SKYX Platforms Corp. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41276 SKYX PLATFORMS CORP. (Exact name of registrant as specified in its charter) Florida 46-3645414 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 2855 W. McNab Road Pompano Beach , Florida 33069 (Address, including zip code, of principal executive offices) (855) 759-7584 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, no par value per share SKYX The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of May 1, 2025, the registrant had 105,759,999 shares of common stock, no par value per share, issued and outstanding. SKYX PLATFORMS CORP. Form 10-Q TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Cautionary Note Regarding Forward Looking Statements Item 1 Financial Statements 4 Consolidated Balance Sheets (Unaudited) 4 Consolidated Statements of Operations (Unaudited) 5 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) 6 Consolidated Statements of Cash Flows (Unaudited) 7 Notes to Consolidated Financial Statements (Unaudited) 8 Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3 Quantitative and Qualitative Disclosures About Market Risk 28 Item 4 Controls and Procedures 28 PART II. OTHER INFORMATION Item 1 Legal Proceedings 29 Item 1A Risk Factors 29 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3 Defaults Upon Senior Securities 29 Item 4 Mine Safety Disclosures 29 Item 5 Other Information 29 Item 6 Exhibits 30 Signatures 31 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (this “Form 10-Q”) of SKYX Platforms Corp. (the “Company,” “we,” “us,” or “our”) contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, outlook, and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “aim,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties, and other factors, many of which have outcomes that are difficult to predict and may be outside our control, that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about: ● our ability to successfully launch, develop additional features and achieve market acceptance of our smart products and technologies, access and integrate our products and technologies with third-party platforms or technologies, respond to rapidly changing technology and customer demands, and compete in our industry; ● our ability to successfully manage and grow the operations of Belami, Inc. (“Belami”) with our business; ● our ability to expand, operate and successfully manage our operations, including managing our business transformation in connection with evolving our business strategy to focus on smart products and technologies and integrating new lines of business; ● our ability to raise additional financing to support and continue our operations as needed; ● our ability to comply with the terms of, and timely repay, our current debt financing; ● our reliance on a limited number of third-party manufacturers and suppliers and our ability to successfully reduce our production costs; ● our potential dependence upon a limited number of customers and/or on contracts awarded through competitive bidding processes; ● any downturn in the cyclical industries in which our customers operate; ● our ability to acquire other businesses, license rights, form alliances or dispose of operations when desired; ● our ability to comply with regulations relating to applicable quality standards; ● our ability to maintain, protect and enhance our intellectual property and retain rights to use intellectual property owned by third parties; ● the potential outcome of any legal proceedings; ● compliance with various tax laws and regulations, including income and sale taxes; ● our ability to successfully sell and distribute our products and technologies; ● our ability to attract and retain key executives and qualified personnel; ● guidance provided by management, which may differ from our actual operating results; ● our ability to successfully manage our planned development and expansion, including the additional costs of being a public company; ● our estimated total addressable market; ● our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; ● the potential impact of unstable market and economic conditions on our business, financial condition, and stock price, including the effects of governmental regulations, geopolitical conflicts, including the conflict in the Middle East and potentially deteriorating relationships with China, tariffs and other trade barriers or restrictions, inflation, labor shortages, supply chain constraints and shortages, including availability of affordable electronic microchips, instability in the global banking system and the possibility of an economic recession; ● the potential impact of cybersecurity breaches or disruptions to our or our third-party vendors’ information systems, including our cloud-based infrastructure; ● risks related to our use of artificial intelligence capabilities in our product offerings, including operational and reputational risks; ● the potential impact of widespread outages, interruptions, or other failures of operational, communication, and other systems; ● the potential impact of natural disasters and other catastrophic events; ● risks related to ownership of our common stock; ● the potential impact of anti-takeover and director and officer liability provisions in our charter documents and under Florida law; and ● other risks and uncertainties, including those listed under the section titled “Risk Factors.” These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors, including unpredictable or unanticipated factors that we have not discussed in this Form 10-Q. Investors should refer to the heading “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in this Form 10-Q for a discussion of other important factors, many of which are outside of our control, that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. Considering the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change; however, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by U.S. federal securities laws. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q. 3 Part I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SKYX PLATFORMS CORP. Consolidated Balance Sheets (Unaudited) March 31, 2025 (Audited) December 31, 2024 Assets Current assets: Cash and cash equivalents $ 9,442,253 $ 12,639,441 Accounts receivable 2,811,322 2,415,314 Inventory, net 3,680,296 3,785,346 Deferred cost of revenues 281,661 223,214 Prepaid expenses and other assets 2,034,854 1,311,135 Total current assets 18,250,386 20,374,450 Other assets: Property and equipment, net 1,692,598 1,349,993 Restricted cash 2,861,054 2,861,054 Right of use assets 19,232,403 19,750,030 Intangibles, definite life 4,770,286 5,189,713 Goodwill 16,157,000 16,157,000 Other assets 204,807 204,807 Total other assets 44,918,148 45,512,597 Total Assets $ 63,168,534 $ 65,887,047 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ 15,038,302 $ 13,083,321 Accounts payable and accrued expenses-related party 169,650 151,900 Accounts payable and accrued expenses 169,650 151,900 Notes payable, current 4,022,953 4,011,168 Operating lease liabilities, current 2,415,346 2,350,868 Royalty obligation 800,000 800,000 Deferred revenues 1,894,445 1,495,846 Convertible notes, current-related parties 950,000 950,000 Convertible notes, current 3,292,408 3,292,408 Total current liabilities 28,583,104 26,135,511 Long term liabilities: Long term accounts payable and accrued expenses 1,139,018 1,044,708 Notes payable 370,436 504,129 Operating lease liabilities 19,747,098 20,376,498 Convertible notes 8,151,272 7,872,773 Royalty obligations 900,000 900,000 Total long-term liabilities 30,307,824 30,698,108 Total liabilities 58,890,928 56,833,619 Mezzanine equity Series A Preferred Stock-shares authorized 400,000 , outstanding 200,000 and 200,000 5,000,000 5,000,000 Stockholders’ Equity (Deficit): Series A-1 Preferred Stock-shares authorized 400,000 , outstanding 260,000 and 240,000 6,500,000 6,000,000 Common stock and additional paid-in-capital: shares authorized 500,000,000 outstanding 104,952,630 and 103,358,975 183,832,707 179,837,253 Accumulated deficit ( 191,055,101 ) ( 181,783,825 ) Total stockholders’ equity (deficit) ( 722,394 ) 4,053,428 Total Liabilities and Stockholders’ Equity (Deficit) $ 63,168,534 $ 65,887,047 The accompanying notes are an integral part of the unaudited consolidated financial statements. 4 SKYX Platforms Corp. Consolidated Statements of Operations (Unaudited) March 31, 2025 March 31, 2024 For the three months ended , March 31, 2025 March 31, 2024 Revenue $ 20,113,938 $ 18,977,821 Operating Costs Cost of revenues 14,402,488 13,399,771 Selling and marketing expenses 6,827,420 6,526,816 General and administrative expenses 6,597,055 7,939,581 Total operating expenses, net 27,826,963 27,866,168 Loss from operations ( 7,713,025 ) ( 8,888,347 ) Other income / (expense) Interest expense, net ( 1,321,353 ) ( 770,104 ) Interest expense, net related parties ( 17,750 ) ( 17,750 ) Interest expense, net ( 17,750 ) ( 17,750 ) Total other expense, net ( 1,339,103 ) ( 787,854 ) Net loss ( 9,052,128 ) ( 9,676,201 ) Preferred dividends - related party ( 10,000 ) - Preferred dividends ( 209,148 ) - Preferred dividends ( 209,148 ) - Net loss attributed to common stockholders $ ( 9,271,276 ) $ ( 9,676,201 ) Net loss per share - basic and diluted $ ( 0.09 ) $ ( 0.10 ) Weighted average number of common shares outstanding - basic and diluted 103,548,494 95,091,003 The accompanying notes are an integral part of the unaudited consolidated financial statements. 5 SKYX Platforms Corp. Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) March 31, 2025 March 31, 2024 For the three months ended March 31, 2025 March 31, 2024 Shares of preferred stock ( Series A-1) Balance, beginning of period 6,000,000 - Balance, beginning of period 240,000 - Conversion to common stock ( 20,000 ) - Preferred stock issued pursuant to offerings 40,000 - Balance, end of perod 6,500,000 - Balance, end of period 260,000 - Preferred stock (Series A-1) Balance, beginning of period $ 6,000,000 $ - Conversion to common stock ( 500,000 ) - Preferred stock issued pursuant to offerings 1,000,000 - Preferred stock issued pursuant to offerings 1,000,000 - Balance, end of period $ 6,500,000 $ - Shares of common stock Balance, beginning of period 103,358,975 93,473,433 Common stock issued pursuant to offerings 223,756 2,733,361 Common stock issued pursuant to conversion of preferred stock and dividends 251,935 - Common stock issued pursuant to services 1,117,964 890,103 Balance, end of period 104,952,630 97,096,897 Common stock and paid-in capital Balance, beginning of period $ 179,837,253 $ 162,025,024 Common stock issued pursuant to offerings, net 450,428 3,655,755 Common stock issued pursuant to services 3,041,157 3,295,029 Common stock issued pursuant to conversion of preferred stock 500,000 - Common stock issued pursuant to dividends 3,869 - Balance, end of period $ 183,832,707 $ 168,975,808 Accumulated deficit Balance, beginning of period $ ( 181,783,825 ) $ ( 145,803,014 ) Preferred dividends ( 219,148 ) - Net loss ( 9,052,128 ) ( 9,676,201 ) Balance, end of period $ ( 191,055,101 ) $ ( 155,479,215 ) Total stockholders’ equity (deficit) $ ( 722,394 ) $ 13,496,593 The accompanying notes are an integral part of the unaudited consolidated financial statements. 6 SKYX Platforms Corp. Consolidated Statements of Cash Flows (Unaudited) 2025 2024 For the three months ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 9,052,128 ) $ ( 9,676,201 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,007,817 1,060,571 Amortization of debt discount 278,499 228,499 Non-cash equity-based compensation expense 3,041,157 3,295,029 Change in operating assets and liabilities: Inventory 105,050 ( 351,990 ) Accounts receivable ( 396,008 ) ( 547,032 ) Prepaid expenses and other assets ( 723,722 ) 91,640 Deferred charges ( 58,447 ) ( 21,289 ) Deferred revenues 398,599 140,519 Operating lease liabilities ( 564,922 ) ( 505,920 ) Royalty obligation - ( 200,000 ) Accounts payable and accrued expenses 1,639,430 376,978 Net cash used in operating activities ( 4,324,675 ) ( 6,109,196 ) Cash flows from investing activities: Purchase of property and equipment ( 413,365 ) ( 53,647 ) Net cash (used in) provided by investing activities ( 413,365 ) ( 53,647 ) Cash flows from financing activities: Proceeds from issuance of common stock- offerings 459,634 3,655,755 Placement costs ( 9,206 ) ( 73,112 ) Dividends ( 212,668 ) - Proceeds from anticipated issuance of preferred stock 425,000 - Proceeds from issuance of preferred stocks 1,000,000 - Proceeds from issuance of convertible notes - - Principal repayments of notes payable ( 121,908 ) ( 60,390 ) Net cash provided by financing activities 1,540,852 3,522,253 Change in cash, cash equivalents and restricted cash ( 3,197,188 ) ( 2,640,590 ) Cash, cash equivalents, and restricted cash at beginning of period 15,500,495 22,430,253 Cash, cash equivalents and restricted cash at end of period $ 12,303,307 $ 19,789,663 Cash paid during the period for: Interest $ 1,378,223 $ 787,854 Taxes - - Supplementary disclosure of non-cash financing activities: Preferred stock conversion to common stock $ 500,000 $ - The accompanying notes are an integral part of the unaudited consolidated financial statements. 7 SKYX Platforms Corp. Notes to Consolidated Financial Statements (Unaudited) NOTE 1 ORGANIZATION AND NATURE OF OPERATIONS SKYX Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004. The Company maintains offices in Sacramento, California, Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, and Guangdong Province, China. The Company has a series of advanced-safe-smart platform technologies. The Company’s first-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged-in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years, the Company has expanded the capabilities of its power-plug product, to include its second generation advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome 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. 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. Going Concern The Company’s liquidity sources include $ 12.3 million in cash and cash equivalents, including restricted cash of $ 2.9 million held for long-term purposes, and $ 10.3 million of working capital deficit as of March 31, 2025. The Company has a history of recurring operating losses, and its net cash used in operating activities amounted to $ 4.3 million and $ 6.1 million during the three months ended March 31, 2025, and 2024, respectively. The Company has also generated net cash provided by financing activities of $ 1.5 million and $ 3.5 million during the three months ended March 31, 2025, and 2024, 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. Management 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 at the market (“ATM”) offering or other equity or debt financing means. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2024 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional disclosures and accounting policies. 8 Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results will differ from estimates. Basis 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, 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. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. On March 31, 2025, and December 31, 2024, the Company’s cash composition was follows: SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH March 31, 2025 December 31, 2024 Cash and cash equivalents $ 9,442,253 $ 12,639,441 Restricted cash 2,861,054 2,861,054 Total cash, cash equivalents and restricted cash $ 12,303,307 $ 15,500,495 Restricted Cash The Company issued a letter of credit of $ 2.8 million in September 2023 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 March 31, 2025, and December 31, 2024. Customer Contracts Balances Accounts receivable are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivable are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts based upon an estimate of probable credit losses in existing accounts receivable. The majority of the Company’s accounts receivable are from third-party payers and are paid within a few days from the order date. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently available evidence. As of March 31, 2025, and December 31, 2024, the Company’s allowance for doubtful accounts was $ 12,711 and $ 12,147 , respectively. 9 The Company determines an allowance for sales returns based upon historical experience. The Company’s allowance for sales returns was $ 159,553 and $ 242,515 , as of March 31, 2025, and December 31, 2024, respectively, and is recorded as accrued expenses in the accompanying consolidated financial statements. The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 1,894,445 and $ 1,495,846 as of March 31, 2025, and December 31, 2024, respectively. The costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet. Such charges include the carrying value of freight, and sales charges. The deferred charges amounted to $ 281,661 and $ 223,214 as of March 31, 2025, and December 31, 2024, respectively. Inventory Inventories are stated at the lower of cost or market, 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. SCHEDULE OF INVENTORY March 31, 2025 December 31, 2024 Inventory, component parts $ 1,799,651 $ 1,901,922 Inventory, finished goods 3,180,645 3,183,424 Allowance ( 1,300,000 ) ( 1,300,000 ) Inventory-total $ 3,680,296 $ 3,785,346 The Company maintains an allowance based on specific inventory items that have shown no activity over a reasonable period. The Company tracks inventory as it is repurposed, disposed, scrapped, or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $ 1.3 million as of March 31, 2025, and December 31, 2024. 10 Loss Per Share Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share are computed by dividing net income (loss) for the period by the weighted average number of common stocks, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option, and warrant contracts. For the three-month ended March 31, 2025, and 2024, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented. The Company had the following anti-dilutive common stock equivalents on March 31, 2025, and March 31, 2024: SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS March 31, 2025 March 31, 2024 Stock warrants 1,523,667 2,049,147 Stock options 31,443,988 36,156,476 Unvested restricted stock 6,350,179 4,734,980 Convertible notes 6,022,224 5,487,260 Preferred stock 5,750,000 – Total 51,090,058 48,427,863 Anti-dilutive securities 51,090,058 48,427,863 Income Taxes – Improvements to Income Tax Disclosures In 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 In November 2024, the Financial Accounting Standards Board (“FASB”) issued a new standard to improve expense disaggregation disclosures. 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. 11 NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT March 31, 2025 December 31, 2024 Equipment and furniture $ 2,142,654 $ 1,729,287 Leasehold improvements 360,003 360,003 Total 2,502,657 2,089,290 Less: accumulated depreciation ( 810,059 ) ( 739,297 ) Total, net $ 1,692,598 $ 1,349,993 Depreciation expense amounted to $ 70,762 and $ 68,022 as of March 31, 2025, and December 31, 2024. NOTE 4 INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS March 31, 2025 December 31, 2024 Useful life Carrying Value Accumulated Amortization Net carrying value Carrying Value Accumulated Amortization Net carrying value Customer relationships 7 $ 4,500,000 $ ( 1,719,634 ) $ 2,780,366 $ 4,500,000 $ ( 1,315,171 ) $ 3,184,829 E-commerce technology platforms 1 - 4 1,400,000 – 1,400,000 1,400,000 – 1,400,000 Patents and other 15 931,831 ( 341,911 ) 589,920 931,831 ( 326,947 ) 604,884 $ 6,831,831 $ ( 2,061,545 ) $ 4,770,286 $ 6,831,831 $ ( 1,642,118 ) $ 5,189,713 Amortization expense on intangible assets amounted to $ 419,427 and $ 1,832,568 as of March 31, 2025, and December 31, 2024. The following table sets forth the estimated amortization expenses for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Twelve months ended March 31: 2026 $ 2,089,449 2027 689,449 2028 689,449 2029 689,449 2030 689,449 12 NOTE 5 DEBTS The following table presents the details of the principal’s outstanding: SCHEDULE OF DEBT March 31, 2025 December 31, 2024 APR on March 31, 2025 Maturity Collateral Convertible Notes (b,c) 15,592,408 15,592,408 0.00 – 10.00 % September 2023-March 2027 Substantially all company assets Notes payable to financial institutions and others (a) 4,393,389 4,515,297 3.75 - 8.5 % August 2025- November 2052 Substantially all Company assets Total $ 19,985,797 $ 20,107,705 Unamortized debt discount ( 3,198,728 ) ( 3,477,227 ) Debt, net of Unamortized debt Discount $ 16,787,069 $ 16,630,478 SCHEDULE OF INTEREST EXPENSE DEBT For the nine-month period ended March 31, 2025 March 31, 2024 Interest expense $ 1,339,103 $ 787,854 As of March 31, 2025, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS Twelve months ended March 31, 2026 $ 8,265,361 Twelve months ended March 31, 2027 11,502,288 Twelve months ended March 31, 2028 9,145 Twelve months ended March 31, 2029 12,166 Twelve months ended March 31, 2030, and thereafter 196,837 Total $ 19,985,797 (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75 % per year. (b) Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $ 600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6 % through December 2023 and 10 % thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $ 3 to $ 15 per share. 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 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. The Company recognized $ 835,496 as amortized debt discount during the nine-months ended September 30, 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. 13 (c) On 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. 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. NOTE 6 OPERATING LEASE LIABILITIES In April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires in February 2027. The Company recognized a right-of-use asset and a liability of $ 1,428,764 pursuant to this lease. In 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 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 a lease. The following table outlines the total lease cost for the Company’s operating leases as well as weighed average information for these leases as of March 31, 2025, and 2024 respectively: SCHEDULE OF LEASE COST OPERATING LEASE Three Months Ended March 31, 2025 2024 Cash paid for operating lease liabilities $ 564,922 $ 505,920 Fixed rent payments 2,703,789 300,933 Lease - Depreciation expense $ 517,628 $ 516,707 Weighted-average discount rate 6.48 % 6.41 % Weighted-average remaining lease term (in months) 92 95 SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation Twelve months ended March 31, 2026 $ 2,415,346 Twelve months ended March 31, 2027 2,388,241 Twelve months ended March 31, 2028 2,286,013 Twelve months ended March 31, 2029 2,535,879 Twelve months ended March 31, 2030, and thereafter 12,536,965 Total $ 22,162,444 NOTE 7 ROYALTY OBLIGATIONS The 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. The Company owes $ 1.7 million to GE pursuant to the license agreement as of March 31, 2025. 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 agreed to reduce such additional amount by $ 400,000 in exchange for the issuance of a convertible promissory note of $ 1.0 million. 14 NOTE 8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES March 31, 2025 December 31, 2024 Accrued interest, convertible notes $ 1,139,018 $ 1,044,708 Accrued dividends 215,278 212,667 Funds received in anticipation of closing of Preferred Stock Series A-1 425,000 - Trade payables 11,774,327 10,043,423 Accrued compensation 2,793,347 2,979,131 Total $ 16,346,970 $ 14,279,929 The Company recognized funds received in anticipation of Series A-1 received in March 2025 as accounts payable and are recognized as equity upon closing, which occurred in April 2025 . NOTE 9 RELATED PARTY TRANSACTIONS Convertible Notes Convertible notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers. The outstanding principal on the convertible promissory notes, associated with related parties was $ 950,000 as of March 31, 2025, and December 31, 2024, and accrued interest of $ 169,950 and $ 151,900 as of March 31, 2025, and December 31, 2024, respectively. Interest expense to related parties amounted to $ 17,750 during the three-month period ended March 31, 2025 and 2024, respectively. The Company paid and declared dividends to related parties (a director and officer and two officers) amounting to $ 19,333 and $ 20,000 during the three-month period ended March 31, 2025. NOTE 10 STOCKHOLDERS’ EQUITY (A) Common Stock The Company issued the following common stock during the three months ended March 31, 2025, and 2024: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ Range of Value Per Share 2025 Equity Transactions Common stock issued, pursuant to services provided 1,117,964 3,041,157 $ 1.16 – 1.87 Common stock issued pursuant to stock at the market offering, net 223,756 450,428 2.0 – 2.08 Common stock issued pursuant to conversion of preferred stock 250,000 500,000 2.0 Transaction Type Shares Issued Valuation $ Range of Value Per Share 2024 Equity Transactions Common stock issued, pursuant to services provided 890,103 3,295,029 $ 1.27 - 1.68 Common stock issued pursuant to stock at the market offering, net 2,733,361 3,655,755 1.25 - 1.64 As of March 31, 2025, the remaining amount to be used under the ATM offering program is $ 5.3 million. 15 (B) Preferred Stock Series A-1 The following is a summary of the Company’s Preferred Stock activity during the three months ended March 31, 2025: SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type Quantity Carrying Value Value per Share Preferred Stock Series A-1 Balance at January 1, 2025 440,000 $ 11,000,000 $ 25 Issuance 40,000 1,000,000 25 Conversion to common stock ( 20,000 ) ( 500,000 ) 25 Preferred Stock Series A-1 Balance at March 31, 2025 460,000 $ 11,500,000 $ 25 During 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. In March 2025 the Company issued 40,000 Preferred stocks Series A-1 and a holder converted 20,000 Preferred stocks Series A-1 into shares of common stock, within terms. The designations of each class of preferred stock are as follows: Series A Preferred Stock: ● Cumulative dividend of 8 % annually, 12 % if paid after dividend date; ● Original issue price of $ 25 per share; ● Conversion 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; ● Redemption 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); ● Voting rights on as converted basis. Series A-1 Preferred Stock: ● Cumulative dividend of 8 % annually, 12 % if paid after dividend date; ● Original issue price of $ 25 per share; ● Conversion 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; ● Redemption 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); ● Voting rights on as converted basis. (C) Stock Options and Restricted Stock The following is a summary of the Company’s stock option activity during the three-months ended March 31, 2025, and 2024: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2024 35,805,976 $ 7.33 - $ 2,037,200 Granted 540,000 1.63 - - Forfeited ( 189,500 ) $ 2.89 - - Outstanding, March 31, 2024 36,156,476 $ 7.3 2.58 $ 2,037,200 Exercisable, March 31, 2024 13,892,937 $ 4.54 2.07 $ 2,034,525 16 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2025 32,493,392 $ 7.31 — $ 1,624,810 Exercised – 0.1 — — Granted 1,358,030 1.26 — — Forfeited ( 2,407,434 ) 9.75 - - Outstanding, March 31, 2025 31,443,988 $ 6.86 2.33 $ 1,624,810 Exercisable, March 31, 2025 11,697,698 $ 4.31 2.05 $ 1,380,058 The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during the three months ended March 31, 2025, and 2024: SCHEDULE OF BLACK SCHOLES PRICING MODEL March 31, 2025 March 31, 2024 Range Range Stock price $ 1.26 - 1.26 $ 1.76 Exercise price $ 0 - 14 $ 0 - 14 Expected life (in years) 2.60 - 3.47 yrs. 2.87 yrs. Volatility 102.29 % 37 % Risk-fee interest rate 3.50 - 4.62 % 4.10 % Dividend yield - — The 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 3.0 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. A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2025, and 2024 are follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units, January 1, 2025 6,278,370 $ 2.65 Granted 1,900,978 1.26 Vested ( 1,242,872 ) 2.13 Forfeited ( 586,297 ) 9.11 Non-Vested restricted stock units, March 31, 2025 6,350,179 $ 1.69 Non-vested restricted stock units, January 1, 2024 4,919,702 $ 4.21 Granted 600,000 1.76 Vested ( 770,888 ) 3.79 Forfeited ( 13,834 ) 1.52 Non-vested restricted stock units on March 31, 2024 4,734,980 $ 3.98 The weighted-average remaining contractual life of the restricted units as of March 31, 2025, is 1.49 years. One RSU and RSA give the right to receive one share of the Company’s common stock. RSU and RSAs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period. The Company recognized compensation expenses of $ 2,411,650 , and $ 2,669,942 , respectively, related to RSUs and RSAs during the three-month period ending March 31, 2025 and 2024. The Company recognized compensation expenses of $ 629,507 and $ 625,087 , respectively, related to stock options during the three-month period ending March 31, 2025 and 2024 The options and restricted stock awards and units are granted to the Company’s employees, board members, and certain consultants. There is no difference in characteristics of the awards other than the stock options have to be exercised and restricted awards and units do not. The vesting of the options, restricted stock units or awards is based on the requisite service period of the employees and the nonemployee’s vesting period is generally based on a period of up to three years. The maximum contractual term of the options is up to 5 years. The number of shares available for grant of options, and restricted stock units or awards amounts to 17,633,596 at March 31, 2025. Unamortized future option expense was $ 14.4 million on March 31, 2025, and it is expected to be recognized over a weighted-average period of 1.2 years. (D) Warrants The following is a summary of the Company’s warrant activity during the three months ended March 31, 2025, and 2024: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2025 1,523,667 $ 4.30 Issued — — Exercised — — Forfeited — — Balance, March 31, 2025 1,523,667 $ 4.30 17 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2024 2,063,522 $ 5.76 Issued — — Exercised — — Forfeited ( 14,375 ) — Balance, March 31, 2024 2,049,147 $ 5.45 During the three months ended March 31, 2025, and 2024 the Company did not issue any warrants. 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. NOTE 11 CONCENTRATIONS OF RISKS AND SEGMENT Major Customers and Accounts Receivable The Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue during the three-month period ended March 31, 2025, and 2024. The Company had no customers with accounts receivable balances representing more than 10% on March 31, 2025, and March 31, 2024, and one and three third party payor representing 36 % and 53 % of the Company’s total accounts receivable on March 31, 2025, and 2024, respectively. 18 Liquidity The Company’s cash and cash equivalents are held primarily with two financial institutions. The Company has deposits which exceed the amount insured by the FDIC. To reduce the risk associated with the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits. Product and Geographic Markets The Company generates its income primarily from lighting and heating products, and increasingly, smart-based products sold primarily in the United States. Segment The 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. The total assets of the segments amount to the Company’s consolidated assets. Long-lived assets, which consists of property and equipment and right of use assets are located in the United States. The 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. SCHEDULE OF CONSOLIDATED REVENUES AND SEGMENT LOSS 2025 2024 March 31, 2025 2024 Revenues from external customers and consolidated revenues $ 20,113,938 $ 18,977,821 Cost of revenues 14,402,488 13,399,771 Compensation costs, excluding share-based payments 2,416,572 2,799,381 Share-based payments 3,041,157 3,295,029 Marketing programs 4,677,381 4,716,424 Professional fees, excluding share-based payments 1,677,992 1,226,197 Depreciation, amortization, and impairment of intangibles 953,262 1,007,817 Other operating expenses 658,167 1,368,794 Total operating expenses, net 27,826,963 27,866,168 Other income / (expense) Amortization of debt discount ( 278,499 ) ( 228,499 ) Interest expense, net ( 1,099,724 ) ( 559,355 ) Net loss $ ( 9,052,128 ) $ ( 9,676,201 ) NOTE 12 SUBSEQUENT EVENTS Management has evaluated subsequent events since March 31, 2025, through 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: Since March 31, 2025, the Company generated proceeds of $ 2.9 million by issuing 114,000 shares of its Preferred Series A-1 stock. 19 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this Form 10-Q and our audited financial statements and related notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024. This discussion and analysis and other parts of this Form 10-Q contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties, and assumptions, such as statements regarding our plans, objectives, strategy, expectations, outlook, intentions, and projections. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, in this Form 10-Q, and in other filings with the Securities and Exchange Commission (the “SEC”). Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements” contained in this Form 10-Q. Overview We have a series of advanced-safe-smart platform technologies. Our first and second-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years, we have expanded the capabilities of our power-plug product to include advanced, safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, Bluetooth Low Energy and voice control connections. The SkyHome App allows scheduling, energy saving-eco mode, dimming, back-up emergency light, night light, light color changing and much more. Our third-generation technology is an all-in-one safe and smart-advanced platform (the “Smart Sky Platform”) that is designed to enhance all-around safety and lifestyle of homes and other buildings. We are continuing to refine our products and began manufacturing certain advanced and smart products in 2023 and expect additional products, including the third-generation smart-advanced platform to be available in 2025. Our products are designed to improve all around home and building safety and lifestyle. We expect to manufacture the additional product offerings within the next six months. We hold over 97 U.S. and global patents and patent applications and have received a variety of final electrical code approvals, including UL, United Laboratories of Canada (cUL) and Conformité Européenne (CE), and 2017 and 2020 inclusion in the NEC Code Book. We believe our total addressable market in the United States exceeds $500 billion, based on the Company’s internal calculations derived from the estimation of the total target user pool, projected average selling price, and projected units per household. We believe there are billions of installations of light and other electrical fixtures globally. Our estimates of the addressable market for our products may prove to be incorrect. The projected demand for our products could differ materially from actual demand. Even if the total addressable market for our products is as large as we have estimated and even if we are able to gain market awareness and acceptance, we may not be able to penetrate the existing market to capture additional market share. Inflation and related risk of recession increased during 2022 and have continued to impact operations. Inflationary factors, such as tariffs, increases in interest rates, supply and overhead costs and transportation costs, may adversely affect our operating results, and we may not be able to offset increased costs with increased sales price per unit, particularly as we work toward commercial manufacturing of our products. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the near future (especially if inflation rates continue to rise). In addition, we may be negatively impacted because of supply chain constraints, consequences associated with government regulations, ongoing and potential geopolitical conflicts, instability in the global banking system, employee availability and wage increases. We are currently evaluating, and do not yet know, the potential impact of recently increased tariffs to our business and financial condition. 20 The conflicts in the Middle East may adversely impact our operations in the near future. We have a number of developers working in Israel. If such individuals are called for service or this conflict escalates regionally, it may create work interruptions leading to longer periods between releases of offering improvements and increased costs. During April 2023, we completed the previously announced acquisition of all the issued and outstanding shares of Belami, a strategic e-commerce lighting and home décor conglomerate. The Company paid cash and issued an aggregate of 3,776,706 shares of our common stock as consideration for the acquisition. The Company expects that Belami will serve as a marketing and growth platform and should provide several distribution channels for our products, including retail customers, builders, and professionals. In connection with the acquisition, the Company engaged in private placements of its securities during the first quarter of 2023, pursuant to which the Company issued and sold (i) subordinated secured convertible promissory notes in the aggregate principal amount of $10.35 million and (ii) warrants to purchase an aggregate of up to 1,391,667 shares of the Company’s common stock. The proceeds were used to fund the cash component of the Belami acquisition and to pay certain transaction expenses in connection with the acquisition and the private placements. Recent Developments In March 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement for the acquisition 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 of the Belami acquisition. 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 into shares of our common stock 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 Belami stock purchase agreement and a change of control of Belami. The letter agreement further provided that the Company would 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 will expire, and the Company would release $750,000 held in escrow. In April 2024, the Company issued an aggregate of 1,853,421 shares of common stock to the sellers and released the escrow amount. On April 11, 2024, the Company entered into an amendment to the letter agreement previously entered into with GE Trademark Licensing, Inc. (“GE-TL”) in December 2023, which extended the deadline for the Company to issue the convertible note to GE-TL to May 1, 2024, and also issued a three-year, $1.0 million convertible note to GE-TL, thereby reducing obligations due in 2027 by $400,000. The note does not bear interest, and the principal amount of the note is convertible into shares of the Company’s common stock at any time at the option of the holder at $1.07 per share. During the second quarter of 2023, we began our at the market offering (“ATM”) pursuant to which we may sell up to $20 million of shares of our common stock. Between October 2024 and March 2025, the Company issued shares of newly authorized Series A Preferred Stock and Series A-1 Preferred Stock which generated proceeds of $12.0 million. 21 The designations of each class of preferred stock are as follows: Series A Preferred Stock: ● Cumulative dividend of 8% annually, 12% if paid after dividend date; ● Original issue price of $25 per share; ● Conversion option at the holder’s option at $2 per share, with subsequent equity offering reset provision of no less than $1.20 per share; ● Redemption at the price of $25 per share at the Company’s option after 5 years or upon change of control (substantially outside the control of the holder); and ● Voting rights on as converted basis. Series A-1 Preferred Stock: ● Cumulative dividend of 8% annually, 12% if paid after dividend date; ● Original issue price of $25 per share; ● Conversion option at the holder’s option at $2 per share, with subsequent equity offering reset provision of no less than $1.20 per share; ● Redemption at the price of $25 per share at the Company’s option after three years or upon change of control (substantially outside the control of the holder); and ● Voting rights on as converted basis. Results of Operations Comparison of the Three months ended March 31, 2025 Three months ended March 31, Increase/ Increase/ 2025($) 2024($) Decrease $ Decrease % Revenue 20,113,938 18,977,821 1,136,117 6 % Cost of revenues 14,402,488 13,399,771 1,002,717 7 % Selling and marketing expenses 6,827,420 6,526,816 300,604 5 % General and administrative expenses 6,597,055 7,939,581 (1,342,526 ) (17 )% Total expenses 27,826,693 27,866,168 (39,205 ) NM Operating loss (7,713,025 ) (8,888,347 ) (1,175,322 ) (13 )% Other income / (expense) Interest expense, net (1,339,103 ) (787,854 ) (551,249 ) 70 % Net loss (9,052,128 ) (9,676,201 ) 624,073 (6 )% NM: Not meaningful Revenue Three months ended March 31 Increase/ Increase/ 2025($) 2024($) Decrease $ Decrease % Revenue 20,113,938 18,977,821 1,136,117 6 The increase in revenues is primarily due to an increased number of units of lighting and heating products sold. We believe that our revenues will be higher in 2025 than in 2024 primarily resulting from revenues from the sale of our advanced and smart products. 22 Cost of Revenues Three months ended March 31, Increase/ Increase/ 2025($) 2024($) Decrease $ Decrease % Cost of revenues 14,402,488 13,399,771 1,002,717 7 The increase in cost of revenue is proportionate to the increase in revenues. We believe that the cost of revenues will increase in 2025 compared to 2024, commensurate with an anticipated increase in revenues. Selling and Marketing Expenses Three months ended March 31, Increase/ Increase/ 2025($) 2025($) Decrease $ Decrease % Selling and marketing expenses 6,827,420 6,526,816 300,604 5 Selling and marketing expenses consist primarily of sales and marketing compensation as well as sales and marketing programs. The increase in selling and marketing expenses is primarily due to increased share-based payments to sales and marketing employees and contractors of approximately $450,000. General and Administrative Expenses Three months ended March 31, Increase/ Increase/ 2025($) 2024($) Decrease $ Decrease % General and administrative expenses 6,597,055 7,939,581 (1,342,526 ) (17 ) General and administrative expenses consist primarily of an allocation of product development, finance, legal, human resources, including salaries, wages, and benefits, and depreciation and amortization, including share-based payments. The decrease in general and administrative expenses is primarily due to decreased share-based payments of approximately $700,000 and decreased professional fees. Three months ended March 31, Increase/ Increase/ 2025($) 2024($) Decrease $ Decrease % Interest expense, net (1,339,103 ) (787,854 ) (551,249 ) 53 The increase in interest expense resulted primarily from interest charges related to increased interest-bearing weighted average debt in the current periods when compared to the prior year periods. 23 Liquidity and Capital Resources As of March 31, 2025, and 2024, we had $12.3 million and $15.5 million in cash, cash equivalents, and restricted cash, respectively. We have raised additional funds through the sale of our common stock for gross proceeds of $ 460,000 pursuant to placements and offerings during the three-month period ended March 31, 2025. We also generated gross proceeds of $1.0 million pursuant to the issuance of 40,000 shares of our Series A-1 Preferred Stock in March 2025. These offerings included shares sold pursuant to our ATM offering program which provides us with additional access to capital, as needed, subject to market conditions. During the three months ended March 31, 2025, we issued 223,756 shares of common stock under such program for net proceeds of $450,428, excluding placement fees of $9,206. From inception through March 31, 2025, we issued 8,118,655 shares of common stock under such a program for net proceeds of $14,706,702, net of brokerage fees and legal fees of $ 628,621. As of March 31, 2025, the remaining amount to be used under the ATM offering program is $5.3 million. Between October, 2024 and March 2025, we sold an aggregate of 480,000 shares of two series of preferred stock, resulting in total gross proceeds of $12.0 million, pursuant to securities purchase agreements under which an investor purchased an aggregate of 200,000 shares of Series A Preferred Stock, at a purchase price of $25 per share, and securities purchase agreements under which certain investors purchased an aggregate of 280,000 shares of Series A-1 Preferred Stock, at a purchase price of $25 per share. Since March 31, 2025, the Company generated proceeds of $2.9 million by issuing 114,000 shares of its Preferred Series A-1 stock. Our future capital requirements will depend on many factors, including the Belami integration of operations, our revenue growth rate, expenditures related to our headcount growth and manufacturing, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the price at which we are able to purchase parts to incorporate in our product offerings, the introduction of platform enhancements, and the market adoption of our platforms. We may continue to enter arrangements to acquire or invest in complementary businesses, products, and technologies. We may, because of those arrangements, or the general expansion of our business, be required to seek additional equity or debt financing. If we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition. We owe approximately $20.0 million under fixed rate obligations as of March 31, 2025. In addition, we owe GE certain minimum royalty payments under a license agreement and other accrued expenses which amounted to $1.7 million as of March 31, 2025. On March 29, 2024, we entered into a letter agreement with Belami sellers, modifying certain obligations under the 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 the 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. On September 23, 2024, the Company, through its wholly owned subsidiary, Belami, entered into a $3.5 million secured revolving line of credit (the “line of credit”) with a commercial bank, increasing, and renewing its previous revolving line of credit with such bank. The line of credit bears interest at a variable rate per annum equal to The Wall Street Journal Prime Rate, subject to a floor of 7.5% and ceiling of the maximum rate allowed under applicable law, payable monthly, and matures September 5, 2025. The line of credit is subject to customary default and acceleration provisions and to certain financial covenants, including working capital in excess of $1.75 million and a debt service coverage ratio in excess of 1.25 to 1.00 (calculated as described in the business loan agreement governing the line of credit). In addition, the Company agreed to guarantee Belami’s obligations under the line of credit, pursuant to a commercial guaranty agreement. As common with companies having a similar cash conversion cycle as ours, when sales are converted into cash rapidly, often referred to as the “Dell Working Capital Model,” we leverage our trades payable to finance our operations to lower our cost of capital, and accordingly, we may have negative working capital. This negative working capital is partly inherent to the relatively quick turnaround of finished goods inventory, quicker collection of accounts receivables, and longer payment cycle of trades payable. Our negative working capital, which consists of accounts receivable, inventory, net of trades and compensation payable, amounted to $8.5 million and $7.2 million as of March 31, 2025, and 2024 respectively. 24 Please see below a summary of the primary components of our cash used in or provided by operating investing and financing activities during the three-month period ended March 31, 2025: For the three months ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ (9,052,128 ) $ (9,676,201 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,007,817 1,060,571 Amortization of debt discount 278,499 228,499 Non-cash equity-based compensation expense 3,041,157 3,295,029 Change in operating assets and liabilities: Working capital changes (399,979 ) (1,973,219 ) Net cash used in operating activities (4,324,674 ) (6,182,308 ) Cash flows from investing activities: Purchase of property and equipment (413,365 ) (53,647 ) Net cash (used in) provided by investing activities (413,365 ) (53,647 ) Cash flows from financing activities: Proceeds from issuance of stock 1,875,428 3,582,643 Dividends (212,668 ) - Proceeds from issuance of debt instruments, net (121,908 ) (60,390 ) Net cash provided by financing activities 1,540,852 3,595,365 Change in cash, cash equivalents and restricted cash (3,197,188 ) (2,640,590 ) Cash, cash equivalents, and restricted cash at beginning of period 15,500,495 22,430,253 Cash, cash equivalents and restricted cash at end of period $ 12,303,307 $ 19,789,663 The changes in working capital, net are primarily attributable to timing differences in accounts receivable, accounts payable related to operations and deferred revenues. Dividends are related to the Series A and A-1 Preferred Stock initially issued in October 2024. Going Concern The Company’s liquidity sources include $ 12.3 million in cash and cash equivalents, including restricted cash of $2.8 million held for long-term purposes, and $ 10.3 million of working capital deficit as of March 31, 2025. The Company has a history of recurring operating losses, and its net cash used in operating activities amounted to $4.3 million and $6.2 million during the three months ended March 31, 2025, and 2024, respectively. The Company has also generated net cash provided by financing activities of $1.5 million and $3.6 million during the three months ended March 31, 2025, and 2024, 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. 25 Management 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, generating cash provided by financing activities through at the market offering or other equity or debt financing means. Non-GAAP Financial Measures Management considers earnings (loss) before interest, taxes, depreciation and amortization, or EBITDA, as adjusted, an important indicator in evaluating our business on a consistent basis across various periods. Due to the significance of non-recurring items, EBITDA, as adjusted, enables our management to monitor and evaluate our business on a consistent basis. We use EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. We believe that EBITDA, as adjusted, eliminates items that are not part of our core operations, such as interest expense and amortization and impairment expense associated with intangible assets, or items that do not involve a cash outlay, such as share-based payments, and non-recurring items, such as transaction costs. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income (loss), net income (loss) and cash flows used in operating activities. This non-GAAP financial measure excludes significant expenses that are required by GAAP to be recorded in our financial statements and is subject to inherent limitations. Investors should review the reconciliation of this non-GAAP financial measure to the comparable GAAP financial measure included below. Investors should not rely on any single financial measure to evaluate our business. For the three months ended March 31, 2025 2024 Net loss $ (9,052,128 ) $ (9,676,201 ) Share-based payments 3,041,157 3,295,029 Interest expense 1,378,223 787,854 Impairment - - Depreciation, amortization 1,007,817 1,060,571 Transaction costs - - EBITDA, as adjusted $ (3,624,931 ) $ (4,532,747 ) Critical Accounting Policies Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements for the year ended December 31, 2024 contained in our Annual Report on Form 10-K. The following is a summary of those accounting policies that involve significant estimates and judgment of management. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates. 26 Fair Value of Financial Instruments Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2025, and December 31, 2024, we believe the amounts reported for cash, prepaid expenses, accounts payable and accrued expenses and other current liabilities, accrued interest, notes payable and convertible note payable approximate fair value because of their short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of ASC 718 - “Compensation-Stock Compensation ”, which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Stock-based compensation is measured at the grant date based on the value of the award granted using the Black- Scholes option pricing model based on projections of various potential future outcomes and recognized over the period in which the award vests. For stock awards no longer expected to vest, any previously recognized stock compensation expense is reversed in the period of termination. The stock-based compensation expense is included in general and administrative expenses. Revenue Recognition We account for revenues in accordance with Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. 27 We determine revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. Recent Accounting Pronouncements Although there are several new accounting pronouncements issued or proposed by the Financial Accounting Standards Board, which we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements have had or will have a material impact on our financial position or results of operations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company”, we are not required to provide the information required by this Item. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures and any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their control objectives. As of the end of the period covered by this report, management, including our Principal Executive Officers and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based upon the evaluation, our Principal Executive Officers and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2025. Changes in Internal Controls Over Financial Reporting: There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 28 PART II. OTHER INFORMATION Item 1. Legal Proceedings From time to time, we become involved in legal proceedings arising in the ordinary course of our business. As of the date of this Form 10-Q, we are not a party to any material legal matters or claims. Legal proceedings are inherently uncertain and the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period. We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance. ITEM 1A. RISK FACTORS There have been no material changes from the risk factors set forth in “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, other than as noted below. Our business, operations and financial results are subject to various risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the report referenced above, together with all of the other information in such report and this Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face, and the disclosure of any risk factor should not be interpreted to imply that the risk has not already materialized. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements. We may face exposure to foreign currency exchange rate fluctuations. While we have historically transacted in U.S. dollars with the majority of our customers and suppliers, we have transacted in some foreign currencies, such as the [Chinese Renminbi], and may transact in additional foreign currencies in the future. Accordingly, changes in the value of foreign currencies relative to the U.S. dollar may affect our revenue and operating results. As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and operating results. In addition, to the extent that fluctuations in currency exchange rates cause our operating results to differ from our expectations or the expectations of our investors, the trading price of our common stock could decrease. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Recent Sales of Unregistered Securities There are no unregistered sales of equity securities during the quarter ended March 31, 2025 that were not previously reported in a Current Report on Form 8-K with the exception of the following: We issued 75,000 shares to a contractor pursuant to services with vesting subject to certain performance conditions. The sales or issuances of the securities described above were deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering. Issuer Purchases of Equity Securities There were no share repurchases during the quarter ended March 31, 2025 other than shares repurchased to settle tax withholdings related to the vesting of restricted stock units. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Item 5. Other Information Rule 10b5-1 Trading Plans During the quarter ended March 31, 2025, 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). 29 Item 6. Exhibits Exhibit No. Description of Exhibit 2.1+ 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). 2.2+ 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). 3.1 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). 3.2 Articles of Amendment to Articles of Incorporation (effective August 12, 2016) (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-261829) filed with the SEC on December 22, 2021). 3.3 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). 3.4 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). 3.5 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). 3.6 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). 3.7 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). 3.8 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). 10.1 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). 10.2 Articles of Amendment to the Certificate of Designation of Rights, Preferences and Privileges of Series A-1 Preferred Stock, dated May 2, 2025 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-k filed with the SEC on May 8, 2025). 10.3 Third Amended and Restated Bylaws, dated 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) 31.1 Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). 31.2 Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). 31.3 Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). 32.1 Certification by Co-Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). 32.2 Certification by Co-Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). 32.3 Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). 101 The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Loss, (iii) Consolidated Statements of Stockholders’ Equity (Deficit), (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements. 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * Indicates management contract or any compensatory plan, contract, or arrangement. + Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SKYX PLATFORMS CORP. Date: May 14, 2025 By:  /s/ John P. Campi John P. Campi, Co- Chief Executive Officer (Principal Executive Officer) Date: May 14, 2025 By:  /s/ Leonard J. Sokolow Leonard J. Sokolow, Co-Chief Executive Officer (Principal Executive Officer) Date: May 14, 2025 By:  /s/ Marc-Andre Boisseau Marc-Andre Boisseau, Chief Financial Officer (Principal Financial and Accounting Officer) 31