What changed in this filing

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Item 9A. Controls and Procedures

2026-03-26 compared with 2025-03-24 · 920 added, 1175 removed, 1724 unchanged (55% of the section changed)

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provide reasonable assurance of achieving their control objectives.

of the end of the period covered by this report, management, including our Principal Executive Officers and Principal Financial Officer,

of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial Officer,

evaluated the effectiveness of our disclosure controls and procedures.

Based upon the evaluation, our Principal Executive Officers and

Based upon the evaluation, our Principal Executive Officer and

Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.

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Internal control over financial reporting is a process designed by, or under the supervision of,

our Principal Executive Officers and Principal Financial Officer and effected by our board of directors, management and other personnel,

our Principal Executive Officer and Principal Financial Officer and effected by our board of directors, management and other personnel,

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for

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of changes in conditions, or that compliance with the policies or procedures may deteriorate.

required by Rule 13a-15(c) promulgated under the Exchange Act, our management, with the participation of our Principal Executive Officers

required by Rule 13a-15(c) promulgated under the Exchange Act, our management, with the participation of our Principal Executive Officer

and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table sets forth the name and position of each of our executive officers and directors, and each such person’s age as

of March 9, 2025.

following table sets forth the name and position of each of our executive officers and directors, and each person’s age as of March

Chairman, Director

Executive Officer

Executive Officer, Director

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Company, he has succeeded in attracting and engaging accomplished board members, talented management and leading executives from various

He has led every major milestone achieved by the Company to date, including securing substantial financing to support the

Company’s growth.

He has led to every major milestone achieved by the Company to date, including securing substantial financing to support

the Company’s growth.

The board of directors believes that with Mr.

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that he brings with his advanced business strategies, he will continue to move us forward towards achieving our goals.

Campi has served as our Co-Chief Executive Officer since September 2023.

He previously served as our Chief Executive Officer

from November 2014 to September 2023 and as our Chief Financial Officer through December 31, 2021.

Campi founded Genesis Management,

LLC in 2009, and retired in 2014 upon accepting the role of our Chief Executive Officer.

Campi has extensive experience in the field

of cost management, is recognized as a founder of the strategic cost-management discipline known as Activity-Based Cost Management and

has extensive experience in the field of supply chain management.

From December 2007 to December 2008, Mr.

Campi served as the Chief

Procurement Officer and an Executive Vice President for Chrysler, where he was responsible for all worldwide purchasing and supplier

quality activities.

From September 2003 to January 2007, Mr.

Campi served as the Senior Vice President of Sourcing and Vendor Management

for The Home Depot, Inc., where he led the drive for standardization and optimization of The Home Depot, Inc.’s global supply chain.

From April 2002 to September 2003, Mr.

Campi served as the Chief Procurement Officer and Vice President for DuPont Global Sourcing and

Prior to 2002, Mr.

Campi led the Global Sourcing activities for GE Power Energy and held a variety of positions with Federal

Mogul, Parker-Hannifin Corporation and PricewaterhouseCoopers.

Campi previously served on the board of Trustees of Case Western Reserve

University and has been appointed an Emeriti Trustee.

Campi also has served as a member of the advisory board of directors for three

startup companies and has served as a Member of the Financial Executives Institute and the Institute of Management Accountants.

received his MBA from Case Western Reserve University.

Campi has extensive executive and advisory experience with established and

startup companies, as well as in cost-management and supply chain management.

Sokolow has served as Co-Chief Executive Officer of the Company since September 2023 and as a director of the Company since

Sokolow has served as Chief Executive Officer of the Company since September 30,

2025 and previously served as co-Chief Executive Officer from September 2023 to September 30, 2025.

Sokolow has also served as a director of the Company since

November 2015.

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Sokolow was Founder, Chairman and Chief Executive

Officer of the Americas Growth Fund Inc., a closed-end management investment company, from 1994 to 1998.

Officer of the Americas Growth Fund Inc., a closed-end management investment company elected to be treated as a Business Development

Company (BDC), from 1994 to 1998.

From 1988 until 1993, Mr.

was an Executive Vice President and the General Counsel of Applica Inc., a publicly traded appliance marketing and distribution company.

Sokolow was an Executive Vice President and the General Counsel of Applica

Inc., a publicly traded appliance marketing and distribution company.

From 1982 until 1988, Mr.

Sokolow practiced corporate, securities and tax law and was one of the founding attorneys and a partner of

an international boutique law firm.

From 1980 until 1982, he worked as a Certified Public Accountant for Ernst & Young and KPMG Peat

Sokolow practiced corporate, securities

and tax law and was one of the founding attorneys and a partner of an international boutique law firm.

From 1980 until 1982, he worked

as a Certified Public Accountant for Ernst & Young and KPMG Peat Marwick.

Sokolow has served on the board of directors of Consolidated Water Co.

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of Vivos Therapeutics, Inc., a publicly traded medical technology company focused on developing and commercializing innovative diagnostic

and treatment methods for patients suffering from breathing and sleep issues arising from certain dentofacial abnormalities, since June

2020, where he currently serves as Chairman of the Audit Committee and as a member of the Nominating and Corporate Governance Committee.

Sokolow previously served on the board of directors of, and as member of the Audit Committee for, Agrify Corporation, a publicly

traded provider of innovative cultivation and extraction solutions for the cannabis industry, and on the board of directors of, and as

Chairman of the Audit Committee for, Marquee Energy Ltd.

(formerly Alberta Oilsands Inc.), a then publicly traded energy company.

board believes Mr.

Sokolow’s qualifications to serve as a member of our board include his extensive experience in the financial

industry and in strategic planning, mergers, acquisitions, securities, and corporate development advisory services, his service on other

public company boards and his history of executive leadership in developing and operating businesses.

and treatment methods for patients suffering from breathing and sleep issues arising from certain dentofacial abnormalities, such as obstructive

sleep apnea (OSA) and snoring in adults, since June 2020, where he currently serves as Chairman of the Audit Committee and as a member

of the Nominating and Corporate Governance Committee.

Sokolow previously served on the board of directors of, and as Chairman of

the Audit Committee for, Agrify Corporation, a publicly traded provider of innovative cultivation and extraction solutions for the cannabis

industry, and on the board of directors of, and as Chairman of the Audit Committee for, Marquee Energy Ltd.

(formerly Alberta Oilsands

Inc.), a then publicly traded energy company.

Our Board believes Mr.

Sokolow’s qualifications to serve as a member of our Board

include his extensive experience in the financial industry and in strategic planning, mergers, acquisitions, securities, and corporate

development advisory services, his service on other public company boards and his history of executive leadership in developing and operating

Boisseau has served as our Chief Financial Officer and as our principal financial officer and principal accounting officer since

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DiMattia has served as a director of the Company since February 2022.

DiMattia has served as Chief Financial Officer of Island

Stone North America, a manufacturer and supplier of natural stone and man-made tiles, since October 2022.

DiMattia previously served

as Senior Vice President and Chief Financial Officer of Tile Shop Holdings, Inc., a publicly traded specialty retailer of natural stone

and man-made tiles, setting and maintenance materials, and related accessories, from September 2019 until January 2022, where she continued

to serve in an advisory capacity through March 2022.

She also previously provided consulting services to Tile Shop Holdings, Inc.

July 2019 until September 2019.

DiMattia has served as Chief Financial Officer of

Island Stone North America, a manufacturer and supplier of natural stone and man-made tiles, from October 2022 to March 2026.

previously served as Senior Vice President and Chief Financial Officer of Tile Shop Holdings, Inc., a publicly traded specialty

retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories, from September 2019 until

January 2022, where she continued to serve in an advisory capacity through March 2022.

She also previously provided consulting

services to Tile Shop Holdings, Inc.

from July 2019 until September 2019.

Before joining Tile Shop Holdings, Inc., Ms.

DiMattia gained over twenty-five years of experience in

financial reporting and accounting processes in positions of increasing responsibility at Virginia Tile Company, a provider of ceramic,

porcelain, glass and natural stone tiles, most recently serving as the Corporate Controller from 2005 until March 2019.

During her tenure

at Virginia Tile Company, she was responsible for establishing sound financial management, promoting effective internal accounting controls,

developing and leading highly competent accounting teams, and maintaining a documented system of accounting policies and procedures.

gained over twenty-five years of experience in financial reporting and accounting processes in positions of increasing

responsibility at Virginia Tile Company, a provider of ceramic, porcelain, glass and natural stone tiles, most recently serving as

the Corporate Controller from 2005 until March 2019.

During her tenure at Virginia Tile Company, she was responsible for

establishing sound financial management, promoting effective internal accounting controls, developing and leading highly competent

accounting teams, and maintaining a documented system of accounting policies and procedures.

Our board believes Ms.

DiMattia’s qualifications to serve as a member of our board include her retail industry experience, including

her experience overseeing retail-related information technology measures and working with a customer base that includes architects and

designers, and financial expertise, including managing audits, internal controls and mergers and acquisitions.

qualifications to serve as a member of our board include her retail industry experience, including her experience overseeing

retail-related information technology measures and working with a customer base that includes architects and designers, and

financial expertise, including managing audits, internal controls and mergers and acquisitions.

Golden has served as a director of the Company since February 2022.

Since June 2023, Mr.

Golden has served as the Chief Financial

Officer of Media Culture, a brand response media agency.

Golden was previously employed at vcfo, which offers fractional CFO and

human resources services to clients who require advisors they can trust to guide them through major changes, from April 2022 through

During 2021, Mr.

Golden served as interim Chief Financial Officer of ADB Companies, which provides strategy, design, execution

and program management services for the communication, utility, and technology industries.

Prior to that, during 2021, Mr.

Golden served

as a project manager and professional services contractor for MMC Group, Inc., which offers full-service workforce solutions, and as

interim controller at SportClips Haircuts.

During 2020, he served as a special project auditor for WebsterRogers LLP, a South Carolina-based

accounting and consulting firm that provides a broad spectrum of assurance, tax and advisory services.

From 2013 to 2019, Mr.

served as Chief Financial Officer at NBG Home, an affiliate of Nielsen & Bainbridge, LLC and one of the largest home decor manufacturing

companies and importers globally.

as the Chief Financial Officer of Media Culture, a brand response media agency, between June 2023 and February 2026.

Golden was previously employed at vcfo, which offers

fractional CFO and human resources services to clients who require advisors they can trust to guide them through major changes, from

April 2022 through May 2023.

During 2021, Mr.

Golden served as interim Chief Financial Officer of ADB Companies, which provides strategy,

design, execution and program management services for the communication, utility, and technology industries.

Prior to that, during 2021,

Golden served as a project manager and professional services contractor for MMC Group, Inc., which offers full-service workforce

solutions, and as interim controller at SportClips Haircuts.

During 2020, he served as a special project auditor for WebsterRogers LLP,

a South Carolina-based accounting and consulting firm that provides a broad spectrum of assurance, tax and advisory services.

Golden served as Chief Financial Officer at NBG Home, an affiliate of Nielsen & Bainbridge, LLC and one of the largest

home decor manufacturing companies and importers globally.

From 2008 to 2013, Mr.

Golden served as Chief Financial Officer and Professional Services Contractor

for MMC Group, Inc.

Golden has served in a variety of other financial and operational roles, including as Vice President, Controller

of Kinko’s Inc., Senior Vice President and Corporate Controller of Blockbuster, Inc., and in controller and internal audit roles

at Fuqua Industries and Qualex, Inc.

Golden served as Chief Financial Officer and Professional

Services Contractor for MMC Group, Inc.

Golden has served in a variety of other financial and operational roles, including as Vice

President, Controller of Kinko’s Inc., Senior Vice President and Corporate Controller of Blockbuster, Inc., and in controller and

internal audit roles at Fuqua Industries and Qualex, Inc.

Golden began his career at Arthur Andersen & Inc.

Our board believes Mr.

qualifications to serve as a member of our board include his financial expertise, including his status as an “audit committee financial

expert,” and his experience in the home goods and lighting industry.

Our board believes

Golden’s qualifications to serve as a member of our board include his financial expertise, including his status as an “audit

committee financial expert,” and his experience in the home goods and lighting industry.

Golden is a Certified Public Accountant.

Greenstein Brayer has served as a director of the Company since February 2022.

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of our Board of Directors

business and affairs are managed under the direction of our board of directors, which currently consists of seven directors, including

business and affairs are managed under the direction of our board of directors, which currently consists of seven directors.

The number of directors is determined by our board of directors or our stockholders, but will not be less than five persons,

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of the audit committee include:

● appointing,

approving the compensation of and assessing the independence of our independent registered

public accounting firm;

approving the compensation of and assessing the independence of our independent registered public accounting firm;

pre-approving

audit and permissible non-audit services, and the terms of such services, to be provided

by our independent registered public accounting firm;

the overall audit plan with our independent registered public accounting firm and members

of management responsible for preparing our financial statements;

and discussing with management and our independent registered public accounting firm our

annual and quarterly financial statements and related disclosures;

our disclosure controls and procedures, as well as reviewing disclosures regarding our internal

control over financial reporting;

● establishing

policies and procedures for the receipt, retention and treatment of accounting-related complaints

and concerns;

● recommending

to the board of directors, based upon the audit committee’s review and discussions

with management and our independent registered public accounting firm, whether our audited

financial statements will be included in our annual reports on Form 10-K;

with management our policies with respect to risk assessment and risk management and our

significant financial risk exposures, as well as information security and technology risks

(including cybersecurity and artificial intelligence);

audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting

the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing

our financial statements;

and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements

and related disclosures;

our disclosure controls and procedures, as well as reviewing disclosures regarding our internal control over financial reporting;

policies and procedures for the receipt, retention and treatment of accounting-related complaints and concerns;

to the board of directors, based upon the audit committee’s review and discussions with management and our independent registered

public accounting firm, whether our audited financial statements will be included in our annual reports on Form 10-K;

with management our policies with respect to risk assessment and risk management and our significant financial risk exposures, as

well as information security and technology risks (including cybersecurity and artificial intelligence);

the audit committee report required by SEC rules to be included in our annual proxy statement;

and overseeing all related person transactions for potential conflict of interest situations,

as well as annually reviewing the related party transactions policy;

and overseeing all related person transactions for potential conflict of interest situations, as well as annually reviewing the related

party transactions policy;

compliance with, and annually reviewing, the Code of Business Conduct and Ethics;

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The functions of the compensation committee include:

reviewing our overall compensation policy as it applies to our employees generally, and the

corporate goals and objectives relevant to compensation of the Executive Chairman, Co-Chief

Executive Officers and our other executive officers;

and approving or recommending to the board of directors the compensation of our executive

and approving or recommending to the board of directors our incentive compensation plans

and equity-based plans;

reviewing our overall compensation policy as it applies to our employees generally, and the corporate goals and objectives relevant

to compensation of the Executive Chairman, Chief Executive Officer and our other executive officers;

and approving or recommending to the board of directors the compensation of our executive officers;

and approving or recommending to the board of directors our incentive compensation plans and equity-based plans;

and recommending to the board of directors the compensation of our non-management directors;

the executive compensation disclosures and, if and when required, preparing the compensation

committee report required by SEC rules to be included in our annual proxy statement or Form

10-K, as applicable;

the executive compensation disclosures and, if and when required, preparing the compensation committee report required by SEC rules

to be included in our annual proxy statement or Form 10-K, as applicable;

risks relating to our compensation policies, practices and procedures;

and overseeing the application of the Company’s policy for clawback, or recoupment,

of incentive compensation;

our strategies related to human capital management, including talent acquisition, development

and retention and corporate culture;

and approving the retention, termination or compensation of any consulting firm or outside

advisor to assist in the evaluation of compensation matters.

and overseeing the application of the Company’s policy for claw back, or recoupment, of incentive compensation;

our strategies related to human capital management, including talent acquisition, development and retention and corporate culture;

and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation of

compensation matters.

member of our compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act.

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The functions of the nominating and corporate governance committee include:

● identifying

and evaluating individuals qualified to become members of the board of directors;

● recommending

to the board of directors the persons to be nominated for election as directors and to each

of the board’s committees;

● considering,

developing and recommending to the board of directors policies and procedures with respect

to the nomination of directors or other corporate governance matters;

disclosures relating to our corporate governance practices to be included in our annual proxy

statement or Form 10-K, as applicable;

our policies and practices regarding corporate social responsibility and environmental, social

and governance matters and related risks;

to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;

developing and recommending to the board of directors policies and procedures with respect to the nomination of directors or other

corporate governance matters;

disclosures relating to our corporate governance practices to be included in our annual proxy statement or Form 10-K, as applicable;

our policies and practices regarding corporate social responsibility and environmental, social and governance matters and related

proposals submitted by stockholders for inclusion in our proxy materials;

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Trading Policies and Procedures

board has adopted an insider trading policy (the “Insider Trading Policy”) that applies to all directors, officers and employees

of the Company and its subsidiaries, as well as certain other designated persons, and provides guidelines with respect to transactions

in the Company’s securities and the handling of confidential information about the Company and the companies with which the Company

engages in transactions or does business, and promotes compliance with the securities laws.

Among other things, the Insider Trading Policy

prohibits directors, officers and employees of the Company and its subsidiaries from the following:

(i) engaging in transactions in Company

securities on material non-public information, subject to certain exceptions, including pursuant to an approved trading plan under Rule

10b5-1 of the Exchange Act (“Rule 10b5-1”);

(ii) disclosing material non-public information to other parties (or “tipping”);

and (iii) engaging in transactions in securities based on material non-public information about other companies with which the Company

does business, in which the Company has significant investments, or that is involved in a potential transaction or business relationship

with the Company.

The Insider Trading Policy also prohibits our employees, officers and directors from engaging in hedging or monetization

transactions with respect to our securities, including through the use of financial instruments such as prepaid variable forwards, equity

swaps, collars and exchange funds, transactions in derivative securities related to our securities, which include publicly traded call

and put options, and short selling of our securities.

The Insider Trading Policy additionally prohibits holding our securities in a margin

account or otherwise pledging our securities as collateral, except with prior approval of the compliance officer designated under the

Insider Trading Policy.

Certain covered persons, including our directors and officers and their covered family members and controlled

entities, are subject to blackout periods during which they are restricted from transacting in our securities and are required to receive

approval from the compliance officer prior to engaging in transactions in our securities.

board has adopted

an insider trading policy (the “Insider Trading Policy”) that applies to all directors, officers and employees of the

Company and its subsidiaries, as well as certain other designated persons, and provides guidelines with respect to transactions in

the Company’s securities and the handling of confidential information about the Company and the companies with which the

Company engages in transactions or does business, and promotes compliance with the securities laws.

Among other things, the Insider

Trading Policy prohibits directors, officers and employees of the Company and its subsidiaries from the following:

(i) engaging in

transactions in Company securities on material non-public information, subject to certain exceptions, including pursuant to an

approved trading plan under Rule 10b5-1 of the Exchange Act (“Rule 10b5-1”);

(ii) disclosing material non-public

information to other parties (or “tipping”);

and (iii) engaging in transactions in securities based on material

non-public information about other companies with which the Company does business, in which the Company has significant investments,

or that is involved in a potential transaction or business relationship with the Company.

The Insider Trading Policy also prohibits

our employees, officers and directors from engaging in hedging or monetization transactions with respect to our securities,

including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds,

transactions in derivative securities related to our securities, which include publicly traded call and put options, and short

selling of our securities.

The Insider Trading Policy additionally prohibits holding our securities in a margin account or otherwise

pledging our securities as collateral, except with prior approval of the compliance officer designated under the Insider Trading

Certain covered persons, including our directors and officers and their covered family members and controlled entities, are

subject to blackout periods during which they are restricted from transacting in our securities and are required to receive approval

from the compliance officer prior to engaging in transactions in our securities.

The Insider Trading Policy also sets forth

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for transactions in Company securities, which are intended to ensure compliance with Rule 10b5-1.

For additional information, see the

Insider Trading Policy, which is included as an exhibit to this Form 10-K and posted on the investor relations section of our website

at www.skyplug.com.

For additional information, see

the Insider Trading Policy, which is included in the exhibit index to this Form 10-K and posted on the investor relations section of

our website at www.skyplug.com.

is also the policy of the Company that the Company will not engage in transactions in Company securities, or adopt any securities repurchase

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a Form 4 filed by Dov Shiff on April 2, 2025,

10, 2024, reporting the April 4, 2024 annual grant of restricted stock and stock options pursuant to the Director Compensation Program;

a Form 4 filed by Steven M.

Schmidt on October 4, 2024, reporting the September 13, 2024 cashless exercise of options;

a Form 4 filed

Schmidt on December 17, 2024, reporting the September 15, 2024 grant of RSUs;

and a Form 4 filed by Thomas J.

Ridge on January

3, 2025 reporting the conversion of preferred stock into common stock on May 1, 2023, the June 30, 2023, September 30, 2023 and December

31, 2023 issuances of restricted stock paid in lieu of the cash retainer payable for his service on the board, pursuant to the Director

Compensation Program, and the April 4, 2024 annual grant of restricted stock and stock options pursuant to the Director Compensation

reporting the March 27, 2025 annual grant of restricted stock and stock options pursuant to the Director Compensation Program;

4 filed by Rani Kohen on December 12, 2025, reporting the December 8, 2025 grant of options;

and a Form 4 filed by Dov Shiff on January

5, 2026, reporting the December 30, 2025 amendment to a convertible promissory note.

EXECUTIVE COMPENSATION

“named executive officers” for the year ended December 31, 2025 were:

Campi, Co-Chief Executive Officer ;

Sokolow, Co-Chief Executive Officer;

Sokolow, Chief Executive Officer;

John Campi, Former Co-Chief Executive Officer;

Kohen, Executive Chairman;

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Barron, Chief Operations Officer.

Sokolow and Campi

served as Co-Chief Executive Officers until September 30, 2025, when Mr.

Campi retired as Co-Chief Executive Officer of the Company pursuant

to the Company’s succession and transition plan

executive compensation program reflects our continued growth and development-oriented focus.

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Compensation Program Components

officer base salaries are based on job responsibilities and individual contributions and are designed to attract and retain employees

Each of our named executive officers (other than Mr.

Schmidt) receives a base salary set forth in an employment agreement

entered into with the Company, and the board has the discretion to review and adjust each applicable named executive officer’s

Barron and Mr.

Boisseau received an annual base salary of $150,000, $160,000, $300,000,

$150,000, and $144,000, respectively, during 2024.

and Bonus Compensation

Named Executives’ base salaries are set to align with the scope and complexity of their roles, their capabilities, and competitive

market conditions.

and Bonus Compensation-Cash based and Equity Compensation Awards

supplement our executive salaries with cash and share-based payments as additional incentive to grow our business to provide a competitive

aggregate compensation package considering our size and scale.

We try to prioritize share-based payments over cash-based payments incentive

whenever possible.

have an executive compensation recovery policy that provides for recoupment in the event of a restatement or misconduct to ensure accountability.

named executive officers’ employment agreements also provide for the receipt of incentive and/or bonus compensation, which may

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These incentive compensation and bonus awards are designed to focus our executive officers on

our business objectives of growing our business, including increasing our revenue and income.

our business objectives of increased growth.

Sokolow will receive a minimum bonus every six months during the term of his employment agreement equal to $40,000 in cash or stock,

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compensation committee approved the following cash and equity awards during 2025:

December 15, 2024, the compensation committee approved the payment of a cash bonus of $45,000 to each of Mr.

Campi and Mr.

a form of retention award.

December 15, 2024, the compensation committee granted to Ms.

Barron a five-year option to purchase 100,000 shares of the Company’s

common stock at an exercise price of $1.09 per share, which vests in three equal annual instalments beginning on January 1, 2025, subject

to continued employment through the applicable vesting date.

to his employment agreement, Mr.

Schmidt received the following equity grants on September 15, 2024, subject to continued employment

through the applicable vesting date:

a five-year option to purchase 250,000 shares of common stock at an exercise price of $0.90 per

share, 10,000 of which vested on December 20, 2024, with the remaining 240,000 vesting in equal quarterly instalments of 20,000 beginning

on December 31, 2024;

and 250,000 RSUs, 10,000 of which vested on December 20, 2024, with the remaining 240,000 vesting in equal quarterly

instalments of 20,000 beginning on December 31, 2024.

In addition, also pursuant to his employment agreement, Mr.

Schmidt received the

following equity grants on December 15, 2024, subject to continued employment through the applicable vesting date:

a five-year option

to purchase 100,000 shares of common stock at an exercise price of $1.09 per share, which vests in two equal annual instalments beginning

on January 1, 2025;

and 100,000 RSUs, which vest in two equal annual instalments beginning on January 1, 2025.

August 2024, the compensation committee granted the payments of cash bonus of $70,000 to Marc Boisseau payable in twelve monthly

payments effective September 1, 2024.

also grant equity-based sign-on bonuses when necessary and appropriate to advance our and our stockholders’ interests, including

to attract or retain top executive-level talent.

Kohen’s Chairman Agreement provided for a sign-on bonus of a stock option

to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which was granted effective January 1, 2022 and

vested in full on January 1, 2023.

Boisseau’s agreement provided for a signing bonus consisting of (1) 10,000 shares of restricted

common stock, which vested in four equal instalments as of the end of each quarter in 2022, and (2) a three-year stock option to purchase

10,000 shares of common stock at an exercise price of $12.34 per share, which vested in four equal instalments at the end of each quarter

in 2022, and which were both granted effective March 11, 2022.

On March 20, 2025, the compensation committee

approved a cash bonus to Mr.

Campi equal to $30,000.

On March 27, 2025, the compensation committee granted

Sokolow a five-year option to purchase 150,000 shares of the Company’s common stock at an exercise price of $1.26 per share,

which vests in three equal annual installments, beginning on the grant date, subject to continued employment through the vesting date.

On August 8, 2025, the compensation committee approved

the payment of a twelve-month bonus to Mr.

Boisseau equal to $75,000, payable in equal monthly installments over twelve months, beginning

on September 2025 and continuing through August 2026.

On August 15, 2025, the compensation committee granted

Barron a five-year option to purchase 500,000 shares of the Company’s common stock at an exercise price of $1.11 per share,

which vests in four equal annual installments, beginning on the grant date subject to continued employment through the applicable vesting

On December 8, 2025, the compensation committee granted

Kohen a five-year option to purchase 1,500,000 shares of the Company’s common stock at an exercise price of $2.42 per share,

which vests in six quarterly installments of 250,000 beginning on December 31, 2025, subject to continued employment through the vesting

On December 15, 2025, the compensation committee

granted to Mr.

Sokolow 150,000 restricted stock units (“RSUs”) representing a contingent right to receive one share of the

Company’s common stock which vest in three equal annual installments beginning on January 1, 2026 and a five-year option to purchase

150,000 shares of the Company’s common stock at an exercise price of $2.15 per share, which vest in three equal annual installments

beginning on January 1, 2026, subject to continued employment through the applicable vesting dates.

We may also grant equity-based sign-on bonuses when necessary and appropriate

to advance our and our stockholders’ interests, including to attract or retain top executive-level talent.

and Perquisites

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personal benefits to our named executive officers, except in limited circumstances.

For instance, Mr.

Kohen is eligible to receive a

$1,000 per month vehicle allowance, pursuant to the Chairman Agreement.

On occasion, the Company pays travel expenses for family members

and guests of named executive officers, to accompany named executive officers on trips for business purposes such as trade shows and

other events.

Compensation Table

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Name and Principal Position

Co-Chief Executive Officer

Former Co-Chief Executive Officer

Chief Executive Officer

Executive Chairman

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Chief Operations Officer

value of stock awards and options in this table represents the fair value of such awards

granted or modified during the fiscal year, as computed in accordance with Financial Accounting

Standards Board Accounting Standards Codification Topic 718 (“Topic 718”).

assumptions used to determine the valuation of the awards are discussed in Note 2 and Note

11 to our consolidated financial statements for the year ended December 31, 2024.

Barron received options to purchase 100,000 shares of common stock at an exercise

price of $1.09 per share;

Schmidt received 350,000 RSUs, options to purchase

250,000 shares of common stock at an exercise price of $0.90 per share, and options to purchase

100,000 shares of common stock at an exercise price of $1.09 per share.

(3) Non-Equity

Incentive Plan Compensation reflects incentive compensation payable pursuant to each individual’s

respective employment agreement, typically as a percent of the Company’s net revenue

or sales earned, and in each case as described below under “Agreements with Named Executive

Officers.” In March 2024, Mr.

value of stock awards and options in this table represents the fair value of such awards granted or modified during the fiscal year,

as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“Topic 718”).

The assumptions used to determine the valuation of the awards are discussed in Note 2 and Note 11 to our consolidated financial statements

for the year ended December 31, 2025.

Barron received options to purchase 500,000 shares of common stock at an exercise price of $1.11 per share;

received options to purchase 1,500,000 shares of common stock at an exercise price of $2.42 per share;

and (iii) Mr.

Sokolow received

options to purchase 150,000 shares of common stock at an exercise price of $1.26 per share, 150,000 RSUs, and options to purchase 150,000

shares of common stock at an exercise price of $2.15.

Barron received options to purchase 100,000 shares of common stock at an exercise price of $1.09 per share;

Schmidt received 350,000 RSUs, options to purchase 250,000 shares of common stock at an exercise price of $0.90 per share, and options

to purchase 100,000 shares of common stock at an exercise price of $1.09 per share.

Incentive Plan Compensation reflects incentive compensation payable pursuant to each individual’s respective employment agreement,

typically as a percent of the Company’s net revenue or sales earned, and in each case as described below under “Agreements

with Named Executive Officers.” In March 2024, Mr.

Campi and Ms.

Barron each entered into a commission termination

agreement, terminating the incentive compensation-related provisions in their employment

agreements and agreeing no amounts would be paid pursuant to such provisions for prior periods

that had not previously been paid.

occasion, the Company pays travel and lodging expenses for family members and guests of named

executive officers, to accompany named executive officers on trips for business purposes

such as road shows and other events.

There was no incremental cost associated with family

member travel that required disclosure in the Summary Compensation Table.

For 2024, all other

compensation consisted of the following:

Sokolow, $21,909 for health insurance premiums,

Kohen, $28,410 for health insurance premiums, $28,846 paid in lieu of vacation, and

Barron each entered into a commission termination agreement,

terminating the incentive compensation-related provisions in their employment agreements and agreeing no amounts would be paid pursuant

to such provisions for prior periods that had not previously been paid.

Other Compensation includes the amounts identified below for the applicable fiscal year:

Name and Principal Position

Health Insurance Premiums

401(k) Employer contributions

Paid time-Off

Car Allowance

Boisseau, $4,210 for health insurance premiums and $7,800

for contributions to the Company’s 401K Plan, and for Ms.

Barron, $10,720 for health

insurance premiums and $7,040 for contributions to the Company’s 401K Plan, and $12,500 paid in lieu of vacation.

2024, we paid $187,500 to Mr.

Campi for wages in arrears.

Former Co-Chief Executive Officer

Chief Executive Officer

Executive Chairman

Marc-Andre Boisseau

Chief Financial Officer

Patricia Barron

Chief Operations Officer

following shows each named executive officer’s 2025 compensation separated by cash-based compensation and stock-based compensation:

Name and Principal Position

Cash-Based Compensation

Stock-Based Compensation

Total Compensation

Former Co-Chief Executive Officer

Chief Executive Officer

Executive Chairman

Marc-Andre Boisseau

Chief Financial Officer

Patricia Barron

Chief Operations Officer

Equity Awards at Fiscal Year End

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Option Awards

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) Not exercisable

Equity incentive plan awards:

Number of securities underlying unexercised

options (#) exercisable

Number of securities underlying unexercised

options (#) Not exercisable

incentive plan awards:

Number of securities underlying unexercised unearned options (#)

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Option expiration date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested ($)*

Equity incentive plan awards:

Number of shares or units of stock

that have not vested (#)

Market value of shares or units of

stock that have not vested ($)*

incentive plan awards:

Number of unearned shares, units or other rights that have not vested

Equity incentive plan awards:

Market or payout value of unearned shares, units or other rights that have not vested

incentive plan awards:

Market or payout value of unearned shares, units or other rights that

have not vested

Leonard Sokolow

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Patricia Barron

Based on the closing stock price of our common stock of $1.16 on December 31, 2024, the last trading day of the 2024 fiscal year.

Based on the closing stock price of our common stock of $2.17 on December 31, 2025, the last trading day of 2025.

options and RSUs vest as follows:

200,000 will vest in four semi-annual instalments of 50,000,

beginning on March 12, 2025, and 30,000 will vest on March 12, 2027.

200,000 will vest in four semi-annual instalments of 50,000, beginning on March 12, 2025, and 30,000

will vest on March 12, 2027.

Kohen’s chairman agreement, Mr.

Kohen has the following options as supplemental

bonus compensation, subject to the Company achieving the specified market capitalization

(i) options to purchase 500,000 shares of common stock at an exercise price of $6.00 per

share, upon the Company achieving each of the following market capitalizations:

and $2.0 billion;

(ii) options to purchase 500,000 shares of common stock at an exercise

price of $7.00 per share, upon the Company achieving each of the following market capitalizations:

$3.0 billion, $4.0 billion, $5.0 billion and $6.0 billion;

and (iii) options to purchase

500,000 shares of common stock at an exercise price of $8.00 per share, upon the Company

achieving each of the following market capitalizations:

$7.0 billion, $8.0 billion, $9.0

Kohen has the following options as supplemental bonus compensation, subject to the Company

achieving the specified market capitalization (i) options to purchase 500,000 shares of common stock at an exercise price of $6.00

per share, upon the Company achieving each of the following market capitalizations:

$1.5 billion and $2.0 billion;

Kohen also received supplemental bonus compensation such that,

in the event the Company achieves a $10.0 billion valuation, for each valuation increase

of $1.0 billion up to $30.0 billion Company valuation, Mr.

Kohen will receive an option to

purchase 500,000 shares at an exercise price of $12.00 per share.

(ii) options to

purchase 500,000 shares of common stock at an exercise price of $7.00 per share, upon the Company achieving each of the following

market capitalizations:

$3.0 billion, $4.0 billion, $5.0 billion and $6.0 billion;

and (iii) options to purchase 500,000 shares of

common stock at an exercise price of $8.00 per share, upon the Company achieving each of the following market capitalizations:

billion, $8.0 billion, $9.0 billion and $10.0 billion.

Kohen also received supplemental bonus compensation such that, in the

event the Company achieves a $10.0 billion valuation, for each valuation increase of $1.0 billion up to $30.0 billion Company valuation,

Kohen will receive an option to purchase 500,000 shares at an exercise price of $12.00 per share.

options vest on January 1, 2025.

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with Named Executive Officers

Campi (Co-Chief Executive Officer)

September 1, 2019, the Company entered into an Executive Employment Agreement with John Campi, then its Chief Executive Officer and Chief

Financial Officer (the “Campi Agreement”), which superseded Mr.

Campi’s previous employment agreement effective September

Effective September 2023, Mr.

Campi began serving under the Campi Agreement as Co-Chief Executive Officer.

The Campi Agreement

provided for an initial term of one year, which expired August 31, 2020.

The term may be, and has been, renewed by the mutual agreement

Campi and the Company.

Subject to other customary terms and conditions of such agreements, the Campi Agreement provides that Mr.

Campi will receive:

(i) a base salary of $150,000 per year, which may be adjusted each year at the discretion of the board;

a sign-on bonus of a stock option to purchase 120,000 shares of common stock at an exercise price of $6.00 per share, which vested in

its entirety on December 31, 2020.

Campi was previously eligible to receive incentive compensation consisting of (a) a cash component,

paid on an annual basis, equal to (x) 0.25% of the Company’s annual gross revenue and (y) 3.0% of the Company’s annual net

income, and (b) a stock option component, consisting of five-year options to purchase shares of common stock in an amount equal to 0.5%

of the Company’s quarterly net income, the exercise price of which will be determined at the time such options are granted.

March 2024, Mr.

Campi entered into a commission termination agreement, terminating the incentive compensation-related provisions in his

employment agreement and agreeing no amounts would be paid pursuant to such provisions for prior periods.

Campi is also entitled

to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred in the performance of his duties.

to the Campi Agreement, Mr.

Campi may be terminated for “cause,” which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform the duties of his employment that is materially injurious to the financial condition

or business reputation of the Company;

a material violation of the Campi Agreement by Mr.

Campi that is not cured within 30 days of written

Campi’s death, disability or incapacity.

Following the expiration of the initial term, the Campi Agreement may

be terminated by the board of directors at its discretion, in which case Mr.

Campi will receive a payment equal to 50% of his then-applicable

annual base salary.

In addition, Mr.

Campi may terminate the Campi Agreement at his discretion by providing at least 30 days’ prior

written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the Campi

Agreement will survive, and the Company will use its best efforts to ensure that the transferee or surviving company is bound by the

provisions of the Campi Agreement.

All shares granted will vest immediately.

Sokolow (Co-Chief Executive Officer)

Campi (Former Co-Chief Executive Officer)

to his retirement as Co-Chief Executive Officer on September 30, 2025, Mr.

Campi was a party to an employment agreement with the Company.

Sokolow (Chief Executive Officer)

connection with his employment as Co-Chief Executive Officer, the Company and Mr.

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Kohen will receive:

salary of $300,000 per year commencing January 1, 2022 (an increase from $250,000 per year under the 2019 Chairman Agreement), which

will be increased by the Company in the event the Company has a significant cash raise;

(ii) annual equity compensation consisting

of options to purchase 1,020,000 shares of common stock at an exercise price of $12.00 per share, which vest in three equal annual

instalments on each of January 1, 2023, 2024 and 2025 (subject to certain exceptions) and have a five-year term;

(iii) a sign-on

bonus stock option to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which vested in its entirety

on January 1, 2023 and has a five-year term;

(iv) supplemental bonus compensation of stock options to purchase up to 6,000,000

shares of common stock at an exercise price ranging between $6.00 and $8.00 per share, determined based on the achievement of

specified market capitalizations of the Company, as described further below, which have a five-year term;

(v) supplemental bonus

compensation such that, in the event the Company achieves a $10.0 billion valuation, for each valuation increase of $1.0 billion up

to $30.0 billion Company valuation, Mr.

Kohen will receive an option to purchase 500,000 shares at an exercise price of $12.00 per

and (vi) incentive compensation equal to 0.5% of the Company’s gross revenue, which will be paid in cash, stock and/or

options on an annual basis.

In the event the Company exceeds a $30.0 billion valuation, the Company and Mr.

Kohen will negotiate a

mutually acceptable amendment to the Chairman Agreement.

(i) a base salary

of $300,000 per year commencing January 1, 2022 (an increase from $250,000 per year under the 2019 Chairman Agreement), which will be

increased by the Company in the event the Company has a significant cash raise;

(ii) annual equity compensation consisting of options

to purchase 1,020,000 shares of common stock at an exercise price of $12.00 per share, which vest in three equal annual instalments on

each of January 1, 2023, 2024 and 2025 (subject to certain exceptions) and have a five-year term;

(iii) a sign-on bonus stock option

to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which vested in its entirety on January 1, 2023

and has a five-year term;

(iv) supplemental bonus compensation of stock options to purchase up to 6,000,000 shares of common stock at

an exercise price ranging between $6.00 and $8.00 per share, determined based on the achievement of specified market capitalizations

of the Company, as described further below, which have a five-year term;

(v) supplemental bonus compensation such that, in the event

the Company achieves a $10.0 billion valuation, for each valuation increase of $1.0 billion up to $30.0 billion Company valuation, Mr.

Kohen will receive an option to purchase 500,000 shares at an exercise price of $12.00 per share;

and (vi) incentive compensation equal

to 0.5% of the Company’s gross revenue, which will be paid in cash, stock and/or options on an annual basis.

In the event the Company

exceeds a $30.0 billion valuation, the Company and Mr.

Kohen will negotiate a mutually acceptable amendment to the Chairman Agreement.

Kohen is eligible for the following supplemental bonus compensation under the Chairman Agreement (in addition to the supplemental bonus

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(i) a grant of 250,000 RSUs and five-year

options to purchase up to 250,000 shares of common stock, each of which vests as to 10,000 RSUs or options on December 20, 2024, with

options to purchase up to 250,000 shares of common stock, each of which vested as to 10,000 RSUs or options on December 20, 2024, with

the remaining 240,000 RSUs or options vesting in equal quarterly instalments of 20,000 RSUs or options beginning on December 31, 2024;

1 unchanged sentence

annual instalments on January 1, 2025 and January 1, 2026.

Schmidt may receive additional equity grants or other bonus or other

incentive compensation, as determined by the Company.

Schmidt is also entitled to up to four weeks of vacation per year and to receive

expense reimbursement for reasonable expenses, approved in advance in writing by the Company, incurred in the performance of his duties.

The Schmidt Agreement includes customary confidentiality and intellectual property provisions and post-employment non-solicitation and

non-competition covenants.

The Schmidt Agreement provides for a term ending December 31, 2027 and may be terminated by either party at

any time, for any reason, upon 30 days’ written notice or immediately and without notice in the event of any breach or default

of a material term or condition of the Schmidt Agreement that is not remedied or cured within ten days after delivery of written notice

Any portion of an award that has not vested as of the date Mr.

Schmidt ceases to be an employee of the Company will be forfeited

and terminated automatically.

Schmidt may receive additional equity grants or other bonus or other incentive

compensation, as determined by the Company.

Schmidt is also entitled to up to four weeks of vacation per year and to receive expense

reimbursement for reasonable expenses, approved in advance in writing by the Company, incurred in the performance of his duties.

Schmidt Agreement includes customary confidentiality and intellectual property provisions and post-employment non-solicitation and non-competition

The Schmidt Agreement provides for a term ending December 31, 2027 and may be terminated by either party at any time, for

any reason, upon 30 days’ written notice or immediately and without notice in the event of any breach or default of a material

term or condition of the Schmidt Agreement that is not remedied or cured within ten days after delivery of written notice thereof.

portion of an award that has not vested as of the date Mr.

Schmidt ceases to be an employee of the Company will be forfeited and terminated

automatically.

Boisseau (Chief Financial Officer)

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serve as the Company’s Chief Financial Officer (the “Boisseau Agreement”).

Subject to other customary terms and conditions

of such agreement, the Boisseau Agreement provides that Mr.

Boisseau will:

(i) receive a base salary of $144,000 per year, subject to

annual review and adjustment;

(ii) receive a signing bonus consisting of (1) 10,000 shares of common stock, which vested in four equal

instalments at the end of each quarter in 2022 and (2) a three-year stock option to purchase 10,000 shares of common stock, which vested

in four equal instalments at the end of each quarter in 2022;

and (iii) be eligible to receive performance-based compensation in the

form of a bonus, payable in equity and/or cash, as determined by the compensation committee, subject to the achievement of performance

metrics and other criteria as determined by the Executive Chairman and approved by the compensation committee.

Subject to other customary terms and

conditions of such agreement, the Boisseau Agreement provides that Mr.

(i) receives a base salary of $144,000 per year,

subject to annual review and adjustment;;

and (ii) will be eligible to receive performance-based compensation in the form of a

bonus, payable in equity and/or cash, as determined by the compensation committee, subject to the achievement of performance metrics

and other criteria as determined by the Executive Chairman and approved by the compensation committee.

Boisseau is also entitled

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incurred in the performance of his duties.

The Boisseau Agreement also contains customary non-competition and non-solicitation covenants

and does not provide for any specified severance benefits.

The Boisseau Agreement also contains customary non-competition and non-solicitation

covenants and does not provide for any specified severance benefits.

The Boisseau Agreement provides that Mr.

Boisseau’s employment is “at

will,” and either party may terminate his employment at any time and for any reason, without cause, upon 90 days’ advance

written notice.

employment is “at will,” and either party may terminate his employment at any time and for any reason, without cause,

upon 90 days’ advance written notice.

Incentive Plans

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Recovery Policy

2023, the board of directors adopted the Company’s Compensation Recovery Policy to comply with SEC and Nasdaq rules for the clawback

of certain executive compensation in the event that we are required to prepare a restatement of our financial statements due to material

noncompliance with any financial reporting requirement under the securities laws.

2023, the board of directors adopted the Company’s Compensation Recovery Policy to comply with SEC and Nasdaq rules for the claw

back of certain executive compensation in the event that we are required to prepare a restatement of our financial statements due to

material noncompliance with any financial reporting requirement under the securities laws.

In the event of such a restatement, the Compensation

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stock options or other equity awards to our named executive officers or other employees at certain times.

During the year ended December 31, 2025, we did not award options to any

of our named executive officers during the period beginning four business days before and ending one business after the filing of a periodic

report on Form 10-Q or Form 10-K or the filing or furnishing of a Current Report on Form 8-K that discloses material nonpublic information,

except as included in the table below.

Under our Director Compensation

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the annual report is filed on Form 10-K.

Number of securities underlying the award

Exercise price of the award ($/Share)

Grant date fair value of the award

Percentage change in the closing market price of the securities underlying the award between the trading day ending immediately prior to the disclosure of material nonpublic information and the trading day beginning immediately following the disclosure of material nonpublic information

the director compensation program approved by the board in March 2023 (the “Director Compensation Program”), for service

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Ridge and Shiff have each elected to receive their 2025 annual cash retainer in shares of common

For 2026, all shares will be granted on December 31, 2026, with the number

of shares granted to be determined based on the opening price per share of common stock on Nasdaq on such date.

Ridge and Shiff

have each elected to receive his 2026 annual cash retainer in shares of common stock.

addition, on the third trading day after the earlier of the date of the earnings release or the date the annual report is filed on Form

1 unchanged sentence

which vest immediately on the Program Grant Date, and (ii) options to purchase up to 5,000 shares of common stock with an exercise price

equal to the closing price of common stock on Nasdaq on the Program Grant Date, which will vest in twelve equal monthly instalments

beginning on the last day of the month in which the options were granted and expire five years from the Program Grant Date.

equal to the closing price of common stock on Nasdaq on the Program Grant Date, which will vest in twelve equal monthly instalments beginning

on the last day of the month in which the options were granted and expire five years from the Program Grant Date.

service as a member of the audit committee, compensation committee and/or nominating and corporate governance committee, non-employee

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Compensation Table

following table summarizes the compensation paid to each non-employee director who served during the fiscal year ended December 31, 2024.

following table summarizes the compensation paid to each non-employee director who served during 2025.

All compensation earned by Messrs.

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Option awards

Non-equity incentive plan compensation

Nonqualified deferred compensation earnings

2 unchanged sentences

Greenstein Brayer

table reflects the grant date fair value, as computed in accordance with Topic 718, of the

restricted share awards and options granted to directors in 2024.

The assumptions used to

determine the valuation of the awards are discussed in Note 2 and Note 11 to our consolidated

table reflects the grant date fair value, as computed in accordance with Topic 718, of the restricted share awards and options granted

to directors in 2025.

The assumptions used to determine the valuation of the awards are discussed in Note 2 and Note 11 to our consolidated

financial statements for the 2025 fiscal year.

All stock options reported in the table above

were granted with an exercise price of $1.09 per share and vest in twelve equal monthly instalments

beginning on April 30, 2024.

were no unvested stock awards held by non-employee directors as of December 31, 2024.

The total number of unexercised option awards (vested

and unvested) held by our non-employee directors as of December 31, 2024 was as follows:

All stock options reported in the table above were granted with an exercise price

of $0.79 per share and vest in twelve equal monthly instalments beginning March 2025.

There were no unvested stock awards held by non-employee

directors as of December 31, 2025.

The total number of unexercised option awards (vested and unvested) held by our non-employee directors

as of December 31, 2025 was as follows:

DiMattia, 87,500 options;

Golden, 46,000

Golden, 64,000 options;

Greenstein Brayer, 57,000 options;

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of our executive officers and directors as a group;

person or group of affiliated persons known by us to be the beneficial owner of more than

5% of our common stock, Series A Preferred Stock, or Series A-1 Preferred Stock.

person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock, Series A Preferred

Stock, Series A-1 Preferred Stock or Series A-2 Preferred Stock.

ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

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and entities named in the table below have sole voting and investment power with respect to all common stock shown as beneficially owned

percentage of beneficial ownership of common stock is based on 104,471,445 shares of common stock issued and outstanding as of March 13, 2025.

The percentage of beneficial ownership of Series A Preferred Stock and Series A-1 Preferred Stock is based on 200,000 shares and 260,000

shares, respectively, issued and outstanding as of March 13, 2025.

The percentage of total voting power is based on the shares of common

stock issued and outstanding as of March 13, 2025, plus the shares of common stock issuable upon the conversion of the Series A Preferred

Stock and Series A-1 Preferred Stock issued and outstanding as of March 13, 2025 based on the conversion price in effect for the preferred stock

on March 13, 2025.

Shares of our common stock that are subject to options

or warrants exercisable, RSUs vesting, or notes or preferred stock convertible within 60 days of March 13, 2025 are deemed to be outstanding

for computing the percentage ownership of common stock and total voting power of the person holding such options, warrants, RSUs, notes

and/or preferred stock and the percentage ownership of any group in which the holder is a member, but are not deemed outstanding for

computing the percentage of any other person, except that total voting power includes the shares of common stock issuable upon conversion

of the Series A Preferred Stock and Series A-1 Preferred Stock in determining percentage ownership, as noted above.

The percentage of beneficial

ownership of common stock is based on 133,281,119 shares of common stock issued and outstanding as of March 18, 2026.

The percentage

of beneficial ownership of Series A Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock is based on 200,000

shares, 253,000 shares and 60,000 shares, respectively, issued and outstanding as of March 18, 2026.

The percentage of total voting

power is based on the shares of common stock issued and outstanding as of March 18, 2026, plus the shares of common stock issuable

upon the conversion of the Series A Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock issued and

outstanding as of March 18, 2026 based on the conversion price in effect for the preferred stock on March 18, 2026.

Shares of our

common stock that are subject to options or warrants exercisable, RSUs vesting, or notes or preferred stock convertible within 60

days of March 18, 2026 are deemed to be outstanding for computing the percentage ownership of common stock and total voting power of

the person holding such options, warrants, RSUs, notes and/or preferred stock and the percentage ownership of any group in which the

holder is a member, but are not deemed outstanding for computing the percentage of any other person, except that total voting power

includes the shares of common stock issuable upon conversion of the Series A Preferred Stock, Series A-1 Preferred Stock and Series

A-2 Preferred Stock in determining percentage ownership, as noted above.

as otherwise indicated below, the address of each beneficial owner is c/o SKYX Platforms Corp., 2855 W.

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Percentage of Class

Number of Shares of Series A-2 Preferred Stock Beneficially Owned

Percentage of Class

Total Voting Power

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Kohen, Executive Chairman and Director (2)

Motek 7 SQL LLC (3)

Strul Associates Limited Partnership (3)

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Michael and Zelene Fowler (6)

Nagelberg 2023 Revocable Trust (8)

MSD Family Partners II (7)

Freeman Caribbean Investments, LLC (8)

Schmidt, President (14)

Harry & Brenda Mittelman Revocable Living Trust (9)

Schmidt, President (10)

Directors and Named Executive Officers (not otherwise included above)

Campi, Co-Chief Executive Officer (11)

Sokolow, Co-Chief Executive Officer, Director (11)

Marc-Andre Boisseau (12)

Ridge, Director (13)

Patricia Barron, Chief Operations Officer (14)

2 unchanged sentences

Greenstein Brayer, Director (17)

Ridge, Director (19)

All directors and current executive officers as a group (11 persons) (20)

Represents beneficial ownership of less than one percent.

directors and current executive officers as a group (10 persons) (18)

* Represents beneficial

ownership of less than one percent.

on a Form 4 and Schedule 13D/A filed by Mr.

Shiff on January 3, 2024 and October 10, 2023,

respectively.

Includes 13,274,618 shares of common stock held by DZDLUX s.a.r.l., of which

Shiff is a controlling person;

235,712 shares of common stock held by Shiff Group Assets

Ltd., of which Mr.

Shiff is a controlling person;

1,488,529 shares of common stock held directly

and 40,000 shares held by Mr.

Shiff on January 2, 2026 and January 27, 2026, respectively.

Includes 13,274,618 shares

of common stock held by DZDLUX s.a.r.l., of which Mr.

Shiff is a controlling person, 235,712 shares of common stock held by Shiff

Group Assets Ltd., of which Mr.

Shiff is a controlling person, 379,955 shares held by Shiff Group Investments Ltd., of which Mr.

Shiff is the President and Chief Executive Officer, 1,507,952 shares of common stock held directly by Mr.

Shiff, and 40,000 shares

Shiff’s spouse.

Also includes 90,000 shares

of common stock underlying stock options that are exercisable within 60 days of March 13,

2025 and 40,000 shares of common stock issuable upon conversion of the principal amount of

an outstanding convertible note held by Shiff Group Investments Ltd., of which Mr.

is the President and Chief Executive Officer.

As a result of his positions at DZDLUX s.a.r.l,

Shiff Group Assets Ltd.

Also includes 45,000 shares of common stock underlying stock options held by or vesting to Mr.

Shiff that are exercisable within 60 days of March 18, 2026.

As a result of his positions at DZDLUX s.a.r.l, Shiff Group Assets

and Shiff Group Investments Ltd., Mr.

Shiff may be deemed to be the

beneficial owner of the shares held by such entities and have voting and dispositive power

over such shares.

Shiff may be deemed to be the beneficial owner of the shares held by such entities and

have voting and dispositive power over such shares.

on a Form 4 and Schedule 13D/A filed by Mr.

Kohen on June 13, 2022 and July 7, 2023, respectively.

Includes 16,001 shares of common stock held directly by Mr.

Kohen, 9,143,969 shares of common

stock held by KRNB Holdings LLC and 100,000 shares of common stock held by Mr.

family member, as well 3,140,000 shares of common stock underlying stock options that are

exercisable within 60 days of March 13, 2025.

Kohen on December 12, 2025 and January 28, 2026, respectively.

Includes 16,001 shares

of common stock held directly by Mr.

Kohen, 9,143,969 shares of common stock held by KRNB Holdings LLC and 100,000 shares of common

stock held by Mr.

Kohen’s family member, as well as 2,640,000 shares of common stock underlying stock options are held by or

vesting to Mr.

Kohen that are exercisable within 60 days of March 18, 2026.

As manager of KRNB Holdings LLC, Mr.

may be deemed to be the beneficial owner of the shares held by KRNB Holdings LLC and have

voting and dispositive power over such shares.

on a Schedule 13G filed by Motek 7 SQL LLC on February 16, 2022.

As manager of Motek 7 SQL

LLC, Hillel Bronstein may be deemed to be the beneficial owner of the shares held by Motek

7 SQL LLC and have voting and dispositive power over such shares.

The business address of

Motek 7 SQL LLC is c/o Mansfield Bronstein, PA, 500 Broward Blvd., Suite 1450, Fort Lauderdale,

Florida 33394.

250,000 shares of common stock issuable upon conversion of Series A-1 Preferred

Stock, 5,070,985 shares of common stock, 125,000 shares of common stock issuable upon exercise of

an outstanding warrant, 1,018,519 shares of common stock underlying convertible promissory

notes that are exercisable within 60 days of March 131, 2025 held by Strul Associates Limited

Partnership, and 75,000 shares of common stock underlying stock options that are exercisable

Kohen may be deemed

to be the beneficial owner of the shares held by KRNB Holdings LLC and have voting and dispositive power over such shares.

416,667 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by Strul Associates Limited Partnership

(“SALP”), 5,000,000 shares of common shares of common stock underlying a convertible promissory note held by SALP that

are exercisable within 60 days of March 18, 2026, which contain a provision limiting the issuance of shares upon conversion to

not exceed 4.99% of the Company’s issued and outstanding shares of common stock, 125,000 shares of common stock issuable upon

exercise of an outstanding warrant held by SALP, 988,162 shares of common stock held by held by SALP, 325,000 shares of common stock

held by Aubrey Strul, and 325,000 shares of common stock underlying stock options held by or vesting to Mr.

Strul that are exercisable

within 60 days of March 18, 2026.

As President of Strul Associates Limited Partnership, Aubrey

Strul may be deemed to be the beneficial owner of the shares held by Strul Associates Limited

Partnership and have voting and dispositive power over such shares.

The business address

of Strul Associates Limited Partnership is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida

Aubrey Strul, the manager of Strul Associates LLC, the general partner of SALP, may be deemed

to be the beneficial owner of the shares held by SALP and has voting and dispositive power over such shares.

The address of Mr.

and SALP is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida 33434.

4,166,667 shares of common stock issuable upon conversion of Series A Preferred Stock held by SKY Opportunity I LLC, 100,000 shares

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Shaner or vesting within 60 days of March 18, 2026, and 100,000 options held by Mr.

Shaner that are

exercisable within 60 days of March 13, 2025.

Shaner, the Manager of Shaner Sky LLC, which is the Manager of SKY Opportunity I LLC, may be deemed to be the

beneficial owner of the shares held by SKY Opportunity I LLC and to have voting and dispositive power over such shares.

for SKY Opportunity I LLC and Mr.

are exercisable within 60 days of March 18, 2026.

Shaner, the Manager of Shaner Sky LLC, which is the Manager of SKY Opportunity

I LLC, may be deemed to be the beneficial owner of the shares held by SKY Opportunity I LLC and to have voting and dispositive power

over such shares.

The address for SKY Opportunity I LLC and Mr.

Shaner is 1965 Waddle Road, State College, Pennsylvania 16803.

500,000 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held

by Steven Siegelaub and 125,000 shares of common stock issuable upon conversion of Series

A-1 Preferred Stock held by Investment 2018 LLC.

Also includes the following shares of common

(i) 831,926 shares held by Safety Investors 2014 LLC;

(ii) 1,016,591 shares held by

Investment 2013, LLC;

(iii) 104,622 shares held by 301 Office Ventures, LLC;

shares held by Enterprises 2013, LLC;

(v) 719,521 shares held by Investment 2018 LLC;

60,000 shares held by DRS Real Estate Ventures LLC;

(vii) 92,872 shares held jointly by Mr.

Siegelaub and his spouse;

(viii) 63,244 shares held by Mr.

(ix) 58,334 shares

of common stock issuable upon conversion of the principal amount of an outstanding convertible

note held by Sky Technology Partners, LLC;

and (x) 200,000 shares of common stock underlying

stock options held jointly by Mr.

Siegelaub and his spouse that are currently exercisable.

As the managing member of each of 301 Office Ventures, LLC, Enterprises 2013, LLC,

Investment 2013 LLC, Safety Investors 2014 LLC, Investment 2018 LLC, DRS Real Estate Ventures

LLC and Sky Technology Partners, LLC, Mr.

Siegelaub may be deemed to the beneficial owner

of the shares held by such entities and to have voting and dispositive power over such shares.

833,334 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by Steven Siegelaub.

Also includes 831,926

shares held by Safety Investors 2014 LLC, 1,016,591 shares held by Investment 2013, LLC, 104,622 shares held by 301 Office Ventures,

LLC, 87,424 shares held by Enterprises 2013, LLC, 719,521 shares held by Investment 2018 LLC, 60,000 shares held by DRS Real Estate

Ventures LLC, 92,872 shares held jointly by Mr.

Siegelaub and his spouse, 63,244 shares held by Mr.

Siegelaub, 58,334 shares of common

stock issuable upon conversion of the principal amount of an outstanding convertible note held by Sky Technology Partners, LLC, and

100,000 shares of common stock underlying stock options held jointly by Mr.

Siegelaub and his spouse that are exercisable within

60 days of March 18, 2026.

As the managing member of each of 301 Office Ventures, LLC, Enterprises 2013, LLC, Investment 2013 LLC,

Safety Investors 2014 LLC, Investment 2018 LLC, DRS Real Estate Ventures LLC and Sky Technology Partners, LLC, Mr.

Siegelaub may

be deemed to the beneficial owner of the shares held by such entities and to have voting and dispositive power over such shares.

The address of Mr.

Siegelaub and his affiliated entities is 361 E.

Hillsboro Blvd., Deerfield

Beach, Florida 33441.

500,000 shares of common stock issuable upon conversion of Series A-1 Preferred Stock.

The address of Michael and Zelene Fowler is 1

Century Drive, #27C, Los Angeles, California 90067.

(8) Includes 500,000 shares of common stock issuable upon conversion of Series

A-1 Preferred Stock, 2,881,403 shares of common stock issuable upon conversion of convertible notes, and 1,150,000 warrants held by the

Nagelberg 2003 Revocable Trust.

Also includes 249,752 shares of common stock issuable upon conversion of convertible notes and

100,000 warrants held by DSN Ventures LLC, 41,781 shares of common stock issuable upon conversion of convertible notes and 16,667 warrants

held by David.

Nagelberg’s spouse, and 100,000 shares of common stock held by David.

Nagelberg which will vest within 60 days of

March 13, 2025.

As trustee of the David S.

Nagelberg 2003 Revocable Trust and Manager of DSN Ventures LLC, David Nagelberg may be deemed

to be the beneficial owner of the shares held by them, and to have voting and dispositive power over such shares.

250,000 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by Freeman Caribbean Investments, LLC, 170,000 shares of common stock held by Neil Freeman or vesting within

60 days of March 13, 2025, and 60,000 options held by Mr.

Shaner that are exercisable within 60 days of March 13, 2025.

Neil Freeman, the Manager of Freeman

Caribbean Investments, LLC, may be deemed to be the beneficial owner of the shares held by Freeman Caribbean Investments, LLC and to

have voting and dispositive power over such shares.

Hillsboro Blvd., Deerfield Beach, Florida 33441.

833,334 shares of common stock issuable upon conversion of Series A-1 Preferred Stock, 650,000 shares of common stock issuable upon

conversion of Series A-2 Preferred Stock, and 1,391 shares of common stock held by Michael and Zelene Fowler.

The address of Michael

and Zelene Fowler is 223 Woodland Grove Court, Westlake Village, California 91362.

100,000 shares of common stock issuable upon conversion of Series A-2 Preferred Stock, and 231 shares of common stock held by MSD

Family Partners II.

The address for MSD Family Partners II is 12070 Summit Circle, Beverly Hills, California 90210.

416,667 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by Freeman Caribbean Investments, LLC,

150,000 shares of common stock held by or vesting to Neil Freeman, and 140,000 options held by or vesting to Mr.

Freeman that are

exercisable within 60 days of March 18, 2026.

Neil Freeman, the Manager of Freeman Caribbean Investments, LLC, may be deemed to

be the beneficial owner of the shares held by Freeman Caribbean Investments, LLC and to have voting and dispositive power over such

The address of Freeman Caribbean Investments, LLC is c/o Aries Capital, 401 W.

Ontario St., Suite 220, Chicago, Illinois

(10) Includes

175,000 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held

by the Harry & Brenda Mittelman Revocable Living Trust, UA DTD 9/17/2007, of which Harry

Mittelman and Brenda Mittelman are the trustees, 144,000 shares held by Mr.

Mittelman, 100 shares held by Ms.

Mittelman and 1,946,066 shares held by trusts

291,667 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by the Harry & Brenda Mittelman Revocable

Living Trust, UA DTD 9/17/2007, of which Harry Mittelman and Brenda Mittelman are the trustees, 177,000 shares held by Mr.

100 shares held by Ms.

Mittelman and 1,946,066 shares held by trusts of which Mr.

Mittelman or Ms.

Mittelman is the trustee or a beneficiary.

Mittelman is the trustee or a

The address of Mr.

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Mittelman and the trusts is 12100 Kate Drive, Los Altos Hills, California 94022.

(11) Includes 125,000 shares of common stock issuable upon conversion of Series

A-1 Preferred Stock, 797,685 shares of common stock, and 33,334 shares of common stock issuable upon conversion of the principal amount

of an outstanding convertible note held by Mr.

(12) Includes 125,000 shares of common stock issuable upon conversion of Series

A-1 Preferred Stock, 538,894 shares of common stock held by Mr.

Sokolow, 955,000 shares of common stock underlying stock options held

Sokolow that are exercisable within 60 days of March 13, 2025, and 83,334 shares of common stock issuable upon conversion of the

principal amount of an outstanding convertible note held by Mr.

(13) Includes 69,528 shares of common stock, 120,000 shares of common stock

underlying stock options that are exercisable within 60 days of March 13, 2025 and 40,000 RSUs that vest within 60 days of March 13, 2025

(14) Includes 232,204 shares of common stock, 200,000 shares of common stock

underlying stock options that are exercisable within 60 days of March 31, 2025, and 20,000 RSUs that vest within 60 days of March 13,

2025 held by Mr.

(15) Includes

129,056 shares of common stock and 683,333 shares of common stock underlying stock options

that are exercisable within 60 days of March 13, 2025 held by Ms.

(16) Includes

84,770 shares of common stock and 61,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 13, 2025 held by Ms.

(17) Includes

46,000 shares of common stock and 46,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 13, 2025 held by Mr.

(18) Includes

41,000 shares of common stock and 41,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 13, 2025 held by Ms.

416,667 shares of common stock issuable upon conversion of Series A-1 Preferred Stock held by Steven Schmidt, 343,664 shares of common

stock held by or vesting to Mr.

Schmidt, and 330,000 shares of common stock underlying stock options held by or vesting to Mr.

that are exercisable within 60 days of March 18, 2026.

208,334 shares of common stock issuable upon conversion of Series A-1 Preferred Stock, 766,615 shares of common stock held by or

vesting to Mr.

Sokolow, 955,000,000 shares of common stock underlying stock options held by or vesting to Mr.

Sokolow that are exercisable

within 60 days of March 18, 2026, and 83,334 shares of common stock issuable upon conversion of the principal amount of an outstanding

convertible note held by Mr.

92,607 shares of common stock and 120,000 shares of common stock underlying stock options that are exercisable within 60 days of

March 18, 2026, all held by Mr.

1,063,193 shares of common stock and 545,000 shares of common stock underlying stock options that are exercisable within 60 days

of March 18, 2026, all held by or vesting to Mr.

282,321 shares of common stock and 266,666 shares of common stock underlying stock options that are exercisable within 60 days of

March 18, 2026, all held by or vesting to Ms.

111,270 shares of common stock and 87,500 shares of common stock underlying stock options that are exercisable within 60 days of

March 18, 2026, all held by or vesting to Ms.

64,000 shares of common stock and 64,000 shares of common stock underlying stock options that are exercisable within 60 days of March 18, 2026, all held by or vesting to Mr.

57,000 shares of common stock and 57,000 shares of common stock underlying stock options that are exercisable within 60 days of March 18, 2026, all held by or vesting to Ms.

Greenstein Brayer.

(19) Includes

1,043,770 shares of common stock and 590,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 13, 2025 held by Mr.

(20) Includes 500,000 shares of common stock issuable upon conversion of Series

A-1 Preferred Stock, 27,165,735 shares of common stock;

5,926,333 shares of common stock underlying stock options that are exercisable

within 60 days of March 13, 2025;

60,000 shares of restricted stock that vest within 60 days of March 13, 2025;

24,290 shares of common

stock issuable upon the exercise of warrants;

and 156,668 shares of common stock issuable upon the conversion of the principal amount

of outstanding convertible notes.

625,001 shares of common stock issuable upon conversion of Series A-1 Preferred Stock, 27,478,877 shares of common stock issued or

vesting, 5,210,166 shares of common stock underlying stock options that are exercisable within 60 days of March 18, 2026, and 83,334

shares of common stock issuable upon the conversion of the principal amount of outstanding convertible notes.

are unaware of any contract, or other arrangement or provision, the operation of which may at any subsequent date result in a change

8 unchanged sentences

Equity compensation plans not approved by security holders (4)

38,527,542shares of common stock issuable upon exercise of stock options and RSUs granted

pursuant to our stock incentive plans and to our Executive Chairman under his employment

agreement, all of which were approved by our security holders, at a weighted average exercise

price of $7.31 per share, which includes:

(a) 4,130,000 shares of common stock issuable upon

exercise of stock options granted under the 2015 Stock Incentive Plan;

(b) 3,453,500 shares

of common stock issuable upon exercise of stock options granted under the 2018 Plan;

269,000 shares of common stock issuable upon vesting of restricted stock granted under the

(d) 8,909,892 shares of common stock issuable upon exercise of stock options granted

under the 2021 Plan;

(e) 5,765,150 shares of common stock issuable upon vesting of RSUs granted

under the 2021 Plan;

and (f) 16,000,000 shares of common stock issuable to our Executive

Chairman upon vesting and exercise of performance-based stock options granted to our Executive

Chairman pursuant to his employment agreement.

2015 Stock Incentive Plan and 2018 Plan were previously replaced and terminated by the 2018

Plan and the 2021 Plan, respectively, and, as such, no securities remained available for

issuance under such plans as of December 31, 2024 and no further awards will be granted under

However, all outstanding awards will continue to be governed by their existing

All shares available for future issuance are under the 2021 Plan.

36,349,790 shares of common stock issuable upon exercise of stock options and RSUs granted pursuant to our stock incentive plans

and to our Executive Chairman under his employment agreement, all of which were approved by our security holders, at a weighted average

exercise price of $6.81 per share, which includes:

(a) 1,100,000 shares of common stock issuable upon exercise of stock options granted

under the 2015 Stock Incentive Plan;

(b) 2,738,500 shares of common stock issuable upon exercise of stock options granted under the

(d) 4,539,004

shares of common stock issuable upon vesting of RSUs granted under the 2021 Plan;

and (e) 16,000,000 shares of common stock issuable

to our Executive Chairman upon vesting and exercise of performance-based stock options granted to our Executive Chairman pursuant

to his employment agreement.

2015 Stock Incentive Plan and 2018 Plan were previously replaced and terminated by the 2018 Plan and the 2021 Plan, respectively,

and, as such, no securities remained available for issuance under such plans as of December 31, 2025 and no further awards will be

granted under such plans.

However, all outstanding awards will continue to be governed by their existing terms.

All shares available

for future issuance are under the 2021 Plan.

the restricted stock and RSUs referred to in footnote 1 because they have no exercise price.

244,220 shares of common stock issuable upon vesting of shares of restricted stock granted

by the Company’s board of directors in connection with services agreements.

148,110 shares of common stock issuable upon vesting of shares of restricted stock and 100,000 shares of common stock issuable upon

exercise of stock options, granted by the Company’s board of directors in connection with services agreements.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, and Director Independence

13 unchanged sentences

all applicable requirements of Nasdaq and the rules and regulations of the SEC, including applicable independence requirements.

Relationships and Related Party Transactions

with related persons

following is a description of transactions or series of transactions since January 1, 2024, to which we were or will be a party, in which:

amount involved in the transaction exceeds the lesser of (i) $120,000 or (ii) 1% of the average

of our total assets at year-end for the last two completed fiscal years;

which any of our executive officers, directors, director nominees or holders of 5% or more

of any class of our voting capital stock, or any immediate family member of any of the foregoing,

had or will have a direct or indirect material interest.

On October 4, 2024, the Company entered into securities purchase agreements

with certain accredited investors, pursuant to which such investors purchased an aggregate of 240,000 shares of Series A-1 Preferred Stock,

at a purchase price of $25.00 per share, and 200,000 shares of Series A Preferred Stock, at a purchase price of $25.00 per share.

11, 2025, the Company entered into a securities purchase agreement pursuant to which an accredited investor purchased 40,000 shares of

Series A-1 Preferred Stock, at a purchase price of $25.00 per share.

The investors in the private placements have certain registration

The Series A Preferred Stock and the Series A-1 Preferred Stock have substantially the same terms.

Both series of preferred stock

have an original issue price of $25.00 per share and are convertible at any time, at the holder’s option, into shares of the Company’s

common stock at an initial conversion price of $2.00 per share (or 12.5 shares of common stock for each share of Series A-1 Preferred

Stock), subject to adjustment provisions (including certain anti-dilution provisions) and a minimum conversion price of $1.20 per share.

The terms of the preferred stock provide for cumulative cash dividends at an annual rate of 8% of the original issue price of $25.00 per

share, payable quarterly in arrears;

in the event the full cumulative dividends are not paid on a dividend payment date, dividends will

accrue on the sum of the original issue price, plus the amount of unpaid dividends, at an annual rate of 12%, until such date as the Company

has paid all previously accrued but unpaid dividends.

Holders of the preferred stock are also entitled to participate in and receive any

dividends declared or paid on the Company’s common stock on an as-converted basis.

Until October 4, 2026, the preferred stock is

subject to mandatory conversion by the Company upon the occurrence of certain specified events.

In addition, the Company may redeem the

Series A Preferred Stock and Series A-1 Preferred Stock for cash upon the occurrence of certain events or at any time beginning October

amount involved in the transaction exceeds the lesser of (i) $120,000 or (ii) 1% of the average of our total assets at year-end for

the last two completed fiscal years;

which any of our executive officers, directors, director nominees or holders of 5% or more of any class of our voting capital stock,

or any immediate family member of any of the foregoing, had or will have a direct or indirect material interest.

pursuant to which such investors purchased an aggregate

of 240,000 shares of Series A-1 Preferred Stock, at a purchase price of $25.00 per share, and 200,000 shares of Series A Preferred Stock,

at a purchase price of $25.00 per share.

During 2025, the Company entered into securities purchase agreements pursuant to which accredited

investors purchased 154,000 shares of Series A-1 Preferred Stock and 60,000 shares of Series A-2 Preferred Stock, at a purchase price

of $25.00 per share.

The investors in the private placements have certain registration rights.

The Series A Preferred Stock, the Series

A-1 Preferred Stock and the Series A-2 Preferred Stock have substantially the same terms.

All series of preferred stock have an original

issue price of $25.00 per share and are convertible at any time, at the holder’s option, into shares of the Company’s common

stock at an adjusted conversion price of $1.20 per share for the Series A Preferred Stock and Series A-1 Preferred Stock (or approximately

20.83 shares of common stock for each share of Series A or A-1 Preferred Stock) or $2.00 per share for the Series A-2 Preferred Stock

(or 12.5 shares of common stock for each share of Series A-2 Preferred Stock), subject to adjustment provisions.

The terms of the preferred

stock provide for cumulative dividends at an annual rate of 8% of the original issue price of $25.00 per share, payable quarterly in arrears;

in the event the full cumulative dividends are not paid on a dividend payment date, dividends will accrue on the sum of the original issue

price, plus the amount of unpaid dividends, at an annual rate of 12%, until such date as the Company has paid all previously accrued but

unpaid dividends.

Dividends on Series A Preferred Stock and Series A-1 Preferred Stock are payable in cash.

The dividends on Series A-2

Preferred Stock may be paid in cash, or up to 50% of the dividend may be paid in shares of the Company’s common stock, valuing the

common stock based on the average closing price per share for the 10 trading days immediately prior to the dividend record date, at the

Company’s election, or the full dividend may be paid in shares of Common Stock upon agreement by the Company and the holder.

Notwithstanding

the foregoing, upon a conversion any accrued and unpaid dividends are payable in shares of the Company’s common stock at the conversion

price of the preferred stock being converted.

Holders of the preferred stock are also entitled to participate in and receive any dividends

declared or paid on the Company’s common stock on an as-converted basis.

Until October 4, 2026, the preferred stock is subject to

mandatory conversion by the Company upon the occurrence of certain specified events.

In addition, the Company may redeem the Series A

Preferred Stock and Series A-1 Preferred Stock for cash upon the occurrence of certain events or at any time beginning October 4, 2029

and October 4, 2027, respectively.

The preferred stock has no expiration date.

The table below sets forth the officers and holders of 5% of more of the

Company’s common stock that participated in the offerings, the number of shares of Series A-1 Preferred Stock purchased, and the

aggregate purchase price:

table below sets forth the officers and holders of 5% of more of the Company’s common stock that participated in the offerings,

the number of shares of Series A-1 Preferred Stock purchased, and the aggregate purchase price:

Name of Related Party

Shares of Series A-1 Preferred Stock Purchased

Aggregate Purchase Price

Sokolow – Co-Chief Executive Officer and director of the Company

Campi – Co-Chief Executive Officer of the Company

Shares of Series

A-1 Preferred

Purchase Price

Sokolow – Chief Executive Officer and director of the Company

Campi – Former Co-Chief Executive Officer of the Company

Schmidt – President of the Company

The table below sets forth the parties that participated

in the offerings that are holders of 5% or more of the applicable series of preferred stock, the series of preferred stock purchased,

the number of shares of preferred stock purchased, and the aggregate purchase price:

Name of Purchase

Series of Preferred Stock Purchased

Shares of Preferred Stock Purchased

Aggregate Purchase Price

SKY Opportunity I LLC

Steven Siegelaub

Michael and Zelene Fowler

Freeman Caribbean Investments, LLC

Harry & Brenda Mittelman Revocable Living Trust

The Company paid dividends to the following parties

Name of Related Party

SKY Opportunity LLC

2020, certain related parties entered into securities purchase agreements with the Company, pursuant to which each agreed to purchase

13 unchanged sentences

the holder, the note will become immediately due and payable and, until paid in full, will bear interest at a rate of 12% per annum.

The following table lists the related parties, the principal amount of the note purchased, and the maturity date of the note.

interest of $36,122 and $46,189 to Mr.

The following table lists the related parties, the remaining principal amount of the note purchased, and the maturity date of the note.

In December 2025, the Company entered into an amendment to a convertible

promissory note with a principal amount of $600,000 payable to Shiff Group Investments Ltd., which is controlled by Dov Shiff, a director

and greater than 5% holder of the Company’s common stock, following which the principal amount, together with accrued interest of

$235,900, was converted into 379,955 shares of the Company’s common stock.

No interest was paid to Mr.

Sokolow and Mr.

Campi, respectively, during 2024.

The Company paid $125,000 The Company has not paid any of the principal on the notes, except for $125,000 in principal paid in December 2023

to Sky Technology Partners, LLC

Name of Related Party

Principal Amount Purchased

Maturity Date

Sokolow - Co-Chief Executive Officer and director of the Company

Sky Technology Partners, LLC - Steven Siegelaub, a former greater than 5% holder with his affiliates, is the managing member

Shiff Group Investments Ltd.

- Dov Shiff, a director and greater than 5% holder, is the President and Chief Executive Officer

November 3, 2024

Campi - Co-Chief Executive Officer of the Company

each of February 6, 2023 and March 29, 2023, the Company closed private placements of its securities, pursuant to which the Company issued

and sold subordinated secured convertible promissory notes and warrants to purchase shares of the Company’s common stock to certain

Strul Associates Limited Partnership, a greater than 5% holder of the Company, purchased notes in the principal amount of

$2.0 million and $750,000, respectively, and was issued warrants to purchase 125,000 shares of common stock, dated March 29, 2023.

investors in the private placement have certain registration rights.

The notes mature on the fourth anniversary of the closing date and

contain customary acceleration events.

The principal amount of the notes is convertible at any time after the closing date, in whole

or in part, at the option of the holder, into shares of common stock at an adjusted conversion price of $2.70 per share.

the notes accrues at a rate of 10% per annum.

For the February 2023 note, 7% of the interest is payable quarterly in arrears in cash

and 3% is payable quarterly in arrears in cash or in shares of the Company’s common stock at the note conversion price on the date

the principal balance of the note is paid in full or fully converted, at the holder’s election.

For the March 2023 note, all of

the interest is payable quarterly in arrears in cash or in shares of the Company’s common stock at the note conversion price on

the date the principal balance of the note is paid in full or fully converted, at the holder’s election.

The notes are secured

by substantially all of the Company’s accounts, instruments, and tangible and intangible property, which secured interest is subordinated

to interests held by other parties in such collateral as of the closing date and certain future debt.

The Company may prepay the entire

then-outstanding principal amount of the notes at any time, plus a prepayment premium;

if the Company exercises such right, the note

holder may instead elect to convert the note.

After the third anniversary of the closing date, the holder may require the Company to

repay the outstanding principal balance and accrued interest on the notes with 30 days’ prior written notice.

The warrants are

exercisable for five years after the closing date and are exercisable immediately after their issuance, in whole or in part.

have an adjusted exercise price of $2.70 per share.

In addition, the notes and warrants contain conversion limitations providing that

a holder thereof may not convert the note or exercise the warrant to the extent that, if after giving effect to such conversion or exercise,

the holder or any of its affiliates would beneficially own in excess of 9.99%, as elected by the holder.

The holder may increase or decrease

its beneficial ownership limitation upon notice to the Company, provided that in no event such limitation exceeds 9.99%, and that any

increase shall not be effective until the 61st day after such notice.

Sokolow - Chief Executive Officer and director of the Company

Campi – Former Chief Executive Officer

and Procedures for Related Party Transactions

7 unchanged sentences

For purposes of this policy, a related person is defined as an executive officer,

director, nominee for director or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most

director, nominee for director or greater than 5% beneficial owner of any class of our voting securities in each case since the beginning of the most

recently completed fiscal year, and their immediate family members.

PRINCIPAL ACCOUNTING FEES AND SERVICES

following table sets forth the aggregate fees billed to us for the years ended December 31, 2024 and December 31, 2023 by our independent

auditors, M&K CPAs, PLLC:

following table sets forth the aggregate fees billed to us for the years ended December 31, 2025 and 2024 by our independent auditors,

M&K CPAs, PLLC:

Audit Fees (1)

Audit-Related Fees

fees represent amounts billed for professional services rendered for the audit and/or review

of our consolidated financial statements.

For 2024, it includes fees related to professional

services rendered in connection with the issuance of consents related to Registration Statements

on Form S-3 and Form S-8.

For 2023, includes fees related to professional services rendered

in connection with the issuance of consents related to Registration Statements on Form S-3

and the audit of the financial statements of Belami, Inc.

All Other Fees

fees represent amounts billed for professional services rendered for the audit and/or review of our consolidated financial statements.

For 2024 and 2025, it includes fees related to professional services rendered in connection with the issuance of consents related

to Registration Statements on Form S-3 and Form S-8.

to the Audit Committee Charter, the audit committee is required to pre-approve the audit and non-audit services performed by our independent

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Audited Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024

Audited Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2024 and 2023

Audited Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024 and 2023

Audited Consolidated Statements of Operations for the Years ended December 31, 2025 and 2024

Audited Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024

Audited Consolidated Statements of Stockholders’ Equity ( Deficit) for the Years ended December 31, 2025 and 2024

Notes to Audited Financial Statements

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or notes thereto.

Exhibit Index

(a)(3) Exhibit Index

Description of Exhibit

Stock Purchase Agreement, dated February 6, 2023, by and among the Company and Mihran Berejikian, Nancy Berejikian, and Michael Lack (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

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333-261829) filed with the SEC on December 22, 2021).

Articles of Amendment to Articles of Incorporation, including the Certificate of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock (effective August 12, 2016) (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No.

Articles of Amendment to Articles of Incorporation, (effective August 12, 2016) (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

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Certificate of Designation of Rights, Preferences and Privileges of Series A-1 Preferred Stock (effective September 30, 2024) (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2024).

Articles of Amendment to the Certificate of Designation of Rights, Preferences and Privileges of Series A-1 Preferred Stock (effective May 2, 2025) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 8, 2025).

Certificate of Designation of Rights, Preferences and Privileges of Series A-2 Preferred Stock (effective December 2, 2025) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 5, 2025).

Articles of Amendment to the Certificate of Designation of Rights, Preferences and Privileges of Series A-2 Preferred Stock (effective December 23, 2025) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report filed with the SEC on January 2, 2026).

Third Amended and Restated Bylaws of the Company (effective March 21, 2025) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 21, 2025).

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and Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2023).

of Closing Promissory Note, dated April 26, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed with the SEC on May 1, 2023).

Form of Closing Promissory Note, dated April 26, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).

Sales Agreement by and between SKYX Platforms Corp.

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Letter Agreement to the Stock Purchase Agreement, as amended, dated March 29, 2024, by and among SKYX Platforms Corp., Mihran Berejikian, Nancy Berejikian and Michael Lack, and form of Convertible Promissory Note (incorporated herein by reference to Exhibit 10.60 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

Form of Amendment No.1 to SKYX Platforms Corp.

Convertible Promissory Note (effective June 30, 2025) (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025).

Amendment of Letter Agreement relating to Trademark License Agreement, dated April 11, 2024, among SKYX Platforms Corp., SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc.

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Form of Securities Purchase Agreement for Series A-1 Preferred Stock, dated March 11, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2025).

Form of Securities Purchase Agreement for Series A-1 Preferred Stock, dated April 7, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 8, 2025).

Subordinated Secured Promissory Note, dated September 2, 2025 (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 5, 2025).

Securities Purchase Agreement, dated September 2, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 5, 2025).

Form of Subordinated Secured Promissory Note (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2025).

Form of Amendment No.

1 to Subordinated Secured Promissory Note (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2025).

Securities Purchase Agreement, dated October 17, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2025).

Form of Securities Purchase Agreement for Series A-2 Preferred Stock, dated December 5, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 5, 2025).

Amendment No.

1 to Subordinated Convertible Balloon Promissory Note, dated December 30, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 2, 2026).

Form of Securities Purchase Agreement for Series A-2 Preferred Stock, dated December 30, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 2, 2026).

Form of Securities Purchase Agreement for Common Stock, dated January 7, 2026 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 13, 2026).

Placement Agency Agreement, dated January 23, 2026, by and between SKYX Platforms Corp.

and Roth Capital Partners, LLC (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026).

Form of Securities Purchase Agreement, dated January 23, 2026 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026).

SKYX Platforms Corp.

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Power of Attorney (included on signature page).

Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Co-Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Certification by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

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eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive

Loss, (iii) Consolidated Statements of Stockholders’ Equity (Deficit), (iv) Consolidated Statements of Cash Flows, and (v)

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders’ Equity (Deficit), (iv) Consolidated Statements of Cash Flows, and (v)

the Notes to Consolidated Financial Statements (filed herewith).

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PLATFORMS CORP.

Campi, Co-Chief Executive Officer

Sokolow, Co-Chief Executive Officer and Director

individual whose signature appears below constitutes and appoints John P.

Campi, Co-Chief Executive Officer, Leonard J.

Sokolow, Co-Chief

Sokolow, Chief Executive Officer and Director

individual whose signature appears below constitutes and appoints Leonard J.

Sokolow, Chief

Executive Officer, and Marc-Andre Boisseau, Chief Financial Officer, and each of them singly, his or her true and lawful attorneys-in-fact

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registrant and in the capacities and on the dates indicated.

Executive Officer

Executive Officer)

Executive Officer and Director

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Financial Officer

March 24, 2025

Financial and Accounting Officer)

Executive Chairman of the Board

March 24, 2025

Nancy DiMattia

March 24, 2025

Greenstein Brayer

March 24, 2025

Greenstein Brayer

March 24, 2025

PLATFORMS CORP.

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Consolidated Balance Sheets - December 31, 2025 and 2024

Consolidated Statements of Operations and Comprehensive Loss - December 31, 2024 and 2023

Consolidated Statements of Stockholders’ Equity (Deficit) - December 31, 2024 and 2023

Consolidated Statements of Operations - December 31, 2025 and 2024

Consolidated Statements of Cash Flows - December 31, 2025 and 2024

Statements of Stockholders’ Equity (Deficit) Cash Flows - December 31, 2025 and 2024

Notes to Consolidated Financial Statements

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on the Financial Statements

have audited the accompanying consolidated balance sheets of SKYX Platforms Corp.

(the Company) as of December 31, 2024 and 2023, and

the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each

of the years in the two-year period ended December 31, 2024 and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America .

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, negative cash flows from operations and recurring

net losses, which raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding those

matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

We have audited the accompanying consolidated balance sheets of SKYX Platforms Corp (the Company) as of December 31, 2025 and 2024 and the related consolidated statements of operation, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2025, and the related consolidated notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its consolidated operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

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Audit Matters

critical audit matter communicated below is a matter arising from the current period audits of the consolidated financial statements

that were communicated, or required to be communicated, to the audit committee and that:

(1) relate to accounts or disclosures that are

material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts

or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated

financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or

disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements,

taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinion on the critical audit

matters or on the accounts or disclosures to which they relate.

to the net loss, accumulated deficit and negative cash flows from operations for the year, the Company evaluated the need for a going

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on future revenues and expenses, which are not able to be easily substantiated.

evaluate the appropriateness of the going concern, we examined and evaluated the financial information

that was the initial cause for this consideration along with management’s plans to mitigate the going concern.

evaluate the appropriateness of the going concern, we examined and evaluated the financial information that was the initial cause for

this consideration along with management’s plans to mitigate the going concern.

Based on the audit procedures performed, we found that management’s conclusion that its plans alleviate the

substantial doubt to be reasonable.

M&K CPAS, PLLC

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Woodlands, TX

March 24, 2025

FINANCIAL INFORMATION

FINANCIAL STATEMENTS

PLATFORMS CORP.

BALANCE SHEETS

December 31, 2024

December 31, 2023

and cash equivalents

cost of revenues

expenses and other assets

current assets

Cash and cash equivalents

Restricted cash

Account receivable, net

Deferred cost of revenues

Prepaid expenses and other assets

Total current assets

and equipment, net

of use assets

definite life

long term assets

Furniture and equipment, net

Restricted cash

Right of use assets

Intangibles, definite life

Total long-term assets

Liabilities and Stockholders’ Equity (Deficit)

and Stockholders’ Equity (Deficit)

payable and accrued expenses

lease liabilities

notes related parties

current liabilities

Accounts payable and accrued expenses

Notes payable, current

Operating lease liabilities, current

Royalty obligations, current

Consideration payable

Deferred revenues

Convertible notes, current related parties

Convertible notes, current

Total current liabilities

term liabilities

term accounts payable

lease liabilities

long-term liabilities

Long term accrued expenses

Notes payable

Consideration payable

Operating lease liabilities

Convertible notes

Royalty obligations

Total long-term liabilities

Total liabilities

Temporary equity:

Series A Preferred Stock 400,000 shares authorized and 200,000 shares outstanding, no par value

at December 31, 2024

Stockholders’ Equity:

Series A-1 Preferred Stock 400,000 shares authorized and 240,000 shares outstanding, no par value

at December 31, 2024

Common stock and additional paid-in capital:

$ 0 par value, 500,000,000 shares authorized;

103,358,975 and 93,473,433 shares issued and outstanding at December 31, 2024, and December 31, 2023, respectively

Accumulated deficit

A Preferred Stock-shares authorized 400,000 , outstanding 200,000 and 200,000

Stockholders’

Equity (deficit)

A-1 Preferred Stock-shares authorized 480,000 , outstanding 292,000 and 240,000

A-2 Preferred Stock-shares authorized 160,000 ,

outstanding 60,000 and -

Preferred stock

stock and additional paid-in-capital:

shares authorized 500,000,000 outstanding 117,666,800 and 103,358,975

( 216,258,604 )

( 181,783,825 )

Accumulated other comprehensive loss

Total stockholders’ equity

Non-controlling interest

Total Liabilities, Temporary Equity, and Stockholders’ Equity

stockholders’ equity (deficit)

( 4,588,386 )

Liabilities and Stockholders’ Equity (deficit)

accompanying notes are an integral part of the consolidated financial statements.

PLATFORMS CORP.

Statements of Operations and Comprehensive Loss

Year ended December 31,

Operating Costs

STATEMENTS OF OPERATIONS

For the year ended December 31,

Operating expenses

Cost of revenues

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General and administrative expenses

Total operating expenses, net

Total expenses, net

Loss from operations

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( 32,112,239 )

Other income / (expense)

Other expenses

Interest expense - related party

Interest expense, net

( 3,904,005 )

( 3,033,265 )

Interest expense, net

( 3,904,005 )

( 3,033,265 )

Gain on extinguishment of debt

Total other expense, net

( 3,655,905 )

( 1,907,450 )

Total other expenses, net

( 33,415,604 )

( 35,768,144 )

Other comprehensive income (loss):

Preferred dividends - related party

Preferred dividends

Net loss attributed to common stockholders

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$ ( 35,980,811 )

Other comprehensive loss:

Unrealized loss on debt securities

Net comprehensive loss attributed to common stockholders

$ ( 35,980,811 )

$ ( 39,670,509 )

Net loss per share - basic and diluted

Weighted average number of common shares outstanding – basic and diluted

accompanying notes are an integral part of the consolidated financial statements.

The accompanying notes are

an integral part of the consolidated financial statements.

PLATFORMS CORP.

Statements of Stockholders’ Equity

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the year ended December 31,

Series A-1 Preferred stocks

Balance, beginning of period

Shares of preferred stock ( Series A-1)

Balance, beginning of year

Preferred stock Conversion to common

Preferred stock issued pursuant to offerings

Balance, December 31,

Series A-1 Preferred stocks

Balance, beginning of period

Balance, end of year

Preferred stock ( Series A-1)

Balance, beginning of year

Preferred stock Conversion to common

( 2,550,000 )

Preferred stock issued pursuant to offerings

Balance, end of year

Shares of preferred stock ( Series A-2)

Balance, beginning of year

Preferred stock Conversion to common

Preferred stock issued pursuant to offerings

Balance, December 31,

Balance, end of year

Preferred stock ( Series A-2)

Balance, beginning of year

Preferred stock Conversion to common

Preferred stock issued pursuant to offerings

Balance, end of year

Shares of common stock

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Common stock issued pursuant to offerings

Common stock issued pursuant to services

Common stock issued pursuant to conversion of preferred stock

Common stock issued pursuant to exercise of options and warrants

Common stock issued pursuant to acquisition

Common stock issued pursuant to extinguishment of debt

Common stock issued pursuant to antidilutive provisions

Common stock issued pursuant to conversion of preferred stock

Common stock issued pursuant to preferred dividends

Common stock issued pursuant to conversion of notes

Common stock issued pursuant to conversion of accrued interest

Common stock issued pursuant to exercise of options

Common stock issued pursuant to services

Balance, end of year

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$ 162,025,024

Common stock issued pursuant to offerings, net of costs

Common stock issued pursuant to services

Common stock issued pursuant to offerings

Common stock issued pursuant to conversion of preferred stock

Debt discount

Common stock issued pursuant to acquisition

Common stock issued pursuant to extinguishment of debt

Common stock issued pursuant to exercise of options and warrants

Common stock issued pursuant to antidilutive provisions

Common stock issued pursuant to preferred dividends

Common stock issued pursuant to conversion of notes

Common stock issued pursuant to conversion of accrued interest

Common stock issued pursuant to exercise of options

Common stock issued pursuant to services

Balance, end of year

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$ ( 145,803,014 )

( 35,768,144 )

( 39,732,656 )

Preferred dividends

Balance, end of year

( 1,059,175 )

( 33,415,604 )

Accumulated other comprehensive loss

Balance, beginning of year

Other comprehensive loss

Balance, end of period

( 35,768,144 )

Balance, end of year

$ ( 216,258,604 )

$ ( 181,783,825 )

Total Stockholders’ Equity (deficit)

$ ( 4,588,386 )

Total Stockholders’ equity

accompanying notes are an integral part of the consolidated financial statements.

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For the year ended December 31,

Cash flows from operating activities:

$ ( 33,415,604 )

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Amortization of debt discount

Impairment of intangible assets

Non-cash equity-based compensation expense

Gain on forgiveness of debt

( 1,201,857 )

Share-based payments

Equity-based payment of interest

Change in operating assets and liabilities

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( 2,345,919 )

Accretion operating lease liabilities

( 2,101,316 )

Royalty obligation

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( 18,260,370 )

Cash flows from investing activities:

Purchase of debt securities

Proceeds from disposition of debt securities

Purchase of property and equipment

( 1,932,873 )

Acquisition, net of cash acquired

Net cash used in investing activities

( 1,932,873 )

Purchase of property and equipment

Net cash provided by (used in) investing activities

( 1,731,428 )

Cash flows from financing activities:

Proceeds from issuance of common stock- offerings and exercise of options

Placement costs

Proceeds from issuance of common stock - offerings

Placement cost

Dividends paid

( 1,020,616 )

Proceeds from line of credit

Proceeds from issuance of convertible notes

Proceeds from issuance of preferred stocks - related party

Proceeds from issuance of preferred stock-related parties

Proceeds from issuance of preferred stocks

Proceeds from exercise of options

Proceeds from issuance of convertible notes

Principal repayments of notes payable

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( 5,397,874 )

Cash, cash equivalents and restricted cash at beginning of year

( 6,929,758 )

Cash, cash equivalents and restricted cash at beginning of the year

Cash, cash equivalents and restricted cash at end of year

Cash paid during period for:

Cash paid during the year for:

Supplementary disclosure of non-cash financing activities:

Substitution of consideration payable to convertible notes

Substitution of royalty payable to convertible notes

Accrued dividends payable

Business acquisition:

Assets acquiring excluding identifiable intangible assets and goodwill and cash

Identifiable intangible assets and goodwill>

Liabilities assumed and consideration payable

Debt discount

Common stock issued pursuant to antidilutive provisions

Fair value of shares issued pursuant to acquisition

Common stock pursuant to extinguishment of debt

Preferred stock conversion to common

Substitution of royalty payable to convertible note

Substitution of consideration payable to convertible note

Right-of-use assets and operating lease liabilities

Accrued dividends payable

accompanying notes are an integral part of the consolidated financial statements.

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The plug and play power-plug technology eliminates the need of touching hazardous

electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products.

electrical wires while installing light fixtures, ceiling fans and other hardwired electrical products.

In recent years, the Company

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April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties.

Company’s liquidity sources include $ 15.5 million in cash and cash equivalents, including restricted cash of $ 2.9 million held for

long-term purposes, and $ 5.8 million of working capital deficit as of December 31, 2024.

The Company has a history of recurring operating

losses, and its net cash used in operating activities amounted to $ 18.3 million and $ 13.0 million during the year ended December 31, 2024,

and 2023, respectively.

The Company has also generated net cash provided by financing activities of $ 13.0 million and $ 22.7 million during

the year ended December 31, 2024 and 2023, respectively.

Accordingly, the Company’s management cannot ascertain that there is no

substantial doubt that it will be able to meet its obligations as they become due within one year after the date that its financial statements

are issued and this raises substantial doubt about its ability to continue as a going concern within one year after the issuance

date of its financial statements.

intends to mitigate such conditions by supporting its continued growth, decreasing its cash used in operating activities through

increased revenues and increased margins from products sold to large retailers and its internet portals, and to the extent

necessary, generate cash provided by financing activities through its at the market (“ATM”) offering or other equity or

debt financing means.

There are no assurances that the Company will be successful in achieving these objectives.

The financial statements

do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as

a going concern.

These financial statements also do not include any adjustments relating to the recoverability and classification of recorded

asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going

Company’s liquidity sources include $ 10.10 million in cash and cash equivalents, including restricted cash of $ 2.05 million held

for long-term purposes.

The Company also generated net proceeds of $ 29.3 million from the issuance of shares of its common stock during

January 2026.

While the Company has a history of operating losses, it has enough liquidity sources as of December 31, 2025, together with

net proceeds generated in January 2026, to alleviate substantial doubt about its ability to continue as a going concern.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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from estimates.

Reclassifications

comparability, reclassifications of certain prior-year balances were made in order to conform with current-year presentations, such as

costs of internal-use software reclassified as intangible assets which were previously included in property and equipment.

of Consolidation

consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January

1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group

LLC from April 28, 2023.

consolidated financial statements include the results of the Company and all its subsidiaries, including SQL Lighting and Fans LLC, Belami,

Inc., BEC, CA 1, Inc.

(through December 31, 2024), BEC CA 2, LLC, Luna BEC (through December 31, 2024), Inc., and Confero Group LLC.

All intercompany balances and transactions have been eliminated in consolidation.

Company accounts for its business acquisitions under the acquisition method of accounting.

This method requires recording of acquired

assets and assumed liabilities at their acquisition date fair values.

The excess of the purchase price over the fair value of the assets

acquired and liabilities assumed is recorded as goodwill.

Results of operations related to the business combination are included prospectively

beginning with the date of acquisition and transaction costs and transaction costs related to business combinations are recorded within

selling, general, and administrative expenses.

Company acquired the outstanding units of Belami, Inc (“Belami”) and its subsidiaries on April 28, 2023.

Belami is an online

retailer and e-commerce provider specializing in home lighting, ceiling fans, and other home furnishings.

The initial allocation of purchase

price is subject to adjustment through April 2024.

The allocation of purchase price may vary based on the number and fair value of the

shares to be issued in April 2024.

The allocation of the purchase price was as follows:

OF INITIAL ALLOCATION OF PURCHASE PRICE

Assets acquired excluding identifiable intangible assets and goodwill

Customer relationships

E-commerce technology platforms

Assumed liabilities

( 10,943,450 )

Total Assets Acquired

Consideration:

Cash outlay, net of cash acquired

Consideration payable

Shares of common stock

Total consideration

Consideration

payable primarily consists of the fair value of cash and amounting to $ 3.1 million payable in April 2024 and $ 750,000 cash, held in escrow,

payable in July 2024.

The consideration payable is discounted using an effective rate of 6 %.

goodwill recognized, none of which is deductible for income tax purposes, is attributable to the assembled workforce of Belami and to

expected synergies and other benefits that the Company believes will result from combining its operations with Belami’s.

The intangible

assets recognized are primarily attributable to expected increased margins that the Company believes will result from Belami’s

existing customer relationships and increased margins from the e-commerce technology platforms Belami has developed over the years.

Cash Equivalents, and restricted cash.

Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.

At December 31, 2024 and December 31, 2023, the Company’s cash composition was follows:

OF CASH EQUIVALENTS AND RESTRICTED CASH

The Company’s cash composition was as follows:

OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

December 31, 2025

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Company issued a letter of credit of $ 2.8 million in September 2022 to use as collateral for certain obligations to one of its lessors

The letter of credit was issued by a financial institution and was secured by cash of $ 2.8 million as of December 31, 2024, and December

Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed $ 750,000 in an escrow account as

of December 31, 2023 which was released to Belami, Inc.

sellers in April 2024.

Furthermore, the Company secured a line of credit of $ 2.0

million with cash of the equivalent amount as of December 31, 2023.

The Company satisfied its obligations under the line of credit in

which was further reduced to $ 2.0 million during 2025.

The letter of credit was issued by a financial institution and was secured by

cash of $ 2.05 million and $ 2.8 million as of December 31, 2025, and December 2024, respectively.

Contracts Balances

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Company’s allowance for sales returns was $ 284,469 and $ 242,515 as of December 31, 2025, and 2024, respectively, and is recorded

as an accrued expense in the accompanying consolidated financial statements.

as an accrued expenses in the accompanying consolidated financial statements.

Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement

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Such charges include

the carrying value of related inventory, freight, and sales charges.

The deferred charges amounted to $ 223,214 and $ 224,445 as of December

31, 2024 and December 31, 2023, respectively.

the carrying value of freight, and sales charges.

Deferred charges are included in prepaid costs and other assets in the accompanying

balance sheet.

are stated at the lower of cost, determined on the first-in, first-out method.

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Inventory-total

Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period.

tracks inventory as it is repurposed, disposed, scrapped, or sold at below cost to determine whether additional items on hand should

be reduced in value through an allowance method.

Losses from subsequent measurement of inventory amounted to $ 1.3 million and $ 1.3 million

as of December 31, 2024 and 2023, respectively.

As of December 31, 2024, and 2023, the Company has determined that no additional allowance

Company maintains an allowance based on specific inventory items that have shown no activity over a reasonable period.

The Company tracks

inventory as it is repurposed, disposed, scrapped, or sold at below cost to determine whether additional items on hand should be reduced

in value through an allowance method.

and Equipment

and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances

and equipment are stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

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of litigation could result in a material impairment charge up to the carrying value of these assets.

determined that there was impairment of the Company’s intangible assets amounted to $ 1,118,750 as of September 30, 2024.

determined that there was no impairment of the Company’s intangible assets as of December 31, 2025.

which was recorded in connection with the acquisition of Belami, is not subject to amortization and is tested for impairment annually,

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and whether it is necessary to perform such two-step impairment test.

determined that there was no impairment of the Company’s goodwill in 2024 or 2023.

determined that there was no impairment of the Company’s goodwill as of December 31, 2025.

Value of Financial Instruments

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The authoritative guidance on fair value measurements establishes a consistent framework

for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical

for measuring fair value on either a recurring or nonrecurring basis whereby inputs used in valuation techniques, are assigned to a hierarchical

following are the hierarchical levels of inputs to measure fair value:

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of December 31, 2025, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion features

on Series A and A1 Preferred Stock, warrants, options, and convertible notes.

These shares have been reserved for issuance by the Company,

and accordingly, no derivative liability has been recognized.

on Series A, A-1 and A-2 Preferred Stock, warrants, options, and convertible notes.

These shares have been reserved for issuance by the

Company, and accordingly, no derivative liability has been recognized.

Distinguishing

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The Company has evaluated

how it should classify its Series A and A-1 Preferred Stock issued in October 2024.

The Company has determined that the Series A and

A-1 Preferred Stock should not be classified as liabilities as of December 31, 2024.

how it should classify its Series A, A-1 and A-2 Preferred Stock issued in the year 2025.

The Company has determined that the Series A,

A-1 and A-2 Preferred Stock should not be classified as liabilities as of December 31, 2025.

The designation of Series A includes provisions

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as temporary equity.

Management determined the Company controls the contingent circumstances under which the holders of Series A-1 would

be granted cash consideration outside of liquidation, and, accordingly, classified Series A-1 Preferred Stock as permanent equity.

Management determined the Company controls the contingent circumstances under which the holders of Series A-1 and

A-2 would be granted cash consideration outside of liquidation, and , accordingly, classified Series A-1 and A-2 Preferred Stock as permanent

Extinguishments

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awards to non-employees are expensed over the period in which the related services are rendered.

June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based

Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based

payments to employees subject to certain exceptions.

The Company adopted ASU 2018-07 with respect to grants of shares of common stock

of the Company made in January 2019.

The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements.

to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU

505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”).

ASU 505-50 measures stock-based compensation at either

the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable.

If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as

of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or

(2) the date at which the counterparty’s performance is completed.

expense resulting from share-based payments is recorded in operating expenses in the statements of operations.

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These vendor considerations are reflected

as a reduction of costs of revenues.

as a reduction of cost of revenues.

The vendor considerations, the rights of returns and replacements are based upon estimates that

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The primary factors affecting the Company’s

accrual for estimated customer rights of returns include estimated customer return rates as well as the number of units shipped that

have a right of return that have not expired as of the measurement date.

of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage

accrual for estimated customer return rights include estimated customer return rates as well as the number of units shipped that have

a right of return that have not expired as of the measurement date.

of revenues represents costs directly related to produce, acquiring and source inventory for sale, and provisions for inventory shrinkage

and obsolescence.

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Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and

tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be reversed.

Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets

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option and warrant contracts.

For the years ended December 31, 2024, and 2023, the Company recognized net loss and a dilutive net loss,

and the effect of considering any common stock equivalents would have been antidilutive for the period.

Therefore, a separate computation

of diluted earnings (loss) per share is not presented for the periods presented.

The Company recognized net loss and a dilutive net loss during 2025 and 2024, and the effect of considering

any common stock equivalents would have been antidilutive for the period.

Therefore, a separate computation of diluted earnings (loss)

per share is not presented for the periods presented.

Company had the following anti-dilutive common stock equivalents at December, 2025 and 2024:

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through enhanced disclosures about significant segment expenses.

The standard is effective as of December 31, 2024 and interim periods

We adopted this standard in 2024.

The impact of this standard is only on the Company’s segment disclosures.

Taxes – Improvements to Income Tax Disclosures

December 2023, the FASB issued a new standard to improve income tax disclosures.

The guidance requires disclosure of disaggregated income

taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies other income

tax-related disclosures.

The standard will be effective for us beginning with our 2025 annual reporting with early adoption permitted.

We are currently evaluating the impact of this standard on our income tax disclosures.

Comprehensive

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The impact of this standard is only on the Company’s expenses disclosures.

3 FURNITURE AND EQUIPMENT

3 PROPERTY AND EQUIPMENT

and equipment consisted of the following:

OF FURNITURE AND EQUIPMENT

OF PROPERTY AND EQUIPMENT

December 31, 2025

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accumulated depreciation

expenses amounted to $ 68,022 and $ 93,693 for the years ended December 2024 and 2023, respectively.

expenses amounted to $ 238,188 and $ 68,022 during 2025 and 2024, respectively.

4 INTANGIBLE ASSETS AND GOODWILL

3 unchanged sentences

December 31, 2024

Carrying Value

Accumulated Amortization

Net carrying value

Carrying Value

Accumulated Amortization

Net carrying value

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E-commerce technology platforms

( 1,482,974 )

Patents and other

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administrative expenses) using a different E-commerce technology platform.

Management believes it will discontinue using its legacy platforms

and deploy a new E-commerce technology platform by October 1, 2025.

Management believes it will discontinue using its legacy platforms by October 1, 2025.

Accordingly, the estimated useful life of its legacy platforms decreased

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Twelve months ended December 31:

Total amortization expenses

following table presents the details of the principal outstanding:

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December 31, 2024

Convertible Notes (b)(c), (d)

APR on December 31, 2025

Convertible Notes

0.00 – 10.00 %

September 2023-March 2028

September 2023-

Substantially all Company assets

Notes payable to financial institutions a)

Notes payable to financial institutions and

August 2025- November 2052

Substantially all Company assets

Notes payable to Belami sellers

Unamortized debt discount

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OF INTEREST EXPENSE DEBT

For the year period ended

December 31, 2024

December 31, 2023

Interest expense, net

expense is recognized as net of interest income which amounted to $ 299,452 and $ 451,703 during 2024 and 2023, respectively.

For the year ended December 31,

Interest expense

of December 31, 2025, the expected future principal payments for the Company’s debt are due as follows:

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS

OF FUTURE PRINCIPAL PAYMENTS

Twelve months ended December 31, 2026

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Twelve months ended December 31, 2030 and thereafter

unpaid principal bears annual interest at the Wall Street Journal Prime Rate plus 1.75 % per year.

in Convertible Notes are loans provided to the Company from two directors and an officer.

The notes each have the following terms:

three-year subordinated convertible promissory note of principal face amounts.

Subject to other customary terms, one of the convertible

promissory note of $ 600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in

May 2025, bear interest at an annual rate of 6 % through December 2023 and 10 % thereafter, which is payable annually in cash or common

stock, at the holder’s discretion.

At any time after issuance and prior to or on the maturity date, the notes are convertible

at the option of the holder into shares of common stock at a conversion price ranging from $ 3 to $ 15 per share.

2023, the Company issued convertible promissory notes for $ 10.4 million.

As an inducement to enter the financing transactions, the

Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $ 2.70 per warrant.

The Company recorded a debt

discount aggregating $ 5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance

The Company recognized $ 835,496 as amortized debt discount during 2024, and it is reflected

three-year subordinated convertible promissory note

of principal face amounts.

Subject to other customary terms, a convertible promissory note

with a principal amount of $ 600,000 payable to a director, together with accrued interest

of $ 235,900 , was converted into 379,955 shares of the Company’s common stock.

remaining convertible promissory notes matured in May 2025, bear interest at an annual rate

of 10 % thereafter, which is payable annually in cash or common stock, at the holder’s

At any time after issuance and prior to or on the maturity date, the notes are

convertible at the option of the holder into shares of common stock at a conversion price

of $ 3 per share.

2023, the Company issued convertible promissory notes.

As an inducement to enter the financing transactions, the Company issued 1,391,667

warrants to the noteholders at an adjusted exercise price of $ 2.7 per warrant.

The Company recorded a debt discount aggregating $ 5.6

million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.

The Company recognized

$ 1,113,996 and $ 835,496 as amortized debt discount during the year ended December 31, 2025, and 2024, respectively, and it is reflected

as interest expense in the accompanying unaudited consolidated statement of operations.

Only the convertible promissory notes issued

during fiscal 2023 are secured by substantially all of the assets of the Company.

March 2024, and as amended in June 2025, the Company and the Belami sellers entered into

a letter agreement modifying certain obligations under the Belami stock purchase agreement.

In connection with the letter agreement, the Company issued convertible promissory notes

to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate

of $ 3,117,909 in cash due to the sellers in monthly principal and interest payments of $ 300,000

beginning in July 2025 until fully paid in January 2026 .

The notes are convertible at $ 3

per share of common stock.

Additionally,

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does not bear interest and is convertible at a price of $ 1.07 per share.

March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the Belami

stock purchase agreement.

In connection with the letter agreement, the Company issued convertible promissory notes to each of the

sellers (the “Seller Note(s)”) in substitution of an aggregate of $ 3,117,408 in cash due to the sellers on the first

anniversary of the closing.

Each seller received a Seller Note in an amount of $ 1,039,303 on the same date.

In addition to other

customary terms, the Seller Notes bear annual interest at 10 %, with interest and principal coming due on May 16, 2025 , and can be

converted by the Sellers at any time at $ 3.00 per share of our common stock.

2025, the Company consolidated convertible notes aggregating $ 9.1 million with convertible

notes generating proceeds of $ 5.2 million.

The terms are substantially the same with the

exception of the convertible rate which is $ 1.20 per share of the Company’s common

6 OPERATING LEASE LIABILITIES

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required to provide the landlord with a letter of credit in the amount of $ 2.7 million, which is secured by the same amount of cash.

In January 2024, the Company entered in a 35-month lease related to its Sacramento office.

In January 2024, the Company entered into a 35 -month lease related to its Sacramento office.

The Company recognized a right-of-use asset

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OF LEASE COST OPERATING LEASE

Twelve Month Ended

For the year ended December 31,

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease obligations

Rights-of-use obtained in exchange for new operating lease liabilities

Fixed rent payments

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The payments associated with this debt are

payable in quarterly tranches aggregating $ 0.8 million during 2024 and 2025 and $ 0.9 million in 2026.

The Company owed an additional

amount of $ 1.4 million pursuant to its agreements with GE which is payable in 2027 as of March 31, 2024.

During April 2024, GE and the

Company reduced such additional amount by $ 400,000 in exchange for the issuance of a convertible promissory note of $ 1.0 million, which resulted in the recognition of a gain on recognition of extinguishment of debt during 2024.

payable in quarterly tranches aggregating $ 1.3 million during the year 2026.

Company owed an additional amount of $ 1.4 million pursuant to its agreements with GE.

During April 2024, GE and the Company agreed to

reduce such additional amount by $ 400,000 in exchange for the issuance of a convertible promissory note of $ 1 million.

8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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Accrued interest, convertible notes

Accrued dividends

Trade payables

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9 INCOME TAXES

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2024 and 2023 were as

Company has not paid or incurred any income taxes liabilities during 2025 and 2024 due to its net operating losses.

State taxes are apportioned

through 47 states.

The states in which the apportionment are greatest are California and Florida, which comprise 22% of the effective

state and local effective tax rate.

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2025, and December 31,

2024 were approximately as follows:

OF DEFERRED TAX ASSETS

For the year ended December 31,

Net operating loss carryforward

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Total Deferred Tax Assets - Net

change in valuation allowance is as follows:

OF CHANGE IN VALUATION ALLOWANCE

For the year ended December 31,

Net operating loss

$ 7,141,156 )

Fair value of options

Other, mostly amortization of intangible assets

Change in valuation allowance

Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2025, and December 31, 2024 and the

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OF INCOME TAX RATE RECONCILIATION

Computed statutory tax benefit – Federal

$ ( 8,210,066 )

$ ( 10,885,333 )

Computed statutory tax benefit – State

Federal Statutory tax rate

States and local income taxes, net of federal income tax effect

Changes in valuation allowance

( 7,897,129 )

( 9,659,709 )

Permanent difference

Change in valuation allowance

Effective tax rate

10 RELATED PARTY TRANSACTIONS

Notes Due to Related Parties

notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers.

The outstanding principal on the convertible promissory notes, associated with related parties was $ 950,000 as of December 31, 2024,

and December 31, 2023, and accrued interest of $ 242,803 and $ 151,900 , respectively.

A Preferred Stock

Company received $ 1,000,000 , in aggregate, from a director and one of the Company’s Co-Chief Executive Officers as well as from

its President in consideration for the issuance of Preferred Series A-1 shares in October 2024.

notes due to related parties represent amounts provided to the Company from a director and the Company’s Chief Executive

Officer as well as the Company’s former Co-Chief Executive Officer.

The outstanding principal on the convertible promissory notes, associated with related parties was $ 350,000

and $ 950,000

as of December 31, 2025, and December 31, 2024, respectively and accrued interest of $ 35,486

and $ 242,803 ,

respectively.

Also, the interest expense associated with these notes during 2025 and 2024 was $ 119,486

and $ 151,900 ,

respectively.

Company paid and declared dividends to related parties (a director and officer and two officers) amounting to $ 80,000 and $ 20,000 during

11 STOCKHOLDERS’ EQUITY

1 unchanged sentence

OF COMMON STOCK

Transaction Type

Shares Issued

Range of Value

2024 Equity Transactions

Common stock issued pursuant to acquisition

Common stock issued, pursuant to services provided

Issuance of common stock pursuant to offering, net

Common stock issued pursuant to exercise of options

Transaction Type

Shares Issued

Valuation $(Issued)

Range of Value Per Share

2023 Equity Transactions

Common stock issued pursuant to acquisition

Common stock issued, pursuant to services provided

Conversion of preferred stock

Issuance of common stock pursuant to offering, net

Common stock issued pursuant to extinguishment of debt

of December 31, 2024, the remaining amount to be used under the ATM offering program is $ 5.9 million.

stock issued pursuant to the acquisition consists of shares issued in April 2024 pursuant to the acquisition of Belami.

the shares issued in April 2024 was reflected in the common stock and additional paid-in capital at the date of acquisition in 2023.

Common stock issued,

pursuant to services provided

Common stock issued pursuant

to stock at the market offering, net

Common stock issued pursuant

to preferred dividends

Common stock issued pursuant

to conversion of notes

Common stock issued pursuant

to conversion of accrued interest

Common stock issued pursuant

to exercise of options

Common stock issued pursuant

to conversion of preferred stock

Common stock issued, pursuant

to services provided

Common stock issued pursuant

to stock at the market offering, net

Common stock issued pursuant

to exercise of options, net

Common stock issued pursuant

to acquisition

Preferred Stock

following is a summary of the Company’s previously issued Preferred Stock activity during the year 2023:

OF PREFERRED STOCK ACTIVITY

Transaction Type

Carrying Value

Value per Share

Preferred Stock Balance at January 1, 2023

Preferred Stock conversions

Preferred Stock Balance at December 31, 2023

Series A Preferred Stock was convertible at the holder’s option.

The Company could repurchase shares of the Preferred Stock for

$ 1.20 - 2.00 per share.

Holders also had a put option, allowing them to sell their shares of Preferred Stock back to the Company at $ 0.25

per share, and therefore the stock was classified as Mezzanine equity rather than permanent equity.

This Series A Preferred Stock was

retired during 2023.

October 2024, the Company completed its authorization of the issuance of 440,000 shares of newly authorized Series A Preferred Stock

1 unchanged sentence

The designations of each class of preferred stock are as follows:

OF PREFERRED STOCK ACTIVITY

Transaction Type

Carrying Value

Value per Share

Value per Share, gross

Preferred Stock Balance at January 1, 2024

2 unchanged sentences

Preferred Stock Balance at December 31, 2024

A Preferred Stock:

the year ended December 31, 2025, the Company authorized the issuance of 60,000 shares of a new series of preferred stock Series A-2.

Details of activity in Preferred Stock Series A-1 and Series A-2 are as follows:

Transaction Type

Carrying Value

Value per Share, gross

Preferred Stock Series A-1 Balance at January 1, 2025

Conversion to common stock

( 2,550,000 )

Preferred Stock Series A-1 Balance at December 31, 2025

Preferred Stock Series A-2 Balance at January 1, 2025

Conversion to common stock

Preferred Stock Series A-2 Balance at December 31, 2025

designations of each class of preferred stock are as follows:

A Preferred Stock (temporary equity):

dividend of 8 % annually, 12 % if paid after dividend date;

issue price of $ 25 per share;

option at the holder’s option at $ 2 per share, with subsequent equity offering reset provision, if issued below $ 2 per share,

of no less than $ 1.20 per share;

option at the holder’s option at $ 1.20

at the price of $ 25 per share at the Company’s option after 5 years or upon change of control (substantially within the control

1 unchanged sentence

rights on as converted basis.

A-1 Preferred Stock:

A-1 and A-2 Preferred Stock (permanent equity):

dividend of 8 % annually, 12 % if paid after dividend date;

issue price of $ 25 per share;

option at the holder’s option at $ 2 per share, with subsequent equity offering reset provision, if issued below $ 2 per share,

of no less than $ 1.20 per share;

at the price of $ 25 per share at the Company’s option after three years or upon change of control (substantially outside the

control of the holder);

option at the holder’s option at $ 1.20

per share for Series A and A-1 and $2 per share for Series A-2;

at the price of $ 25 per share at the Company’s option after 3 years or upon change of control (substantially outside the control

of the holder);

rights on as converted basis.

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following is a summary of the Company’s stock option activity during 2025 and 2024:

SCHEDULE OF STOCK OPTION ACTIVITY

OF STOCK OPTION ACTIVITY

Exercise Price

Outstanding, January 1, 2025

( 7,401,100 )

Outstanding, December 31, 2025

Exercisable, December 31, 2025

January 1, 2024

December 31, 2024

Outstanding, January 1, 2024

( 6,851,084 )

Outstanding, December 31, 2024

Exercisable, December 31, 2024

following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2025 and 2024.

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Expected life (in years)

2.50 - 3.47 yrs.

2.50 - 4.00 yrs.

36.7 – 96.5 %

Risk-fee interest rate

3.56 - 4.02 %

3.50 - 4.62 %

Dividend yield

Company does not have historical stock prices that can be reliably determined for a period that is at least equal to the expected terms

of its options.

The expected options terms, which is calculated using the plain vanilla method, are 3.5 years, and its historical period is 2.7 years.

The Company relies on the expected

volatility of comparable peer-group publicly traded companies within its industry sector, to supplement the Company’s historical

data for the period of the expected terms of the options that exceeds the period of the Company’s historical volatility data.

future option expense was $ 14.4 million (excluding certain market-based options which management cannot ascertain to have a probable

outcome amounting to $ 63 million) on December 31, 2024, and it is expected to be recognized over a weighted-average period of 1.2 years.

Prior to the second quarter of 2025, the Company

did not have historical stock prices that could be reliably determined for a period that is at least equal to the expected terms of its

The expected options terms, which were calculated using the plain vanilla method, are 3.5 years, and its historical period was

The Company relied on the expected volatility of comparable peer-group publicly traded companies within its industry sector,

to supplement the Company’s historical data for the period of the expected terms of the options that exceeded the period of the

Company’s historical volatility data.

As of May 1, 2025, the Company uses its historical stock prices to determine its expected

Warrants Issued

2 unchanged sentences

Number of Warrants

Weighted Average Exercise Price

Weighted Average

Exercise Price

Balance, January 1, 2025

Forfeited/Cancelled

( 1,236,356 )

Balance, December 31, 2025

Forfeited/Cancelled

Balance, January 1, 2024

Balance, December 31, 2024

2023, the Company issued convertible promissory notes for $ 10.4 million.

As an inducement to enter into the financing transactions, the Company

issued 1,391,667 3 - year warrants to the noteholders at an adjusted exercise price of $ 2.70 per warrant.

The Company recorded a debt

discount aggregating $ 5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.

year ended December 31, 2025 and 2024, the Company did not issue any warrants except for warrants issued to a placement agent in connection

with its Series A -1 Preferred offerings in the second quarter of 2025.

Restricted stock units

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OF NON-VESTED RESTRICTED STOCK

Weighted Average Grant Due Fair Value

Average Grant

Due Fair Value

Non-vested restricted stock units, January 1, 2025

( 6,655,463 )

Non-vested restricted stock units December 31, 2023

( 1,171,102 )

Non-vested restricted stock units, December 31, 2025

Non-vested restricted stock units, January 1, 2024

( 4,513,527 )

Non-vested restricted stock units on December 31, 2024

weighted-average remaining contractual life of the restricted units as of December 31, 2025, is 1.32 years.

RSU and RSA gives the right to one share of the Company’s common stock.

RSU and RSAs that vest based on service and performance

are measured based on the fair values of the underlying stock on the date of grant.

The Company used a Lattice model to determine the

fair value of the RSU with a market condition.

Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over

the vesting period.

the years ended December 31, 2024, and 2023, the Company recognized compensation expense of $ 13.0 million, and $ 18.0 million, respectively,

related to RSUs, RSAs and stock options.

The options and restricted stock

awards and units are granted to the Company’s employees, board members, and certain consultants.

vesting of the options, restricted stock units or awards is based on requisite service period of the employees and the

nonemployee’s vesting period is generally based on a period of up to three

The maximum contractual term of the options is up to 5

The number of shares available for grant of options, and restricted stock units or awards amounts to 18,048,873

at December 31, 2024.

12 CONCENTRATIONS OF RISKS AND SEGMENT

give the right to receive one share of the Company’s common stock.

RSUAs that are vest based on service and performance are measured

based on the fair values of the underlying stock on the date of grant.

The Company used a Lattice model to determine the fair value of

the RSU with a market condition.

Compensation with respect to RSUA awards is expensed on a straight-line basis over the vesting period.

Company recognized compensation expenses of $ 10,420,491 , and $ 10,078,955 , respectively, related to RSUs and RSAs during the year ended

December 31, 2025 and 2024, respectively.

The Company recognized compensation expenses of $ 3,139,881 and $ 3,395,479 , respectively, related

to stock options during the year ended December 31, 2025 and 2024, respectively.

options and RSUAs are granted to the Company’s employees, board members, and certain consultants.

There is no difference in characteristics

of the awards other than the stock options have to be exercised and restricted awards and units do not.

The vesting of the options, restricted

stock units or awards is based on the requisite service period of the employees and the non-employee’s vesting period is generally

based on a period of up to six years .

The maximum contractual term of the options is up to 5 years.

The number of shares available for

grant of options, and restricted stock units or awards amounts to 19,717,706 at December 31, 2025.

future stock-based compensation expense was $ 9.25 million as of December 31, 2025.

12 CONCENTRATIONS OF RISKS

Customers and Accounts Receivable

Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue.

The Company had three

and one third-party payor accounts receivable balance representing 54 % and 24 % of the Company’s total accounts receivable at December

31, 2024 and December 31, 2023, respectively.

The Company had two

and three third-party payor accounts receivable balance representing 59 % and 24 % of the Company’s total accounts receivable at

December 31, 2025 and 2024, respectively.

Company’s cash and cash equivalents are held primarily with two financial institutions.

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Company generates its income primarily from lighting and heating products sold primarily in the United States.

Segment and Expense Disaggregation

Company operates in one segment:

advanced-safe-smart technologies and related products.

The Company used the following factors to

identify includes the basis of organization, the relative similarities in types of product offerings.

The chief operating decision

maker consists of a team comprised of the Company’s Executive Chairman and its two Co-Chief Executive Officers.

assets of the segments amount to the Company’s consolidated assets.

Long-lived assets, which consists of property and

equipment and right of use assets are located in the United States.

The Company used the following factors to identify

includes the basis of organization, the relative similarities in types of product offerings.

The chief operating decision maker consists

of a team comprised of the Company’s Executive Chairman and its Chief Executive Officer.

The total assets of the segments

amount to the Company’s consolidated assets.

Long-lived assets, which consists of property and equipment and right of use assets

are located in the United States.

Company has concluded that consolidated net income or loss is the measure of segment profitability.

The following is a

reconciliation of the Company’s revenues from external customers and consolidated revenues and the consolidated and segment

loss, including significant segment expenses.

The following is a reconciliation

of the Company’s revenues from external customers and consolidated revenues and the consolidated and segment loss, including significant

disaggregated segment expenses.

OF CONSOLIDATED REVENUES AND SEGMENT LOSS

Year ended December 31,

For the year ended December 31,

Revenues from external customers and consolidated revenues

Cost of revenues

( 64,173,870 )

( 61,682,934 )

Compensation costs, excluding share-based payments

( 10,180,474 )

( 9,730,111 )

Share-based payments

( 13,560,580 )

( 13,474,433 )

Marketing programs

( 20,800,181 )

( 18,800,142 )

Professional fees, excluding share-based payments

( 6,795,654 )

( 7,149,168 )

Depreciation, amortization, and impairment of intangibles

( 4,176,466 )

( 5,185,706 )

Other operating expenses

( 1,866,114 )

( 2,366,621 )

Total operating expenses, net

Other income / (expense)

$ ( 121,553,339 )

$ ( 118,389,115 )

Other expenses

Amortization of debt discount

7 unchanged sentences

$ ( 35,768,144 )

13 PROFORMA FINANCIAL STATEMENTS (unaudited)

following proforma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023:

pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results to reflect, among

other things, 1) additional amortization that would have been charged assuming the fair value adjustments to amortizable intangible assets

had been applied, 2) the shares issued and issuable by the Company to acquire Belami, 3) fair value of the initial grant and options

to Belami employees, and 4) the increase in interest expense related to the issuance of convertible notes payable, including amortization

of debt discount.

Furthermore, it excludes transaction costs related to the Belami acquisition.

These pro forma results of operations

have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have

resulted had the acquisition occurred on the date indicated or that may result in the future.

OF PROFORMA CONSOLIDATED RESULTS OF OPERATION

December 31, 2023

$ ( 39,495,552 )

Basic and diluted loss per share

Weighted average number of shares outstanding- basic and diluted

13 SUBSEQUENT EVENTS

has evaluated subsequent events through March 2025, which is the date the consolidated financial statements were available to be issued.

There were no significant subsequent events that required adjustment to or disclosure in the consolidated financial statements with the

exception of the following:

has evaluated subsequent events through March 26 2026, which is the date the consolidated financial statements were available to be

There were no significant subsequent events that required adjustment to or disclosure in the consolidated financial

statements with the exception of the following:

Company generated proceeds of $ 29.3 million in consideration for the issuance of shares of common stock pursuant to two offerings and

exercise of warrants.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures