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.
RESULTS OF OPERATIONS
For the three month period ended January 31, 2020, revenue was $419,482 compared
to $438,066 for the same period in 2021. Revenue increased for the three month
period ended January 31, 2021 over the same period in 2020 by 4.4%. The increase
in revenue for the three month period ended January 31, 2021 is attributed to
higher sales by Cogent. The Company is benefiting from its prior investment in
sales and marketing and market recognition which has contributed to the increase
in Cogent's sales.
General and administrative expense was $431,126 for the three month period ended
January 31, 2020 compared to $448,006 for the same period in 2021. The increase
in general and administrative expenses for the three month period ended January
31, 2021 resulted from increased employment expenditures over the same period in
2020.
For the three month period ended January 31, 2020, the Company reported an
operating loss of $12,271 compared to operating loss of $10,581 for the same
period in 2021. The decrease of operating loss during the three month period
ended January 31, 2021 over the same period in 2020 is attributable to higher
revenue in 2021 compared to 2020.
Other income and expense for the three month period ended January 31, 2020, was
other income of $3,790 compared to other loss of $31,131 for the same periods in
2021. The amount of change in both periods was due to the effect of currency
exchange.
Net loss before and after income taxes of $8,481 was reported for the three
month period ended January 31, 2020, compared to a net loss before and after
income taxes of $41,712 for the same period in 2021. The higher net loss for the
three month period in 2021 can be attributed to higher general and
administrative cost and currency exchange loss in 2021 compared to the same
period in 2020.
The Company reported comprehensive loss of $17,035 for the three month period
ended January 31, 2020 compared to a comprehensive loss of $35,971 for the same
period in 2021. 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.
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LIQUIDITY AND CAPITAL RESOURCES
At January 31, 2021, Skkynet had current assets of $874,343 and current
liabilities of $375,400, resulting in working capital of $498,943. Accumulated
deficit, as of January 31, 2021, was $6,275,922 with total shareholders' equity
of $485,003.
Net cash used in operating activities for the three month period ended January
31, 2020, was $47,598 compared to net cash used in operating activities of
$220,860 for the same period in 2021.
The increase in cash used in operating activities for the three month period
ended January 31, 2021 over the same period in 2020 was primarily due to an
increase in accounts receivable, reduction in accounts payable and a large
reduction of $222,603 in accrued liabilities to related parties.
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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