Q1 2025 SKYX Platforms Corp Earnings Call
Operator: Good day, and welcome to the Sky X Platforms Corp. First Quarter 2025 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. And to withdraw your question, please press star, then two.
Good day and welcome to the Sky X platforms Corp, first quarter 2025 earnings call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone.
And to withdraw your question. Please press Star then two before we begin. Please note that today's call may contain forward looking statements based on current expectations and assumptions. These are subject to risks and uncertainties and actual results may differ materially.
Operator: Before we begin, please note that today's call may contain forelooking statements based on current expectations and assumptions. These are subject to risk and uncertainties, and actual results may differ materially.
Operator: For a more complete discussion, please refer to our Form 10-Q for the quarter ending March 31st of 2025, filed with the SEC. Please note, this event is being recorded.
For a more complete discussion please refer to our Form 10-Q for the quarter ending March 31st of 2025 filed with the S. E C.
Please note. This event is being recorded I would now like to turn the conference over to Sky <unk> founder and Executive Chairman Mr. Rani Cohen. Please go ahead Sir.
Ronnie Kohen: I would now like to turn the conference over to Sky X's founder and executive chairman, Mr. Ronnie Kohen. Please go ahead, sir.
Ronnie Kohen: Thank you, good afternoon everyone. I'm happy to be here again as we continue to with our business. goals.
Thank you good afternoon, everyone.
I'm happy to be here again.
As we continue to progress.
With our business.
Speaker Change: Goes we will have now pass it to our president.
Ronnie Kohen: We will have, and I'll pass it to our president. to start our conference.
Steve Schmidt: Steve Schmidt.
Steve Schmidt: To start our conference.
Steve Schmidt: <unk>.
Steve Schmidt: Okay.
Steven Schmidt: Hey, Ronnie, thank you very much. You know, as I think about the comments I'm about ready to make, I think several things stand out. First of all, we are making great progress. And we're excited about the momentum that we have in the business right now. And we really see significant activity going on that's going to really move us forward to really become something very, very significant.
Steve Schmidt: Yeah Ronny thank you very much.
Steve Schmidt: As I think about the comments about ready to make I think several things stand out first of all we are making great progress and we're excited about the momentum that we have in the business right now and we really see significant activity going on it's going to really move us forward to really become something very very significant.
Steven Schmidt: It's an exciting time at Sky X, it really is. So let's jump into kind of our key highlights that we've got. For more information visit www.skyx.com We recorded first quarter sales in 2025 of $20.1 million compared to $18.9 million for the first quarter 2024. And we continue to grow our market penetration of our advanced and smart platform products in both the US and Canadian markets. This is our fifth consecutive quarter of year-over-year revenue growth, and we hope that that will continue. We expect our products to be in 30,000 U.S. and Canadian homes by the end of the second quarter of 2025.
Steve Schmidt: It's an exciting time at Sky UX. It really is so let's jump into kind of our key highlights that we've got.
Speaker Change: We recorded first quarter sales in 2025 of $20 1 million compared to $18 9 million for the first quarter 2024.
Steve Schmidt: We continue to grow our market penetration of our advanced and smart platform products and both of you.
Steve Schmidt: U S and Canadian markets.
Steve Schmidt: This is our fifth consecutive quarter of year over year revenue growth.
Steve Schmidt: We hope that that will continue.
Steve Schmidt: We expect our products to be in the 30000 U S and Canadian homes by the end of the second quarter of 2025.
Steven Schmidt: We are progressing with significant projects and orders that will enable us to become cash flow positive in the second half of 2025. Our DNA expenses decreased by 17% compared to the first quarter of 2024. and Gross Margin and Gross Profit improved by 4.8% and 2% in the first quarter of 2025 sequentially from the fourth quarter of 2024. Very important regarding our safety code standardization team is receiving support from a new significant leading individual with our government safety organization process for a safety mandatory standardization of our electrical ceiling outlet and receptacle technology and more to come.
Steve Schmidt: We are progressing with significant projects and orders.
Steve Schmidt: It will enable us to become cash flow positive in the second half of 2025.
Steve Schmidt: Our G&A expenses decreased by 17% compared to the first quarter of 2024 and.
Steve Schmidt: And gross margin and gross profit improved by four 8% and 2% in the first quarter of 2025 sequentially from the fourth quarter of 2024.
Steve Schmidt: Very important regarding our safety code standardization team is receiving support from a new significant leading individual with our government safety organization process or safety mandatory standardization of our electrical ceiling outlet and receptacle.
Steve Schmidt: G and more to come.
Steven Schmidt: As of March 31st, 2024, we reported $12.3 million in cash, cash equivalents and restricted cash, as compared to $15.5 million as of March 31st, 2024. We recently secured approximately $4 million in additional equity mainly through preferred stock investments representing $2 per share of common stock with no warrants, part of a broader financing round totaling approximately $15 million to date. led by the Shader Group, owner and developer of more than 70 hotels worldwide. The $15 million broader round included substantial participation from company insiders, including myself and co-CEOs Lenny Sokolow and John Campy, underscoring their contingent confidence in Sky's strategic vision and growth trajectory.
Speaker Change: As of March 31st 2024, we reported $12 3 million in cash cash equivalents and restricted cash as compared to $15 5 million as of March 31 2024.
Speaker Change: We recently secured approximately $4 million in additional equity mainly through preferred stock investments representing $2 per share of common stock.
Speaker Change: No warrants part of a broader financing round totaling approximately $15 million to date.
Speaker Change: Led by the senior group owner and developer of more than 70 hotels worldwide.
Speaker Change: The 15 million broader round include a substantial participation from company insiders, including myself and co Ceos of any sokolow, John Cathy underscoring their continued confidence and sky strategic vision and growth trajectory.
Speaker Change: Okay.
Steven Schmidt: As you can see, we are continuing to raise money from strategic investors that understand the depth of our strategic vision and our significant value proposition for builders, insurance companies, and others. That's common with companies such as ours when sales are converted into cash rapidly, often referred to as the Dell Working Capital Model. We leverage our trades payable to finance our operations, to enhance our cash position, and lower our cost of capital. We strongly believe our product can save insurance companies many billions of dollars annually. by reducing fires, ladder falls, electrocution. We expect once we complete an entire range of America.
Speaker Change: As you can see we are continuing to raise money.
Speaker Change: Strategic investors that understand the depth of our strategic vision and our significant value proposition for builders insurance companies and others.
Speaker Change: That is common with companies such as ours when sales are converted into cash rapidly often referred to as the Dell working capital model.
Speaker Change: We leverage our trades payable to finance, our operations to enhance our cash position and lower our cost of capital.
We strongly believe our products can save insurance companies, many billions of dollars annually.
By reducing fires ladder falls electrocutions.
Speaker Change: We expect once we complete an entire range.
Speaker Change: Variation of our safe plug and play products, we will start being recommended by insurance companies.
Steven Schmidt: Our technologies provide opportunities for recurring revenues through interchangeability, upgrades, monitoring, and subscription. We are focused on the razor and blade model. and our product range includes our advanced sealing electrical outlet, the Razor. and our advanced smart home plug-and-play products, the Blade, including our advanced smart home plug-and-play platform products. lighting, recess lights, down lights, exit signs, emergency lights, ceiling fans, chandeliers, pendants, holiday kits, you name it, outdoor and indoor lights, among other things. You can think it, we've got it. Our plug-and-play technology enables an installation of lighting fans and smart home products in high-rise buildings and hotels within days rather than months.
Speaker Change: Our technologies provide opportunities for recurring revenues.
Speaker Change: Interchange ability upgrades monitoring and subscriptions.
Speaker Change: We are focused on the razor and blade model.
Speaker Change: And our product range includes our advanced sealing electrical outlet the razor.
Speaker Change: And our advanced Smart home plug and play products double aid, including our.
Speaker Change: Our advanced Smart home plug and play platform Biotics.
Speaker Change: Lighting recessed light down lights exit signs emergency like ceiling fan chandelier spend its holiday kits you name it outdoor and indoor lighting among other things you can think we've got it.
Speaker Change: Our plug and play technology enabled and installation of lighting bans and smart home products in high rise buildings and hotels within days rather than months.
Steven Schmidt: Our total addressable market, our TAM, in the U.S. is roughly $500 billion, with over 42 billion ceiling applications in the U.S. alone.
Speaker Change: Our total addressable market or Tam in the U S is roughly $500 billion with over 42 billion ceiling applications in the U S alone.
Steven Schmidt: and Dennis Johnson. royalties, licensing subscriptions, monitoring, and the sale of global country rights. We continue to utilize our e-commerce platform of over 60 websites for lighting and home decor to educate, enhance our market penetration to both retail and the professional segment. So as I said, great progress, a lot going on, and significant more information to come.
Speaker Change: Expected revenue streams from our retail and professional segments include product sales.
Speaker Change: Royalties licensing subscriptions monitoring and the sale of global country rights.
Speaker Change: We continue to utilize our ecommerce platform of over 60 website for lighting and home decor educate enhance our market penetration to both retail and the professional segments.
Speaker Change: As I said, great progress a lot going on and significantly more information to come so with that let me introduce our co CEO Lenny Sokolow, who will walk you through the financials Lenny all yours.
Leonard Sokolow: So with that, let me introduce our co-CEO, Lenny Sokolow, who will walk you through the financials. Lenny, all yours. Thank you. Thank you, Steve. Thank you very much and welcome everyone again.
Speaker Change: Okay.
Lenny Sokolow: Thank you Steve.
Speaker Change: Thank you very much.
Speaker Change: Welcome everyone again.
Leonard Sokolow: Just if I could run through some select first quarter 2025 financial results. Our revenue in the first quarter of 2025 increased 6% to a $20.1 million in revenues, including e-commerce sales, as well as smart and standard plug-and-play products, as compared to $18.9 million in the first quarter of 2024. Our gross profit for the first quarter ending March 31, 2025 increased sequentially to 2% to 5.7 million.
Speaker Change: Just if I could run through some select first quarter 2025 financial results.
Speaker Change: Our revenue in the first quarter of 2025 increased 6% to a $20 1 million in.
Speaker Change: Revenues, including e-commerce sales as well as smart and standard plug and play Braga products.
Speaker Change: As compared to 18 9 million in the first quarter of 'twenty 'twenty four.
Our gross profit for the first quarter ending March 31, 2025 increase sequentially.
Speaker Change: 2%.
Speaker Change: Two $5.7 million.
Leonard Sokolow: And as discussed, our gross margin increased 4.8% as compared to the fourth quarter of 2024. Net cash used in operating activities for the first quarter ending March 31 decreased sequentially by 29% to $4 million, compared to $6.1 million in the fourth quarter of 2024. For the first quarter of 2025, adjusted EBITDA loss, which is the loss before interest, taxes, depreciation, and amortization, as adjusted for share-based payments, which is a non-GAAP measure, decreased to $3.6 million, or $0.04 per share, as compared to $4.5 million, or $0.05 per share, in the first quarter of 2024.
Speaker Change: And as discussed our gross margin increased 4.8.
Speaker Change: 8% as compared to fourth quarter of 'twenty 'twenty four.
Speaker Change: Our net cash used in operating activities for the first quarter ended March 31 decreased sequentially by 29% to $4 million compared to $6 1 million in the fourth quarter of 2024.
Speaker Change: For the first quarter of 2025, adjusted EBITDA loss loss, which was the loss before interest taxes, depreciation and amortization as adjusted for share based payments, which is a non-GAAP measure decreased to $3 6 million or <unk> <unk> per share as compared to 4.5.
Speaker Change: Million or five cents per share in the first quarter of 2024.
Leonard Sokolow: You know, we would like to emphasize that we have sufficient cash to achieve our goals, including being cash flow positive in 2025. And as we reported, we realized the reduction in the general administrative expenses by 17% by 1.3 million to 6.6 million in the first quarter of 2025 from 7.9 million in the first quarter of 2024. And again, emphasizing that our gross margin and gross profit for the first quarter increased in both events by 4.8% and 2% compared to the quarter ending December 31, 2024. Our net loss per share decreased by 1% to $0.09 per share in the first quarter compared to $0.10 per share loss in the first quarter of 2024.
Speaker Change: We would like to emphasize that we have sufficient cash to achieve our goals, including being cash flow positive in 2025.
Speaker Change: And as we reported the Oh, we have a we realized the reduction in the general and administrative expenses by 17% by $1 3 million, So $6 6 million in the first quarter of 2020, but.
Speaker Change: From seven 9 million in the first quarter of 'twenty 'twenty four.
Speaker Change: And again, emphasizing that our gross margin and gross profit for the first quarter.
Speaker Change: <unk>.
Speaker Change: Both events by four 8% with 2% compared to the quarter ending 20, <unk> December 31 2024.
Speaker Change: Our net loss per share decreased by 1% to nine cents per share in the first quarter compared to 10 cents per share loss in the first quarter of 2024.
Leonard Sokolow: And again, as reported, our EBITDA loss decreased to $0.04 per share in the first quarter compared to $0.05 per share in the first quarter of 2024. We continue to grow our market penetration of our advanced and smart plug-and-play products, and we expect our products to be in 30,000 U.S. and Canadian homes by the end of the second quarter. So, our penetration continues. We expect our products to be in tens of thousands of additional homes in the second half of 2025. We also expect to continue to increase. our units and grow our revenue to the professional and builder segment.
Speaker Change: Again as reported our EBITDA loss.
Speaker Change: Greece, So four cents per share in the first quarter compared to five cents per share in the first quarter of 2024.
Speaker Change: We continue to grow our market penetration of our advanced and smart life products and we expect.
Speaker Change: Our products can be.
Speaker Change: The 30000 U S and Canadian homes by the end of the second quarter. So our penetration continues.
Speaker Change: We expect our products to be in tens of thousands of additional homes in the second half of 2025.
Speaker Change: We also expect to continue to increase.
Speaker Change: Our our units and grow our revenue to.
Speaker Change: The professional and build their segments.
Leonard Sokolow: As previously announced, we entered into a U.S. strategic manufacturing partnership with Profab Electronics, a premier electronic contract manufacturer based in Pompano Beach, Florida. This collaboration marks a significant step in Sky X's commitment to building a resilient, efficient, and localized supply chain for our innovative product line. This partnership, if I can emphasize, is in addition to manufacturing collaborations that Sky X has in Vietnam, Taiwan, China, and Cambodia.
Speaker Change: As previously announced we.
Speaker Change: We entered into a U.
Speaker Change: U S strategic manufacturing partnership profile, but electronics, a premier electronic contract manufacturer based in Pompano Beach, Florida.
Speaker Change: This collaboration marks a significant step.
Speaker Change: Sky UX is commitment to building a resilience.
Speaker Change: And localized supply chain for our innovative product lines.
Speaker Change: This partnership if I can emphasize is in addition to manufacturing collaborations that Sky UX has in Vietnam, Taiwan, China and Cambodia.
Ronnie Kohen: And if I may, I'll hand it back to Ronnie, our Founder and Executive Chairman. Lenny and Steve. As you know, we are progressing nicely on several fronts. We hope that in the very near future we can share a few additional items that we are working on and show some more significant or just getting ready for that production. And once we are, we will be able to share that with the public. And we're also working on some major projects. And as Steve mentioned, and emphasize that we are doing some tremendous progress with adding significant leading and prominent leaders to our code team, led by Mark Early, former head of the National Electrical Code, and Eric Jacobson, former president and CEO of American Lighting Association.
Speaker Change: And if I may hand, it back to.
Speaker Change: Irani, our founder and executive Chairman.
Speaker Change: Very much.
Speaker Change: <unk>.
Speaker Change: Lenny and Steve.
Speaker Change: As.
Speaker Change: As you know, we're progressing and as you heard you were progressing.
Speaker Change: Nicely on several fronts, I think that and we hope that.
Speaker Change: In the near very near future, we can share a few additional items that we're working on and a show some more significant or even more significant progress.
Speaker Change: Where we intend to launch a few new patented products.
Speaker Change: We're just getting ready for that production and once we are we will be able to share that.
Speaker Change: With the public and we're also working on some major projects.
Steve Schmidt: And as Steve mentioned.
Steve Schmidt: And emphasize that we are doing.
Steve Schmidt: Doing some tremendous.
Steve Schmidt: Progress.
Steve Schmidt: Adding <unk>.
Steve Schmidt: Leading significant leading and prominently leaders.
Speaker Change: Tool our codes team led by Mark early former head of the National Electrical Code, then Erik Jacobsen, former President and CEO of American Lighting Association.
Ronnie Kohen: We have, in addition to that team, a very high level that will help our team, and it's already working with us and our team, and ways to expedite our standardization of safety to a mandated position that we all hope and our management team and our leadership, co-leadership, strongly believe that we met all the conditions and the significant life-saving aspects as thousands of people per day in the U.S. fall from ladders, get electrocuted, and fires happen on a daily basis, and millions of hazardous incidents annually happen that we can probably mitigate, if not prevent completely in many cases, so we are excited in our progress, and we hope that we'll be able to share some of those aspects in the next coming months or hopefully sooner.
Steve Schmidt: We have in addition to that team and a very high level that are won't help our team and it already working with us and our team.
Steve Schmidt: And ways to expedite our standardization.
Steve Schmidt: Of safety.
Steve Schmidt: Two a mandated position.
Steve Schmidt: That we all hope and our management team and our leadership code leadership strongly believe.
Steve Schmidt: That we met all the conditions and.
Steve Schmidt: The significant life saving aspect says.
Steve Schmidt: The people per day in the U S fall from ladders get allergic users than electric you didn't buyers happen on a daily basis.
Steve Schmidt: And in and the millions of hazardous incidents.
Steve Schmidt: Annually have then that we can probably mitigate if not prevent completely in many cases so we.
Steve Schmidt: We are excited and our progress in.
Steve Schmidt: We hope that we'll be able to share some of those aspects.
Steve Schmidt: The next coming.
Steve Schmidt: Months or hopefully sooner.
Ronnie Kohen: I think, in general, we're very happy to, you know, where we are, and as Steve and Lenny both mentioned, we can, we believe we can be with our products and We are expecting 30,000 homes by the end of this quarter and we also expect to have much more significant growth towards the second half of the year with homes and units that we penetrate with our products. So that's a general overview here that you got from us with some details. We'll be happy to share, to answer any questions you have.
Steve Schmidt: I think in general well.
Speaker Change: We're very happy to you know, where we are and as Stephen Lenny both mentioned.
Speaker Change: We can we believe we can b with our products in.
Speaker Change: 30000 homes.
Speaker Change: By the end of this quarter and we also expect to have a much more significant growth towards the second half of.
Speaker Change: Of the year.
Speaker Change: With homes in units that we penetrate with our products. So.
Speaker Change: That's a general overview here that you've got from us with some details.
Speaker Change: We'll be happy to share to answer.
Speaker Change: Any questions you have.
Speaker Change: So.
Operator: With that being said, I'll transfer it to Q&A.
Speaker Change: If that's it but that being said I'll transfer it to Q&A.
Operator: Thank you, we will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star then 2.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys. If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Operator: And at this time, we'll pause momentarily to assemble our roster.
Operator: Yes, and I see here, Pat. from Noble. So, guys, thank you.
Speaker Change: Yes, and I see here.
Speaker Change: Pat.
Speaker Change: From a knowable.
Speaker Change: So hey, Guy your line is open.
Patrick McCann: Hey guys, thanks for taking my questions. First of all, I wanted to ask about the manufacturing, the U.S. partnership that you guys recently announced, given the tenuous tariff situation, what is the current state of manufacturing as far as where that is mostly occurring now? And then with regard to the U.S. partnership, what's the cost difference between that versus your partnership with Rui? You know, if you were to ignore the tariffs, you know, how much more expensive might that be?
Speaker Change: Hey, guys. Thanks for taking my questions.
Speaker Change: First of all I wanted to ask about about the manufacturing in the U S partnership that you guys recently announced.
Speaker Change: You know given the tenuous tariff situation Oh, what is the current state of manufacturing as far as where where that is mostly occurring now and then with regard to the U S partnership.
Speaker Change: What what's.
Speaker Change: What's the cost.
Speaker Change: The difference between that versus your partnership or through we you know if you were to ignore the tariffs how much more expensive might that be if you could kind of give a little bit of an overview of that.
Steven Schmidt: If you could kind of give a little bit of an overview of that. Yeah, Pat, it's a great question. And what we're doing here is actually part of our collaboration with ProFab Electronics, a prominent leader here in Florida and also a player nationwide, is that our goal is, together with them, to fully automate many of our products and production that's fully automated. The cost difference is not significant. And this is our goal, and we have a few ways to achieve that goal, working with them at the Salimi Advanced Facility, 60,000 square foot. I think we shared that in the press release we had a couple months ago, 45 days ago probably.
Pat: Yeah, Pat it's a great question and.
Pat: What we're doing here is actually part of our collaboration with pro Fab electronics.
Pat: Prominent leader here are in Florida and also.
Pat: A player nationwide is that our our goal is together with them to fully automate.
Pat: Many of our products and production that is fully automated.
Pat: The cost difference is not significant.
Pat: And this is our goal and we have a few ways to achieve that goal working with them at that Silly me advance facility 60000 square foot I think we shared that in the press release, we had a couple of months ago.
Pat: 45 days ago, poly and their machinery and and their sophistication level of production.
Steven Schmidt: And their machinery and their sophistication level of production is very high, and there's many major products that we intend to launch that we can, with time, can fully automate their production here in the U.S. And by this, we mitigate most of the differences, and it's made in the U.S. So I don't want to promise it's going to be cheaper, but fully automated can be very competitive. Thanks.
Pat: It is very high and there are many.
Pat: Many major projects that we had to launch that we can with time.
Pat: I can fully automate the production here in the U S.
Pat: And by this we mitigate a.
Pat: Most of the differences and it's made in the U S. So I don't want to promise it is gonna be cheaper, but you know fully automated.
Pat: It can be very competitive.
Pat: Yeah.
Pat: Thanks, and then I also wanted to just ask a little bit about the.
Patrick McCann: And then I also wanted to just ask a little bit about the additional investment primarily from the Shainer Group. So, is there room to continue to add to that source of funds through the preferred offering?
Pat: The additional investment from primarily for machinery group.
Pat: So is there room to continue to add to that.
Pat: Source of funds through the.
Pat: Through the preferred the preferred offering and also as long as we're on that topic. I was curious if you could maybe give a little bit of an update on the hotel distribution channel as well as I would imagine that would be.
Steven Schmidt: And also, as long as we're on that topic, I was curious if you could maybe give a little bit of an update on the hotel distribution channel as well, as I would imagine that would be a potential partnership with the Shainer Group there as well. Yeah, with the last approximately four million that we raised, came from strategic investors. And and that's part of our broader round, led by the Shainer group. And, you know, we always welcome strategic people that believe in us and would like to invest. And it's always good to take Thank you. from And they strongly believe, in many cases, that the mandate standardization might happen.
That would be a potential partnership with the shorter route there as well.
Pat: Yeah. The last Oh, it's approximately $4 million that we raised came from strategic investors.
Pat: Investors and and that's part of our browser round.
Pat: Led by the Shaner group.
Pat: And you know we always welcome strategic people that believe in us and would like to invert.
Pat: And it's.
Pat: It's always good to take.
Pat: You know investments or to accept investment.
Pat: From.
Pat: Strategic people that can help.
Pat: And now we're interested too to help us in growing the company. So that's something that when we have the right opportunity you know, we will do but it really depends where we are from a market standpoint, but we feel today, where the stock is today, it's a <unk>.
Very compelling offering for from our perspective, and it's a great win win for investors because they strongly believe in our future and they strongly believe in many cases that the mandate the standardization.
Pat: They happen so.
Steven Schmidt: So they want to be involved. And they also really understand, as Steve mentioned, the value proposition we have in real estate and also for insurance companies, that once we have the entire assortment here, we think that that might become—and we're getting more and more products as we're rolling. So we expect to launch this quarter, announce a few additional new products here. And so the more product we get in— that we expect to start working with insurance companies here.
Speaker Change: They wanted to be involved and they also really understand as Steve mentioned the value proposition, we have in real estate and also for insurance companies that once we have the entire assortment here, we think that that might become and we're getting more and more products as we're rolling so.
Speaker Change: We expect to launch this quarter announced a few additional new products here and so the more product we get in.
Speaker Change:
Speaker Change: We expect to start working with insurance companies here.
Steven Schmidt: Your second question regarding hotels is kind of the same answer here. We are rolling production or started production with all the products that we need. If we're talking about recess lights that we mentioned before, it's a multi-billion unit market globally, and the U.S. is a very big market, and still it's a small picture, but the plug-and-play is not only safer, it saves a lot of time and significant costs on the installation, probably 90 percent, if not more, and it's easy to replace because this is LED-embedded. LED-embedded is significant for our growth because today, light bulbs are becoming less and less important in the market as everything is converting into LED-integrated, so those are electronic chips that provide light, and when they burn or the driver burns, the only way to replace them is to replace the fixture, and this is the most significant growth in the market as LED-embedded.
Speaker Change: Your second question regarding hotels is kind of same answer here we are.
Rolling.
Speaker Change: <unk> no we started production with the with all the products that we need.
Speaker Change: If we're talking about recessed lights that we mentioned before is a multibillion unit market.
Speaker Change: Globally in U S is a very big market and still it's a small fixture, but the plug and play is not only safer. It saves a lot of time and significant cost and installation probably 90% if not more and it's easy to replace because this is leds embedded L. A the embedded as it is.
Speaker Change: For our growth because today, our light bulbs are are are becoming less and less important in the market as abbvie everything is converting into L. E D.
Speaker Change: Integrated so does our electronic chips that gifts give light and provides a light and when they are burn or the driver Burns.
Speaker Change: The only way to replace them is really replace the fixture and that's the market is there is the most significant growth in the market as the elite the embedded it goes on recess lights, and the Shanda leaders and many other products.
Steven Schmidt: It goes on recess lights and chandeliers and many other products, and if it goes wrong, the driver burns or the light bulb burns, the only solution is to replace the entire fixture. So that helps us a lot, and we're in production here, including exit signs and emergency lights that are key for hotels. Wall sconces are key for hotels, indoor and outdoor, that we started receiving, and once we have the entire assortment that's going to include ceiling fans that we hope very soon to launch towards the summer and early, even before the summer. So once we have the entire assortment, it will position us to go forward with hotels.
If it goes wrong the driver Burns the lightbulb balloons are the only.
Speaker Change: Solution is to replace the entire fixture so that helps us a lot and we're in production here, including exit signs an emergency lights are key for hotels wall Sconces are key for hotels indoor and outdoor that we started receiving and and once we have the entire assortment that's going to include ceiling.
Speaker Change: Since then we hope.
Speaker Change: Very soon to launch.
Speaker Change: Towards the summer and early even before the summer.
Speaker Change: So once we have the entire assortment will position us to.
Speaker Change: Go forward with hotels, so we're looking forward to that and this quarter.
Steven Schmidt: So we're looking forward to that, and this quarter, we have a lot of expectations of a product that started production and will arrive, and our goal is to have the entire assortment here by the end of this quarter. And once we have it, I think next half of the year, we're going to have some more updates regarding the pro and builder market, and with that being said, the pro and builder market is a major emphasis of our business plan that we're looking forward to grow.
Speaker Change: We have a lot of expectations of a product that started production and will arrive and our goal is to have the entire assortment in here.
Speaker Change: By the end of this quarter and once we have it I think.
Speaker Change: The next half of the year, you're going to have some more updates regarding the pro and builder market and with that being said the Pearl and builder market is a major emphasis of our business plan.
Speaker Change: We're looking forward to grow.
Patrick McCann: Great, I appreciate all the additional color.
Speaker Change: Great I appreciate all the additional color I'll jump back in the queue congrats on the quarter.
Patrick McCann: I'll jump back in the queue. Congrats on the quarter.
Jack Aarde: And then we have Jack from Maxim Group. Hey, Ronnie. Hey, Lenny. Thanks for the update. I appreciate it. And good to hear the continued growth momentum and solid control over the OPEX in this kind of challenging environment here.
Jack: Okay, and then we have Jack.
Speaker Change: Maxim Group.
Speaker Change: Hey, Ronny.
Thanks sure. Thanks for the update I appreciate it and good to hear the continued growth momentum and.
Speaker Change: So a solid control over the Opex in this challenging environment here. So you know I.
Jack Aarde: So, you know, a follow-up question on manufacturing and tariff mitigation.
Speaker Change: A follow up question on the manufacturing and tariff mitigation.
Jack Aarde: You know, with the recent announcement of ProFab to establish a domestic supply chain, and any other moves you're making, maybe you're making to establish domestic manufacturing, do you have a goal for what percentage of products will be manufactured domestically? And then second part is, you mentioned you're working with ProFab to increase automation of production. How long will that take until we're, it's kind of like fully up to scale at capacity and utilization to get to, you know, whatever the envisioned automation is of the production ramp? Just curious to hear your update there. Overall source of domestic manufacturing, and then also how long will it take to get to automation.
Speaker Change: You know with the recently announced that pro fab to establish a domestic supply chain.
Speaker Change: And any other moves you're making maybe youre, making to establish domestic manufacturing.
Speaker Change: You have a goal for what percentage of products will be manufactured domestically and then second part is.
Speaker Change: You mentioned, you're working with <unk> to increase automation of production, how long will that take until we're it's kind of like fully up to scale, our capacity and utilization to get you yeah.
Speaker Change: Whatever the envision automation is of the production ramp just curious to hear your update there.
Speaker Change: Overall source of domestic manufacturing and then also how long will it take to get your automation.
Speaker Change: Yes and no.
Leonard Sokolow: Jack, thank you for your question, the broader question. So, you know, as everyone knows, it's a day-to-day situation here with the tariffs, right?
Speaker Change: Jack Thank you for your question. The broader question. So you know as everyone knows where it's a day to day situation here with the tariffs right. If you asked me that question three days ago.
Leonard Sokolow: Because if you asked me that question three days ago, I'd probably answer it differently than I'm going to answer it now. So the good news is we really have four significant relationships here in the U.S. and it's profiled are also investors and long-term investors with us. So they're very talented and extremely capable. And we are exploring what the right product and when is the right time to do things in the U.S. But definitely a goal we have. And this is, you know, we're exploring it as we're exploring it. You know, the announcement on tariffs going down again in China now, you know, brought the Chinese manufacturers back to the picture where they kind of were out or some of them that we have a good relationship with them already have sources in Vietnam and Cambodia and in Taiwan.
Speaker Change: We answer it differently, then I'm going to answer it now so.
The good news is we really have a four significant relationships here in the U S and it's a profile are also investors and long term investors with us so.
Speaker Change: They're very talented and very capable extremely capable and we are exploring what the right product.
Speaker Change: And when is the right time to do things in the U S. But it's definitely a goal we have and this is you know.
Speaker Change: We're exploring it as we're exploring it.
Speaker Change: The announcement, then on tariffs going down again in China now.
Speaker Change: <unk> brought that the Chinese manufacturers back to the picture where were they kind of wore out or some of them that we have good relationship with them already have sources in Vietnam, and Cambodia and in Taiwan, So they're not out but China was out for now and now is back in play.
Leonard Sokolow: So they're not out. But China was out for now and now is back in play. So, you know, for us, the more solutions we have, the more options we have, we're situated better and we're obviously always calculating where's the best place to produce.
Speaker Change: So you know for US is the more solutions, we have the more options. We have a we're situated better and we're obviously always calculating where's the best place to produce and and the the future goal is really to get a lot of production here in the U S. Because.
Leonard Sokolow: And the future goal is really to get a lot of production here in the U.S. because. We believe that's the best thing to do for the company, for the country, and that's a good thing that we can achieve, and we're definitely looking into it more than ever. But in the short term, we'll explore the best possibilities to get the product as fast as possible, but on the long term and maybe even shorter term, we're looking for some solutions to start production here in the U.S., but we just announced it 45 days ago, and we like to say it's product, it's not a bakery here, so it takes a bit more time between tooling and other things that we're working on, but the good news is really we have all those options open to us and all of them are very good options that we have on the table.
Speaker Change: We believe that's the best thing to do.
Speaker Change: From the company for the company for the country and that's a good thing that we can achieve and we're definitely looking into it.
Speaker Change: More than ever but in the short term, we will explore the best possibilities to get the product as fast as possible and and and but on the long term and maybe even shorter term. We're looking for some solutions to start production here in the U S.
Speaker Change: But we were still you know, we just announced it 45 days ago and that product is that we like to say, it's a product it's not a bakery here. So it takes a bit more time.
Speaker Change: Between tooling and other things that we're working on but the good news is really we have all those options open to us and all of them are a very good options that we have on the table.
Jack Aarde: Okay, great. I appreciate the color there.
Speaker Change: Okay, Great I appreciate the color there.
Jack Aarde: And then kind of a two-part second question, then I'll hop back in the queue.
Speaker Change: And then kind of a two part second question, then I'll hop back in the queue.
Jack Aarde: Can you maybe just – questions kind of just to clarify again or remind us of the safety code mandatory standardization process of the ceiling receptacle, and then just given the growing additions to the team of, you know, very well-connected personnel. So, two things. I believe the earliest or next possible vote to receive mandatory standardization is around September 2026. So, the question is really, will you get an indication in advance of that date? And then the second part is, what would – would you expect a ramp of actual product orders to come in in advance of that date as well?
Speaker Change: Can you can you maybe just a question Scott just to clarify again to remind us of the safety code mandatory standardization process of the fueling receptacle and and then just given the growing additions to the team of you know very well connected personnel.
Speaker Change: So two things.
Speaker Change: I believe the earliest or next possible vote to receive a mandatory standardization is around September 2026. So the question is really where you get an indication in advance of that date.
Speaker Change: And then the second part is what would would you expect a ramp of actual product orders to come in in advance of that date as well.
Ronnie Kohen: Thanks. So what we're exploring now and what we said recently, there are several government organizations that their criteria is to save lives, mitigate injuries and property damages. And there's more than one organization that can influence a mandatory standardization. And what we are saying here at this point, we can't say more than this, but we are finding that there is ways to expedite. So there's some non-profit and some government associations that that's actually their obligation to find products like what we have that will save lives.
Speaker Change: <unk>.
Speaker Change: So.
Speaker Change: It did they you know theres, so what we're exploring now and what we said recently there several government organizations.
Speaker Change: Are there criteria is to save lives a mitigate injuries and property damages.
Speaker Change: And there's more than one organization that can influence our mandatory standardization.
Speaker Change: And what we are saying here at this point, we can't say more than this but we are finding that there is ways to expedite.
Speaker Change: So some of Theres, some known nonprofit and some of the government.
Speaker Change: Associations that that's actually their obligation.
Speaker Change: To to find products like what we have that will save lives.
Ronnie Kohen: and Paul Sokolow. similar like what I said with the manufacturers, but what we're finding recently is that there are several organizations that really their mandate is to save lives, mitigate injuries and property damages. So that's in addition to what you mentioned. Also important to say is A mandate will happen. So the date, the mandate, if you mention the date, and I don't want to go to details in date because there's different ways, but when you mention the date, the most important date is the decision date because there's the mandate or effective date of situations like this is usually.
Speaker Change: Injuries and property, the damages or mitigate property damages and indeed injuries and is significant in a significant way.
Speaker Change: So the good news is that we are today exploring our possibilities are.
Similar like what I said with the manufacturers, but what we're finding recently is that there are several organizations that really their mandate is to save lives mitigate our injuries and property damages. So that in addition to what you mentioned.
Speaker Change: Also important to say is.
Speaker Change: The mandate will happen.
Speaker Change: So the date that mandate, if you mentioned the data and I don't want to go to details and base because of the different ways, but when you mentioned that date. The most important date is is the decision date, because there's the mandate or effective date of situations like this is usually.
Ronnie Kohen: 18 months or 24 months ahead. So if you get a product mandated, what happened many times with seatbelts and airbags and GFCI that you have in your bathrooms. And another famous one is hair dryers. Someone knows how a hair dryer plug looks. It has a big lock on it with the GFCI. So when there's a decision to mandate a product like this, it gives the market some time. So the decision date of a mandate is extremely important. And again, we're exploring ways to expedite it because our co-team strongly believes that our product met all the conditions to become mandate.
Speaker Change: 18 months 24 months ahead, so if you get a product mandated what happened many time.
Speaker Change: With seatbelts and airbags and.
Speaker Change: G F C. I that you have in your bathrooms.
Speaker Change: And another famous one is hair dryers someone knows how a hair dryer plugged looks it has a big lock on it with the G. F. C. I. So when there's decision a decision to mandate a product like this it gives the market. Some time so the decision date of Av.
Speaker Change: Oh.
Speaker Change: Our mandate is extremely important okay, and again going we're exploring.
Speaker Change: Waste the expedited because our co team strongly believes that they met all the conditions are.
Speaker Change: <unk> met all the conditions to become mandate and were being looked at in a different angle.
Ronnie Kohen: And we're being looked at in a different angle recently.
Speaker Change: Recently.
Jack Aarde: Okay, great. Now, that's really helpful, Culler. I appreciate that, Ronnie.
Speaker Change: Okay, Great no. That's really helpful color I appreciate that Ronny I'll hop back in the queue I may have a few more later thanks.
Jack Aarde: I'll hop back in the queue. I may have a few more later. Thanks.
Speaker Change: Yeah.
Ronnie Kohen: Okay, so yeah, I think today we're taking calls only from analysts. So if you have another question, please do it. If not, If there are investors that want to call us, feel free to call our co-CEO Lenny Sokolow or email him through our PCG, our IR firm. They will be happy to arrange a call with investors that want to talk to us.
Speaker Change: Okay. So yeah, I'd say I think with today, we're taking get calls only from analysts. So if you have another question. Please do it or not.
Speaker Change: There's investors that want a cordless feel free to call our call our co CEO, Lenny sokolov or email him.
Speaker Change: P C G. Our IR firm and they will be happy to arrange a call with investors that want to talk to us.
Ronnie Kohen: And if there are more analysts that want to ask questions, we'll be happy to take them. And if not, we'll be happy to answer any questions that you may have.
Speaker Change: And if there's more analysts that want to ask questions.
Speaker Change: We'll be happy to take them.
Speaker Change: And if not.
Speaker Change: We'll we're looking forward to the next call or hopefully some announcements prior to that next call.
Operator: We're looking forward to the next call or hopefully some announcements prior to that next call. Again, if you have a question, please press star, then 1.
Speaker Change: Again, if you have a question. Please press Star then one.
Operator: There seems to be no more questions for today.
Speaker Change: There seems to be no more questions for today I would like to turn the conference back over to Mr. Rani Cohen for any closing remarks.
Ronnie Kohen: I would like to turn the conference back over to Mr. Ronnie Kohen for any closing remarks. Thank you. Thank you, everyone, Steve and Lenny, for your comments and highlights here. And thank you to the team and thank you to all of you on the call. We're progressing and we look forward to share, hopefully, more good things. soon. Thank you very much.
Speaker Change: Thank you. Thank you everyone, Steve and Lenny for your comments.
Speaker Change: Comments and highlights here and thank you to the team and thank you to all of you on the call.
Speaker Change: We're progressing and we look forward to share hopefully more good things.
Speaker Change:
Speaker Change: Soon thank you very much.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].
Hum.
Speaker Change: [music].