to Rani Kohen.

Thank you, Steve. Thank you, Lenny. I’ll provide a brief overview of our business and products. As Steve mentioned, we believe our products will significantly save costs, time, and, most importantly, lives. Once we have the entire assortment of products available, we anticipate being recommended by insurance companies. The products currently in production include exit signs, emergency lights, flush mounts, recessed lights, and a variety of ceiling fans and wall sconces. Once we have the complete range, we strongly believe that we'll receive recommendations from insurance companies regarding our product's life-saving aspects. Our approach involves the razor and blade model, where the ceiling outlet acts as the razor, and the products that can plug-in act as the blades, allowing users to interchange them according to their needs. We predict that we will begin shipping products to builders and hotels early next year. Our partnership with GE involves licensing products to establish a plug-and-play standard for the electrical and lighting industry, enhancing the installation process and overall safety. We have received significant interest in licensing these products due to their unique technological enhancements. As we enter 2024, we look forward to expanding our presence in homes and buildings, adding significant value to the installation process.

Hi, everyone. Thank you for taking my questions, and congrats on the quarter. I have a few questions. Recently, SKYX participated in the Real Deal Miami Real Estate Forum. Could you please provide an update on your collaboration with builders?

As we showed previously, we are now in production of all the types of fixtures that builders use today. We are enhancing our market penetration with our ceiling outlet receptacle. Our plan is, once we are ready, to start delivering products once we supply the ceiling receptacles. We have one-pack, four-pack, an eight-pack, and a 24-pack available. This razor and blade model indicates that we have already begun supply, and production continues monthly. We look forward to several announcements regarding our progress with builders and hotel owners.

Thank you. I have another question. Most of your suppliers are based in China. How do you assess the potential increase in import tariffs? For instance, considering President Trump's statement proposing a 60% tariff on all Chinese goods, how might such changes affect your gross profit margin?

We have factories that we're currently working with in China, and many of our manufacturers are considering backup factories in case of any issues between the U.S. and China. We're also working with companies in Taiwan and Vietnam, so I believe we're well protected. We are prepared for any political changes and have alternative manufacturing options in place.

Hey, Rani. Thanks, Steve. Thanks for taking my call. I had a couple of questions specifically about collaborations with Home Depot and Wayfair. Have they given you a schedule for the rollout of the products into the stores and connecting them online?

We have started rolling out to over 100 stores, and we have already placed some products on the website. While the initial rollout in stores is only about 3%, it's important to note that we have begun production and products are arriving in the country now. We expect to increase our online presence and once visibility is gained, we anticipate more products will be available in stores. As we ramp up production, our expectation is to have more products in stores as well as an increase in online product availability. The e-commerce space is expanding rapidly, and it's beneficial for us to maintain a presence in both online and retail.

Is the Gen 3 platform with Wi-Fi, lighting, etc., in production? If not, what is the timeline for that?

We are in the final stages of clearing all safety requirements with UL and FCC. Mass production is expected to begin in the next month or so, as we want to ensure all safety protocols are passed. We are committed to minimizing any potential defects, especially for a new product launch. The opportunities with Gen 3 involve licensing discussions that will be more managed by GE based on their extensive expertise in creating global standards, which will enhance our positions in the market. We're still in the process for the mandatory opportunity with the NSC. It's a lengthy process, but we're making progress and hope to have positive news regarding insurance recommendations that will enhance our standing in the industry.

What would the insurance recommendation look like from the consumer's point of view? I imagine it’s similar to getting a discount for a home security system, right?

Yes, our products significantly reduce risks such as fires and electrocutions. Our goal is to establish value propositions with insurance companies, providing either recommendations or discounts based on the effectiveness of our system in saving lives and reducing costs.

Can you provide any updates on the homebuilder channel, particularly regarding any recent orders?

We have great expectations for the homebuilder channel as we hope to supply products early next year. The interest from builders is significant because of the installation savings our products provide. This will be a driving factor for future orders.

How is the relationship with Ruee going, and is there any update on their production status?

Ruee is in production now, and we believe they are about to start shipping. We have already begun receiving some products. Thank you, everyone. We appreciate your time here. Thanks, Steve and Lenny. We look forward to our next call and continued growth.

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