Good day, and welcome to SKYX Platforms Corp. First Quarter 2024 Investor Update Call. Today's webinar is being recorded. Before we begin the formal presentation, I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and industry prospects are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks, and we would like to refer you to the company's website for more supporting industry information. At this time, I'd like to turn the webinar over to Rani Kohen, Executive Chairman of SKYX Platforms Corp. Sir, please go ahead.

Thank you, Alicia. Thank you, everyone, for joining us to our Q1 Update Call 2024. We will have today open the call is our President, Steve Schmidt; and we will have then our CEO, Lenny Sokolow; will also have our CFO, Marc Boisseau. And we're going to also have our senior smart home and AI adviser, Khadija Mustafa, former AI and business global leader for Microsoft that joined us last year as we got a few patents related to smart home and AI. Thank you very much for everyone to joining here, and I'll pass it to Steve Schmidt. Thank you, Steve.

Rani, thank you very much. And it's my pleasure to be with you here this afternoon. As we've shown you before in the past, we've got a very strong leadership team. We feel very good about both the management team, our Board, Governor Tom Ridge, former Head of Homeland Security and Governor of Pennsylvania; Bob Nardelli, former Home Depot CEO and Chrysler. Lance Shaner, representing Marriott's. Eric Jacobson has joined us from the American Lighting Association, and we've been through this. Mark Earley also from the National Electrical Code, obviously, are all key executives that we rely on every single day to run the company. And then as Rani had just said, Khadija Mustafa is going to join us later on the call because of really the importance around AI and everything that's going on in the world and the importance it is to Sky as an overall company. As we've talked to you before, really, there's 2 key points I want to make here. First of all, our mission really is we believe that based on everything that's happening at Sky that we are positioned to revolutionize both the lighting and smart home industries and become a safety standard in homes and buildings in the U.S. and globally. And as we've spoken before, our products significantly do 4 things. We save lives, we save cost, we save time and we simplify. And many companies have had success simply with one of these areas. And having all 4 of these, we believe, is foundational and really represents what makes us very special. We also talk in this chart about our patents, and we continue to grow patent. We have now over 90 U.S. and global patents and patents pending with 30 issued patents included in the U.S., China, India and…

Thank you, Steve. Thanks, everybody, for joining our earnings call. Basically, the revenue in the first quarter of 2024 increased to $19 million. This includes all the e-commerce sales as well as the smart and standard plug-and-play products, and this compares favorably to the $18.6 million in comparable e-commerce platform sales in the first quarter of 2023. Cash, cash equivalents and restricted cash amounted to $19.8 million as of March 31, 2024, compared to $22.4 million as of December 31, 2023. Sales and marketing expenses amounted to $6.5 million during the first quarter of 2024, which compares to the comparable e-commerce platform sales and marketing expenses of the first quarter of 2023 of $5.7 million. The net cash loss, which is a non-GAAP measure, amounted to $5.1 million in Q4 -- in Q1 of 2024. In addition, there is a noncash basis loss of $4.6 million. And in aggregate, our net loss was $9.7 million during the first quarter of 2024 or $0.10 per share. In the first quarter of 2023, our net cash loss was $4.4 million and our noncash basis loss of $3.6 million, again, for a net loss of $8 million or $0.10 per share. And let me introduce you to Lenny Sokolow, our co-CEO.

Thank you, Marc, very much. As Marc indicated, the first quarter of 2024, which reflected expected tempered revenues following traditionally stronger calendar fourth quarter sales, was highlighted by our continued market penetration, positioning that not only includes the Ruee Appliances collaboration, but also developing our sales channels and focusing on sales and marketing programs with key stakeholders in such channels. We believe we have accelerated our cadence of sales with a robust gross margin profile, notably managing our cash burn. Additionally, our e-commerce platform with over 60 websites is providing additional cash flow to the company, which, when combined with our existing cash enhances our cash position to continue executing our business plan. As stated before, we believe we will be cash flow positive during 2025. We're encouraged by our path to the builder, commercial segments, large online and brick-and-mortar retail partners as well as our future potential to realize incremental licensing, subscription and AI/data aggregation revenues. Furthermore, with our e-commerce website platform with over 60 websites, which enhances the acceleration of marketing, distribution channels, collaborations and sales to both professional and retail segments has been a material factor for us. Our websites include banners, videos and educational materials regarding the simplicity, cost savings, time savings and lifesaving aspects of the company's patented technologies. And now if I could turn it over to Rani, Please?

Thank you very much, Steve, Marc and Lenny. And now we will have Khadija Mustafa, former global leader for AI and business in Microsoft that joined our company last year. And Khadija will share with you what she likes about our products and what she -- why she joined us and what she believes and I put a slide here that references one of our favorite slides of our deck. Please Khadija, if you can hear us.

Thanks so much, Rani. Yes. So I think these days, it's pretty much hard to get away from anything related to AI. It's almost -- I think it's less about what the potential is, and it's sometimes easier to talk about where it doesn't apply. I think the part that's very important is when you think about realizing the value of AI, it relies on data. I think that's been mentioned several times on the call. And if you think about 3 different sockets, I mean, it's -- we've had our consumer devices. So when you think about the phone. The second one, of course, has been the automobile. It's still an area that -- which has a lot of focus. But the third one is smart home. I mean you can also extend it to smart buildings, but this is one space that is right now ripe for disruption. When you think about big tech companies, obviously, the world that I was coming from before, that has been a space that's been a big focus area because how do you take all the data that's being garnered to our movements in that environment. And that is a space which has had a bigger long tail, I would say. There's really -- there have been very few companies that have been able to sort of master that space. You'll see a lot of different players with different components of the solution, but there really hasn't been -- there hasn't been a consolidation yet. So I think that area is prime, which is, of course, where SKYX is playing. When you combine -- and of course, when we talk about data, we are talking about anonymized data and sort of leveraging that to then garner the insights. So I think this is what uniquely positions SKYX to be a key player in that third socket for all kinds of companies, the tech companies as well, of course, but also when you think about various different companies that want to harness -- or that can harness that data to then provide services. And that -- and from that perspective, I think SKYX is uniquely positioned because of some of the things that were mentioned in the phone call. The IP portfolio that's been established, all of the engineering work that's been done, and that's something, especially on the tech side, that's really not the core focus area and then -- their focus area. And then most importantly, the potential that it could become a mandatory component. So when you combine all of these together, there's lots of potential. And not to mention the sorts of partnerships that can be established can be fairly wide ranging. So I think for me, I particularly found that to be what attracted me to take on an adviser role, and I look forward to seeing a lot of those things come to fruition.

Thank you very much, Khadija. I think we can summarize today based on some bullet points here that we don't take for granted our team, as Steve mentioned in the beginning and world leading people and having Khadija. By the way, she has a nice talk show that I encourage people to see and learn about her a bit, but how she grew her position in 23 years in Microsoft and few weeks after joining our company. We really very much appreciate her knowledge, expertise and connections. And we're working together on some major things now that hopefully we'll be able to announce to the market sometimes, depends on how -- when it happens. But in addition to this, as Steve mentioned earlier, we're working on additional collaborations in different fronts that some of them major and hopefully, they'll come to fruition and we'll be able to share with everyone. But really, the goal is, at the end of the day, to enhance market penetration. As Steve mentioned, we have 4.2 billion applications potential in homes, and that's residential only. And commercial is much bigger as -- or same size at least. And globally, based on the safety aspects many here believe including Khadija and Steve and the team here that there's a global potential to have a wall -- like you have a wall outlet in every home, why not a ceiling outlet rather than going on ladders and risk in life. So really a lot of hard working and grinding behind the scenes for the team here. And I want to thank everyone for joining us on the -- our team here and investors and potential new investors. And we'll open up for Q&A. If someone has any questions, we'll be happy to answer those questions. Thank you again.

[Operator Instructions]

Okay. I think we have Jack Vander Aarde from Maxim here. So we're happy to take that question.

Jack Vander here, analyst at Maxim Group. Great to see the continued momentum. There's plenty to talk about with you guys. That's for sure. So I'll start with the question maybe for Rani. And whoever wants to chime in on this, I'm sure everyone has a perspective. But you've recently announced all these new major collaborations, Kichler, Quoizel, Ruee Appliances, Golden Lighting, you name it. I'd be interested to hear your perspective on which of these collaborations you consider maybe the most impactful on your business in the near term and then the long term? I think really Ruee Appliances comes to mind when I think about maybe a gross margin driver for you guys. But just would like to get your perspective on these collaborations just to make sense of it all.

Sure. I'd be happy to. I think all of them, Kichler is a world-leading brand of elite products, same as Quoizel over 100 years brand. And I think having companies like this, we started our collaborations online, but we'll keep moving together to the builder segments and working together with major brands like this. I think that's quite significant for us. And the potential is we just started, and there's a lot to capture based on the size of the TAM, and you just mentioned potentially down the road of 4.2 billion applications of outlets. So I think there's a lot to accomplish step-by-step. We're working that together. The collaboration with Ruee Appliances, I think, is quite significant as well for several reasons. The first is it's a global manufacturer player that -- with highest quality of products that are sold here in the U.S., in Europe is a major player as well as in China. There's potential collaborations towards [ codes ] in China and safety aspects in other areas of the world with them, but also the fact that they are going to be backing us with products and financing aspects of this. I think it's major having a company that started from 0 with the leader of this company [indiscernible] taking it to become one of the biggest lighting manufacturers in the world and selling all around the world globally is a major factor and the belief in our product and a lot of confirmation to what we're seeing and all the collaborations we have with those leaders, the first to jump in are actually the people that see the potential we have here. And not to mention GE that also believes, as Steve mentioned, that we have potential for global licensing of our 3 generations of…

Yes, very thorough. I appreciate the response kind of my loaded question there. And then maybe a 2-part follow-up here, and then I'll hop back in the queue. But can you maybe provide an update on the launch timing or just whatever you're expecting for the upcoming GEN-3 all-in-one platform product? And then kind of the second part is that, according to Steve Schmidt's prepared remarks, it sounds like you'll be announcing some additional major collaborations in 2024. I'm assuming maybe one of those -- or maybe I'm getting ahead of myself, but would any of those collaborations or future announcements relate to potential service offerings and subscription offerings that you could attach to that GEN-3 product.

We can say we're working on several collaborations in several segments and we know until something doesn't happen, it doesn't happen. We can tell you based on the team we have and based on the team we showed earlier in the chart, we're working with Bob Nardelli, that not only a CEO -- former CEO of Home Depot and Chrysler, but also the former CEO of GE Power Systems. And then Steve, our President, is a former CEO of Nielsen. And then Al Wiess that we have, former President of Disney World and Khadija. And each one of them is a world-class player that helps us in different areas and segments here. But we really don't know what's going to happen first and what we can announce. But we can tell you we're working on all fronts, and it looks good. But again, everything is slowly, hopefully, shortly according to what we accomplished. But if you really look at the list of accomplishments for us Q4 and Q1, the last 6 months or 7 months, I think that we're very good positioned. And I think we're building a very strong foundation of a leading company, and that's what we all believe are positioned to be. Thank you so much. We also have, I believe, Pat McCann from NOBLE. And I'd be happy to take your call. Pat?

Yes. Congratulations on the quarter. My first question is just about the timing of some of the partnerships that have already been announced. I guess, what I'm wondering is what would be -- is there any additional information you can give about when some of those partnerships, be it Kichler, Quoizel, the Ruee partnership, when we might start to see the effects of those in your results kind of in addition to what you already have built with your websites and the revenue you're generating from those?

Patrick, as you know, we...

Lenny, please do you want to add.

Absolutely. Patrick, as you know, we haven't projected out. I appreciate your question though. And I think that our expectation is that it will evolve this year in 2024. It will start to get penetration. We'll start to realize a turnover in revenues from that. We're on a good path with these multiple collaborations. And everything -- it really takes a little time, not just on our end, but on their end, on the marketing and the materials and all kinds of things. But we're on a good path. We just can't point to when in the year it's going to evolve in a material way. But it's -- for us, it is happening.

Sure. Okay. Understand. And then another question was with regard to the safety standardization application. I know we can't really go behind the curtain of the NECs and know what's going on there. But I'm wondering if there is any color you can give as to what that process looks like on the side of the NEC. So you made the application last year, and so here we are in May. And I'm just wondering what sort of process do they go through when they're assessing your application before they come to that vote? What are -- is there any information we might have about what that looks like, even though I know we don't know when exactly a vote will come?

Yes. Yes. Thank you for the question. So as we said many times and we'll say again, it's a very lengthy process, the standardized and industry. It happened with the GFCI 40 years ago in homes. And I think that's the last time that happened in something significant in homes, and it also took them the same cycle that we're experiencing here of over 12 years. But I think the bad news is a very slow process. I think the good news is we're already 12 years, and we're really getting momentum and we're getting support from some major companies we can't announce yet, but we really got some good feedback and some help. The process is slow, but our team is, as Steve mentioned earlier, are confident to where they are. And there's cycles of meetings and task groups and discussions and every meeting like this, you try to enhance your position and address one more issue. It's a major co-change, but remember, people really today in 2024 in order to install a life picture go on ladders and risk their lives and the regulators, that's their job at the end of the day, and I think they're taking it very serious. But there's a process and time table and it's a major change. So we can't -- as you said, we can't anticipate the time, but we can say that we are -- our co-team led by Mark Earley, Eric Jacobson, Patty Barron, Amy Cronin and Chuck Mello and other leading people here are meeting and I would say, only a weekly base and enhancing and moving to the right direction. So really the clock is not on our end, but I think we're making great progress in accomplishing the ANSI/NEMA board to mention, we already got a generic name for our product in the Code Books, like the GFCI has a generic name of ground fault circuit interrupter. Our Sky outlet has the generic name was voted for WSCR, Weight Support Ceiling Receptacle. And those are major necessary steps to become mandatory in the standardization. So I think we accomplished a lot, and we are accomplishing more that we can't announce yet. But hopefully, it seems that we're in the right direction here. Thank you very much. Any additional questions, I don't see for now. So I think, Steve, do you want to add something?

I would just say that I think as you've heard today, there continues to be significant momentum in all areas around Sky. As a management leadership team, we are very confident in the future and we have some very exciting things that we'll hopefully be sharing with you in the next few quarters as we've spoken about. But a lot of great stuff and momentum and much more to come.

Okay. Great. Thank you very much, Steve. Khadija, thank you very much having you on those calls. Hopefully, we'll bring you again and every time, we'll have something more to share here. Lenny, our Co-CEO, thank you so much, Lenny Sokolow and Marc Boisseau, our CFO. Thank you so much, everyone, and hope everyone has a great evening. Thanks again.

This concludes today's virtual webinar. Thank you for your participation.