SKYX Platforms Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 14, 2024

There are 8 speakers on the call.

Operator

Good day, and welcome to Skyx Platform 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's 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.

Operator

At this time, I'd like to turn the webinar over to Randy Cohen, Executive Chairman of Skyx Platforms. Sir, please go ahead.

Speaker 1

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 Sacamo. We'll also have our CFO, Mark Busuet and we're going to also have our senior smart home and AI advisor, Khadija Mustafa, former AI and Business Global Leader for Microsoft.

Speaker 1

They joined us last year as we got a few patents related to smart home and AI. Thank you very much for everyone to join joining here. And I'll pass it to Steve Schmidt. Thank you, Steve.

Speaker 2

Ronnie, thank you very much and 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, from 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 Early also from the National Electric Code, obviously, are all key executives that we rely on every single day to run the company. And then as Ronnie had just said, Khadija Mostafa 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.

Speaker 2

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.

Speaker 2

And many companies have had success simply with one of these areas and having all four 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 patents. We're now over 90 U. S. And global patents and patents pending with 30 issued patents included in the U.

Speaker 2

S, China, India and Europe. We're currently selling our products in over 60 lighting and home decor websites And our TAM is huge, dollars 50,000,000,000 U. S. Addressable market, dollars 500, I said 50, I apologize. Small difference with the zeros there between 50500.

Speaker 2

And obviously, we're expecting very strong revenue streams through our royalty, licensing, subscription monitoring and sale of global country rights. So a lot of great things going on from a positioning standpoint. Our technologies advance key sectors. And when you think about the electrical and building safety regulators, it's really about enhancing home and building safety. Insurance companies, huge dollar savings for insurance companies based on the safety aspect of our products.

Speaker 2

The lighting industry is going to save costs and increase sales and profits. Smart home industry, the same thing. And then the electro outlet box manufacturers will save significant increase in Chile, where we have a significant increase in sales and profits. And when you think about builders, apartment buildings, hotels, cruise industries, all of them will have significant cost and time savings while enhancing building safety. Our Q1 2014 financial highlights, we generated record 1st quarter sales of 2024 sales of $19,000,000 in revenue compared to $18,600,000 for the Q1 of 2023, including sales of our advanced and smart platform plug and play products.

Speaker 2

We've reported $19,800,000 in cash, cash equivalents, restricted cash, available cash and investments available for sale as of December 31, 2023 as compared to $22,400,000 as of December 30 1, 2023. And very importantly, management anticipates the company will become cash flow positive during 2025. So let's go through some key updates over the last 6 months that have occurred at Sky. First of all, new global smart home and AI related patents enable and enhance performance of smart home and AI sensors in addition to home safety sensors. We recently received 8 additional patent issuance, bringing the company's intelligent issuing the intellectual property portfolio to a total of over 90 issued and pending patents, 30 of which are issued covering Sky's advanced plug and play smart home platform technologies for the smart home, AI, electrical and lighting industries.

Speaker 2

We've got collaboration with a world leading Chinese lighting supplier and manufacturer, Rui Appliances. This collaboration with Rui will include Sky's advanced and smart products to both professional and retail markets and provides Sky substantial backing in several areas, including financial, mass production, manufacturing capabilities and distribution to global markets, including China and Europe. Plus, this collaboration is expected to substantially enhance gross margins on Sky's product sales. We have signed with General Electric, a 5 year global licensing partnership agreement to license Sky's patented advanced and smart home platform technologies, including a ceiling outlet receptacle related products, as well as its all in one smart home platform technology. We've announced a collaboration with a world leading lighting company Kichler, which will include Sky's advanced smart standard products for online, retail and professional channels.

Speaker 2

We've announced the collaboration with Quizelle, a premier U. S. Lighting manufacturer for nearly 100 years to integrate Sky X's advanced smart and standard products for online retail and professional channels. And finally, we've announced the collaboration with Golden Lighting, a leading provider of elegant lighting solutions in the U. S, which will again feature Sky's advanced and smart products for different channels.

Speaker 2

Enhancing market penetration to both retail and pro segments are really one of our key strategies and let's talk about what we've done. The company continues to grow its market penetration of its advanced and smart platform technology products to both retail and commercial segments through its e commerce platform of over 60 websites for lighting and home decor. We continue to deliver our products to thousands of homes in the U. S. And Canada and expect our products to be in tens of thousands of homes within a year.

Speaker 2

We have started sales to builders and pro segments and we've opened up over 100 builder and pro accounts during the International Builder Show in Las Vegas. We've entered into an agreement to supply approximately 1,000 homes with advanced smart home platform technologies and expecting to deliver approximately 30,000 units representing a variety of our advanced and smart platform technology products to the developers' upcoming projects. And as we've announced prior, we have won 7 CIS Awards CES, I said CES, I apologize, including most recently 2 awards for all in one smart home platform. And most importantly, we plan to announce significant additional partnerships and collaboration over the coming months. So when you think about really our outlet and how we think about building our business, In just the ceiling receptacles alone, we believe there's 4,200,000,000 applications in the U.

Speaker 2

S. And building market. There is 140,000,000 U. S. Homes, you can do the math and that comes to 4,200,000,000 applications and opportunities for us.

Speaker 2

The TAM is huge, which we've already spoken about and those 4,200,000,000 U. S. Installs are residential only and do not include commercial properties and we believe that's approximately the same size. So you can double that number and global fixture installations are estimated to be several 1000000000 annually. So a significant opportunity on our core outlet receptacle.

Speaker 2

Our strategy on the core receptacle is very simple and we call it the razor and blade model. We want to get that receptacle installed in as many locations as possible and then bring on then our Phase 2 and Phase 3 technology products from a plug and play concept. And so we're really opening up a whole new world for plug and play sealing products and all of this is dealing with app and voice control and we feel very good that this really is the foundation of building what we have. Our all in one smart platform is really something that is our Phase 3. And if you look on this chart, think about an all in one platform from the standpoint of being able to make a home or building smart almost instantly versus the way it's done today that literally takes thousands of hours and hundreds of man hours of work to get done in buildings.

Speaker 2

And we have the ability with our product, our own one platform to plug it directly into our platform. And look at the different attributes that it's got. We have security features. We have speakers. We have Wi Fi.

Speaker 2

We have emergency intercoms, we are compatible with Apple, Amazon, Google, Android, an intercom system, premium speakers. And so everything that you can think about from a smart enhanced standpoint are represented in our all in one smart platform,

Speaker 3

which will

Speaker 2

be available coming this year. Finally, as you think about really our 3 products, it's really 3 phases. You've got Gen 1, which is our plug and play. You then got the smart products, our smart Sky plug in ceiling outlets. And then Gen 3, our smart product Sky all in once home ceiling platform that makes homes become smart in just minutes.

Speaker 2

And GE licensing, all three generations, we're really working with GE to really sell all three of these generations to the lighting and technology industries. Continuing here, we've already talked about the CES and the 7 awards that we've achieved through our launches of our Sky products and services. And we think this really speaks volumes to the industry's recognition of how significant our products and services are. And then the products that we're offering here, you can see the plug and play products we've got are ready and are being sold in the marketplace today, and we're ready for distribution. One of the key subjects that we continue to talk about is the mandatory application with the National Electric Code for homes and buildings in all 50 states and our safety mandatory filing with the NEC.

Speaker 2

And we filed for mandatory safety standardization with the NEC for our ceiling outlet receptacle for ceilings in homes and buildings with our team, which is led by Mark Early, our former Head of National Electric Code and Eric Jacobsen, the former President and CEO of the American Lighting Association. Mr. Early and Mr. Jacobson are instrumental in numerous code and safety changes in both the electrical and lighting industries. And from a highlight standpoint, we believe that after over 11, 12 years of standardization processes, including product specification approval voting or by ANSI and NEMA, the American National Standardization Institute and the National Electric Manufacturing Association that we have met the necessary safety conditions for becoming a ceiling safety standardization requirement for homes and buildings.

Speaker 2

And in the past 12 years, our products were voted into 10 segments in the National Electric Code book. And but as we have to be straight, voting decisions are at the discretion of the NEC voting membership. When you look at filing for safety mandatory in homes and buildings, it's really this picture. Ceilings from yesterday and ceilings from today and tomorrow, using our basic platform, really will save lives and create safety in the marketplace. And it's a real core reason why we believe our products and services will be accepted by the National Electric Code and become a standard.

Speaker 2

We have our Sky ceiling outlet receptacle, 100 of 1,000,000 U. S. Hazards occur every year. You have a ladder falls, you have electrocutions from touching wires, etcetera, and all of these things are contributing to the safety standards for our products. And most significantly, the addition of the National Accord in 40 years, we believe this will be.

Speaker 2

You all are familiar with the GFCI and that was really the last significant change. And we believe with our products that we will be the next big change that's occurring in the National Electric Code. And really after 120 years, changing the definition of a receptacle is really what we're talking about here and we feel very confident that in the near future this will be achieved. And with that, I want to stop and I'd like to introduce our CFO, Mark Faso. Mark, to you.

Speaker 2

Thank you, Steve.

Speaker 4

Thanks, everybody, for joining our earnings call. Basically, the revenue in the Q1 of 2024 increased to $19,000,000 This includes all the e commerce sales as well as the smart and standard plug and play products. And this compares favorably to the $18,600,000 in comparable e commerce platform sales in the Q1 of 2023. Cash, cash equivalent and restricted cash amounted to $19,800,000 as of March 31, 2024, compared to $22,400,000 as of December 31, 2023. Sales and marketing expenses amounted to $6,500,000 dollars during the Q1 of 2024, which compares to the comparable e commerce cash loss, which is a non GAAP measure amounted to $5,100,000 in Q4 of in Q1 of 2024.

Speaker 4

And in addition, there is a non cash basis loss of $4,600,000 and in aggregate, our net loss was 9,700,000 dollars during the Q1 of 2024 or $0.10 per share. In the Q1 of 2023, our net cash loss was 4 point $4,000,000 and our non cash basis loss was $3,600,000 again for a net loss of $8,000,000 or $0.10 per share. And let me introduce you to Leidy Sokolov, our Co CEO.

Speaker 3

Thank you, Mark, very much. As Mark indicated, the Q1 of 2024, which reflected expected tempered revenues following traditionally stronger calendar 4th quarter sales was highlighted by our continued market penetration positioning that not only includes the Ruyi 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.

Speaker 3

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 saving and life savings aspects of the company's patented technologies. And now if I could turn it over to Ronny, please.

Speaker 1

Thank you very much, Steve, Mark and Lemmy. And now we will have Khadija Mustapha, former global leader for AI and Business in Microsoft. They 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 her favorite slides of our deck. Please, Khadija, you can hear us.

Speaker 5

Thanks so much, Ronny. 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.

Speaker 5

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.

Speaker 5

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 through 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.

Speaker 5

You'll see a lot of different players with different components of the solution, but there really hasn't been a consolidation yet. So I think that area is prime, which is of course where Sky X 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 Sky X to be a key player in that 3rd 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 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.

Speaker 5

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 advisor role and I look forward to seeing a lot of those things come to fruition.

Speaker 1

Thank you very much, Gedija. 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 we're leading people and having Khadija, by the way, she has a nice TED 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 sometime, depends on how when it happens. But in addition to this, as Steve mentioned earlier, we're working in 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.

Speaker 1

As Steve mentioned, we have 4,200,000,000 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 risking life. So really a lot of hard working and grinding behind the scenes with the team here. And I want to thank everyone for joining us, all the our team here and investors and potential new investors. And we'll open up for Q and A. If someone has any question, we'll be happy to answer those questions.

Speaker 1

Thank you again.

Operator

Thank you. We will now be conducting a question and answer session.

Speaker 1

Okay. I think we have Jack Van Derait from Maxim here. So, I'll be happy to take the question.

Speaker 6

Can you hear me okay?

Speaker 1

Yes. Yes, we do.

Speaker 6

Okay, great. Thanks guys. Jack Bandert here, analyst at Maxim Group. Hey, great to see the continued momentum. There's plenty to talk about with you guys, that's for sure.

Speaker 6

So I'll start with a question maybe for Ronny 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, Quisel, RUI appliance, 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 RUI appliances comes to mind when I think about maybe a gross margin driver for you guys. But just like to get your perspective on these collaborations just to make sense of it all.

Speaker 6

Thanks.

Speaker 1

Sure. Be happy to. I think all of them, Kichler is a world leading brand of elite products, same as Quisel over 100 years brand. And I think having the companies like this, we started our collaborations online, but we're working moving together to builder segments and working together with major brands like this. I think that's quite significant for us.

Speaker 1

And the potential is just 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 4,200,000,000 applications of outlets. So I think there's a lot to accomplish and step by step we're working that together. The collaboration with WUI 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.

Speaker 1

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, Abe, taking it to become one of the biggest lighting manufacturers in the world and selling all around the world globally is a major factor in the belief in our product and a lot of confirmation what we're saying 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 to mention GE that also believes, as Steve mentioned, that we have potential for global licensing of our 3 generations of products, the 1st generation plug and play platform and then the 2nd generation smart and the third one that's going to be the all in one smart platform that we can license it to global names that have softwares and hardwares that want to be in every room.

Speaker 1

So the Generation 3 platform is really enabling us to combine as much more players as Steve mentioned earlier. We already have Apple inside of it and we have Google inside of that platform and we have Amazon and Samsung and we're going to add in addition. And as we always like to say, every CEO and every company wants to be in every room and that we feel that our patents enable this and not only this, it's based on its top center of the ceiling location, it will enhance any type of products, if it's smart home, if it's Wi Fi, if it's sound, if it's voice and our patents really protect that type of platform and what we have. So this is why GE also another major collaboration strongly believes there's a global licensing potential and as Steve said many times, it's all also based on safety. So there's a lot of win win situations.

Speaker 1

And I believe that that's what Khadija also said and likes about us. So hopefully that answers your question,

Speaker 6

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 second part to that, according to Steve Schmidt's prepared remarks, it sounds like you'll be announcing some additional major collaborations in 2024.

Speaker 6

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? Thanks.

Speaker 1

We can't say what type. 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 CEO, former CEO of Home Depot and Chrysler, but also the former CEO of GE Power Systems. And then Steve as our President as the former CEO of Nielsen and then Al Weisz 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.

Speaker 1

But we really don't know what's going to happen in person, we can announce. But we can tell you we're working on all fronts and it looks good. But again, everything is slowly, hopefully, surely according to what we accomplished. But if we 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 we're positioned to be.

Speaker 6

Okay. I really appreciate it, Ronnie. I'll hop back in the queue. Thank you.

Speaker 1

Thank you so much. We also have, I believe, Pat Buchanan from Noble. And I'd be happy to take your call. Pat?

Speaker 7

Hey, yes. Good afternoon. And yes, thanks for taking my questions and 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, Quisel, the Ruiy 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?

Speaker 3

Patrick, as you know, we Andy,

Speaker 1

please do you want to answer?

Speaker 3

Absolutely. Yes. Patrick, as you know, we haven't projected out. I appreciate your question though. And I think that our expectation is that it will be it will evolve this year in 2024.

Speaker 3

It will start to get penetration. We'll start to realize a turnover and revenues from that. We're on a good path with these multiple collaborations. Everything takes a little time, not just on our end, but on their end, on their marketing and the materials and all kinds of things. But we're on a good path.

Speaker 3

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.

Speaker 7

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.

Speaker 7

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?

Speaker 1

Yes. Thank you for the question. So as we said many times, we'll say again, it's a very lengthy process to standardize an 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 that same cycle that we're experiencing here of over 12 years.

Speaker 1

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 get really got some good feedback and some help. The process is slow, but our team is, as Steve mentioned earlier, confident the way to where they are. And there's cycles of meetings and task groups and discussions.

Speaker 1

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 light fixture, go on ladders and risk the lights 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 timetable 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 Early, Eric Jacobson, Patty Barron, Amy Cronin, Chuck Mello and other leading people here are meeting and I would say almost on 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 and accomplishing the NC NEMA boat. And to mention, we already got a generic name for our product and the code books like the GFCI has a generic name of ground fault secret interrupter.

Speaker 1

Our Sky outlet has the generic name was voted for WSCR, weight support sealing 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 directions here.

Speaker 7

Great. Thanks so much. I'll hand the floor back over.

Speaker 1

Thank you very much. Any additional questions? I don't see for now. So I think Steve, do you want to add something?

Speaker 2

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

Speaker 1

a lot

Speaker 2

of great stuff and momentum and much more to come.

Speaker 1

Okay, great. Thank you very much, Steve. Kadeep, just 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 Sokolov and

Speaker 2

Mark Busy, our CFO.

Speaker 1

Thank you so much everyone and hope everyone has a great evening. Thanks again.

Operator

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

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