The Company was incorporated on
Skkynet is an evolution of Cogent, an established financial and industrial middleware software vendor. Cogent's specialization has focused on providing connectivity and data acquisition to a wide variety of industrial and office hardware and software products, and then making that data available over a network using industry-standard protocols. The architecture of Cogent's software naturally suits it for use both as a data aggregation platform at the process level, and as a data server at the Cloud level. By marrying these two capabilities together, Skkynet can effectively and securely offer the Cloud as an extension to any local process.
Cogent's market has been primarily in industrial automation. With little
advertising, Cogent has also acquired a number of financial trading companies as
clients, due to the fact that Cogent's software is both source and content
agnostic. High-speed trading and high-speed industrial automation behave very
similarly at the level of abstraction that Cogent's software uses. Recently,
Cogent has been working with Japanese companies to penetrate the lucrative
embedded device manufacturing world.
The Company believes that deploying its product in a Cloud environment will increase the potential applications for customers and broaden its usage and expansion into various markets including Cloud industrial middleware, Cloud financial services, home monitoring, fleet tracking, and energy usage monitoring. New applications that may not exist today but will through the new Cloud platform may also open new markets unknown to Skkynet today. However, management will carefully monitor the growth in new markets and manage each opportunity to maximize its return and minimize risks. This includes selecting specific markets with known trends to introduce its products and services and maintain a controlled release until the market has been understood and sales in the market have become significant to the Company. Only then will the Company risk new markets for its product. We must also include additional staffing at the senior management level with proven experiences and business records in the Company's environment to implement these markets.
The expansion into new markets will require additional cash resources from sources other than those available to the Company today. Only after the Company has secured specific amounts of financing it believes is required for development of each market application enumerated above will Skkynet begin its marketing efforts.
The additional staffing will not begin until Skkynet has funded itself to finance both the staff increase and the required capital to carry out its marketing plan. If the Company is not successful in obtaining the required additional capital, it believes the present business operation will be able to sustain Skkynet's additional costs as a public company at a minimal level.
16 Table of Contents RESULTS OF OPERATIONS
The following table sets forth selected statement of operations data as a percentage of total revenue for the periods indicated:
For Years Ended October 31, 2021 2020 Revenue$ 1,830,459 100 %$ 1,506,929 100 %
Operating expenses: General and administrative expense 1,983,596 (108.5 )% 1,896,705 (125.9 )% Depreciation
2,624 (0.0 )% 2,455 (0.1 )% Income (loss) from operations (155,761 ) (8.5 )% (392,232 ) (26.0 )% Other income (expense) (33,728 ) (1.8 )% 64,896 4.3 % Net income (loss) before taxes (189,489 ) (10.3 )% (327,337 ) (21.7 )% Tax refund 25,901 1.4 % 16,004 1.00 % Net income (loss)$ (163,588 ) (8.9 )%$ (311,333 ) (20.7 )%
Revenue: For the year ended
General and Administrative Expenses: (G&A) Total general and administrative
expenses increased from
Depreciation and Amortization: The Company had depreciation of
Other Income (Expense): Other expense totaled
Income Tax: During the years ended
Net Loss: The Company recorded a net loss of
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital has been dependent on the revenue generated internally by the Company's subsidiaries, by loans from its officers and directors and by deferral of accrued salaries. There are no agreements or understandings with regard to future loans by or with the officers, directors, principals, affiliates or shareholders of the Company. In the past, officers and directors of the Company have lent or advanced monies to the Company to fund operations, but there are no formal agreements or arrangements for them to continue to do so.
17 Table of Contents
The Company anticipates continually expanding its business through the planned expansion of the Company's marketing of venues in expanded markets. The Company's plans will be limited, however, by its ability to finance such a proposed expansion of its business. If the revenues generated are not sufficient to finance these proposed operations, then the Company will have to scale back its proposed operations. The Company's ultimate success will be based upon whether or not there continues to be a demand for the services that the Company anticipates providing, which is also very dependent on the economy. There can be no assurance that there will be a demand for the Company's services in the future or that the Company will become profitable in providing these services. As the Company's expands its operations, the revenues received, in addition to paying current expenses may increase the Company's capital requirements.
The Company is attempting to secure additional capital from independent sources in the form of equity and debt. The success and ability to meet its capital needs is highly dependent on its success in generating additional revenue and profitability now and in the future.
Working Capital: At
Operating Activities: Net cash used in operating activities during the year
ended
Financing Activities: Net cash provided by financing was
As of
NEED FOR ADDITIONAL FINANCING
The Company's existing capital is sufficient to meet the Company's cash needs if the Company continues to operate its ongoing business as presently conducted through revenues generated from operations of our subsidiary for the next twelve months. The Company may from time to time may seek additional equity or debt financing as it feels is required to continue the growth of the Company.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements.
18 Table of Contents
Critical Accounting Policies and Recent Accounting Pronouncements
Principles of Consolidation
The consolidated financial statements of the Company include the Company and its
wholly-owned subsidiaries
Revenue recognition
In
ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are: 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfied the performance obligations.
Effective
The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:
1. Sale of software direct to the end customer 2. Sale of software through distributors and channel partners 3. Maintenance support services 4. Cloud services
Revenue for the sale of software both directly to end users and through the
distributor and channel partners is recognized upon delivery of the software and
code required for the customer to install the software. Maintenance support
services are recognized as revenue on a straight-line basis over the service
period of the arrangement. Revenue from cloud services is recognized over time
(typically, on a monthly basis) as service is provided. Payments received in
advance of services being rendered are recorded as deferred revenue and
recognized to revenue when earned. As of
19 Table of Contents Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the fair
value recognition provision of the
Advertising
Advertising costs are expensed as incurred. Advertising expenses for the years
ended
Recently Issued Accounting Pronouncements
In
In
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