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, 2023, revenue was $492,119 compared
to $477,179 for the same period in 2022. Revenue increased for the three month
period ended January 31, 2023 over the same period in 2022 by 3.1%. The
increase in revenue for the three month period ended January 31, 2023 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 $625,964 for the three month period ended
January 31, 2023 compared to $577,290 for the same period in 2022. The increase
in general and administrative expenses for the three month period ended January
31, 2023 over the same period in 2022, resulted from increased expenditures
primarily in salaries and payroll of $12,197, Advertising of $7,696, and other
general and administrative of $25,873.
For the three month period ended January 31, 2023, the Company reported an
operating loss of $133,845 compared to operating loss of $100,111 for the same
periods in 2022. The increase of operating loss during the three month period
ended January 31, 2023 over the same period in 2022 is attributable to higher
marketing. consulting and general and administrative costs in the period ended
January 31, 2023 as compared to the same period in 2022.
Other income and expense for the three month period ended January 31, 2023, was
other expense of $13,261 compared to other income of $25,947 for the same
periods in 2022. The amount of change in both periods was due to the effect of
currency exchange.
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Net loss before and after income taxes of $147,206 was reported for the three
month period ended January 31, 2023, compared to a net loss before and after
income taxes of $74,164 for the same period in 2022. The higher net loss for the
three month period in 2023 can be attributed to higher operating expenses in
2023 compared to 2022. Revenue increased in the three months period ending
January 31, 2023 over the same period in 2022 but was not significant enough
to offset the increase in expenses in that period.
Net loss to common shareholders was $150,111 for the three month period ended
January 31, 2023 compared to $77,069 for the same period in 2022. The loss
includes the expense of dividends for preferred shareholders of $2,905 being
accrued for the periods ended January 31, 2023 and 2022.
The Company reported comprehensive loss of $144,627 for the three month period
ended January 31, 2023 compared to a comprehensive loss of $93,618 for the same
period in 2022. The comprehensive loss is an adjustment to net loss with foreign
currency translation adjustments.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 2023, Skkynet had current assets of $1,011,112 and current
liabilities of $424,451, resulting in working capital of $586,661. Accumulated
deficit, as of January 31, 2023, was $6,599,396 with total shareholders' equity
of $578,252.
Net cash provided by operating activities for the three month period ended
January 31, 2023, was $36,690 compared to net cash used in operating activities
of $144,538 for the same period in 2022.
The positive change in cash in operating activities for the three month period
ended January 31, 2023 over the same period in 2022 was primarily due to a
positive net change in accounts receivable of $217,935.
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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