Good morning. Welcome to SKYX Platforms Corp shareholder conference call. Before we begin, I would like to remind everyone that certain statements made during today's call may be forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. These statements may include expectations regarding the announced merger, its anticipated closing, the expected benefits of the transaction, integration of businesses, anticipated synergies, and the future growth and performance of SKYX. The transactions remains subject to the satisfaction or waiver of applicable closing conditions, and actual results may differ materially from current expectations due to various risks and uncertainties, including those described in SKYX's filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of today, and SKYX undertakes no obligation to update them except as required by law. With that, I will now turn the call over to Rani Kohen, Executive Chairman. Thank you. You may begin.
Thank you. Good morning, everyone. We're very excited about this call and about the merger, SKYX and Deako merger. We will have today our President, Steve Schmidt, former CEO of A.C. Nielsen, with us. We will have Derek Richardson, Founder and CEO of Deako, and we will have Lenny Sokolow, our CEO, and they will each one give some color and their aspects of the deal. Before I move it to Steve Schmidt, I would like to say the following. We are extremely excited about this merger. We strongly believe it's not only game-changing for SKYX and Deako, this is game-changing for the smart home and AI industry. If you ask yourself, how come every car today and all cars are smart, while 90% of homes are not?
The answer is that the complexity, the time-consuming, the rigorous wiring are tremendous barriers to make homes become smart. Technologies are so advanced, while homes are 90% not smart, and globally, it's a higher number. We strongly believe that this SKYX merger with Deako will revolutionize the smart home and AI industry. What we offer here, this offering, eliminates all the hard wiring and weeks of making a home become smart within minutes or hours at maximum. Every home has about 90 outlet boxes, electrical outlet boxes. We aim to control and lead all of those boxes with all-in plug-and-play solutions. While it takes usually several companies to fill those 90 outlet boxes, smart home companies, smoke detectors companies, wall switch companies, wall outlet companies, lighting companies, ceiling fan companies, we offer the entire solution where all our competitors need a few of them to do that.
90 outlet boxes are average per home in America, while we offer an all-in-one solution with all plug-and-play from wall outlet all the way to wall switches, to smart home plug-and-play products and smart lighting, smart ceiling fan, and an entire smart home, all plug-and-play solution. Not only are we the only one that has the entire solution, our competitors that need three or four to make an entire home or 90 boxes smart are all doing it with wires. So those two elements, the plug-and-play solution for the entire home, and the fact that we can offer the entire complete solution for a smart home, I think is game-changing for SKYX and for the smart home industry. We, for six months, had back and forth due diligence. We on Deako on us, and we understood that our platforms are game-changing.
Therefore, Deako's management, led by Derek Richardson, Scott Vertrees, and their board members and lead investor, Paul Jacobs, former CEO and Chairman of Qualcomm, and Marwan Fawaz, former CEO of Nest, all believe that our game-changing platforms are also game-changing for the industry. All the aspects here of this merger are win-win situations. There is going to be huge cost savings because of consolidation of employees and software accountings and general administration. We are going to do 5x on the SKUs that Deako offers today to the builder market with all the leading builders, including D.R. Horton, Toll Brothers, and many others. All of this will provide a lead position to control the outlet boxes in home, all plug-and-play, safe plug-and-play solution, very important to say, safe plug-and-play solution.
By this, whoever owns those 90 outlet boxes, might own the subscriptions, monitoring, data aggregation for our own use, and study to improve AI and our products, as well as open to licensing opportunities. W e are extremely excited after many, many meetings, discussions, and conversations. We are very happy to announce this, and this is just the beginning. We want to remind everyone this is just the beginning. Stay tuned on this because there is a lot more to say on this story. With that being said, I would like to have Steve Schmidt, our President, go over some bullet points and additional highlights. Thank you, Steve.
Rani, thank you very, very much. As Rani said, we are really excited to announce the signing of this merger agreement with the leading U.S. AI smart home Silicon Valley-backed company, Deako. We are aiming to significantly enhance our strategy to lead the smart home, builder, and hotel markets with our combined platform technologies. I strongly believe that our combined plug-and-play platform technologies with vast electronic real estate and endless offerings, including home safety centers, smart home centers, AI intelligence, and much more, will be game-changing for the smart home, building, and hotel industries. Some facts on Deako. In the past five years, Deako has shipped over 32 million units of its technologies, including its smart home plug-and-play switches, and over $26 million in revenue in 2025.
They are a leading technology supplier to over 50 U.S. builders, including D.R. Horton, Toll Brothers, Risewell Homes, Adams Homes, Maronda Homes, Shea Homes, Schumacher Homes, among others, and is expected to fast-track SKYX technologies to the vast builder market. Their lead investors, as Rani talked about, and board members include Paul Jacobs, former Chairman and CEO of Qualcomm, and board member Marwan Fawaz, former CEO of Nest. Additionally, Deako is a smart home AI platform and intelligent lighting company with 20 U.S. and global patents and patents pending applications for plug-and-play advanced smart homes and AI-activated lighting wall switches.
The merger agreement between SKYX and Deako will enable SKYX to address, from A to Z, the smart electronic real estate of electrical outlet boxes in homes and buildings, including wall outlets, wall switches, ceiling outlet boxes for smart homes and safety products, lighting, ceiling fans, smoke detectors, among others, all with the advanced and smart home plug-and-play solutions. Most smart home solutions today require, as Rani talked, time-consuming and very costly wired installations and address only part of the A to Z opportunity. The SKYX/Deako merger is aiming to facilitate an entire A to Z solution, all plug-and-play for advanced smart home AI platforms and products. As previously stated, the merger is expected to fast-track SKYX's technologies and products into Deako's vast builder market footprint of over 50 U.S. builders, including those named above.
Additionally, this merger will open the door for Deako's products into SKYX products, including Marriott and European Hotels, Miami's $4 billion smart city, among others. This merger is expected to increase Deako's SKU count to builders, hotel, and pro markets fivefold. Additionally, this merger is expected to provide deployment opportunities of millions of combined products into the builder, hotel, and pro market, and future recurring revenue opportunities from plug-and-play products, interchangeability, AI services, monitoring, subscriptions, licensing, among others. This merger will enable significant cost-saving synergies, including overhead consolidation in software, accounting, general administration, sourcing, efficient optimization, and other benefits. This merger will expand the collective patent portfolio, where SKYX has over 100 patents and pending applications, and Deako with 20 patents and patents pending applications to over 120 patents and patents pending applications related to platforms, smart home, AI, and plug-and-play products.
Finally, I have to say in closing, that working with Rani over these many years, I need to emphasize that this merger and its growth potential really demonstrate how Rani's vision and business acumen are as unique as his inventing capabilities. Great job. With that, let me turn it back to Rani.
Thank you very much, Steve, and we will now go to Derek Richardson, Founder and CEO of Deako.
Very excited to join Rani, Lenny, and the entire SKYX team. I'm Derek Richardson, Founder and CEO of Deako. Before starting Deako, I was a sales leader at BlackBerry and Cypress Semiconductor. I'd first like to mention that all of us at Deako, myself included, along with our board members, Paul Jacobs, the former CEO and Chairman of Qualcomm, Marwan Fawaz, the former CEO of Nest, and our Executive Chairman, Scott Vertrees, are all very excited about our merger with SKYX and its game-changing platform technologies. That includes its all-in-one smart home and AI platform technology, as well as its plug-and-play ceiling outlet receptacle, which was voted in by ANSI, NEMA, and the NFPA's National Electrical Code based on its significant safety benefits. We view our merger with SKYX much like the way PayPal started. Elon Musk and Peter Thiel decided to merge and become PayPal instead of competing.
With the SKYX-Deako merger, we're not competing. We're complementing each other. Deako leads with our plug-and-play smart wall switch platform technology, while SKYX leads with its game-changing plug-and-play ceiling platform technologies. We see tremendous opportunities in combining our patented platform technologies. Here are just some of those opportunities. Deako is a leading technology supplier to the builder market, with over 50 U.S. builders, including D.R. Horton, Toll Brothers, Risewell Homes, Adams Homes, Maronda Homes, Shea Homes, and Schumacher Homes among them. In the past five years, Deako has shipped over 32 million units of our technology, including our smart home plug-and-play wall switches, with over $26 million in revenues in 2025. The merger is expected to fast-track SKYX's technologies and products into Deako's vast builder market footprint of over 50 U.S. builders, including those named above.
It will also open the door for Deako's products into SKYX's projects, including Marriott and European Hotels and Miami's $4 billion smart city development. The SKYX-Deako merger is expected to increase Deako's SKU count to the builder, hotel, and pro markets fivefold. Most smart home solutions today require time-consuming and costly wired installation and address only part of the A-to-Z opportunity. The SKYX-Deako merger aims to deliver an entire A-to-Z solution, all plug-and-play for advanced smart home AI platforms and products.
Thank you, Derek. We very much appreciate, and Derek Richardson will lead our growth, including builder, hotel, and pro segments. With that being said, I would like to have Lenny Sokolow address some financial aspects here, and we will go afterwards with a few additional comments and Q&A to come after. Lenny, please go with your highlights.
Thank you. Thank you very much, Rani. We think that the opportunity for this merger is exceptional, and we have a huge opportunity with respect to the two companies because there's a lot of complementary and collective benefits to the merger, which we'll realize in terms of the bottom line. We're excited about that, and we're excited about the teams and the collective teams together. It gives us a huge dimension and a huge background and level of experience. Just to reiterate, the consideration that SKYX is issuing is about 25 million shares, and they're subject to a two-year lockup and leak out agreement. This is really comprised of a one-year full lockup, in addition to a 9 to 12 months of a leak out. Overall, these shares are subject to a Rule 10b5-1 trading plan.
When the dust settles in the post-merger, the SKYX shareholders will own 84.4% of the company, and the Deako shareholders and their lender will collectively own 15.6%. In addition, SKYX is paying Deako's lender a payment of $4 million by closing and will issue a note of $8.5 million, with $2.5 million getting paid in Q1 of 2027 and the remaining $6.25 million in Q4 of 2027. That gives you the highlights and more detail in our filings, and we look forward to following up with questions and answers. Again, I think that this merger demonstrates Rani's vision, his perseverance on this project and the focus and his ability to creatively put together a plan and to actually be the leader in the smart home and AI market for homes, buildings, and hotels.
I think this is an example of what we've seen and witnessed over these years, and it's a continuation. This is not the culmination, but only the beginning of this unbelievable, really game-changing, and not to use this overused word, but very disruptive approach by two unique companies that absolutely complement each other in this space. With that, I'd rather turn this over to Rani, and then we could go into questions and answers.
Thank you, Lenny. Again, more aspects of this deal. We also see a tremendous validation to what we put together so many years. If you think about it, Qualcomm is a world-leading company when it comes to platforms. I want to give credit to Barry Sine, that over a year, put together and said, "SKYX can be the Qualcomm of smart home." Barry did a really nice report, analyst report, great analyst, and he said it. We never exchanged a word about this. We were talking to, and what is very interesting to know, not a lot of people know, but what Qualcomm did and what Paul Jacobs really did, he is the person that approached Steve Jobs and told him cell phones is not only to talk, cell phones are platforms, that you can have apps and much more.
Really that is how the iPhone and the platform happened, okay? He brought it up when he saw our platform and the potential of electronic real estate we have there, what homes can do, and people that know our presentation, for years we put the Apple phone with separate apps and then on the phone all consolidated and all in one personal, I would say, personal platform. We provide home platforms, room platforms, and we have five times more electronic real estate than an iPhone. Just imagine what could come, as Steve mentioned in his quote today, there is endless offerings that we can come with over their software and electronic real estate that can provide us to enable so much in AI and home safety. Stay tuned on home safety, because safety was always the main foundation of our company.
Every invention we have has to have the safety aspect and a large addressable TAM, addressable market. Continuing with this and getting to that point with the merger of such a disruptive company with such a large market share, like Deako, with their smart AI and switches and plug-and-play and the same concept that we have, they are on the wall and we are on the ceiling. This is, as I said in the beginning, I strongly believe, and we strongly believe, I think both teams of Deako and SKYX, is going to be game-changing not only for us, but game-changing down the road to the smart home industry.
It provides validation to our patent portfolio, to our disruptive technologies, very strong patents we have here, U.S. and global, and really opens the door to recurring revenues, AI services, monitoring subscriptions, and also opens the door for, as I mentioned earlier, the consolidation, cost savings on software teams, okay? Also enhancing our path to cash flow positive. The terms of the deal really speaks from themselves how much value we bring for SKYX and the shareholders. We are very excited at this moment. There is a lot more we can elaborate, but I think we said enough.
There is a press release there with some detailed information and very nice quotes from Paul Jacobs, former CEO of Qualcomm, and from Marwan Fawaz, former CEO of Nest, and our President, Steve Schmidt, former CEO of A.C. Nielsen, as well as Derek Richardson, CEO of Deako, and the person who is going to lead our growth in several segments here. With that being said, we are happy to take some Q&A if people in this early morning are around. We welcome questions. Thank you.
If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Joe Gomes with Noble Capital. Please proceed.
Good morning. Thanks for taking my questions.
Thank you. Good morning, Joe. How are you?
Good. I'd like to start off, maybe just if you could get a little bit more of the financial details here. I don't know if you can provide what kind of adjusted EBITDA Deako did in 2025 on that $26 million of revenue? What was the year-over-year growth for revenue, adjusted EBITDA? What kind of number are we talking about here in terms of potential synergies?
We did not publish the numbers yet. Deako for the past five years is a growing company, emerging company, with over 50 builders, including some of them among the biggest in the world and in the country. Very good reputation to their product and reliability of the product to get to those builders, maintain those accounts for so many years speaks for itself. The consolidations are many. We're not disclosing the numbers. We're just starting here today, but we have great plans to enhance our sales significantly without even increasing sales team. Because if you think about it, Deako's already there sitting with the same buyers that buy smart wall switches and wall outlets, receptacles, the same buyers buy other smart home products, smoke detectors, light fixtures, ceiling fans. Those are the electrical buyers for those builders. We don't need to grow our sales team.
As we mentioned, the SKU count is going to be 5x. That's quite significant. We see those opportunities that not only will bring much more revenue to SKYX with, we believe, strong margins and will help us with our process and progress to getting to cash flow positive as well. But the consolidations will be significant, and the savings will be significant, in software and accounting, and administration, and other areas. But the good news is with the sales, we don't need to increase. They're already there in the places, and we're already in the hotel places, so this is really a great synergy.
As Steve mentioned earlier, they can put our products, obviously, in those mass builders, leading builders, and we can also take their product through the hotels we're doing, the smart communities, the $4 billion smart city in Miami, another smart community we're doing in North Carolina. We're doing other projects around the country that we announced. The synergies are there, and the business is just going to grow with not only not growing our overhead, we believe we're going to reduce our overhead significantly, and those results are going to show in the near future.
Okay, thanks for that. You talked about, in the beginning, Rani, the complexity and the wiring. Now with the merger, you don't have to switch out the wiring. Are you saying, in the past, Deako was kind of just for new construction, but now with the merger with you guys, we'll be able to go back to the retrofit market also, so significantly expanding that addressable market? Just trying to clear that. Is that what you're saying?
I'll tell you, even more than that, because one of the things that Deako has, they have an aftermarket because it's a plug-and-play. They have an aftermarket upgrade division. We can tell you that part of our diligence, we were very impressed how when even a builder doesn't want to invest in too many switches at the beginning, he decides to do entire home with Deako switches and wall outlets and everything else. But on the smart switches, they'll go only with a few. But what we saw, very impressive with very high gross margins, how the Deako sales force go to those homeowners and say, "Hey, you can buy a 10-pack, a 20-pack, and make your entire home smart switches.
All you need to do is plug and play." They ship those 10, 20 switches, and within 10 minutes, you plug it in, all of them, and you go to your app, set it, and your entire home is controlled in the app. So they already have this model, and now they can use the same sales force they have to do the upgrades with our systems, okay? Because once you have the receptacle, the way we work, our upgrades can be significant, starting with, for example, like what's popular now, we see great results with the Smart Turbo Heater we have, and we're coming with adddtional models for builders and retail for this coming winter.
We're going to expand our thing, and this is going to offer much more upgrade opportunities in the market. Deako sales team are really impressive, what Derek Richardson put together there. We're really impressed about their abilities, their penetration, and now they're just going to have much more SKUs, and larger revenues and gross margins.
Okay, great. Thanks for that clarification. I will get back in queue.
Thank you.
Our next question is from Barry Sine with Litchfield Hills Research. Please proceed.
Hey, good morning, everybody, and congratulations. Very exciting transaction. Derek, on your website, you talk about how builders actively steer clients away from smart home technology due to a number of things, including high support costs. I know that personally. Just yesterday, I wrote a $3,000 check to a Lutron installer because the computer in my Lutron system failed, and they had to spend three hours manually reprogramming it. I certainly understand firsthand the value of your technology. A question on it, though, what does artificial intelligence in a smart home system do? What features? What will it benefit the homeowner?
First of all, Barry, thanks. I want to tell you about two things. Derek is on the West Coast and recorded last night his comments.
Okay.
He is going to be and he had a crazy day, but we wanted him to join in, and we did not want to kill his day. That is first and foremost. I can answer part of our diligence, your question. Before I do, I gave you credit earlier and, a year ago, way before we met Deako, I talked to their team and board members. You did really see the equivalence of platforms, what Qualcomm did, and you put a very nice analysis report. We have really great coverage. We are really blessed with really good coverage by several banks, Lake Street and Roth and many others here that we have, and all of them really do a great job. I give you all the credit in the world. You did emphasize, and that was your vision.
I can tell you that that vision was shared even with Paul Jacobs himself, and that is really what helped us and why this is why he invested in Deako, and obviously, SKYX Platforms has a much broader platform and much more electronic real estate. We want to give you credit. You made it early. You thought it firstly. You probably canceled everything, and you deserve to be on this call. Thank you for this, Barry. To answer your question, with AI today, there are so many things you can do with wall switch, with electronic real estate at homes, and it is going to synchronize with our AI offerings. Some of the things you have, you can map a house, how many people are there. Today, AI can tell you, with sensors, the height, the size of the person from his walk, the age.
The estimate of the age. It can identify a baby compared to a dog. They can identify an intruder, something that is not normal and active and normal action in homes. There are so many things and habits you have, and when you walk through a certain corridor, they know you go to a certain room, and suddenly it is not even motion sensors anymore. The AI knows you are going there, so the light is going to wait on for you. It is so much really to elaborate on, and as Steve said, and it is quoted there, if you see Steve Schmidt's quote, he said, "Endless offerings," because there is so much we are doing more with this, both companies here, that stay tuned on this, but there is much more that we can elaborate.
Your question is really good, and I am sure that next time we will have more of Deako's members live. We will probably do it after markets. It is going to be easier for them, but we had to do it pre-market as we signed yesterday. Great question, Barry.
Thank you for the plug, Rani .
People should read your report. I give you all the credit. People on the phone, they should read your report. You acted like a fortune teller, but it was such a long shot. Some people laughed. I give you all the credit in the world. You covered them, and you told us. I used to cover them in the beginning before they became what they became, and I saw this. We are very happy, and you understand our excitement here and what we are doing and where we are aiming to go and leading this smart home and AI industry. Thanks again for this, for your belief.
Thank you. A logistics question. I do not know if this is for Lenny Sokolow. Just the timing on when you expect to close this transaction, and much more importantly, both companies, you look at their websites, you look at retailer websites, have extensive product lines, great distribution, but they are separate product lines marketed separately. How long is it going to take to get to an integrated product set that you can go out to hotels, home builders, the Amazons, the Home Depots of the world?
Another good question. From your first question, I want to say I am sorry about your $3,000 spend. This time you did not know it is happening, this merge, so it is okay. Next time, we will help you there. What we are doing now is actually, we are admins both sides to close this, and it is really definitive, and it is very hard, that agreement. So we are already working like we are partners. There are certain procedures we need to go around a few weeks, not more than this. We believe by the end of this month, and latest early October, we will be closed. The good news, we are already working parallel on those offerings, combined offerings to the builder market, to the hotel market, and to other pro segments.
Really, we should have something, an offering together even next month already to show a catalog with all the versatility and variety and an online catalog with all those products.
Wow, very fast. All right. Again, thank you for taking my questions, Rani.
Okay, thank you. We always joke as we see it behind the scenes and we say it is like, if they have, if Deako invented the best flying sandals or something so unique. Now they go to, I do not know, Bloomingdale's or Saks Fifth Avenue or Nordstrom, and now they can go with Nike and boots and heel shoes and tuxedo shoes and kids shoes and soccer shoes. So the variety is expanding on the same leading companies. We look forward to that catalog to come to fruition.
Our next question is from Jacob Stephan with Lake Street Capital Markets. Please proceed.
Hey, guys. Congrats on the merger here. Seems like a nice transaction. I guess first, just for me, when looking at the hospitality segment as a whole, what is the demand for the smart switch type products within your current kind of Marriott B2B partners?
I can tell you, and good morning, Jacob, we can tell you that there is great demand. Everything is moving towards smart and AI now. As I explained, I do not know if you were in the beginning of the call, but the technology in every aspect of our life is so developed. So game-changing on a day-to-day basis, and the only place in the world that is stuck, really, the only place, is homes and buildings and hotels. The main reason is the complexity, the high cost, the rigorous installations. It is a major barrier that we believe we are solving and bringing together. The demand is there. It is just putting the packages together, and for hotels, time saving is significant.
With renovations that most hotels go through every seven years, we can help complete a renovation like this within days compared to months or a one-year renovations in big hotels or two years in Vegas-sized hotels. We can do with our combined technology within weeks. It is quite significant. Not only the product is way more advanced, what we have, much easier to use. By the time saving, it is so much faster and the time saving, that it is a significant labor saving to hotels and builders. If you think about it, we really hit a 10 on safety, a 10 on time saving, and 10 on advancing, and a 10, I believe, on cost saving. That is quite significant to have if you think about it.
Got it. Maybe just a second one for me. Looking at their website, it looks like they have several different kind of product bundles. Obviously, your strategy is either direct or through one of your portfolios of websites. Is there anything that Deako does that you guys are trying to bring in-house with regards to product distribution or even marketing? Thanks.
To our e-commerce?
Yeah, or just bundling products or any of their distribution lines that they have?
Yeah, we have many thoughts.
—that maybe you are not using.
We have many thoughts, and we will definitely do some online, using our e-commerce platform. We will definitely do specialty websites, and as we said, we are focusing on creating a B2B for the pro segment, with our e-commerce platform, and definitely the Deako plug-and-play products, smart switches, and AI-enabled and intelligence were going to be part of this combined with our products. T here is definitely synergies we can see. We are already in Home Depot, and other places like this, and we are vendors, and now we are merged together here. W e will definitely open doors for them, and they are definitely going to open doors for us, and this is really two active companies with disruptive platform technologies merging together. This is why we are very excited on numerous of opportunities we see around us, and hopefully very soon we can talk about some of them.
I appreciate it, guys. Congrats.
Thank you.
There are no further questions at this time. I would like to turn the floor back over to Rani for closing comments.
Thank you. It was great having those questions. Again, credit to Barry. It is unbelievable how he said a year ago out of the blue, "SKYX reminds of Qualcomm, the platform." Here we are having really the leaders of that company, former leaders and CEO and chairman, Paul Jacobs and his team, having the same thoughts. We want to thank everyone for their time. We are going to go now and close this deal and try to make things happen. There is a lot of hard work in front of us, but we are all very excited here. Thank you very much. Everyone, have a great remaining of the day. Thank you.
Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.