What changed in SKYX Platforms Corp.'s 10-K — 2024 vs 2025

CONSOLIDATED BALANCE SHEETS December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 8,052,621 $ 12,639,441 Accounts receivable 1,891,488 2,415,314 Inventory 4,250,168 3,785,346 Deferred cost of revenues - 223,214 Prepaid expenses and other assets 1,206,639 1,311,135 Total current assets 15,400,916 20,374,450 Long-term assets: Property and equipment, net 1,347,640 545,333 Restricted cash 2,050,000 2,861,054 Right of use assets 17,502,685 19,750,030 Intangibles, definite life 5,051,949 5,994,373 Goodwill 16,157,000 16,157,000 Other assets 205,044 204,807 Total long term assets 42,314,318 45,512,597 Total assets $ 57,715,234 $ 65,887,047 Liabilities and Stockholders’ Equity (Deficit) Current liabilities Accounts payable and accrued expenses $ 16,014,585 $ 13,235,221 Notes payable 356,474 4,011,168 Operating lease liabilities 2,589,994 2,350,868 Royalty obligations 1,300,000 800,000 Deferred revenues 2,082,622 1,495,846 Convertible notes related parties 350,000 950,000 Convertible notes 1,884,347 3,292,408 Total current liabilities 24,578,022 26,135,511 Long term liabilities Long term accounts payable 552,354 1,044,708 Notes payable 145,022 504,129 Operating lease liabilities 17,791,453 20,376,498 Royalty obligations - 900,000 Convertible notes 14,236,769 7,872,773 Total long-term liabilities 32,725,598 30,698,108 Total liabilities 57,303,620 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 480,000 , outstanding 292,000 and 240,000 7,124,167 6,000,000 Series A-2 Preferred Stock-shares authorized 160,000 , outstanding 60,000 and - 1,500,000 - Preferred stock 1,500,000 - Common stock and additional paid-in-capital: shares authorized 500,000,000 outstanding 117,666,800 and 103,358,975 203,046,051 179,837,253 Accumulated deficit (216,258,604 ) (181,783,825 ) Total stockholders’ equity (deficit) (4,588,386 ) 4,053,428 Total Liabilities and Stockholders’ Equity (deficit) $ 57,715,234 $ 65,887,047 The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS (AUDITED) 2025 2024 For the year ended December 31, 2025 2024 Revenue $ 92,009,949 $ 86,276,876 Operating expenses Cost of revenues 64,173,870 61,682,934 Selling and marketing expenses 25,701,665 25,353,172 General and administrative expenses 31,246,804 31,353,009 Total expenses, net 121,122,339 118,389,115 Loss from operations (29,112,390 ) (32,112,239 ) Other expenses Interest expense - related party 119,486 151,900 Interest expense, net 4,183,728 3,904,005 Gain on extinguishment of debt - (400,000 ) Total other expenses, net 4,303,214 3,655,905 Net loss (33,415,604 ) (35,768,144 ) Preferred dividends - related party 80,000 20,000 Preferred dividends 979,175 192,667 Net loss attributed to common stockholders $ (34,474,779 ) $ (35,980,811 ) Net loss per share - basic and diluted $ (0.32 ) $ (0.36 ) Weighted average number of common shares outstanding – basic and diluted 108,757,074 99,766,866 The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (AUDITED) 2025 2024 For the year ended December 31, 2025 2024 Shares of preferred stock ( Series A-1) Balance, beginning of year 240,000 - Preferred stock Conversion to common (102,000 ) - Preferred stock issued pursuant to offerings 154,000 240,000 Balance, end of year 292,000 240,000 Preferred stock ( Series A-1) Balance, beginning of year $ 6,000,000 $ - Preferred stock Conversion to common (2,550,000 ) - Preferred stock issued pursuant to offerings 3,674,167 6,000,000 Balance, end of year $ 7,124,167 $ 6,000,000 Shares of preferred stock ( Series A-2) Balance, beginning of year - - Preferred stock Conversion to common - - Preferred stock issued pursuant to offerings 60,000 - Balance, end of year 60,000 - Preferred stock ( Series A-2) Balance, beginning of year $ - $ - Preferred stock Conversion to common - - Preferred stock issued pursuant to offerings 1,500,000 - Balance, end of year $ 1,500,000 $ - Shares of common stock Balance, beginning of year 103,358,975 93,473,433 Common stock issued pursuant to offerings 4,243,123 3,535,067 Common stock issued pursuant to acquisition - 1,853,421 Common stock issued pursuant to conversion of preferred stock 1,958,336 - Common stock issued pursuant to preferred dividends 30,842 - Common stock issued pursuant to conversion of notes 272,728 - Common stock issued pursuant to conversion of accrued interest 433,073 - Common stock issued pursuant to exercise of options 1,001,492 128,023 Common stock issued pursuant to services 6,368,231 4,369,031 Balance, end of year 117,666,800 103,358,975 Common stock and paid-in capital Balance, beginning of year $ 179,837,253 $ 162,025,024 Common stock issued pursuant to offerings 5,424,368 4,330,295 Common stock issued pursuant to conversion of preferred stock 2,550,000 - Common stock issued pursuant to preferred dividends 38,559 - Common stock issued pursuant to conversion of notes 600,000 - Common stock issued pursuant to conversion of accrued interest 615,291 - Common stock issued pursuant to exercise of options 420,000 7,501 Common stock issued pursuant to services 13,560,580 13,474,433 Balance, end of year $ 203,046,051 $ 179,837,253 Accumulated Deficit Balance, beginning of year $ (181,783,825 ) $ (145,803,014 ) Preferred dividends (1,059,175 ) (212,667 ) Net loss (33,415,604 ) (35,768,144 ) Balance, end of year $ (216,258,604 ) $ (181,783,825 ) Total Stockholders’ Equity (deficit) $ (4,588,386 ) $ 4,053,428 The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (AUDITED) 2025 2024 For the year ended December 31, 2025 2024 Operations: Net loss $ (33,415,604 ) $ (35,768,144 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 4,320,338 4,066,957 Amortization of debt discount 1,113,996 1,211,974 Impairment of intangible assets - 1,118,750 Non-cash equity-based compensation expense 13,560,580 13,474,433 Gain on forgiveness of debt - (400,000 ) Equity-based payment of interest 615,291 - Change in operating assets and liabilities Inventory (464,823 ) (359,612 ) Accounts receivable 523,826 969,662 Prepaid expenses and other assets 104,256 (628,461 ) Deferred charges 223,214 1,231 Deferred revenues 586,776 20,327 Operating lease liabilities (2,345,919 ) (2,101,316 ) Royalty obligation (400,000 ) (800,000 ) Accounts payable and accrued expenses 2,287,010 933,829 Net cash used in operating activities (13,291,059 ) (18,260,370 ) Investing: Purchase of property and equipment (1,932,873 ) (981,428 ) Acquisition, net of cash acquired - (750,000 ) Net cash used in investing activities (1,932,873 ) (1,731,428 ) Financing: Proceeds from issuance of common stock - offerings 5,584,390 4,426,222 Placement cost (335,855 ) (88,426 ) Dividends paid (1,020,616 ) - Proceeds from line of credit - 500,000 Proceeds from issuance of preferred stock-related parties - 1,000,000 Proceeds from issuance of preferred stocks 5,350,000 10,000,000 Proceeds from issuance of preferred stocks 5,350,000 10,000,000 Proceeds from exercise of options 420,000 - Proceeds from issuance of convertible notes 5,250,000 - Principal repayments of notes payable (5,421,861 ) (2,775,756 ) Net cash provided by financing activities 9,826,058 13,062,040 Change in cash and cash equivalents, and restricted cash (5,397,874 ) (6,929,758 ) Cash, cash equivalents and restricted cash at beginning of the year 15,500,495 22,430,253 Cash, cash equivalents and restricted cash at end of year $ 10,102,621 $ 15,500,495 Cash paid during the year for: Interest $ 3,872,214 $ 3,281,597 Taxes - - Supplementary disclosure of non-cash financing activities: Preferred stock conversion to common $ 2,550,000 $ - Substitution of royalty payable to convertible note - 1,000,000 Substitution of consideration payable to convertible note 600,000 3,117,408 Right-of-use assets and operating lease liabilities - 662,698 Accrued dividends payable $ 36,444 $ 212,667 The accompanying notes are an integral part of the consolidated financial statements.

F-6 SKYX Platforms Corp. Notes to Consolidated Financial Statements 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.

Going Concern The Company’s liquidity sources include $ 10.10 million in cash and cash equivalents, including restricted cash of $ 2.05 million held for long-term purposes. The Company also generated net proceeds of $ 29.3 million from the issuance of shares of its common stock during January 2026.

While the Company has a history of operating losses, it has enough liquidity sources as of December 31, 2025, together with net proceeds generated in January 2026, to alleviate substantial doubt about its ability to continue as a going concern.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the Company’s significant accounting policies: Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under the accrual basis of accounting.

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.

F-7 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 could differ significantly from estimates. Reclassifications For comparability, reclassifications of certain prior-year balances were made in order to conform with current-year presentations, such as costs of internal-use software reclassified as intangible assets which were previously included in property and equipment.

Basis of Consolidation The consolidated financial statements include the results of the Company and all its subsidiaries, including SQL Lighting and Fans LLC, Belami, Inc., BEC, CA 1, Inc. (through December 31, 2024), BEC CA 2, LLC, Luna BEC (through December 31, 2024), Inc., and Confero Group LLC. All intercompany balances and transactions have been eliminated in consolidation.

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.

The Company’s cash composition was as follows: SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2025 December 31, 2024 Cash and cash equivalents $ 8,052,621 $ 12,639,441 Restricted cash 2,050,000 2,861,054 Total cash, cash equivalents and restricted cash $ 10,102,621 $ 15,500,495 Restricted Cash The Company issued a letter of credit of $ 2.8 million in September 2022 to use as collateral for certain obligations to one of its lessors which was further reduced to $ 2.0 million during 2025.

The letter of credit was issued by a financial institution and was secured by cash of $ 2.05 million and $ 2.8 million as of December 31, 2025, and December 2024, respectively. Customer Contracts Balances Accounts receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional.

Accounts receivables 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. The Company’s allowance for doubtful accounts was $ 22,668 and $ 12,147 as of December 31, 2025, and 2024, respectively.

The Company determines an allowance for sales returns based upon historical experience. F-8 The Company’s allowance for sales returns was $ 284,469 and $ 242,515 as of December 31, 2025, and 2024, respectively, and is recorded as an accrued 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. The deferred revenues amounted to $ 2,082,622 , and $ 1,495,846 as of December 31, 2025, and 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. Deferred charges are included in prepaid costs and other assets in the accompanying balance sheet. Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out method.

Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand.

SCHEDULE OF INVENTORY December 31, 2025 December 31, 2024 Inventory, component parts $ 2,413,821 $ 1,901,922 Inventory, finished goods 3,136,347 3,183,424 Allowance (1,300,000 ) (1,300,000 ) Inventory-total $ 4,250,168 $ 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.

Furniture and Equipment Furniture and equipment are stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 to 7 years of the respective assets. Expenditures for maintenance and repairs are charged to expense as incurred.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. Intangible Asset Intangible assets were recorded in connection with the acquisition of Belami.

Intangible assets with finite lives, which consist of customer relationships and e-commerce technology platforms, are being amortized over their estimated useful lives on a straight-line basis. Such intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining estimated useful life through undiscounted estimated future cash flows.

If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows.

Estimated future cash flows are based on trends of historical performance and the Company’s estimate of future performance, considering existing and anticipated competitive and economic conditions. F-9 The Company developed various patents for an installation device used in light fixtures and ceiling fans.

Costs incurred for submitting the applications to the United States Patent and Trademark Office for these patents have been capitalized. Patent costs are amortized using the straight-line method over the related 15 -year lives. The Company begins amortizing patent costs once a filing receipt is received stating the patent serial number and filing date from the Patent Office.

The Company incurs certain legal and related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company.

The Company also capitalizes legal costs incurred in the defense of the Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable. Capitalized patent defense costs are amortized over the remaining expected life of the related patent.

The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying value of these assets. Management determined that there was no impairment of the Company’s intangible assets as of December 31, 2025.

Goodwill Goodwill, which was recorded in connection with the acquisition of Belami, is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill represents the excess of the purchase price of Belami over the fair value of its identifiable net assets acquired.

Goodwill is tested for impairment at the reporting unit level. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables.