Skkynet Cloud Systems Inc

Previous wording

The Company believes that deploying its product in a Cloud environment will increase the potential applications for customers and broaden its usage and expansion into various markets including Cloud industrial middleware, Cloud financial services, home monitoring, fleet tracking, and energy usage monitoring. New applications that may not exist today but will through the new Cloud platform may also open new markets unknown to Skkynet today. However, management will carefully monitor the growth in new markets and manage each opportunity to maximize its return and minimize risks. This includes selecting specific markets with known trends to introduce its products and services and maintain a controlled release until the market has been understood and sales in the market have become significant to the Company. Only then will the Company risk new markets for its product. We must also include additional staffing at the senior management level with proven experiences and business records in the Company’s environment to implement these markets.

Current wording

The Company believes that deploying its product in a Cloud environment will increase the potential applications for customers and broaden its usage and expansion into various markets including Cloud industrial middleware, Cloud financial services, home monitoring, fleet tracking, and energy usage monitoring. New applications that may not exist today but will through the new Cloud platform may also open new markets unknown to Skkynet today. However, management will carefully monitor the growth in new markets and manage each opportunity to maximize its return and minimize risks. This includes selecting specific markets with known trends to introduce their products and services and maintain a controlled release until the market has been understood and sales in the market have become significant to the Company. Only then will the Company risk new markets for its product. We must also include additional staffing at the senior management level with proven experiences and business records in the Company’s environment to implement these markets.

Previous wording

Revenue: For the year ended October 31, 2022, the Company had revenues of $2,156,880 compared to $2,374,216 of revenue for the year ended October 31, 2023. This reflects an increase of $217,336 from 2022 to 2023. Revenue increases can be attributed to the increase of sales in the Cogent subsidiary. During the year ended October 31, 2022, the Company’s deferred revenue was $281,615 compared to a deferred revenue balance of $360,170 as of October 31, 2023, an increase of $78,555. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 12 months.

Current wording

Revenue: For the year ended October 31, 2024, the Company had revenues of $2,561,745 compared to $2,374,216 of revenues for the year ended October 31, 2023. This reflects an increase of $187,529 from 2024 over 2023. Revenue increases can be attributed to the increase of sales in the Cogent subsidiary. During the year ended October 31, 2024, the Company’s deferred revenue was $338,382 compared to a deferred revenue balance of $360,170 as of October 31, 2023, a decrease of $21,788. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 39 months.

Previous wording

Operating Expenses: Total operating expenses, excluding depreciation, increased to $2,214,765 in the year ended October 31, 2022 and to $2,489,712 for the same period in 2023. This was an increase of $273,202 and as a percent of revenue G&A increased to 106% in 2023 from 102.8% in 2022. The increase as a percentage is attributed to higher spending in the Cogent subsidiary in 2023 over 2022.

Current wording

Operating Expenses: Total operating expenses, excluding depreciation, increased to $2,500,623 in the year ended October 31, 2024 compared to $2,487,967 for the same period in 2023. This was an increase of $12,656 and as a percentage of revenue G&A decreased to 97.6% in 2024 from 106% in 2023. The percentage decrease of G&A is attributed to higher revenue in the Cogent subsidiary in 2024 over 2023.

Previous wording

Depreciation and Amortization: The Company had depreciation of $2,563 in the year ended October 31, 2022 compared to $2,447 in the same period in 2023.

Current wording

Depreciation and Amortization: The Company had depreciation of $2,425 in the year ended October 31, 2024 compared to $2,447 in the same period in 2023.

Previous wording

Other Income (Expense): Other income totaled $54,463 during the year ended October 31, 2022 compared to other expense of $9,826 during the same period in 2023. The currency exchange in 2023 of $ 6,087 was a negative change of $52,762 in currency exchange from the same period in 2022. This was the primary reason for the other income in the year ended October 31, 2022 verses other expense in the same period in 2023.

Current wording

Other Income (Expense): Other income totaled $14,265 during the year ended October 31, 2024 compared to other expense of $9,826 during the same period in 2023. The currency exchange in 2024 of $11,341 was compared to $6,087 in currency exchange for the same period in 2023. An increase in other income of $25,461 over last year is the primary reason that the Company had other income in the year ended October 31, 2024 verses other expense in the same period in 2023.

Previous wording

Income Tax: During the years ended October 31, 2022 and 2023 the Company and its subsidiary incurred no tax. The subsidiary filed tax returns as a foreign corporation. During the year ended October 31, 2022 the subsidiary received a tax refund of $38,743 compared to a refund of $29,897 for the same period in 2023.

Current wording

Income Tax: During the years ended October 31, 2024 and 2023 the Company and its subsidiary incurred no tax. The subsidiary filed tax returns as a foreign corporation. During the year ended October 31, 2024, the subsidiary received a tax refund of $26,128 compared to a refund of $29,897 for the same period in 2023.

Previous wording

Net Income (Loss): The Company recorded net income of $32,758 for the year ended October 31, 2022 compared to net loss of $97,872 in the same period in 2023, a negative variance of $130,630. The increase in sales in the Cogent subsidiary was insufficient to overcome the increase in expenses in 2023 resulting in the loss in 2023 versus net income in 2022.

Current wording

Net Income (Loss): The Company recorded net income of $99,090 for the year ended October 31, 2024 compared to net loss of $97,872 in the same period in 2023, a positive variance of $196,962. The increase in sales in the Cogent subsidiary was sufficient to overcome the increase in expenses in 2024 resulting in the net income in 2024 compared to a net loss in 2023.

Previous wording

Working Capital: At October 31, 2023, the Company had working capital of $711,086 with current assets of $1,251,991 and current liabilities of $540,905 with a current ratio of 2.31 to 1. The current assets consisted of cash of $916,780, accounts receivable of $306,255, accounts receivable from related parties of $4,695, and prepaid expense and other receivable of $24,261. The current liabilities of the Company at October 31, 2023 are composed primarily of accounts payable and accrued expenses of $84,870, accrued liabilities to related party of $95,865, and deferred revenue of $360,170.

Current wording

Working Capital: At October 31, 2024, the Company had working capital of $887,374 with current assets of $1,547,330 and current liabilities of $659,956 with a current ratio of 2.34 to 1. The current assets consisted of cash of $1,158,255, accounts receivable of $361,480, and prepaid expense and other receivable of $27,595. The current liabilities of the Company at October 31, 2024 are composed primarily of accounts payable and accrued expenses of $154,634, accrued liabilities to related party of $166,940, and deferred revenue of $338,382. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 39 months.

Previous wording

Operating Activities: Net cash used in operating activities during the year ended October 31, 2022 was $36,021 compared to net cash provided of $207,822 for the same period in 2023. This represents a positive change of $243,843.

Current wording

Operating Activities: Net cash provided by operating activities during the year ended October 31, 2024 was $234,638 compared to net cash provided of $207,822 for the same period in 2023. This represents a positive change of $26,816.

Previous wording

Financing Activities: Net cash used in financing was $19,106 for the year ended October 31, 2023 compared to net cash provided by financing activities of $27,747 in 2022. The change results from the payback of the Canadian emergency loans in 2023 of $19,106 compared to loan payback of $29,315 in 2022, offset by option conversion of $1,568 in 2022.

Current wording

Financing Activities: Net cash provided by financing was zero for the year ended October 31, 2024 compared to net cash used in financing activities of $19,016 in 2023. The change results from the payback of the Canadian emergency loans in 2023 of $19,106.

Previous wording

As of October 31, 2023, the Company had total assets of $1,256,545 and total liabilities of $540,905 compared to $1,144,994 and $455,292, respectively in the same period in 2022. Stockholders’ equity as of October 31, 2023 was $715,640 compared to stockholder’s equity of $670,596 at October 31, 2021, an increase of $45,044.

Current wording

As of October 31, 2024, the Company had total assets of $1,549,486 and total liabilities of $659,956 compared to $1,256,545 and $540,905, respectively for the same period in 2023. Stockholders’ equity as of October 31, 2024 was $889,530 compared to stockholder’s equity of $715,640 at October 31, 2023, an increase of $173,890.

Previous wording

The accounting policies and pronouncements are discussed in the financial footnotes of the Company and should be referenced therein. (See Note -2 Significant Accounting Policies)

Current wording

The accounting policies and pronouncements are discussed in the financial footnotes of the Company and should be referenced therein. Of the policies, Management considers that of the Company’s significant accounting policies and estimates, revenue recognition involves a higher degree of judgment or complexity and is believed to be a critical accounting policy (See Note -2 Critical and Significant Accounting Policies)