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 customers (to the extent relevant) 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.

The results of operations reflect the adjustments of the three and six months periods in 2019 for discontinued operations. Discontinued operations are not part of the results of operations in this section.

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, delivery of software and support has been virtual for years with delivery through the internet, we do not anticipate a significant impact on our operations or financial condition, except an initial reduction for the sale for our software.





RESULTS OF OPERATIONS

For the three and six month periods ended April 30, 2020, revenue was $419,043 and $838,525 compared to $372,824 and $635,813 for the same period in 2019. Revenue increased for the six month period ended April 30, 2020 over the same period in 2019 by 31.7%. The increase in revenue for the six month period ended April 30, 2020 is attributed to higher sales by Cogent. The Company has recently increased its investment in sales and marketing which has contributed to the increase in Cogent's sales.

General and administrative expense was $400,306 and $831,432 for the three and six month periods ended April 30, 2020 compared to $636,229 and $1,031,652 for the same period in 2019. The decrease in general and administrative expenses for the three and six-month periods ended April 30, 2020 resulted from lower option expenses in 2020 over the same period in 2019.

For the three and six- month period ended April 30, 2020, the Company reported an operating income of $76,655 and $68,174 compared to operating loss from continuing operations of $264,461 and $390,578 for the same periods in 2019. The change in operating loss during the three- and six-month periods ended April 30, 2019 to operating income in the same period in 2020 is attributable to higher revenue in 2020 compared to 2019.

Other income and expense for the three and six-month periods ended April 30, 2020, includes other income of $42,516 and $46,306 compared to other expense of $937 and other income of $5,500 for the same periods in 2019. The amount in both periods were due primarily to the effect of currency exchange.

Net income of $76,655 and $68,174 was reported for the three and six month periods ended April 30, 2020, compared to a net loss from continuing operations of $264,461 and a loss from discontinued operations of $14,411 for the three month period and a net loss from continuing operations of $390,578 and a loss from discontinued operations of $42,606 in 2019 for the six month period. The net income for the three and six month periods in 2020 is attributed to higher sales in 2020 compared to the same period in 2019.






         12

  Table of Contents

The Company reported comprehensive income of $38,509 and $21,474 for the three and six month periods ended April 30, 2020 compared to a comprehensive loss of $242,210 and $408,173 for the same periods in 2019. The comprehensive loss is an adjustment to net loss with accrued preferred stock dividends and foreign currency translation adjustments along with taxes taken into account.

LIQUIDITY AND CAPITAL RESOURCES

At April 30, 2020, Skkynet had current assets of $881,766 and current liabilities of $164,580, resulting in working capital of $717,186. Accumulated deficit, as of April 30, 2020, was $5,854,703 with total shareholders' equity of $722,267.

Net cash provided by operating activities for the six month period ended April 30, 2020, was $45,712 compared to net cash used in operating activities of $118,366 for the same period in 2019.

The increase in cash provided by operating activities for the six month period ended April 30, 2020 over the same period in 2019 was primarily due to income of $68,174 for the six months ended April 30, 2020 compared to a net loss of $390,578 for the same period in 2019.

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.

© Edgar Online, source Glimpses