SKKYNET CLOUD SYSTEM

SKKY
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SKKYNET CLOUD SYSTEMS, INC. : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

06/14/2021 | 04:02pm

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 and six months periods ended April 30, 2020, revenue was $419,482
and $838,525 compared to $,972 and $886,038 for the same periods in 2021.
Revenue increased for the six month period ended April 30 , 2021 over the same
period in 2020 by 5.67%. The increase in revenue for the six months period ended
April 30, 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, including depreciation, was $400,906 and
$832,659 for the three and six month periods ended April 30, 2020 compared to
$415,747 and $864,394 for the same periods in 2021. The increase in general and
administrative expenses for the three and six month periods ended April 30, 2021
resulted from increased employment expenditures over the same period in 2020.



For the three and six month periods ended April 30, 2020, the Company reported
an operating income of $18,137 and $5,866 compared to operating income of
$32,225 and $21,644 for the same periods in 2021. The increase of operating
income during the three and six month periods ended April 30, 2021 over the same
periods in 2020 is attributable to higher revenue in 2021 compared to 2020.



Other income and expense for the three and six month periods ended April 30,
2020
, was other income of $42,516 and $46,306 compared to other loss of $23,310
and $54,441 for the same periods in 2021. The amount of change in both periods
was due to the effect of currency exchange.



Net income before and after income taxes of $60,653 and $52,172 was reported for
the three and six month periods ended April 30, 2020, compared to net income
before and after income taxes of $8,915 and net loss of $32,797 for the same
periods in 2021. The higher net loss for the three month period in 2021 can be
attributed primarily to the change in currency from a gain of $42,515 to a loss
of $31,497 or a negative change of $74,012.



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 income of
$26,373 and comprehensive loss of $9,608 for the same periods 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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Table of Contents





LIQUIDITY AND CAPITAL RESOURCES



At April 30, 2021, Skkynet had current assets of $950,238 and current
liabilities of $371,441, resulting in working capital of $578,797 for a current
ratio of 2.56 to 1. Accumulated deficit, as of April 30, 2021, was $6,267,007
with total shareholders' equity of $563,022.



Net cash provided from operating activities for the six months period ended
April 30, 2020, was $45,712 compared to net cash used in operating activities of
$288,962 for the same period in 2021.



The increase in cash used in operating activities for the six months period
ended April 30, 2021 over the same period in 2020 was primarily due to an
increase in accounts receivable of $168,374, reduction in accounts payable and
accrued expenses of $43,812 plus 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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