Skkynet Narrows Losses to $14K Amid Flat Revenue, Increased Cash

TL;DR

**SKKY is treading water, narrowing losses but showing no real revenue growth — a risky bet for traders looking for momentum.**

AI Summary

Skkynet Cloud Systems, Inc. reported a net loss of $14,105 for the nine months ended July 31, 2025, a significant improvement from the $23,401 net loss in the same period of 2024. Revenue remained largely flat year-over-year, at $1,897,446 for the nine months ended July 31, 2025, compared to $1,898,701 in 2024. Operating expenses slightly decreased to $1,946,305 from $1,952,333, primarily due to a reduction in compensation expense from $1,190,888 to $1,206,261, offset by increased advertising expenses from $235,800 to $243,480. The company's cash and cash equivalents increased to $1,352,883 as of July 31, 2025, up from $1,158,255 at October 31, 2024. A notable change was the recognition of $13,631 in bad debt expense for the nine months ended July 31, 2025, where none was recorded in the prior year. The company continues to operate through its subsidiaries, focusing on integrating existing business lines with Cloud-based systems and expanding product and service applications.

Why It Matters

Skkynet's ability to reduce its net loss, despite stagnant revenue, suggests some operational efficiency gains, which is a positive signal for investors. However, the flat revenue growth in a competitive cloud systems market raises questions about its market penetration and scalability, potentially impacting future stock performance. For employees, the stable compensation expense indicates a consistent workforce, while customers might see continued investment in support services, which increased to 32% of revenue. The competitive landscape, with larger cloud players, means Skkynet needs to demonstrate stronger growth to capture significant market share.

Risk Assessment

Risk Level: medium — The company reported a net loss of $14,105 for the nine months ended July 31, 2025, and revenue remained flat at $1,897,446, indicating ongoing profitability challenges. While cash reserves increased to $1,352,883, the reliance on related party transactions, with $182,485 due to related parties as of July 31, 2025, introduces potential governance and conflict-of-interest risks.

Analyst Insight

Investors should monitor Skkynet's next earnings report for signs of revenue growth acceleration and further loss reduction. Given the flat revenue and ongoing losses, a 'wait and see' approach is prudent, focusing on whether the company can leverage its increased cash to drive market expansion or product innovation.

Financial Highlights

debt To Equity

0.71

revenue

$1,897,446

operating Margin

-2.58%

total Assets

$1,615,964

total Debt

$0

net Income

$(14,105)

eps

N/A

gross Margin

N/A

cash Position

$1,352,883

revenue Growth

-0.07%

Revenue Breakdown

Key Numbers

• $1,897,446 — Revenue (Remained flat for the nine months ended July 31, 2025, compared to $1,898,701 in 2024.)
• $(14,105) — Net Loss (Improved from $(23,401) in the prior nine-month period, indicating reduced losses.)
• $1,352,883 — Cash and Cash Equivalents (Increased from $1,158,255 at October 31, 2024, showing improved liquidity.)
• $182,485 — Accrued Liabilities – Related Party (Increased from $166,940 at October 31, 2024, highlighting ongoing related party transactions.)
• 53,143,822 — Common Shares Outstanding (Remained constant, indicating no new dilution from common stock issuance.)
• 65% — Product Sales Percentage of Revenue (Slightly decreased from 66% in 2024, showing a stable core business.)
• 32% — Support Revenue Percentage of Revenue (Increased from 30% in 2024, suggesting growing importance of support services.)
• $13,631 — Bad Debt Expense (Recognized for the nine months ended July 31, 2025, compared to none in 2024, indicating potential collection challenges.)
• $89,140 — Stock Based Compensation (Increased from $59,667 in 2024, reflecting higher non-cash compensation.)
• $243,480 — Advertising Expense (Increased from $235,800 in 2024, indicating continued investment in marketing.)

Key Players & Entities

• Skkynet Cloud Systems, Inc. (company) — registrant
• Andrew S. Thomas (person) — CEO and Chairman of the Board of Directors
• Paul Benford (person) — COO and member of the Board of Directors
• Sakura Software (company) — corporation owned by Andrew S. Thomas
• Benford Consultancy (company) — corporation owned by Paul Benford
• Real Innovations International LLC (company) — owner of Skkynet's intellectual property
• Cogent Real-Time Systems, Inc. (company) — wholly owned subsidiary of Skkynet
• Securities and Exchange Commission (regulator) — filing oversight
• $1,352,883 (dollar_amount) — cash and cash equivalents as of July 31, 2025
• $1,897,446 (dollar_amount) — total revenue for the nine months ended July 31, 2025

FAQ

Risk Factors

• Bad Debt Expense Recognition [medium — financial]: The company recognized $13,631 in bad debt expense for the nine months ended July 31, 2025, whereas no such expense was recorded in the prior year. This indicates potential challenges in collecting receivables and could impact future profitability if uncollected amounts increase.
• Increased Stock-Based Compensation [medium — financial]: Stock-based compensation increased to $89,140 from $59,667 year-over-year. While this is a non-cash expense, it represents a higher dilution of ownership for existing shareholders and an increased cost of employee compensation.
• Dependence on Subsidiaries [medium — operational]: The company operates through its wholly owned subsidiaries Cogent Real-Time Systems, Inc., Skkynet Corp. (Canada), and Skkynet, Inc. (USA). Any operational disruptions or financial difficulties within these subsidiaries could materially impact the overall financial health and performance of Skkynet Cloud Systems, Inc.
• Industry 4.0 and IoT Market Volatility [medium — market]: The company targets the Industrial Internet of Things (IoT) market, also referred to as 'Industry 4.0'. This is a rapidly evolving sector, and changes in technology, customer adoption rates, and competitive pressures could affect Skkynet's revenue and growth prospects.
• Related Party Liabilities [low — financial]: Accrued liabilities to related parties increased to $182,485 from $166,940. While common in closely held companies, significant or increasing related party balances warrant scrutiny regarding the terms and potential conflicts of interest.

Industry Context

Skkynet operates in the Industrial Internet of Things (IoT) and Industry 4.0 market, providing software for real-time data collection, processing, and distribution in industrial and financial systems. This sector is characterized by rapid technological advancement and increasing demand for automation and data-driven decision-making. The competitive landscape includes established industrial automation providers and emerging IoT platform companies.

Regulatory Implications

As a publicly traded company, Skkynet is subject to SEC regulations and reporting requirements. The adoption of new accounting standards, such as ASU 2016-13 for credit losses, requires ongoing compliance. Potential future regulations related to data privacy and cybersecurity in the IoT space could also impact operations.

What Investors Should Do

1. Monitor bad debt expense trends.
2. Analyze the growth drivers of support revenue.
3. Evaluate the impact of increased stock-based compensation.
4. Assess the company's strategy for integrating cloud systems.

Glossary

Accumulated deficit

The total net losses of a company that have not been offset by net income since its inception. (Indicates the company has historically incurred more expenses than revenues, with a deficit of $6,494,127 as of July 31, 2025.)

Deferred revenue

Revenue that has been received by a company for goods or services that have not yet been delivered or rendered. (Represents $339,609 in current liabilities, indicating future revenue obligations from services or products not yet fully provided.)

Stock-based compensation

Compensation provided to employees in the form of stock or stock options, recognized as an expense over time. (Increased to $89,140 for the nine months ended July 31, 2025, reflecting a higher non-cash expense and potential future dilution.)

Bad debt expense

An expense recognized by a company for accounts receivable that are deemed uncollectible. (The recognition of $13,631 in bad debt expense for the first time indicates potential collection issues with customers.)

SaaS

Software as a Service, a software distribution model where a third-party provider hosts applications and makes them available to customers over the Internet. (Skkynet aims to deliver a SaaS product targeting the Industrial IoT market, indicating a focus on a recurring revenue business model.)

Year-Over-Year Comparison

For the nine months ended July 31, 2025, Skkynet Cloud Systems, Inc. reported a net loss of $14,105, a significant improvement from the $23,401 net loss in the same period of 2024. Revenue remained virtually flat at $1,897,446 compared to $1,898,701. Operating expenses saw a slight decrease to $1,946,305 from $1,952,333, driven by lower compensation and G&A expenses, partially offset by increased advertising and stock compensation. Cash and cash equivalents increased to $1,352,883, indicating improved liquidity.

Filing Documents

• skky_10q.htm (10-Q) — 676KB
• skky_ex311.htm (EX-31.1) — 10KB
• skky_ex312.htm (EX-31.2) — 10KB
• skky_ex321.htm (EX-32.1) — 4KB
• skky_ex322.htm (EX-32.2) — 4KB
• 0001477932-25-006754.txt ( ) — 2683KB
• skky-20250731.xsd (EX-101.SCH) — 24KB
• skky-20250731_lab.xml (EX-101.LAB) — 166KB
• skky-20250731_cal.xml (EX-101.CAL) — 29KB
• skky-20250731_pre.xml (EX-101.PRE) — 132KB
• skky-20250731_def.xml (EX-101.DEF) — 71KB
• skky_10q_htm.xml (XML) — 304KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and October 31, 2024 (Audited) 4 Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended July 31, 2025 and 2024 (Unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the Nine Months Ended July 31, 2025 and 2024 (Unaudited) 6 Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2025 and 2024 (Unaudited) 7

Notes to Consolidated Financial Statements(Unaudited)

Notes to Consolidated Financial Statements(Unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 15

Controls and Procedures

Item 4. Controls and Procedures 15

: OTHER INFORMATION

PART II: OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 16

Risk Factors

Item 1A. Risk Factors 16

Sales of Equity Securities and Use of Proceeds

Item 2. Sales of Equity Securities and Use of Proceeds 16

Defaults upon Senior Securities

Item 3. Defaults upon Senior Securities 16

Mine Safety Information

Item 4. Mine Safety Information 16

Other Information

Item 5. Other Information 16

Exhibits

Item 6. Exhibits 17

Signatures

Signatures 18 2 Table of Contents

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS 3 Table of Contents PART I

: FINANCIAL STATEMENTS

ITEM 1: FINANCIAL STATEMENTS SKKYNET CLOUD SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS July 31, 2025 October 31, 2024 (Unaudited) (Audited) ASSETS Current Assets: Cash and cash equivalents $ 1,352,883 $ 1,158,255 Accounts receivable 230,408 361,480 Prepaid expenses 32,289 27,595 Total current assets 1,615,580 1,547,330 Property and equipment, net of accumulated depreciation of $ 90,893 and $ 88,746 respectively 384 2,156 Total Assets $ 1,615,964 $ 1,549,486 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $ 146,852 $ 154,634 Accrued liabilities – related party 182,485 166,940 Deferred revenue 339,609 338,382 Total current liabilities 668,946 659,956 Total Liabilities 668,946 659,956 Commitments and contingencies - - Stockholders' Equity: Preferred stock: $ 0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively 5 5 Series B Preferred convertible stock: $ 0.001 par value, 500,000 shares authorized, 193,661 issued and outstanding, respectively 194 194 Common stock; $ 0.001 par value, 70,000,000 shares authorized, 53,143,822 shares issued and outstanding, respectively 53,145 53,145 Additional paid-in capital 7,315,687 7,226,547 Accumulative other comprehensive income 72,114 80,946 Accumulated deficit ( 6,494,127 ) ( 6,471,307 ) Total stockholders' equity 947,018 889,530 Total Liabilities and Stockholders' Equity $ 1,615,964 $ 1,549,486 The accompanying notes are an integral part of the unaudited consolidated financial statements. 4 Table of Contents SKKYNET CLOUD SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) As of July 31 , Three Months Nine Months 2025 2024 2025 2024 Revenue $ 482,682 $ 666,359 $ 1,897,446 $ 1,898,701 Operating Expenses: Depreciation 600 603 1,761 1,821 Compensation exp

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Skkynet Cloud Systems, Inc. ("Skkynet" or "the Company") is a Nevada corporation formed on August 31, 2011 and headquartered in Toronto, Canada. Skkynet operates its business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. ("Cogent"), Skkynet Corp. (Canada) and Skkynet, Inc. (USA). Skkynet was formed primarily for the purpose of taking the existing business lines of Cogent and its current and future customers and integrating these businesses with Cloud based systems. We also intend to expand the areas of business activity to which the kinds of products and services we provide are applied. The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the "SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's October 31, 2024 Annual Report on form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the consolidated financial statements for the most recent fiscal year end October 31, 2024 as reported on Form 10-K, have been omitted. Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. The reclassifications have no effect on the net loss or stockholders' equity. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Recent a

: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2 : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 relevant customers 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

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