8-K: SKYX Platforms Secures $500K Investment, Boosts Preferred Stock

SKYX Platforms Corp. announced it secured $500,000 from strategic investors through the sale of Series A-2 Preferred Stock and increased its authorized Series A-2 Preferred shares.

Summary

• SKYX Platforms Corp. (the Company) signed and closed Securities Purchase Agreements on December 30, 2025, raising gross proceeds of $500,000 from an existing and a new strategic investor.
• Investors purchased 20,000 shares of Series A-2 Preferred Stock at $25.00 per share, with no price protection.
• The Company intends to use the proceeds for working capital and other general corporate purposes.
• Effective December 23, 2025, the Company filed an Amendment to its Certificate of Designation, increasing the number of shares designated as Series A-2 Preferred Stock from 40,000 shares to 160,000 shares.
• The Series A-2 Preferred Stock carries a liquidation preference of $25.00 per share plus accrued but unpaid dividends.
• Dividends are cumulative, payable quarterly at 8% of the $25.00 liquidation preference per annum, with an option for up to 50% in Common Stock or full dividend in Common Stock by agreement. Unpaid dividends accrue at 12% per annum.
• Each Series A-2 Preferred Share is convertible into Common Stock at the holder's option at a conversion price of $2.00 per share (12.5 shares of Common Stock for each Series A-2 Preferred Share as converted).
• The Company may force conversion if the Common Stock trading price equals or exceeds $10.00 for at least 20 trading days in any 30-day period, after two years from the closing date of the offering.
• The Series A-2 Preferred Shares have a three-year non-callable feature, after which the Company can redeem them at $25.00 per share plus unpaid dividends.
• The Series A-2 Preferred Stock ranks senior to Common Stock and pari passu with Series A and A-1 Preferred Shares regarding dividends and liquidation.
• Voting rights are on an as-converted basis with Common Stock, but certain actions (e.g., issuing more Series A-2, creating senior stock, amending designation) require consent of 51% of Series A-2 holders.
• Purchasers receive registration rights for the resale of Common Stock issuable upon conversion, with a registration statement to be filed within 60 days of closing.
• A Conversion Share Cap limits the aggregate number of Common Stock deliverable upon conversion or dividend payment to 19.99% of outstanding Common Stock or voting power on the closing date, unless stockholder approval is obtained.

Sentiment

Score: 6

Explanation: The capital raise provides immediate working capital and demonstrates continued investor interest, but the amount is relatively small, and the preferred stock terms introduce additional financial obligations and potential dilution for common shareholders. The increase in authorized shares provides flexibility but also signals potential future dilution.

Positives

• Secured $500,000 in gross proceeds from strategic investors, bolstering working capital.
• Increased authorized Series A-2 Preferred Stock from 40,000 to 160,000 shares, providing flexibility for future capital raises.
• The Series A-2 Preferred Stock offers an 8% cumulative dividend, potentially attractive to investors.
• The conversion feature at $2.00 per share provides a clear path to common stock ownership for preferred holders.
• Registration rights for underlying common stock facilitate liquidity for investors.

Negatives

• The capital raise is relatively small ($500,000), which might indicate limited investor appetite or a short-term funding need.
• Issuance of preferred stock, especially with an 8% cumulative dividend, adds to the company's financial obligations and can be dilutive to common shareholders upon conversion.
• The 19.99% Conversion Share Cap, unless stockholder approval is obtained, could limit the full conversion of preferred shares, potentially complicating future capital structure.
• The forced conversion feature at $10.00 per share, while beneficial for the company, might not align with all preferred shareholders' investment horizons.

Risks

• The Conversion Share Cap of 19.99% of outstanding Common Stock or voting power, unless stockholder approval is obtained, could limit the full conversion of preferred shares and may require future shareholder votes.
• The Company's ability to pay dividends in cash or common stock, and the increased rate for unpaid dividends (12%), could strain cash flow or lead to further dilution.
• The representations, warranties, and covenants in the Purchase Agreement are solely for the benefit of the parties and do not provide investors with other factual information, requiring reliance on other SEC filings.
• The issuance of unregistered securities (Series A-2 Preferred Stock) means these securities are restricted and may only be disposed of in compliance with state and federal securities laws, potentially limiting liquidity for investors.

Future Outlook

The Company intends to use the proceeds from the capital raise for working capital and other general corporate purposes. It also commits to filing a registration statement within 60 days of closing to register the resale of common stock issuable upon conversion of the Series A-2 Preferred Shares, facilitating future liquidity for investors.

Management Comments

• The Company intends to use the proceeds for working capital and other general corporate purposes.

Industry Context

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Corporate Governance

Stakeholder Impact

• Shareholders (Common Stock): Potential for dilution from the conversion of Series A-2 Preferred Stock into Common Stock and from dividends paid in Common Stock. The 19.99% Conversion Share Cap offers some temporary protection against immediate significant dilution without further shareholder approval.
• Preferred Shareholders (Series A-2): Benefit from an 8% cumulative dividend, a liquidation preference, and conversion rights. They also gain significant protective voting rights over future capital structure changes.
• Company: Receives $500,000 in working capital for general corporate purposes. Faces increased financial obligations due to preferred dividends and potential future dilution.

Next Steps

• The Company will file a Form D with the U.S. Securities and Exchange Commission and comply with applicable state securities or blue sky laws.
• The Company will prepare and file with the SEC a Registration Statement covering the resale of the Underlying Shares (Common Stock issuable upon conversion of Preferred Shares) within 60 days following the Closing Date.
• The Company will use commercially reasonable efforts to cause the Registration Statement to become effective within 120 days following the Closing Date and remain effective.
• The Company will continue to maintain public information and comply with reporting requirements to facilitate Rule 144 sales for investors.

Key Dates

Recommendation

The capital raise provides necessary working capital and indicates continued investor confidence, which is positive. However, the relatively small amount raised and the terms of the preferred stock, including cumulative dividends and potential dilution upon conversion, introduce additional financial obligations and future dilution risk for common shareholders. The protective voting rights granted to preferred shareholders also warrant careful consideration. Investors should hold and monitor the company's use of proceeds and progress towards profitability before making further investment decisions.

Keywords

SKYX Platforms, SKYX, Preferred Stock, Series A-2 Preferred Stock, Capital Raise, Equity Financing, SEC Filing, Form 8-K, Corporate Governance, Securities Purchase Agreement, Dividend, Conversion Rights, Registration Rights, Working Capital