What changed in this filing

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Item 9A. Controls and Procedures

2025-03-24 compared with 2024-04-01 · 1213 added, 1219 removed, 1686 unchanged (59% of the section changed)

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10b5-1 Trading Plans

the quarter ended December 31, 2023, none of the Company’s directors or executive officers adopted ,

modified or terminated

any contract, instruction or written plan for

the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange

Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

the quarter ended December 31, 2024, none of the Company’s directors or executive officers adopted , modified or terminated any

contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense

conditions of Rule 10b5-1(c) of the Exchange Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c)

of Regulation S-K).

Annual Meeting of Stockholders

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will be entitled to receive notice of, and vote at, the annual meeting.

Note Extensions

March 31, 2024, the Company entered into an amendment to three of its previously issued subordinated convertible balloon promissory notes

(the “promissory notes”) aggregating $575,000 with certain holders of such promissory notes.

The amendment extends the maturity

date of each respective promissory note to May 16, 2025, increases the interest rate to ten percent (10%) per year starting January 1,

2024 and adjusts the conversion price to $3.00 per share.

No other terms of the promissory notes were changed.

Each of Leonard J.

Co-Chief Executive Officer and a director of the Company, John P.

Campi, Co-Chief Executive Officer of the Company, and an investor entered

into an amendment to his or its respective promissory note.

The amendment is effective as of the original maturity date of the respective

The Company’s Board of Directors approved the amendment.

The issuance of the notes was deemed to be exempt from registration

pursuant to Section 4(a)(2) of the Securities Act, including Regulation D and Rule 506 promulgated thereunder, as transactions by the

Company not involving a public offering.

Notes Issued to Belami Sellers

March 29, 2024, the Company and the Sellers entered into a letter agreement modifying certain obligations under the Stock Purchase

Agreement, dated February 6, 2023, between the Company and the Sellers of Belami.

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, or April 28, 2024.

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 becoming due on May 16, 2025, and can be converted by the Sellers at any time at $3.00

per share of our common stock.

The Seller Notes include customary events of default accelerating maturity, including a breach of the

Company’s covenants, representations and warranties under the Stock Purchase Agreement and a change of control of Belami.

letter agreement further provides that the Company will perform all other obligations arising on the first anniversary of the

Closing, including issuance of shares of common stock due to Sellers, and that on such date the non-fundamental representations and

warranties expire, and the Company will release $750,000 held in escrow.

The issuance of the notes was deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities

Act, including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering.

Commission Termination Agreement

March 29, 2024, Mr.

Campi and Ms.

Barron each entered into a commission termination agreement with the Company, terminating the incentive

compensation-related provisions in their employment agreements and agreeing no amounts would be paid pursuant to such provisions for

prior periods.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Inc., a publicly traded financial services company, including as Chairman of the board of directors from January 2007, a member of the

board of directors from November 1997 and Chief Executive Officer from January 2007 through July 2008, when it merged into National

Holdings Corporation, a publicly traded financial services company.

board of directors from November 1997 and Chief Executive Officer from January 2007 through July 2008, when it merged into National Holdings

Corporation, a publicly traded financial services company.

Sokolow also served as President of vFinance, Inc.

2001 through December 2006.

from January 2001 through

December 2006.

From July 2008 until July 2012, Mr.

Sokolow was President of National Holdings Corporation, and from July

2008 until July 2014, he was Vice Chairman of the board of directors of National Holdings Corporation.

From July 2012 until December

Sokolow was a consultant and partner at Caribou LLC, a strategic advisory services firm.

Sokolow was Founder, Chairman

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

until 1993, Mr.

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

and distribution company.

Sokolow was President of National Holdings Corporation, and from July 2008 until July

2014, he was Vice Chairman of the board of directors of National Holdings Corporation.

From July 2012 until December 2014, Mr.

was a consultant and partner at Caribou LLC, a strategic advisory services firm.

Sokolow was Founder, Chairman and Chief Executive

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

From 1988 until 1993, 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 Marwick.

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

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

and on the board of directors of Agrify Corporation, a publicly traded provider of innovative cultivation and extraction solutions for

the cannabis industry, since December 2021, where he currently serves as a member of the Audit Committee and the Compensation Committee.

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

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 businesses.

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.

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

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Boisseau is a Certified Public

Schmidt has served as our President since June 2021 and has served as a consultant to the Company since August 2019.

formed Schmidt Family Investments LLC, which invests in early stage companies, in May 2017, of which he is the sole principal.

previously served in a variety of roles at Office Depot, Inc., an office supply retailer, from July 2007 through May 2016, including

as Executive Vice President and President, International from November 2011 to May 2016, Executive Vice President, Corporate Strategy

and New Business Development from July 2011 until November 2011 and President, North American Business Solutions from July 2007 until

November 2011.

Schmidt has served as our President since June 2021 and previously served as a consultant to the Company since August 2019.

Schmidt formed Schmidt Family Investments LLC, which invests in early stage companies, in May 2017, of which he is the sole principal.

Schmidt previously served in a variety of roles at Office Depot, Inc., an office supply retailer, from July 2007 through May 2016,

including as Executive Vice President and President, International from November 2011 to May 2016, Executive Vice President, Corporate

Strategy and New Business Development from July 2011 until November 2011 and President, North American Business Solutions from July 2007

until November 2011.

Prior to joining Office Depot, Inc., Mr.

Schmidt spent 11 years with the ACNielsen Corporation, a marketing research firm,

most recently serving as President and Chief Executive Officer.

Schmidt spent 11 years with the ACNielsen Corporation, a marketing research

firm, most recently serving as President and Chief Executive Officer.

Prior to joining ACNielsen, Mr.

Schmidt spent eight years at the Pillsbury

Food Company, serving as President of its Canadian and Southeast Asian operations.

He has also held management positions at PepsiCo and

Procter & Gamble.

Schmidt spent eight years at the

Pillsbury Food Company, serving as President of its Canadian and Southeast Asian operations.

He has also held management positions at

PepsiCo and Procter & Gamble.

Barron has served as our Chief Operations Officer since June 2007.

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

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

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

During 2021, Mr.

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at Fuqua Industries and Qualex, Inc.

Golden is a licensed Certified Public Accountant and began his career at Arthur Andersen &

Golden began his career at Arthur Andersen & Inc.

Our board believes Mr.

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.

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.

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

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a global strategic consulting company and provider of insurance and risk transfer solutions, since July 2006, where he currently serves

as Chairman of the board and Chief Executive Officer and previously served as President.

as Chairman of the board and previously served as Chief Executive Officer and President.

Ridge co-founded Ridge Schmidt

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serves as Co-Chair of the Bipartisan Commission on Biodefense, as Chairman Emeritus of the board of the National Organization on Disability,

and as a member of board of trustees of the Center for the Study of the Presidency, among other private organizations.

Our board believes

Ridge’s qualifications to serve as a member of our board include his vast experience in both government and industry, his service

on other public and private company boards and his expertise in risk management and cybersecurity.

and as a member of board of counselors of the Center for the Study of the Presidency and Congress, among other private organizations.

Our board believes Mr.

Ridge’s qualifications to serve as a member of our board include his vast experience in both government

and industry, his service on other public and private company boards and his expertise in risk management and cybersecurity.

Shiff has served as a director of the Company since February 2014.

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of the Shiff Group of Companies.

The Shiff Group owns and operates hotels and other real estate in Israel, including Hayozem Resorts

& Hotels Ltd., Marina Hotel Tel Aviv Ltd.

and Zvidan Investments Ltd.

The Shiff Group owns and operates Shiff Group Assets Ltd., Shiff Group Investments Ltd., and Zvidan

Investments Ltd.

Our board believes Mr.

Shiff’s qualifications to serve

as a member of our board include his experience in developing and operating new businesses.

Shiff’s qualifications to serve as a member of our board include his experience in developing

and operating new businesses.

Relationships

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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.

of directors is determined by our board of directors or our stockholders, but will not be less than five persons, subject to the terms

of our articles of incorporation and our bylaws.

Each director is elected to a one-year term and holds office until his or her successor

is duly elected and qualified or until his or her earlier death, resignation or removal.

Vacancies and newly created directorships on

the board of directors may be filled at any time by the remaining directors.

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

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

subject to the terms of our articles of incorporation and our bylaws.

Each director is elected to a one-year term and holds office until

his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

Vacancies and

newly created directorships on the board of directors may be filled at any time by the remaining directors.

board of directors has three standing committees:

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audit committee consists of Ms.

Greenstein Brayer, Ms.

DiMattia and Mr.

DiMattia, Ms.

Greenstein Brayer, and Mr.

Golden, who is the chair of the audit committee.

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of the audit committee include:

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

● appointing,

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

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);

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);

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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members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and

Nasdaq listing rules.

Nasdaq listing standards.

Our board of directors has determined that Mr.

Golden qualifies as an “audit committee financial expert”

within the meaning of applicable SEC regulations and meets the financial sophistication requirements of Nasdaq listing standards.

making this determination, our board of directors considered Mr.

within the meaning of applicable SEC regulations and meets the financial sophistication requirements of the Nasdaq listing standards.

In making this determination, our board of directors considered Mr.

Golden’s prior experience, business acumen and independence.

our independent registered public accounting firm and management periodically meet privately with our audit committee.

Both our independent registered public accounting firm and management periodically meet privately with our audit committee.

compensation committee consists of Ms.

Greenstein Brayer, Ms.

DiMattia, and Mr.

DiMattia, Ms.

Greenstein Brayer and Mr.

Golden, who is the chair of the compensation committee.

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, 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;

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;

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;

reviewing 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, diversity and inclusion

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 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.

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;

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 ESG matters and related risks;

● 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;

proposals submitted by stockholders for inclusion in our proxy materials;

the evaluation of our board of directors and board committees.

Each member of our nominating and governance committee is a non-employee director, as defined in Rule 16b-3 promulgated

under the Exchange Act.

member of our nominating and governance committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange

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.

The Insider Trading Policy also sets forth

mandatory guidelines that apply to directors, officers and employees of the Company and its subsidiaries who adopt Rule 10b5-1 plans

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.

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

plans, while in possession of material non-public information relating to the Company or its securities other than in compliance with

applicable law.

of Business Conduct and Ethics

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Section 16(a) Reports

16(a) of the Exchange Act requires all persons subject to such reporting requirements to file initial reports of ownership and

reports of changes in ownership of our common stock and other equity securities with the SEC.

To our knowledge, based solely on a

review of these reports filed with the SEC and certain written representations furnished to us that no other reports were required,

we believe that all Section 16 filing requirements applicable to our executive officers, directors and greater than 10% shareholders

were complied with during the fiscal year ended December 31, 2023, except as follows:

a Form 4 filed by Patricia Barron on August 9,

2023, reporting the August 4, 2023 grant of restricted stock units, and related withholding of shares for taxes, and grant of stock

a Form 4 filed by Dov Shiff on October 10, 2023, reporting the September 30, 2023 issuance of restricted stock paid in lieu

of the cash retainer payable for service on the board, pursuant to the non-employee director compensation program;

and a Form 4 to

be filed by Thomas J.

Ridge reporting the conversion of preferred stock into common stock on May 1, 2023 and 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 non-employee director compensation program.

16(a) of the Exchange Act requires all persons subject to such reporting requirements to file initial reports of ownership and reports

of changes in ownership of our common stock and other equity securities with the SEC.

To our knowledge, based solely on a review of these

reports filed with the SEC and certain written representations furnished to us that no other reports were required, we believe that all

Section 16 filing requirements applicable to our executive officers, directors and greater than 10% stockholders were complied with during

the fiscal year ended December 31, 2024 and through the date of this Form 10-K, except as follows:

a Form 4 filed by Dov Shiff on April

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

EXECUTIVE COMPENSATION

“named executive officers” for the year ended December 31, 2024 were:

Campi, Co-Chief Executive Officer (since September 12, 2023;

previously, Chief Executive Officer);

Sokolow, Co-Chief Executive Officer (since September 12, 2023;

previously a non-employe director of the Company)

Campi, Co-Chief Executive Officer ;

Sokolow, Co-Chief Executive Officer;

Kohen, Executive Chairman;

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Barron and Mr.

Boisseau received an annual base salary of $150,000, $300,000, $150,000, and $144,000,

respectively, during 2023.

Pursuant to the employment agreement that the Company entered into with Mr.

Sokolow at the time of his appointment

as Co-Chief Executive Officer on September 12, 2023, Mr.

Sokolow receives a base salary of $160,000 per year.

For his services on the

board of directors during the portion of 2023 prior to his appointment as Co-Chief Executive Officer, Mr.

Sokolow was paid pursuant to

the Company’s non-employee Director Compensation Program (defined below), which is described below under the heading “Director

Compensation.”

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 executive officer’s employment agreement also provides for the receipt of incentive and/or bonus compensation, which may

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

be paid annually in cash and/or stock.

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

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

cash or stock, as elected by Mr.

Sokolow, and is eligible to receive a performance-based bonus, payable in equity and/or cash, subject

to the achievement of performance metrics and other criteria as determined by the Executive Chairman and approved by the compensation

Kohen is eligible to receive annual incentive compensation based on our annual gross revenue, which may be paid in cash,

stock and/or options, as well as supplemental bonus compensation of performance-based stock options to purchase up to 17,000,000 shares

of common stock at an exercise price ranging between $4.00 and $12.00 per share, determined based on the achievement of specified market

capitalizations of the Company, and the potential to receive further options based on the achievement of additional specific market capitalizations

of the Company, as described further below under “Agreements with Named Executive Officers.”.

Schmidt is eligible to receive a stock bonus

of 20,000 shares that will be payable upon achievement of certain sales program goals, and he may be eligible to receive additional bonus

compensation as determined by the Company.

Boisseau is 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.

The actual incentive and/or bonus compensation

earned by each of our named executive officers during our most recent fiscal year is set forth in the “Summary Compensation Table”

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

as elected by Mr.

Sokolow, and is eligible to receive a performance-based bonus, payable in equity and/or cash, subject to the achievement

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

is eligible to receive annual incentive compensation based on our annual gross revenue, which may be paid in cash, stock and/or options,

as well as supplemental bonus compensation of performance-based stock options to purchase up to 15,000,000 shares of common stock at

an exercise price ranging between $6.00 and $12.00 per share, determined based on the achievement of specified market capitalizations

of the Company, and the potential to receive further options based on the achievement of additional specific market capitalizations of

the Company, as described further below under “Agreements with Named Executive Officers.” Mr.

Schmidt may receive additional

equity grants or other bonus or other incentive compensation, as determined by the Company.

Boisseau is 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.

incentive and/or bonus compensation earned by each of our named executive officers during our most recent fiscal year is set forth in

the “Summary Compensation Table” below.

Equity Compensation and Awards

executive officers may also receive equity awards under our 2021 Stock Incentive Plan (the “2021 Plan”).

We use equity awards

to align the interests of our named executive officers with those of our stockholders.

We believe that equity awards, such as stock options,

restricted share units (“RSUs”) and non-vested restricted stock, encourage our named executive officers to focus on our long-term

success as reflected in increases to our stock prices over a period of several years, growth in our profitability and other elements.

to his employment agreement, on September 12, 2023, Mr.

Sokolow received (i) 450,000 RSUs, 120,000 of which vested on the date of grant,

300,000 of which will vest in six semi-annual installments of 50,000, beginning on March 12, 2024, and 30,000 of which will vest on March

and (ii) five-year stock options to purchase up to 450,000 shares of the Company’s common stock at an exercise price

of $1.58 per share, 120,000 of which vested on the date of grant, 300,000 of which will vest in six semi-annual installments of 50,000,

beginning on March 12, 2024, and 30,000 of which will vest on March 12, 2027, in each case subject to continuous employment through the

applicable vesting date.

2023, the compensation committee granted certain equity awards and a cash bonus award to Mr.

On April 5, 2023, Mr.

received 120,000 RSUs and five-year stock options to purchase up to 120,000 shares of the Company’s common stock at an exercise

price of $3.28 per share, in each case vesting in three equal annual installments beginning on the grant date, subject to continued employment

through the applicable vesting date.

In addition, on October 19, 2023, Mr.

Boisseau received 7,993 RSUs that vested in full on November

15, 2023, and 25,000 RSUs that vest in two equal installments on February 15, 2024 and May 15, 2024, subject to Mr.

continuous employment through the applicable vesting date.

In October 2023, the compensation committee also approved the payment of a

discretionary cash bonus of $50,000 to Mr.

Boisseau, of which $25,000 was immediately payable and $12,500 will be payable on each of

February 15, 2024 and May 15, 2024.

Boisseau additionally elected to receive certain equity awards in cash, resulting in an additional

$25,000 cash bonus payment to Mr.

Boisseau, which was paid in November 2023.

August 4, 2023, the compensation committee granted to Ms.

Barron 100,000 RSUs and five-year stock options to purchase up to 100,000 shares

of the Company’s common stock at an exercise price of $2.08 per share, in each case vesting in four equal annual installments beginning

on the grant date, subject to continued employment through the applicable vesting date.

addition to the equity incentive and supplemental bonus awards granted during fiscal 2023 as described above, pursuant to the Chairman

Agreement (as defined below), effective January 1, 2022, Mr.

Kohen was granted five-year options to purchase 1,020,000 shares of common

stock, which have an exercise price of $12.00 per share, vest as to 340,000 shares on each of January 1, 2023, 2024 and 2025, and expire

January 1, 2027.

named executive officers may also receive equity awards under our 2021 Stock Incentive Plan (as amended and restated, the “2021

We use equity awards to align the interests of our named executive officers with those of our stockholders.

that equity awards, such as stock options, restricted stock units (“RSUs”) and non-vested restricted stock, encourage our

named executive officers to focus on our long-term success as reflected in increases to our stock prices over a period of several years,

growth in our profitability and other elements.

compensation committee approved the following cash and equity awards during 2024:

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:

a five-year option to purchase 60,000 shares of common

stock at an exercise price of $0.10 per share, which vested in three equal annual installments on each of October 1, 2020, 2021 and 2022;

a five-year option to purchase 60,000 shares of common stock at an exercise price of $6.00 per share, which vested in three equal annual

installments on each of October 1, 2020, 2021 and 2022;

and a five-year option to purchase 100,000 shares of common stock at an exercise

price of $12.00 per share, which vests in four equal annual installments on each of June 1, 2021, 2022, 2023 and 2024 (which includes

a signing bonus of options to purchase 25,000 shares).

Schmidt’s employment agreement also provides for an annual grant of

25,000 shares of common stock on each of June 1, 2022, 2023 and 2024.

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

4 unchanged sentences

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

common stock, which vested in four equal installments as of 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 installments at the end of each quarter in 2022, and which were both granted

effective March 11, 2022.

Those options have an exercise price of $12.34 per share.

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.

and Perquisites

24 unchanged sentences

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

Boisseau received 152,993 RSUs and options to purchase 120,000 shares of common

stock at an exercise price of $3.28 per share;

Barron received 100,000 RSUs and

options to purchase 100,000 shares of common stock at an exercise price of $2.08 per share;

and (iii) Mr.

Sokolow received 450,000 RSUs and a stock option to purchase 450,000 shares

common stock at an exercise price of $1.58 per share, in addition to 26,615 shares of common

stock and stock options to purchase up to 17,500 shares of common stock at an exercise price

of $3.28 per share, granted pursuant to our Director Compensation Program for his service

as a non-employee director prior to his appointment as our Co-Chief Executive Officer, which

are also reported in this table.

For more information regarding equity awards granted to

our named executive officers during fiscal 2023 and 2022, see “Executive Compensation

Program Components—Other Equity Compensation and Awards” above.

(3) Non-Equity Incentive Plan Compensation reflects incentive compensation and commission 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.

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.

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

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

3 unchanged sentences

member travel that required disclosure in the Summary Compensation Table.

to the Schmidt Agreement (as defined below), Mr.

Schmidt’s receives equity compensation

for his services to the Company and is eligible to receive additional bonus compensation

as determined by the Company, as described below under “Agreements with Named Executive

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

$12,000 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.

Equity Awards at Fiscal Year End

following table sets forth certain information regarding outstanding equity awards held by the named executive officers as of December

table below sets forth certain information regarding outstanding equity awards held by the named executive officers as of December 31,

Campi did not hold any outstanding equity awards as of December 31, 2024.

Option Awards

Number of securities underlying unexercised options (#) exercisable

of securities underlying unexercised options (#) Not exercisable

Number of securities underlying unexercised options (#) Not exercisable

Equity incentive plan awards:

9 unchanged sentences

Leonard Sokolow

1,000,000 (4)

1,140,000 (4)

1,500,000 (4)(5)

500,000 (4)(5)

1,000,000 (4)(5)

460,000 (4)(6)

Marc-Andre Boisseau

1 unchanged sentence

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.

options were granted pursuant to the Director Compensation Program and vest in twelve equal monthly installments beginning on April

options and RSUs vest as follows:

300,000 will vest in six semi-annual installments of 50,000, beginning on March 12, 2024, and 30,000

will vest on March 12, 2027.

November 9, 2022, the Company entered into the Advisory Agreement (as defined below) with Newbridge Securities Corporation, pursuant

to which Newbridge Securities Corporation agreed to provide financial and general corporate advisory services to the Company.

to the Advisory Agreement, the Company agreed to issue to affiliates of Newbridge Securities Corporation an aggregate of 200,000

restricted shares of the Company’s common stock, which vest on the following schedule:

50,000 shares on November 9, 2022 and

50,000 shares on each of the six-, 12- and 18-month anniversaries of such date.

Sokolow received 40,333 of the restricted shares,

of which 10,084 were unvested as of December 31, 2023 and will vest on May 9, 2024.

In the event the Advisory Agreement is terminated

prior to its expiration, any shares that have not vested as of such date will be forfeited.

options were granted pursuant to executive chairman agreements entered into with Mr.

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 was granted the following supplemental bonus options as it was determined that

the applicable performance conditions had been satisfied:

(i) options to purchase 1,500,000 shares of common stock at an exercise

price of $3.00 per share;

(ii) options to purchase 500,000 shares of common stock at an exercise price of $4.00 per share;

options to purchase 1,000,000 shares of common stock at an exercise price of $6.00 per share.

These options were exercisable as of

the date of grant and expire November 21, 2024.

Pursuant to the 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 $4.00 per share, upon the Company achieving each of the following market capitalizations:

$1.5 billion and $2.0

(ii) options to purchase 500,000 shares of common stock at $5.00 per share, upon the Company achieving each of the following

market capitalizations:

$2.5 billion and $3.0 billion;

(iii) 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;

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 (v) 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:

(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;

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.

options vest as follows:

460,000 vested on January 1, 2023 and 340,000 will vest on each of January 1, 2024 and 2025.

options vest in equal annual installments on each of April 5, 2024 and 2025.

these RSUs, 80,000 vest in in equal annual installments on each of April 5, 2024 and 2025 and 25,000 vest in equal installments on

February 15, 2024 and May 15, 2024.

options and RSUs vest in three equal annual installments on each of August 4, 2024, 2025 and 2026.

to purchase 60,000 shares have an exercise price of $0.10 per share and options to purchase an additional 60,000 shares have an exercise

price of $6.00 per share.

options vest on June 1, 2024 and have an exercise price of $12.00 per share.

Schmidt’s employment agreement provides for an annual grant of 25,000 shares of common stock with the last installment vesting on June 1, 2024.

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

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, Mr.

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.

options and RSUs vest on April 5, 2025.

options and RSUs vest in two equal annual installments on each of August 4, 2025 and 2026.

options vest in three equal annual installments on each of January 1, 2025, 2026 and 2027.

options and RSUs vest in eleven equal quarterly installments of 20,000, beginning March 31,

options and RSUs vest in two equal annual instalments on each of January 1, 2025 and 2026.

with Named Executive Officers

Campi (Co-Chief Executive

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 1, 2016.

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

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 of 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.

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;

and (ii) 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 an

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.

In March 2024, Mr.

Campi entered into a commission

termination agreement, terminating the incentive compensation-related provisions in his employment agreements and agreeing no

amounts would be paid pursuant to such provisions for prior periods Mr.

Campi is also entitled to receive expense reimbursement for

reasonable expenses, including travel and entertainment, incurred in the performance of his duties.

(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.

79 unchanged sentences

Kohen will receive:

(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 installments

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;

(vi) supplemental bonus compensation

of stock options to purchase up to 4,000,000 shares of common stock at an exercise price ranging between $3.00 and $5.00 per share, determined

based on the achievement of specified market capitalizations of the Company, as provided by the previous chairman agreement and described

further below;

and (vii) 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.

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.

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

9 unchanged sentences

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

Kohen additionally remains eligible to receive the following supplemental

bonus compensation, pursuant to the prior chairman agreement:

(i) options to purchase 500,000 shares of common stock at $3.00 per share,

upon the Company achieving each of the following market capitalizations:

$300.0 million, $500.0 million and $750.0 million;

to purchase 500,000 shares of common stock at $4.00 per share, upon the Company achieving each of the following market capitalizations:

$1.0 billion, $1.5 billion and $2.0 billion;

and (iii) options to purchase 500,000 shares of common stock at $5.00 per share, upon the

Company achieving each of the following market capitalizations:

$2.5 billion and $3.0 billion.

Of these, as of December 31, 2023, the

following have vested:

(i) options to purchase 1.5 million shares at an exercise price of $3.00 per share, (ii) options to purchase 500,000

shares at an exercise price of $4.00 per share;

As of December 31, 2024, the following previously vested, and expired during 2024:

(i) options to purchase 1.5 million shares at an exercise price of $3.00 per share;

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

price of $4.00 per share;

and (iii) options to purchase 1.0 million shares at an exercise price of $6.00 per share.

46 unchanged sentences

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

(ii) a sign-on bonus of a stock

option to purchase 100,000 shares of common stock at an exercise price of $6.00 per share, which vested in its entirety on December 31,

Ms Barron was previously eligible to receive cash incentive compensation equal to 0.25% of the Company’s net revenue, payable on an annual or quarterly basis.

and (ii) a sign-on bonus of a

stock option to purchase 100,000 shares of common stock at an exercise price of $6.00 per share, which vested in its entirety on December

Barron was previously eligible to receive cash incentive compensation equal to 0.25% of the Company’s net revenue,

payable on an annual or quarterly basis.

In March 2024, Ms.

Barron entered into a commission termination agreement, terminating the incentive compensation-related

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

Barron is also entitled to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred in

the performance of her duties.

Barron entered into a commission termination agreement, terminating the incentive

compensation-related provisions in her employment agreement and agreeing no amounts would be paid pursuant to such provisions for prior

Barron is also entitled to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred

in the performance of her duties.

to the Barron Agreement, Ms.

17 unchanged sentences

Schmidt (President)

Company initially entered into a consultant agreement with Steven M.

Schmidt on August 20, 2019, as amended June 1, 2021 (as amended,

the “Schmidt Agreement”), pursuant to which amendment Mr.

Schmidt agreed to serve as the Company’s President.

Agreement provides for a three-year term, which may be renewed upon the signed written consent of the Company and Mr.

to other customary terms and conditions of such agreement, the Schmidt Agreement provides that Mr.

Schmidt will receive:

(i) a five-year

option to purchase 60,000 shares of common stock at an exercise price of $0.10 per share, which vested in three equal annual installments

on each of October 1, 2020, 2021 and 2022;

(ii) a five-year option to purchase 60,000 shares of common stock at an exercise price of

$6.00 per share, which vested in three equal annual installments on each of October 1, 2020, 2021 and 2022;

(iii) a stock bonus of 20,000

shares, payable upon achievement of certain sales program goals;

(iv) a signing bonus of 25,000 shares of common stock;

(v) a five-year

option to purchase 100,000 shares of common stock at an exercise price of $12.00 per share, which vests in four equal annual installments

on each of June 1, 2021, 2022, 2023 and 2024 (which includes a signing bonus of options to purchase 25,000 shares);

and (vi) an annual

grant of 25,000 shares of common stock on each of June 1, 2022, 2023 and 2024.

Schmidt may be eligible to receive additional bonus

compensation as determined by the Company.

to the Schmidt Agreement, Mr.

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

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

of the Company;

a material violation of the Schmidt Agreement by Mr.

Schmidt that is not cured within 30 days of written notice;

Schmidt’s death, disability or incapacity;

willful misconduct that damages the Company, its reputation, products, services or customers;

and being charged with a felony or misdemeanor involving moral turpitude.

The Company may terminate the Schmidt Agreement at any time,

in which case Mr.

Schmidt will immediately receive all shares of common stock provided for under the Schmidt Agreement and all options

provided for will immediately vest.

Schmidt may terminate the Schmidt 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 provisions

and rights provided for in the Schmidt 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 Schmidt Agreement.

All shares granted will vest immediately.

December 20, 2024, the Company entered into a three-year employment agreement with Steven M.

Schmidt, pursuant to which Mr.

Schmidt agreed

to serve as the Company’s President (the “Schmidt Agreement”).

Subject to other customary terms and conditions of such

agreements, Mr.

Schmidt received the following awards as compensation for his service as President:

(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

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

and (ii) a grant of 100,000 RSUs and five-year options to purchase up to 100,000 shares of common stock, each of which vests in two equal

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.

Boisseau (Chief Financial Officer)

8 unchanged sentences

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

installments 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 installments at the end of each quarter in 2022;

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

11 unchanged sentences

Incentive Plans

Stock Incentive Plan

2021 Plan was adopted by our board of directors in December 2021 and approved by our stockholders in February 2022 and became effective

February 9, 2022 (the “Effective Date”).

The 2021 Plan is the successor to the Company’s 2018 Stock Incentive Plan

(as amended and restated, the “2018 Plan”), and no further awards may be granted under the 2018 Plan after the Effective

Stock Incentive Plan (as Amended and Restated)

2021 Plan was originally adopted by our board of directors in December 2021 and approved by our stockholders in February 2022 and became

effective February 9, 2022.

On July 10, 2024, our stockholders approved the amendment and restatement of the 2021 Plan, increasing the

number of shares authorized for issuance under the 2021 Plan by 20,000,000 shares.

The 2021 Plan is the successor to the Company’s

2018 Stock Incentive Plan (as amended and restated, the “2018 Plan”), and no further awards may be granted under the 2018

The following provides a summary of the 2021 Plan.

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To the extent that any award under the 2021 Plan or

any award granted under the 2018 Plan prior to the effectiveness of the 2021 Plan is forfeited, canceled, surrendered, or terminated

any award granted under the 2018 Plan prior to the effectiveness of the 2021 Plan is forfeited, cancelled, surrendered, or terminated

without the issuance of shares or an award is settled only in cash, the shares subject to such awards granted but not delivered will

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the fair market value of a share on the date of grant, and each SAR shall have a term no longer than 10 years.

Company may make payment in settlement of the exercise of a SAR by delivering shares, cash or a combination of shares and cash as set

forth in the applicable award agreement.

Each SAR will be evidenced by an award agreement that specifies the date and terms of the award

and such additional limitations, terms and conditions as the compensation committee may determine, consistent with the provisions of

the 2021 Plan.

The Company may make payment

in settlement of the exercise of a SAR by delivering shares, cash or a combination of shares and cash as set forth in the applicable

award agreement.

Each SAR will be evidenced by an award agreement that specifies the date and terms of the award and such additional

limitations, terms and conditions as the compensation committee may determine, consistent with the provisions of the 2021 Plan.

the 2021 Plan, the compensation committee may grant or sell restricted shares to participants (i.e., shares that are subject to a substantial

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Amendment and Termination

awards may be granted under the 2021 Plan after the date that is 10 years from the Effective Date, or such earlier date as the 2021 Plan

may be terminated by the board of directors.

The board of directors may, without stockholder approval, amend or terminate the 2021 Plan,

except in any respect as to which stockholder approval is required by the 2021 Plan, by law, regulation or the rules of an applicable

stock exchange.

awards may be granted under the 2021 Plan on or after February 9, 2032 (the tenth anniversary of the effective date of the 2021 Plan),

or such earlier date as the 2021 Plan may be terminated by the board of directors.

The board of directors may, without stockholder approval,

amend or terminate the 2021 Plan, except in any respect as to which stockholder approval is required by the 2021 Plan, by law, regulation

or the rules of an applicable stock exchange.

Stock Incentive Plan (as Amended and Restated)

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approved the amendment and restatement of the 2018 Plan.

Prior to the effectiveness of the 2021 Plan, the Company, acting through the

board, or the applicable committee, was authorized to grant stock options, restricted stock awards, deferred bonus awards, deferred stock

awards and performance share awards.

In connection with the effectiveness of our 2021 Plan, no further awards will be granted under the

However, all outstanding awards under the 2018 Plan will continue to be governed by their existing terms.

The Company no longer grants awards under the 2018 Plan as it was replaced by

the 2021 Plan.

However, any outstanding awards under the 2018 Plan continue to be governed by their existing terms.

the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to another

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Stock Incentive Plan

Company previously granted equity awards under the 2015 Plan, which contained substantially the same terms as the 2018 Plan, described

The Company no longer grants awards under the 2015 Plan as it was replaced by the 2018 Plan.

Company previously granted equity awards under the 2015 Stock Incentive Plan, which contained substantially the same terms as the 2018

Plan, described above.

The Company no longer grants awards under the 2015 Stock Incentive Plan as it was replaced by the 2018 Plan.

any outstanding awards under the 2015 Stock Incentive Plan continue to be governed by their existing terms.

or Change in Control Benefits

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such provisions.

For additional discussion, please see “2018 Stock Incentive Plan (as Amended and Restated)” and “2021

Stock Incentive Plan” above.

For additional discussion, please see “Stock Incentive Plans” above.

Recovery Policy

2023, the board of directors adopted the Company’s Compensation Recovery Policy to comply with SEC and Nasdaq Stock Market 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.

In the event of such a restatement,

the Compensation Recovery Policy provides that the compensation committee will cause the Company to promptly recover any erroneously

awarded incentive-based compensation received by any covered executive officer during the three completed fiscal years immediately preceding

the date on which the Company is required to prepare the accounting restatement.

Covered executive officers include both current and

former executive officers, and incentive-based compensation includes any compensation that is granted, earned, or vested based wholly

or in part on the attainment of a financial reporting measure.

Financial reporting measures are those that are determined and presented

in accordance with the accounting principles used in preparing our financial statements, and any measures that are derived wholly or

in part from such measures.

The amount required to be recovered under the Compensation Recovery Policy in the event of an accounting

restatement generally will equal the amount of incentive-based compensation received by the covered executive officer that exceeds the

amount of such compensation that otherwise would have been received had it been determined based on the restated amounts, computed without

regard to any taxes paid.

The Compensation Recovery Policy is effective with respect to covered incentive-based compensation received

by a covered executive officer on or after October 2, 2023.

The full text of the Compensation Recovery Policy is attached to this Annual

Report as Exhibit 97.

board of directors approved a program for non-employee director compensation (the “Director Compensation Program”) in

March 2022, and the board of directors amended the Director Compensation Program in March 2023.

Under the Director Compensation

Program, for service on our board, non-employee directors receive an annual cash retainer of $30,000, paid in quarterly

installments.

Directors may elect to have the cash retainer paid in the form of shares of common stock.,.

For 2023, shares were

granted on the last day of each quarter, with the number of shares granted determined based on the opening price per share of common

stock on Nasdaq on the last day of the quarter.

For 2024, all shares will be granted on December 31, 2024, with the number of shares

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

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.

In the event of such a restatement, the Compensation

Recovery Policy provides that the compensation committee will cause the Company to promptly recover any erroneously awarded incentive-based

compensation received by any covered executive officer during the three completed fiscal years immediately preceding the date on which

the Company is required to prepare the accounting restatement.

Covered executive officers include both current and former executive officers,

and incentive-based compensation includes any compensation that is granted, earned, or vested based wholly or in part on the attainment

of a financial reporting measure.

Financial reporting measures are those that are determined and presented in accordance with the accounting

principles used in preparing our financial statements, and any measures that are derived wholly or in part from such measures.

required to be recovered under the Compensation Recovery Policy in the event of an accounting restatement generally will equal the amount

of incentive-based compensation received by the covered executive officer that exceeds the amount of such compensation that otherwise

would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid.

The Compensation

Recovery Policy is effective with respect to covered incentive-based compensation received by a covered executive officer on or after

October 2, 2023.

and Practices Related to the Grant of Certain Equity Awards

do not schedule the grant of stock options or other equity awards in anticipation of the disclosure of material nonpublic information,

and we do not schedule the disclosure of material nonpublic information based on the timing of grants of stock options or other equity

We have not adopted any formal policy that would require the compensation committee or the board to grant, or to avoid granting,

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

Under our Director Compensation

Program (described below under the heading “Director Compensation”), annual awards of stock options and restricted stock

are granted to our non-employee directors 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 10-K.

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

on our board, non-employee directors receive an annual cash retainer of $30,000, paid in quarterly instalments, or, if a director elects

to receive payment in shares of common stock, a single annual distribution of common stock.

For 2024, shares were granted on December

31, 2024, with the number of shares granted determined based on the opening price per share of common stock on Nasdaq on December 31,

Ridge and Shiff each elected to receive their 2024 annual cash retainer in shares of common stock.

For 2025, all shares

will be granted on December 31, 2025, 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 their 2025 annual cash retainer in shares of common

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

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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 Program Grant Date, which will vest in twelve equal monthly installments 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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Date, and (ii) options to purchase up to 3,000 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 installments beginning on the last day of the month in which

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.

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Date, and (ii) options to purchase up to 2,000 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 installments beginning on the last day of the month in which

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.

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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 2023.

The assumptions used to determine the valuation of the awards are discussed in Note 2 and Note 12 to our

consolidated financial statements for the 2023 fiscal year.

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

price of $3.28 per share and vest in twelve equal monthly installments beginning on April 30, 2023.

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

financial statements for the 2024 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, 2023 was as follows:

The total number of unexercised option awards (vested

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

DiMattia, 61,000 options;

Golden, 28,000 options;

Golden, 46,000

Greenstein Brayer, 41,000 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.

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.

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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power and includes securities that the individual or entity has the right to acquire, such as through the exercise of issued stock options

or warrants, vesting of RSUs or conversion of convertible notes, within 60 days of March 21, 2024.

Except as noted by footnote, and

subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities

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

The percentage of beneficial ownership is based on

96,870,902 shares of common stock issued and outstanding as of March 21, 2024.

or warrants, vesting of RSUs, or conversion of convertible notes or preferred stock, within 60 days of March 13, 2025.

Except as noted

by footnote, and subject to community property laws where applicable, we believe, based on the information provided to us, that the persons

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 convertible within 60 days of March 21, 2024 are deemed to be outstanding for computing

the percentage ownership of the person holding such options, warrants, RSUs and/or notes 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.

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.

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

McNab Road, Pompano Beach, Florida

Common Stock Beneficially Owned

Name and Address of Beneficial Owner[

Number of Shares and Nature of Beneficial Ownership

Percentage of Total Common Stock

Name of Beneficial Owner

Number of Shares of Common Stock Beneficially Owned

Percentage of Class

Number of Shares of Series A Preferred Stock Beneficially Owned

Percentage of Class

Number of Shares of Series A-1 Preferred Stock Beneficially Owned

Percentage of Class

Total Voting Power

Greater than 5% Stockholders

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Strul Associates Limited Partnership (4)

SKY Opportunity I LLC (5)

Steven Siegelaub (6)

Michael and Zelene Fowler (7)

Nagelberg 2023 Revocable Trust (8)

Freeman Caribbean Investments, LLC (9)

Schmidt, President (14)

Harry & Brenda Mittelman Revocable Living Trust (10)

Directors and Named Executive Officers (not otherwise included above)

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Marc-Andre Boisseau (13)

Schmidt, President (8)

Patricia Barron, Chief Operations Officer (15)

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

beneficial ownership of less than one percent.

Represents beneficial ownership of less than one percent.

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

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Florida 33394.

4,855,015 shares of common stock, 125,000 shares of common stock issuable upon exercise of

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 21, 2024 held by Strul Associates Limited Partnership., and 25,000 shares of common stock underlying stock options that are

exercisable within 60 days of March 21, 2024 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

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

within 60 days of March 13, 2025.

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

2,500,000 shares of common stock issuable upon conversion of Series A Preferred Stock held by SKY Opportunity I LLC, 75,000 shares

of common stock held by Lance T.

Shaner or vesting within 60 days of March 13, 2025, and 75,000 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.

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.

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.

The business address of Strul Associates

Limited Partnership is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida 33434.

797,685 shares of common stock, 120,000 shares of common stock underlying stock options that

are exercisable within 60 days of March 21, 2024 and 6,667 shares of common stock issuable

upon conversion of the principal amount of an outstanding convertible note held by Mr.

469,136 shares of common stock held by Mr.

Sokolow, 10,084 shares of unvested restricted

stock, 955,000 shares of common stock underlying stock options held by Mr.

Sokolow that are

exercisable within 60 days of March 21, 2024, 16,667 shares of common stock issuable upon

conversion of the principal amount of an outstanding convertible note held by Mr.

and 24,290 shares of common stock issuable upon exercise of warrants held by Mr.

40,470 shares of common stock, 90,000 shares of common stock underlying stock options that

are exercisable within 60 days of March 21, 2024 and 52,500 RSUs that vest within 60 days

of March 21, 2024 held by Mr.

103,843 shares of common stock, including, and

195,000 shares of common stock underlying stock options that are exercisable within 60 days

of March 21, 2024 held by Mr.

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

Ontario St., Suite 220, Chicago, Illinois 60654.

(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

Mittelman or Ms.

Mittelman is the trustee or a beneficiary.

The address of Mr.

Mittelman, Ms.

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

(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

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

(14) Includes

26,917,844 shares of common stock,;

8,782,500 shares of common stock underlying stock options that are exercisable within 60

days of March 21, 2024;

(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 63,334 shares of common stock

issuable upon the conversion of the principal amount of outstanding convertible notes.

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.

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

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Equity compensation plans not approved by security holders (4)

Includes 40,654,237 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 $6.45 per share, which includes:

(a) 4,330,000 shares of common stock issuable upon exercise of

stock options granted under the 2015 Stock Incentive Plan;

(b) 5,725,500 shares of common stock issuable upon exercise of stock

options granted under the 2018 Plan;

(d) 5,750,476 shares of common stock issuable upon exercise of stock options granted under the 2021 Plan;

(d) 4,482,261 shares of

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

and (f) 20,000,000 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, of which 3,000,000 had vested as of December 31, 2023.

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, 2023 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 RSUs referred to in footnote 1 because they have no exercise price.

Includes 71,441 shares of common stock issuable vesting of shares of restricted stock granted by the Company’s board of directors

in connection with services agreements.

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.

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.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, and Director Independence

required under Nasdaq rules and regulations, a majority of the members of a listed company’s board of directors must qualify as

“independent,” as affirmatively determined by the board of directors.

Based upon information requested from and provided

by each director concerning his or her background, employment, and affiliations, including family relationships, our board of directors

has determined that all members of the board of directors, except Rani R.

Kohen, Dov Shiff and Leonard J.

Sokolow, are “independent”

as that term is defined under applicable SEC rules and regulations and Nasdaq listing requirements and rules.

In making such independence

determinations, our board of directors considered the relationships that each non-employee director has with us and all other facts and

circumstances that our board of directors deemed relevant in determining their independence, including the transactions described below

under “Certain Relationships and Related Party Transactions” and beneficial ownership of our capital stock by each non-employee

The composition of our board of directors and each of our committees complies with all applicable requirements of Nasdaq and

the rules and regulations of the SEC.

rules and regulations of The Nasdaq Stock Market LLC (“Nasdaq”) require that a majority of the members of a listed company’s

board of directors qualify as “independent,” as affirmatively determined by the company’s board of directors.

upon information requested from and provided by each director concerning his or her background, employment, and affiliations, including

family relationships, our board of directors has determined that all members of the board of directors, except Rani R.

Kohen, Dov Shiff

and Leonard J.

Sokolow, are “independent” as that term is defined under applicable SEC rules and regulations and Nasdaq listing

requirements and rules.

In making such independence determinations, our board of directors considered the relationships that each non-employee

director has with us and all other facts and circumstances that our board of directors deemed relevant in determining their independence,

including the transactions described below under “Certain Relationships and Related Party Transactions” and beneficial ownership

of our capital stock by each non-employee director.

The composition of our board of directors and each of our committees complies with

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

Relationships and Related Party Transactions

following is a description of transactions or series of transactions since January 1, 2023, 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.

During 2020, certain related parties entered

into securities purchase agreements with the Company, pursuant to which each agreed to purchase a three-year subordinated

convertible promissory note.

In March 2024, certain of these related parties entered into an amendment to the note, effective as of

the original maturity date of the respective note, which, among other things, extended the maturity date of the note to May 16,

Subject to other customary terms, the note accrues interest at a rate of 6% per annum, or, as amended, 10% per annum effective

as of January 1, 2024, 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 note is convertible at the option of the holder into shares of common stock at a

conversion price of $15.00 per share, or, as amended, $3.00 per share.

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

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:

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

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

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

a three-year subordinated convertible promissory note.

In March 2024, certain of these related parties entered into an amendment to the

note, effective as of the original maturity date of the respective note, which, among other things, extended the maturity date of the

note to May 16, 2025.

Subject to other customary terms, the note accrues interest at a rate of 6% per annum, or, as amended, 10% per

annum effective as of January 1, 2024, which is payable annually in cash or common stock, at the holder’s discretion.

after issuance and prior to or on the maturity date, the note is convertible at the option of the holder into shares of common stock

at a conversion price of $15.00 per share, or, as amended, $3.00 per share.

Upon notice to the holder, the Company may prepay, in whole

or in part, the outstanding balance of the note at any time prior to the maturity date;

provided, that the holder has the right to

convert the note into shares of common stock in lieu of prepayment.

Upon the occurrence of certain events of default and written

notice from 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 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

Amount Purchased

provided, that the holder has the right to convert

the note into shares of common stock in lieu of prepayment.

Upon the occurrence of certain events of default and written notice from

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.

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

– 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

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.

1 unchanged sentence

November 3, 2024

Campi – Co-Chief

Executive Officer of the Company

each of February 6, 2023 and March 29, 2023, the Company closed the Private Placements, 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 investors.

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.

The 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,.

Interest on 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

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

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

The Company may prepay the entire then-outstanding principal amount of the notes at any time, plus a prepayment premium;

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.

The warrants 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.

Securities Corporation

Sokolow, our Co-Chief Executive Officer and director, previously served in various executive roles at Newbridge Financial, Inc.

its subsidiaries, including Newbridge Securities Corporation, until September 2023.

January 2022, the Company and Newbridge Securities Corporation entered into a termination agreement, pursuant to which three investment

banking agreements previously entered into during October 2018, May 2021, and May 2021, respectively, were terminated, and the parties

agreed that there are no continuing rights or obligations under such agreements, and that Newbridge Securities Corporation is not entitled

to any fees or payments, in cash or otherwise, pursuant to such agreements.

November 9, 2022, the Company entered into a corporate advisory engagement agreement (the “Advisory Agreement”) with Newbridge

Securities Corporation, pursuant to which Newbridge Securities Corporation agreed to provide financial and general corporate advisory

services to the Company in connection with certain investment banking matters, such as assisting with investor presentations and investor

conferences, providing advice related to capital structures, capital market opportunities and asset allocation or exit strategies, and

assisting with the preparation of a due diligence package for use in potential merger and acquisition, joint venture and capital raising

transactions.

The Advisory Agreement has a 24-month term and may be terminated by either party, at any time, upon 15 days’ prior

written notice.

Pursuant to the Advisory Agreement, the Company issued to affiliates of Newbridge Securities Corporation an aggregate

of 200,000 restricted shares of the Company’s common stock, which vest on the following schedule:

50,000 shares of common stock

on November 9, 2022 and 50,000 shares on each of the six-, 12- and 18-month anniversaries of such date.

Sokolow received 40,333 of

the restricted shares.

In the event the Advisory Agreement is terminated prior to its expiration, any shares that have not vested as

of such date will be forfeited.

The common stock is subject to a six-month lock up restriction from the date the shares vest.

Line Ventures

Company and Bridge Line Ventures, LLC Series ST-1 (“Bridge Line Ventures”), the manager of which is Bridge Line Advisors,

LLC, of which Leonard J.

Sokolow, our Co-Chief Executive Officer and a member of our board of directors, previously served as Chief Executive

Officer and President, entered into stock purchase agreements during 2021, pursuant to which the Company issued an aggregate of 317,656

shares of common stock (including shares issued pursuant to anti-dilution provisions) and warrants to purchase 231,624 shares of common

stock to Bridge Line Ventures.

On September 12, 2022, Bridge Line Ventures distributed its shares of common stock and warrants to purchase

common stock to its investors, pursuant to a pro rata distribution for no consideration.

Public Offering

the initial public offering completed in February 2022, 455,353 shares were purchased by our directors, officers and greater than 5%

stockholders at the public offering price.

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.

and Procedures for Related Party Transactions

14 unchanged sentences

Audit-Related Fees

All Other Fees

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

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.

For 2022, includes audit fees for professional

services rendered in relation to the review of our registration statement and other documents filed with the SEC in connection with

our initial public offering and fees related to professional services rendered in connection with the issuance of a consent related

to a Registration Statement on Form S-8.

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.

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

17 unchanged sentences

Exhibit Index

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).

Amendment to Stock Purchase Agreement, dated April 28, 2023, by and among SKYX Platforms Corp.

and Mihran Berejikian, Nancy Berejikian,

and Michael Lack (incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the

SEC on May 1, 2023).

of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on

Form S-1 (File No.

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).

First Amendment to Stock Purchase Agreement, dated April 28, 2023, by and among SKYX Platforms Corp.

and Mihran Berejikian, Nancy Berejikian, and Michael Lack (incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).

Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No.

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

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, 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.

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

of Amendment to Articles of Incorporation (effective February 7, 2022) (incorporated by reference to Exhibit 3.3 to the Company’s

Current Report on Form 8-K filed with the SEC on February 14, 2022).

of Amendment to Articles of Incorporation (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.1 to the Company’s

Current Report on Form 8-K filed with the SEC on June 14, 2022).

of Amendment to Articles of Incorporation (effective May 2, 2023) (incorporated herein by reference to Exhibit 3.1 to the Company’s

Current Report on Form 8-K filed with the SEC on May 5, 2023).

Amended and Restated Bylaws of the Company (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.2 to the Company’s

Current Report on Form 8-K filed with the SEC on June 14, 2022).

Articles of Amendment to Articles of Incorporation (effective February 7, 2022) (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Articles of Amendment to Articles of Incorporation (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2022).

Articles of Amendment to Articles of Incorporation (effective May 2, 2023) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 5, 2023).

Certificate of Designation of Rights, Preferences and Privileges of Series A Preferred Stock (effective September 30, 2024) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2024).

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).

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).

Description of the Company’s Registered Securities (filed herewith).

Specimen Common Stock Certificate (filed herewith).

of Securities Subscription Agreement and Warrant used in 2021 Private Placements (incorporated herein by reference to Exhibit 10.13

to Amendment No.

Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

Form of Securities Subscription Agreement and Warrant used in 2021 Private Placements (incorporated herein by reference to Exhibit 10.13 to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on January 10, 2022).

Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1

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

of Stock Option Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.15 to the Company’s Registration Statement

on Form S-1 (File No.

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

of Stock Award Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement

on Form S-1 (File No.

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

Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.17 to the Company’s Registration

Statement on Form S-1 (File No.

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

of Stock Option Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement

on Form S-1 (File No.

2015 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No.

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

of Stock Award Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.19 to the Company’s Registration Statement

on Form S-1 (File No.

Form of Stock Option Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (File No.

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

Employment Agreement, dated September 1, 2019, between the Company and John P.

Campi (incorporated herein by reference to Exhibit

10.22 to the Company’s Registration Statement on Form S-1 (File No.

Form of Stock Award Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No.

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

Agreement, dated August 20, 2019, between the Company and Steven M.

Schmidt (incorporated herein by reference to Exhibit 10.23 to

the Company’s Registration Statement on Form S-1 (File No.

2018 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 (File No.

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

Amendment to Consulting Agreement, dated June 1, 2021, between the Company and Steven M.

Schmidt (incorporated herein by reference

to Exhibit 10.24 to the Company’s Registration Statement on Form S-1 (File No.

Form of Stock Option Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No.

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

Employment Agreement, dated September 1, 2019, between the Company and Patricia Barron (incorporated herein by reference to Exhibit

10.25 to the Company’s Registration Statement on Form S-1 (File No.

Form of Stock Award Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-1 (File No.

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

of Placement Agent Warrant (incorporated herein by reference to Exhibit 10.29 to the Company’s Registration Statement on Form

S-1 (File No.

Executive Employment Agreement, dated September 1, 2019, between the Company and John P.

Campi (incorporated herein by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-1 (File No.

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

of Stock Purchase Agreement between the Company and Bridge Line Ventures, LLC Series ST-1 (incorporated herein by reference to Exhibit

10.32 to the Company’s Registration Statement on Form S-1 (File No.

Executive Employment Agreement, dated September 1, 2019, between the Company and Patricia Barron (incorporated herein by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1 (File No.

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

of Common Stock Purchase Warrant issued by the Company to Bridge Line Ventures, LLC Series ST-1 (incorporated herein by reference

to Exhibit 10.33 to the Company’s Registration Statement on Form S-1 (File No.

Form of Stock Purchase Agreement between the Company and Bridge Line Ventures, LLC Series ST-1 (incorporated herein by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-1 (File No.

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

of Securities Purchase Agreement related to Purchase of Subordinated Convertible Balloon Promissory Note, including form of Subordinated

Convertible Balloon Promissory Note (incorporated herein by reference to Exhibit 10.34 to the Company’s Registration Statement

on Form S-1 (File No.

Form of Securities Purchase Agreement related to Purchase of Subordinated Convertible Balloon Promissory Note, including form of Subordinated Convertible Balloon Promissory Note (incorporated herein by reference to Exhibit 10.34 to the Company’s Registration Statement on Form S-1 (File No.

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

Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association, as Lender,

as of April 13, 2020 (incorporated herein by reference to Exhibit 10.35 to the Company’s Registration Statement on Form S-1

Form of Amendment No.

1 to Subordinated Convertible Balloon Promissory Note, dated March 29, 2024 (incorporated herein by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

Paycheck Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association, as Lender, as of April 13, 2020 (incorporated herein by reference to Exhibit 10.35 to the Company’s Registration Statement on Form S-1 (File No.

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

to the Paycheck Protection Term Note, effective June 5, 2020 (incorporated herein by reference to Exhibit 10.36 to the Company’s

Registration Statement on Form S-1 (File No.

Amendment to the Paycheck Protection Term Note, effective June 5, 2020 (incorporated herein by reference to Exhibit 10.36 to the Company’s Registration Statement on Form S-1 (File No.

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

Draw Paycheck Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association,

as Lender, as of February 3, 2021 (incorporated herein by reference to Exhibit 10.37 to the Company’s Registration Statement

on Form S-1 (File No.

Second Draw Paycheck Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association, as Lender, as of February 3, 2021 (incorporated herein by reference to Exhibit 10.37 to the Company’s Registration Statement on Form S-1 (File No.

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

Authorization and Agreement (Economic Injury Disaster Loan), dated June 24, 2020, between the U.S.

Small Business Administration

and the Company (incorporated herein by reference to Exhibit 10.38 to the Company’s Registration Statement on Form S-1 (File

Loan Authorization and Agreement (Economic Injury Disaster Loan), dated June 24, 2020, between the U.S.

Small Business Administration and the Company (incorporated herein by reference to Exhibit 10.38 to the Company’s Registration Statement on Form S-1 (File No.

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

(Secured Disaster Loans), entered into by the Company, as Borrower, for the benefit of the U.S.

Small Business Administration, as

of June 24, 2020 (incorporated herein by reference to Exhibit 10.39 to the Company’s Registration Statement on Form S-1 (File

Note (Secured Disaster Loans), entered into by the Company, as Borrower, for the benefit of the U.S.

Small Business Administration, as of June 24, 2020 (incorporated herein by reference to Exhibit 10.39 to the Company’s Registration Statement on Form S-1 (File No.

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

Agreement, dated June 24, 2020, between the U.S.

Small Business Administration and the Company (incorporated herein by reference

to Exhibit 10.40 to the Company’s Registration Statement on Form S-1 (File No.

Security Agreement, dated June 24, 2020, between the U.S.

Small Business Administration and the Company (incorporated herein by reference to Exhibit 10.40 to the Company’s Registration Statement on Form S-1 (File No.

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

Stock Incentive Plan (effective February 9, 2022) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed with the SEC on February 14, 2022).

of Nonqualified Stock Option Agreement (2021 Plan) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report

on Form 8-K filed with the SEC on February 14, 2022).

of Incentive Stock Option Agreement (2021 Plan) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report

on Form 8-K filed with the SEC on February 14, 2022).

of Restricted Shares Award Agreement (2021 Plan) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report

on Form 8-K filed with the SEC on February 14, 2022).

of Nonqualified Stock Option Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on August 5, 2022).

of Incentive Stock Option Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed with the SEC on August 5, 2022).

of Restricted Shares Award Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.3 to the Company’s

Current Report on Form 8-K filed with the SEC on August 5, 2022).

of Restricted Share Unit Award Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.4 to the Company’s

Current Report on Form 8-K filed with the SEC on August 5, 2022).

of Nonqualified Stock Option Agreement (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit 10.12 to the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Share Unit Award Agreement (three-year vesting) (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit

10.13 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Share Unit Award Agreement (one year vesting) (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit

10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Shares Award Agreement (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit 10.15 to the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Cash Retention Incentive Agreement (April 2023) (incorporated herein by reference to Exhibit 10.11 to the Company’s Quarterly

Report on Form 10-Q for the quarter ended March 31, 2023).

Chairman Agreement, effective as of January 1, 2022, between the Company and Rani R.

Kohen (incorporated herein by reference to Exhibit

10.45 to the Company’s Registration Statement on Form S-1 (File No.

Amended and Restated 2021 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 10, 2024).

Form of Nonqualified Stock Option Agreement (2021 Stock Incentive Plan) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Incentive Stock Option Agreement (2021 Stock Incentive Plan) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Restricted Shares Award Agreement (2021 Stock Incentive Plan) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Nonqualified Stock Option Agreement (2021 Stock Incentive Plan) (August 2022) (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Incentive Stock Option Agreement (2021 Stock Incentive Plan) (August 2022) (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Restricted Shares Award Agreement (2021 Stock Incentive Plan) (August 2022) (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Restricted Share Unit Award Agreement (2021 Stock Incentive Plan) (August 2022) (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Nonqualified Stock Option Agreement (2021 Stock Incentive Plan) (April 2023) (incorporated herein by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

Form of Restricted Share Unit Award Agreement (three-year vesting) (2021 Stock Incentive Plan) (April 2023) (incorporated herein by reference to Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

Form of Restricted Share Unit Award Agreement (one year vesting) (2021 Stock Incentive Plan) (April 2023) (incorporated herein by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

Form of Restricted Shares Award Agreement (2021 Stock Incentive Plan) (April 2023) (incorporated herein by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

Form of Cash Retention Incentive Agreement (April 2023) (incorporated herein by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

Executive Chairman Agreement, effective as of January 1, 2022, between the Company and Rani R.

Kohen (incorporated herein by reference to Exhibit 10.45 to the Company’s Registration Statement on Form S-1 (File No.

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

Financial Officer Agreement, effective as of January 1, 2022, between the Company and Marc-Andre Boisseau (incorporated herein by

reference to Exhibit 10.46 to Amendment No.

Chief Financial Officer Agreement, effective as of January 1, 2022, between the Company and Marc-Andre Boisseau (incorporated herein by reference to Exhibit 10.46 to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed

with the SEC on January 10, 2022).

Representative’s

Warrant, dated February 9, 2022 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed

with the SEC on February 14, 2022).

Agreement, executed as of April 28, 2022, by and between the Company and Sicart Associates LLC (incorporated herein by reference

to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2022).

Agreement, by and between 400 Biscayne Commercial Owner, L.P., as Landlord and the Company, as Tenant (incorporated herein by reference

to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2022).

Advisory Engagement Agreement, dated November 9, 2022, between the Company and Newbridge Securities Corporation (incorporated herein

by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2022).

of Securities Purchase Agreement, dated February 6, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on February 7, 2023).

of Subordinated Secured Convertible Promissory Note, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.1 to the

Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

of Common Stock Purchase Warrant, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.2 to the Company’s

Current Report on Form 8-K filed with the SEC on February 7, 2023).

of Securities Purchase Agreement, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.49 to the Company’s

Annual Report on Form 10-K for the year ended December 31, 2022).

of Subordinated Secured Convertible Promissory Note, dated March 29, 2023 (filed herewith) (incorporated herein by reference to Exhibit

10.50 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).

of Common Stock Purchase Warrant, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.51 to the Company’s

Annual Report on Form 10-K for the year ended December 31, 2022).

333-261829) filed with the SEC on January 10, 2022).

Representative’s Warrant, dated February 9, 2022 (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Sublease Agreement, executed as of April 28, 2022, by and between the Company and Sicart Associates LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2022).

Lease Agreement, by and between 400 Biscayne Commercial Owner, L.P., as Landlord and the Company, as Tenant (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2022).

Form of Securities Purchase Agreement, dated February 6, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Subordinated Secured Convertible Promissory Note, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Common Stock Purchase Warrant, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Securities Purchase Agreement, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).

Form of Subordinated Secured Convertible Promissory Note, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).

Form of Common Stock Purchase Warrant, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).

Letter Agreement, effective as of April 27, 2023, between SKYX Platforms Corp.

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).

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).

Form of Retained Earnings Promissory Note, dated April 26, 2023 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).

Promissory Note and Business Loan Agreement, dated May 1, 2023, between SKYX Platforms Corp.

and First-Citizens Bank & Trust Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 5, 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).

Sales Agreement by and between SKYX Platforms Corp.

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and GE Technology Development, Inc., and Letter Agreement relating to Trademark License Agreement, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2023.

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp and John Campi ( filed herewith)

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp and Patricia Baron ( filed herewith)

Form of Amendment No.

1 to Subordinated Convertible Balloon Promissory Note, dated March 29, 2024 (filed herewith).

Preferability Letter from M&K CPAS, PLLC (incorporated herein by reference to Exhibit 18.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023).

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp.

and John Campi (incorporated herein by reference to Exhibit 10.57 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp.

and Patricia Barron (incorporated herein by reference to Exhibit 10.58 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

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).

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.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 17, 2024).

Convertible Promissory Note, dated April 11, 2024, issued to GE Trademark Licensing, Inc.

(incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 17, 2024.)

Business Loan Agreement (Asset Based), signed September 23, 2024, by and between Belami, Inc., as borrower, and Farmers & Merchants Bank of Central California, as lender (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 24, 2024).

Commercial Guaranty, signed September 23, 2024, by and among Belami, Inc., as borrower, SKYX Platforms Corp., as guarantor, and Farmers & Merchants Bank of Central California, as lender (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 24, 2024).

Form of Securities Purchase Agreement for Series A Preferred Stock, dated October 4, 2024 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 7, 2024).

Form of Securities Purchase Agreement for Series A-1 Preferred Stock, dated October 4, 2024 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 7, 2024).

Employment Agreement, dated as of December 20, 2024, by and between SKYX Platforms Corp.

and Steven Schmidt (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 23, 2024).

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).

SKYX Platforms Corp.

Insider Trading Policy (last revised March 2023) (filed herewith).

Insider Trading Policy (last revised March 2023) (incorporated herein by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

List of Subsidiaries (filed herewith).

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SKYX Platforms Corp.

Compensation Recovery Policy (adopted August 2023) (filed herewith).

Compensation Recovery Policy (adopted August 2023) (incorporated herein by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).

following financial statements from the Annual Report on Form 10-K for the year ended December 31, 2024 are formatted in iXBRL (Inline

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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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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.

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.

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.

consolidated financial statements are the responsibility of the Company’s management.

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or disclosures to which they relate.

discussed in Note 2 to the consolidated financial statements, the Company recognizes revenue upon the transfer of control of promised

goods to the customer upon delivery in an amount that reflects the consideration the Company expects to receive in exchange for the products.

management’s evaluation of agreements with customers involves significant judgement, given the fact that some agreements require

managements evaluation and allocation of the transaction price and transfer of goods to the customer.

evaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s assessment in relationship

to the relevant agreements and management’s disclosure in the consolidated financial statements.

to the net loss, accumulated deficit and negative cash flows from operations for the year, the Company evaluated the need for a going

management’s evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates

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.

M&K CPAS, PLLC

have served as the Company’s auditor since 2019

Woodlands, TX

March 24, 2025

Platforms Corp.

6 unchanged sentences

Account receivable, net

Investments, available-for-sale

Deferred cost of revenues

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Convertible notes, current

Convertible notes

Total current liabilities

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Total liabilities

Commitments and Contingent Liabilities:

Redeemable preferred stock - subject to redemption:

0 and 20,000,000

shares authorized;

0 and 880,400

and 12,376,536

shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Stockholders’ Equity (Deficit):

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:

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Accumulated other comprehensive loss

Total stockholders’ equity (deficit)

Total stockholders’ equity

Non-controlling interest

Total equity (deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

Total Liabilities, Temporary Equity, and Stockholders’ Equity

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

Year ended December 31,

Operating Costs

Cost of revenues

Gross profit (loss)

Selling and marketing expenses

General and administrative expenses-related party

General and administrative expenses

Total expenses, net

Total operating expenses, net

Loss from operations

2 unchanged sentences

Other income / (expense)

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

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( 35,768,144 )

Common stock issued pursuant to antidilutive provisions

Non-controlling interest

( 39,732,656 )

Other comprehensive income (loss):

Preferred dividends - related party

Preferred dividends

Net loss attributed to common stockholders

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Platforms Corp.

Statements of Stockholders’ Equity (Deficit)

Statements of Stockholders’ Equity

For the year ended December 31,

Series A-1 Preferred stocks

Balance, beginning of period

Preferred stock issued pursuant to offerings

Balance, December 31,

Series A-1 Preferred stocks

Balance, beginning of period

`Preferred stock issued pursuant to offerings

Preferred stock issued pursuant to offerings

Balance, December 31,

Shares of common stock

Balance, beginning of year

$ 114,039,638

Balance, beginning of year

Common stock issued pursuant to offerings

6 unchanged sentences

Balance, end of year

$ 162,025,024

$ 114,039,638

Balance, end of year

Common stock and paid-in capital

1 unchanged sentence

$ 162,025,024

Common stock issued pursuant to offerings

$ 114,039,638

Common stock issued pursuant to offerings, net of costs

Common stock issued pursuant to services

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( 39,732,656 )

Non-controlling interest

Common stock issued pursuant to antidilutive provisions

( 4,691,022 )

Preferred dividends

9 unchanged sentences

( 35,768,144 )

Total Stockholders’ Equity (Deficit)

( 39,732,656 )

Total Stockholders’ equity

accompanying notes are an integral part of the consolidated financial statements.

1 unchanged sentence

Statements of Cash Flows

For the twelve months ended December 31,

For the year ended December 31,

Cash flows from operating activities:

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Change in operating assets and liabilities:

( 1,004,889 )

Accounts receivable

3 unchanged sentences

Operating lease liabilities

( 2,101,316 )

Accretion operating lease liabilities

Royalty obligation

( 1,200,000 )

Consideration payable

Accounts payable and accrued expenses

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Purchase of debt securities

( 7,436,103 )

Proceeds from disposition of debt securities

2 unchanged sentences

Purchase of property and equipment

Payment of patent costs and other intangibles

Net cash provided by (used in) investing activities

1 unchanged sentence

Cash flows from financing activities:

Proceeds from issuance of common stock- offerings

Placement cost

( 2,548,000 )

Proceeds from exercise of options and warrants

Proceeds from issuance of common stock- offerings and exercise of options

Placement costs

Proceeds from line of credit

Proceeds from issuance of convertible notes

Dividends paid

Proceeds from issuance of preferred stocks - related party

Proceeds from issuance of preferred stocks

Principal repayments of notes payable

( 2,775,756 )

( 3,413,225 )

Net cash provided by financing activities

Change in cash and cash equivalents, and restricted cash

( 6,929,758 )

Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

Cash paid during period for:

Supplementary disclosure of non-cash financing activities:

Preferred stock conversion to common

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

Liabilities assumed and consideration payable

Identifiable intangible assets and goodwill>

Liabilities assumed and consideration payable

Debt discount

3 unchanged sentences

Right-of-use assets and operating lease liabilities

Cash paid during period for:

accompanying notes are an integral part of the consolidated financial statements.

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App, through WIFI, Bluetooth Low Energy and voice control.

It allows scheduling, energy savings eco mode, dimming, back-up emergency light,

night light, light color changing and much more.

It allows scheduling, energy savings eco mode, dimming, back-up emergency

light, night light, light color changing and much more.

The Company’s third-generation technology is an all-in-one safe and smart-advanced

platform that is designed to enhance all-around safety and lifestyle of homes and other buildings.

Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties.

Company’s liquidity’s sources include $ 22.4 million in cash and cash equivalents, including restricted cash of $ 5.6 million, and $ 3.1 million of working capital.

However, the Company has a history of recurring operating losses and its net cash used in operating activities amounted to $ 13.0 million

and $ 13.8 million during 2023 and 2022, respectively.

The Company has also generated net cash provided by financing activities

of $ 22.7 million and $ 20.9 million during 2023 and 2022, 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.

intends to mitigate such conditions by continuing to support its continued growth by decreasing its cash used in operating activities

through increased revenues and increased margins fr om products sold to large retailers and

its internet portals, and to the extent necessary, generate cash provided by financing activities through it’s at the market offering

or other equity or debt financing means.

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

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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GAAP) under the accrual basis of accounting.

Non-controlling

Company owns 98.8 % of SQL Lighting & Fans LLC, which was formed in Florida on April 27, 2011.

The subsidiary had no activity during

2022 and 2021 .

preparation of financial statements in conformity with U.S.

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from estimates.

Reclassifications

comparability, reclassifications of certain prior-year balances were made to conform with current-year presentations, such as certain

expenses previously included in cost of revenues and reclassified as general, and administrative expenses in 2022 and sales and marketing

expenses which were previously included in selling, general, and administrative expenses in 2022.

of Consolidation

The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC

from January 1, 2022 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 to December 31, 2023.

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.

All intercompany balances and transactions have been eliminated in consolidation.

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shares to be issued in April 2024.

The initial allocation of the purchase price is as follows:

The allocation of the purchase price was as follows:

OF INITIAL ALLOCATION OF PURCHASE PRICE

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Shares of common stock

Total purchase price

Total consideration

Consideration

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OF CASH EQUIVALENTS AND RESTRICTED CASH

December 31, 2024

December 31, 2023

Cash and cash equivalents

1 unchanged sentence

Total cash, cash equivalents and restricted cash

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, 2023 and 2022.

Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed

$ 750,000 in an escrow

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.

million with cash of the equivalent amount as of December 31, 2023.

The Company satisfied its obligations under the line of credit in

Contracts Balances

9 unchanged sentences

available evidence.

As of December 31, 2023, and December 31, 2022, the Company’s allowance for doubtful accounts was $ 54,987 and

$ 0 , respectively.

The Company’s allowance for doubtful accounts was $ 12,147 and $ 54,987 as of December 31, 2024 and 2023, respectively.

The Company determines an allowance for sales returns based upon historical experience.

As of December 31, 2023, and

December 31, 2022, the Company’s allowance for sales returns was $ 182,584 and $ 0 , respectively and is recorded as an accrued expenses

in the accompanying consolidated financial statements.

Company’s allowance for sales returns was $ 242,515 and $ 182,584 as of December 31, 2024, and 2023, respectively, and is recorded

as an accrued expense 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

Such amounts are recognized as deferred revenues in the accompanying balance sheet.

As of December 31, 2023, the deferred

revenues amounted to $ 1,475,519 .

There were no deferred revenues as of December 31, 2022.

The deferred revenues amounted to $ 1,495,846 ,

and $ 1,475,519 as of December 31, 2024 and 2023, respectively.

costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet.

1 unchanged sentence

the carrying value of related inventory, freight, and sales charges.

The deferred charges amounted to $ 224,445 as of December 31, 2023.

There were no deferred charges as of December 31, 2022.

The deferred charges amounted to $ 223,214 and $ 224,445 as of December

31, 2024 and December 31, 2023, respectively.

are stated at the lower of cost, determined on the first-in, first-out method.

Cost principally consists of the purchase price (adjusted

for lower of cost or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine potentially

obsolete items and evaluates the impact of any anticipated changes in future demand.

December 31, 2024

December 31, 2023

Inventory, component parts

Inventory, finished goods

( 1,300,000 )

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

and Equipment

6 unchanged sentences

or loss is reflected in the statements of operations.

are stated at the lower of cost, determined on the first-in, first-out (FIFO) method.

Cost principally consists of the purchase price

(adjusted for lower of cost or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine

potentially obsolete items and evaluates the impact of any anticipated changes in future demand.

Inventory, component parts

Inventory, finished goods

Inventory- total

Company will maintain an allowance based on specific inventory items that are obsolete.

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.

Losses from subsequent measurement of inventory amounted to $ 1.3 million and $ 0 as of December 31, 2023 and 2022,

respectively.

As of December 31, 2023, and 2022, the Company has determined that no additional allowance is required.

securities are classified as available-for-sale when they might be sold before maturity.

Securities available for sale are carried at

fair value, with unrealized holding gains and losses included in accumulated other comprehensive income.

Available-for-sale

debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary)

reported as a component of other comprehensive income (loss).

Realized gains and losses and charges for other-than-temporary impairments

are included in determining net income, with related purchase costs based on the first-in, first-out method.

The Company evaluates its

available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length

of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and

the Company’s ability and intent to hold the investment for sufficient time for its market value to recover.

For impairments that

are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and

its fair value at the balance sheet date of the reporting period for which the assessment is made.

The fair value of the investment then

becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value.

state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local

governmental agencies.

The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement

date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of

these securities.

When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other

observable market inputs at dates other than the measurement dates.

As a result, the Company classifies its debt securities as Level

I and Level II of the fair value hierarchy.

Management does not believe that its investment in debt securities were impaired as of December

Intangible assets were recorded in connection with the acquisition of Belami.

Intangible assets with finite lives,

which consist of customer relationships and e-commerce technology platforms, are being amortized over their estimated useful lives on

a straight-line basis.

Such intangible assets are tested for recoverability whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable.

The Company assesses the recoverability of its intangible assets by determining whether the

unamortized balance can be recovered over the assets’ remaining estimated useful life through undiscounted estimated future cash

If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be

made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated

with achieving such cash flows.

Estimated future cash flows are based on trends of historical performance and the Company’s estimate

of future performance, considering existing and anticipated competitive and economic conditions.

assets were recorded in connection with the acquisition of Belami.

Intangible assets with finite lives, which consist of customer relationships

and e-commerce technology platforms, are being amortized over their estimated useful lives on a straight-line basis.

Such intangible

assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over

the assets’ remaining estimated useful life through undiscounted estimated future cash flows.

If undiscounted estimated future

cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value

based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows.

future cash flows are based on trends of historical performance and the Company’s estimate of future performance, considering existing

and anticipated competitive and economic conditions.

Company developed various patents for an installation device used in light fixtures and ceiling fans.

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of litigation could result in a material impairment charge up to the carrying value of these assets.

Management has determined that there was no impairment of the Company’s intangible assets during 2023 and 2022.

determined that there was impairment of the Company’s intangible assets amounted to $ 1,118,750 as of September 30, 2024.

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.

initial carrying value of goodwill associated with the Belami acquisition may vary during the first year of initial purchase (through

April 2024) if the carrying value of the assets acquired or assumed liabilities or the fair value of the shares issuable in April 2024

varies from the initial allocation of assets previously performed or based on the number of shares the Company has to issue in April

Management has determined that there was no impairment

of the Company’s goodwill 2023 and 2022.

Company has two U.S.

and global agreements with General Electric (“GE”) related to the Company’s products.

and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement

under similar terms.

The agreement expires on December 4, 2028 and includes automatic renewal provisions.

Pursuant to such agreement,

GE’s licensing team has the rights to exclusively license certain of Sky’s Standard and Smart plug-and-play products set forth

in a statement of work in the U.S.

and worldwide.

Pursuant to the agreement, the Company expects that GE’s licensing team will seek

and arrange licensee partners for our products in the U.S.

and globally, including negotiating agreement terms, managing contracts, collecting

payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the

“Six Sigma” guidelines.

For products licensed to third parties, the Company and GE will each receive a specified percentage

of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work.

letter agreement dated November 28, 2023.

The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S.

Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and

GE Trademark Licensing, Inc.

Under this new payment arrangement, SQL’s revised royalty payment obligation is $ 2.7

million in the aggregate (the “Royalty Payment”)

payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and $ 1.4

million payable in 2027.

determined that there was no impairment of the Company’s goodwill in 2024 or 2023.

Value of Financial Instruments

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or credits to income.

of December 31, 2023, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion

features on warrants, options, estricted stock units, and convertible notes.

These shares have been reserved for issuance by the

Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares.

of December 31, 2024, 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.

Distinguishing

Liabilities from Equity

Company evaluates at each measurement date the proper classification of its liabilities and equity accounts.

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.

The designation of Series A includes provisions

that under certain contingent circumstances outside of liquidation, the holders of the Series A Preferred Stock control whether they

could receive cash consideration.

Management determined that based on these provisions, the Series A Preferred Stock should be classified

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.

Extinguishments

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Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions

of Section 740-10-25 for the reporting periods ended December 31, 2023, and 2022.

of Section 740-10-25 for fiscal 2024.

Contingencies

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Company had the following anti-dilutive common stock equivalents at December, 2024 and 2023:

SCHEDULE OF EARNING (LOSS) PER SHARE

OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS

December 31, 2024

December 31, 2023

Stock warrants

Stock options

Unvested restricted stock

Convertible notes

Preferred stock

Anti-dilutive common stock equivalents at December

31, 2023 excludes shares issuable in April 2024 pursuant to the business combination of Belami which range between 1,390,065 and 1,853,421

shares of common stock.

Anti-dilutive securities

Issued Accounting Pronouncements

does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect

on its consolidated financial statements.

in Accounting Principles

Historically,

the Company recognized its revenues of products shipped by third-party providers upon shipment.

During the second quarter of 2023,

the Company changed its revenue recognition policy as it believes that it is preferable to recognize the revenues of products

shipped by such third-party providers upon delivery.

This revenue recognition method is consistent with the method used by Belami.

The change in accounting principle does not significantly impact on the revenues historically recorded by the Company.

3 DEBT SECURITIES

components of investments as of December 31, 2022, were as follows:

SCHEDULE OF COMPONENTS OF INVESTMENTS

Fair value level

Unrealized loss

Carrying value

Corporate debt securities

State and local government debt securities

Accrued interest

Company disposed of its portfolio of debt securities during 2023.

Reporting – Improvements to Reportable Segment Disclosures

November 2023, the Financial Accounting Standards Board (“FASB”) issued a new standard to improve reportable segment disclosures.

The guidance expands the disclosures required for reportable segments in our annual and interim consolidated financial statements, primarily

through enhanced disclosures about significant segment expenses.

The standard is effective as of December 31, 2024 and interim periods

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

Income- Improvements to Expense Disaggregation Disclosures

November 2024, the Financial Accounting Standards Board (“FASB”) issued a new standard to improve expense disaggregation

The guidance expands the disclosures required for certain costs and expenses in our annual and interim consolidated financial

statements, primarily through enhanced disclosures about significant expenses.

The standard is effective as of March 31, 2026 and interim

and annual periods thereafter.

The impact of this standard is only on the Company’s expenses disclosures.

3 FURNITURE AND EQUIPMENT

1 unchanged sentence

OF FURNITURE AND EQUIPMENT

Machinery and equipment

Computer equipment

Furniture and fixtures

Tooling and production

Software development costs

December 31, 2024

December 31, 2023

Equipment and furniture

Leasehold improvements

4 unchanged sentences

OF INTANGIBLE ASSETS

Patents and trademarks (useful life 15 years)

Customer relationships (useful life 7 years)

E-commerce technology platforms (useful life 4 years)

December 31, 2024

December 31, 2023

Carrying Value

Accumulated Amortization

Net carrying value

Carrying Value

Accumulated Amortization

Net carrying value

Customer relationships

$ ( 1,315,171 )

$ ( 428,571 )

E-commerce technology platforms

Patents and other

$ ( 1,642,118 )

$ ( 1,299,895 )

expense on intangible assets was $ 1,832,568 and $ 1,092,876 during 2024 and 2023, respectively.

following table sets forth the estimated amortization expense for the next five years:

SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE

the quarter ended September 30, 2024, the Company evaluated the effectiveness of the E-commerce technology platforms it acquired in 2023.

Management determined that revenues could increase without increasing its operating expenses (and potentially decrease its general and

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.

Accordingly, the estimated useful life of its legacy platforms decreased

from 4 to 1 year.

The reduced estimated useful life of the intangible asset indicated a possible impairment of the carrying value of

such intangible.

Management prepared, with a third-party firm, an analysis of the future cash flows related to the legacy platform and

determined that, as of September 30, 2024, such future cash flows were lower than the carrying value of the related intangible asset.

Accordingly, management believes that its legacy platforms’ carrying value was impaired.

Based on the future estimated discounted

cash flows, Management believes that the carrying value of the legacy platforms should be $ 1.4 million.

Accordingly, management recorded

an impairment expense of $ 1.1 million and adjusted the carrying value of its legacy platform to $ 1.4 million as of and during the quarter

ended September 30, 2024.

following table sets forth the estimated amortization expenses for the next five years:

OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE

Twelve months ended December 31:

Goodwill increased by $ 16.2 million during 2023 resulting

from the business combination with Belami in April 2023

following table presents the details of the principal outstanding:

OF DEBT TABLE

December 31, 2024

December 31, 2023

APR at December 31, 2023

Notes payable

Satisfied prior to maturity

Substantially all Company assets

Convertible Notes (b)

December 31, 2024

Convertible Notes (b)(c), (d)

0.00 – 10.00 %

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Notes payable to financial institutions a)

August 2024-August 2026

Inventory, accounts receivable, cash

,Notes payable to Belami sellers

SBA-related loans (c)

April 2025-November 2052

August 2025-November 2052

Substantially all company assets

Notes payable to Belami sellers

Unamortized debt discount

( 3,477,227 )

( 4,591,222 )

Debt, net of Unamortized debt Discount

OF INTEREST EXPENSE

OF INTEREST EXPENSE DEBT

For the year period ended

December 31, 2024

December 31, 2023

Interest expense, net

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of December 31, 2024, the expected future principal payments for the Company’s debt are due as follows:

OF FUTURE PRINCIPAL PAYMENTS

2028 and thereafter

unpaid principal bears annual interest at the Wall Street Journal prime rate.

in Convertible Notes are loans provided to the Company from one director, two officers and two investors.

The notes each have the

following terms:

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS

Twelve months ended December 31, 2025

Twelve months ended December 31, 2026

Twelve months ended December 31, 2027

Twelve months ended December 31, 2028

Twelve months ended December 31, 2029 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,

the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 %, 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 note

is convertible at the option of the holder into shares of common stock at a conversion price ranging from $ 15 per share.

convertible notes are convertible at a price ranging between $ 2.70 and $ 15 per share.

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.

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discount aggregating $ 5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance

The Company recognized $ 700,000 as amortized debt discount during 2023, 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.

Small Business Administration forgave approximately $ 178,000 of PPP loans during the year ended December 31, 2022, which was

recognized as other income.

The Company recognized $ 835,496 as amortized debt discount during 2024, 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.

Additionally,

the convertible promissory notes include a $ 1.0 million note payable to GE issued in April 2024.

The convertible note is due in April

2027, 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.

6 OPERATING LEASE LIABILITIES

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The Company recognized a right-of-use asset and a liability of $ 1,428,764 pursuant to this lease.

September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space.

recognized a right-of-use asset and a liability of $ 22,192,503 pursuant to such lease.

In connection with the execution of lease, the

Company was required to provide the landlord with a letter of credit in the amount of $ 2.7 million, which is secured by the same amount

September 2022, the Company entered a 124-month lease related to its future headquarters offices and showrooms space.

The Company recognized

a right-of-use asset and a liability of $ 22,192,503 pursuant to such lease.

In connection with the execution of lease, the Company was

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.

The Company recognized a right-of-use asset

and a liability of $ 662,696 pursuant to such lease.

following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these

leases as of December 31, 2023:

leases as of December 31, 2024 and 2023 respectively:

OF LEASE COST OPERATING LEASE

Twelve Month Ended

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease obligations

Fixed rent payment

Fixed rent payments

Lease – Depreciation expense

Other information:

Weighted-average discount rate

2 unchanged sentences

Minimum Lease obligation

2028 and thereafter

Twelve months ended December 31, 2025

Twelve months ended December 31, 2026

Twelve months ended December 31, 2027

Twelve months ended December 31, 2028

Twelve months ended December 31, 2029 and thereafter

7 ROYALTY OBLIGATIONS

Company had a license agreement with General Electric (“GE”) which provided, among other things, for rights to market

certain of the Company’s products displaying the GE brand in consideration of royalty payments to GE.

Company had a license agreement with General Electric (“GE”) which provided, among other things, for rights to market certain

of the Company’s products displaying the GE brand in consideration of royalty payments to GE.

The agreement expired in 2023.

Company owes $ 2.5

million to GE pursuant to the license agreement.

The payments associated with this debt are payable in quarterly tranches aggregating $ 0.8

million during 2024 and 2025 and $ 0.9 million

Additionally, the Company owes an additional $ 1.4

million pursuant to its agreements with GE which

is payable in 2027 which is recorded as an accounts payable in the accompanying balance sheet as of December 31, 2023.

Company owes $ 1.7 million to GE pursuant to the license agreement as of December 31, 2024.

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.

8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

OF ACCRUED EXPENSES

December 31, 2024

December 31, 2023

Accrued interest, convertible notes

2 unchanged sentences

9 INCOME TAXES

taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due.

taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable

or deductible when the assets or liabilities are recovered or settled.

December 31, 2023, the Company had a net operating loss carryforward of approximately $ 37,502,020

available to offset future taxable income indefinitely.

Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue

December 31, 2022, the Company had a net operating loss carryforward of approximately $ 27,035,941

available to offset future taxable income indefinitely.

Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the

deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation

of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled

reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred

income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2023, and 2022.

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2023 and December 31,

2022 were approximately as follows:

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2024 and 2023 were as

OF DEFERRED TAX ASSETS

19 unchanged sentences

Permanent difference

( 1,321,512 )

Change in valuation allowance

4 unchanged sentences

and December 31, 2023, and accrued interest of $ 242,803 and $ 151,900 , respectively.

Public Offering

Company issued 455,353 shares of its common stock to certain directors, officers and greater than 5% stockholders which generated gross

proceeds of $ 6,374,942 during 2022.

Company issued 95,386 shares of its common stock to affiliates of certain directors and greater than 5% stockholders pursuant to certain

anti-dilutive provisions during 2022.

The issuance of such shares was triggered based on the Company’s effective price of its initial

public offering in February 2022.

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.

11 STOCKHOLDERS’ EQUITY

7 unchanged sentences

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

Common stock issued pursuant to exercise of options

Transaction Type

3 unchanged sentences

2023 Equity Transactions

Common stock issued per exercise of options and warrants

$ 0.10 – 14.0

Common stock issued per exercise of warrants, cashless

Common stock issued pursuant to acquisition

Common stock issued, pursuant to services provided

1 unchanged sentence

Issuance of common stock pursuant to offering, net

Issuance of common stock, pursuant to anti-dilutive provisions

Company issued 335,073 shares of its common stock to certain stockholders during 2022.

The issuance of such shares was triggered based

on the Company’s effective price of its initial public offering.

The shares were recorded as an increase in common stock and additional

paid-in capital and accumulated deficit during the period, using the fair value of the shares at the date of issuance.

Company satisfied its obligations under a note payable, initially maturing in September 2026, amounting to $ 6.2 million during April

The Company paid $ 2 million and issued 574,713 shares of its common stock to satisfy such obligations, which generated a gain on

extinguishment of debt of $ 1,201,857 .

of the common stock issued pursuant to acquisition includes the carrying value of shares issuable in April 2024.

The Company anticipates

that the number of shares of its common stock issuable in April 2024 will range between 1,390,066 and 1,853,421 with a carrying value

of $ 5,560,262 .

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.

Preferred Stock

following is a summary of the Company’s Preferred Stock activity during the years 2023 and 2022:

following is a summary of the Company’s previously issued Preferred Stock activity during the year 2023:

OF PREFERRED STOCK ACTIVITY

2 unchanged sentences

Value per Share

Preferred Stock Balance at December 31, 2022

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

and Series A-1 Preferred Stock.

The designations of each class of preferred stock are as follows:

Transaction Type

1 unchanged sentence

Value per Share

Preferred Stock Balance at December 31, 2021

2022 Preferred Stock conversions

( 12,376,536 )

( 3,094,133 )

Preferred Stock Balance at January 1, 2024

Preferred Stock Series A

Preferred Stock Series A-1

Preferred Stock Balance at December 31, 2024

Series A Preferred Stock was convertible at the holder’s option.

The Company could repurchase shares of the Preferred Stock for

$ 3.50 per share.

Holders also have 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 is classified as Mezzanine equity rather than permanent equity.

of preferred stock converted 880,400 shares and 12,376,536 shares of preferred stock in the shares of common stock during 2023 and 2022,

respectively.

There were no shares of Series A Preferred Stock outstanding at December 31, 2023 and the Company terminated its designation

of the Series A Preferred Stock.

The Company has not designated any other preferred stock as of December 31, 2023.

A Preferred Stock:

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 5 years or upon change of control (substantially within the control

of the holder);

rights on as converted basis.

A-1 Preferred Stock:

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);

rights on as converted basis.

Stock Options

5 unchanged sentences

Exercisable, December 31, 2023

Exercise Price

Outstanding, January 1, 2022

( 1,834,792 )

Outstanding, December 31, 2022

Exercisable, December 31, 2022

January 1, 2024

December 31, 2024

following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2024 and 2023:

SCHEDULE OF BLACK SCHOLES PRICING MODEL

OF BLACK SCHOLES PRICING MODEL

December 31, 2024

December 31, 2023

Exercise price

Expected life (in years)

1.5 – 5.8 yrs

36.71 – 96.5 %

Risk-fee interest rate

Dividend yield

Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during

a term comparable to the expected term of stock option issued.

The Company relies on the expected volatility of comparable publicly traded

companies within its industry sector, which is deemed more relevant, to compute its expected volatility.

Unamortized future option expense was $ 13.0 million (excluding certain market-based options which management

cannot ascertain to have a probable outcome amounting to $ 61 million) at December 31, 2023 and it is expected to be recognized over

a weighted-average period of 1.4 years.

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.

Warrants Issued

1 unchanged sentence

OF WARRANT ACTIVITY

Weighted Average

Exercise Price

Balance, January 1, 2023

Balance, December 31, 2023

Number of Warrants

2 unchanged sentences

Forfeited/Cancelled

( 1,236,356 )

Balance, December 31, 2023

During 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 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.

During 2022, the Company issued 608,961 3 -year warrants at exercise prices ranging between $ 9.80 and $ 18.2 in connection with the issuance of common shares.

Forfeited/Cancelled

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.

Restricted stock units

summary of the Company’s non-vested restricted stock units during 2024 and 2023 are as follows

SCHEDULE OF NON-VESTED RESTRICTED STOCK

OF NON-VESTED RESTRICTED STOCK

Weighted Average Grant Due Fair Value

2 unchanged sentences

Non-vested restricted stock units December 31, 2023

Non-vested restricted stock units, January 1, 2022

( 4,513,527 )

Non-Vested restricted stock units, December 31, 2024

The weighted-average remaining contractual life of the restricted units

as of December 31, 2023 is 1.85 years.

weighted-average remaining contractual life of the restricted units as of December 31, 2024 is 1.55 years.

RSU and RSA gives the right to one share of the Company’s common stock.

5 unchanged sentences

the vesting period.

the years ended December 31, 2023, and 2022, the Company recognized compensation expense of $ 18.0

million, and $ 14.0

million , respectively, related to RSUs, RSAs

and stock options

13 CONCENTRATIONS OF RISKS

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

Customers and Accounts Receivable

Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue.

The Company had one

third-party payor accounts receivable balance representing 24 % of the Company’s total accounts receivable at December 31, 2023

and none at December 31, 2022.

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.

Company’s cash and cash equivalents are held primarily with two financial institutions.

5 unchanged sentences

Company generates its income primarily from lighting and heating products sold primarily in the United States.

14 PROFORMA FINANCIAL STATEMENTS (unaudited)

following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2022:

OF PROFORMA CONSOLIDATED RESULTS OF OPERATION

Twelve-month period ended

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.

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.

OF CONSOLIDATED REVENUES AND SEGMENT LOSS

Year ended December 31,

Revenues from external customers and consolidated revenues

Cost of revenues

Compensation costs, excluding share-based payments

Share-based payments

Marketing programs

Professional fees, excluding share-based payments

Depreciation, amortization, and impairment of intangibles

Other operating expenses

Total operating expenses, net

Other income / (expense)

Amortization of debt discount

( 1,211,974 )

( 1,365,789 )

Basic and diluted loss per share

Weighted average number of shares outstanding- basic and diluted

Interest expense, net

( 2,843,931 )

( 1,743,518 )

Gain on extinguishment of debt

$ ( 35,768,144 )

$ ( 39,732,656 )

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

7 unchanged sentences

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

14 SUBSEQUENT EVENTS

has evaluated subsequent events through April 1, 2024, 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:

The Company generated proceeds of $ 3.6 million in

consideration for the issuance of 2,733,361 shares of common stock pursuant to its at-the market offering,

The selling shareholders of Belami agreed to extend the payment of the Company’s consideration payable of $ 3.1

million from April 2024 to May 2025, under convertible promissory notes.

The notes bear annual interest at

10 % and are convertible at $ 3 per share.

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:

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