Skkynet (OTC: SKKY) grows subscriptions but 2025 net income falls
Rhea-AI Filing Summary
Skkynet Cloud Systems develops industrial connectivity and real-time data software, centered on its Cogent DataHub products and Azure-managed cloud service for secure OT-to-cloud data flows and industrial IoT/AI use cases.
For the year ended October 31, 2025, Skkynet generated revenue of $2,550,951, essentially flat versus 2024. A shift from perpetual licenses to subscriptions drove a 268% increase in subscription payments to $364,395, while perpetual license revenue declined to $2,186,556. Operating results slipped to a small operating loss of $6,488, but tax refunds and other income yielded net income of $35,351, down from $99,090 in 2024.
The company reports solid liquidity, with working capital of $1,027,715, including cash of $1,427,321, versus total liabilities of $803,299. As of October 31, 2025, there were 53,143,822 common shares outstanding and 193,661 Series B preferred shares, which carry a 6% cumulative dividend; accrued Series B dividends totaled $119,105.
Management outlines growth plans in industrial automation, cloud SaaS, and AI-focused applications, but notes expansion will require additional capital. The report highlights a material weakness in internal control over financial reporting due to limited accounting staff and segregation of duties. Skkynet describes ongoing efforts to strengthen cybersecurity, including training, incident response planning, third‑party risk management, and enhanced technical safeguards.
Positive
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Negative
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Insights
Skkynet shows stable revenue, rising subscriptions, modest profit, and control weaknesses.
Skkynet reported essentially flat 2025 revenue at
Cash generation remained positive, with operating cash flow of
The business targets industrial real-time data, cloud connectivity and AI-related data pipelines, backed by multiple patent families and long-standing industrial customers. Risks include customer concentration in resellers, dependence on major cloud providers, and a disclosed material weakness in internal controls due to limited accounting staff and segregation of duties, which management has not yet fully remediated. Cybersecurity programs and insurance are described, but their effectiveness will be tested by future incidents.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
For the transition period from _________ to _________.
Commission File Number:
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incorporation or organization |
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Registrant's telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act: None.
Name of each exchange on which registered: None.
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001
Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act Yes ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or such shorter period of that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the previous 12 months (or for such shorter period that the registrant was required to submit and post such files.)
Indicate by checkmark if disclosure of delinquent filers to Item 405 of Regulation S-K (§229.405) is not contained herein and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. Yes ☐ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
Emerging Growth Company |
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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
The aggregate number of shares of the voting stock held by non-affiliates on April 30, 2025 was 15,801,100 with a market value of $
The number of shares outstanding of the Company’s $.001 Par Value Common Stock as of January 27, 2026, was
DOCUMENTS INCORPORATED BY REFERENCE: None.
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS |
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PART 1 |
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Item 1. | Business |
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Item 1A. | Risk Factors |
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Item 1B. | Unresolved Staff Comments |
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Item 1C | Cybersecurity |
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Item 2. | Properties |
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Item 3. | Legal Proceedings |
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Item 4. | Mine Safety Disclosure |
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PART II |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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Item 6. | Selected Financial Data |
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Item 7. | Management’s Discussion and Analysis of Financial Conditions and Results of Operations |
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Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
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Item 8. | Financial Statements and Supplementary Data |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A. | Controls and Procedures |
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Item 9B. | Other Information |
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PART III |
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Item 10. | Directors, Executive Officers and Corporate Governance |
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Item 11. | Executive Compensation |
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Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Item 13. | Certain Relationships and Related Transactions, and Director Independence |
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Item 14. | Principal Accounting Fees and Services |
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PART IV |
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Item 15. | Exhibits, Financial Statement Schedules |
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SIGNATURES |
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FORWARD-LOOKING STATEMENTS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Various statements in this Annual Report on Form 10-K, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of our business activities, our revenues, income and capital spending. We generally identify forward-looking statements with the words “believe,” “intend,” “expect,” “seek,” “may,” “should,” “anticipate,” “could,” “estimate,” “plan,” “predict,” “project” or their negatives, and other similar expressions. All statements we make relating to our estimated timelines and commencement of operations, and our projected earnings, costs, expenditures, cash flows, and financial results or to our expectations regarding future industry trends are forward-looking statements.
These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. The forward-looking statements contained in this Form 10-K are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors and it is impossible for us to anticipate all factors that could affect our actual results. In addition, management's assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this Form 10-K are not guarantees of future performance, and we cannot assure any reader that such statements will prove correct, or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the numerous risks and uncertainties as described elsewhere in this Form 10-K.
All forward-looking statements are based upon information available to us on the date of this Form 10-K. We undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks, contingencies and uncertainties associated with our forward-looking statements relate to, among other matters, the following:
| · | our ability to attract new clients to enter into subscriptions or one time installations for our products and services; |
| · | our ability to service those clients effectively and induce them to renew their subscriptions to our products and services; |
| · | our ability to expand our sales organization to effectively address the new industries, geographies and types of organizations we intend to target; |
| · | our ability to accurately forecast revenue and appropriately plan our expenses; |
| · | continued market acceptance of our products and services, including alternate ways of addressing needs for coordination and control of manufacturing and financial services processes through modified or new technologies we create; |
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| · | continued acceptance of our products and services as an effective method for delivering manufacturing and financial services management solutions and other manufacturing and financial services management applications; |
| · | the attraction and retention of qualified employees and key personnel; |
| · | our ability to protect and defend our intellectual property; |
| · | costs associated with defending intellectual property infringement and other claims; |
| · | events in the markets for our products and applications and alternatives to our products and applications, in the United States and global markets generally; |
| · | future regulatory, judicial and legislative changes in our industry; |
| · | changes in the competitive environment in our industry and the markets in which we operate;
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| · | developments and acceptance, favorable and unfavorable, about the use of cloud systems for the implementation of our products and services; |
| · | other factors discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K. |
We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K.
As used in this Form 10-K, unless the context otherwise requires, the terms “we,” “us,” “the Company,” “Skkynet” and “Cogent” refer to Skkynet Cloud Systems, Inc., a Nevada corporation, and its subsidiaries.
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ITEM 1: BUSINESS.
Overview
Skkynet is a Nevada corporation headquartered in Mississauga, Canada. Skkynet operates its business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet, Inc. (“Skkynet (USA)”), Skkynet Corp. (“Skkynet (Canada)”). Skkynet was established to enhance Cogent’s existing business lines through the integration of cloud-based systems (“Cloud”), and to deliver a Software-as-a-Service (“SaaS”) product targeting the Industrial Internet of Things (“IoT”) market, often referred to by the term “Industry 4.0”.
Boston Consulting Group issued reports on Industry 4.0 and how the future of productivity and growth in manufacturing industries will be impacted by the convergence of nine new technologies1, and how it will transform the industrial workforce2. Of the identified nine new technologies (autonomous robots, big data analytics, the Cloud, cybersecurity, the Industrial Internet of Things, horizontal and vertical system integration, simulation, augmented reality, additive manufacturing), the first six fit within the scope of Skkynet’s core technical expertise. Specifically, Skkynet provides software and related systems and facilities to collect process and distribute real-time information over networks. This capability allows our customers to both locally and remotely manage, supervise and control industrial processes and financial information systems. By using our software and web-based assets we provide our clients and their end-customers, the ability and tools to observe and interact with these processes in real-time. We give our customers the power to analyze, change and control their local and remote systems to meet regulatory requirements and exceed target objectives.
We believe there is a steady movement of manufacturing facilities from developed countries to underdeveloped countries because of the economic advantages of lowering production costs; however, this relocation process should not be viewed in traditional frameworks alone. In the United States there is a movement from high to low-cost states such as Alabama, and, for other reasons, European and Asian manufacturers are locating their own manufacturing facilities within the United States. The tendency is to relocate physical plants while preserving the overall engineering skills, process analytics and related intellectual property and management systems at home. This geographical distinction between production and engineering requires the ability to remotely monitor these systems during operations to control processes in real-time while preserving the safety, confidentiality and integrity of the manufacturer’s process and information. There are other aspects of the same remote capabilities: we have determined a growing need for large enterprise to have the ability to safely share information on operations to third parties (e.g. suppliers, or contract manufacturers), and to access this data for Artificial Intelligence (“AI”) applications. Our products and Cloud-based services are designed to address these issues and concerns, and to enable these AI applications.
Although we are primarily involved thus far in the areas of industrial processing and financial services, the concepts and software underlying our existing products and services are applicable to a variety of areas including fleet tracking,energy usage monitoring and control including wind power, solar power and agriculture. Our products are modular in design and are therefore well-suited for use in OEM and embedded products. We have obtained existing clients in some of these areas, but to date we have not had the resources to pursue systematically the marketing and sale of our products and services to these industries.
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1 https://www.bcg.com/publications/2015/engineered_products_project_business_industry_4_future_productivity_growth_manufacturing_industries/
2 https://www.bcg.com/publications/2015/technology-business-transformation-engineered-products-infrastructure-man-machine-industry-4
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Our acquisition of Cogent
In March 2012, we completed the acquisition of all of the issued and outstanding shares of common stock of Cogent from Sakura Software Inc. and Benford Consultancy Inc. in exchange for a total of thirty million (30,000,000) restricted shares of our common stock, as a result of which Cogent became our wholly owned subsidiary. As part of the exchange transaction, we also issued 5,000 Series A Preferred share to Sakura Software and Benford Consultancy. Prior to the closing of the exchange transaction, we did not have any operating revenues. At the acquisition closing, Cogent’s business consisted primarily of providing connectivity and data acquisition to a wide variety of industrial and office hardware and software products and then making that data available over a network using industry-standard protocols. Cogent currently markets its products and services primarily to systems integrators, OEMs, resellers, and end customers where we do not have a distribution partner in industrial processes and financial services companies. Cogent received $2,484,315 in annual revenues from its operations for its fiscal year ended October 31, 2025 and $2,561,745 in annual revenues for the fiscal year ended October 31, 2024.
Our business
We are an industrial software and services vendor that specializes in providing secure connectivity and data acquisition to a wide variety of industrial and office hardware and software products and making that data available over a network using industry-standard protocols. We have introduced a number of innovations to our real-time data products including a high-speed redundancy facility and a web-based user interface providing desktop quality graphics, and more recently, inclusion of high speed storage capabilities. We have patented and patent-pending technologies that address the data transmission problems of data rate, latency, redundancy, and security in Cloud-based systems with a unique push-pull system that insulates both a plant and a remote user from opening their firewalls to the Internet.
Our system can operate as a simple add-on to existing Supervisory Control and Data Acquisition (“SCADA”) or as the basis for new deployment. SCADA is a system that collects information from various sensors installed at a factory or other remote locations. All of the collected data is sent to a common or central computer for further processing and storage and is used to describe control processes in various industries such as water treatment, manufacturing processes, and environmental procedures.
Skkynet’s Cogent DataHub™ service for Microsoft Azure is compatible with our existing Cogent DataHub and Embedded Toolkit (ETK) software. Current customers of our DataHub software can easily configure it to immediately take advantage of our Cloud services. Our DataHub software includes applications for all of the following uses:
| — | real-time graphical web display of data, which includes collaborative screen development and full permissions-based access; |
| — | connection to data from OPC (open process control), DDE (dynamic data exchange) and Modbus servers to produce immersive real-time displays to analyze the current status of factory production, embedded systems or financial strategies; |
| — | connection to data from MQTT (message queuing telemetry transport) clients to connect remote sensors and other Cloud-based services, such as ‘big data’ analytics and Artificial Intelligence applications, offered by Amazon, Microsoft and others; |
| — | a feature that enables full data mirroring designed to overcome DCOM (distributed component object models) server issues to permit connection to the most recent data available if a server is temporarily unavailable; |
| — | data logging which enables both reading and writing of data with any ODBC (open database connectivity) database such as most Windows and Linux databases; |
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| — | creation of a data bridging interface to permit association of data points in one system with corresponding data points in another control system; |
| — | the ability to provide historical data within Microsoft Azure Event Hubs, Apache Kafka, Amazon Kinesis, Databricks Data Intelligence Platform, AVEVA Historian, AVEVA Insight, OSIsoft PI and/or InfluxDB, including unique store-and-forward capabilities; |
| — | data redundancy features; and |
| — | network system monitoring with the ability to query the operating system it is running on for system status and resource capacity such that this system wide monitoring of critical network resources can help identify problems. |
These DataHub® features make our existing customer base a logical first marketing source for the adoption of our Cloud services. Our Cogent DataHub service for Microsoft Azure, which is a fully managed service, is now available within the Azure Marketplace. The DataHub service connects seamlessly to Azure IoT Hub for real-time remote monitoring, control, and data logging, as well as offering many of the same features as the standalone DataHub software. Security is based on Skkynet’s patented technology that uses outbound-only connections to ensure that no attack surface is exposed on a local plant network. It requires no IT policy changes, no open inbound firewall ports, no VPNs, and no extra hardware while allowing real-time bi-directional data flow through DMZs and network proxies up to the cloud. Additional enterprise-focused security features have been introduced for robust permission granularity and multi-factor authentication (“MFA”).
Our Cogent DataHub service for Microsoft Azure provides the following additional functionality and features over the DataHub®:
| — | scalable remote networking of industrial SCADA systems and embedded devices in real-time with built-in consolidation of data; |
| — | lower cost of ownership by not requiring any programing, no software to buy, no additional PC or server hardware to buy; |
| — | high-speed data throughput with the ability to collect, send, and receive up to 50,000+ data changes per second at speeds just a few milliseconds over Internet latency; |
| — | robust security model, where no inbound connection requests to the SCADA system or embedded device are required; |
| — | full supports of industry standard SSL encryption protection, and no requirement for virtual private networks (VPNs) or additional security hardware; |
| — | no changes to the hardware or software of an existing system. Our customers can decide what data to transmit, and how: one-way or bidirectional, where all configuration changes are in the customers’ control; |
| — | view any connected process in a fully web-based interface, providing immersive graphics and real-time response that replicates or exceeds the performance of traditional human-machine-interfaces (HMIs); |
| — | granular security permissions so that qualified users can configure security settings to provide read-only access to limited data sets for public use, while giving bi-directional access to insiders. Authorized developers can access the complete online design interface; |
| — | create and edit screens from any location, all within a standard web browser; no coding or development system is required, and our customers can drag-and-drop desktop-quality graphics to build HMI screens right inside a web browser as it populates and displays data in real-time on the same screen; changes can be deployed to all users instantly; |
| — | DataHub® Embedded Toolkit (ETK) provides a direct link to the Cogent DataHub service for Microsoft Azure from a wide range of devices and operating systems, a seamless, end-to-end solution for M2M and viewing customer data from their device on the Internet. |
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The Cogent DataHub service for Microsoft Azure is DataHub technology provided in a Microsoft Azure Managed Application for secure, real-time industrial data communications. With it, our customers can make secure connections between machines, applications and embedded systems that utilize real-time data.
A diagrammatic example is shown of an implementation of Cogent DataHub on-premise in an isolated process network, a secure connection to a de-militarized zone (“DMZ”) network, a secure connection to an instance of Cogent DataHub service for Microsoft Azure, and a secure connection from a user or third-party network employing a variety of data sources or clients.
This example implementation provides the following unique advantages to our customers:
| 1. | Production (process) systems stay secure; using our patented technology for outbound-only connections ensures no exposed attack surface in the customer plant network. The implementation requires no IT policy changes, no open inbound firewall ports, no VPNs, and no extra hardware on the production network; |
| 2. | Aggregate data and connect to any application on Microsoft Azure; our customers can securely take advantage of the hundreds of 3rd party tools available in the Microsoft Azure marketplace. They can seamlessly connect to Azure IoT Hub—or any OPC UA or MQTT supported system—for real-time remote monitoring, and control, using standard protocols, and add applications and programs running on Azure or elsewhere, as needed; and |
| 3. | Securely sharing data with third parties; our technology is particularly adept at allowing our customers to view custom data sets, give equipment vendors access to maintenance and performance statistics for their machines, and keep raw materials suppliers informed of current stock levels and usage rates. |
Our customers
The Company, including the historical operations of Cogent, have provided our products and services to more than 3,000 customers in the following industries: Aerospace, Automation & Control, Chemicals, Communications, Education, Engineering, Energy & Utilities, Financial, Food & Beverage, Government & Municipal, Healthcare & Pharmaceutical, Instrumentation, Manufacturing, Natural Resources and System Integrators. We are well-diversified across these industries such that cyclical swings in any individual industries does not expose us significantly.
The Company sells to their end-user customers both directly and indirectly, through resellers. In the twelve months ended October 31, 2024, 7 resellers accounted for 51% of sales, of which 1 reseller accounted for 25% of sales. In the twelve months ended October 31, 2025, 11 resellers accounted for 50% of sales, of which 1 reseller accounted for 20% of sales. The Company maintains all the information on their end user customers, and should a reseller discontinue operations, the Company can sell directly to the end user. No reseller has exclusivity in their territory. In the twelve months ended October 31, 2024, no end user customers were responsible for more than 10% of gross revenue and 35 end user customers were responsible for approximately 50% of gross revenue. In the twelve months ended October 31, 2025, no end user customers were responsible for more than 10% of gross revenue and 25 end user customers were responsible for approximately 50% of gross revenue.
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Our products and services
Our business is organized such that we license our software under a variety of packaging and financial arrangements.
Our software is designed to be modular, with a set of over 51 different features. We offer license packs (“Product Packs”) which represent common customer use-cases and individual add-on licenses (“Add-ons”). The combination of Product Packs and Add-on licenses allows the customer to fully customize a solution based on their own project requirements.
In addition, we offer customers the ability to license our products for use as a Subscription which is a recurring revenue model. We also offer our licenses with upgrades in the form of an on-going maintenance and service program for which we charge additional fees depending upon the package of services requested.
We offer OEM customers the ability to re-brand our software to integrate it with their own product offering. This re-branding can be “shallow” or “deep.” Shallow rebranding modifies the icons, images, name and contact information our software presents to the end user. There is no attempt to hide the fact that the software was developed by us. Deep rebranding attempts to remove all visible indications that our software is being used by the OEM customer. This requires more work and ongoing maintenance, as well as formal agreements with regard to our intellectual property.
Industrial automation systems require expertise to configure properly. Generally, the customer has in-house IT expertise regarding its particular process but may have limited experience with our software or the details of communication integration. We offer consulting services to assist customers in configuring their systems and our software to smoothly integrate into their processes. We provide a limited amount of assistance at no charge as part of the sales cycle. Where the customer requires more involved assistance, we offer consulting services at market rates.
As part of our expansion into Cloud services, we provide three types of configurations: remotely hosted Cloud systems, locally hosted systems, or a hybrid of the two. In the remotely located case, we maintain and manage the operating system infrastructure that allows users to access their industrial automation data via the Internet. We subcontract the Cloud hardware infrastructure from Microsoft; a large, established vendor. In the locally hosted case, the customer is responsible for the hardware and data connectivity, and we will provide the software. A customer who wants a remotely located Cloud system will still be required to run some software locally. Our existing on-premises software acts as a bridge between the plant and the remote Cloud system, making a hybrid implementation possible. If the Cloud system becomes unavailable due to communication outage or hardware failure, the customer’s plant will still continue to run in isolation from the remote Cloud system, simply reconnecting once the remote system becomes available again. In effect, our Cloud offering acts as an extension of the local process to a wide-area network or to the Internet. For reasons of speed, security, and resiliency we do not anticipate that customers will accept a purely Cloud-based system for their immediate industrial automation data needs. We believe that this may change in the future as technology and market expectations change, as they have done in other markets that have adopted purely Cloud-based services, such as, for example, Salesforce.com and customer relations management (CRM) software.
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Our on-premises software is available for download from our product website, https://cogentdatahub.com. Our Cloud-based service is available for registration at the Microsoft Azure Marketplace3. A customer can install and use the on-premises software in demonstration mode for a limited time, after which they can re-start the software to reset the time limit. This allows a potential customer to configure and test the software in their system before purchase, both to ensure that it meets their needs and to determine which product features they will want to purchase. Similarly, the Cloud-based service is available to potential customers to sign up and use it for a paid trial to configure and test, as well as other service levels for full system implementations.
To ensure smooth implementation of our software in a customer’s environment we have organized approximately fifty (50) different technical partners and resellers in different geographic areas with whom we cooperate. Some of them also sell related hardware and software products of their own, and assist us in the installation, monitoring, and maintenance of our products within their customer base. These technical partners may be listed on our website. We continuously seek to recruit new technical partners. We have made recent progress on partnering with world-class hardware companies such as Microsoft (world’s largest software vendor), Siemens AG (world’s largest industrial automation vendor), AVEVA (wholly owned subsidiary of Schneider Electric, the world’s largest industrial software market channel).
Our service supports potential and existing customers
The nature of our market and our sales style demand timely and thorough customer support both before and after a sale is made. Because a potential customer can download and test our software, we provide service support even before the sale is made. This provides the customer with a no-risk mechanism for ensuring that the software will work in their system and gives us early feedback from the customer. If the customer has questions or concerns, they are answered immediately, making the subsequent sale and installation process simpler.
During the sales process, we work with customers via telephone or email to help them understand which product features are necessary for their projects. This starts with asking the customer to fill out a short questionnaire explaining their project needs when they ask for a cost quotation. If the customer is unsure about their software requirements, we assist by asking pertinent questions regarding the intended application and by providing clarification on the types of features they need.
We offer customer support via telephone, email and Internet instant messaging on our websites during office hours. Where appropriate, we offer live desktop-sharing sessions with customers via video conference. This dramatically reduces the time to resolution when the customer’s network and security policy allow it. We have distributors in different parts of the world who offer support in the customer’s time zone and language. We place a high priority on support of distributors, including joint phone calls and video conference sessions with their customers to arrive at quick and satisfactory resolutions.
We incentivize distributors and resellers to develop their technical support capabilities by offering a price discount structure on software sales based on the degree to which the distributor can handle technical support requests from customers. Our goal is to have our sales occur through a combination of our direct efforts and reliance upon our global network of distributors, where the distributor provides support to the customer, and we provide support to the distributor.
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3 https://azuremarketplace.microsoft.com/en-us/marketplace/apps/cogentrealtimesystemsinc1581352149215.skkynetdatahub
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Our marketing
We have a variety of marketing activities. We maintain a website at https://skkynet.com focused on general company information, updates, and press releases regarding the general operations of the business. We maintain a product-focused website at https://cogentdatahub.com that includes a complete library of product information, manuals, blog articles, whitepapers, how-to videos and industry news on implementing real-time data communication and access over the Cloud.
Our primary means of contacting customers is through direct telephone and email contact; appearances at trade shows, publications in recognized industry magazines and periodicals, social media platforms, our websites coupled with multi-channel advertising and marketed web-based presentations, including joint promotions with key partners and resellers. We use ad-words and search engine optimization to draw the attention of customers in our market. Some of our website materials can be technical in nature, and may include live demonstrations, training videos and instruction manuals. We invite potential customers to download free trial versions of our software prior to purchase.
We maintain distribution relationships with approximately 35 companies around the world. These companies perform their own marketing and promotion to varying degrees, using both original material and material that we provide. We continue to seek new qualified distribution partners, and in 2019 we partnered with Siemens Mobility to co-market a hardware/software combined solution that includes our DataHub software,4 and we also became a Certified Technology Partner to AVEVA, where our DataHub software is made available directly from AVEVA’s website for download and evaluation.5,6
In addition to the foregoing, we engage in the following activities as part of our marketing efforts. We have previously retained ARC Advisory Group and Gartner to promote our new version of the Cogent DataHub and the security model of our Cogent DataHub service for Microsoft Azure. This is augmented by product features within industry email publications (e.g. Automation.com), and various industry-specific conferences in which direct client meetings are arranged. We send a monthly newsletter to an opt-in mailing list of over 10,000 customers and contacts. We produce periodic press releases through a press release service. We maintain LinkedIn, X (Twitter), and YouTube accounts for outreach to our customers and to draw attention to aspects of our software and market.
We write and publish case studies of successful implementations of our software. These are sometimes produced in cooperation with distributors and are occasionally published in industry trade magazines. We publish white papers on technical subjects and send them to prospects and distributors, as well as distribute them on our website and through trade magazine websites. These activities are focused on education rather than promotion.
Our revenue sources
Our revenue comes from the following sources:
| · | Software licensing for industrial automation systems |
| · | Software licensing for OEM customers |
| · | Software support program renewals |
| · | Legacy installation support |
| · | Custom integration and development |
| · | Monthly support revenue from financial clients |
| · | SaaS revenue from Cogent DataHub service for Microsoft Azure |
_____________________________________________
4 https://skkynet.com/siemens/
5 https://skkynet.com/aveva/
6 For example, https://www.aveva.com/en/products/datahub-tunneller-for-opc/
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More than 70% of our revenues are derived from software licensing for industrial automation systems, while financial trading, software support, custom development, and legacy system support account for the remainder.
Our expenses
Our typical expenses are primarily incurred in the following areas: wages, benefits, and contractors, of which about half are for software development; office and general; sales, marketing, advertising, and promotion. In future years, we expect the proportion of expenses in our operating budgets allocable to the categories of programming development and sales personnel to increase, as well as the expenses associated with maintaining and improving our Cloud-based service for our customers.
Our business plans
We believe that we have substantial room for growth in three primary areas of our business. The first is the expansion of our current lines of business providing real-time data software to the industrial automation markets. Second, is the deployment of our products and services through Cloud-based SaaS products. Third, is the application of our products and services to new business lines such as AI-focused providers, embedded products or combination solutions (such as our recent partnering with Siemens); where “edge-processing” is required (e.g. remote AI-enabled monitoring, analysis and control of assets over third party networks). We have limited resources to apply to marketing and sales in these areas. We believe that this revenue can be improved through dedicated marketing and sales effort.
As stated above, we expect the second area of growth to be in the provision of Cloud services for real-time data. This is a market that is still in its formative stages around the world, and our technology is well suited to its development. We will expand and focus our software development on modifying our existing products to provide a smoother and more secure user experience for real-time data handling in the Cloud. Real-time Cloud systems require two components – a local component running at the customer’s site, and a Cloud component running on a managed Cloud infrastructure system. Our software development will focus on improving security and reducing the friction for users to deploy the local component on their systems. At the same time, we will improve the user experience and automation of the Cloud component to reduce the cost of management, deployment and scaling as the number of customers grows. We rent Cloud server space from Cloud infrastructure providers such as Amazon Web Services and Microsoft Azure, and/or run and maintain our own servers. In the future, we may transition to our own servers as resources permit, and if there is an economic rationale to do so.
We recognize that not all customers will be willing to entrust some of their data transmission to a third party, or to an Internet-based server. In these cases, we offer to deploy our software on private servers managed by the customer or local Cloud infrastructure providers. These “private Cloud” systems will require IT professionals to maintain them and will further require the attention of experts knowledgeable in real-time data systems. We offer our expertise on an ongoing basis to partially or completely manage private Cloud systems on behalf of our customers. For this reason, we are currently working to partner with Cloud infrastructure providers in other countries where there is sensitivity over customer data remaining inside those countries.
The third area of growth is also related to Cloud systems and AI. For the past 30 years, commercial activity on the Internet has been dominated by business-to-consumer or business-to-business applications. The advent of extremely low-cost and low power consumption sensors will change that, making the Internet into a viable medium for machine-to-machine applications. That is, sensors, machines, appliances and other devices will become directly connected data transmitters, numbering in the billions. This rise of machine-to-machine communication will require the kinds of real-time data distribution that will be at the center of our Cloud activity. In combination with recent advances in AI-enabled analysis, we believe that our Cloud services will be positioned to take advantage of the future development of this “Internet of Intelligent Things.” Some examples of applications that need this kind of data access are home energy monitoring, commercial building energy management, agricultural monitoring, weather monitoring, remote seismic sensing, fleet tracking and asset maintenance.
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Industrial AI Platforms and Security
Goldman Sachs7 issued guidance that over $1Trillion will be put towards AI capital expenditures in the coming years. A recent survey published by the Economist Group8 reported that only 22% of organizations say their current architecture can support AI workloads without modifications, and 48% of data engineers spend most of their time resolving data source connections. S&P Global Market Intelligence surveyed9 over 1,500 AI leaders who reported that data management is the #1 barrier to AI success. With respect to AI adoption in the industrial sector, recent studies have shown that less than 20% of AI pilots end up in production. The key limitations are security, real-time processing and robust data pipelines. In summary, the largest challenge is that companies do not have the architecture and systems in place to support the data demands of AI initiatives.
"Skkynet provides the secure, real-time industrial data pipeline that industrial AI demands, zero-trust OT access, unified live datasets ready for models, and battle-tested reliability to close the loop safely and at scale.
Our products, led by Cogent DataHub™, and the Azure service excel for industrial AI platforms with Zero-attack-surface security; Enables secure, bidirectional OT-to-IT/cloud data flow using only outbound connections (via DHTP, MQTT, Kafka, etc.), no inbound firewall ports or VPNs required, often via DMZ or optional data diode mode, ideal for protecting critical infrastructure while feeding live data to industrial AI platforms and engines hosted on public or private cloud.
Additionally, Real-time, unified data for AI; aggregates diverse protocols (OPC UA/DA, Modbus, MQTT Sparkplug B, etc.) into a single, high-performance unified namespace/dataset, handling 50,000+ changes/sec with low latency, perfect for feeding clean, consolidated real-time data to machine learning, predictive maintenance, anomaly detection, and closed-loop AI systems.
Skkynet’s products are proven & industrial-grade with 25+ years of development, thousands of installations worldwide (used by Siemens, ABB, BASF, Equinor, etc.), secure-by-design for Industry 4.0/IIoT, with redundancy, historian integration (AVEVA PI, InfluxDB), and edge processing.
And for something that is typically difficult to set up, configure or integrate with, we provide low/no-code setup, bidirectional control support, and seamless connectivity to cloud (Azure Event Hubs, Kafka) or on-premise analytics, enables fast deployment for AI initiatives without compromising OT security or requiring a expensive expertise to setup and configure.
In order to pursue all of these business areas, we will require capital to hire the personnel needed to explore and develop a strategy to pursue potential customers in each area.
_______________________________________
7 https://www.goldmansachs.com/images/migrated/insights/pages/gs-research/gen-ai--too-much-spend,-too-little-benefit-/TOM_AI%202.0_ForRedaction.pdf
8 https://www.databricks.com/sites/default/files/2024-11/unlocking-enterprise-ai.pdf
9 https://www.aiunplugged.io/wp-content/uploads/2024/01/2023-Global-Trends-in-AI-Report.pdf
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Our intellectual property
We have an exclusive license of all of our intellectual property and enhancements thereof, licensed to Cogent Real-Time Systems, Inc., our wholly owned subsidiary, from an affiliated corporation, Real Innovations International LLC, (“Real Innovations”) that is 100% indirectly owned by our CTO and COO. See “Certain Relationships and Related Transactions.” In return for the assignment, Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement. As a result of this license, we have thirteen U.S. patents and additional patent applications pending for the real-time technologies employed in our software products. The first patent family is directed toward a system and method for providing real-time data to a web browser through use of a Rich Internet Application (“RIA”). Specifically, the graphical and networking features of RIA frameworks allow our software to provide low-latency, real-time data applications in a traditional web browser. The patent family includes U.S. Utility Patent Serial Nos. 8,661,092, 9,667,689 and 10,498,796, and Canadian Patent No. 2,813,076.
The second patent family includes U.S. Patent Serial Nos. 9,100,424, 9,288,272 and 9,762,675 directed towards system and methods for secure real-time cloud services. The system and methods provide a communication framework between sensors, devices, and machinery and the users of that data from any remote location that is connected to the Internet without requiring open inbound firewall ports, while at the same time enabling high data rates, low latency and full bidirectionality. The graphical and networking features of RIA frameworks in combination with the patented system and method provide low-latency, real-time data applications in a web browser securely over the Internet. The patent family includes Japanese Patent No. JP6689838 and Canadian Patent Application No. 2,991,685.
A third patent family includes U.S. Patent Serial Nos. 10,462,206 and 10,558,744 and corresponding Canadian Patent No. 3,062,745 for improved methods to network bidirectional real-time data directly from within Microsoft Excel.
A fourth patent family includes U.S. Patent Serial Nos. 11,627,114, 11,943,205, 12,107,835, 12,107,836 and 12,113,777 for novel methods for tunnelling historical data. Corresponding Canadian Patent Application No. 3,181,369 is pending.
A fifth patent family includes a U.S., and Canadian applications filed to cover novel methods of multi-device support for certain IoT protocols.
Further patents are being sought as new technologies are being developed.
As part of our license, we have the exclusive right to use several registered trademarks including “DATAHUB” and “SKKYNET” which are registered in the United States and Canada. We have trade secrets and technical know-how that we protect through confidentiality and restrictive covenants with our employees and contractors. Finally, under our license agreement, we have exclusive rights to all copyrighted software and written materials, which are stored as backups in several different physical locations, and in secure, encrypted format.
Our competition
We face competition from several vendors who offer products similar to ours in the industrial automation space. Some of these competitors have resources and revenues larger than ours; however, our software is compatible with their products, making it common for a customer to install software from both us and our competition in the same system. There are also a number of large industrial automation vendors who offer SCADA systems to their clients. Examples include Siemens, ABB, Emerson Process Management, Rockwell Automation, Honeywell Process Solutions, Schneider Electric, GE Invensys, and PTC. We view these companies and others performing similar services as potential competitors inasmuch as they have resources to link their SCADA functions to a Cloud based system; however, we are not currently aware that any vendor is doing so yet. Since these companies already have an installed base of SCADA customers whose systems can be easily connected to our software, these companies also represent an opportunity for joint sales or OEM licensing. A number of these companies are already our customers, and two are official partners (Siemens and AVEVA/Schneider).
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There do not currently appear to be Cloud system companies organized for the purpose of hosting real-time industrial data and connectivity. One company, LogMeIn, Inc. (previously Pachube and then Cosm Ltd.), provides Cloud storage services for sensor data, but we do not regard them as competitive due to their focus on storage rather than real-time collection and distribution. Cloud infrastructure companies such as Amazon, Microsoft (Azure) and Google offer pre-configured applications or computing platforms for remotely hosting a customer’s IT activities. Their primary purpose is to provide the computing substrate for the customer’s applications. As such, these companies, as presently operated, act as suppliers of computing resources to us, not as competition.
Employees
Currently, other than our six officers, we have eight full time employees and five consultants.
ITEM 1A: RISK FACTORS
The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans, and quarantine. This may limit access to our customers, management, support staff and professional advisors. As the Company’s operations depends on numerous unknown factors, we cannot measure the impact on our operations or financial condition at this point in time.
ITEM 1B: UNSOLVED STAFF COMMENTS
None
ITEM 1C: CYBERSECURITY
We are highly dependent on third-party provided software applications to conduct key operations. We depend on both our own systems as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners.
Our cybersecurity evaluation identifies various risks and issues that we continue to mitigate to further improve our program. These include:
· | Establishing a cybersecurity training program. |
· | Setting up and implementing a |
· | Setting up and testing a Cybersecurity Incident Response Plan. |
· | Establishing additional processes for identifying cybersecurity threats and vulnerabilities within the environment in which we operate. |
· | Enhancing our technical security safeguards and configurations. |
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Process for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats
In the event of a cybersecurity incident designated personnel are responsible for assessing the severity of an incident and associated threat, containing the threat, remediating the threat, including recovery of data and access to systems, analyzing any reporting obligations associated with the incident, and performing post-incident analysis and program enhancements. Our Company maintains an insurance policy through an independent insurance company for claims pursuant to a cybersecurity claim for damages.
ITEM 2: PROPERTIES
The Company principal office address is located at 2233 Argentia Road Suite 302 Mississauga, Ontario Canada L5N 2X7. The office address is leased, on a month-to-month basis, with a monthly cost of CDN $290.
ITEM 3: LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
ITEM 4: MINE SAFETY DISCLOSURE
Not applicable
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PART II
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES
The Company’s common stock is currently traded on the OTC.BB market under the ticker symbol SKKY. The Company commenced trading on April 16, 2013, As of October 31, 2025; the Company had 53,143,822 shares of its common stock issued and outstanding, of which 15,840,500 were held by non-affiliates. The Company has authorized 70,000,000 shares of common stock, par value $.001 and 5,000,000 shares of preferred stock, par value $.001, of which 500,000 are designated as Series B preferred shares, par value $.001. As of October 31, 2025, 5,000 preferred shares were issued and outstanding, and 193,661 shares of Series B Preferred authorized were issued and outstanding.
The high and low closing prices are noted below:
Period | High Bid | Low Bid | ||
1 st Qtr. 2025 |
| 1.45 | 0.35 |
|
2 nd Qtr. 2025 |
| 1.00 | 0.46 |
|
3 rd. Qtr. 2025 |
| 0.95 | 0.56 |
|
4 th Qtr. 2025 |
| 0.74 | 0.55 |
|
1st Qtr. 2024 |
| 0.47 | 0.22 |
|
2nd Qtr. 2024 |
| 0.35 | 0.15 |
|
3rd Qtr. 2024 |
| 0.68 | 0.25 |
|
4th Qtr. 2024 |
| 0.68 | 0.34 |
|
As of October 31, 2025, the Company estimates there are approximately 106 “holders of record” of its common stock.
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Dividends
We have not declared nor paid any cash dividend on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business, and we do not expect to pay any cash dividends in the foreseeable future. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant.
Dividends of 6% of the value of $1.00 per share are being accrued on our Series B preferred shares and as of October 31, 2025 the balance due was $119,105.
Unregistered Sale of Equity Securities
None
ITEM 6: SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The Company was incorporated on August 31, 2011 in the State of Nevada. On March 26, 2012, the Company acquired Cogent Real-Time Systems, Inc.
Skkynet is an evolution of Cogent, an established financial and industrial middleware software vendor. Cogent’s specialization has focused on providing connectivity and data acquisition to a wide variety of industrial and office hardware and software products and then making that data available over a network using industry-standard protocols. The architecture of Cogent’s software naturally suits it for use both as a data aggregation platform at the process level, and as a data server at the Cloud level. By marrying these two capabilities together, Skkynet can effectively and securely offer the Cloud as an extension to any local process.
Cogent’s market has been primarily in industrial automation. With little advertising, Cogent has also acquired a number of financial trading companies as clients, due to the fact that Cogent’s software is both source and content agnostic. High-speed trading and high-speed industrial automation behave very similarly at the level of abstraction that Cogent’s software uses. Recently, Cogent has been working with Japanese companies to penetrate the lucrative embedded device manufacturing world. Japan is one of the largest producers of consumer and business electronics devices, more and more of which contain small, embedded computers. Cogent has been working with partners in Japan to establish a name and presence in this world, with the aim of having Cogent’s software installed directly on the electronic devices, allowing the manufacturers to instantly make them network accessible.
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.
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The expansion into new markets will require additional cash resources from sources other than those available to the Company today. Only after the Company has secured specific amounts of financing it believes is required for development of each market application enumerated above will Skkynet begin its marketing efforts.
The additional staffing will not begin until Skkynet has funded itself to finance both the staff increase and the required capital to carry out its marketing plan. If the Company is not successful in obtaining the required additional capital, it believes the present business operation will be able to sustain Skkynet’s additional costs as a public company at a minimal level.
RESULTS OF OPERATIONS
The following table sets forth selected statement of operations data as a percentage of total revenue for the periods indicated:
|
| For Years Ended October 31, |
| |||||||||||||
|
| 2025 |
|
| 2024 |
| ||||||||||
Revenue |
| $ | 2,550,951 |
|
|
| 100 | % |
| $ | 2,561,745 |
|
|
| 100 | % |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General operating expense |
|
| 2,555,508 |
|
|
| (101 | )% |
|
| 2,500,623 |
|
|
| 97.6 | % |
Depreciation |
|
| 1,931 |
|
|
| 0.0 | % |
|
| 2,425 |
|
|
| 0.00 | % |
Income (loss) from operations |
|
| (6,488 | ) |
|
| (0.0 | )% |
|
| 58,697 |
|
|
| 2.3 | % |
Other income (expense) |
|
| 16,914 |
|
|
| 0.5 | % |
|
| 14,265 |
|
|
| 0.1 | % |
Net income (loss) before taxes |
|
| 10,426 |
|
|
| 0.5 | % |
|
| 72,962 |
|
|
| 2.4 | % |
Tax refund |
|
| 24,925 |
|
|
| 1.0 | % |
|
| 26,128 |
|
|
| 1.0 | % |
Net income (loss) |
| $ | 35,351 |
|
|
| 1.0 | % |
| $ | 99,090 |
|
|
| 3.4 | % |
Revenue: For the year ended October 31, 2025, the Company had revenues of $2,550,951 compared to $2,561,745 of revenues for the year ended October 31, 2024. This reflects a decrease of $10,672 from 2025 over 2024. The revenue decrease is attributed to the shift in sales from one time license payments to subscription payments for software licenses. During the year ended October 31, 2025, the Company’s deferred revenue was $347,686 compared to a deferred revenue balance of $338,382 as of October 31, 2024 an increase of $9,304. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 12 to 39 months.
Payments for subscription revenue has increased 268% to $364,395 in the year ended October 31, 2025 from $136,770 in 2024. Perpetual revenue for the year ended October 31, 2025 was $2,186,556 compared to $2,424,975 in 2024. The move to subscription revenue from perpetual revenue impacts near term revenue with the potential of future increased revenue.
Operating Expenses: Total operating expenses, excluding depreciation, increased to $2,555,508 in the year ended October 31, 2025 compared to $2,500,623 for the same period in 2024. This was an increase of $53,665. The increase of G&A is attributed to higher salary and wages along with higher consulting fees during the year ended October 31, 2025 over 2024.
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Depreciation and Amortization: The Company had depreciation of $1,931 in the year ended October 31, 2025 compared to $2,425 in the same period in 2024. During 2025 the fixed asset were completely depreciated resulting in a lower depreciation amount in 2025 over 2024.
Other Income (Expense): Other income totaled $16,914 during the year ended October 31, 2025 compared to other income of $14,265 during the same period in 2024. The currency loss in 2025 of $7,172 compares to $11,341 in currency loss for the same period in 2024. Other income of $37,761, principally interest earned, offset by bad debt expense of $13,675 and currency expense of $7,172 in 2025 compared to other income of $25,606, offset by currency loss of $11,341 in 2024 giving us the net results in each period.
Income Tax: During the years ended October 31, 2025 and 2024 the Company and its subsidiary incurred no income tax. Two subsidiaries filed tax returns as a foreign corporation. During the year ended October 31, 2025, the subsidiary received a tax refund of $24,925 compared to a refund of $26,128 for the same period in 2024.
Net Income (Loss): The Company recorded net income of $35,351 for the year ended October 31, 2025 compared to net income of $99,090 in the same period in 2024. Sales in 2025 were slightly lower than the same period in 2024 due to the conversion to subscription sales. The Company recorded an operating loss of $6,488 in 2025 compared to operating income of $58,697 in 2024. Other income and the tax refund resulted in the net profit $ 35,351 in 2025 compared to net profit of $99,090 in 2024.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s liquidity and capital has been dependent on the revenue generated internally by the Company’s subsidiaries, by loans from its officers and directors and by deferral of accrued salaries. There are no agreements or understandings with regard to future loans by or with the officers, directors, principals, affiliates or shareholders of the Company.
The Company anticipates continually expanding its business through the planned expansion of the Company’s marketing of venues in expanded markets. The Company’s plans will be limited, however, by its ability to finance such a proposed expansion of its business. If the revenues generated are not sufficient to finance these proposed operations, then the Company will have to scale back its proposed operations. The Company’s ultimate success will be based upon whether or not there continues to be a demand for the services that the Company anticipates providing, which is also very dependent on the economy. There can be no assurance that there will be a demand for the Company’s services in the future or that the Company will become profitable in providing these services. As the Company’s expands its operations, the revenues received, in addition to paying current expenses may increase the Company’s capital requirements.
The Company is attempting to secure additional capital from independent sources in the form of equity and debt. The success and ability to meet its capital needs is highly dependent on its success in generating additional revenue and profitability now and in the future.
Working Capital: At October 31, 2025, the Company had working capital of $1,027,715 with current assets of $1,831,014 and current liabilities of $803,299 with a current ratio of 2.28 to 1. The current assets consisted of cash of $1,427,321, accounts receivable of $376,830, and prepaid expense and other receivable of $26,863. The current liabilities of the Company at October 31, 2025 are composed primarily of accounts payable and accrued expenses of $209,901, accrued liabilities to related party of $245,712, and deferred revenue of $347,686. 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.
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Operating Activities: Net cash provided by operating activities during the year ended October 31, 2025 was $276,827 compared to net cash provided of $234,638 for the same period in 2024. This represents a positive change of $42,189 from 2024 to 2025 .
Financing Activities: The Company did not have any financing activity during the years ending October 31, 2025 and 2024. The positive cash flows from operating activities allows the Company to self-finance.
As of October 31, 2025, the Company had total assets of $1,831,014 and total liabilities of $803,299 compared to $1,547,330 and $659,956, respectively for the same period in 2024. Stockholders’ equity as of October 31, 2025 was $1,027,715 compared to stockholder’s equity of $899,530 at October 31, 2024, an increase of $128,185. Shareholders equity has continued to grow year over year.
NEED FOR ADDITIONAL FINANCING
The Company’s existing capital is sufficient to meet the Company’s cash needs if the Company continues to operate its ongoing business as presently conducted through revenues generated from operations of our subsidiary for the next twelve months. The Company may from time to time seek additional equity or debt financing as it feels is required to continue the growth of the Company.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements.
Critical Accounting Policies and Recent Accounting Pronouncements
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)
Revenue Recognition
In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606.
ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are:
| 1. | Identify the contract(s) with a customer. |
| 2. | Identify the performance obligations in the contract. |
| 3. | Determine the transaction price. |
| 4. | Allocate the transaction price to the performance obligations in the contract. |
| 5. | Recognize revenue when (or as) the entity satisfied the performance obligations. |
The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:
| 1. | Sale of software direct to the end customer |
| 2. | Sale of software through distributors and channel partners |
| 3. | Maintenance support services |
| 4. | Cloud services |
Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. The Company maintains ownership of the customer regardless of the distribution channel of the sale.
Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.
Revenues from cloud services and subscription service are recognized over time (typically, on a monthly basis) as service is provided.
Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the year ended October 31, 2025, $271,683 of deferred revenue was returned to sales and $284,540 was added to deferred revenue from sales. As of October 31, 2025 and 2024 the deferred revenue was $347,686 and $338,382, respectively.
Payments for subscription revenue has increased 268% to $364,395 in the year ended October 31, 2025 from $136,770 in 2024. Perpetual revenue for the year ended October 31, 2025 was $2,186,556 compared to $2,424,975 in 2024. The move to subscription revenue from perpetual revenue impacts near term revenue.
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.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
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ITEM 8: FINANCIAL STATEMENTS and SUPPLEMENTARY DATA.
Financial statements are audited and included in this Form 10-K as an exhibit and are incorporated herein by this reference.
ITEM 9: CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.
None
ITEM 9A: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission'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 Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our CEO and CFO has concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting, which is identified below, which we view as an integral part of our disclosure controls and procedures.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed 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. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of October 31, 2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework- 2013. Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting. We lack full time personnel in accounting and financial staff to sufficiently monitor and process financial transactions in an efficient and timely manner. We identified this as a material weakness over overall internal controls that are not in place to provide adequate segregation of duties and oversight over accounting functions. Our history of losses has severely limited our budget to hire and train enough accounting and financial personnel needed to adequately provide this function. Consequently, we lacked sufficient technical expertise, reporting standards and written policies and procedures along with a lack of a formal review process which includes multiple layers of review. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on this evaluation, management has concluded that the Company’s control over financial reporting is not effective.
This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for “smaller reporting companies” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Changes in Internal Controls over Financial Reporting
We have not made any changes in our internal controls over financial reporting during the fourth fiscal period of the year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B: OTHER INFORMATION
None
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PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Identification of Directors and Executive Officers of the Company
The following table sets forth the names and ages of all directors and executive officers of the Company and all persons nominated or chosen to become a director, indicating all positions and offices with the Company held by each such person and the period during which they have served as a director:
The principal executive officers and directors of the Company are as follows:
Name | Age | Director Since | Position |
Mr. Andrew S. Thomas | 62 | November 2011 | CTO and Director |
Mr. Paul E. Thomas | 51 | March 2013 | Director, President and Secretary |
Mr. Paul Benford | 58 | March 2013 | Director and COO |
Mr. Lowell Holden | 83 | -- | CFO and Treasurer |
Mr. Xavier Mesrobian | 62 | November 2024 | Chairman of the Board and Independent Director |
Mr. Norman Evans | 71 | August 2013 | Independent Director |
Mr. Kenneth W. Jennings | 77 | August 2013 | Independent Director |
Mr. Gary Tillery | 60 | June 2025 | CEO and Director |
Mr. Lee Tedstone | 47 | December 2025 | Independent Director |
The Directors named above will serve until the next annual meeting of the Company’s stockholders. Thereafter, Directors will be elected for one-year terms at the annual stockholders’ meeting. There is no arrangement or understanding between the Directors and Officers of the Company and any other person pursuant to which any Director or Officer was or is to be selected as a director or Officer of the Company.
There is no family relationship between or among any Officer and Director except that Andrew S. Thomas and Paul E. Thomas are brothers.
Although each of our employment agreements permit the employee to engage in other business activities, Mr. Gary Tillery, Mr. Andrew S. Thomas and Mr. Paul Benford, respectively, our CEO, CTO and COO, devote substantially all of their business activities time to the business of the Company and its subsidiaries, Cogent, Skkynet (Canada), Skkynet (USA). Mr. Paul E. Thomas and Mr. Lowell Holden devote not less than 80% and 25%, respectively, of their overall business activities to the business of the Company and its subsidiaries Cogent, Skkynet (Canada) and Skkynet (USA).
Committees of the Board of Directors
The Company has an audit committee comprising Norman Evans (Chair), Kenneth Jennings, and Lee Tedstone each of whom is an “independent” director as determined under the rules of the Exchange Act and NASDAQ and a compensation committee comprising Kenneth Jennings (Chair), Lee Tedstone, and Norman Evans. The Company currently does not have a nominating committee.
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Business Experience: The following is a brief account of the business experience for the past five years of the directors and executive officers, indicating their principal occupations and employment during that period, and the names and principal businesses of the organizations in which such occupations and employment were carried out.
ANDREW S. THOMAS: Mr. Andrew S. Thomas has been the Chief Executive Officer and the Chairman of the Board of Director of Skkynet since November 1, 2011. On November 21, 2025 Mr. Thomas resigned as Chairman of the Board of Directors and on December 8, 2025 he resigned as Chief Executive Officer and became Chief Technology Officer of the Company. From May 1995 to the November 2025, Mr. Thomas has been the founder and served as President and CEO of Cogent Real-Time Systems, Inc. our wholly owned subsidiary. Mr. Thomas was appointed CTO in November, 2025. Prior thereto from 1992-1995 Mr. Thomas was an independent process control consultant and systems integrator and software developer of real time data communications systems. Mr. Thomas received a Master of Applied Science in Engineering from the University of Waterloo in 1991 and a B.A. in Applied Science from the University of Waterloo in 1987. Mr. Andrew Thomas’s qualifications to serve as a director of the Company consist of his experience in our products and services development and strategic planning, and his broad, fundamental understanding of the business drivers affecting the Company.
PAUL E. THOMAS: Mr. Paul E. Thomas has been the President and Assistant Secretary of Skkynet since November 26, 2011 and became a member of the Board of Directors on March 26, 2013. Mr. Paul Thomas has also been Vice President of Intellectual Property for Cogent since January 1, 2012. Mr. Paul Thomas is the brother of our CTO, Andrew S. Thomas. From September 2008 to the present Mr. Thomas has been the founder and principal of a group of affiliated companies, LifeCycle IP Management, Inc. and LifeCycle Capital Partners, Inc. that are engaged in various IP related businesses including valuations, due diligence, transactions analysis and structuring, strategic partnering and filing and processing IP applications to regulatory authorities. Prior thereto, from January to September 2008, Mr. Thomas was Assistant General Counsel at Iovate Health Sciences at which he managed the global IP portfolio of more than 100 patent families of products. Prior thereto, Mr. Thomas from 2007 to 2008 Mr. Thomas was IP and Corporate Development Counsel at Cipher Pharmaceuticals, Ltd., and during the period between 2000-2007 Mr. Thomas practiced intellectual property law as an associate lawyer at three different law firms in Toronto Canada. Mr. Thomas is a registered patent agent with the U.S Patent and Trademark Office and a registered patent and trademark agent with the Canadian Patent Office. Mr. Thomas received his J.D. from the University of British Columbia in 2000. He also received a Master of Applied Science in Chemical Engineering from the University of British Columbia in 1998 and a B.A in Applied Science, Chemical Engineering from Queen’s University, Kingston in 1995. Mr. Paul Thomas’s qualifications to serve as a director of the Company consist of his experience in fund raising activities for developing companies, public and private, and proper planning for intellectual property development and protection of our products and services.
PAUL BENFORD: Mr. Paul Benford has been the Chief Operating Officer of Skkynet since November 1, 2011 and became a member of our Board of Directors on March 26, 2013. From 1995 to the present Mr. Benford has been the Business Manager of Cogent. Prior thereto, from 1992 through 1995 Mr. Benford was an independent process control consultant and an application engineer. Mr. Benford received a Master of Applied Science in Mineral Process Engineering from the University of British Columbia in 1993, and a B.A. with honors from the Camborne School of Mines in Cornwall, United Kingdom in 1990. Mr. Paul Benford’s qualifications to serve as a director of the Company consist of his experience in the fields of strategies of customer development and forms of communication with a variety of corporate constituencies in the industries within which we operate.
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LOWELL HOLDEN: Lowell Holden has been the CFO and Chief Accounting Officer of the Company since March 2012. Since 1992, Mr. Holden has owned and operates his own consulting firm, Mayday Management Inc., which provides business consulting, accounting and other services to businesses. Mr. Holden has a broad range of business experience including managing, securing financing, structuring of transactions, and is experienced and knowledgeable in managing relationships with customers, financing institutions and stockholders. He also serves as CFO and director of Nascent Biotech, Inc (NBIO). Mr. Holden also has a background in assisting companies in fulfilling their financial auditing and SEC reporting requirements. Mr. Lowell Holden has a Bachelor of Science degree from Iowa State University.
XAVIER MESROBIAN: Mr. Xavier Mesrobian became Vice President of Sales and Marketing October 1, 2013. On November 1, 2024, Mr. Mesrobian resigned as Vice President of Sales and was elected to the Board of Directors. He became Chairman of the Board of Directors on November 21, 2025. He has direct experience with cutting edge venture-backed software start-ups and possesses extensive experience in technical sales. Since 2008, Mr. Mesrobian was an Account Development Executive at ADP Inc., Dealer Services Division. Prior to his work at ADP, from 2003 to 2007, he was Director of Product Management and Business Development at Decisiv, Inc., a leading provider of a Service Relationship Management (SRM) platform, and prior thereto he was the Director of Market Development at Novarra Inc., an internet mobility software company. Mr. Mesrobian received a BA from Carleton University in Economics.
NORMAN EVANS: Mr. Norman Evans has been a director of the Company since August 2013 having retired as the Chief Financial Officer of Cipher Pharmaceuticals Inc., a Canadian publicly listed pharmaceutical company. Mr. Evans is also a Chartered Accountant with over 25 years of business experience. Prior to his work at Cipher, from 1996 to 2006, Mr. Evans was Vice-President of Finance at MDS Pharma Services, a pharmaceutical services company, and prior thereto was a Partner at Ernst & Young Inc. Mr. Evans received a B.Sc. from Concordia University and received his Canadian Chartered Accountant designation in 1980. Mr. Evans’ qualifications to serve as a director of Skkynet consist of his experience in conducting audits, corporate governance and financial reporting for public companies.
KENNETH JENNINGS: Mr. Kenneth Jennings has been a director of the Company since August 2013 and is also Vice President of Kinesis Identity Security System Inc., a software security company. Prior to his work at Kinesis, from 1991 to 2009, Mr. Jennings held senior roles including VP of Manufacturer Solutions & Consulting, VP of Marketing, and VP of Sales at ADP Dealer Services, a division of ADP Inc., the payroll outsourcing company. Mr. Jennings’ qualifications to serve as a Director of Skkynet consist of over 30 years of experience in business development, strategy and in leading business-to-business software sales and marketing teams.
GARY TILLERY: Gary Tillery has been a director of the Company since June 2025. On December 8, 2025, Mr. Tillery was elected as Chief Executive Officer of the Company. Prior to joining the board of directors, Mr. Tillery was the Senior Director, Strategic Portfolio Partners and M&A at AVEVA Software, where he held additional senior leadership positions in Technical Support, Research and Development, Product Portfolio and Cloud Business Practice. Since 2025, Mr. Tillery owns and operates his own advisor firm, KGx Advizors LLC, which provides services for mergers and acquisitions, business consulting, software development process and methodologies, and other services to businesses. He also serves as Advisor to Paragon Software Advisors, a boutique M&A advisory firm specializing in founder-led, lower-middle-market software and high-tech businesses. Mr. Tillery has a broad range of software development, mergers and acquisitions, strategic partnership and alliances experience for small businesses to larger corporations focused on the industrial technology industry.
LEE TEDSTONE: Lee Tedstone became a director of the Company in December 2025. Lee Tedstone is a technology executive with over 25 years of experience building, scaling, and advising enterprise software and data-driven businesses. He currently serves as Chief Executive Officer of Kobai, an industrial AI and knowledge-graph company focused on accelerating analytics and AI adoption for asset-intensive industries. Mr. Tedstone has held senior leadership roles across sales, strategy, and operations, including serving as Global Vice President at AVEVA, where he led global commercial teams and worked closely with large industrial and infrastructure customers. Mr. Tedstone has extensive experience in enterprise SaaS, industrial data platforms, and go-to-market execution, with a particular focus on regulated and complex operating environments. He has advised and served on the boards of multiple technology and innovation-led organizations. He brings deep expertise in scaling revenue, partnerships, and enterprise customer engagement, as well as governance and risk considerations relevant to growth-stage technology companies.
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Conflict of Interest
Although each of our employment agreements permit the employee to engage in other business activities, Mr. Andrew S. Thomas and Mr. Paul Benford, respectively, our CTO and COO, devote substantially all of their business activities time to the business of the Company and its subsidiary, Cogent. Mr. Paul E. Thomas and Mr. Lowell Holden devote not less than 80% and 25%, respectively, of their overall business activities to the business of the Company and its subsidiaries. There will be occasions when the time requirements of the Company’s business conflict with the demands of their other business and investment activities. Such conflicts may require that the Company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the Company.
There is no procedure in place which would allow the Officers and Directors to resolve potential conflicts in an arms-length fashion. Accordingly, they will be required to use their discretion to resolve them in a manner which they consider appropriate.
Director or Officer Involvement in Certain Legal Proceedings
Our directors and executive officers have not been involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten years.
Board Independence
As currently constituted and applying the rules of NASDAQ, Norman Evans, Kenneth Jennings, Xavier Mesrobian and Lee Tedstone are the members of our Board of Directors that are independent. We established a board in which a majority of our members consist of independent directors, as defined under the NASDAQ rules.
Code of Ethics
We have adopted a Code of Ethics which covers the Chief Executive Officer and Chief Financial Officer, which is administered and monitored by the Board of Directors as a whole.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, and the rules of the Securities and Exchange Commission (SEC) require our directors, executive officers and persons who own more than 10% of our Class A common stock to file reports of their ownership and changes in ownership of our Class A common stock with the SEC. Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we determined that no director, executive officer or beneficial owner of more than 10% of our common stock failed to file a report on a timely basis during the year ended October 31, 2025:
Name |
| Position |
| Filed Reports Timely |
Andrew S. Thomas |
| Officer, Director |
| Yes |
Paul E. Thomas |
| Officer, Director |
| Yes |
Paul Benford |
| Officer, Director |
| Yes |
Lowell Holden |
| Officer |
| Yes |
Xavier Mesrobian |
| Officer |
| Yes |
Norman Evans |
| Director |
| Yes |
Kenneth Jennings |
| Director |
| Yes |
Gary Tillery |
| Director |
| Yes |
Lee Tedstone |
| Director |
| Yes |
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ITEM 11: EXECUTIVE COMPENSATION.
The following tables sets for the compensation for all officers and directors during the past two years:
DIRECTORS and OFFICERS – COMPENSATION
|
|
|
| Annual compensation |
| Long-term compensation |
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| Awards |
| Payouts |
|
|
|
| ||
Name and Principal Position |
| Year |
| Salary ($) |
| Bonus ($) |
| Other annual compen -sation ($) |
| Restricted stock award(s) ($) |
| Securities under- lying options/ SARs (#) |
| LTIP payouts ($) |
| All other compen- sation ($) |
| Total Compensation |
Andrew S. Thomas, (1,6) Chief Technology Officer |
| 2025 2024 |
| 133,183 129,817 |
| 18,975 -- |
| - - |
| -- -- |
| - - |
| -- -- |
| -- -- |
| 152,158 129,817 |
Paul Benford, (1,6) Chief Operating Officer |
| 2025 2024
|
| 133,183 129,817
|
| 18,975 --
|
| - - |
| -- -- |
| - - |
| - - |
| - - |
| 152,158 129,817 |
Lowell Holden, (2) Chief Financial Officer |
| 2025 2024 |
| 49,920 49,193 |
| 7,675 7,423
|
| --- -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| 57,595 56,616 |
Paul E. Thomas, (3,6 President |
| 2025 2024 |
| 133,183 129,817
|
| 18,975 --
|
| -- -- |
| -- -- |
| -- --
|
| -- --
|
| -- -- |
| 152,158 129,817 |
Xavier Mesrobin. Chairman and Director(4,5) |
| 2025 2024
|
| -- 113,259 |
| 57,600 36,736 |
| 36,000 32,906 |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| 93,600 182,901
|
Norman Evans, Director (4) |
| 2025 2024 |
| -- -- -- |
| - - - |
| 36,000 30,000 |
| - - - |
| - - - |
| - - - |
| -- - - |
| 36,000 30,000 |
Kenneth Jennings, Director(4) |
| 2025 2024 |
| -- -- -- |
| -- -- -- |
| 36,000 30,000 |
| -- -- -- |
| -- -- -- |
| -- -- -- |
| -- -- -- |
| 36,000 30,000 |
John X Adiletta, Director (7) |
| 2025 2024 |
| -- -- |
| -- -- |
| 21,000 30,000 |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| 21,000 30,000 |
Gary Tillery, Chief Executive Officer and Director (4,8) |
| 2025 2024 |
| -- -- |
| -- -- |
| 13,500 -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| 13,500 -- |
Lee Testone, Director (9) |
| 2025 2024 |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
| -- -- |
(1) | Mr. Andrew S. Thomas and Mr. Benford each received cash payments paid by Cogent Real-Time Systems Inc. of $152,158, respectively. |
(2) | Mr. Holden through, Mayday Management, Inc., a company of which he is President, received $57,595. |
(3) | Mr. Paul E. Thomas received cash payments of $152,158 for consulting services through LifeCycle IP Management Inc., which he owns. |
(4) | Directors’ fees of $36,000 per director were paid in cash to two outside directors. |
(5) | Mr. Mesrobian during the year ending October 31, 2025,was paid $36,000 in director fees and $57,600 in bonus. He was elected to the board of directors on November 1, 2024 and resigned as Vice President of Sales and Marketing. On November 21, 2025 he was elected Chairman of the Board of Directors. |
(6) | Compensation is calculated in US dollars for reporting purposes causing a variance from year to year on persons paid in Canadian dollars. |
(7) | Mr. Adiletta resigned as a Director on May 31, 2025 for personal reasons and was paid $21,000 in Director fees prior to his resignation. |
(8) | Mr. Tillery was appointed a Director on June 18, 2025 and was paid $13,500. He was elected Chief Executive Officer on December 8, 2025. |
(9) | Mr. Tedstone was appointed a Director on December 2, 2025. |
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Employment Agreements
We and our subsidiary, Cogent, have employment agreements with all of our executive officers. The terms and conditions of each such agreement are described below.
Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with our CTO, Andrew S. Thomas commencing January 1, 2012. Mr. Thomas will perform identical duties for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Thomas is to receive an annual base salary of CDN$140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Thomas is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Thomas’s performance. While employed with the Company, the Agreement allows Mr. Thomas to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Thomas to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.
Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with our COO, Paul Benford commencing January 1, 2012. Mr. Benford will perform identical duties for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Benford is to receive an annual base salary of CDN $140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Benford is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Benford’s performance. While employed with the Company, the Agreement allows Mr. Benford to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Benford to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.
Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with its Vice President of Intellectual Property, Paul E. Thomas commencing January 1, 2012. Mr. Paul Thomas will also serve as President for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Paul Thomas is to receive an annual base salary of CDN $140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Thomas is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Paul Thomas’s performance. While employed with the Company, the Agreement allows Mr. Paul Thomas to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Paul Thomas to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.
Effective April 16, 2012, the Company entered into an Employment Agreement (the “Agreement”) with our Chief Financial Officer, Lowell T. Holden commencing April 16, 2012. The Agreement is for an eight-month term commencing on April 16, 2012 and provides for automatic renewal of successive quarterly terms unless notice is provided ninety (90) days prior to the expiration of the current term. The agreement provides that Mr. Holden is to receive an annual base salary of $49,920, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Holden is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Holden’s performance. While employed with the Company, the Agreement allows Mr. Holden to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Holden to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.
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Effective October 1, 2013, the Company entered into an Employment Agreement (the “Agreement”) with our Vice President, Sales & Marketing, Xavier Mesrobian commencing November 1, 2013, for an indefinite term. The agreement provides that Mr. Mesrobian is to receive an annual base salary of CDN$100,000, subject to annual increase at the discretion of our Board of Directors, and a commission calculated quarterly based on sales/revenue growth of the Company. In addition, Mr. Mesrobian is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Mesrobian’s performance. The Employment Agreement permits Mr. Mesrobian to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company. On November 1, 2024, Mr. Mesrobian resigned as Vice President of Sales and Marketing and was appointed to the Board of Directors. On November 21, 2025, Mr. Mesrobian was elected Chairman of the Board of Directors.
Directors received $2,500 per month each in fees for the first quarter ending January 31, 2025 and $3,000 per month thereafter. They are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meeting of the Board of Directors.
The Company has no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company’s directors or executive officers.
The Company has no compensatory plan or arrangements, including payments to be received from the Company, with respect to any executive officer or director, where such plan or arrangement would result in any compensation or remuneration being paid resulting from the resignation, retirement or any other termination of such executive officer’s employment or from a change-in-control of the Company or a change in such executive officer’s responsibilities following a change-in-control and the amount, including all periodic payments or installments where the value of such compensation or remuneration exceeds $100,000 per executive officer.
During the last completed fiscal year, no funds were set aside or accrued by the Company to provide pension, retirement, or similar benefits for Directors or Executive Officers.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT and RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the beneficial ownership of our common stock, by (I) each person known by us to own beneficially five per cent (5%) or more of the outstanding shares of each class, (ii) each of our directors and executive officers, and (iii) all of our executive officers and directors as a group.
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The number of shares beneficially owned by each 5% stockholder, director or executive officer is determined under the rules of the Securities and Exchange Commission, or SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual or entity has the right to acquire through the exercise of any stock option, warrant or other right, or the conversion of any security. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
Name and Address (1) |
| Shares of Common Stock Beneficially Owned |
|
| Percent of Common Stock |
|
| Exercisable Options |
| |||
Andrew S. Thomas (1)(2) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7 |
|
| 22,308,300 |
|
|
| 41.81 |
|
|
| 300,000 |
|
Paul E. Thomas (1) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7 |
|
| 5,338,900 |
|
|
| 10.05 |
|
|
| 290,000 |
|
Paul Benford (1) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7 |
|
| 8,660,400 |
|
|
| 16.29 |
|
|
| 250,000 |
|
Lowell Holden (1)(3) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7 |
|
| 218,989 | (3) |
|
| 0.39 |
|
|
| 228,500 |
|
Norman Evans (1) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N |
|
|
|
|
|
|
|
|
|
|
|
|
2X7 |
|
| 245,600 |
|
|
| 0.46 |
|
|
| 86,500 |
|
Kenneth Jennings (1) 2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7 |
|
| 308,600 |
|
|
| 0.58 |
|
|
| 83,750 |
|
Xavier Mesrobian 2233 Argentia Road, Suite 306 Mississauga, Ontario, Canada, L5N 2X7 |
|
| 86,400 |
|
|
| 0.00 |
|
|
| 764,750 |
|
John X Adiletta (1,4) |
|
|
|
|
|
|
|
|
|
|
|
|
2233 Argentia Road Suite 306 |
|
|
|
|
|
|
|
|
|
|
|
|
Mississauga, Ontario, Canada L5N2X7 |
|
| 183,533 |
|
|
| 0.35 |
|
|
| 74,500 |
|
Gary Tillery (1) 2233 Argentia Road, Suite 306 Mississauga, Ontario, Canada, L5N 2X7 |
|
| -- |
|
|
| 0.00 |
|
|
| 20,000 |
|
All directors and officers as a group |
|
| 37,342,722 |
|
|
| 70.27 |
|
| 2.098,000 |
| |
(1) | Denotes officer or director. |
(2) | Mr. Andrew Thomas’s shares are held by Sakura Software, which is owned by Mr. Thomas. |
(3) | Mr. Holden holds 208,989 of his shares directly and 10,000 indirectly through a related party. |
(4) | Mr. Adiletta resigned as a director during the year ended October 31, 2025. |
Change in Control:
There are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change of control of the Company.
Options
We have adopted a 2012 Stock Option Plan (the “2012 Plan”) under which we are authorized to issue up to a maximum of 10,000,000 incentive stock options and non-qualified stock options to our directors, officers, employees and consultants. The 2012 Plan has been approved by our stockholders. The 2012 Plan authorizes the Board of Directors or a committee thereof to grant awards of incentive stock options and non-qualified stock options upon such terms and conditions as the Board may determine. The total number of options granted and outstanding as of October 31, 2025, is 8,737,200 options. Currently, the 2012 Plan is administered by the Board of Directors.
| 30 |
| Table of Contents |
We currently have 8,737,200 options issued and outstanding under our 2012 Stock Option Plan which have been granted to four key employees, four officers, two consultants and three directors. Each of the foregoing individuals has been awarded options which will vest in equal annual installments over a five-year period with the first 20% vesting at the date of grant. All of the options are exercisable at a purchase price range of $0.10 to $0.88 per share.
The following table sets forth the option holder as of the date of this filing:
Recipient |
| Title |
|
| Number Options |
| ||
Andrew Thomas |
| Officer and Director |
|
|
| 300,000 |
| |
Paul Benford |
| Officer and Director |
|
|
| 250,000 |
| |
Paul Thomas |
| Officer and Director |
|
|
| 290,000 |
| |
Lowell Holden |
| Officer |
|
|
| 292,500 |
| |
Xavier Mesrobian |
| Director |
|
|
| 1,580,000 |
| |
Kenneth Jennings |
| Director |
|
|
| 95,000 |
| |
Norman Evans |
| Director |
|
|
| 103,750 |
| |
Gary Tillery |
| Officer and Director |
|
|
| 100,000 |
| |
Employees and consultant as a group |
|
| -- |
|
|
| 5,725,950 |
|
Total |
|
|
|
|
|
| 8,737,200 |
|
Equity Compensation Plan Information
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) |
| (a) | (b) | (c) |
Equity compensation plans approved by security holders | 10,000,000 | -- | 1,262,800 |
Equity compensation plans not approved by security holders | -- | -- |
|
Total | 10,000,000 | -- | 1,262,800 |
The Company utilizes the shares available under the Plan described above to issue shares of stock as compensation to employees, consultants and officers and directors. At the end of each quarter, the Board of Directors of the Company determines the number of shares to be issued pursuant to the Plan.
| 31 |
| Table of Contents |
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Sakura Software, a corporation owned by our CTO and Director, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72.34% and 27.66% of the issued and outstanding shares of Real Innovations International LLC, (“Real Innovations”) a corporation organized under the laws of Nevis, West Indies. In March 2012, Cogent, our operating subsidiary, assigned all of its intellectual property including the pending patent applications for its real-time data transmission and display technology (the “IP”) to Real Innovations under an assignment of intellectual property agreement (the “Assignment Agreement”). In return for the assignment Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment, allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement.
Real Innovations, in turn, entered into a master intellectual property license agreement (the “License Agreement”) with Cogent for all of the same IP. Under the License Agreement Real Innovations granted a royalty-free license in perpetuity to Cogent for the use and exploitation of the IP in return for which Cogent agreed to: (i) pay all operating expenses of Real Innovations incurred in connection with the continued prosecution of pending patent applications and others that may be prepared; (ii) prosecute all claims for infringement of the IP; (iii) defend and indemnify Real Innovations from and against all claims of infringement of the IP asserted by third parties against Real Innovations, Cogent or our Company; (iv) purchase liability insurance in favor of Real Innovations for this purpose. Under the termination provision of the license agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parities, the Company ceasing doing business, by breach by the Company or by the Company failing to maintain the license and the support to prosecute and protect the license under applicable laws.
Under the License Agreement, Messrs. Andrew S. Thomas and Paul Benford will benefit indirectly from their indirect ownership of all of the shares of Real Innovations to the extent of any such payments or other undertakings by Cogent on behalf of Real Innovations, but the exact amount of these benefits cannot be determined at this time. As of October 31, 2025 the Company has not made payments per the agreement.
Mr. Andrew S. Thomas and Mr. Paul Benford were each paid $129,897 as salary for the fiscal year ended October 31, 2025 for serving as the CEO and COO of Cogent.
Mr. Lowell Holden, the Chief Financial Officer of the Company, was paid $49,920 during the year ended October 31, 2025 in consulting fees by the Company
Mr. Paul E. Thomas, the President of the Company was paid $129,897 for services for the fiscal year ended October 31, 2025.
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
|
| 2025 |
|
| 2024 |
| ||
Audit fees |
| $ | 67,650 |
|
| $ | 49,250 |
|
Audit related fees |
|
| -- |
|
|
| -- |
|
Tax fees |
|
| -- |
|
|
| -- |
|
All other fees |
| $ | -- |
|
| $ | -- |
|
Audit fees represent the professional services rendered for the audit of our annual financial statements and the review of our financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees. Services provided by the audit firm are reviewed and approved by the audit committee prior to engagement of the audit firm.
Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for in the other categories.
| 32 |
| Table of Contents |
PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SECHEDULES.
(a) The following financial statements and schedules are filed as part of this report:
Consolidated Audited Financial Statements of Skkynet Cloud Systems Inc. for years ended October 31, 2025 and 2024.
Exhibit Number |
| Description |
(31) |
| Section 302 Certifications |
31.1* |
| Section 302 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer |
(32) |
| Section 906 Certification |
32.1* |
| Section 906 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer |
101** |
| Interactive Data Files |
101.INS |
| Inline XBRL Instance Document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 33 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Las Vegas, State of Nevada, on January 27, 2026.
| SKKYNET CLOUD SYSTEMS, INC. |
| |
|
|
|
|
| By: | /s/ Gary Tillery, Chief Executive Officer |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on January 27, 2026
/s/ Andrew Thomas |
| Chief Technology Officer and Director |
|
|
Andrew Thomas |
|
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|
/s/ Paul Thomas |
| Director, President |
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|
Paul Thomas |
|
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/s/ Paul Benford |
| Director and Chief Operating Officer |
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|
Paul Benford |
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/s/ Lowell Holden |
| Chief Financial Officer (Principal Financial Officer), |
|
|
Lowell Holden Principal Accounting Officer, Treasurer |
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/s/ Norman Evans |
| Independent Director |
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|
Norman Evans |
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/s/ Kenneth Jennings |
| Independent Director |
|
|
Kenneth Jennings |
|
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/s/ Gary Tillery |
| Chief Executive Officer and Director |
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|
Gary Tillery |
| (Principal Executive Officer) |
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|
/s/ Xavier Mesrobian |
| Chairman of the Board and Director |
|
|
Xavier Mesrobian |
|
|
|
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|
|
|
|
|
/s/ Lee Tedstone |
| Independent Director |
|
|
Lee Tedstone |
|
|
|
|
| 34 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm |
| F-2&3 |
|
Consolidated Balance Sheets as of October 31, 2025 and 2024 |
| F-4 |
|
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended October 31, 2025 and 2024 |
| F-5 |
|
Consolidated Statements of Stockholders’ Equity for the Years Ended October 31, 2025 and 2024 |
| F-6 |
|
Consolidated Statements of Cash Flows for the Years Ended October 31, 2025 and 2024 |
| F-7 |
|
Notes to the Consolidated Financial Statements |
| F-8 |
|
F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Skkynet Cloud Systems, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Skkynet Cloud Systems, Inc. (“the Company”) as of October 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the two-year period ended October 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and 2024 and the results of its operations and its cash flows for each of the years in the two-year period ended October 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition – Refer to Note 2 in the financial statements
Description of the Critical Audit Matter
As discussed in Note 2, the Company recognizes revenue when (or as) the entity satisfies its performance obligations.
| F-2 |
| Table of Contents |
Significant judgment is exercised by the Company in determining revenue recognition for its software and services, and includes the following:
| · | Determination of whether software and services (including installation, maintenance support, and cloud services) are considered distinct performance obligations that should be accounted for separately. |
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| · | Identification and treatment of contract terms that may impact the timing and amount of revenue recognized. |
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|
|
| · | Determination of stand-alone selling prices for each distinct performance obligation and for software and services that are not sold separately. |
Auditing management’s revenue recognition was highly judgmental due to the significant estimation required for the recognition of revenue.
How the Critical Audit Matter Was Addressed in the Audit
Our principal audit procedures related to the Company’s revenue recognition for these customer agreements included the following, among other things:
| · | We evaluated management’s significant accounting policies related to revenue recognition and reviewed the underlying customer invoices for reasonableness of the application of ASC 606. |
|
|
|
| · | We obtained an understanding of the process by which accounting estimates are utilized by management in determining when performance obligations are satisfied for the Company’s various revenue streams and how this affects the related recognition of revenue over time. |
|
|
|
| · | We obtained and read contract source documents for selected revenue invoices and tested management’s treatment of those terms. |
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| · | We evaluated and tested the mathematical accuracy of management’s calculations and consistency of applied methodology for revenue and the associated timing of revenue and deferred revenue recognized in the financial statements. |
We have served as the Company’s auditor since 2020.
| |
January 27, 2026 |
|
| F-3 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
|
| October 31, |
| |||||
|
| 2025 |
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| 2024 |
| ||
ASSETS |
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| ||
Current assets: |
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| ||
Cash and cash equivalents |
| $ |
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| $ |
| ||
Accounts receivable |
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Prepaid expenses |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Total assets |
| $ |
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| $ |
| ||
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|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued expense |
| $ |
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| $ |
| ||
Accrued liability - related parties |
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Deferred revenue |
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Total current liabilities |
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Total liabilities |
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Commitments and Contingencies |
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Stockholders’ equity: |
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Preferred stock; $ |
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Series B Preferred convertible stock: $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income (loss) |
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Accumulated deficit |
|
| ( | ) |
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| ( | ) |
Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
| Years Ended October 31, |
| |||||
|
| 2025 |
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| 2024 |
| ||
Revenue |
| $ |
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| $ |
| ||
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Operating expenses: |
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Salary and wages |
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Consultants and directors |
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Advertising |
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General and administrative expense |
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Depreciation |
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Operating expense |
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Income (loss) from operations |
|
| ( | ) |
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| |
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Other income (expense): |
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Other income |
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Debt recovery (expense) |
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| ( | ) |
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Currency exchange |
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| ( | ) |
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| ( | ) |
Total other income (expense) |
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Income (loss) before taxes |
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Income tax refund |
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Net income (loss) |
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Preferred dividends |
|
| ( | ) |
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| ( | ) |
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Income (loss) to common shareholders |
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Foreign currency translation adjustments |
|
| ( | ) |
|
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| |
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Comprehensive income (loss) |
| $ |
|
| $ |
| ||
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Net income (loss) per share to common shareholders, basic |
| $ |
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| $ | |||
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Net income (loss) per share to common shareholders, diluted |
| $ |
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| $ | |||
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Weighted average number of shares outstanding, basic |
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Weighted average number of shares outstanding, diluted |
|
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| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
YEARS ENDED OCTOBER 31, 2025 AND 2024
|
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| Accumulated |
|
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| |||||||||||||||||||
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| Series B Preferred |
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| Additional |
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| Other |
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| Total |
| ||||||||||||||||||||
|
| Common Stock |
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| Preferred Stock |
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| Convertible Stock |
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| Paid-In |
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| Accumulated |
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| Comprehensive |
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| Stockholders’ |
| |||||||||||||||||||
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| Shares |
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| Amount |
|
| Shares |
|
| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Income (Loss) |
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| Equity |
| ||||||||||
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| ||||||||||
Balance at October 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
| |||||||||
Stock option expense |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
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|
|
|
|
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| |||||||
Change due to currency exchange |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
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| |||||||
Dividend accrued on series B preferred shares |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
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|
|
| ( | ) |
|
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| ( | ) | |||||
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|
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Net income |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
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| |||||||
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|
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|
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|
|
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|
|
Balance at October 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
| |||||||||
Stock option expense |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Change due to currency exchange |
|
| - |
|
|
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| - |
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| - |
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| ( | ) |
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| ||||||
Dividend accrued on series B preferred share |
|
| - |
|
|
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|
|
| - |
|
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| - |
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| ( | ) |
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| ( | ) | |||||
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Net income |
|
| - |
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| - |
|
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| - |
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Balance at October 31, 2025 |
|
|
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| $ |
|
|
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|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
| |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| Years Ended October 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Cash flows from operating activities: |
|
|
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| ||
Net income |
| $ |
|
| $ |
| ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation and amortization expense |
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| ||
Option based compensation |
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Bad debt expense |
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| ||
Changes in operating assets and liabilities: |
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Accounts receivable |
|
| ( | ) |
|
| ( | ) |
Prepaid and other assets |
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| ( | ) | |
Accounts payable and accrued expense |
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| ||
Accrued liability-related party |
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| ||
Deferred revenue |
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| ( | ) | |
Net cash provided by (used in) operating activities |
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| ||
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Effect of foreign exchange on cash and cash equivalents |
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| ( | ) |
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| |
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Net increase in cash and cash equivalents |
|
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| ||
Cash and cash equivalents– beginning of year |
|
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|
| ||
Cash and cash equivalents– end of year |
| $ |
|
| $ |
| ||
|
|
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|
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|
SUPPLEMENT DISCLOSURES: |
|
|
|
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|
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Interest paid |
| $ |
|
| $ |
| ||
Income taxes paid |
| $ |
|
| $ |
| ||
|
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|
|
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|
NON MONETARY TRANSACTIONS |
|
|
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|
|
|
|
Dividends accrued on series B preferred shares |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements
| F-7 |
| Table of Contents |
SKKYNET CLOUD SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS
Skkynet Cloud Systems, Inc. (“Skkynet”, the “Company”), a Nevada Corporation headquartered in Toronto, Canada was formed on August 31, 2011. Skkynet operates it business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (Cogent)(Canada), Skkynet Corp (Canada), and Skkynet, Inc. (USA). Skkynet was formed primarily for the purpose of taking the existing business lines of Cogent and its current and future customers and integrating these businesses with Cloud based systems. We also intend to expand the areas of business activity to which the kinds of products and services we provide are applied.
In March 2012, we completed the acquisition of all of the issued and outstanding shares of common stock of Cogent from Sakura Software Inc. and Benford Consultancy Inc. in exchange for a total of thirty million (
Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. The reclassifications have no effect on the net loss or stockholders’ equity.
NOTE 2 – CRITICAL AND SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries Cogent Real Time Systems, Inc (Canada), Skkynet Corp. (Canada) and Skkynet Inc (US). All material intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
| F-8 |
| Table of Contents |
Cash deposits are insured up to US$
Revenue Recognition
In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606.
ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are:
| 1. | Identify the contract(s) with a customer. |
| 2. | Identify the performance obligations in the contract. |
| 3. | Determine the transaction price. |
| 4. | Allocate the transaction price to the performance obligations in the contract. |
| 5. | Recognize revenue when (or as) the entity satisfied the performance obligations. |
The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:
| 1. | Sale of software direct to the end customer |
| 2. | Sale of software through distributors and channel partners |
| 3. | Maintenance support services |
| 4. | Cloud services |
Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.
Revenues from cloud services and subscription service are recognized over time (typically, on a monthly basis) as service is provided.
Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the year ended October 31, 2025, $
Payments for subscription revenue has increased 268% to $
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:
| F-9 |
| Table of Contents |
Accounts Receivable
Accounts Receivable are carried at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable include receivables from customers that have received software and support from the Company. Credit losses are a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the year. No allowance for credit losses were considered necessary in previous years as the Company had not experienced credit losses during those periods Although, the Company expensed $
Advertising
Advertising costs are expensed as incurred. Advertising expenses for the years ended October 31, 2025 and 2024 were $
Property and Equipment
Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.
Foreign Currency Translation
The Company’s reporting currency is in U.S. dollars. The functional currency of the Company’s foreign operations is their local currency. The financial statements of the Company’s subsidiaries in Canada are translated to U.S. dollars in accordance with ASC 830-30, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date while the income statement accounts are translated using the average exchange rate for the year. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
Basic and Diluted Earnings Per Share
Basic earnings per share (EPS) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities, such as stock options and convertible preferred shares, were exercised or converted to common stock. The treasury method is used to calculate the effect of options, and if the converted method is used for convertible preferred shares. Securities that are antidilutive are excluded from the computation of diluted EPS.
The following table reconciles the numerator and denominators used in the computation of basic and diluted EPS for the income from continuing operations.
|
| Income |
|
| Shares |
|
| Per -Share |
| |||
For Year Ended October 31, 2025 |
| (Numerator) |
|
| (Denominator ) |
|
| Amount |
| |||
Income from continuing operations |
|
|
|
|
|
|
|
|
| |||
Less: preferred share dividends |
|
| ( | ) |
|
|
|
|
|
| ||
Income available to common stockholders - basic EPS |
|
|
|
|
|
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities |
|
|
|
|
|
|
|
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|
Stock options |
|
|
|
|
|
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|
|
|
|
| |
Convertible preferred stock |
|
|
|
|
|
|
|
|
|
| ||
Income available to common stockholders- diluted EPS |
|
|
|
|
|
|
| $ |
| |||
Income Taxes
Income taxes are provided in accordance with Accounting Standards Codification (“ASC”), Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
| F-10 |
| Table of Contents |
Income taxes for subsidiaries Cogent Real-Time Systems , Inc. and Skkynet Corp are subject to the tax statutes in their country of domicile which is Canada.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the fair value recognition provision of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No 718. The Company issues restricted stock to employees and consultants for their services. Cost of these transactions are measured at fair value of the equity instrument issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as the expense in the period granted. The Company recognized consulting expense and a corresponding increase to the additional paid in capital related to the stock issued for services. For agreements requiring future services the consulting expense is to be recognized ratably over the requisite service period.
Fair Value Measurement
As defined in (Financial Accounting Standards Board ASC 820), fair value is 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 (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 | – | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities. |
|
|
|
Level 2 | – | Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options, and collars. |
|
|
|
Level 3 | – | Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
The Company’s stock option awards are measured at fair value using the Black Scholes option pricing model and are classified as Level 3 fair value measurements due to the use of significant unobservable inputs
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.”
Recently Issued Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13 Financial Instruments-Credit Losses, which replaces the incurred impairment methodology to reflect expected credit losses. The amendments requires the measurement of all expected credit losses for financial assets held at the reporting due to the performance based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 31, 2022. The Company adopted the standard on October 31, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU) No 2023-07 Segment Reporting This amendment is an update on all public entities that are required to report segment information in accordance with Topic 280 Segment Reporting. The amendment improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU on an annual and interim bases requires disclosure of significant revenue and expenses on segmented basis. In addition to the measurements that are most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. This Amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. The Company adopted ASU 2023‑07 on January 1, 2025, applying the guidance retrospectively to all periods presented. The adoption did not impact the Company’s consolidated financial statements, as the amendments relate solely to disclosure. The segment reporting is disclosed in these financials.
| F-11 |
| Table of Contents |
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at October 31, 2025 and 2024:
|
| 2025 |
|
| 2024 |
| ||
Property and equipment |
|
|
|
| $ |
| ||
Less: accumulation depreciation |
|
| ( | ) |
|
| ( | ) |
Net property and equipment |
| $ |
|
| $ |
| ||
Depreciation expense totaled $
NOTE 4 – INCOME TAXES
The Company follows Accounting Standards Codification 740, Accounting for Income Taxes. During 2009, there was a change in control of the Company.
Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. For federal income tax purposes, the Company uses the accrual basis of accounting, the same that is used for financial reporting purposes.
The Company’s deferred tax assets for the U.S. parent company and its US subsidiary consisted of the following as of October 31, 2025, and 2024:
|
| 2025 |
|
| 2024 |
| ||
Income/(Loss) Before Income Taxes |
| $ |
|
| $ |
| ||
Income Tax Expense |
|
|
|
|
|
| ||
Valuation Allowance |
|
| ( | ) |
|
| ( | ) |
Net Amount |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Net Operating Losses |
| $ |
|
| $ |
| ||
Tax Rate |
|
| % |
|
| % | ||
|
|
|
|
|
|
|
|
|
Deferred Tax Assets |
|
|
|
|
|
| ||
Valuation Allowance |
|
| ( | ) |
|
| ( | ) |
Net Deferred Tax Assets |
| $ |
|
| $ |
| ||
The US companies had a net income of $
| F-12 |
| Table of Contents |
A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2025 and 2024 is as follows:
|
| 2025 |
|
| 2024 |
| ||
U.S. federal statutory rate |
|
| % |
|
| % | ||
Net operating loss |
|
| ( | )% |
|
| ( | )% |
Effective tax rate |
| % |
| % | ||||
The US Companies, due to their losses, have not filed US Corporate tax returns and are subject to examination back to October 31, 2012.
The Company’s deferred tax assets for the Canadian subsidiary companies consisted of the following as of October 31, 2025 and 2024:
|
| 2025 |
|
| 2024 |
| ||
Income/(Loss) Before Income Taxes |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Income Tax Benefit |
|
|
|
|
|
| ||
Valuation Allowance |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Net Operating Losses |
| $ |
|
| $ |
| ||
Tax Rate |
|
| % |
|
| % | ||
|
|
|
|
|
|
|
|
|
Deferred Tax Assets |
|
|
|
|
|
| ||
Valuation Allowance |
|
| ( | ) |
|
| ( | ) |
Net Deferred Tax Assets |
| $ |
|
| $ |
| ||
The Canadian Companies had net loss of $
A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2025 and 2024 is as follows:
|
| 2025 |
|
| 2024 |
| ||
Canadian federal statutory rate |
|
| % |
|
| % | ||
Net operating loss |
|
| ( | )% |
|
| ( | )% |
Effective tax rate |
|
| % |
|
| % | ||
The Canadian Companies have filed corporate tax returns through October 31, 2025 and returns since 2017 are open to examination.
During the years ended October 31, 2025 and 2024 Cogent received tax refunds of $
NOTE 5 – OPTIONS
The Company, under its 2012 Stock Option Plan, issues options to various officers, directors, and consultants. The options vest in equal annual installments over a five year period with the first 20% vested when the options are granted. All of the options are exercisable at a purchase price based on the last trading price of the Company’s common stock.
The Company has elected to amortize the options over the vesting period of the option as stock-based compensation. During the year ended October 31, 2025, the Company expensed $
During the year ended October 31, 2025, the Company issued
The number of outstanding options as of year ended October 31, 2025 was
The following sets forth the options granted and outstanding as of October 31, 2025:
|
|
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|
| Weighted |
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| ||||
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| Weighted |
|
| Average |
|
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|
| ||||
|
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|
| Average |
|
| Remaining |
|
|
|
| ||||
|
|
|
|
| Exercise |
|
| Contract |
|
| Intrinsic |
| ||||
|
| Options |
|
| Price |
|
| Life |
|
| Value |
| ||||
Outstanding at October 31, 2023 |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
Granted |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Exercises |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Forfeited/ Expired by termination |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Outstanding at October 31, 2024 |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
Granted |
|
|
|
|
|
|
|
|
|
|
| - |
| |||
Exercised |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
| |
Forfeited/Expired by termination |
|
| ( | ) |
|
| - |
|
|
| - |
|
|
| - |
|
Outstanding at October 31, 2025 |
|
|
|
|
|
|
|
|
|
| $ |
| ||||
Exercisable and vested at October 31, 2025 |
|
|
|
|
|
|
|
|
|
|
| - |
| |||
NOTE 6 – RELATED PARTY TRANSACTIONS
Sakura Software, a corporation owned by our Chief Technology Officer and Director, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively,
| F-13 |
| Table of Contents |
Real Innovations, in turn, entered into a master intellectual property license agreement (the “License Agreement”) with Cogent for all of the same IP. Under the License Agreement Real Innovations granted a royalty-free license in perpetuity to Cogent for the use and exploitation of the IP in return for which Cogent agreed to: (i) pay all operating expenses of Real Innovations incurred in connection with the continued prosecution of pending patent applications and others that may be prepared; (ii) prosecute all claims for infringement of the IP; (iii) defend and indemnify Real Innovations from and against all claims of infringement of the IP asserted by third parties against Real Innovations, Cogent or our Company; (iv) purchase liability insurance in favor of Real Innovations for this purpose. Under the termination provision of the license agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parities, the Company ceasing doing business, by breach by the Company or by the Company failing to maintain the license and the support to prosecute and protect the license under applicable laws.
Under the License Agreement, Messrs. Andrew S. Thomas and Paul Benford will benefit indirectly from their indirect ownership of all of the shares of Real Innovations to the extent of any such payments or other undertakings by Cogent on behalf of Real Innovations, but the exact amount of these benefits cannot be determined at this time. No payment have been made as of October 31, 2024.
On July 30, 2015 the Company designated
During the year ended October 31, 2025, Mr. Paul E. Thomas received cash payments of $
As of October 31, 2025 and 2024, the Company had the following outstanding accrued liabilities due to related parties:
|
| 2025 |
|
| 2024 |
| ||
Accrued liabilities - related parties |
| $ |
|
| $ |
| ||
Accrued commissions |
|
|
|
|
|
| ||
Accrued dividends preferred shares |
|
|
|
|
|
| ||
Total accrued liabilities- related parties |
| $ |
|
| $ |
| ||
NOTE 7 – MAJOR CUSTOMERS
The Company sells to their end-user customers both directly and indirectly, through resellers. In the twelve months ended October 31, 2024, 7 resellers accounted for
| F-14 |
| Table of Contents |
NOTE 8 – REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS
The Company revenue by product line during the years ended October 31, 2025, and 2024 was as follows:
|
| 2025 |
|
| 2024 |
| ||||||||||
Category |
| Percent |
|
| Amount |
|
| Percent |
|
| Amount |
| ||||
Software sales |
|
| % |
| $ |
|
|
| % |
| $ |
| ||||
Support sales |
|
| % |
|
|
|
|
| % |
|
|
| ||||
Other sales |
|
| % |
|
|
|
|
| % |
|
|
| ||||
Total |
|
| % |
| $ |
|
|
| % |
| $ |
| ||||
The Company sells its products on a worldwide basis. During the years ended October 31, 2025, and 2024 the Company’s revenue resulted in the following amounts geographically:
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| 2024 |
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Area |
| Percent |
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| Amount |
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| Percent |
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| Amount |
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North America |
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| $ |
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Europe |
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Asia Pacific |
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| % |
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| % |
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South America |
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| % |
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| % |
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Other |
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| % |
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Total |
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| % |
| $ |
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|
| % |
| $ |
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NOTE 9 – EQUITY
The Company’s authorized shares of common stock is
The Company’s authorized shares of preferred stock is
On July 30, 2015, the Company designated
| F-15 |
| Table of Contents |
NOTE 10 – SEGMENT REPORTING
ASC Topic 280, “Segment Reporting” establishes the standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company is managed as one operating unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making and discloses its operating results in a single reportable segment. The Company’s chief operating decision maker (“CODM”), represented by the Company’s Chief Executive Officer, reviews financial information and assesses the operations of the Company in order to make strategic decisions such as allocation of resources and assessing operating performance.
NOTE 11 – SUBSEQUENT EVENTS
On December 2, 2025 the Company granted
On December 8, 2025 the Company granted
On December 15, 2025 the Company granted
On December 18, 2025, the Company received a $
On January 7, 2026 the Company granted
The Company has evaluated subsequent events to determine events occurring after October 31, 2025 through the filing of this report that would have a material impact on the Company’s financial results or require disclosure and have determined none exist.
| F-16 |
FAQ
How did Skkynet (SKKY) perform financially in fiscal 2025?
What is driving Skkynet’s shift toward subscription revenue?
What is Skkynet’s liquidity and balance sheet position as of October 31, 2025?
How many Skkynet (SKKY) shares are outstanding and what preferred stock is issued?
What internal control and cybersecurity issues does Skkynet disclose?
What are Skkynet’s main business lines and growth priorities?
Does Skkynet pay dividends on its common or preferred stock?
