SKYX Platforms Corp. (SKYX) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Fall Investment Conference 2025. The next presenting company is SKYX Platforms Corp. [Operator Instructions] I would now like to turn the floor over to today's host, Lenny Sokolow, Co-CEO of SKYX Platforms Corp. Sir, the floor is yours.

Very good. Thank you very much, and it's great to be here presenting again at IAccess. As I said, during our most recent presentations, we are working on some very big things, which we have since accomplished and announced as you will see today. I, again, would like to reiterate that we're continuing to work on major developments coming in the near future, including standardization process and other significant projects. We appreciate you investing your time and listening to this presentation and welcome any questions you would have. I'm going to make some time at the end and any follow-up, I'm sure we could organize with IAccess. So with that, I'll start the presentation. As you could see, the future of homes and buildings at SKYX. We have our cautionary statements. And I wanted to just provide a little overview of our leadership team, which I know we -- in a lot of decks, there's always advisors and consultants, but these are very substantial active participants and investors with us. Besides Rani Kohen, who's our Founder and Executive Chairman and our inventor responsible for over 100 patents and patents pending. We have Steve Schmidt, our President, who's former President of Office Depot International and CEO of Nielsen Data Rating Corporation. Bob Nardelli is an active advisor, former CEO of Home Depot and Chrysler and GE Power Systems, and he's been instrumental in working with us, including our collaboration and relationship with Home Depot. Al Weiss, former President of Disney Worldwide Parks, Hotels and Resorts, has been an investor, understands the commercial and hotel application. And our Lead Director is Governor Tom Ridge, two times Governor of Pennsylvania, former Head of Homeland Security. I've been on the Board with him for over 13 years. And Lance Shaner, who owns 60 Marriott and 20 Hiltons led our private equity round that we did early in the year that we completed, is an active developer in the branded hotels and have been an investor with us for a very long time. Probably the most important and least known guy is Mark Earley, former Head of the National Electrical Code. He was the head for over 30 years and Chief Engineer of the NFPA, which is the umbrella organization through the National Electrical Code. And he retired, about 3 months later, joined us to lead our code team, and he has signed our application now for a mandatory status. He, along with Eric Jacobson, the former CEO of the American Lighting Association. These 2 gentlemen have probably done the most regulatory electrical lighting changes in the U.S. Khadija Mustafa is a Senior Advisor and former Head of Global AI for Microsoft, and she's been helpful with us in framing the application of our Generation 3, which should be in production by the end of this year for positioning it with -- as a hub for AI and chip performance and Paul Chernawsky, founder of Endurance Car Warranty, we hear it on the radio a lot. He sold it, bought the company back. He is our insurance guru, and we believe insurance companies will provide discounts to those who install our products similar to -- incentives or discounts similar to homeowners. And Patty Barron, our COO. She is an extraordinary technology guru and technically the country's leaders in UL in UL regulatory aspects. We have the -- just as a quick preview, we've gone to -- our mission, as you could see, is enabling the new world on the ceiling. I mentioned we have over 100 patents, 45 have been issued in the U.S. and globally, including China, India and Europe. We have over 60 websites that we acquired in 2023, and we use it to lead and feed the market, which is basically educating consumers and enhancing our market penetration. It's a platform that given us to be able to exhibit and show and ultimately now as we're selling our products and the transformative nature of our generation now Generation 1 and Generation 2. And predominantly, our websites are B2C business with consumer retail, and we're growing it in the B2B platform. As we understand, and we know that builders and large builders are buying more of their products online and contractors. Our TAM or total addressable market in the U.S. is over $500 billion and about 4.2 billion ceiling applications in the U.S. alone. And we have the math to support on that. And our revenue streams include product sales, royalties, licensing, subscriptions, monitoring, data aggregation and ultimately selling the global country rights. Those are all our focused channels of revenue. We measure our penetration with how many receptacles that we have in the market. We're projecting by the end of Q3, 40,000 in the U.S. and Canada, and we measure that because we know that anything that plugs into it is either a product we sold or ultimately be a product we'll have licensed. So it's a way to measure it and in effect, all roads lead to Rome because our patents cover our receptacle and our plug. So we've now expanded our business on our B2B to builders and the Pro. We're in Home Depot, Wayfair, electrical suppliers as well as the websites discussed. And so the -- if you look at the -- our historical revenues from 2023 was $58.8 million. '24 overviewed at $86.3 million. We've had sequential quarter comparative quarter-to-quarter growth. And so far following that into 2025. We did an equity round with insiders, including the Lance Shaner, the Marriott Hotel chain developer as well as a lot of other strategic partners with them. So when you look at the collaborations we've announced, Home Depot, which we continue to expand our line into with Wayfair, we have a licensing agreement with the GE Licensing Group, the Kichler which is the world's leading lighting company; Quoizel, the U.S. oldest leading lighting company; EGLO is the biggest in Europe; and Ruee, which is the largest Chinese manufacturer. These are all collaborations that we've announced. Most important in the -- several months ago, we had an announcement with respect to our Smart City in Miami. It's a $3 billion smart city. We have -- if you could see this picture, there's Downtown Miami in the background. You have Wynwood, which is where they have our Basel. The South Beach up to the upper left. And here is the Smart City footprint. It's a 200-year land lease that was given to 2 major developers, 63 acres. And this includes -- it will result in over 500,000 of our unit sales of Generation 1, 2 and 3. Our Generation 3 is critical to this Smart City. We expect to have over 5,700 apartments, condos, retail, mixed-use and as well as the tri-rail station that's being built for this area coming out from the East Coast to add to the existing tri-rail stations. So all of this is part of the footprint and our mandate. This project was provided by the SG Holdings and the Swerdlow Group, which have been developers in Miami for many decades. And the architecture firm is Arquitectonica, which really became world renowned when they designed the Microsoft building in Paris. They're designing this Smart City, and it's gotten us a lot of interest globally and also its validation as to the application and the justification for these builders to use our product. And the -- this will redefine Miami's urban landscape. And fortunately, for us, Miami is like a Dubai, and there's a lot of -- this will generate, we believe, a lot of further interest in this whole space, needless to say. So in terms of the next slide on the we won, of course, 7 CES awards in '23 and '24. These are our 3 generations. I encourage you on the website where the IAccess is going to post a PowerPoint, there will be a link to our video. It's a 3-minute video, it will be worth watching. These are Generation 1, 2 and 3. Generation 1 and 2 are out there. We're selling. We have our app, which works and then out in the marketplace, works with a Generation 2 and we're going be working with a Generation 3. Our Generation 2 works with Apple's voice, Apple's Siri, Alexa, you could dim the lights, you could raise the intensity that's got an emergency light WiFi, Bluetooth, et cetera. And so this is a game changer for the industry. And what we've done is we approached the regulators and followed suit with what's happened in the U.S. and of course, other countries, including Canada. And the 1904, they created a standard for the wall outlet and they used to be put in lamps with wires, similar to the Edison bulb that was put in the ceiling by wires. You have -- it didn't become a global standard until they invented -- the Edison invented the Edison base. So you could screw it in. And then the 1980s come along, and I know most of you, if not all of you have in your bathroom and kitchen, a GFCI, a ground fault circuit interruptor, which became mandatory in the '80s because people were dying as a result of personal injury, fires, et cetera, in those wet areas. And then believe it or not, some people know this, but I was General Counsel and EVP of the New York Stock Exchange company, and we made personal care products, including hair dryers and flatiron that competed against Philips and Conair and Sunbeam. And after this became mandatory in the late '80s and early 1990s, they mandated putting this plug at the end of hair dryers. I lived through this personally, and we had to go out and license that technology. And 24 months later, the industry is making all these products to this day with the plug at the end of these electrical cords. And so when I met Rani, I saw our basic all-in-one sky plug and receptacle, I got it because I understood, I seen the fires. And I was also on the Board of lighting company, public company as well that had fires all the time in their lighting pictures. So we come along and we invent and solved this problem that's been around since 1920s, the junction box with wires and we come in with a plug-and-play solution. It's safe. There's a double locking mechanism. Each lock holds 200 pounds and the junction box itself is only coated for 50 pounds. So we put on our box 50 pounds, so that's all we need to say, but we know it's a double lock, each one holding 200. So the regulators, of course, required exit signs as we evolve emergency light, airbags and seatbelts. So what these issues are is we've solved a major problem that occurs in the billion. It's these installations and then our safe solution. And so what we've done is we've approached it, and this is the TAM we calculated. We approached the market and said, well, we want to be ubiquitous just like the wall outlet. Like every home has a wall and every home or building should have a receptacle. And there's a reason for it. It's just not cost effective, but it's safe and it prevents a lot of injuries and [indiscernible] the TAM calculation. And so when we went to the regulators over 13 years ago and we said, what's the difference between this wall outlet and our outlet. There were 2 junction boxes, outlets, the receptacle, cover plate, finished product and then we plug in and they plug in. And the only difference, by the way, is that we have patents on both sides on the receptacle and on the plug side. And not only that, about 1/3 of our patents have to do with smart. So I think that's smart that touches either side of this, those are our patents, and these are global. So the regulators after going through 13 years of this, based on the fact that there are injuries, their own data is that we were putting 10 code segments in the electrical code, the U.S. electrical code. We are already a standard. We've been codified. And not only that, in 2023, we got approved by ANSI, which is the American National Standardization Institute and NEMA, which is the National Electrical Manufacturers Association. We were approved for commercial buildings, which is also an extremely rare event, and it covers rebars and concrete that go into buildings [indiscernible] there's a specification that's standard. And the AIA, the architects are already trending the architects for safety on our product. And so what happened as a result of all these changes, and I think what the market doesn't always understand is that as a result of these changes, the National Electrical Code changed the definition of receptacle. And this is codified to include not only the wall outlet, but our outlet. So there's 2 defined receptacles in the National Electrical Code. In addition, just like the GFCI, we've been already granted a generic name, Weight Support Ceiling Receptacle. And of course, what the plug side, they call it the WSCR. So we've been codified. We've been given a generic name. We've checked all the boxes. And the last thing we're having to do now and the last thing we have done is we've applied for mandatory with the National Electrical Code. That's the last thing that's left. And the reason why we got all these approvals is not only is this a really brilliant solution that has global application is that their own data from the National Fire Protection Association says that there's approximately 400 deaths per year and tens of thousands of injuries annually from people just putting in the wiring wrong in the ceilings. And electrical fires in homes are a major problem. And there's over 500,000 ladder falls and thousands of deaths annually. So this is why we're in the code. This is why we've gotten the approvals we received. And so this is the -- for us, it makes sense. And for the industry, it's critical and to saving lives, it's critical. We've also announced recently a collaboration with a senior adviser close to the U.S. administration. We've concluded that there are 2 other government agencies that we believe have the ability to make what we have mandatory. And so because they're all mandated with having to protect lives, to mitigate injuries and property damage. So that's something that we feel and we believe will accelerate our process for mandatory adoption. Our business model is not dependent on mandatory, but it just -- it becomes a stratospheric result when that happens. But we continue to penetrate and expand our channels, including the Smart City speaks for itself. But the reason why these builders are doing this and developers we make so much sense on new construction and renovation and for the hotels, which have to be renovated every 7 years of the major brands is that we save almost 90% of the time and cost for the installation. And why? Because it's a minute to put in this receptacle in the ceiling. You have the junction box that's there where you're not displacing anybody. And we put in now receptacle 3 wires into it and you screw it into the junction box on the bracket, that's standard. That's a minute. And then when they want to light up their building or their home, then it's someone that walks around going click, click, click, click, and that takes another minute or 2. And so you're changing the industry and how you install the fixtures, you're saving a lot of money and time. And by the way, because of our definitional changes to becoming a receptacle defined by the code, a builder could just put in this receptacle in the ceiling or sconce or outdoor and get their certificate of occupancy or a permit, they don't have to put in a light fixture like they did before. For a wall outlet, they didn't have to go around plug in the lamp to get their permit or certificate of occupancy. And that's what's happened as a result of this change. So this is why we're getting a tremendous amount of interest and adoption and penetration into the commercial channels as well. So when you look at the all-in-one, which is -- should be in production by the end of this year, this is a solution to make this easy and to install all these smart features that are synchronized and work together seamlessly. We have the -- we basically took the concept of an iPhone and all the apps that can go on one iPhone and work seamlessly without any latency under one application. One application dealing with lights, dealing with flashlights, cameras and not having separate products, and we've solved that problem. And this is essentially for the builders, why 97% of the homes and buildings aren't Smart is that to install even a one bedroom with the oldest smart products could take days to be synchronized and not have latency. And here we are, we've got a solution that takes minutes to install, and it's all ready to go with our app that's already out in the field. And more so, we've got the location for all-in-one platform being able to work as an open platform with other technology companies and then ultimately have some monitoring because we have smoke and CO detector, subscriptions and of course, the data integration to monetize that ultimately is a massive business. So the reason why, by the way, Khadija Mustafa says that we've got the best location for this alone, you know that WiFi extended people's plugging in the sidewall because that's what the power is and you lose the power going through a room or passing furniture. And here, when you have all of this on your ceiling in the middle of a room, your speed and your range almost doubles, if not triples. So this is the power of what we have for builders and developers to install 1 bedroom at home or a hotel or commercial, it's a fraction of the time and the cost to do it. And just a little preview where we think there's a huge opportunity is in the modular prefabricated home sales in that business of being able to put our receptacles when the homes are being constructed into the factories and the receptacles are there and then when they're ready to go into the field and install them and stack the modules, the prefabricated homes, you're just plugging in the fixtures, click, click, click and everything works on the app. So this is a massive business that's growing in the U.S. And we have maybe 3% to 4% penetration. Some countries are over 50% already. And it's because of the consistency of the product, labor issues, et cetera. And the cost for prefabricated modular buildings and even in the high rises are big cost savings. So the -- I'm just trying to be quick, we have all these products that -- this will be out of the -- in production by the end of this year, hopefully. We have all these products in production or in stock now, and these are in stock and in production. A lot of these would be those that we could work with the hotels, et cetera. And we announced the demonstration with the Marriott Spring of Suites as well as other opportunities. And one of the bigger products for the end of this year, we think will be impactful will be our all-in-one Smart Heater fan that's got the fan and the heater underneath, and there's 2 different designs, and we think that this is a year-round product, and we've got a lot of interest in this from our channels. So we believe this will be very impactful as it develops and we continue to roll it out. And so we've got -- our go-to-market is we've been lead and seed. I mentioned online sales, big box retail, builders, apartments, hotels and licensing. It's a pretty straightforward strategy. I wanted to -- in the interest of time, I know there's not a lot left, but I wanted to hit some questions.

The -- I have one question. The Miami $3 billion Smart City project is milestone. How do you envision scaling that success into other large developments? That's a great question. We think that one is that we will -- we've generated a lot of interest in the fact that we got the exposure and there's a lot of smart projects around the world, which makes somewhat sense in smart developments. So stay tuned. We believe it will be something that will scale and that can easily scale not only in the U.S. but outside the U.S. The expected timing and contribution of the new all-in-one plug-and-play heater fan ahead of winter demand? And so the answer is we expect to get -- for the winter demand, we expect to get some in the channel. We can't say how much. We're not projecting, but that's our target is -- and we believe that the demand will continue to exhibit itself. And so we -- that's been our goal. And so it's just a function of timing and shipping and -- but that's been the plan. The momentum -- the question on the momentum on our revenue growth, which has been 15% sequentially with gross margins reaching 30%. What levers will sustain this momentum into '26? And we think it will be the product mix, which we believe will create a blended higher gross margin because a lot of the product is product that we're having produced for ourselves that we're making, not third-party product that we're retrofitting that. So we think that will be important and these newer products, which we believe will provide continued momentum into 2026. So stay tuned on that. And then the -- our gross margins right now are around 30%. And the -- our goal that we publicly stated is to be cash flow breakeven by the end of 2025, not on an annual basis, but at that time. It shouldn't take much with some of the new products, but we shall see. It's a function of getting them into the marketplace and getting them through the channel. And the -- one of the questions was how many SKUs are Home Depot today? And I could say it's over 100. So between Home Depot, you have online and you have stores. So it's not -- it's something that will continue to grow more meaningfully, not only with that big box, but other retail. So I'm going to see if there's any other questions. I think I've done it. So I really appreciate everyone's time and your interest in SKYX, and we would be happy to follow up in any way with any questions or one-on-ones, et cetera. And I hope you guys have a good day and productive.

Thank you. That concludes SKYX Platforms Corp. presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.