SKYX SKYX Platforms Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from         to         

 

Commission File Number: 001-41276

 

SKYX PLATFORMS CORP.

(Exact name of registrant as specified in its charter)

 

Florida		46-3645414
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

2855 W. McNab Road

Pompano Beach, Florida 33069

(Address, including zip code, of principal executive offices)

 

(855)759-7584

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, no par value per share		SKYX		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

 

As of May 1, 2024, the registrant had 100,032,804 shares of common stock, no par value per share, issued and outstanding.

 

 

 

SKYX PLATFORMS CORP.

 

Form 10-Q

 

TABLE OF CONTENTS

 

	PART I. FINANCIAL INFORMATION
	Cautionary Note Regarding Forward Looking Statements
Item 1	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations and Comprehensive Loss	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4	Controls and Procedures	22
	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	23
Item 1A	Risk Factors	23
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3	Defaults Upon Senior Securities	23
Item 4	Mine Safety Disclosures	23
Item 5	Other Information	23
Item 6	Exhibits	24
Signatures		25

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “Form 10-Q”) of SKYX Platforms Corp. (the “Company,” “we,” “us,” or “our”) contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, outlook, and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “aim,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors, many of which have outcomes that are difficult to predict and may be outside our control, that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

 

	●	our ability to successfully launch, develop additional features and achieve market acceptance of our smart products and technologies, access and integrate our products and technologies with third-party platforms or technologies, respond to rapidly changing technology and customer demands, and compete in our industry;
	●	our ability to successfully manage and grow the operations of Belami, Inc. (“Belami”) with our business;
	●	our ability to expand and successfully manage our operations, including managing our business transformation in connection with evolving our business strategy to focus on smart products and technologies and integrating new lines of business;
	●	our ability to raise additional financing to support and continue our operations as needed;
	●	our ability to comply with the terms of, and timely repay, our current debt financing;
	●	our reliance on a limited number of third-party manufacturers and suppliers and our ability to successfully reduce our production costs;
	●	our potential dependence upon a limited number of customers and/or on contracts awarded through competitive bidding processes;
	●	any downturn in the cyclical industries in which our customers operate;
	●	our ability to acquire other businesses, license rights, form alliances or dispose of operations when desired;
	●	our ability to comply with regulations relating to applicable quality standards;
	●	our ability to maintain, protect and enhance our intellectual property and retain rights to use intellectual property owned by third parties;
	●	the potential outcome of any legal proceedings;
	●	compliance with various tax laws and regulations, including income and sale tax;
	●	our ability to successfully sell and distribute our products and technologies;
	●	our ability to attract and retain key executives and qualified personnel;
	●	guidance provided by management, which may differ from our actual operating results;
	●	our ability to successfully manage our planned development and expansion, including the additional costs of being a public company;
	●	Our estimated total addressable market;
	●	our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
	●	the potential impact of unstable market and economic conditions on our business, financial condition and stock price, including the effects of governmental regulations, geopolitical conflicts, including the Israel-Hamas war and potentially deteriorating relationships with China, inflation, labor shortages, supply chain constraints and shortages, including availability of affordable electronic microchips, instability in the global banking system and the possibility of an economic recession;
	●	the potential impact of cybersecurity breaches or disruptions to our information systems, including our cloud-based infrastructure;
	●	the potential impact of natural disasters and other catastrophic events;
	●	risks related to ownership of our common stock; and
	●	the potential impact of anti-takeover and director and officer liability provisions in our charter documents and under Florida law.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors, including unpredictable or unanticipated factors that we have not discussed in this Form 10-Q. Investors should refer to the heading “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of other important factors, many of which are outside of our control, that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. Considering the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change; however, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by U.S. federal securities laws. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

 

 

Part I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

SKYX PLATFORMS CORP.

Consolidated Balance Sheets

 

		(Unaudited) March 31, 2024				(Audited) December 31, 2023
Assets
Current assets:
Cash and cash equivalents		$	14,146,785			$	16,810,983
Restricted cash			2,750,000				2,750,000
Account receivable			3,932,008				3,384,976
Inventory			3,777,724				3,425,734
Deferred cost of revenues			245,734				224,445
Prepaid expenses and other assets			630,077				721,717
Total current assets			25,482,328				27,317,855
Long-term assets:
Furniture and equipment, net			459,929				436,587
Restricted cash			2,892,878				2,869,270
Right of use assets			21,360,642				21,214,652
Intangibles, definite life			7,627,472				8,141,032
Goodwill			16,157,000				16,157,000
Other assets			204,807				204,807
Total long-term assets			48,702,728				49,023,348
Total Assets		$	74,185,056			$	76,341,203
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses		$	12,537,437			$	12,388,475
Notes payable			5,865,829				5,724,129
Operating lease liabilities			2,160,938				1,898,428
Royalty obligation			800,000				800,000
Consideration payable			750,000				730,999
Deferred revenues			1,616,038				1,475,519
Convertible notes, related parties			600,000				825,000
Convertible notes			—				350,000
Total current liabilities			24,330,242				24,192,550
Long term liabilities:
Accounts payable and accrued expenses			950,358				744,953
Notes payable			764,333				1,016,924
Consideration payable			—				3,038,430
Operating lease liabilities			22,161,824				22,267,558
Convertible notes			9,231,706				5,758,778
Convertible notes related parties			350,000				—
Convertible notes			350,000				—
Royalty obligations			2,900,000				3,100,000
Total long-term liabilities			36,358,221				35,926,643
Total liabilities			60,688,463				60,119,193
Stockholders’ Equity:
Common stock and additional paid-in-capital: $0 par value, 500,000,000 shares authorized; and 97,096,897 and 93,473,433 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			168,975,808				162,025,024
Accumulated deficit			(155,479,215	)			(145,803,014	)
Accumulated other comprehensive loss			—				—
Total stockholders’ equity			13,496,593				16,222,010
Total Liabilities and Stockholders’ Equity		$	74,185,056			$	76,341,203

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

SKYX Platforms Corp.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

 

		2024				2023
		For the three months ended March 31,
		2024				2023
Revenue		$	18,977,821			$	10,025
Cost of revenues			13,399,771				1,468
Gross profit (loss)			5,578,050				8,557
Selling and marketing expenses			6,526,816				1,299,859
General and administrative expenses			7,939,581				5,948,346
Total expenses, net			14,466,397				7,248,205
Loss from operations			(8,888,347	)			(7,239,648	)
Other income / (expense)
Interest expense, net			(787,854	)			(730,621	)
Gain on extinguishment of debt			—				—
Other income			—				—
Total other expense, net			(787,854	)			(730,621	)
Net loss			(9,676,201	)			(7,970,269	)
Other comprehensive loss:
Unrealized loss on debt securities			—				57,494
Net comprehensive loss attributed to common stockholders		$	(9,676,201	)		$	(7,912,775	)
Net loss per share - basic and diluted		$	(0.10	)		$	(0.10	)
Weighted average number of common shares outstanding – basic and diluted			95,091,003				82,965,182

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

SKYX Platforms Corp.

Consolidated Statements of Stockholders’ Equity

(Unaudited)

 

		2024				2023
		For the three months ended March 31,
		2024				2023
Shares of common stock
Balance, beginning of period		$	162,025,024			$	114,039,638
Balance, beginning of period			93,473,433				82,907,541
Common stock issued pursuant to offerings			2,733,361				—
Common stock issued pursuant to services			890,103				282,188
Balance, end of period			168,975,808				122,573,318
Balance, end of period			97,096,897				83,189,729
Common stock and paid-in capital
Balance, beginning of period		$	162,025,024			$	114,039,638
Common stock issued pursuant to offerings			3,655,755				—
Common stock issued pursuant to services			3,295,029				2,963,702
Debt discount			—				5,569,978
Balance, end of period		$	168,975,808			$	122,573,318
Accumulated Deficit
Balance, beginning of period		$	(145,803,014	)		$	(106,070,358	)
Net loss			(9,676,201	)			(7,970,269	)
Balance, end of period		$	(155,479,215	)		$	(114,040,627	)
Accumulated other comprehensive loss
Balance, beginning of period		$	—			$	(62,147	)
Unrealized gain on debt securities			—				57,494
Balance, end of period			—				(4,653	)
Balance		$	16,222,010			$	7,907,133
Net loss			(9,676,201	)			(7,970,269	)
Total stockholders’ equity		$	13,496,593			$	8,528,038
Balance		$	13,496,593			$	8,528,038

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

SKYX Platforms Corp.

Consolidated Statements of Cash Flows

(Unaudited)

 

		2024				2023
		For the three months ended March 31,
		2024				2023
Cash flows from operating activities:
Net loss		$	(9,676,201	)		$	(7,970,269	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,060,571				497,373
Amortization of debt discount			228,499				143,257
Non-cash equity-based compensation expense			3,295,029				2,963,702
Change in operating assets and liabilities:
Inventory			(351,990	)			(178,780	)
Accounts receivable			(547,032	)			—
Prepaid expenses and other assets			91,640				(45,501	)
Deferred charges			(21,289	)			—
Deferred revenues			140,519				—
Operating lease liabilities			(505,920	)			(171,963	)
Accretion operating lease liabilities			—				245,009
Royalty obligation			(200,000	)			—
Accounts payable and accrued expenses			303,866				398,183
Net cash used in operating activities			(6,182,308	)			(4,118,989	)
Cash flows from investing activities:
Purchase of debt securities			—				(136,033	)
Purchase of property and equipment			(53,647	)			(306	)
Payment of patent costs and other intangibles			—				(33,559	)
Net cash used in investing activities			(53,647	)			(169,898	)
Cash flows from financing activities:
Proceeds from issuance of common stock- offerings			3,655,755				—
Proceeds from issuance of convertible notes			—				10,350,000	)
Principal repayments of notes payable			(60,390	)			(893	)
Net cash provided by financing activities			3,595,365				10,349,107
Change in cash, cash equivalents and restricted cash			(2,640,590	)			6,060,221
Cash, cash equivalents, and restricted cash at beginning of period			22,430,253				9,461,597
Cash, cash equivalents and restricted cash at end of period		$	19,789,663			$	15,521,818
Supplementary disclosure of non-cash financing activities:
Substitution of consideration payable to convertible notes		$	3,117,408			$	—
Debt discount			—			$	5,569,978
Right-of-use assets and operating lease liabilities			662,698				—
Cash paid during the period for:
Interest		$	641,647			$	711,648

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

SKYX Platforms Corp.

Notes to Consolidated Financial Statements

(Unaudited)

 

NOTE 1 ORGANIZATION AND NATURE OF OPERATIONS

 

SKYX Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004.

 

The Company maintains offices in Sacramento, California, Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, and Guangdong Province, China.

 

The Company has a series of advanced-safe-smart platform technologies. The Company’s first-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged-in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years the Company has expanded the capabilities of its power-plug product, to include its second generation advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, Bluetooth Low Energy and voice control. It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night light, light color changing and much more. The Company’s third-generation technology is an all-in-one safe and smart-advanced platform that is designed to enhance all-around safety and lifestyle of homes and other buildings.

 

Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties.

 

Going Concern

 

The Company’s liquidity sources include $ 19.7 million in cash and cash equivalents, including restricted cash of $5.6 million, and $ 1.2 million of working capital as of March 31, 2024. However, the Company has a history of recurring operating losses and its net cash used in operating activities amounted to $6.2 million and $4.1 million during the three months ended March 31, 2024 and March 31, 2023, respectively. The Company has also generated net cash provided by financing activities of $3.6 million and $10.3 million during the three months ended March 31, 2024 and 2023, respectively. Accordingly, the Company’s management cannot ascertain that there is no substantial doubt that it will be able to meet its obligations as they become due within one year after the date that its financial statements are issued.

 

Management intends to mitigate such conditions by supporting its continued growth, decreasing its cash used in operating activities through increased revenues and increased margins from products sold to large retailers and its internet portals, and to the extent necessary, generate cash provided by financing activities through its at the market (“ATM”) offering or other equity or debt financing means.

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional disclosures and accounting policies.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

 

Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates.

 

Reclassifications

 

For comparability, reclassifications of prior-year balances were made to conform with current-year presentations, such as sales and marketing expenses which were previously included in selling, general, and administrative expenses in the 2023 comparable period.

 

Basis of Consolidation

 

The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28 2023. All intercompany balances and transactions have been eliminated in consolidation.

 

8

 

 

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 EQUIVALENTS AND RESTRICTED CASH

		March 31, 2024				December 31, 2023
Cash and cash equivalents		$	14,146,785			$	16,810,983
Restricted cash			5,642,878				5,619,270
Total cash, cash equivalents and restricted cash		$	19,789,663			$	22,430,253

 

Restricted Cash

 

The Company issued a letter of credit of $2.8 million in September 2023 to use as collateral for certain obligations to one of its lessors. The letter of credit was issued by a financial institution and was secured by cash of $2.8 million as of March 31, 2024 and December 31, 2023. Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed $750,000 in an escrow account. Furthermore, the Company secured a line of credit of $2.0 million with cash of the equivalent amount.

 

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. As of March 31, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $54,987 and $54,987, respectively. The Company determines an allowance for sales returns based upon historical experience. As of March 31, 2024, and December 31, 2023, the Company’s allowance for sales returns was $185,501 and $182,584, respectively and is recorded as accrued expenses in the accompanying consolidated financial statements.

 

The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 1,616,038 and $1,475,519 as of March 31, 2024 and December 31, 2023, 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 related inventory, freight, and sales charges. The deferred charges amounted to $ 245,734 and $224,445 as of March 31, 2024 and December 31, 2023, respectively.

 

Inventory

 

Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand.

 SCHEDULE OF INVENTORY

		Match 31, 2024				December 31, 2023
Inventory, component parts		$	2,944,213			$	2,230,252
Inventory, finished goods			2,133,511				2,495,482
Allowance			(1,300,000	)			(1,300,000	)
Inventory-total			3,777,724				3,425,734

 

The Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period of time. The Company tracks inventory as it is repurposed, disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $1.3 million as of March 31, 2024 and December 31, 2023.

 

GE Agreements

 

The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products.

 

	●	A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement under similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of the Company’s Standard and Smart plug-and-play products set forth in a statement of work in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work.
	●	A letter agreement dated November 28, 2023. The agreement expires on December 15, 2027 and includes a repayment plan relating to certain amounts due under the U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, the Company was required to pay a revised royalty payment obligation of $2.7 million in the aggregate (the “Royalty Payment”), payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and an additional obligation equal to either a $1 million convertible promissory note, subject to agreement on terms, or otherwise $1.4 million payable in 2027. As of March 31, 2024, the Company owed $3.7 million in royalty payment obligations. On April 11, 2024, the Company amended the payment arrangement and issued a convertible promissory note, (the “GE Note”), for the additional obligation, thereby reducing the payment obligations by $400,000. A detailed description of the GE Note is set forth in Note 7 below.

 

9

 

 

Loss Per Share

 

Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stocks, common stock equivalents and potentially dilutive securities outstanding during each period.

 

The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the three-month ended March 31, 2024, and 2023, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented.

 

The Company had the following anti-dilutive common stock equivalents as of March 31, 2024, and March 31, 2023:

 SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS

		March 31, 2024				March 31, 2023
Stock warrants			2,049,147				2,063,522
Stock options			36,156,476				33,114,250
Convertible notes			5,487,260				3,536,668
Preferred stock			–				880,400
Total			43,692,883				39,594,840

 

Recently Issued Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.

 

NOTE 3 FURNITURE AND EQUIPMENT

 

Furniture and equipment consisted of the following:

 SCHEDULE OF FURNITURE AND EQUIPMENT

		March 31, 2024				December 31, 2023
Machinery and equipment		$	391,895			$	282,799
Computer equipment			6,846				6,846
Furniture and fixtures			36,059				36,059
Tooling and production			672,509				642,509
Software development costs			219,076				109,096
Leasehold improvements			30,553				30,553
Total			1,356,938				1,107,862
Less: accumulated depreciation			(897,009	)			(671,275	)
Total, net		$	459,929			$	436,587

 

Depreciation expense amounted to $ 30,305 and $22,141 during the three-month ended March 31, 2024 and 2023, respectively.

 

NOTE 4 INTANGIBLE ASSETS AND GOODWILL

 

Intangible assets consisted of the following:

 SCHEDULE OF INTANGIBLE ASSETS

		March 31, 2024				December 31, 2023
Patents and trademarks (useful life 15 years)		$	931,831			$	1,040,927
Customer relationships (useful life 7 years)			4,500,000				4,500,000
E-commerce technology platforms (useful life 4 years)			3,900,000				3,900,000
Total			3,900,000				3,900,000
Less: accumulated amortization		$	(1,704,359	)			(1,299,895	)
Total, net		$	7,627,472			$	8,141,032

 

Amortization expense on intangible assets amounted to $ 513,559 and $14,307 during the three-month ended March 31, 2024 and 2023, respectively.

 

The following table sets forth the estimated amortization expense for the next five years:

 SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE

Nine months ended December 31, 2024		$	1,269,150
2025			1,673,613
2026			1,673,613
2027			1,511,113
2028			698,613
2029			698,613

 

10

 

 

NOTE 5 DEBTS

 

The following table presents the details of the principal outstanding:

 SCHEDULE OF DEBT

		March 31, 2024				December 31, 2023				APR at March 31, 2024			Maturity		Collateral
Convertible Notes (b,c)			14,642,909				11,525,000			6.00 – 10.00	%		September 2023-March 2026		Substantially all company assets
Notes payable to financial institutionsa)			6,233,624				6,348,104			7.93-8.5			August 2024-August 2026		Inventory, accounts receivable, cash
Notes payable to Belami sellers			251,516				247,927			4.86	%		April 2024		–
SBA-related loans			145,022				145,022			3.75	%		April 2025-November 2052		Substantially all Company assets
Total		$	21,273,071			$	18,266,053
Unamortized debt discount			(4,410,702	)			(4,591,222	)
Debt, net of Unamortized debt Discount			16,862,369				13,674,831

 

SCHEDULE OF INTEREST EXPENSE

		For the three-month period ended
		March 31, 2024				March 31, 2023
Interest expense		$	787,854			$	730,621

 

As of March 31, 2024, the expected future principal payments for the Company’s debt are due as follows:

 SCHEDULE OF FUTURE PRINCIPAL PAYMENTS

Nine-months ended December 31, 2024		$	6,334,514
2025			4,086,855
2026			10,582,955
2027			3,040
2028 and thereafter			134,392
Total		$	21,273,071

 

 

	(a)	The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75% per year.
	(b)	Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6% through December 2023 and 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $3 to $15 per share.   During 2023, the Company issued convertible promissory notes for $10.4 million. As an inducement to enter the financing transactions, the Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet. The Company recognized $228,499 as amortized debt discount during the three months ended March 31, 2024, and it is reflected as interest expense in the accompanying unaudited consolidated statement of operations. Only the convertible promissory notes issued during fiscal 2023 are secured by substantially all of the assets of the Company.
	(c)	On March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers at any time at $3.00 per share of our common stock.

 

11

 

 

NOTE 6 OPERATING LEASE LIABILITIES

 

In April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires in February 2027. The Company recognized a right-of-use asset and a liability of $1,428,764 pursuant to this lease.

 

In September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space. The Company recognized a right-of-use asset and a liability of $22,192,503 pursuant to such lease. In connection with the execution of lease, the Company was required to provide the landlord with a letter of credit in the amount of $2.7 million, which is secured by the same amount of cash.

 

In January 2024 the Belami, subsidiary of SKYX entered in a 35-month lease related to its Sacramento office. The Company recognized a right-of-use asset and a liability of $ 662,698 pursuant to such lease.

 

The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of March 31, 2024:

 SCHEDULE OF LEASE COST OPERATING LEASE

		March 31, 2024
Lease costs:
Cash paid for operating lease liabilities		$	505,920
Right-of-use assets obtained in exchange for new operating lease obligations		$	21,360,642
Fixed rent payment		$	300,933
Lease – Depreciation expense		$	516,707

 

		years ended
		March 31, 2024
Other information:
Weighted-average discount rate			6.41	%
Weighted-average remaining lease term (in months)			107

 

 SCHEDULE OF MINIMUM LEASE OBLIGATION

Minimum Lease obligation
Nine months ended December 31, 2024		$	1,595,397
2025			2,346,540
2026			2,589,372
2027			2,288,363
2028 and thereafter			15,703,089
Total		$	24,522,761

 

NOTE 7 ROYALTY OBLIGATIONS

 

The Company had a license agreement with General Electric (“GE”) which provided, among other things, for rights to market certain of the Company’s products displaying the GE brand in consideration of royalty payments to GE. The agreement expired in 2023.

 

The Company owes $2.5 million to GE pursuant to the license agreement. The payments associated with this debt are payable in quarterly tranches aggregating $0.8 million during 2024 and 2025 and $0.9 million in 2026. Additionally, the Company owes an additional amount of $1.4 million pursuant to its agreements with GE which is payable in 2027. During April 2024, GE and the Company agreed to reduce the additional amount of $1.4 million by $400,000 in exchange for the issuance of a convertible promissory note of $1.0 million. The GE Note does not bear interest and the principal amount of the Note is convertible into shares of the Company’s common stock at any time at the option of the holder at $1.07 per share. The Company may prepay the entire then-outstanding principal amount of a Note at any time, plus a prepayment premium; if the Company exercises such right, the Note holder may instead elect to convert the Note into shares of common stock. The Note also provides for certain piggyback registration rights.

 

12

 

 

NOTE 8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consisted of the following:

 SCHEDULE OF ACCRUED EXPENSES

		March 31, 2024				December 31, 2023
Accrued interest, convertible notes		$	950,358			$	744,953
Trade payables			11,238,517				11,513,918
Accrued compensation			1,248,419				874,557
Total		$	13,437,294			$	13,133,428

 

NOTE 9 RELATED PARTY TRANSACTIONS

 

Convertible Notes Due to Related Parties

 

Convertible notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers. The outstanding principal on the convertible promissory notes, associated with related parties was $950,000 as of March 31, 2024, and December 31, 2023 and accrued interest of $ 272,824 and $151,081, respectively.

 

NOTE 10 STOCKHOLDERS’ EQUITY

 

(A) Common Stock

 

The Company issued the following common stock during the three months ended March 31, 2024, and 2023:

 SCHEDULE OF COMMON STOCK

Transaction Type		Shares Issued				Valuation $				Range of Value Per Share $
March 31, 2024 Equity Transactions
Common stock issued, pursuant to services provided			890,103				3,295,029			1.27-1.68
Issuance of common stock pursuant to offering, net			2,733,361				3,655,755			1.25-1.64

 

Transaction Type		Shares Issued				Valuation ($)				Range of Value Per Share ($)
March 31, 2023 Equity Transactions
Common stock issued, pursuant to services provided			282,188				2,963,702			2.52 – 3.56

 

As of March 31, 2024, the remaining amount to be used under the ATM offering program is $6.5 million.

 

(B) Preferred Stock

 

The following is a summary of the Company’s Preferred Stock activity during the three months ended March 31, 2023:

 

 SCHEDULE OF PREFERRED STOCK ACTIVITY

Transaction Type		Quantity				Carrying Value				Value per Share ($)
Preferred Stock Balance at December 31, 2022			880,400			$	220,099			$	0.25
Preferred Stock redemptions			—				—				—
Preferred Stock Balance at March 31, 2023			880,400			$	220,099			$	0.25

 

The Series A Preferred Stock was convertible at the holder’s option. The Company could repurchase shares of the Preferred Stock for $3.50 per share. Holders also had a put option, allowing them to sell their shares of Preferred Stock back to the Company at $0.25 per share, and therefore the stock was classified as mezzanine equity rather than permanent equity.

 

13

 

 

There were no shares of Series A Preferred Stock outstanding at March 31, 2024 and the Company terminated its designation of the Series A Preferred Stock in May 2023. The Company has not designated any other preferred stock as of March 31, 2024.

 

(C) Stock Options

 

The following is a summary of the Company’s stock option activity during the three month ended March 31, 2024 and 2023:

 SCHEDULE OF STOCK OPTION ACTIVITY

Options		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (In Years)				Aggregate Intrinsic Value
Outstanding, January 1, 2024			35,805,976			$	7.33				––			$	2,037,200
Exercised			––				––				––				––
Granted			540,000				1.63				––				—
Forfeited			(189,500	)			2.89				—				—
Expired							—
Outstanding, March 31, 2024			36,156,476			$	7.3				2.58			$	2,037,200
Exercisable, March 31, 2024			13,892,937			$	4.54				2.07			$	2,034,525

 

Options		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (In Years)				Aggregate Intrinsic Value
Outstanding, January 1, 2023			33,289,250			$	7.7				—			$	—
Exercised											—				—
Expired			175,000				3.0				—				—
Outstanding, March 31, 2023			33,114,250			$	7.7				3.2			$	10,534,567
Exercisable, March 31, 2023			12,731,250			$	4.4				2.55			$	10,534,567

 

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during three month ended March 31, 2024 and 2023:

 SCHEDULE OF BLACK SCHOLES PRICING MODEL

		March 31, 2024				March 31, 2023
			Range				Range
Stock price		$	1.76			$	3.74-3.84
Exercise price		$	0 - 14			$	3.0
Expected life (in years)			2.87 yrs.				5 yrs.
Volatility			37	%			42	%
Risk-fee interest rate			4.10	%			5.02	%
Dividend yield			—				—

 

The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility.

 

Unamortized future option expense was $13.9 million (excluding certain market-based options which management cannot ascertain to have a probable outcome amounting to $63 million) at March 31, 2024 and it is expected to be recognized over a weighted-average period of 2 years.

 

14

 

 

(D) Warrants Issued

 

The following is a summary of the Company’s warrant activity during three month ended March 31, 2024 and 2023:

 SCHEDULE OF WARRANT ACTIVITY

		Number of Warrants				Weighted Average Exercise Price
Balance, January 1, 2024			2,063,522			$	5.76
Issued			—				—
Exercised			—				—
Forfeited			(14,375	)			—
Balance, March 31, 2024			2,049,147			$	5.45

 

		Number of Warrants				Weighted Average Exercise Price
Balance, January 1, 2023			671,855			$	11.5
Issued			1,391,667				3.0
Exercised			—				—
Forfeited			—				—
Balance, March 31, 2023			2,063,522			$	5.76

 

During the three months ended March 31, 2024, the Company did not issued any warrants. During the three months ended March 31, 2023 as an inducement to enter certain financing transactions, the Company issued 1,391,667 3- year warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.

 

(D) Restricted stock units

 

A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2024 and 2023 are as follows:

 SCHEDULE OF NON-VESTED RESTRICTED STOCK

		Shares				Weighted Average Grant Due Fair Value
Non-vested restricted stock units, January 1, 2024			4,919,702			$	4.21
Granted			600,000				1.76
Vested			(770,888	)			3.79
Forfeited			(13,834	)			1.52
Non-Vested restricted stock units, March 31, 2024			4,734,980			$	3.98
Non-vested restricted stock units, January 1, 2023			2,516,461			$	8.39
Granted			9,096				3.29
Vested			(540,188	)			10.73
Forfeited			(5,400	)			11.4
Non-vested restricted stock units on March 31, 2023			1,979,969			$	7.87

 

The weighted-average remaining contractual life of the restricted units as of March 31, 2024 is 1.3 years.

 

One RSU gives the right to receive one share of the Company’s common stock. RSUs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period.

 

During the three months ended March 31, 2024, and 2023, the Company recognized compensation expense of $ 3,295,029, and $2,963,702, respectively, related to stock options, RSUs and RSAs.

 

15

 

 

NOTE 11 CONCENTRATIONS OF RISKS

 

Major Customers and Accounts Receivable

 

The Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue during the three months ended March 31, 2024 and 2023. The Company had one third-party payor accounts receivable balance representing 24% of the Company’s total accounts receivable at March 31, 2024 and none at March 31, 2023.

 

Liquidity

 

The Company’s cash and cash equivalents are held primarily with two financial institutions. The Company has deposits which exceed the amount insured by the FDIC. To reduce the risk associated with the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits.

 

Product and Geographic Markets

 

The Company generates its income primarily from lighting and heating products sold primarily in the United States.

 

NOTE 12 PROFORMA FINANCIAL STATEMENTS (unaudited)

 

The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023:

 SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION

		2023
		Three-month period ended March 31,
		2023
Revenues		$	18,636,969
Net loss		$	(10,349,191	)
Basic and diluted loss per share		$	(0.11	)
Weighted average number of shares outstanding- basic and diluted			90,601,616

 

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results to reflect, among other things, 1) additional amortization that would have been charged assuming the fair value adjustments to amortizable intangible assets had been applied, 2) the shares issued and issuable by the Company to acquire Belami, 3) fair value of the initial grant and options to Belami employees, and 4) the increase in interest expense related to the issuance of convertible notes payable, including amortization of debt discount. Furthermore, it excludes transaction costs related to the Belami acquisition. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have resulted had the acquisition occurred on the date indicated or that may result in the future.

 

NOTE 13 SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through May 14, 2024, which is the date the consolidated financial statements were available to be issued. There were no significant subsequent events that required adjustment to or disclosure in the unaudited consolidated financial statements.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this Form 10-Q and our audited financial statements and related notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion and analysis and other parts of this Form 10-Q contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, strategy, expectations, outlook, intentions and projections. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 and in other filings with the Securities and Exchange Commission (the “SEC”). Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements” contained in this Form 10-Q.

 

Overview

 

We have a series of advanced-safe-smart platform technologies. Our first- and second-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology eliminates the need to touch hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years, we have expanded the capabilities of our power-plug product to include advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, BLE and voice control. It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night light, light color changing and much more. Our third-generation technology is an all-in-one safe and smart-advanced platform that is designed to enhance all-around safety and lifestyle of homes and other buildings. Our products are designed to improve all around home and building safety and lifestyle. We are continuing to refine our products and began manufacturing certain advanced and smart products in 2023 and expect additional products, including the third-generation smart-advanced platform to be available in 2024. We hold over 96 U.S. and global patents and patent applications and have received a variety of final electrical code approvals, including UL, United Laboratories of Canada (cUL) and Conformité Européenne (CE), and 2017 and 2020 inclusion in the NEC Code Book.

 

We believe our total addressable market in the United States exceeds $500 billion, based on the Company’s internal calculations derived from the estimation of the total target user pool, projected average selling price, and projected units per household. We believe there are billions of installations of light and other electrical fixtures globally. Our estimates of the addressable market for our products may prove to be incorrect. The projected demand for our products could differ materially from actual demand. Even if the total addressable market for our products is as large as we have estimated and even if we are able to gain market awareness and acceptance, we may not be able to penetrate the existing market to capture additional market share.

 

Inflation and related risk of recession has continued to impact operations during 2023 and 2024. Inflationary factors, such as increases in interest rates, supply and overhead costs and transportation costs, may adversely affect our operating results, and we may not be able to offset increased costs with increased sales price per unit, particularly as we work toward commercial manufacturing of our products. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the near future (especially if inflation rates continue to rise). In addition, we may be negatively impacted because of supply chain constraints, consequences associated with government regulations, ongoing and potential geopolitical conflicts, instability in the global banking system, employee availability and wage increases.

 

The Israel-Hamas war may adversely impact our operations in the near future. We have a number of developers working in Israel. If such individuals are called for service or this war escalates regionally, it may create work interruptions leading to longer periods between releases of offering improvements and increased costs.

 

During April 2023, we completed the previously announced acquisition of all the issued and outstanding shares of Belami, a strategic e-commerce lighting and home décor conglomerate. The Company paid cash and issued an aggregate of 3,776,706 shares of common stock as consideration for the acquisition (including shares issued in April 2024). The Company expects that Belami will serve as a marketing and growth platform and should provide several distribution channels, including to retail customers, builders, and professionals.

 

 

Recent Developments

 

In March 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement for the acquisition of Belami. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing of the Belami acquisition. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers into shares of our common stock at any time at $3.00 per share of our common stock. The Seller Notes include customary events of default accelerating maturity, including a breach of the Company’s covenants, representations, and warranties under the Belami stock purchase agreement and a change of control of Belami. The letter agreement further provided that the Company will perform all other obligations arising on the first anniversary of the closing, including issuance of shares of common stock due to sellers, and that on such date the non-fundamental representations and warranties will expire, and the Company will release $750,000 held in escrow. In April 2024, the Company issued an aggregate of 1,853,421 shares of common stock to the sellers and released the escrow amount.

 

On April 11, 2024, the Company entered into an amendment to the letter agreement previously entered into with GE Trademark Licensing, Inc. (“GE-TL”) in December 2023, which extended the deadline for the Company to issue the convertible note to GE-TL to May 1, 2024, and also issued a three-year, $1.0 million convertible note to GE-TL, thereby reducing obligations due in 2027 by $400,000. The note does not bear interest, and the principal amount of the note is convertible into shares of the Company’s common stock at any time at the option of the holder at $1.07 per share.

 

During the second quarter of 2023, we began our at the market offering (“ATM”) pursuant to which we may sell up to $20 million of shares of our common stock.

 

Results of Operations

 

Comparison of the Three Months Ended March 31, 2024 and 2023

 

		For the Three Months Ended March 31,								Increase/(Decrease) Between the Months Ended March 31,
		2024				2023				2024				2023
Revenue		$	18,977,821			$	10,025			$	18,967,796				NM
Cost of revenues			13,399,771				1,468				13,398,303				NM
Gross income			5,578,050				8,557				5,569,493				NM
Selling and marketing expenses			6,586,816				1,299,859				5,226,957				402	%
General and administrative expenses			7,939,581				5,948,346				1,991,235				33	%
Total expenses, net			14,466,397				7,248,205				7,218,192				100	%
Other income / (expense)
Interest expense			(787,854	)			(730,621	)			57,233				NM
Total other income (expense), net			(787,854	)			(730,621	)			57,233				8	%
Net loss		$	(9,676,201	)		$	(7,970,269	)		$	1,705,932				21	%

 

NM: Not meaningful

 

Revenue

 

The increase in revenues during the three-month ended March 31, 2024, when compared to the prior year period, is primarily due to revenues from products marketed by Belami which was acquired in April 2023.

 

We believe that revenues will be higher in 2024 than in 2023, primarily resulting from revenues from Belami, and the sale of our advanced-safe-smart products.

 

 

Cost of Revenues

 

The cost of revenues consists primarily of costs associated with selling the products marketed by Belami. The increase in cost of revenues during the three-month periods ended March 31, 2024 when compared to the prior year period, is primarily due to costs associated with revenues from products marketed by Belami which was acquired on April 28, 2023.

 

We believe that cost of revenues will increase in 2024 compared to 2023, commensurate with an anticipated increase in revenues.

 

Selling and Marketing Expenses

 

Selling and marketing expenses consist primarily of sales and marketing compensation as well as sales and marketing programs.

 

The increase in selling and marketing expenses is primarily due to such expenses increasing following the acquisition of Belami aggregating $4.4 million during the three-month period ended March 31, 2024.

 

General and Administrative Expenses

 

General and administrative expenses consist primarily of an allocation of product development, finance, legal, human resources, including salaries, wages, and benefits, and depreciation and amortization, including share-based payments.

 

The increase in general, and administrative expenses during the three months ended March 31, 2024, when compared to the prior year period was primarily due to the following:

 

	●	Increase in general and administrative expenses following the acquisition of Belami aggregating $2.0 million;
	●	Increase of depreciation and amortization expenses of $1.0 million primarily related to increased intangibles acquired during the second quarter of 2023

 

We believe that our operating expenses will be higher during 2024 when compared to 2023 as we continue to invest to support our anticipated growth and now includes such expenses related to Belami’s operations following its acquisition.

 

Other Income (Expense)

 

The increase in interest expense in the three-month periods ended March 31, 2024, when compared to the prior year period resulted primarily from interest charges related to increased interest-bearing weighted-average debt in the current period when compared to the prior year period.

 

Liquidity and Capital Resources

 

As of March 31, 2024 and 2023, we had $19.7 million and $23.1 million in cash, cash equivalents, and restricted cash respectively.

 

We have raised additional funds through the sale of our common stock for gross proceeds of $3.6 million and placements and offerings during the three-month period ended March 31, 2024.

 

These offerings included shares sold pursuant to our ATM offering program which provides us with additional access to capital, as needed, subject to market conditions. During the three months ended March 31, 2024, we issued 2,733,361 shares of common stock under such a program for net proceeds of $ 3,582,610, net of brokerage fees of approximately $ 73,145. From inception through March 31, 2024, we issued 6,593,193 shares of common stock under such a program for net proceeds of $ 12,751,281, net of brokerage fees of approximately $ 260,230. As of March 31, 2024, the remaining amount to be used under the ATM offering program is $6.6 million.

 

Our future capital requirements will depend on many factors, including the Belami acquisition and integration of operations, our revenue growth rate, expenditures related to our headcount growth and manufacturing, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the price at which we are able to purchase parts to incorporate in our product offerings, the introduction of platform enhancements, and the market adoption of our platforms. We may continue to enter arrangements to acquire or invest in complementary businesses, products, and technologies. We may, because of those arrangements, or the general expansion of our business, be required to seek additional equity or debt financing. If we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition.

 

 

We owe approximately $11.5 million under fixed rate obligations as of March 31, 2024. In addition, we owe GE certain minimum royalty payments under a license agreement which amounted to $3.7 million as of March 31, 2024.

 

On March 29, 2024, we entered into a letter agreement with Belami sellers, modifying certain obligations under the Stock Purchase Agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the Sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the Sellers on the first anniversary of the Closing. Each Seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the Sellers at any time at $3.00 per share of our common stock.

 

Three-months period ended March 31, 2024:

 

We had $19.8 million in cash, cash equivalents, and restricted cash as of March 31, 2024.

 

We used $6.1 million in our operating activities which consists of a net loss of $9.7 million adjusted for the following:

 

	●	Stock-based compensation of $3.3 million.
	●	Depreciation and amortization of $1.0 million.

 

We generated $3.6 million in financing activities which were primarily related to proceeds we generated from the issuance of shares of our common stock.

 

Three-months period ended March 31, 2023:

 

We had $23.1 million in cash, cash equivalents, restricted cash and marketable debt securities as of March 31, 2023.

 

We used $4.1 million in our operating activities which consists of a net loss of $8 million adjusted for the following:

 

	●	Stock-based compensation of $3 million.
	●	Depreciation and amortization of $500,000.

 

We generated $10.3 million in financing activities which were primarily related to proceeds we generated from the issuance of convertible promissory notes.

 

Going Concern

 

The Company’s liquidity sources include $ 19.8 million in cash and cash equivalents, including restricted cash of $5.6 million, and $ 1.2 million of working capital at March 31, 2024. However, the Company has a history of recurring operating losses and its net cash used in operating activities amounted to $6.2 million and $4.1 million during the three months ended March 31, 2024 and March 31, 2023, respectively. The Company has also generated net cash provided by financing activities of $3.6 million and $10.3 million during the three months ended March 31, 2024 and 2023, respectively. Accordingly, the Company’s management cannot ascertain that there is no substantial doubt that it will be able to meet its obligations as they become due within one year after the date that its financial statements are issued.

 

Management intends to mitigate such conditions by supporting its continued growth, decreasing its cash used in operating activities through increased revenues and increased margins from products sold to large retailers and its internet portals, and to the extent necessary, generate cash provided by financing activities through its at the market offering or other equity or debt financing means.

 

Non-GAAP Financial Measures

 

Management considers earnings (loss) before interest, taxes, depreciation and amortization, or EBITDA, as adjusted, an important indicator in evaluating our business on a consistent basis across various periods. Due to the significance of non-recurring items, EBITDA, as adjusted, enables our management to monitor and evaluate our business on a consistent basis. We use EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. We believe that EBITDA, as adjusted, eliminates items that are not part of our core operations, such as interest expense and amortization expense associated with intangible assets, or items that do not involve a cash outlay, such as share-based payments and non-recurring items, such as transaction costs. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income (loss), net income (loss) and cash flows used in operating activities. This non-GAAP financial measure excludes significant expenses that are required by GAAP to be recorded in our financial statements and is subject to inherent limitations. Investors should review the reconciliation of this non-GAAP financial measure to the comparable GAAP financial measure included below. Investors should not rely on any single financial measure to evaluate our business.

 

		For the three-months ended March 31,
		2024				2023
Net loss		$	(9,676,201	)		$	(7,970,269	)
Share-based payments			3,295,029				2,963,702
Interest expense			787,854				730,621
Depreciation, amortization			1,060,571				497,373
Transaction costs			-				-
EBITDA, as adjusted		$	(4,532,747	)		$	(3,778,573	)

 

 

Critical Accounting Policies

 

Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements for the year ended December 31, 2023 contained in our Annual Report on Form 10-K for the year ended December 31, 2023. The following is a summary of those accounting policies that involve significant estimates and judgment of management.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes.

 

Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates.

 

Fair Value of Financial Instruments

 

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2024, and December 31, 2023, we believe the amounts reported for cash, prepaid expenses, accounts payable and accrued expenses and other current liabilities, accrued interest, notes payable and convertible note payable approximate fair value because of their short maturities.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

 

	●	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
	●	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
	●	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

 

Stock-Based Compensation

 

Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation–Stock Compensation”, which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

 

Stock-based compensation is measured at the grant date based on the value of the award granted using the Black- Scholes option pricing model based on projections of various potential future outcomes and recognized over the period in which the award vests. For stock awards no longer expected to vest, any previously recognized stock compensation expense is reversed in the period of termination. The stock-based compensation expense is included in general and administrative expenses.

 

Revenue Recognition

 

We account for revenues in accordance with Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606).

 

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

	●	identification of the contract, or contracts, with a customer;
	●	identification of the performance obligations in the contract;
	●	determination of the transaction price;
	●	allocation of the transaction price to the performance obligations in the contract; and
	●	recognition of revenue when, or as, we satisfy a performance obligation.

 

Recent Accounting Pronouncements

 

Although there are several new accounting pronouncements issued or proposed by the Financial Accounting Standards Board, which we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had or will have a material impact on our financial position or results of operations.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures and any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their control objectives.

 

As of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based upon the evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2024.

 

Changes in Internal Controls Over Financial Reporting:

 

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of the date of this Form 10-Q, we are not a party to any material legal matters or claims., Legal proceedings are inherently uncertain and the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

 

We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance.

 

ITEM 1A. RISK FACTORS

 

There have been no material changes from the risk factors set forth in “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Our business, operations and financial results are subject to various risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the report referenced above, together with all of the other information in such report and this Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face, and the disclosure of any risk factor should not be interpreted to imply that the risk has not already materialized. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Recent Sales of Unregistered Securities

 

The following is a summary of issuances of unregistered securities during the first quarter of 2024, to the extent not previously disclosed in a Current Report on Form 8-K filed by the Company: (i) the Company granted 393,703 shares of restricted shares of common stock pursuant to agreements regarding services provided to the Company: (ii) three of the Company’s previously issued subordinated convertible balloon promissory notes aggregating $575,000 were amended to, among other things, adjust the conversion price to $3.00 per share; and (iii) the Company issued convertible promissory notes to each of the sellers in the Belami acquisition in substitution of an aggregate of $3,117,408 in cash due to the sellers on April 28, 2024, which can be converted by the sellers into shares of the Company’s common stock at any time at $3.00 per share of the Company’s common stock.

 

The sales or issuances of the securities described above were deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering.

 

Issuer Purchases of Equity Securities

 

During the quarter ended December 31, 2023, the Company withheld 3,785 shares of common stock, at a price per share of $1.72, to satisfy tax withholding obligations due upon the vesting of a restricted stock grant. We did not pay cash to repurchase these shares, nor was this repurchase part of a publicly announced plan or program.

 

Period		Total Number of Shares Purchased(1)				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs				Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs
January 2024			386			$	1.44				—				—
February 2024			6,421				1.50				—				—
March 2024			22,325				1.28				—				—
Total			29,132			$	1.33				—				—

 

(1) Includes shares repurchased to satisfy tax withholding obligations due upon the vesting of restricted stock held by certain employees. We did not pay cash to repurchase these shares, nor were these repurchases part of a publicly announced plan or program.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

Item 5. Other Information

 

Rule 10b5-1 Trading Plans

 

During the quarter ended March 31, 2024, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

 

 

Item 6. Exhibits

 

Exhibit No.		Description of Exhibit
2.1		Stock Purchase Agreement, dated February 6, 2023, by and among the Company and Mihran Berejikian, Nancy Berejikian, and Michael Lack (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).
2.2		First Amendment to Stock Purchase Agreement, dated April 28, 2023, by and among SKYX Platforms Corp. and Mihran Berejikian, Nancy Berejikian, and Michael Lack (incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).
3.1		Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-261829) filed with the SEC on December 22, 2021).
3.2		Articles of Amendment to Articles of Incorporation, including the Certificate of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock (effective August 12, 2016) (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-261829) filed with the SEC on December 22, 2021).
3.3		Articles of Amendment to Articles of Incorporation (effective February 7, 2022) (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).
3.4		Articles of Amendment to Articles of Incorporation (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2022).
3.5		Articles of Amendment to Articles of Incorporation (effective May 2, 2023) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 5, 2023).
3.6		Second Amended and Restated Bylaws of the Company (effective June 14, 2022) (incorporated by reference herein to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2022).
10.1*		Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp. and John Campi (incorporated herein by reference to Exhibit 10.57 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).
10.2*		Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp. and Patricia Barron (incorporated herein by reference to Exhibit 10.58 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).
10.3		Form of Amendment No. 1 to Subordinated Convertible Balloon Promissory Note, dated March 29, 2024 (incorporated herein by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).
10.4		Letter Agreement to the Stock Purchase Agreement, as amended, dated March 29, 2024, by and among SKYX Platforms Corp., Mihran Berejikian, Nancy Berejikian and Michael Lack, and form of Convertible Promissory Note (incorporated herein by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023).
10.5		Amendment of Letter Agreement relating to Trademark License Agreement, dated April 11, 2024, among SKYX Platforms Corp., SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 17, 2024).
10.6		Convertible Promissory Note, dated April 11, 2024, issued to GE Trademark Licensing, Inc. (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 17, 2024).
31.1		Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2		Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.3		Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1		Certification by Co-Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2		Certification by Co-Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.3		Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL(Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Loss, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements (filed herewith).
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) (filed herewith).

 

* Indicates management contract or any compensatory plan, contract or arrangement.

 

+ Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

			SKYX PLATFORMS CORP.
Date:	May 14, 2024		By:	/s/ John P. Campi
				John P. Campi, Co- Chief Executive Officer
				(Principal Executive Officer)
Date:	May 14, 2024		By:	/s/ Leonard J. Sokolow
				Leonard J. Sokolow, Co-Chief Executive Officer and Director
				(Principal Executive Officer)
Date:	May 14, 2024		By:	/s/ Marc-Andre Boisseau
				Marc-Andre Boisseau, Chief Financial Officer
				(Principal Financial and Accounting Officer)

 

 

 

Exhibit 31.1

 

CERTIFICATION

 

I, John P. Campi, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of SKYX Platforms Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 14, 2024	By:	/s/ John P. Campi
		John P. Campi
		Co-Chief Executive Officer
		(Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Leonard J. Sokolow, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of SKYX Platforms Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 14, 2024	By:	/s/ Leonard J. Sokolow
		Leonard J. Sokolow
		Co-Chief Executive Officer and Director
		(Principal Executive Officer)

 

 

 

Exhibit 31.3

 

CERTIFICATION

 

I, Marc-Andre Boisseau, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of SKYX Platforms Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 14, 2024	By:	/s/ Marc-Andre Boisseau
		Marc-Andre Boisseau
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of SKYX Platforms Corp. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 14, 2024	By:	/s/ John P. Campi
		John P. Campi
		Co-Chief Executive Officer
		(Principal Executive Officer)

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of SKYX Platforms Corp. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 14, 2024	By:	/s/ Leonard J. Sokolow
		Leonard J. Sokolow
		Co-Chief Executive Officer and Director
		(Principal Executive Officer)

 

 

 

Exhibit 32.3

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of SKYX Platforms Corp. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 14, 2024	By:	/s/ Marc-Andre Boisseau
		Marc-Andre Boisseau
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

 

v3.24.1.1.u2

Cover - shares	3 Months Ended
	Mar. 31, 2024	May 01, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-41276
Entity Registrant Name	SKYX PLATFORMS CORP.
Entity Central Index Key	0001598981
Entity Tax Identification Number	46-3645414
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	2855 W. McNab Road
Entity Address, City or Town	Pompano Beach
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33069
City Area Code	(855)
Local Phone Number	759-7584
Title of 12(b) Security	Common Stock, no par value per share
Trading Symbol	SKYX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		100,032,804

v3.24.1.1.u2

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 14,146,785	$ 16,810,983
Restricted cash	2,750,000	2,750,000
Account receivable	3,932,008	3,384,976
Inventory	3,777,724	3,425,734
Deferred cost of revenues	245,734	224,445
Prepaid expenses and other assets	630,077	721,717
Total current assets	25,482,328	27,317,855
Long-term assets:
Furniture and equipment, net	459,929	436,587
Restricted cash	2,892,878	2,869,270
Right of use assets	21,360,642	21,214,652
Intangibles, definite life	7,627,472	8,141,032
Goodwill	16,157,000	16,157,000
Other assets	204,807	204,807
Total long-term assets	48,702,728	49,023,348
Total Assets	74,185,056	76,341,203
Current liabilities:
Accounts payable and accrued expenses	12,537,437	12,388,475
Notes payable	5,865,829	5,724,129
Operating lease liabilities	2,160,938	1,898,428
Royalty obligation	800,000	800,000
Consideration payable	750,000	730,999
Deferred revenues	1,616,038	1,475,519
Total current liabilities	24,330,242	24,192,550
Long term liabilities:
Accounts payable and accrued expenses	950,358	744,953
Notes payable	764,333	1,016,924
Consideration payable		3,038,430
Operating lease liabilities	22,161,824	22,267,558
Royalty obligations	2,900,000	3,100,000
Total long-term liabilities	36,358,221	35,926,643
Total liabilities	60,688,463	60,119,193
Stockholders’ Equity:
Common stock and additional paid-in-capital: $0 par value, 500,000,000 shares authorized; and 97,096,897 and 93,473,433 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	168,975,808	162,025,024
Accumulated deficit	(155,479,215)	(145,803,014)
Accumulated other comprehensive loss
Total stockholders’ equity	13,496,593	16,222,010
Total Liabilities and Stockholders’ Equity	74,185,056	76,341,203
Related Party [Member]
Current liabilities:
Convertible notes	600,000	825,000
Long term liabilities:
Convertible notes	350,000
Nonrelated Party [Member]
Current liabilities:
Convertible notes		350,000
Long term liabilities:
Convertible notes	$ 9,231,706	$ 5,758,778

v3.24.1.1.u2

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	97,096,897	93,473,433
Common stock, shares outstanding	97,096,897	93,473,433

v3.24.1.1.u2

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Defined Benefit Plan Disclosure [Line Items]
Revenue	$ 18,977,821	$ 10,025
Cost of revenues	13,399,771	1,468
Gross profit (loss)	5,578,050	8,557
Selling and marketing expenses	6,526,816	1,299,859
Total expenses, net	14,466,397	7,248,205
Loss from operations	(8,888,347)	(7,239,648)
Other income / (expense)
Interest expense, net	(787,854)	(730,621)
Gain on extinguishment of debt
Other income
Total other expense, net	(787,854)	(730,621)
Net loss	(9,676,201)	(7,970,269)
Other comprehensive loss:
Unrealized loss on debt securities		57,494
Net comprehensive loss attributed to common stockholders	$ (9,676,201)	$ (7,912,775)
Net loss per share - basic	$ (0.10)	$ (0.10)
Net loss per share - diluted	$ (0.10)	$ (0.10)
Weighted average number of common shares outstanding - basic	95,091,003	82,965,182
Weighted average number of common shares outstanding - diluted	95,091,003	82,965,182
Nonrelated Party [Member]
Defined Benefit Plan Disclosure [Line Items]
General and administrative expenses	$ 7,939,581	$ 5,948,346

v3.24.1.1.u2

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock Including Additional Paid in Capital [Member]	Common Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2022	$ 114,039,638		$ (106,070,358)	$ (62,147)	$ 7,907,133
Balance, shares at Dec. 31, 2022		82,907,541
Common stock issued pursuant to offerings, shares
Common stock issued pursuant to services, shares		282,188
Common stock issued pursuant to offerings
Common stock issued pursuant to services	2,963,702
Debt discount	5,569,978
Net loss			(7,970,269)		(7,970,269)
Unrealized gain on debt securities				57,494
Balance at Mar. 31, 2023	122,573,318		(114,040,627)	(4,653)	8,528,038
Balance, shares at Mar. 31, 2023		83,189,729
Balance at Dec. 31, 2023	162,025,024		(145,803,014)		16,222,010
Balance, shares at Dec. 31, 2023		93,473,433
Common stock issued pursuant to offerings, shares		2,733,361
Common stock issued pursuant to services, shares		890,103
Common stock issued pursuant to offerings	3,655,755
Common stock issued pursuant to services	3,295,029
Debt discount
Net loss			(9,676,201)		(9,676,201)
Unrealized gain on debt securities
Balance at Mar. 31, 2024	$ 168,975,808		$ (155,479,215)		$ 13,496,593
Balance, shares at Mar. 31, 2024		97,096,897

v3.24.1.1.u2

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (9,676,201)	$ (7,970,269)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,060,571	497,373
Amortization of debt discount	228,499	143,257
Non-cash equity-based compensation expense	3,295,029	2,963,702
Change in operating assets and liabilities:
Inventory	(351,990)	(178,780)
Accounts receivable	(547,032)
Prepaid expenses and other assets	91,640	(45,501)
Deferred charges	(21,289)
Deferred revenues	140,519
Operating lease liabilities	(505,920)	(171,963)
Accretion operating lease liabilities		245,009
Royalty obligation	(200,000)
Accounts payable and accrued expenses	303,866	398,183
Net cash used in operating activities	(6,182,308)	(4,118,989)
Cash flows from investing activities:
Purchase of debt securities		(136,033)
Purchase of property and equipment	(53,647)	(306)
Payment of patent costs and other intangibles		(33,559)
Net cash used in investing activities	(53,647)	(169,898)
Cash flows from financing activities:
Proceeds from issuance of common stock- offerings	3,655,755
Proceeds from issuance of convertible notes		10,350,000
Principal repayments of notes payable	(60,390)	(893)
Net cash provided by financing activities	3,595,365	10,349,107
Change in cash, cash equivalents and restricted cash	(2,640,590)	6,060,221
Cash, cash equivalents, and restricted cash at beginning of period	22,430,253	9,461,597
Cash, cash equivalents and restricted cash at end of period	19,789,663	15,521,818
Supplementary disclosure of non-cash financing activities:
Substitution of consideration payable to convertible notes	3,117,408
Debt discount		5,569,978
Right-of-use assets and operating lease liabilities	662,698
Cash paid during the period for:
Interest	$ 641,647	$ 711,648

v3.24.1.1.u2

Pay vs Performance Disclosure - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (9,676,201)	$ (7,970,269)

v3.24.1.1.u2

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

v3.24.1.1.u2

ORGANIZATION AND NATURE OF OPERATIONS	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF OPERATIONS	NOTE 1 ORGANIZATION AND NATURE OF OPERATIONS   SKYX Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004.   The Company maintains offices in Sacramento, California, Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, and Guangdong Province, China.   The Company has a series of advanced-safe-smart platform technologies. The Company’s first-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged-in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years the Company has expanded the capabilities of its power-plug product, to include its second generation advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, Bluetooth Low Energy and voice control. It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night light, light color changing and much more. The Company’s third-generation technology is an all-in-one safe and smart-advanced platform that is designed to enhance all-around safety and lifestyle of homes and other buildings.   Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties.   Going Concern   The Company’s liquidity sources include $ 19.7 million in cash and cash equivalents, including restricted cash of $5.6 million, and $ 1.2 million of working capital as of March 31, 2024. However, the Company has a history of recurring operating losses and its net cash used in operating activities amounted to $6.2 million and $4.1 million during the three months ended March 31, 2024 and March 31, 2023, respectively. The Company has also generated net cash provided by financing activities of $3.6 million and $10.3 million during the three months ended March 31, 2024 and 2023, respectively. Accordingly, the Company’s management cannot ascertain that there is no substantial doubt that it will be able to meet its obligations as they become due within one year after the date that its financial statements are issued.   Management intends to mitigate such conditions by supporting its continued growth, decreasing its cash used in operating activities through increased revenues and increased margins from products sold to large retailers and its internet portals, and to the extent necessary, generate cash provided by financing activities through its at the market (“ATM”) offering or other equity or debt financing means.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation   The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional disclosures and accounting policies.   Use of Estimates   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.   Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.   Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates.   Reclassifications   For comparability, reclassifications of prior-year balances were made to conform with current-year presentations, such as sales and marketing expenses which were previously included in selling, general, and administrative expenses in the 2023 comparable period.   Basis of Consolidation   The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28 2023. All intercompany balances and transactions have been eliminated in consolidation.     Cash, Cash Equivalents, and Restricted Cash   The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. The Company’s cash composition was as follows:  SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH     March 31, 2024     December 31, 2023                 Cash and cash equivalents   $ 14,146,785     $ 16,810,983   Restricted cash     5,642,878       5,619,270   Total cash, cash equivalents and restricted cash   $ 19,789,663     $ 22,430,253     Restricted Cash   The Company issued a letter of credit of $2.8 million in September 2023 to use as collateral for certain obligations to one of its lessors. The letter of credit was issued by a financial institution and was secured by cash of $2.8 million as of March 31, 2024 and December 31, 2023. Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed $750,000 in an escrow account. Furthermore, the Company secured a line of credit of $2.0 million with cash of the equivalent amount.   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. As of March 31, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $54,987 and $54,987, respectively. The Company determines an allowance for sales returns based upon historical experience. As of March 31, 2024, and December 31, 2023, the Company’s allowance for sales returns was $185,501 and $182,584, respectively and is recorded as accrued expenses in the accompanying consolidated financial statements.   The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 1,616,038 and $1,475,519 as of March 31, 2024 and December 31, 2023, 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 related inventory, freight, and sales charges. The deferred charges amounted to $ 245,734 and $224,445 as of March 31, 2024 and December 31, 2023, respectively.   Inventory   Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand.  SCHEDULE OF INVENTORY     Match 31, 2024     December 31, 2023   Inventory, component parts   $ 2,944,213     $ 2,230,252   Inventory, finished goods     2,133,511       2,495,482   Allowance     (1,300,000 )     (1,300,000 ) Inventory-total     3,777,724       3,425,734     The Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period of time. The Company tracks inventory as it is repurposed, disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $1.3 million as of March 31, 2024 and December 31, 2023.   GE Agreements   The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products.     ● A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement under similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of the Company’s Standard and Smart plug-and-play products set forth in a statement of work in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work.         ● A letter agreement dated November 28, 2023. The agreement expires on December 15, 2027 and includes a repayment plan relating to certain amounts due under the U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, the Company was required to pay a revised royalty payment obligation of $2.7 million in the aggregate (the “Royalty Payment”), payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and an additional obligation equal to either a $1 million convertible promissory note, subject to agreement on terms, or otherwise $1.4 million payable in 2027. As of March 31, 2024, the Company owed $3.7 million in royalty payment obligations. On April 11, 2024, the Company amended the payment arrangement and issued a convertible promissory note, (the “GE Note”), for the additional obligation, thereby reducing the payment obligations by $400,000. A detailed description of the GE Note is set forth in Note 7 below.     Loss Per Share   Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stocks, common stock equivalents and potentially dilutive securities outstanding during each period.   The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the three-month ended March 31, 2024, and 2023, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented.   The Company had the following anti-dilutive common stock equivalents as of March 31, 2024, and March 31, 2023:  SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS     March 31, 2024     March 31, 2023   Stock warrants     2,049,147       2,063,522   Stock options     36,156,476       33,114,250   Convertible notes     5,487,260       3,536,668   Preferred stock     –       880,400   Total     43,692,883       39,594,840     Recently Issued Accounting Pronouncements   Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.

v3.24.1.1.u2

FURNITURE AND EQUIPMENT	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
FURNITURE AND EQUIPMENT	NOTE 3 FURNITURE AND EQUIPMENT   Furniture and equipment consisted of the following:  SCHEDULE OF FURNITURE AND EQUIPMENT     March 31, 2024     December 31, 2023   Machinery and equipment   $ 391,895     $ 282,799   Computer equipment     6,846       6,846   Furniture and fixtures     36,059       36,059   Tooling and production     672,509       642,509   Software development costs     219,076       109,096   Leasehold improvements     30,553       30,553   Total     1,356,938       1,107,862   Less: accumulated depreciation     (897,009 )     (671,275 ) Total, net   $ 459,929     $ 436,587     Depreciation expense amounted to $ 30,305 and $22,141 during the three-month ended March 31, 2024 and 2023, respectively.

v3.24.1.1.u2

INTANGIBLE ASSETS AND GOODWILL	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS AND GOODWILL	NOTE 4 INTANGIBLE ASSETS AND GOODWILL   Intangible assets consisted of the following:  SCHEDULE OF INTANGIBLE ASSETS     March 31, 2024     December 31, 2023   Patents and trademarks (useful life 15 years)   $ 931,831     $ 1,040,927   Customer relationships (useful life 7 years)     4,500,000       4,500,000   E-commerce technology platforms (useful life 4 years)     3,900,000       3,900,000   Total     3,900,000       3,900,000   Less: accumulated amortization   $ (1,704,359 )     (1,299,895 ) Total, net   $ 7,627,472     $ 8,141,032     Amortization expense on intangible assets amounted to $ 513,559 and $14,307 during the three-month ended March 31, 2024 and 2023, respectively.   The following table sets forth the estimated amortization expense for the next five years:  SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Nine months ended December 31, 2024   $ 1,269,150   2025     1,673,613   2026     1,673,613   2027     1,511,113   2028     698,613   2029     698,613

v3.24.1.1.u2

DEBTS	3 Months Ended
	Mar. 31, 2024
Debt Disclosure [Abstract]
DEBTS	NOTE 5 DEBTS   The following table presents the details of the principal outstanding:  SCHEDULE OF DEBT     March 31, 2024     December 31, 2023     APR at March 31, 2024     Maturity   Collateral Convertible Notes (b,c)     14,642,909       11,525,000     6.00 – 10.00 %   September 2023-March 2026   Substantially all company assets Notes payable to financial institutionsa)     6,233,624       6,348,104     7.93-8.5     August 2024-August 2026   Inventory, accounts receivable, cash                                 Notes payable to Belami sellers     251,516       247,927     4.86 %   April 2024   –                                 SBA-related loans     145,022       145,022     3.75 %   April 2025-November 2052   Substantially all Company assets Total   $ 21,273,071     $ 18,266,053                 Unamortized debt discount     (4,410,702 )     (4,591,222 )               Debt, net of Unamortized debt Discount     16,862,369       13,674,831                   SCHEDULE OF INTEREST EXPENSE     For the three-month period ended       March 31, 2024     March 31, 2023   Interest expense   $ 787,854     $ 730,621     As of March 31, 2024, the expected future principal payments for the Company’s debt are due as follows:  SCHEDULE OF FUTURE PRINCIPAL PAYMENTS           Nine-months ended December 31, 2024   $ 6,334,514   2025     4,086,855   2026     10,582,955   2027     3,040   2028 and thereafter     134,392   Total   $ 21,273,071         (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75% per year.   (b) Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6% through December 2023 and 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $3 to $15 per share.   During 2023, the Company issued convertible promissory notes for $10.4 million. As an inducement to enter the financing transactions, the Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet. The Company recognized $228,499 as amortized debt discount during the three months ended March 31, 2024, and it is reflected as interest expense in the accompanying unaudited consolidated statement of operations. Only the convertible promissory notes issued during fiscal 2023 are secured by substantially all of the assets of the Company.   (c) On March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers at any time at $3.00 per share of our common stock.

v3.24.1.1.u2

OPERATING LEASE LIABILITIES	3 Months Ended
	Mar. 31, 2024
Operating Lease Liabilities
OPERATING LEASE LIABILITIES	NOTE 6 OPERATING LEASE LIABILITIES   In April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires in February 2027. The Company recognized a right-of-use asset and a liability of $1,428,764 pursuant to this lease.   In September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space. The Company recognized a right-of-use asset and a liability of $22,192,503 pursuant to such lease. In connection with the execution of lease, the Company was required to provide the landlord with a letter of credit in the amount of $2.7 million, which is secured by the same amount of cash.   In January 2024 the Belami, subsidiary of SKYX entered in a 35-month lease related to its Sacramento office. The Company recognized a right-of-use asset and a liability of $ 662,698 pursuant to such lease.   The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of March 31, 2024:  SCHEDULE OF LEASE COST OPERATING LEASE     March 31, 2024   Lease costs:         Cash paid for operating lease liabilities   $ 505,920   Right-of-use assets obtained in exchange for new operating lease obligations   $ 21,360,642   Fixed rent payment   $ 300,933   Lease – Depreciation expense   $ 516,707         years ended       March 31, 2024   Other information:         Weighted-average discount rate     6.41 % Weighted-average remaining lease term (in months)     107      SCHEDULE OF MINIMUM LEASE OBLIGATION         Minimum Lease obligation         Nine months ended December 31, 2024   $ 1,595,397   2025     2,346,540   2026     2,589,372   2027     2,288,363   2028 and thereafter     15,703,089   Total   $ 24,522,761

v3.24.1.1.u2

ROYALTY OBLIGATIONS	3 Months Ended
	Mar. 31, 2024
Royalty Obligations
ROYALTY OBLIGATIONS	NOTE 7 ROYALTY OBLIGATIONS   The Company had a license agreement with General Electric (“GE”) which provided, among other things, for rights to market certain of the Company’s products displaying the GE brand in consideration of royalty payments to GE. The agreement expired in 2023.   The Company owes $2.5 million to GE pursuant to the license agreement. The payments associated with this debt are payable in quarterly tranches aggregating $0.8 million during 2024 and 2025 and $0.9 million in 2026. Additionally, the Company owes an additional amount of $1.4 million pursuant to its agreements with GE which is payable in 2027. During April 2024, GE and the Company agreed to reduce the additional amount of $1.4 million by $400,000 in exchange for the issuance of a convertible promissory note of $1.0 million. The GE Note does not bear interest and the principal amount of the Note is convertible into shares of the Company’s common stock at any time at the option of the holder at $1.07 per share. The Company may prepay the entire then-outstanding principal amount of a Note at any time, plus a prepayment premium; if the Company exercises such right, the Note holder may instead elect to convert the Note into shares of common stock. The Note also provides for certain piggyback registration rights.

v3.24.1.1.u2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	NOTE 8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES   Accounts payable and accrued expenses consisted of the following:  SCHEDULE OF ACCRUED EXPENSES     March 31, 2024     December 31, 2023   Accrued interest, convertible notes   $ 950,358     $ 744,953   Trade payables     11,238,517       11,513,918   Accrued compensation     1,248,419       874,557   Total   $ 13,437,294     $ 13,133,428

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 RELATED PARTY TRANSACTIONS   Convertible Notes Due to Related Parties   Convertible notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers. The outstanding principal on the convertible promissory notes, associated with related parties was $950,000 as of March 31, 2024, and December 31, 2023 and accrued interest of $ 272,824 and $151,081, respectively.

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 10 STOCKHOLDERS’ EQUITY   (A) Common Stock   The Company issued the following common stock during the three months ended March 31, 2024, and 2023:  SCHEDULE OF COMMON STOCK Transaction Type   Shares Issued     Valuation $     Range of Value Per Share $ March 31, 2024 Equity Transactions                     Common stock issued, pursuant to services provided     890,103       3,295,029     1.27-1.68 Issuance of common stock pursuant to offering, net     2,733,361       3,655,755     1.25-1.64   Transaction Type   Shares Issued     Valuation ($)     Range of Value Per Share ($) March 31, 2023 Equity Transactions                     Common stock issued, pursuant to services provided     282,188       2,963,702     2.52 – 3.56   As of March 31, 2024, the remaining amount to be used under the ATM offering program is $6.5 million.   (B) Preferred Stock   The following is a summary of the Company’s Preferred Stock activity during the three months ended March 31, 2023:    SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type   Quantity     Carrying Value     Value per Share ($)   Preferred Stock Balance at December 31, 2022     880,400     $ 220,099     $ 0.25   Preferred Stock redemptions     —       —       —   Preferred Stock Balance at March 31, 2023     880,400     $ 220,099     $ 0.25     The Series A Preferred Stock was convertible at the holder’s option. The Company could repurchase shares of the Preferred Stock for $3.50 per share. Holders also had a put option, allowing them to sell their shares of Preferred Stock back to the Company at $0.25 per share, and therefore the stock was classified as mezzanine equity rather than permanent equity.     There were no shares of Series A Preferred Stock outstanding at March 31, 2024 and the Company terminated its designation of the Series A Preferred Stock in May 2023. The Company has not designated any other preferred stock as of March 31, 2024.   (C) Stock Options   The following is a summary of the Company’s stock option activity during the three month ended March 31, 2024 and 2023:  SCHEDULE OF STOCK OPTION ACTIVITY Options   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (In Years)     Aggregate Intrinsic Value   Outstanding, January 1, 2024     35,805,976     $ 7.33     ––     $ 2,037,200   Exercised     ––       ––       ––       ––   Granted     540,000       1.63       ––       —   Forfeited     (189,500 )     2.89       —       —   Expired             —                   Outstanding, March 31, 2024     36,156,476     $ 7.3       2.58     $ 2,037,200                                     Exercisable, March 31, 2024     13,892,937     $ 4.54       2.07     $ 2,034,525     Options   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (In Years)     Aggregate Intrinsic Value   Outstanding, January 1, 2023     33,289,250     $ 7.7       —     $ —   Exercised                     —       —                                     Expired     175,000       3.0       —       —   Outstanding, March 31, 2023     33,114,250     $ 7.7       3.2     $ 10,534,567                                     Exercisable, March 31, 2023     12,731,250     $ 4.4       2.55     $ 10,534,567     The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during three month ended March 31, 2024 and 2023:  SCHEDULE OF BLACK SCHOLES PRICING MODEL     March 31, 2024     March 31, 2023         Range       Range   Stock price   $ 1.76     $ 3.74-3.84   Exercise price   $ 0 - 14     $ 3.0   Expected life (in years)     2.87 yrs.       5 yrs.   Volatility     37 %      42 % Risk-fee interest rate     4.10 %      5.02 % Dividend yield     —       —     The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility.   Unamortized future option expense was $13.9 million (excluding certain market-based options which management cannot ascertain to have a probable outcome amounting to $63 million) at March 31, 2024 and it is expected to be recognized over a weighted-average period of 2 years.     (D) Warrants Issued   The following is a summary of the Company’s warrant activity during three month ended March 31, 2024 and 2023:  SCHEDULE OF WARRANT ACTIVITY     Number of Warrants     Weighted Average Exercise Price   Balance, January 1, 2024     2,063,522     $ 5.76   Issued     —       —   Exercised     —       —   Forfeited     (14,375 )     —   Balance, March 31, 2024     2,049,147     $ 5.45         Number of Warrants     Weighted Average Exercise Price   Balance, January 1, 2023     671,855     $ 11.5   Issued     1,391,667       3.0   Exercised     —       —   Forfeited     —       —   Balance, March 31, 2023     2,063,522     $ 5.76     During the three months ended March 31, 2024, the Company did not issued any warrants. During the three months ended March 31, 2023 as an inducement to enter certain financing transactions, the Company issued 1,391,667 3- year warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.   (D) Restricted stock units   A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2024 and 2023 are as follows:  SCHEDULE OF NON-VESTED RESTRICTED STOCK     Shares     Weighted Average Grant Due Fair Value   Non-vested restricted stock units, January 1, 2024     4,919,702     $ 4.21   Granted     600,000       1.76   Vested     (770,888 )     3.79   Forfeited     (13,834 )     1.52   Non-Vested restricted stock units, March 31, 2024     4,734,980     $ 3.98                     Non-vested restricted stock units, January 1, 2023     2,516,461     $ 8.39   Granted     9,096       3.29   Vested     (540,188 )     10.73   Forfeited     (5,400 )     11.4   Non-vested restricted stock units on March 31, 2023     1,979,969     $ 7.87     The weighted-average remaining contractual life of the restricted units as of March 31, 2024 is 1.3 years.   One RSU gives the right to receive one share of the Company’s common stock. RSUs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period.   During the three months ended March 31, 2024, and 2023, the Company recognized compensation expense of $ 3,295,029, and $2,963,702, respectively, related to stock options, RSUs and RSAs.

v3.24.1.1.u2

CONCENTRATIONS OF RISKS	3 Months Ended
	Mar. 31, 2024
Risks and Uncertainties [Abstract]
CONCENTRATIONS OF RISKS	NOTE 11 CONCENTRATIONS OF RISKS   Major Customers and Accounts Receivable   The Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue during the three months ended March 31, 2024 and 2023. The Company had one third-party payor accounts receivable balance representing 24% of the Company’s total accounts receivable at March 31, 2024 and none at March 31, 2023.   Liquidity   The Company’s cash and cash equivalents are held primarily with two financial institutions. The Company has deposits which exceed the amount insured by the FDIC. To reduce the risk associated with the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits.   Product and Geographic Markets   The Company generates its income primarily from lighting and heating products sold primarily in the United States.

v3.24.1.1.u2

PROFORMA FINANCIAL STATEMENTS (unaudited)	3 Months Ended
	Mar. 31, 2024
Proforma Financial Statements
PROFORMA FINANCIAL STATEMENTS (unaudited)	NOTE 12 PROFORMA FINANCIAL STATEMENTS (unaudited)   The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023:  SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION     2023       Three-month period ended March 31,       2023   Revenues   $ 18,636,969   Net loss   $ (10,349,191 ) Basic and diluted loss per share   $ (0.11 ) Weighted average number of shares outstanding- basic and diluted     90,601,616     These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results to reflect, among other things, 1) additional amortization that would have been charged assuming the fair value adjustments to amortizable intangible assets had been applied, 2) the shares issued and issuable by the Company to acquire Belami, 3) fair value of the initial grant and options to Belami employees, and 4) the increase in interest expense related to the issuance of convertible notes payable, including amortization of debt discount. Furthermore, it excludes transaction costs related to the Belami acquisition. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have resulted had the acquisition occurred on the date indicated or that may result in the future.

v3.24.1.1.u2

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 13 SUBSEQUENT EVENTS   Management has evaluated subsequent events through May 14, 2024, which is the date the consolidated financial statements were available to be issued. There were no significant subsequent events that required adjustment to or disclosure in the unaudited consolidated financial statements.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation   The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional disclosures and accounting policies.
Use of Estimates	Use of Estimates   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.   Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.   Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates.
Reclassifications	Reclassifications   For comparability, reclassifications of prior-year balances were made to conform with current-year presentations, such as sales and marketing expenses which were previously included in selling, general, and administrative expenses in the 2023 comparable period.
Basis of Consolidation	Basis of Consolidation   The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28 2023. All intercompany balances and transactions have been eliminated in consolidation.
Cash, Cash Equivalents, and Restricted Cash	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 EQUIVALENTS AND RESTRICTED CASH     March 31, 2024     December 31, 2023                 Cash and cash equivalents   $ 14,146,785     $ 16,810,983   Restricted cash     5,642,878       5,619,270   Total cash, cash equivalents and restricted cash   $ 19,789,663     $ 22,430,253
Restricted Cash	Restricted Cash   The Company issued a letter of credit of $2.8 million in September 2023 to use as collateral for certain obligations to one of its lessors. The letter of credit was issued by a financial institution and was secured by cash of $2.8 million as of March 31, 2024 and December 31, 2023. Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed $750,000 in an escrow account. Furthermore, the Company secured a line of credit of $2.0 million with cash of the equivalent amount.
Customer Contracts Balances	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. As of March 31, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $54,987 and $54,987, respectively. The Company determines an allowance for sales returns based upon historical experience. As of March 31, 2024, and December 31, 2023, the Company’s allowance for sales returns was $185,501 and $182,584, respectively and is recorded as accrued expenses in the accompanying consolidated financial statements.   The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 1,616,038 and $1,475,519 as of March 31, 2024 and December 31, 2023, 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 related inventory, freight, and sales charges. The deferred charges amounted to $ 245,734 and $224,445 as of March 31, 2024 and December 31, 2023, respectively.
Inventory	Inventory   Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand.  SCHEDULE OF INVENTORY     Match 31, 2024     December 31, 2023   Inventory, component parts   $ 2,944,213     $ 2,230,252   Inventory, finished goods     2,133,511       2,495,482   Allowance     (1,300,000 )     (1,300,000 ) Inventory-total     3,777,724       3,425,734     The Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period of time. The Company tracks inventory as it is repurposed, disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $1.3 million as of March 31, 2024 and December 31, 2023.
GE Agreements	GE Agreements   The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products.     ● A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement under similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of the Company’s Standard and Smart plug-and-play products set forth in a statement of work in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work.         ● A letter agreement dated November 28, 2023. The agreement expires on December 15, 2027 and includes a repayment plan relating to certain amounts due under the U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, the Company was required to pay a revised royalty payment obligation of $2.7 million in the aggregate (the “Royalty Payment”), payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and an additional obligation equal to either a $1 million convertible promissory note, subject to agreement on terms, or otherwise $1.4 million payable in 2027. As of March 31, 2024, the Company owed $3.7 million in royalty payment obligations. On April 11, 2024, the Company amended the payment arrangement and issued a convertible promissory note, (the “GE Note”), for the additional obligation, thereby reducing the payment obligations by $400,000. A detailed description of the GE Note is set forth in Note 7 below.
Loss Per Share	Loss Per Share   Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stocks, common stock equivalents and potentially dilutive securities outstanding during each period.   The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the three-month ended March 31, 2024, and 2023, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented.   The Company had the following anti-dilutive common stock equivalents as of March 31, 2024, and March 31, 2023:  SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS     March 31, 2024     March 31, 2023   Stock warrants     2,049,147       2,063,522   Stock options     36,156,476       33,114,250   Convertible notes     5,487,260       3,536,668   Preferred stock     –       880,400   Total     43,692,883       39,594,840
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements   Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SCHEDULE OF 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 EQUIVALENTS AND RESTRICTED CASH     March 31, 2024     December 31, 2023                 Cash and cash equivalents   $ 14,146,785     $ 16,810,983   Restricted cash     5,642,878       5,619,270   Total cash, cash equivalents and restricted cash   $ 19,789,663     $ 22,430,253
SCHEDULE OF INVENTORY	SCHEDULE OF INVENTORY     Match 31, 2024     December 31, 2023   Inventory, component parts   $ 2,944,213     $ 2,230,252   Inventory, finished goods     2,133,511       2,495,482   Allowance     (1,300,000 )     (1,300,000 ) Inventory-total     3,777,724       3,425,734
SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS	The Company had the following anti-dilutive common stock equivalents as of March 31, 2024, and March 31, 2023:  SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS     March 31, 2024     March 31, 2023   Stock warrants     2,049,147       2,063,522   Stock options     36,156,476       33,114,250   Convertible notes     5,487,260       3,536,668   Preferred stock     –       880,400   Total     43,692,883       39,594,840

v3.24.1.1.u2

FURNITURE AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
SCHEDULE OF FURNITURE AND EQUIPMENT	Furniture and equipment consisted of the following:  SCHEDULE OF FURNITURE AND EQUIPMENT     March 31, 2024     December 31, 2023   Machinery and equipment   $ 391,895     $ 282,799   Computer equipment     6,846       6,846   Furniture and fixtures     36,059       36,059   Tooling and production     672,509       642,509   Software development costs     219,076       109,096   Leasehold improvements     30,553       30,553   Total     1,356,938       1,107,862   Less: accumulated depreciation     (897,009 )     (671,275 ) Total, net   $ 459,929     $ 436,587

v3.24.1.1.u2

INTANGIBLE ASSETS AND GOODWILL (Tables)	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF INTANGIBLE ASSETS	Intangible assets consisted of the following:  SCHEDULE OF INTANGIBLE ASSETS     March 31, 2024     December 31, 2023   Patents and trademarks (useful life 15 years)   $ 931,831     $ 1,040,927   Customer relationships (useful life 7 years)     4,500,000       4,500,000   E-commerce technology platforms (useful life 4 years)     3,900,000       3,900,000   Total     3,900,000       3,900,000   Less: accumulated amortization   $ (1,704,359 )     (1,299,895 ) Total, net   $ 7,627,472     $ 8,141,032
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE	The following table sets forth the estimated amortization expense for the next five years:  SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Nine months ended December 31, 2024   $ 1,269,150   2025     1,673,613   2026     1,673,613   2027     1,511,113   2028     698,613   2029     698,613

v3.24.1.1.u2

DEBTS (Tables)	3 Months Ended
	Mar. 31, 2024
Debt Disclosure [Abstract]
SCHEDULE OF DEBT	The following table presents the details of the principal outstanding:  SCHEDULE OF DEBT     March 31, 2024     December 31, 2023     APR at March 31, 2024     Maturity   Collateral Convertible Notes (b,c)     14,642,909       11,525,000     6.00 – 10.00 %   September 2023-March 2026   Substantially all company assets Notes payable to financial institutionsa)     6,233,624       6,348,104     7.93-8.5     August 2024-August 2026   Inventory, accounts receivable, cash                                 Notes payable to Belami sellers     251,516       247,927     4.86 %   April 2024   –                                 SBA-related loans     145,022       145,022     3.75 %   April 2025-November 2052   Substantially all Company assets Total   $ 21,273,071     $ 18,266,053                 Unamortized debt discount     (4,410,702 )     (4,591,222 )               Debt, net of Unamortized debt Discount     16,862,369       13,674,831                     (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75% per year.   (b) Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6% through December 2023 and 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $3 to $15 per share.   During 2023, the Company issued convertible promissory notes for $10.4 million. As an inducement to enter the financing transactions, the Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet. The Company recognized $228,499 as amortized debt discount during the three months ended March 31, 2024, and it is reflected as interest expense in the accompanying unaudited consolidated statement of operations. Only the convertible promissory notes issued during fiscal 2023 are secured by substantially all of the assets of the Company.   (c) On March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers at any time at $3.00 per share of our common stock.
SCHEDULE OF INTEREST EXPENSE	SCHEDULE OF INTEREST EXPENSE     For the three-month period ended       March 31, 2024     March 31, 2023   Interest expense   $ 787,854     $ 730,621
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS	As of March 31, 2024, the expected future principal payments for the Company’s debt are due as follows:  SCHEDULE OF FUTURE PRINCIPAL PAYMENTS           Nine-months ended December 31, 2024   $ 6,334,514   2025     4,086,855   2026     10,582,955   2027     3,040   2028 and thereafter     134,392   Total   $ 21,273,071

v3.24.1.1.u2

OPERATING LEASE LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2024
Operating Lease Liabilities
SCHEDULE OF LEASE COST OPERATING LEASE	The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of March 31, 2024:  SCHEDULE OF LEASE COST OPERATING LEASE     March 31, 2024   Lease costs:         Cash paid for operating lease liabilities   $ 505,920   Right-of-use assets obtained in exchange for new operating lease obligations   $ 21,360,642   Fixed rent payment   $ 300,933   Lease – Depreciation expense   $ 516,707         years ended       March 31, 2024   Other information:         Weighted-average discount rate     6.41 % Weighted-average remaining lease term (in months)     107
SCHEDULE OF MINIMUM LEASE OBLIGATION	SCHEDULE OF MINIMUM LEASE OBLIGATION         Minimum Lease obligation         Nine months ended December 31, 2024   $ 1,595,397   2025     2,346,540   2026     2,589,372   2027     2,288,363   2028 and thereafter     15,703,089   Total   $ 24,522,761

v3.24.1.1.u2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	3 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
SCHEDULE OF ACCRUED EXPENSES	Accounts payable and accrued expenses consisted of the following:  SCHEDULE OF ACCRUED EXPENSES     March 31, 2024     December 31, 2023   Accrued interest, convertible notes   $ 950,358     $ 744,953   Trade payables     11,238,517       11,513,918   Accrued compensation     1,248,419       874,557   Total   $ 13,437,294     $ 13,133,428

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Tables)	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
SCHEDULE OF COMMON STOCK	The Company issued the following common stock during the three months ended March 31, 2024, and 2023:  SCHEDULE OF COMMON STOCK Transaction Type   Shares Issued     Valuation $     Range of Value Per Share $ March 31, 2024 Equity Transactions                     Common stock issued, pursuant to services provided     890,103       3,295,029     1.27-1.68 Issuance of common stock pursuant to offering, net     2,733,361       3,655,755     1.25-1.64   Transaction Type   Shares Issued     Valuation ($)     Range of Value Per Share ($) March 31, 2023 Equity Transactions                     Common stock issued, pursuant to services provided     282,188       2,963,702     2.52 – 3.56
SCHEDULE OF PREFERRED STOCK ACTIVITY	SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type   Quantity     Carrying Value     Value per Share ($)   Preferred Stock Balance at December 31, 2022     880,400     $ 220,099     $ 0.25   Preferred Stock redemptions     —       —       —   Preferred Stock Balance at March 31, 2023     880,400     $ 220,099     $ 0.25
SCHEDULE OF STOCK OPTION ACTIVITY	The following is a summary of the Company’s stock option activity during the three month ended March 31, 2024 and 2023:  SCHEDULE OF STOCK OPTION ACTIVITY Options   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (In Years)     Aggregate Intrinsic Value   Outstanding, January 1, 2024     35,805,976     $ 7.33     ––     $ 2,037,200   Exercised     ––       ––       ––       ––   Granted     540,000       1.63       ––       —   Forfeited     (189,500 )     2.89       —       —   Expired             —                   Outstanding, March 31, 2024     36,156,476     $ 7.3       2.58     $ 2,037,200                                     Exercisable, March 31, 2024     13,892,937     $ 4.54       2.07     $ 2,034,525     Options   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (In Years)     Aggregate Intrinsic Value   Outstanding, January 1, 2023     33,289,250     $ 7.7       —     $ —   Exercised                     —       —                                     Expired     175,000       3.0       —       —   Outstanding, March 31, 2023     33,114,250     $ 7.7       3.2     $ 10,534,567                                     Exercisable, March 31, 2023     12,731,250     $ 4.4       2.55     $ 10,534,567
SCHEDULE OF BLACK SCHOLES PRICING MODEL	SCHEDULE OF BLACK SCHOLES PRICING MODEL     March 31, 2024     March 31, 2023         Range       Range   Stock price   $ 1.76     $ 3.74-3.84   Exercise price   $ 0 - 14     $ 3.0   Expected life (in years)     2.87 yrs.       5 yrs.   Volatility     37 %      42 % Risk-fee interest rate     4.10 %      5.02 % Dividend yield     —       —
SCHEDULE OF WARRANT ACTIVITY	The following is a summary of the Company’s warrant activity during three month ended March 31, 2024 and 2023:  SCHEDULE OF WARRANT ACTIVITY     Number of Warrants     Weighted Average Exercise Price   Balance, January 1, 2024     2,063,522     $ 5.76   Issued     —       —   Exercised     —       —   Forfeited     (14,375 )     —   Balance, March 31, 2024     2,049,147     $ 5.45         Number of Warrants     Weighted Average Exercise Price   Balance, January 1, 2023     671,855     $ 11.5   Issued     1,391,667       3.0   Exercised     —       —   Forfeited     —       —   Balance, March 31, 2023     2,063,522     $ 5.76
SCHEDULE OF NON-VESTED RESTRICTED STOCK	A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2024 and 2023 are as follows:  SCHEDULE OF NON-VESTED RESTRICTED STOCK     Shares     Weighted Average Grant Due Fair Value   Non-vested restricted stock units, January 1, 2024     4,919,702     $ 4.21   Granted     600,000       1.76   Vested     (770,888 )     3.79   Forfeited     (13,834 )     1.52   Non-Vested restricted stock units, March 31, 2024     4,734,980     $ 3.98                     Non-vested restricted stock units, January 1, 2023     2,516,461     $ 8.39   Granted     9,096       3.29   Vested     (540,188 )     10.73   Forfeited     (5,400 )     11.4   Non-vested restricted stock units on March 31, 2023     1,979,969     $ 7.87

v3.24.1.1.u2

PROFORMA FINANCIAL STATEMENTS (unaudited) (Tables)	3 Months Ended
	Mar. 31, 2024
Proforma Financial Statements
SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION	The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023:  SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION     2023       Three-month period ended March 31,       2023   Revenues   $ 18,636,969   Net loss   $ (10,349,191 ) Basic and diluted loss per share   $ (0.11 ) Weighted average number of shares outstanding- basic and diluted     90,601,616

v3.24.1.1.u2

ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Restricted cash and cash equivalents	$ 19,700,000
Restricted cash	5,600,000
Working capital	1,200,000
Net cash used in operating activities	6,182,308	$ 4,118,989
Net cash provided by financing activities	$ 3,595,365	$ 10,349,107

v3.24.1.1.u2

SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Sep. 30, 2023
Accounting Policies [Abstract]
Cash and cash equivalents	$ 14,146,785	$ 16,810,983
Restricted cash	5,642,878	5,619,270	$ 2,800,000
Total cash, cash equivalents and restricted cash	$ 19,789,663	$ 22,430,253

v3.24.1.1.u2

SCHEDULE OF INVENTORY (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Inventory, component parts	$ 2,944,213	$ 2,230,252
Inventory, finished goods	2,133,511	2,495,482
Allowance	(1,300,000)	(1,300,000)
Inventory-total	$ 3,777,724	$ 3,425,734

v3.24.1.1.u2

SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	43,692,883	39,594,840
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,049,147	2,063,522
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	36,156,476	33,114,250
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	5,487,260	3,536,668
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total		880,400

v3.24.1.1.u2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)			3 Months Ended
	Dec. 15, 2026	Dec. 15, 2023	Mar. 31, 2024	Dec. 31, 2023	Sep. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Restricted cash			$ 5,642,878	$ 5,619,270	$ 2,800,000
Restricted investments			2,800,000	2,800,000
Escrow deposit			750,000
Line of credit			2,000,000.0
Allowance for doubtful accounts			54,987	54,987
Allowance for sales returns			185,501	182,584
Deferred revenues			1,616,038	1,475,519
Deferred charges			245,734	224,445
Inventory allowance			1,300,000	$ 1,300,000
Subsequent Event [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty payment	$ 1,400,000
Global Trademark Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty payment		$ 2,700,000	$ 3,700,000
Convertible debt		1,000,000
Accounts payable		$ 400,000

v3.24.1.1.u2

SCHEDULE OF FURNITURE AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total	$ 1,356,938	$ 1,107,862
Less: accumulated depreciation	(897,009)	(671,275)
Total, net	459,929	436,587
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	391,895	282,799
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	6,846	6,846
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total	36,059	36,059
Tooling and Production [Member]
Property, Plant and Equipment [Line Items]
Total	672,509	642,509
Software Development [Member]
Property, Plant and Equipment [Line Items]
Total	219,076	109,096
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total	$ 30,553	$ 30,553

v3.24.1.1.u2

FURNITURE AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 30,305	$ 22,141

v3.24.1.1.u2

SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Less: accumulated amortization	$ (1,704,359)	$ (1,299,895)
Total, net	7,627,472	8,141,032
Patents and Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Total	931,831	1,040,927
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Total	4,500,000	4,500,000
E-Commerce Technology Platforms [Member]
Finite-Lived Intangible Assets [Line Items]
Total	$ 3,900,000	$ 3,900,000

v3.24.1.1.u2

INTANGIBLE ASSETS AND GOODWILL (Details) (Parenthetical)	Mar. 31, 2024
Patents and Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	15 years
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	7 years
E-Commerce Technology Platforms [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	4 years

v3.24.1.1.u2

SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE (Details)	Mar. 31, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Nine months ended December 31, 2024	$ 1,269,150
2025	1,673,613
2026	1,673,613
2027	1,511,113
2028	698,613
2029	$ 698,613

v3.24.1.1.u2

INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 513,559	$ 14,307

v3.24.1.1.u2

SCHEDULE OF DEBT (Details) - USD ($)		3 Months Ended
		Mar. 31, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Total		$ 21,273,071	$ 18,266,053
Debt instrument interest rate stated percentage		1.75%
Unamortized debt discount		$ (4,410,702)	(4,591,222)
Debt, net of Unamortized debt Discount		16,862,369	13,674,831
Convertible Notes [Member]
Short-Term Debt [Line Items]
Total	[1],[2]	$ 14,642,909	$ 11,525,000
Debt instrument interest rate stated percentage		10.00%	6.00%
Maturity date description	[1],[2]	September 2023-March 2026
Convertible Notes [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate stated percentage	[1],[2]	6.00%
Convertible Notes [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate stated percentage	[1],[2]	10.00%
Notes Payable Financial Institutions [Member]
Short-Term Debt [Line Items]
Total	[3]	$ 6,233,624	$ 6,348,104
Maturity date description	[3]	August 2024-August 2026
Notes Payable Financial Institutions [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate stated percentage	[3]	7.93%
Notes Payable Financial Institutions [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate stated percentage	[3]	8.50%
Notes Payble Belami Sellers [Member]
Short-Term Debt [Line Items]
Total		$ 251,516	247,927
Debt instrument interest rate stated percentage		4.86%
Maturity date description		April 2024
SBA Related Loans [Member]
Short-Term Debt [Line Items]
Total		$ 145,022	$ 145,022
Debt instrument interest rate stated percentage		3.75%
Maturity date description		April 2025-November 2052
[1] Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6% through December 2023 and 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $3 to $15 per share. [2] On March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers at any time at $3.00 per share of our common stock. [3] The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75% per year.

v3.24.1.1.u2

SCHEDULE OF INTEREST EXPENSE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Debt Disclosure [Abstract]
Interest expense	$ 787,854	$ 730,621

v3.24.1.1.u2

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Nine-months ended December 31, 2024	$ 6,334,514
2025	4,086,855
2026	10,582,955
2027	3,040
2028 and thereafter	134,392
Total	$ 21,273,071	$ 18,266,053

v3.24.1.1.u2

SCHEDULE OF DEBT TABLE (Details) (Parenthetical) - USD ($)			3 Months Ended		12 Months Ended
		Mar. 29, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Short-Term Debt [Line Items]
Bears interest at a rate of percentage			1.75%
Stock Purchase Agreement [Member]
Short-Term Debt [Line Items]
Bears interest at a rate of percentage			10.00%
Debt conversion, convertible,conversion amount		$ 3.00
Debt conversion, original debt, amount		$ 3,117,408
Debt conversion, converted instrument, amount		$ 1,039,303
Debt instrument, maturity date		May 16, 2025
Convertible Notes [Member]
Short-Term Debt [Line Items]
Bears interest at a rate of percentage			10.00%		6.00%
Convertible notes payable			$ 600,000		$ 10,400,000
Warrants issued				1,391,667	1,391,667
Warrant price per share				$ 2.70	$ 2.70
Debt instrument convertible beneficial conversion feature				$ 5,600,000	$ 5,600,000
Amortization of debt discount			$ 228,499
Convertible Notes [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Bears interest at a rate of percentage	[1],[2]		6.00%
Debt conversion, convertible,conversion amount			$ 3
Convertible Notes [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Bears interest at a rate of percentage	[1],[2]		10.00%
Debt conversion, convertible,conversion amount			$ 15
[1] Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $600,000 payable to a director matured in 2023, and the other remaining convertible promissory notes mature in May 2025, bear interest at an annual rate of 6% through December 2023 and 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price ranging from $3 to $15 per share. [2] On March 29, 2024, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,408 in cash due to the sellers on the first anniversary of the closing. Each seller received a Seller Note in an amount of $1,039,303 on the same date. In addition to other customary terms, the Seller Notes bear annual interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the sellers at any time at $3.00 per share of our common stock.

v3.24.1.1.u2

SCHEDULE OF LEASE COST OPERATING LEASE (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Operating Lease Liabilities
Cash paid for operating lease liabilities	$ 505,920
Right-of-use assets obtained in exchange for new operating lease obligations	21,360,642
Fixed rent payment	300,933
Lease - Depreciation expense	$ 516,707
Operating lease, weighted average discount rate, percentage	6.41%
Operating lease, weighted average remaining lease term (in months)	107 months

v3.24.1.1.u2

SCHEDULE OF MINIMUM LEASE OBLIGATION (Details)	Mar. 31, 2024 USD ($)
Operating Lease Liabilities
Nine months ended December 31, 2024	$ 1,595,397
2025	2,346,540
2026	2,589,372
2027	2,288,363
2028 and thereafter	15,703,089
Total	$ 24,522,761

v3.24.1.1.u2

OPERATING LEASE LIABILITIES (Details Narrative) - USD ($)	Jan. 31, 2024	Sep. 30, 2022	Apr. 30, 2022
58-Month Lease [Member]
Lessee, Lease, Description [Line Items]
Operating lease, liability			$ 1,428,764
124-Month Lease [Member]
Lessee, Lease, Description [Line Items]
Operating lease, liability		$ 22,192,503
Letter of credit		$ 2,700,000
35-Month Lease [Member]
Lessee, Lease, Description [Line Items]
Operating lease, liability	$ 662,698

v3.24.1.1.u2

ROYALTY OBLIGATIONS (Details Narrative) - USD ($)		3 Months Ended
	Apr. 30, 2024	Mar. 31, 2024	Mar. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Issuance of convertible promissory note			$ 10,350,000
License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from royalties received		2,500,000
License Agreement [Member] | Subsequent Event [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accounts payable	$ 1,400,000
Decrease in accounts payable	400,000
Issuance of convertible promissory note	$ 1,000,000.0
Shares issued price per share	$ 1.07
License Agreement [Member] | 2024 and 2025 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Debt, Current		800,000
License Agreement [Member] | 2026 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Debt, Current		900,000
License Agreement [Member] | 2027 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accounts payable		$ 1,400,000

v3.24.1.1.u2

SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued interest, convertible notes	$ 950,358	$ 744,953
Trade payables	11,238,517	11,513,918
Accrued compensation	1,248,419	874,557
Total	$ 13,437,294	$ 13,133,428

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Accrued interest	$ 950,358	$ 744,953
Director and Co-Chief Executive Officer [Member]
Related party transactions amount	950,000	950,000
Accrued interest	$ 272,824	$ 151,081

v3.24.1.1.u2

SCHEDULE OF COMMON STOCK (Details) - Common Stock [Member] - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Shares Issued	890,103	282,188
Issuance of common stock pursuant to offering, net, Shares Issued	2,733,361
2024 Equity Transactions [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Shares Issued	890,103
Common stock issued, pursuant to services provided, Valuation issued	$ 3,295,029
Issuance of common stock pursuant to offering, net, Shares Issued	2,733,361
Issuance of common stock pursuant to offering, net, Valuation issued	$ 3,655,755
2024 Equity Transactions [Member] | Minimum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Range of value per share	$ 1.27
Issuance of common stock pursuant to offering, net, Range of value per share	1.25
2024 Equity Transactions [Member] | Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Range of value per share	1.68
Issuance of common stock pursuant to offering, net, Range of value per share	$ 1.64
2023 Equity Transactions [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Shares Issued		282,188
Common stock issued, pursuant to services provided, Valuation issued		$ 2,963,702
2023 Equity Transactions [Member] | Minimum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Range of value per share		$ 2.52
2023 Equity Transactions [Member] | Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued, pursuant to services provided, Range of value per share		$ 3.56

v3.24.1.1.u2

SCHEDULE OF PREFERRED STOCK ACTIVITY (Details) - Preferred Stock [Member]	3 Months Ended
	Mar. 31, 2024 USD ($) $ / shares shares
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred stock beginning, shares outstanding | shares	880,400
Preferred stock beginning, carrying value | $	$ 220,099
Preferred stock, value per share, beginning | $ / shares	$ 0.25
Preferred stock redemption shares | shares
Preferred stock redemption shares, carrying value | $
Preferred stock redemption, value per share | $ / shares
Preferred stock ending, shares outstanding | shares	880,400
Preferred stock ending, carrying value | $	$ 220,099
Preferred stock, value per share, ending | $ / shares	$ 0.25

v3.24.1.1.u2

SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity [Abstract]
Number of shares, Outstanding beginning	35,805,976	33,289,250
Weighted Average Exercise Price, Outstanding beginning	$ 7.33	$ 7.7
Aggregate Intrinsic value, Outstanding beginning	$ 2,037,200
Number of shares, Exercised
Weighted Average Exercise Price, Exercised	$ 0
Number of shares, Granted	540,000
Weighted Average Exercise Price, Granted	$ 1.63
Number of shares, Forfeited/Awards Canceled	(189,500)
Weighted Average Exercise Price, Forfeited/Awards Canceled	$ 2.89
Weighted Average Exercise Price, Expired		$ 3.0
Number of shares, Outstanding ending	36,156,476	33,114,250
Weighted Average Exercise Price, Outstanding Ending	$ 7.3	$ 7.7
Weighted Average Remaining Contractual Life in Years, Outstanding ending	2 years 6 months 29 days	3 years 2 months 12 days
Aggregate Intrinsic value, Outstanding ending	$ 2,037,200	$ 10,534,567
Number of shares, Exercisable	13,892,937	12,731,250
Weighted Average Exercise Price, Exercisable ending	$ 4.54	$ 4.4
Weighted Average Remaining Contractual Life in Years, Exercisable ending	2 years 25 days	2 years 6 months 18 days
Aggregate Intrinsic value, Exercisable ending	$ 2,034,525	$ 10,534,567
Number of shares, expired		175,000

v3.24.1.1.u2

SCHEDULE OF BLACK SCHOLES PRICING MODEL (Details) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock price	$ 1.76
Exercise price		$ 3.0
Expected term (in years)	2 years 10 months 13 days	5 years
Expected volatility	37.00%	42.00%
Risk-fee interest rate	4.10%	5.02%
Dividend yield
Minimum [Member]
Stock price		$ 3.74
Exercise price	$ 0
Maximum [Member]
Stock price		$ 3.84
Exercise price	$ 14

v3.24.1.1.u2

SCHEDULE OF WARRANT ACTIVITY (Details) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity [Abstract]
Number of Warrants, Beginning balance	2,063,522	671,855
Weighted average exercise price outstanding, beginning	$ 5.76	$ 11.5
Number of Warrants, Issued		1,391,667
Weighted Average Exercise Price, Issued		$ 3.0
Number of Warrants, Exercised
Weighted Average Exercise Price, Exercised
Number of Warrants, Forfeited	(14,375)
Weighted Average Exercise Price, Forfeited
Number of Warrants, Ending balance	2,049,147	2,063,522
Weighted average exercise price outstanding, ending	$ 5.45	$ 5.76

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Subsidiary, Sale of Stock [Line Items]
Unamortized future option expense	$ 13,900,000
Unamortized future option expense excluding market based options	$ 63,000,000
Weighted average period	2 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms	1 year 3 months 18 days
Share based compensation expense	$ 3,295,029	$ 2,963,702
Restricted Stock Units (RSUs) [Member]
Subsidiary, Sale of Stock [Line Items]
Share based compensation expense	$ 3,295,029	$ 2,963,702
Preferred Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Preferred stock, par value	$ 3.50
Sale of stock, price per share	$ 0.25
ATM Offering Program [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares value issued	$ 6,500,000

v3.24.1.1.u2

SCHEDULE OF NON-VESTED RESTRICTED STOCK (Details) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non-vested restricted stock units, granted	540,000
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non-vested restricted stock units, beginning balance	4,919,702	2,516,461
Non-vested restricted stock units, Weighted average grant due fair value, beginning balance	$ 4.21	$ 8.39
Non-vested restricted stock units, granted	600,000	9,096
Non-vested restricted stock units, Weighted average grant due fair value, granted	$ 1.76	$ 3.29
Non-vested restricted stock units, vested	(770,888)	(540,188)
Non-vested restricted stock units, Weighted average grant due fair value, vested	$ 3.79	$ 10.73
Non-vested restricted stock units, forfeited	(13,834)	(5,400)
Non-vested restricted stock units, Weighted average grant due fair value, forfeited	$ 1.52	$ 11.4
Non-vested restricted stock units, beginning balance	4,734,980	1,979,969
Non-vested restricted stock units, Weighted average grant due fair value, ending balance	$ 3.98	$ 7.87

v3.24.1.1.u2

STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) - Convertible Notes [Member] - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2023
Short-Term Debt [Line Items]
Warrants issued	1,391,667	1,391,667
Warrants term	3 years
Warrant exercise price	$ 2.70	$ 2.70
Debt instrument convertible beneficial conversion feature	$ 5.6	$ 5.6

v3.24.1.1.u2

CONCENTRATIONS OF RISKS (Details Narrative)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Third Party Payor [Member]
Concentration Risk [Line Items]
Concentration risk percentage	24.00%	24.00%

v3.24.1.1.u2

SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares
Proforma Financial Statements
Revenues | $	$ 18,636,969
Net loss | $	$ (10,349,191)
Basic loss per share	$ (0.11)
Diluted loss per share	(0.11)
Weighted average number of shares outstanding basic	90,601,616
Weighted average number of shares outstanding diluted	$ 90,601,616

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