[10-Q] Skkynet Cloud Systems, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Skkynet Cloud Systems, Inc. (SKKY) reported limited disclosures in this 10-Q excerpt. The company has 70,000,000 authorized shares with 53,143,822 issued and outstanding. For the nine months ended July 31, 2025, the company recorded a $13,631 credit loss compared with none in the prior-year period. An agreement with Cogent involved a $30,000 payment that Cogent elected to forgo, allowing Real Innovations to offset future expenses; there is no ongoing royalty or other compensation owed under that Assignment Agreement. Stock options described carry exercise prices of $0.41 to $0.88, an expected term of 10 years, and are expensed over a 5-year period with 20% expensed at issuance and 20% in each subsequent year. The filing includes a signature dated September 15, 2025.

Positive

• Clear share structure disclosed: 70,000,000 authorized, 53,143,822 issued and outstanding, aiding dilution analysis
• Cogent settlement reduces future obligations: $30,000 forgone payment with no ongoing royalty, indicating no continuing cash outflow to Cogent under the Assignment Agreement
• Option accounting schedule provided: Exercise prices $0.41–$0.88, 10-year term, expensed over five years with explicit vesting/expense timing

Negative

• Credit loss recorded: $13,631 for nine months ended July 31, 2025 versus none prior year, indicating new credit expense
• Insufficient financial detail: No revenue, net income, cash flow, or balance sheet totals provided in the excerpt, limiting material analysis

Insights

Securities Analyst

TL;DR Small credit loss and equity details; limited operational or revenue data restrict impact assessment.

The disclosed $13,631 credit loss for nine months is immaterial in absolute terms relative to most public-company scales, but it signals some credit-related expense where none existed last year. The share count (53,143,822 outstanding of 70,000,000 authorized) provides capitalization context for dilution analysis. The Cogent arrangement appears to be a one-time settlement structure with no future royalties, clarifying no recurring cash obligation from Real Innovations to Cogent under that agreement. Option terms (strike range $0.41–$0.88, 10-year term, 5-year expensing with staged vesting) are standard and indicate management expects multi-year expense recognition. Overall, the excerpt lacks revenue, profitability, cash flow, or balance sheet totals necessary for material investor conclusions.

Corporate Governance Specialist

TL;DR Governance disclosures are basic: share structure, signature, and compensation accounting details only.

The filing confirms authorized and outstanding share counts, which is useful for ownership and dilution monitoring. The signature block indicates proper execution. The option accounting mechanics (20% at issuance and annually thereafter) should be confirmed against grant agreements for compliance with accounting rules, but the provided schedule clarifies expense timing. The Cogent concession removes a potential ongoing liability, improving clarity on future obligations. Missing are executive changes, related-party transactions beyond Cogent, and governance items that would materially affect investor assessments.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended July 31, 2025

OR

☐ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________.

Commission File Number 000-54747

SKKYNET CLOUD SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada		45-3757848
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2233 Argentia Road Suite 302. Mississauga, Ontario, Canada L5N 2X7

(Address of principal executive offices)

(888) 702-7851

(Issuer's telephone number)

Indicate by check mark whether the Company: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes: ☒     No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes: ☒     No: ☐

Indicate by check mark whether the Company is a large accelerated filer, an accelerated file, non-accelerated filer, or a smaller reporting company.

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

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

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

As September 15, 2025, there were 53,143,822 shares of Common Stock and 193,661 shares of series B preferred of the issuer outstanding.

		Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and October 31, 2024 (Audited)		4
Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended July 31, 2025 and 2024 (Unaudited)		5
Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended July 31, 2025 and 2024 (Unaudited)		6
Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2025 and 2024 (Unaudited)		7
Notes to Consolidated Financial Statements(Unaudited)		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		15
Item 4. Controls and Procedures		15
PART II: OTHER INFORMATION
Item 1. Legal Proceedings		16
Item 1A. Risk Factors		16
Item 2. Sales of Equity Securities and Use of Proceeds		16
Item 3. Defaults upon Senior Securities		16
Item 4. Mine Safety Information		16
Item 5. Other Information		16
Item 6. Exhibits		17
Signatures		18

2

Table of Contents

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical, or current facts are forward-looking statements. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. Among the factors that could cause actual results to differ materially from the forward-looking statements are the following: the Company’s ability to obtain necessary capital, the Company’s ability to meet anticipated development timelines, the Company’s ability to protect its proprietary technology and knowhow, the Company’s ability to establish a global market, the Company’s ability to successfully consummate future acquisitions, and such other risk factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission, including those filed with this Form 10-Q quarterly report. We disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

3

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PART I

ITEM 1: FINANCIAL STATEMENTS

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

		July 31, 2025				October 31, 2024
		(Unaudited)				(Audited)
ASSETS
Current Assets:
Cash and cash equivalents		$	1,352,883			$	1,158,255
Accounts receivable			230,408				361,480
Prepaid expenses			32,289				27,595
Total current assets			1,615,580				1,547,330
Property and equipment, net of accumulated depreciation of $90,893 and $88,746 respectively			384				2,156
Total Assets		$	1,615,964			$	1,549,486
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	146,852			$	154,634
Accrued liabilities – related party			182,485				166,940
Deferred revenue			339,609				338,382
Total current liabilities			668,946				659,956
Total Liabilities			668,946				659,956
Commitments and contingencies			-				-
Stockholders’ Equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively			5				5
Series B Preferred convertible stock: $0.001 par value, 500,000 shares authorized, 193,661 issued and outstanding, respectively			194				194
Common stock; $0.001 par value, 70,000,000 shares authorized, 53,143,822 shares issued and outstanding, respectively			53,145				53,145
Additional paid-in capital			7,315,687				7,226,547
Accumulative other comprehensive income			72,114				80,946
Accumulated deficit			(6,494,127	)			(6,471,307	)
Total stockholders’ equity			947,018				889,530
Total Liabilities and Stockholders’ Equity		$	1,615,964			$	1,549,486

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

4

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

		As of July 31,
		Three Months								Nine Months
		2025				2024				2025				2024
Revenue		$	482,682			$	666,359			$	1,897,446			$	1,898,701
Operating Expenses:
Depreciation			600				603				1,761				1,821
Compensation expense			318,519				424,279				1,206,261				1,190,888
Advertising			55,001				1,790				243,480				235,800
Stock compensation			34,503				19,889				89,140				59,667
General & administrative expenses			126,462				109,713				405,663				464,157
Operating expenses			535,085				556,274				1,946,305				1,952,333
Income (loss) from operations			(52,403	)			110,085				(48,859	)			(53,632	)
Other income (expense):
Other income			11,857				6,464				29,966				14,459
Bad debt expense			(157	)			-				(13,631	)			-
Currency exchange			(3,532	)			5,169				(9,131	)			(12,502	)
Total other income (expense)			8,168				11,633				7,204				1,957
Income (loss) before taxes			(44,235	)			121,718				(41,655	)			(51,675	)
Income taxes refund (expense)			28,790				-				27,550				28,274
Net income (loss)			(15,445	)			121,718				(14,105	)			(23,401	)
Preferred dividends			(2,905	)			(2,905	)			(8,715	)			(8,715	)
Income (loss) to common stockholders			(18,353	)			118,813				(22,820	)			(32,116	)
Foreign currency translation adjustment			515				(179	)			(8,832	)			(10,956	)
Comprehensive income (loss)		$	(17,838	)		$	118,634			$	(31,652	)			(21,160	)
Net income per share to common stockholders- basic		$	(0.00	)		$	0.00			$	(0.00	)		$	(0.00	)
Weighted average common shares outstanding -basic			53,143,822				53,143,822				53,143,822				53,143,822
Net income per share to common stockholders – diluted		$	(0.00	)		$	0.00			$	(0.00	)		$	(0.00	)
Weighted average common stock outstanding- diluted			53,143,822				61,217,272				53,143,822				53,143,822

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

5

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2025 AND 2024

(Unaudited)

																																		Accumulated
																		Series B Preferred								Additional								Other				Total
		Common Stock								Preferred Stock								Convertible Stock								Paid-In				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Shares				Amount				Shares				Amount				Capital				Deficit				Income (loss)				Equity
Balance at October 31, 2023			53,143,822			$	53,145				5,000			$	5				193,661			$	194			$	7,146,991			$	(6,558,777	)		$	74,082			$	715,640
Change due to currency translation			--				-				--				-				--				-				-				-				5,472				5,472
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				---				--								19,889				-				-				19,889
Net income			--				-				--				-				--				-				-				21,384								21,384
Balance at January 31, 2024			53,143,822				53,145				5,000				5				193,661				194				7,166,880				(6,540,298	)			79,554				759,480
Change due to currency translation			--				-				--				-				--				-				-				-				5,305				5,305
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				-				--				-				19,889												19,889
																											--				--				--				--
Net loss			--				-				--				-				--				-				-				(166,503	)			-				(166,503	)
Balance at April 30, 2024			53,143,822				53,145				5,000				5				193,661				194				7,186,769				(6,709,706	)			84,859				615,266
Change due to currency translation			--				-				--				-				--				-				-				-				179				179
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				-				--				-				19,889				-				-				19,889
Net income			--				-				--				-				--				-				-				121,718				-				121,718
Balance at July 31, 2024			53,143,822			$	53,145				5,000			$	5				193,661			$	194			$	7,206,658			$	(6,590,893	)		$	85,038			$	754,147
Balance at October 31, 2024			53,143,822			$	53,145				5,000			$	5				193,661			$	194			$	7,226,547			$	(6,471,307	)		$	80,946			$	889,530
Change due to currency translation			--				-				--				-				--				-				-				-				(4,673	)			(4,673	)
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				-				--				-				32,098								-				32,098
Net income			---				-				--				-				--				-				-				229,063				-				229,063
Balance at January 31, 2025			53,143,822				53,145				5,000				5				193,661				194				7,258,645				(6,245,149	)			76,273				1,143,113
Change due to currency translation			--				-				--				-				--				-				-				-				(4,674	)			(4,674	)
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				-				--				-				22,539				-				-				22,539
Net loss			--				-				--				-				--				-				-				(227,723	)							(227,723	)
Balance at April 30, 2025			53,143,822				53,145				5,000				5				193,661				194				7,281,184				(6,475,777	)			71,599				930,350
Change due to currency translation			--				-				--				-				--				-				-				-				515				515
Dividend accrued on series B preferred shares			--				-				--				-				--				-				-				(2,905	)			-				(2,905	)
Stock option expense			--				-				--				-				--				-				34,503				-				-				34,503
Net income			--				-				--				-				--				-				-				(15,445	)			-				(15,445	)
Balance at July 31, 2025			53,143,822			$	53,145				5,000			$	5				193,661			$	194			$	7,315,687			$	(6,494,127	)		$	72,114			$	947,018

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

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SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

		For the Nine Months Ended July 31,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	(14,105	)		$	(23,401	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			1,761				1,821
Stock based compensation			89,140				59,667
Bad debt expense			13,631				-
Changes in operating assets and liabilities:
Accounts receivable			117,441				78,213
Accounts payable and accrued expenses			(7,782	)			59,563
Accrued liabilities – related parties			6,830				64,870
Prepaid expenses and other assets			(4,694	)			11,677
Deferred revenue			1,227				(52,908	)
NET CASH PROVIDED BY OPERATING ACTIVITIES			203,449				199,502
Effect of exchange rate changes on cash and cash equivalents			(8,821	)			10,924
Net increase in cash and cash equivalents			194,628				210,426
Cash and cash equivalents, beginning of period			1,158,255				916,780
Cash and cash equivalents, end of period		$	1,352,883			$	1,127,206
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-
NON CASH INVESTING AND FINANCING ACTIVITIES
Dividends accrued on Series B preferred shares		$	8,715			$	8,715

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

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SKKYNET CLOUD SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Skkynet Cloud Systems, Inc. (“Skkynet” or “the Company”) is a Nevada corporation formed on August 31, 2011 and headquartered in Toronto, Canada. Skkynet operates its business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), 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.

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2024 Annual Report on form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the consolidated financial statements for the most recent fiscal year end October 31, 2024 as reported on Form 10-K, have been omitted.

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 – SIGNIFICANT ACCOUNTING POLICIES

Recent adopted accounting standards

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13 Financial Instruments- Credit Losses, which replaces the impairment methodology incurred to reflect expected credit losses. The amendments require 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) 2023-07 Segment Reporting The change in this announcement requires more detailed profit and loss reporting by business segments used by the Company to determine the allocation of assets. ASU  2016-07 is effective for annual periods beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. The Company is evaluating the adoption of the standard but believe it will not have a material impact on the Company’s consolidated financial statements.

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 is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the year. No allowance for bad debt was considered necessary for the nine months ended July 31, 2025 and the year ended October 31, 2024, respectively. However, the Company expensed $13,631 in credit loss for the nine months ended July 31, 2025 compared to none during the same period in 2024.

Basic and Diluted Net Loss Per Share

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Basic and diluted net income per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. For the nine months ended July 31, 2025 and the nine months ended July 31, 2024, 8,737,200 and 8,073,450, respectively, of potentially issuable shares of common stock from stock options have not been included in the calculations due to losses in each respective period. Due to the net profit for the quarter ending July 31, 2024, the Company reported 61,217,272 as the number of shares to calculate the per share earnings on a diluted basis.

NOTE 3 – 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.

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As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the nine month periods ended July 31, 2025, and 2024 the revenue by product line is as follows:

Category		Percentage				2025				Percentage				2024
Product sales			65	%		$	1,240,174				66	%		$	1,246,252
Support			32	%			606,976				30	%			575,346
Cloud & Other			3	%			50,296				4	%			77,103
Total			100	%		$	1,897,446				100	%		$	1,898,701

The Company sells its products on a worldwide basis. During the nine month periods ended July 31, 2025, and 2024 the Company’s geographic concentration of revenue is as follows: 

Area		Percentage				2025				Percentage				2024
Europe			41	%		$	768,937				45	%		$	850,146
North America			37	%			694,013				40	%			764,641
Asia Pacific			10	%			201,671				8	%			153,853
Middle East Africa/Other			10	%			201,469				6	%			107,011
South America			2	%			31,356				1	%			23,050
Total			100	%		$	1,897,446				100	%		$	1,898,701

NOTE 4 – RELATED PARTY TRANSACTIONS

Sakura Software, a corporation owned by our CEO and Chairman of the Board of Directors, 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’s agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parties, 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 payments have been made as of July 31, 2025.

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As of July 31, 2025, the amount due to related parties was $182,485 compared to $166,940 as of October 31, 2024. As of July 31, 2025, the amount consisted of accrued dividends of $116,200 and accrued liabilities of $66,285.

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.

During the nine month period ended July 31, 2025 the Company issued 763,750 options to 19 individuals. The options can be exercised into common stock of the Company at $0.41- $0.88 per share. The Company calculated a fair value of the options of $53,128 using the Black Scholes option pricing model with computed volatility of 126.00%, risk-free interest rate of 4.5%, expected dividend yield 0%, stock price at measurement date of $0.41-0.88 and the expected term of ten years. The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year.

As of July 31, 2025 the total number of options was 8,737,200 of which 6,656,700 can be exercised and 2,080,500 not exercisable.

During the nine month period ended July 31, 2025, the Company recognized $89,140 of option expense. The unrecognized future balance to be expensed over the term of the options is $433,666. 

The following sets forth the options granted and outstanding as of July 31, 2025:

		Options				Weighted Average Exercise price				Weighted Average Remaining Contract Life				Granted Options Exercisable				Intrinsic value
Outstanding at October 31, 2024			8,073,450			$	0.16				3.35				6,490,700			$	2,822,540
Granted			763,750				0.57				9.50				--				--
Exercised			--				--				--				--				--
Forfeited/Expired by termination			(100,000	)			--				--				--				--
Outstanding as July 31, 2025			8,737,200			$	0.20				3.93				6,656,700			$	4,090,273

NOTE 6 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and indirectly, through resellers. In the nine months ended July 31, 2024, 5 resellers accounted for 51% of sales, of which 1 reseller accounted for 27% of sales. In the nine months ended July 31, 2025, 7 resellers accounted for 52% 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 nine months ended July 31, 2024, no end user customers were responsible for more than 10% of gross revenue and 32 end user customers were responsible for approximately 50% of gross revenue. In the nine months ended July 31, 2025, no end user customers were responsible for more than 10% of gross revenue and 19 end user customers were responsible for approximately 50% of gross revenue.

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NOTE 7 – EQUITY

On July 30, 2015, the Company designated 500,000 shares of the preferred stock as Series B Convertible preferred. The Series B shares have a par value of $0.001 and issue value of $1.00 per share. Series B is convertible by the holder into common stock at $1.32 per share. The Company may, any time at its option, redeem the Series B shares at their stated value. The Series B preferred shares hold a 6% per annum accumulative dividend. During the nine months periods ended July 31, 2025 and 2024, the Company recognized but did not pay dividends of $2,905 for the respective quarters. As of July 31, 2025, the total amount of dividends due to the preferred shareholders was $116,200.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events to determine events occurring after July 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 other than noted above.

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ITEM2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Skkynet’s actual results could differ materially from those set forth on the forward-looking statements as a result of the risks set forth in Skkynet’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

OVERVIEW

Skkynet is a Nevada corporation headquartered in Mississauga, Canada. Skkynet operates three different lines of business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet, Inc. (“Skkynet (USA)”), and Skkynet Corp. (“Skkynet (Canada)”). Skkynet was established to enhance Cogent’s existing business lines through the integration of Cloud-based systems, and to deliver a Software-as-a-Service (“SaaS”) product targeting the Industrial Internet of Things (“IoT”) market, now referred to by the terms “Industry 4.0” and “Industrial Internet Consortium”.

The Company provides software and related systems and facilities to collect, process, and distribute real-time information over a network. This capability allows the customers to both locally and remotely manage, supervise, and control industrial processes and financial information systems. By using this software and, when requested by a client, our web based assets; our clients and their relevant customers are given the ability and the tools to observe and interact with these processes and services in real-time as they are underway and to give them the power to analyze, alter, stop, or otherwise influence these activities to conform to their plans.

RESULTS OF OPERATIONS

For the three and nine month periods ended July 31, 2025, revenue was $482,682 and $1,897,446 compared to $666,359 and $1,898,701 for the same periods in 2024. Revenue decreased for the nine month period ended July 31, 2025 over the same period in 2024 by less than 1%. During the nine months ended July 31, 2025, subscription revenue accounted for 12% of sales or $224,730 versus 2% of revenue or $47,336 for the same period in 2024. The decrease in revenue for the nine month period can be partially attributed to the $177,394 increased subscription license agreements over perpetual license in 2025 over 2024. Under the subscription agreement the licensee pays for the license on an annual basis at a lower amount than if it was a perpetual license. Revenue from quarter-to-quarter is dependent on the timing of orders placed by its customers. Additionally, as larger customers place orders, the revenue volume can fluctuate significantly. The Company instituted subscription agreement terms in which the customer’s license is for two years with an option to renew each year thereafter. Payments for the software licenses are made on an annual basis compared to the one-time payment for a perpetual license. Subscription licenses impact the amount of revenue that can be recorded in a specific reporting period and may impact the comparison of revenue when compared to a previous reporting period. During the quarter ending July 31, 2025, the Company had fewer individual software orders plus increased subscription license revenue compared to the third quarter ending July 31, 2024 resulting in 28% less revenue in the second quarter. The Company cannot determine if there were any significant external factors in the marketplace that impacted the results.

Operating expense was $535,085 and $1,946,305 for the three and nine month periods ended July 31, 2025 compared to $556,274 and $1,952,333 for the same periods in 2024. Compensation expense of $1,206,261 for the nine months ended July 31, 20125 consisted of payroll of $875,640 and consulting and directors’ fees of $330,621 compared to compensation of $1,190,888 consisting of payroll of $844,389 and consulting and directors’ fees of $346,499 for the same period in 2024. The change in operating expenses between the nine months in 2025 over 2024 was minimal and no specific category of expense changed significantly except for salaries and wages and general and administrative expenses.

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For the three and nine month periods ended July 31, 2025, the Company reported an operating loss of $52,403 and $48,859 compared to operating income of $110,085 and operating loss of $53,632 for the same periods in 2024. The operating loss during the nine month period ended July 31, 2025 over the operating loss for same period in 2024 is attributable to static revenues and static expenses in both nine month periods ended July 31, 2025 and 2024.

Other income/expense for the three and nine month periods ended July 31, 2025 was income of $8,168 and $7,204, consisting of other income of $11,857 and $29,966, currency loss of $3,532 and $9,131 plus a bad debt expense of $13,631. This compared to other income of $11,633 and $1,957 for the three and nine months period ended July 31, 2024. Other income and expense consisted of other income of $6,464 and $14,459, currency income of $5,169 and currency loss of $12,502 for the same period in 2024. The amount of change in both periods was due to the effect of currency exchange, increased other income and bad debt expense of $13,631.

Net loss before taxes of $44,235 and $41,655 was reported for the three and nine month periods ended July 31, 2025, compared to net income of $121,718 and net loss of $51,675 for the same periods in 2024. Net loss after tax for the three and nine month periods ended July 31, 2025 was $15,445 and $14,105 compared to net income of $121,718 and net loss of $23,401 for the same periods in 2024. These amounts reflect tax refunds of $28,790 and $28,274 during the nine month periods in 2025 and 2024, respectively.

Net loss to common stockholders was $18,353 and $22,820 for the three and nine month periods ended July 31, 2025, compared to net income of $118,813 and net loss of $32,116 for the same periods in 2024. Net income or loss to common shareholders includes the expense of dividend for preferred stockholders of $2,905 and $8,715 being accrued for the three and nine month periods ended July 31, 2025 and 2024.

The Company reported comprehensive losses of $17,838 and $31,652 for the three and nine month periods ended July 31, 2025 compared to a comprehensive income of 118,634 and loss of $21,160 for the same periods in 2024. Comprehensive income is an adjustment to net gain or loss with foreign currency translation adjustments.

LIQUIDITY AND CAPITAL RESOURCES

At July 31, 2025, the Company had current assets of $1,615,964 and current liabilities of $668,946, resulting in working capital of $946,634. Accumulated deficit, as of July 31, 2025, was $6,494,127 with total stockholders’ equity of $947,018. Stockholders’ equity increased by $57,488 during the nine month period ending July 31, 2025. The change was primarily due to the increase in current assets in the nine month period ending July 31, 2025.

Net cash provided by operating activities for the nine month period ended July 31, 2025, was $203,449 compared to net cash provided by operating activities of $199,502 for the same period in 2024. The cash provided by operating activities for the nine month period ended July 31, 2025 compared to the net cash provided in operating activities over the same period in 2024 was influenced by the lower loss in 2025 over 2024.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, Skkynet is not required to provide information required under this Item.

ITEM 4: CONTROLS AND PROCEDURES

This report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 under the Securities Exchange Act of 1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Financial Officer, to allow timely decisions regarding required disclosures.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of July 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. 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.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management believes that the Unaudited Financial Statements included herein present, in all material respects, the Company’s financial condition, results of operations and cash flows for the periods presented.

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PART II – OTHER INFORMATION

ITEM 1: 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 1A: RISK FACTORS

There have been no material changes to the Company’s risk factors as previously disclosed in our most recent 10-K filing for the year ended October 31, 2024.

ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4: MINE SAFETY INFORMATION

None.

ITEM 5: OTHER INFORMATION

None.

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ITEM 6: EXHIBITS

EXHIBIT 31.1		Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 31.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
EXHIBIT 32.1		Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 32.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SKKYNET CLOUD SYSTEMS INC.
Date: September 15, 2025	By:	/s/ Andrew Thomas
	Andrew Thomas, Chief Executive Officer (Duly Authorized, Principal Executive Officer)
	By:	/s/ Lowell Holden
	Lowell Holden, Chief Financial Officer (Duly Authorized Principal Financial Officer)

18

FAQ

How many SKKY shares are authorized and outstanding?

The filing states 70,000,000 shares authorized and 53,143,822 shares issued and outstanding.

Did Skkynet record any credit losses in the period?

Yes. The company recorded a $13,631 credit loss for the nine months ended July 31, 2025 compared with none in the same period in 2024.

What is the Cogent payment arrangement mentioned in the filing?

Cogent elected to forgo a $30,000 payment, allowing Real Innovations to offset future expenses against that payment, and there is no ongoing royalty or other compensation owed under the Assignment Agreement.

What are the terms of the stock options disclosed?

Options have exercise prices of $0.41 to $0.88, an expected term of 10 years, and are expensed over 5 years with 20% expensed at issuance and 20% each subsequent year.

When was the filing signed?

The excerpt shows a signature dated September 15, 2025 by Andrew Thomas.