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, 2022, revenue was $477,179 compared
to $438,066 for the same period in 2021. Revenue increased for the three month
period ended January 31, 2022 over the same period in 2021 by 8.9%. The increase
in revenue for the three month period ended January 31, 2022 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 $576,639 for the three month period ended
January 31, 2022 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, 2022 over the same period in 2021, resulted from increased expenditures
primarily in legal and accounting of $26,700, hired consulting services of
$13,800, advertising and promotion of $49,400, computer and internet of$$4,500,
and payroll for new hires of $23,200.
For the three month period ended January 31, 2022, the Company reported an
operating loss of $100,111 compared to operating loss of $10,581 for the same
periods in 2021. The increase of operating loss during the three month period
ended January 31, 2022 over the same period in 2021 is attributable to
higher general and administrative costs in the period ended January 31, 2022 as
noted in the above paragraph compared to 2021.
Other income and expense for the three month period ended January 31, 2022, was
other income of $25,947 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 $74,164 was reported for the three
month period ended January 31, 2022, 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 in 2022 compared to the same period in 2021.
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Net loss to common shareholders was $77,069 for the three month period ended
January 31, 2022 compared to $44,617 for the same period in 2021. The loss
includes the expense of dividend for preferred shareholders of $2,905 being
accrued for the period ended January 31, 2022.
The Company reported comprehensive loss of $90,713 for the three month period
ended January 31, 2022 compared to a comprehensive loss of $33,076 for the same
period in 2021. The comprehensive loss is an adjustment to net loss with foreign
currency translation adjustments.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 2022, Skkynet had current assets of $968,952 and current
liabilities of $536,202, resulting in working capital of $432,750. Accumulated
deficit, as of January 31, 2022, was $6,547,492 with total shareholders' equity
of $408,286.
Net cash used in operating activities for the three month period ended January
31, 2022, was $144,538 compared to net cash used in operating activities of
$220,860 for the same period in 2021.
The decrease in cash used in operating activities for the three month period
ended January 31, 2022 over the same period in 2021 was primarily due to an,
increase in accounts payable offset by a decrease in accrued liabilities to
related parties and increased accounts receivable.
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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