UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~___________~~_________ to ~~___________~~_________.

Commission File Number: 000-54747

SKKYNET CLOUD SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada		45-3757848
(State or other jurisdiction of		(IRS Employer
State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification Number)
incorporation or organization		Identification Number)

2233 Argentia Road/ Suite 302, Mississauga, Ontario Canada L5N 2X7.

(Address of principal executive offices) (Zip Code)

Registrant’'s telephone number, including area code: (888) 702-7851

Securities registered pursuant to Section 12(b) of the Act: None.

Name of each exchange on which registered: None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or such shorter period of that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the previous 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ☒ No ☐

Indicate by checkmark if disclosure of delinquent filers to Item 405 of Regulation S-K (§229.405) is not contained herein and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “"large accelerated filer,”" “"accelerated filer,”" and “"smaller reporting company”" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer X ☒ Smaller reporting company ☒ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act,) Yes ☐ No ☒

The aggregate number of shares of the voting stock held by non-affiliates on April 2930, ~~2024~~2025 was 15,801,100 with a market value of $212,~~844~~798,~~198~~891. For the purposes of the foregoing calculation only, all directors and executive officers of the registrant have been deemed affiliates.

The number of shares outstanding of the Company’s $.001 Par Value Common Stock as of January 3127, ~~2025~~2026, was 53,143,822 plus 193,661 of Series B preferred shares.

DOCUMENTS INCORPORATED BY REFERENCE: None.

TABLE OF CONTENTS

		Page
FORWARD-LOOKING STATEMENTS		3
		3
PART 1
Item 1.	Business	45
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	15
Item 1C	Cybersecurity	15
Item 2.	Properties	16
Item 3.	Legal Proceedings	16
Item 4.	Mine Safety Disclosure	16
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
Item 6.	Selected Financial Data	18
Item 7.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 8.	Financial Statements and Supplementary Data	2122
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	2122
Item 9A.	Controls and Procedures	2122
Item 9B.	Other Information	22
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	23
Item 11.	Executive Compensation	2627
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence	32
Item 14.	Principal Accounting Fees and Services	32
PART IV
Item 15.	Exhibits, Financial Statement Schedules	3233
SIGNATURES		34

Table of Contents

FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Various statements in this Annual Report on Form 10-K, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of our business activities, our revenues, income and capital spending. We generally identify forward-looking statements with the words “believe,” “intend,” “expect,” “seek,” “may,” “should,” “anticipate,” “could,” “estimate,” “plan,” “predict,” “project” or their negatives, and other similar expressions. All statements we make relating to our estimated timelines and commencement of operations, and our projected earnings, costs, expenditures, cash flows, and financial results or to our expectations regarding future industry trends are forward-looking statements.

These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. The forward-looking statements contained in this Form 10-K are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors and it is impossible for us to anticipate all factors that could affect our actual results. In addition, management’'s assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this Form 10-K are not guarantees of future performance, and we cannot assure any reader that such statements will prove correct, or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the numerous risks and uncertainties as described elsewhere in this Form 10-K.

All forward-looking statements are based upon information available to us on the date of this Form 10-K. We undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks, contingencies and uncertainties associated with our forward-looking statements relate to, among other matters, the following:

· our ability to attract new clients to enter into subscriptions or one time installations for our products and services; · our ability to service those clients effectively and induce them to renew their subscriptions to our products and services; · our ability to expand our sales organization to effectively address the new industries, geographies and types of organizations we intend to target; · our ability to accurately forecast revenue and appropriately plan our expenses; · continued market acceptance of our products and services, including alternate ways of addressing needs for coordination and control of manufacturing and financial services processes through modified or new technologies we create;

our ability to service those clients effectively and induce them to renew their subscriptions to our products and services;

our ability to expand our sales organization to effectively address the new industries, geographies and types of organizations we intend to target;

our ability to accurately forecast revenue and appropriately plan our expenses;

continued market acceptance of our products and services, including alternate ways of addressing needs for coordination and control of manufacturing and financial services processes through modified or new technologies we create;

Table of Contents

· continued acceptance of our products and services as an effective method for delivering manufacturing and financial services management solutions and other manufacturing and financial services management applications; · the attraction and retention of qualified employees and key personnel; · our ability to protect and defend our intellectual property; · costs associated with defending intellectual property infringement and other claims; · events in the markets for our products and applications and alternatives to our products and applications, in the United States and global markets generally; · future regulatory, judicial and legislative changes in our industry; · changes in the competitive environment in our industry and the markets in which we operate; · developments and acceptance, favorable and unfavorable, about the use of cloud systems for the implementation of our products and services; · other factors discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

the attraction and retention of qualified employees and key personnel;

our ability to protect and defend our intellectual property;

costs associated with defending intellectual property infringement and other claims;

events in the markets for our products and applications and alternatives to our products and applications, in the United States and global markets generally;

future regulatory, judicial and legislative changes in our industry;

changes in the competitive environment in our industry and the markets in which we operate;

developments and acceptance, favorable and unfavorable, about the use of cloud systems for the implementation of our products and services;

other factors discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K.

As used in this Form 10-K, unless the context otherwise requires, the terms “we,” “us,” “the Company,” “Skkynet” and “Cogent” refer to Skkynet Cloud Systems, Inc., a Nevada corporation, and its subsidiaries.

Table of Contents

ITEM 1: BUSINESS.

Overview

Skkynet is a Nevada corporation headquartered in Mississauga, Canada. Skkynet operates its business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet, Inc. (“Skkynet (USA)”), Skkynet Corp. (“Skkynet (Canada)”). Skkynet was established to enhance Cogent’s existing business lines through the integration of cloud-based systems (“Cloud”), and to deliver a Software-as-a-Service (“SaaS”) product targeting the Industrial Internet of Things (“IoT”) market, often referred to by the term “Industry 4.0”.

Boston Consulting Group issued reports on Industry 4.0 and how the future of productivity and growth in manufacturing industries will be impacted by the convergence of nine new technologies1, and how it will transform the industrial workforce2. Of the identified nine new technologies, ~~several~~(autonomous ~~fit~~robots, ~~within~~big ~~the~~data ~~scope~~analytics, ~~of Skkynet’s core technical expertise:~~ the ~~cloud~~Cloud, cybersecurity, the ~~industrial~~Industrial ~~internet~~Internet of ~~things~~Things, ~~and~~ horizontal and vertical system integration, simulation, augmented reality, additive manufacturing), the first six fit within the scope of Skkynet’s core technical expertise. Specifically, Skkynet provides software and related systems and facilities to collect process and distribute real-time information over networks. This capability allows our customers to both locally and remotely manage, supervise and control industrial processes and financial information systems. By using our software and web-based assets we provide our clients and their end-customers, the ability and tools to observe and interact with these processes in real-time. We give our customers the power to analyze, change and control their local and remote systems to meet regulatory requirements and exceed target objectives.

We believe there is a steady movement of manufacturing facilities from developed countries to underdeveloped countries because of the economic advantages of lowering production costs; however, this relocation process should not be viewed in traditional frameworks alone. In the United States there is a movement from high to low-cost states such as Alabama, and, for other reasons, European and Asian manufacturers are locating their own manufacturing facilities within the United States. The tendency is to relocate physical plants while preserving the overall engineering skills, process analytics and related intellectual property and management systems at home. This geographical distinction between production and engineering requires the ability to remotely monitor these systems during operations to control processes in real-time while preserving the safety, confidentiality and integrity of the manufacturer’s process and information. There are other aspects of the same remote capabilities: we have determined a growing need for large enterprise to have the ability to safely share information on operations to third parties (e.g. suppliers, or contract manufacturers), and to access this data for Artificial Intelligence (“AI”) applications. Our products and Cloud-based services are designed to address these issues and concerns, and to enable these AI applications.

Although we are primarily involved thus far in the areas of industrial processing and financial services, the concepts and software underlying our existing products and services are applicable to a variety of areas including fleet tracking, energy usage monitoring and control including wind power, solar power and agriculture. Our products are modular in design and are therefore well-suited for use in OEM and embedded products. We have obtained existing clients in some of these areas, but to date we have not had the resources to pursue systematically the marketing and sale of our products and services to these industries.

~~_______________________~~ ______________________________________

1 https://www.~~bcgperspectives~~bcg.com/~~content~~publications/~~articles~~2015/~~engineered_products_project_business_industry_40_future_productivity_growth_manufacturing_industries~~engineered_products_project_business_industry_4_future_productivity_growth_manufacturing_industries/

2 https://www.~~bcgperspectives~~bcg.com/~~content~~publications/~~articles~~2015/technology-business-transformation-engineered-products-infrastructure-man-machine-industry-4/

Table of Contents

Our acquisition of Cogent

In March 2012, we completed the acquisition of all of the issued and outstanding shares of common stock of Cogent from Sakura Software Inc. and Benford Consultancy Inc. in exchange for a total of thirty million (30,000,000) restricted shares of our common stock, as a result of which Cogent became our wholly owned subsidiary. As part of the exchange transaction, we also issued 5,000 Series A Preferred share to Sakura Software and Benford Consultancy. Prior to the closing of the exchange transaction, we did not have any operating revenues. At the acquisition closing, Cogent’s business consisted primarily of 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. Cogent currently markets its products and services primarily to ~~manufacturers~~systems integrators, OEMs, resellers, and end customers where we do not have a distribution partner in industrial processes and financial services companies. Cogent ~~had~~received $2,~~561~~484,~~745~~315 in annual revenues from its operations for its fiscal year ended October 31, ~~2024~~2025 and $2,~~374~~561,~~216~~745 in annual revenues for the fiscal year ended October 31, ~~2023~~2024.

Our business

We are an industrial ~~middleware~~software and services vendor that specializes in providing secure connectivity and data acquisition to a wide variety of industrial and office hardware and software products and making that data available over a network using industry-standard protocols. We have introduced a number of innovations to our real-time data products including a high -speed redundancy facility and a web-based user interface providing desktop quality graphics, and more recently, inclusion of high speed storage capabilities. We have patented and patent-pending technologies that address the data transmission problems of data rate, latency, redundancy, and security in Cloud-based systems with a unique push-pull system that insulates both a plant and a remote user from opening their firewalls to the Internet.

Our system can operate as a simple add-on to existing Supervisory Control and Data Acquisition (“SCADA”) or as the basis for new deployment. SCADA is a system that collects information from various sensors installed at a factory or other remote locations. All of the collected data is sent to a common or central computer for further processing and storage and is used to describe control processes in various industries such as water treatment, manufacturing processes, and environmental procedures.

Skkynet’s Cogent DataHub™ service for Microsoft Azure is compatible with our existing Cogent DataHub and Embedded Toolkit (ETK) software. Current customers of our DataHub software can easily configure it to immediately take advantage of our Cloud services. Our DataHub software includes applications for all of the following uses:

— real-time graphical web display of data, which includes collaborative screen development and full permissions-based access; — connection to data from OPC (open process control), DDE (dynamic data exchange) and Modbus servers to produce immersive real-time displays to analyze the current status of factory production, embedded systems or financial strategies; — connection to data from MQTT clients to connect remote sensors and other Cloud-based services, such as ‘big data’ analytics and Artificial Intelligence applications, offered by Amazon, Microsoft and others; — a feature that enables full data mirroring designed to overcome DCOM (distributed component object models) server issues to permit connection to the most recent data available if a server is temporarily unavailable; — data logging which enables both reading and writing of data with any ODBC (open database connectivity) database such as most Windows and Linux databases; — creation of a data bridging interface to permit association of data points in one system with corresponding data points in another control system; — the ability to provide historical data within Microsoft Azure Event Hubs, Apache Kafka, Amazon Kinesis, AVEVA Historian, AVEVA Insight, OSIsoft PI and/or InfluxDB, including unique store-and-forward capabilities; — data redundancy features; and — network system monitoring with the ability to query the operating system it is running on for system status and resource capacity such that this system wide monitoring of critical network resources can help identify problems.

	—	connection to data from OPC (open process control), DDE (dynamic data exchange) and Modbus servers to produce immersive real-time displays to analyze the current status of factory production, embedded systems or financial strategies;
	—	connection to data from MQTT (message queuing telemetry transport) clients to connect remote sensors and other Cloud-based services, such as ‘big data’ analytics and Artificial Intelligence applications, offered by Amazon, Microsoft and others;

—

a feature that enables full data mirroring designed to overcome DCOM (distributed component object models) server issues to permit connection to the most recent data available if a server is temporarily unavailable;

—

data logging which enables both reading and writing of data with any ODBC (open database connectivity) database such as most Windows and Linux databases;

Table of Contents

—

creation of a data bridging interface to permit association of data points in one system with corresponding data points in another control system;

—

the ability to provide historical data within Microsoft Azure Event Hubs, Apache Kafka, Amazon Kinesis, Databricks Data Intelligence Platform, AVEVA Historian, AVEVA Insight, OSIsoft PI and/or InfluxDB, including unique store-and-forward capabilities;

—

data redundancy features; and

—

network system monitoring with the ability to query the operating system it is running on for system status and resource capacity such that this system wide monitoring of critical network resources can help identify problems.

These DataHub^® features make our existing customer base a logical first marketing source for the adoption of our Cloud services. Our Cogent DataHub service for Microsoft Azure, which is a fully managed service, is now available within the Azure Marketplace. The DataHub service connects seamlessly to Azure IoT Hub for real-time remote monitoring, control, and data logging, as well as offering many of the same features as the standalone DataHub software. Security is based on Skkynet’s patented technology that uses outbound-only connections to ensure that no attack surface is exposed on a local plant network. It requires no IT policy changes, no open inbound firewall ports, no VPNs, and no extra hardware while allowing real-time bi-directional data flow through DMZs and network proxies up to the cloud. Additional enterprise-focused security features have been introduced for robust permission granularity and multi-factor authentication (“MFA”).

Our Cogent DataHub service for Microsoft Azure provides the following additional functionality and features over the DataHub®:

—

scalable remote networking of industrial SCADA systems and embedded devices in real-time with built-in consolidation of data;

	—	lower cost of ownership by not requiring any programing, no software to buy, no additional PC or server hardware to buy;
	—	high-speed data throughput with the ability to collect, send, and receive up to 50,000+ data changes per second at speeds just a few milliseconds over Internet latency;
	—	robust security model, where no inbound connection requests to the SCADA system or embedded device are required;
	—	full supports of industry standard SSL encryption protection, and no requirement for virtual private networks (VPNs) or additional security hardware;
	—	no changes to the hardware or software of an existing system. Our customers can decide what data to transmit, and how: one-way or bidirectional, where all configuration changes are in the customers’ control;
	—	view any connected process in a fully web-based interface, providing immersive graphics and real-time response that replicates or exceeds the performance of traditional human-machine-interfaces (HMIs);
	—	granular security permissions so that qualified users can configure security settings to provide read-only access to limited data sets for public use, while giving bi-directional access to insiders. Authorized developers can access the complete online design interface;
	—	create and edit screens from any location, all within a standard web browser; no coding or development system is required, and our customers can drag-and-drop desktop-quality graphics to build HMI screens right inside a web browser as it populates and displays data in real-time on the same screen; changes can be deployed to all users instantly;
	—	DataHub® Embedded Toolkit (ETK) provides a direct link to the Cogent DataHub service for Microsoft Azure from a wide range of devices and operating systems, a seamless, end-to-end solution for M2M and viewing customer data from their device on the Internet.

Table of Contents

The Cogent DataHub service for Microsoft Azure is DataHub technology provided in a Microsoft Azure Managed Application for secure, real-time industrial data communications. With it, our customers can make secure connections between machines, applications and embedded systems that utilize real-time data.

A diagrammatic example is shown of an implementation of Cogent DataHub on-premise in an isolated process network, a secure connection to a de-militarized zone (“DMZ”) network, a secure connection to an instance of Cogent DataHub service for Microsoft Azure, and a secure connection from a user or third-party network employing a variety of data sources or clients.

This example implementation provides the following unique advantages to our customers:

	1.	Production (process) systems stay secure; using our patented technology for outbound-only connections ensures no exposed attack surface in the customer plant network. The implementation requires no IT policy changes, no open inbound firewall ports, no VPNs, and no extra hardware on the production network;
	2.	Aggregate data and connect to any application on Microsoft Azure; our customers can securely take advantage of the hundreds of 3rd party tools available in the Microsoft Azure marketplace. They can seamlessly connect to Azure IoT Hub—or any OPC UA or MQTT supported system—for real-time remote monitoring, and control, using standard protocols, and add applications and programs running on Azure or elsewhere, as needed; and
	3.	Securely sharing data with third parties; our technology is particularly adept at allowing our customers to view custom data sets, give equipment vendors access to maintenance and performance statistics for their machines, and keep raw materials suppliers informed of current stock levels and usage rates.

Our customers

The Company, including the historical operations of Cogent, have provided our products and services to more than 23,000 customers in the following industries: Aerospace, Automation & Control, Chemicals, Communications, Education, Engineering, Energy & Utilities, Financial, Food & Beverage, Government & Municipal, Healthcare & Pharmaceutical, Instrumentation, Manufacturing, Natural Resources and System Integrators. We are well-diversified across these industries such that cyclical swings in any individual industries does not expose us significantly.

The Company sells to their end-user customers both directly and indirectly, through resellers. ~~Seven~~ (In the twelve months ended October 31, 2024, 7) resellers accounted for 51% of sales, inof ~~fiscal~~which ~~2024~~1 ~~and~~reseller ~~nine~~accounted ~~(9)~~for 25% of sales. In the twelve months ended October 31, 2025, 11 resellers accounted for 50% of sales, inof ~~fiscal~~which ~~2023~~1 reseller accounted for 20% of sales. The Company maintains all the information on their end user customers, and should a reseller discontinue operations, the Company can sell directly to the end user. No reseller has exclusivity in their territory. In ~~fiscal~~the twelve months ended October 31, 2024, no end user customers were responsible for more than 10% of ~~our~~gross ~~revenues~~revenue and ~~thirty-five (~~35) end user customers were responsible for approximately 50% of gross revenue. In ~~fiscal~~the ~~2023~~twelve months ended October 31, 2025, no end user ~~customer~~customers ~~was~~were responsible for more than 10% of gross revenue and ~~thirty-one~~25 ~~(31)~~ end user customers were responsible for approximately 50% of gross revenue.

Table of Contents

Our products and services

Our business is organized such that we license our software under a variety of packaging and financial arrangements.

Our software is designed to be modular, with a set of over 2051 different features. We offer license packs (“Product Packs”) which represent common customer use-cases and individual add-on licenses (“Add-ons”). The combination of Product Packs and Add-on licenses allows the customer to fully customize a solution based on their own project requirements.

In addition, we offer customers the ability to license our products for use as ~~SaaS (Software-as-~~a~~-Service)~~ Subscription which is a recurring ~~subscription~~revenue model. We also offer our licenses with upgrades in the form of an on-going maintenance and service program for which we charge additional fees depending upon the package of services requested.

We offer OEM customers the ability to re-brand our software to integrate it with their own product offering. This re-branding can be “shallow” or “deep.” Shallow rebranding modifies the icons, images, name and contact information our software presents to the end user. There is no attempt to hide the fact that the software was developed by us. Deep rebranding attempts to remove all visible indications that our software is being used by the OEM customer. This requires more work and ongoing maintenance, as well as formal agreements with regard to our intellectual property.

Industrial automation systems require expertise to configure properly. Generally, the customer has in-house IT expertise regarding its particular process but may have limited experience with our software or the details of communication integration. We offer consulting services to assist customers in configuring their systems and our software to smoothly integrate into their processes. We provide a limited amount of assistance at no charge as part of the sales cycle. Where the customer requires more involved assistance, we offer consulting services at market rates.

As part of our expansion into Cloud services, we provide three types of configurations: remotely hosted Cloud systems, locally hosted systems, or a hybrid of the two. In the remotely located case, we maintain and manage the operating system infrastructure that allows users to access their industrial automation data via the Internet. We subcontract the Cloud hardware infrastructure from Microsoft; a large, established vendor. In the locally hosted case, the customer is responsible for the hardware and data connectivity, and we will provide the software. A customer who wants a remotely located Cloud system will still be required to run some software locally. Our existing on-premises software acts as a bridge between the plant and the remote Cloud system, making a hybrid implementation possible. If the Cloud system becomes unavailable due to communication outage or hardware failure, the customer’s plant will still continue to run in isolation from the remote Cloud system, simply reconnecting once the remote system becomes available again. In effect, our Cloud offering acts as an extension of the local process to a wide-area network or to the Internet. For reasons of speed, security, and resiliency we do not anticipate that customers will accept a purely Cloud-based system for their immediate industrial automation data needs. We believe that this may change in the future as technology and market expectations change, as they have done in other markets that have adopted purely Cloud-based services, such as, for example, Salesforce.com and customer relations management (CRM) software.

Table of Contents

Our on-premises software is available for download from our product website, https://cogentdatahub.com. Our Cloud-based service is available for registration at the Microsoft Azure Marketplace³. A customer can install and use the on-premises software in demonstration mode for a limited time, after which they can re-start the software to reset the time limit. This allows a potential customer to configure and test the software in their system before purchase, both to ensure that it meets their needs and to determine which product features they will want to purchase. Similarly, the Cloud-based service is available to potential customers to sign up and use it for a paid trial to configure and test, as well as other service levels for full system implementations.

To ensure smooth implementation of our software in a customer’s environment we have organized approximately fifty (50) different technical partners and resellers in different geographic areas with whom we cooperate. Some of them also sell related hardware and software products of their own, and assist us in the installation, monitoring, and maintenance of our products within their customer base. These technical partners may be listed on our website. We continuously seek to recruit new technical partners. We have made recent progress on partnering with world-class hardware companies such as Microsoft (world’s largest software vendor), Siemens AG (world’s largest industrial automation vendor), AVEVA (wholly owned subsidiary of Schneider Electric, the world’s largest industrial software market channel).

Our service supports potential and existing customers

The nature of our market and our sales style demand timely and thorough customer support both before and after a sale is made. Because a potential customer can download and test our software, we provide service support even before the sale is made. This provides the customer with a no-risk mechanism for ensuring that the software will work in their system and gives us early feedback from the customer. If the customer has questions or concerns, they are answered immediately, making the subsequent sale and installation process simpler.

During the sales process, we work with customers via telephone or email to help them understand which product features are necessary for their projects. This starts with asking the customer to fill out a short questionnaire explaining their project needs when they ask for a cost quotation. If the customer is unsure about their software requirements, we assist by asking pertinent questions regarding the intended application and by providing clarification on the types of features they need.

We offer customer support via telephone, email and Internet instant messaging on our websites during office hours. Where appropriate, we offer live desktop-sharing sessions with customers via video conference. This dramatically reduces the time to resolution when the customer’s network and security policy allow it. We have distributors in different parts of the world who offer support in the customer’s time zone and language. We place a high priority on support of distributors, including joint phone calls and video conference sessions with their customers to arrive at quick and satisfactory resolutions.

We incentivize distributors and resellers to develop their technical support capabilities by offering a price discount structure on software sales based on the degree to which the distributor can handle technical support requests from customers. Our goal is to have our sales occur through a combination of our direct efforts and reliance upon our global network of distributors, where the distributor provides support to the customer, and we provide support to the distributor.

~~____________________________~~ __________________________________

³ https://azuremarketplace.microsoft.com/en-us/marketplace/apps/cogentrealtimesystemsinc1581352149215.skkynetdatahub

Table of Contents

Our marketing

We have a variety of marketing activities. We maintain a website at https://skkynet.com focused on general company information, updates, and press releases regarding the general operations of the business. We maintain a product-focused website at https://cogentdatahub.com that includes a complete library of product information, manuals, blog articles, whitepapers, how-to videos and industry news on implementing real-time data communication and access over the Cloud.

Our primary means of contacting customers is through direct telephone and email contact; appearances at ~~tradeshows~~trade shows, publications in recognized industry magazines and periodicals, social media platforms, our websites coupled with ~~Google~~multi-channel advertising and marketed web-based presentations, including joint promotions with key partners and resellers. We use ~~Google~~ ad-words and search engine optimization to draw the attention of customers in our market. Some of our website materials can be technical in nature, and may include live demonstrations, training videos and instruction manuals. We invite potential customers to download free trial versions of our software prior to purchase.

We maintain distribution relationships with approximately 5035 companies around the world. These companies perform their own marketing and promotion to varying degrees, using both original material and material that we provide. We continue to seek new qualified distribution partners, and in 2019 we partnered with Siemens Mobility to co-market a hardware/software combined solution that includes our DataHub software,4 and we also became a Certified Technology Partner to AVEVA, where our DataHub software is made available directly from AVEVA’s website for download and evaluation.5,6

In addition to the foregoing, we engage in the following activities as part of our marketing efforts. We have previously retained ARC Advisory Group and Gartner to promote our new version of the Cogent DataHub and the security model of our Cogent DataHub service for Microsoft Azure. This is augmented by product features within industry email publications (e.g. Automation.com), and various industry-specific conferences in which direct client meetings are arranged. We send a monthly newsletter to an opt-in mailing list of over 10,000 customers and contacts. We produce periodic press releases through a press release service. We maintain LinkedIn, X (Twitter), and YouTube accounts for outreach to our customers and to draw attention to aspects of our software and market.

We write and publish case studies of successful implementations of our software. These are sometimes produced in cooperation with distributors and are occasionally published in industry trade magazines. We publish white papers on technical subjects and send them to prospects and distributors, as well as distribute them on our website and through trade magazine websites. These activities are focused on education rather than promotion.

Our revenue sources

Our revenue comes from the following sources:

	·	Software licensing for industrial automation systems
	·	Software licensing for OEM customers
	·	Software support program renewals
	·	Legacy installation support
	·	Custom integration and development
	·	Monthly support revenue from financial clients
	·	SaaS revenue from Cogent DataHub service for Microsoft Azure

~~___________________________~~ _____________________________________________

⁴ https://skkynet.com/siemens/

⁵ https://skkynet.com/aveva/

⁶ For example, https://www.aveva.com/en/products/datahub-tunneller-for-opc/

Table of Contents

More than 70% of our revenues are derived from software licensing for industrial automation systems, while financial trading, software support, custom development, and legacy system support account for the remainder.

Our expenses

Our typical expenses are primarily incurred in the following areas: wages, benefits, and contractors, of which about half are for software development; office and general; sales, marketing, advertising, and promotion. In future years, we expect the proportion of expenses in our operating budgets allocable to the categories of programming development and sales personnel to increase, as well as the expenses associated with maintaining and improving our Cloud-based service for our customers.

Our business plans

We believe that we have substantial room for growth in three primary areas of our business. The first is the expansion of our current lines of business providing real-time data software to the industrial automation markets. Second, is the deployment of our products and services through Cloud-based SaaS products. Third, is the application of our products and services to new business lines such as AI-focused providers, embedded products or combination solutions (such as our recent partnering with Siemens); where “edge-processing” is required (e.g. remote AI-enabled monitoring, analysis and control of assets over third party networks). We have limited resources to apply to marketing and sales in these areas. We believe that this revenue can be improved through dedicated marketing and sales effort.

As stated above, we expect the second area of growth to be in the provision of Cloud services for real-time data. This is a market that is still in its formative stages around the world, and our technology is well suited to its development. We will expand and focus our software development on modifying our existing products to provide a smoother and more secure user experience for real-time data handling in the Cloud. Real-time Cloud systems require two components – a local component running at the customer’s site, and a Cloud component running on a managed Cloud infrastructure system. Our software development will focus on improving security and reducing the friction for users to deploy the local component on their systems. At the same time, we will improve the user experience and automation of the Cloud component to reduce the cost of management, deployment and scaling as the number of customers grows. We rent Cloud server space from Cloud infrastructure providers such as Amazon Web Services and Microsoft Azure, and/or run and maintain our own servers. In the future, we may transition to our own servers as resources permit, and if there is an economic rationale to do so.

We recognize that not all customers will be willing to entrust some of their data transmission to a third party, or to an Internet-based server. In these cases, we offer to deploy our software on private servers managed by the customer or local Cloud infrastructure providers. These “private Cloud” systems will require IT professionals to maintain them and will further require the attention of experts knowledgeable in real-time data systems. We offer our expertise on an ongoing basis to partially or completely manage private Cloud systems on behalf of our customers. For this reason, we are currently working to partner with Cloud infrastructure providers in other countries where there is sensitivity over customer data remaining inside those countries.

The third area of growth is also related to Cloud systems and AI. For the past 30 years, commercial activity on the Internet has been dominated by business-to-consumer or business-to-business applications. The advent of extremely low-cost and low power consumption sensors will change that, making the Internet into a viable medium for machine-to-machine applications. That is, sensors, machines, appliances and other devices will become directly connected data transmitters, numbering in the billions. This rise of machine-to-machine communication will require the kinds of real-time data distribution that will be at the center of our Cloud activity. In combination with recent advances in AI-enabled analysis, we believe that our Cloud services will be positioned to take advantage of the future development of this “Internet of Intelligent Things.” Some examples of applications that need this kind of data access are home energy monitoring, commercial building energy management, agricultural monitoring, weather monitoring, remote seismic sensing, fleet tracking and asset maintenance.

Table of Contents

~~The~~Industrial ~~impact~~AI ofPlatforms AIand Security

Goldman Sachs7 issued guidance that over $1T1Trillion will be put towards AI capital expenditures in the coming years. A recent survey published by the Economist Group8 reported that only 22% of organizations say their current architecture can support AI workloads without modifications, and 48% of data engineers spend most of their time resolving data source connections. S&P Global Market Intelligence surveyed9 over 1,500 AI leaders who reported that data management is the #1 barrier to AI success. With respect to AI adoption in the industrial sector, recent studies have shown that less than 20% of AI pilots end up in production. The key limitations are security, real-time processing and robust data pipelines. In summary, the largest challenge is that companies do not have the architecture and systems in place to support the data demands of AI initiatives.

"Skkynet’s ~~software~~provides ~~has~~the asecure, ~~proven~~real-time ~~technological~~industrial ~~approach~~data pipeline that ~~can~~industrial ~~address these concerns. Confirmed by our customer base and now used to accelerate~~ AI ~~adoption~~demands, ~~our pilot~~zero-~~to-production~~trust ~~ratio~~OT ~~is over 90%. More importantly~~access, ~~our~~unified ~~software~~live isdatasets ~~also~~ready ~~being~~for ~~adopted by companies that focus on machine learning. In the competitive landscape~~models, ~~many companies claim to specialize in AI or machine learning,~~ and ~~yet~~battle-tested ~~others~~reliability ~~provide data contextualization. However, they lack the technology needed~~ to ~~seamlessly~~close ~~connect operations data with IT systems or~~ the ~~Cloud. In~~loop ~~some~~safely ~~cases,~~and ~~they~~at ~~use file transfers, but all lack real-time, bi-directional data flow~~scale. ~~For this reason, we have recently seen AI-focused companies choosing our software to be part of their solution stack.~~

~~Today~~Our products, AIled ~~models~~by ~~are~~Cogent ~~mostly~~DataHub™, ~~hosted~~and on the ~~Cloud,~~Azure ~~although~~service weexcel ~~see~~for ~~this~~industrial asAI aplatforms ~~short~~with Zero-~~term~~attack-surface ~~solution. Due~~security; Enables secure, bidirectional OT-to-IT/cloud ~~the~~data ~~key~~flow ~~limitations,~~using weonly ~~outlined~~outbound ~~above~~connections (~~security~~via DHTP, ~~real-time~~MQTT, ~~processing~~Kafka, ~~and~~etc.), ~~data~~no ~~pipelines)~~inbound wefirewall ~~believe~~ports ~~long~~or ~~term~~VPNs AIrequired, ~~models~~often ~~will~~via beDMZ ~~hosted~~or ~~locally. Yet~~optional ~~the~~data ~~ability~~diode tomode, ~~securely~~ideal ~~access~~for ~~bidirectional~~protecting critical infrastructure while feeding live data isto ~~the~~industrial ~~critical~~AI ~~component~~platforms ~~that~~and noengines ~~competitor~~hosted ~~can~~on ~~adequately~~public ~~address~~or ~~today~~private cloud.

~~These~~Additionally, ~~business areas are inter~~Real-~~related. A~~time, ~~customer~~unified ofdata ~~our~~for ~~Cloud~~AI; ~~services~~aggregates ~~may~~diverse ~~also~~protocols ~~want~~(OPC toUA/DA, ~~install~~Modbus, ~~our~~MQTT ~~software~~Sparkplug inB, ~~their plant facility~~etc. ~~Any~~) ~~existing~~into ~~on-premise software customer is~~ a ~~potential~~single, ~~customer~~high-performance ~~for~~unified ~~our~~namespace/dataset, ~~Cloud~~handling ~~services. In effect~~50,000+ ~~each~~changes/sec ofwith ~~our~~low ~~commercial~~latency, ~~offerings~~perfect ~~will act as a possible source of sales~~ for ~~the~~feeding ~~others. Our~~clean, ~~goals~~consolidated ~~in increasing our sales of software is both to improve short~~real-~~term~~time ~~revenue~~data ~~and~~ to ~~create~~machine alearning, ~~market~~predictive ~~for~~maintenance, ~~our~~anomaly ~~Cloud services. Once established~~detection, ~~our~~and ~~Cloud services will further create a market for our on~~closed-~~premise~~loop ~~software~~AI ~~products~~systems.

Skkynet’s products are proven & industrial-grade with 25+ years of development, thousands of installations worldwide (used by Siemens, ABB, BASF, Equinor, etc.), secure-by-design for Industry 4.0/IIoT, with redundancy, historian integration (AVEVA PI, InfluxDB), and edge processing.

And for something that is typically difficult to set up, configure or integrate with, we provide low/no-code setup, bidirectional control support, and seamless connectivity to cloud (Azure Event Hubs, Kafka) or on-premise analytics, enables fast deployment for AI initiatives without compromising OT security or requiring a expensive expertise to setup and configure.

In order to pursue all of these business areas, we will require capital to hire the personnel needed to explore and develop a strategy to pursue potential customers in each area.

~~_________________________~~ _______________________________________

⁷ https://www.goldmansachs.com/images/migrated/insights/pages/gs-research/gen-ai--too-much-spend,-too-little-benefit-/TOM_AI%202.0_ForRedaction.pdf

⁸ https://www.databricks.com/sites/default/files/2024-11/unlocking-enterprise-ai.pdf

⁹https://www.aiunplugged.io/wp-content/uploads/2024/01/2023-Global-Trends-in-AI-Report.pdf

Table of Contents

Our intellectual property

We have an exclusive license of all of our intellectual property and enhancements thereof, licensed to Cogent Real-Time Systems, Inc., our wholly owned subsidiary, from an affiliated corporation, Real Innovations International LLC, (“Real Innovations”) that is 100% indirectly owned by our ~~CEO~~CTO and COO. See “Certain Relationships and Related Transactions.” In return for the assignment, Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement. As a result of this license, we have ~~nine~~thirteen U.S. patents and ~~several~~additional patent applications pending for the real-time technologies employed in our software products. The first patent family is directed toward a system and method for providing real-time data to a web browser through use of a Rich Internet Application (“RIA”). Specifically, the graphical and networking features of RIA frameworks allow our software to provide low-latency, real-time data applications in a traditional web browser. The patent family includes U.S. Utility Patent Serial Nos. 8,661,092, 9,667,689 and 10,498,796, ~~Japanese Patent Nos. JP6314204,~~ and Canadian Patent No. 2,813,076.

The second patent family includes U.S. Patent Serial Nos. 9,100,424, 9,288,272 and 9,762,675 directed towards system and methods for secure real-time cloud services. The system and methods provide a communication framework between sensors, devices, and machinery and the users of that data from any remote location that is connected to the Internet without requiring open inbound firewall ports, while at the same time enabling high data rates, low latency and full bidirectionality. The graphical and networking features of RIA frameworks in combination with the patented system and method provide low-latency, real-time data applications in a web browser securely over the Internet. The patent family includes Japanese Patent No. JP6689838 and Canadian Patent Application No. 2,991,685.

A third patent family includes U.S. Patent Serial Nos. 10,462,206 and 10,558,744 and corresponding Canadian Patent No. 3,062,745 for improved methods to network bidirectional real-time data directly from within Microsoft Excel.

A fourth patent family includes U.S. Patent Serial Nos. 11,627,114, 11,943,205, 12,107,835, 12,107,836 and 12,113,777 for novel methods for tunnelling historical data. Corresponding Canadian Patent Application No. 3,181,369 is pending.

A fifth patent family includes a U.S., and Canadian applications filed to cover novel methods of multi-device support for certain IoT protocols.

Further patents are being sought as new technologies are being developed.

As part of our license, we have the exclusive right to use several registered trademarks including “DATAHUB” and “SKKYNET” which are registered in the United States and Canada. We have trade secrets and technical know-how that we protect through confidentiality and restrictive covenants with our employees and contractors. Finally, under our license agreement, we have exclusive rights to all copyrighted software and written materials, which are stored as backups in several different physical locations, and in secure, encrypted format.

Our competition

We face competition from several vendors who offer products similar to ours in the industrial automation space. Some of these competitors have resources and revenues larger than ours; however, our software is compatible with their products, making it common for a customer to install software from both us and our competition in the same system. There are also a number of large industrial automation vendors who offer SCADA systems to their clients. Examples include Siemens, ABB, Emerson Process Management, Rockwell Automation, Honeywell Process Solutions, Schneider Electric, GE Invensys, and PTC. We view these companies and others performing similar services as potential competitors inasmuch as they have resources to link their SCADA functions to a Cloud based system; however, we are not currently aware that any vendor is doing so yet. Since these companies already have an installed base of SCADA customers whose systems can be easily connected to our software, these companies also represent an opportunity for joint sales or OEM licensing. A number of these companies are already our customers, and two are official partners (Siemens and AVEVA/Schneider).

Table of Contents

There do not currently appear to be Cloud system companies organized for the purpose of hosting real-time industrial data and connectivity. One company, LogMeIn, Inc. (previously Pachube and then Cosm Ltd.), provides Cloud storage services for sensor data, but we do not regard them as competitive due to their focus on storage rather than real-time collection and distribution. Cloud infrastructure companies such as Amazon, Microsoft (Azure) and Google offer pre-configured applications or computing platforms for remotely hosting a customer’s IT activities. Their primary purpose is to provide the computing substrate for the customer’s applications. As such, these companies, as presently operated, act as suppliers of computing resources to us, not as competition.

Employees

Currently, other than our ~~four~~six officers, we have eight full time employees and five consultants.

ITEM 1A: RISK FACTORS

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans, and quarantine. This may limit access to our customers, management, support staff and professional advisors. As the Company’s operations depends on numerous unknown factors, we cannot measure the impact on our operations or financial condition at this point in time.

ITEM 1B: UNSOLVED STAFF COMMENTS

None

ITEM 1C: CYBERSECURITY

We are highly dependent on third-party provided software applications to conduct key operations. We depend on both our own systems as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners.

Our cybersecurity evaluation identifies various risks and issues that we continue to mitigate to further improve our program. These include:

· Establishing a cybersecurity training program.. · Setting up and implementing a third-party risk management program to support a Third-Party Risk Management Policy and process to assess the risks associated with our critical third-party vendor engagements. · Setting up and testing a Cybersecurity Incident Response Plan. · Establishing additional processes for identifying cybersecurity threats and vulnerabilities within the environment in which we operate. · Enhancing our technical security safeguards and configurations.

Table of Contents

Process for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats

In the event of a cybersecurity incident designated personnel are responsible for assessing the severity of an incident and associated threat, containing the threat, remediating the threat, including recovery of data and access to systems, analyzing any reporting obligations associated with the incident, and performing post-incident analysis and program enhancements. Our Company maintains an insurance policy through an independent insurance company for claims pursuant to a cybersecurity claim for damages.

15 Table of Contents

ITEM 2: PROPERTIES

The Company principal office address is located at 2233 Argentia Road Suite 302 Mississauga, Ontario Canada L5N 2X7. The office address is leased, on a month-to-month basis, with a monthly cost of CDN $290.

ITEM 3: LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 4: MINE SAFETY DISCLOSURE

Not applicable

Table of Contents

PART II

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

The Company’s common stock is currently traded on the OTC.BB market under the ticker symbol SKKY. The Company commenced trading on April 16, 2013, As of October 31, ~~2024~~2025; the Company had 53,143,822 shares of its common stock issued and outstanding, of which 15,840,500 were held by non-affiliates. The Company has authorized 70,000,000 shares of common stock, par value $.001 and 5,000,000 shares of preferred stock, par value $.001, of which 500,000 are designated as Series B preferred shares, par value $.001. As of October 31, ~~2024~~2025, 5,000 preferred shares were issued and outstanding, and 193,661 shares of Series B Preferred authorized were issued and outstanding.

The high and low closing prices are noted below:

Period	High Bid	~~High Bid~~	Low Bid	~~Low Bid~~
1 st Qtr. 2023			0.25		0.18
1 st Qtr. 2025		1.45	0.35
2 nd Qtr. 2023			0.38		0.18
2 nd Qtr. 2025		1.00	0.46
3 rd. Qtr. 2023			0.30		0.24
3 rd. Qtr. 2025		0.95	0.56
4 th Qtr. 2023			0.59		0.17
4 th Qtr. 2025		0.74	0.55
1st Qtr. 2024		0.47	0.4722		~~0.22~~
2nd Qtr. 2024		0.35	0.3515		~~0.15~~
3rd Qtr. 2024		0.68	0.6825		~~0.25~~
4th Qtr. 2024		0.68	0.6834		~~0.34~~

As of October 31, ~~2024~~2025, the Company estimates there are approximately 106 “holders of record” of its common stock.

Table of Contents

Dividends

We have not declared nor paid any cash dividend on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business, and we do not expect to pay any cash dividends in the foreseeable future. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant.

Dividends of 6% of the value of $1.00 per share are being accrued on our Series B preferred shares and as of October 31, ~~2024~~2025 the balance due was $~~107~~119,~~485~~105.

Unregistered Sale of Equity Securities

None

ITEM 6: SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The Company was incorporated on August 31, 2011 in the State of Nevada. On March 26, 2012, the Company acquired Cogent Real-Time Systems, Inc.

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. Japan is one of the largest producers of consumer and business electronics devices, more and more of which contain small, embedded computers. Cogent has been working with partners in Japan to establish a name and presence in this world, with the aim of having Cogent’s software installed directly on the electronic devices, allowing the manufacturers to instantly make them network accessible.

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 their 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.

Table of Contents

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.

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,
	2024					2023
	2025					2024
Revenue	$	2,~~561~~550,~~745~~951		100	%	$	2,~~374~~561,~~216~~745		100	%
Operating expenses:
General operating expense		2,~~500~~555,~~623~~508		~~97.6~~(101	)%		2,~~487~~500,~~967~~623		~~(106~~97.6	)%
Depreciation		21,~~425~~931		0.000	%		2,~~447~~425		0.00	%
Income (loss) from operations		58(6,~~697~~488	)	2(0.30	)%		~~(117~~58,~~943~~697	)	(42.93	)%
Other income (expense)		1416,~~265~~914		0.15	%		(914,~~826~~265	)	(0.41	)%
Net income (loss) before taxes		7210,~~962~~426		20.45	%		~~(127~~72,~~769~~962	)	(52.4	)%
Tax refund		2624,~~128~~925		1.0	%		2926,~~897~~128		(1.30	)%
Net income (loss)	$	9935,~~090~~351		31.40	%	$	~~(97~~99,~~872~~090	)	(43.14	)%

Revenue: For the year ended October 31, ~~2024~~2025, the Company had revenues of $2,~~561~~550,~~745~~951 compared to $2,~~374~~561,~~216~~745 of revenues for the year ended October 31, ~~2023~~2024. This reflects ana ~~increase~~decrease of $~~187~~10,~~529~~672 from ~~2024~~2025 over ~~2023~~2024. ~~Revenue~~The ~~increases~~revenue ~~can~~decrease beis attributed to the ~~increase~~shift ofin sales infrom ~~the~~one ~~Cogent~~time ~~subsidiary~~license payments to subscription payments for software licenses. During the year ended October 31, ~~2024~~2025, the Company’s deferred revenue was $~~338~~347,~~382~~686 compared to a deferred revenue balance of $~~360~~338,~~170~~382 as of October 31, ~~2023,~~2024 aan ~~decrease~~increase of $219,~~788~~304. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 12 to 39 months.

~~Operating Expenses: Total~~Payments ~~operating~~for ~~expenses,~~subscription ~~excluding~~revenue ~~depreciation,~~has increased 268% to $2364,~~500,623~~395 in the year ended October 31, ~~2024~~2025 ~~compared~~from to $2136,~~487,967~~770 ~~for the same period~~ in ~~2023~~2024. ~~This~~Perpetual ~~was~~revenue anfor ~~increase~~the ofyear ~~$12,656~~ended ~~and~~October as31, a2025 ~~percentage~~was of$2,186,556 ~~revenue~~compared ~~G&A decreased~~ to ~~97.6%~~$2,424,975 in 2024 ~~from 106% in 2023~~. The ~~percentage~~move ~~decrease~~to ofsubscription ~~G&A~~revenue isfrom ~~attributed~~perpetual torevenue ~~higher~~impacts near term revenue inwith the ~~Cogent~~potential ~~subsidiary~~of infuture ~~2024~~increased ~~over 2023~~revenue.

~~Depreciation~~Operating ~~and Amortization~~Expenses: ~~The~~Total ~~Company~~operating ~~had~~expenses, excluding depreciation, ofincreased to $2,~~425~~555,508 in the year ended October 31, ~~2024~~2025 compared to $2,~~447~~500,623 infor the same period in ~~2023~~2024. This was an increase of $53,665. The increase of G&A is attributed to higher salary and wages along with higher consulting fees during the year ended October 31, 2025 over 2024.

Other Income (Expense): Other income totaled $14,265 during the year ended October 31, 2024 compared to other expense of $9,826 during the same period in 2023. The currency exchange in 2024 of $11,341 was compared to $6,087 in currency exchange for the same period in 2023. An increase in other income of $25,461 over last year is the primary reason that the Company had other income in the year ended October 31, 2024 verses other expense in the same period in 2023.

Table of Contents

~~Income~~Depreciation ~~Tax~~and Amortization: ~~During~~The ~~the~~Company ~~years~~had ~~ended~~depreciation ~~October~~of 31$1,931 ~~2024~~in ~~and 2023~~ the ~~Company~~year ~~and~~ended ~~its~~October ~~subsidiary~~31, ~~incurred~~2025 nocompared ~~tax.~~to ~~The~~$2,425 ~~subsidiary~~in ~~filed~~the ~~tax~~same ~~returns~~period asin ~~a foreign corporation~~2024. During ~~the~~2025 ~~year ended October 31, 2024,~~ the ~~subsidiary~~fixed ~~received~~asset awere ~~tax~~completely ~~refund~~depreciated ofresulting ~~$26,128~~in ~~compared to~~ a ~~refund~~lower ofdepreciation ~~$29,897~~amount ~~for~~in ~~the~~2025 ~~same~~over ~~period in 2023~~2024.

~~Net~~Other Income (~~Loss~~Expense): ~~The~~Other ~~Company recorded net~~ income oftotaled $9916,~~090~~914 ~~for~~during the year ended October 31, ~~2024~~2025 compared to ~~net~~other ~~loss~~income of $9714,~~872~~265 induring the same period in ~~2023,~~2024. ~~a positive variance~~The currency loss in 2025 of $~~196~~7,~~962.~~172 ~~The~~compares ~~increase~~to $11,341 in ~~sales~~currency inloss for the ~~Cogent~~same ~~subsidiary~~period ~~was~~in ~~sufficient~~2024. toOther ~~overcome~~income ~~the~~of ~~increase~~$37,761, inprincipally ~~expenses~~interest inearned, ~~2024~~offset ~~resulting~~by bad debt expense of $13,675 and currency expense of $7,172 in ~~the~~2025 ~~net~~compared to other income of $25,606, offset by currency loss of $11,341 in 2024 ~~compared~~giving tous athe net ~~loss~~results in ~~2023~~each period.

Income Tax: During the years ended October 31, 2025 and 2024 the Company and its subsidiary incurred no income tax. Two subsidiaries filed tax returns as a foreign corporation. During the year ended October 31, 2025, the subsidiary received a tax refund of $24,925 compared to a refund of $26,128 for the same period in 2024.

Net Income (Loss): The Company recorded net income of $35,351 for the year ended October 31, 2025 compared to net income of $99,090 in the same period in 2024. Sales in 2025 were slightly lower than the same period in 2024 due to the conversion to subscription sales. The Company recorded an operating loss of $6,488 in 2025 compared to operating income of $58,697 in 2024. Other income and the tax refund resulted in the net profit $ 35,351 in 2025 compared to net profit of $99,090 in 2024.

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.

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 October 31, ~~2024~~2025, the Company had working capital of $~~887~~1,~~374~~027,715 with current assets of $1,~~547~~831,~~330~~014 and current liabilities of $~~659~~803,~~956~~299 with a current ratio of 2.3428 to 1. The current assets consisted of cash of $1,~~158~~427,~~255~~321, accounts receivable of $~~361~~376,~~480~~830, and prepaid expense and other receivable of $2726,~~595~~863. The current liabilities of the Company at October 31, ~~2024~~2025 are composed primarily of accounts payable and accrued expenses of $~~154~~209,~~634~~901, accrued liabilities to related party of $~~166~~245,~~940~~712, and deferred revenue of $~~338~~347,~~382~~686. Deferred revenue consists of services billed but not yet provided to the customer and reflects revenues that will be recognized over the next 3912 months.

Operating Activities: Net cash provided by operating activities during the year ended October 31, 2024 was $234,638 compared to net cash provided of $207,822 for the same period in 2023. This represents a positive change of $26,816.

Financing Activities: Net cash provided by financing was zero for the year ended October 31, 2024 compared to net cash used in financing activities of $19,016 in 2023. The change results from the payback of the Canadian emergency loans in 2023 of $19,106.

As of October 31, 2024, the Company had total assets of $1,549,486 and total liabilities of $659,956 compared to $1,256,545 and $540,905, respectively for the same period in 2023. Stockholders’ equity as of October 31, 2024 was $889,530 compared to stockholder’s equity of $715,640 at October 31, 2023, an increase of $173,890.

Table of Contents

Operating Activities: Net cash provided by operating activities during the year ended October 31, 2025 was $276,827 compared to net cash provided of $234,638 for the same period in 2024. This represents a positive change of $42,189 from 2024 to 2025 .

Financing Activities: The Company did not have any financing activity during the years ending October 31, 2025 and 2024. The positive cash flows from operating activities allows the Company to self-finance.

As of October 31, 2025, the Company had total assets of $1,831,014 and total liabilities of $803,299 compared to $1,547,330 and $659,956, respectively for the same period in 2024. Stockholders’ equity as of October 31, 2025 was $1,027,715 compared to stockholder’s equity of $899,530 at October 31, 2024, an increase of $128,185. Shareholders equity has continued to grow year over year.

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 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.

Critical Accounting Policies and Recent Accounting Pronouncements

The accounting policies and pronouncements are discussed in the financial footnotes of the Company and should be referenced therein. Of the policies, Management considers that of the Company’s significant accounting policies and estimates, revenue recognition involves a higher degree of judgment or complexity and is believed to be a critical accounting policy (See Note -2 Critical and Significant Accounting Policies)

Revenue Recognition

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606.

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.

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. The Company maintains ownership of the customer regardless of the distribution channel of the sale.

Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.

Revenues from cloud services and subscription service are 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. During the year ended October 31, 2025, $271,683 of deferred revenue was returned to sales and $284,540 was added to deferred revenue from sales. As of October 31, 2025 and 2024 the deferred revenue was $347,686 and $338,382, respectively.

Payments for subscription revenue has increased 268% to $364,395 in the year ended October 31, 2025 from $136,770 in 2024. Perpetual revenue for the year ended October 31, 2025 was $2,186,556 compared to $2,424,975 in 2024. The move to subscription revenue from perpetual revenue impacts near term revenue.

Management considers that of the Company’s significant accounting policies and estimates; revenue recognition involves a higher degree of judgment or complexity and is believed to be a critical accounting policy.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

Table of Contents

ITEM 8: FINANCIAL STATEMENTS and SUPPLEMENTARY DATA.

Financial statements are audited and included in this Form 10-K as an exhibit and are incorporated herein by this reference.

ITEM 9: CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.

None

ITEM 9A: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’'s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’'s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our CEO and CFO has concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting, which is identified below, which we view as an integral part of our disclosure controls and procedures.

21 Table of Contents

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of October 31, ~~2024~~2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework- 2013. Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting. We lack full time personnel in accounting and financial staff to sufficiently monitor and process financial transactions in an efficient and timely manner. We identified this as a material weakness over overall internal controls that are not in place to provide adequate segregation of duties and oversight over accounting functions. Our history of losses has severely limited our budget to hire and train enough accounting and financial personnel needed to adequately provide this function. Consequently, we lacked sufficient technical expertise, reporting standards and written policies and procedures along with a lack of a formal review process which includes multiple layers of review. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on this evaluation, management has concluded that the Company’s control over financial reporting is not effective.

This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for “smaller reporting companies” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Changes in Internal Controls over Financial Reporting

We have not made any changes in our internal controls over financial reporting during the fourth fiscal period of the year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B: OTHER INFORMATION

None

Table of Contents

PART III

ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Identification of Directors and Executive Officers of the Company

The following table sets forth the names and ages of all directors and executive officers of the Company and all persons nominated or chosen to become a director, indicating all positions and offices with the Company held by each such person and the period during which they have served as a director:

The principal executive officers and directors of the Company are as follows:

Name	Age	Director Since	Position
Mr. Andrew S. Thomas	6162	November 2011	~~Chairman~~CTO ofand ~~the Board of Directors ,CEO &~~ Director
Mr. Paul E. Thomas	5051	March 2013	Director, President and Secretary
Mr. Paul Benford	5758	March 2013	Director and COO
Mr. Lowell Holden	8283	--	CFO and Treasurer
Mr. Xavier Mesrobian	6162	November 2024	Chairman of the Board and Independent Director
Mr. Norman Evans	7071	August 2013	Independent Director
Mr. Kenneth W. Jennings	7677	August 2013	Independent Director
Mr. John X. Adiletta	76	September 2014	Independent Director
Mr. Gary Tillery	60	June 2025	CEO and Director
Mr. Lee Tedstone	47	December 2025	Independent Director

The Directors named above will serve until the next annual meeting of the Company’s stockholders. Thereafter, Directors will be elected for one-year terms at the annual stockholders’ meeting. There is no arrangement or understanding between the Directors and Officers of the Company and any other person pursuant to which any Director or Officer was or is to be selected as a ~~Director~~director or Officer of the Company.

There is no family relationship between or among any Officer and Director except that Andrew S. Thomas and Paul E. Thomas are brothers.

Although each of our employment agreements permit the employee to engage in other business activities, Mr. Gary Tillery, Mr. Andrew S. Thomas and Mr. Paul Benford, respectively, our CEO, CTO and COO, devote substantially all of their business activities time to the business of the Company and its subsidiaries, Cogent, Skkynet (Canada), Skkynet (USA). Mr. Paul E. Thomas and Mr. Lowell Holden devote not less than 80% and 1525%, respectively, of their overall business activities to the business of the Company and its subsidiaries Cogent, Skkynet (Canada) and Skkynet (USA).

Committees of the Board of Directors

The Company has an audit committee comprising Norman Evans (Chair), Kenneth Jennings, and ~~John~~Lee XTedstone ~~Adiletta,~~ each of whom is an “independent” director as determined under the rules of the Exchange Act and NASDAQ and a compensation committee comprising Kenneth Jennings (Chair), ~~John~~Lee ~~X Adiletta~~Tedstone, and Norman Evans. The Company currently does not have a nominating committee.

Business Experience: The following is a brief account of the business experience for the past five years of the directors and executive officers, indicating their principal occupations and employment during that period, and the names and principal businesses of the organizations in which such occupations and employment were carried out.

ANDREW S. THOMAS: Mr. Andrew S. Thomas has been the Chief Executive Officer and the Chairman of the Board of Director of Skkynet since November 1, 2011. From May 1995 to the present, Mr. Thomas has been the founder, President and CEO of Cogent Real-Time Systems, Inc. our wholly owned subsidiary. Prior thereto from 1992-1995 Mr. Thomas was an independent process control consultant and systems integrator and software developer of real time data communications systems. Mr. Thomas received a Master of Applied Science in Engineering from the University of Waterloo in 1991 and a B.A. in Applied Science from the University of Waterloo in 1987. Mr. Andrew Thomas’s qualifications to serve as a director of the Company consist of his experience in our products and services development and strategic planning, and his broad, fundamental understanding of the business drivers affecting the Company.

Table of Contents

~~PAUL~~Business ~~E. THOMAS~~Experience: ~~Mr.~~ ~~Paul~~The E.following ~~Thomas~~is ~~has~~a ~~been~~brief ~~the~~account ~~President and Assistant Secretary~~ of ~~Skkynet~~the ~~since~~business ~~November~~experience ~~26,~~for ~~2011 and became a member of~~ the ~~Board~~past offive ~~Directors~~years ~~on March 26, 2013. Mr. Paul Thomas has also been Vice President~~ of ~~Intellectual Property for Cogent since January 1, 2012. Mr. Paul Thomas is~~ the ~~brother~~directors ~~of our CEO~~ and ~~Board~~executive ~~Chairman~~officers, ~~Andrew~~indicating S.their ~~Thomas. From September 2008 to the present Mr. Thomas has been the founder and~~ principal ofoccupations ~~a group of affiliated companies, LifeCycle IP Management, Inc.~~ and ~~LifeCycle~~employment ~~Capital~~during ~~Partners, Inc.~~ that ~~are engaged in various IP related businesses including valuations~~period, ~~due diligence, transactions analysis~~ and structuring, strategic partnering and filing and processing IP applications to regulatory authorities. Prior thereto, from January to September 2008, Mr. Thomas was Assistant General Counsel at Iovate Health Sciences at which he managed the ~~global~~names ~~IP portfolio of more than 100 patent families of products. Prior thereto, Mr. Thomas from 2007 to 2008 Mr. Thomas was IP~~ and ~~Corporate~~principal ~~Development~~businesses Counsel at Cipher Pharmaceuticals, Ltd., and during the period between 2000-2007 Mr. Thomas practiced intellectual property law as an associate lawyer at three different law firms in Toronto Canada. Mr. Thomas is a registered patent agent with the U.S Patent and Trademark Office and a registered patent and trademark agent with the Canadian Patent Office. Mr. Thomas received his J.D. from the University of ~~British Columbia in 2000. He also received a Master of Applied Science in Chemical Engineering from~~ the ~~University~~organizations ~~of British Columbia~~ in ~~1998~~which ~~and~~such aoccupations B.A in Applied Science, Chemical Engineering from Queen’s University, Kingston in 1995. Mr. Paul Thomas’s qualifications to serve as a director of the Company consist of his experience in fund raising activities for developing companies, public and ~~private,~~employment ~~and~~were ~~proper~~carried ~~planning for intellectual property development and protection of our products and services~~out.

ANDREW S. THOMAS: Mr. Andrew S. Thomas has been the Chief Executive Officer and the Chairman of the Board of Director of Skkynet since November 1, 2011. On November 21, 2025 Mr. Thomas resigned as Chairman of the Board of Directors and on December 8, 2025 he resigned as Chief Executive Officer and became Chief Technology Officer of the Company. From May 1995 to the November 2025, Mr. Thomas has been the founder and served as President and CEO of Cogent Real-Time Systems, Inc. our wholly owned subsidiary. Mr. Thomas was appointed CTO in November, 2025. Prior thereto from 1992-1995 Mr. Thomas was an independent process control consultant and systems integrator and software developer of real time data communications systems. Mr. Thomas received a Master of Applied Science in Engineering from the University of Waterloo in 1991 and a B.A. in Applied Science from the University of Waterloo in 1987. Mr. Andrew Thomas’s qualifications to serve as a director of the Company consist of his experience in our products and services development and strategic planning, and his broad, fundamental understanding of the business drivers affecting the Company.

PAUL E. THOMAS: Mr. Paul E. Thomas has been the President and Assistant Secretary of Skkynet since November 26, 2011 and became a member of the Board of Directors on March 26, 2013. Mr. Paul Thomas has also been Vice President of Intellectual Property for Cogent since January 1, 2012. Mr. Paul Thomas is the brother of our CTO, Andrew S. Thomas. From September 2008 to the present Mr. Thomas has been the founder and principal of a group of affiliated companies, LifeCycle IP Management, Inc. and LifeCycle Capital Partners, Inc. that are engaged in various IP related businesses including valuations, due diligence, transactions analysis and structuring, strategic partnering and filing and processing IP applications to regulatory authorities. Prior thereto, from January to September 2008, Mr. Thomas was Assistant General Counsel at Iovate Health Sciences at which he managed the global IP portfolio of more than 100 patent families of products. Prior thereto, Mr. Thomas from 2007 to 2008 Mr. Thomas was IP and Corporate Development Counsel at Cipher Pharmaceuticals, Ltd., and during the period between 2000-2007 Mr. Thomas practiced intellectual property law as an associate lawyer at three different law firms in Toronto Canada. Mr. Thomas is a registered patent agent with the U.S Patent and Trademark Office and a registered patent and trademark agent with the Canadian Patent Office. Mr. Thomas received his J.D. from the University of British Columbia in 2000. He also received a Master of Applied Science in Chemical Engineering from the University of British Columbia in 1998 and a B.A in Applied Science, Chemical Engineering from Queen’s University, Kingston in 1995. Mr. Paul Thomas’s qualifications to serve as a director of the Company consist of his experience in fund raising activities for developing companies, public and private, and proper planning for intellectual property development and protection of our products and services.

PAUL BENFORD: Mr. Paul Benford has been the Chief Operating Officer of Skkynet since November 1, 2011 and became a member of our Board of Directors on March 26, 2013. From 1995 to the present Mr. Benford has been the Business Manager of Cogent. Prior thereto, from 1992 through 1995 Mr. Benford was an independent process control consultant and an application engineer. Mr. Benford received a Master of Applied Science in Mineral Process Engineering from the University of British Columbia in 1993, and a B.A. with honors from the Camborne School of Mines in Cornwall, United Kingdom in 1990. Mr. Paul Benford’s qualifications to serve as a director of the Company consist of his experience in the fields of strategies of customer development and forms of communication with a variety of corporate constituencies in the industries within which we operate.

LOWELL HOLDEN: Lowell Holden has been the CFO and Chief Accounting Officer of the Company since March 2012. Since 1983, Mr. Holden owns and operates his own consulting firm, LS Enterprises, Inc., which provides business consulting, accounting and other services to businesses. Mr. Holden has a broad range of business experience including managing, securing financing, structuring of transactions, and is experienced and knowledgeable in managing relationships with customers, financing institutions and stockholders. He also serves as CFO and director of Nascent Biotech, Inc (NBIO). Mr. Holden also has a background in assisting companies in fulfilling their financial auditing and SEC reporting requirements. Mr. Lowell Holden has a Bachelor of Science degree from Iowa State University.

XAVIER MESROBIAN: Mr. Xavier Mesrobian has been the Vice President of Sales and marketing since October 1, 2013. On November 1, 2024, Mr. Mesrobian resigned as Vice President of Sales and was elected to the board of directors. He has direct experience with cutting edge venture-backed software start-ups and possesses extensive experience in technical sales. Since 2008, Mr. Mesrobian was an Account Development Executive at ADP Inc., Dealer Services Division. Prior to his work at ADP, from 2003 to 2007, he was Director of Product Management and Business Development at Decisiv, Inc., a leading provider of a Service Relationship Management (SRM) platform, and prior thereto he was the Director of Market Development at Novarra Inc., an internet mobility software company. Mr. Mesrobian received a BA from Carleton University in Economics.

Table of Contents

~~NORMAN~~LOWELL ~~EVANS~~HOLDEN: ~~Mr.~~ ~~Norman~~Lowell ~~Evans~~Holden has been athe ~~director~~CFO and Chief Accounting Officer of the Company since ~~August~~March ~~2013~~2012. ~~and~~Since 1992, Mr. Holden has ~~retired~~owned asand ~~the~~operates ~~Chief~~his ~~Financial~~own ~~Officer~~consulting offirm, ~~Cipher~~Mayday ~~Pharmaceuticals~~Management Inc., awhich ~~Canadian~~provides ~~publicly~~business ~~listed~~consulting, ~~pharmaceutical~~accounting ~~company. Mr.~~and ~~Evans~~other isservices ~~also~~to abusinesses. ~~Chartered~~Mr. ~~Accountant~~Holden ~~with~~has ~~over~~a 25broad ~~years~~range of business experience~~. Prior~~ toincluding ~~his~~managing, ~~work~~securing ~~at Cipher~~financing, ~~from~~structuring ~~1996~~of ~~to 2006~~transactions, ~~Mr.~~and ~~Evans~~is ~~was~~experienced ~~Vice-President~~and ofknowledgeable ~~Finance~~in atmanaging ~~MDS~~relationships ~~Pharma~~with ~~Services~~customers, afinancing ~~pharmaceutical~~institutions ~~services~~and ~~company,~~stockholders. ~~and~~He ~~prior~~also ~~thereto~~serves ~~was~~as aCFO ~~Partner~~and atdirector ~~Ernst~~of &Nascent ~~Young~~Biotech, Inc (NBIO). Mr. ~~Evans~~Holden ~~received~~also has a ~~B.Sc.~~background ~~from~~in ~~Concordia~~assisting ~~University~~companies ~~and~~in ~~received~~fulfilling ~~his~~their ~~Canadian~~financial ~~Chartered~~auditing ~~Accountant~~and ~~designation~~SEC inreporting ~~1980~~requirements. Mr. ~~Evans’~~Lowell ~~qualifications~~Holden tohas ~~serve as~~ a ~~director~~Bachelor of ~~Skkynet~~Science ~~consist~~degree offrom ~~his~~Iowa ~~experience~~State ~~in conducting audits, corporate governance and financial reporting for public companies~~University.

~~KENNETH~~XAVIER ~~JENNINGS~~MESROBIAN: Mr. ~~Kenneth~~Xavier ~~Jennings~~Mesrobian ~~has~~became ~~been~~Vice aPresident ~~director~~of ifSales ~~the~~and ~~Company~~Marketing ~~since~~October ~~August~~1, 2013. ~~and~~On isNovember ~~also~~1, 2024, Mr. Mesrobian resigned as Vice President of ~~Kinesis~~Sales ~~Identity~~and ~~Security~~was ~~System~~elected ~~Inc.,~~to athe ~~software~~Board ~~security~~of ~~company~~Directors. ~~Prior~~ toHe ~~his~~became ~~work~~Chairman atof ~~Kinesis,~~the ~~from~~Board ~~1991~~of toDirectors ~~2009~~on November 21, Mr2025. ~~Jennings~~He ~~held~~has ~~senior~~direct ~~roles~~experience ~~including~~with VPcutting ofedge ~~Manufacturer~~venture-backed ~~Solutions~~software &start-ups ~~Consulting,~~and VPpossesses ofextensive ~~Marketing~~experience in technical sales. Since 2008, ~~and~~Mr. VPMesrobian ofwas ~~Sales~~an Account Development Executive at ADP Inc., Dealer Services, aDivision. ~~division~~Prior ofto his work at ADP, ~~Inc.~~from 2003 to 2007, ~~the~~he ~~payroll~~was ~~outsourcing~~Director ~~company.~~of ~~Mr.~~Product ~~Jennings’~~Management ~~qualifications~~and toBusiness ~~serve~~Development asat Decisiv, Inc., a ~~Director~~leading provider of ~~Skkynet~~a ~~consist~~Service ofRelationship ~~over~~Management 30(SRM) ~~years~~platform, and prior thereto he was the Director of ~~experience~~Market inDevelopment ~~business~~at ~~development~~Novarra Inc., ~~strategy~~an ~~and~~internet inmobility ~~leading~~software ~~business-to-business~~company. ~~software~~Mr. ~~sales~~Mesrobian ~~and~~received ~~marketing~~a ~~teams~~BA from Carleton University in Economics.

~~JOHN~~NORMAN ~~X. ADILETTA~~EVANS: Mr. ~~Adiletta~~Norman Evans has been a director of the Company since ~~September~~August ~~2014.~~2013 Ashaving ~~managing~~retired ~~partner~~as the Chief Financial Officer of ~~PCS~~Cipher ~~Management~~Pharmaceuticals ~~Group~~Inc., ~~since~~a ~~its~~Canadian ~~founding~~publicly inlisted ~~1993,~~pharmaceutical company. Mr. ~~Adiletta~~Evans ~~has~~is ~~hands~~also ona ~~experience~~Chartered inAccountant ~~mergers~~with ~~and~~over ~~acquisitions~~25 asyears ~~they~~of ~~pertain~~business experience. Prior to ~~medical~~his ~~and~~work ~~security~~at ~~products~~Cipher, ~~and~~from ~~services~~1996 to 2006, ~~telecommunications~~Mr. ~~providers~~Evans was Vice-President of Finance at MDS Pharma Services, ~~data~~a ~~carriers~~pharmaceutical services company, and ~~related~~prior ~~suppliers~~thereto was a Partner at Ernst & Young Inc. He ~~has~~Mr. ~~also~~Evans ~~served~~received ona ~~boards~~B.Sc. offrom ~~directors~~Concordia ~~for~~University ~~technology~~and ~~companies~~received his Canadian Chartered Accountant designation in ~~various~~1980. ~~capacities~~Mr. ~~including~~Evans’ ~~the~~qualifications ~~audit,~~to ~~compensation,~~serve ~~and~~as a director of Skkynet consist of his experience in conducting audits, corporate governance ~~committee~~and financial reporting for public companies.

KENNETH JENNINGS: Mr. Kenneth Jennings has been a director of the Company since August 2013 and is also Vice President of Kinesis Identity Security System Inc., a software security company. Prior to his work at Kinesis, from 1991 to 2009, Mr. Jennings held senior roles including VP of Manufacturer Solutions & Consulting, VP of Marketing, and VP of Sales at ADP Dealer Services, a division of ADP Inc., the payroll outsourcing company. Mr. Jennings’ qualifications to serve as a Director of Skkynet consist of over 30 years of experience in business development, strategy and in leading business-to-business software sales and marketing teams.

GARY TILLERY: Gary Tillery has been a director of the Company since June 2025. On December 8, 2025, Mr. Tillery was elected as Chief Executive Officer of the Company. Prior to joining the board of directors, Mr. Tillery was the Senior Director, Strategic Portfolio Partners and M&A at AVEVA Software, where he held additional senior leadership positions in Technical Support, Research and Development, Product Portfolio and Cloud Business Practice. Since 2025, Mr. Tillery owns and operates his own advisor firm, KGx Advizors LLC, which provides services for mergers and acquisitions, business consulting, software development process and methodologies, and other services to businesses. He also serves as Advisor to Paragon Software Advisors, a boutique M&A advisory firm specializing in founder-led, lower-middle-market software and high-tech businesses. Mr. Tillery has a broad range of software development, mergers and acquisitions, strategic partnership and alliances experience for small businesses to larger corporations focused on the industrial technology industry.

LEE TEDSTONE: Lee Tedstone became a director of the Company in December 2025. Lee Tedstone is a technology executive with over 25 years of experience building, scaling, and advising enterprise software and data-driven businesses. He currently serves as Chief Executive Officer of Kobai, an industrial AI and knowledge-graph company focused on accelerating analytics and AI adoption for asset-intensive industries. Mr. Tedstone has held senior leadership roles across sales, strategy, and operations, including serving as Global Vice President at AVEVA, where he led global commercial teams and worked closely with large industrial and infrastructure customers. Mr. Tedstone has extensive experience in enterprise SaaS, industrial data platforms, and go-to-market execution, with a particular focus on regulated and complex operating environments. He has advised and served on the boards of multiple technology and innovation-led organizations. He brings deep expertise in scaling revenue, partnerships, and enterprise customer engagement, as well as governance and risk considerations relevant to growth-stage technology companies.

Table of Contents

Conflict of Interest

Although each of our employment agreements permit the employee to engage in other business activities, Mr. Andrew S. Thomas and Mr. Paul Benford, respectively, our ~~CEO~~CTO and COO, devote substantially all of their business activities time to the business of the Company and its subsidiary, Cogent. Mr. Paul E. Thomas and Mr. Lowell Holden devote not less than 80% and 1525%, respectively, of their overall business activities to the business of the Company and its subsidiaries. There will be occasions when the time requirements of the Company’s business conflict with the demands of their other business and investment activities. Such conflicts may require that the Company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the Company.

There is no procedure in place which would allow the Officers and Directors to resolve potential conflicts in an arms-length fashion. Accordingly, they will be required to use their discretion to resolve them in a manner which they consider appropriate.

Director or Officer Involvement in Certain Legal Proceedings

Our directors and executive officers have not been involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten years.

25 Table of Contents

Board Independence

As currently constituted and applying the rules of NASDAQ, Norman Evans, Kenneth Jennings, ~~and~~Xavier ~~John~~Mesrobian X.and ~~Adiletta~~Lee Tedstone are the members of our Board of Directors that are independent. We ~~are~~established ~~committed to eventually establishing~~ a board in which a majority of our members consist of independent directors, as defined under the NASDAQ rules. ~~Our ability to implement this goal will depend upon the growth of the Company and our ability to attract and compensate strategic persons willing to serve in that function.~~

Code of Ethics

We have adopted a Code of Ethics which covers the Chief Executive Officer and Chief Financial Officer, which is administered and monitored by the Board of Directors as a whole.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, and the rules of the Securities and Exchange Commission (SEC) require our directors, executive officers and persons who own more than 10% of our Class A common stock to file reports of their ownership and changes in ownership of our Class A common stock with the SEC. Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we determined that no director, executive officer or beneficial owner of more than 10% of our common stock failed to file a report on a timely basis during the year ended October 31, ~~2024~~2025:

Name Position Filed Reports Timely Andrew S. Thomas Officer, Director Yes Paul E. Thomas Officer, Director Yes Paul Benford Officer, Director Yes Lowell Holden Officer Yes Xavier ~~Mesrobin~~Mesrobian Officer Yes Norman Evans Director Yes Kenneth Jennings Director Yes ~~John~~Gary XTillery ~~Adiletta~~ Director Yes ~~Michael~~Lee ~~Thomas~~Tedstone ~~Advisor~~Director Yes

Table of Contents

ITEM 11: EXECUTIVE COMPENSATION.

The following tables sets for the compensation for all officers and directors during the past two years:

26 Table of Contents

DIRECTORS and OFFICERS – COMPENSATION

		Annual compensation					Long-term compensation				~~Long-term compensation~~
							Awards			Payouts	~~Awards~~					~~Payouts~~
Name andPrincipalPosition	Year	Salary($)		Bonus($)	~~Bonus~~Otherannualcompen-sation($)		Restrictedstockaward(s)($)	~~Otherannualcompen~~Securitiesunder-~~sation~~lyingoptions/SARs($#)		LTIPpayouts($)	~~Restrictedstockaward~~All othercompen-sation(~~s)(~~$)		Total Compensation	~~Securitiesunder-lyingoptions/SARs(#)~~		~~LTIPpayouts($)~~		~~All othercompen-sation($)~~		~~Total Compensation~~
Andrew S. Thomas, (1,6)	2024		129,817			--			-			--			-		--		--		129,817
Andrew S. Thomas, (1,6)Chief Technology Officer	20252024	133,183129,817		18,975--	--		----	--		----	----		152,158129,817
Chief Executive Officer	2023		130,733			--			-			--			-		--		--		130,733
Paul Benford, (1,6) Chief Operating Officer	20252024	133,183129,817		18,975--	--		----	--		--	--		152,158129,817
Paul Benford, (1,6)	2024		129,817			--			-			--			-		-		-		129,817
Lowell Holden, (2) Chief Financial Officer	20252024	49,92049,193		7,6757,423	-----		----	----		----	----		57,59556,616
Chief Operating Officer	2023		130,733			--			-			--			-		-		-		130,733
Paul E. Thomas, (3,6President	20252024	133,183129,817		18,975--	----		----	----		----	----		152,158129,817
Lowell Holden, (2)	2024		49,193			7,423															56,616
Xavier Mesrobin. Chairman and Director(4,5)	20252024	--113,259		57,60036,736	36,00032,906		----	----		----	----		93,600182,901
Chief Financial Officer	2023		48,000			7,417															55,417
Norman Evans, Director (4)	20252024	------		---	36,00030,000		---	---		---	----		36,00030,000
Paul E. Thomas, (3,6)	2024		129,817			--			-			--			-		-		-		129,817
Kenneth Jennings, Director(4)	20252024	------		------	36,00030,000		------	------		------	------		36,00030,000
President	2023		130,733																		130,733
John X Adiletta, Director (7)	20252024	----		----	21,00030,000		----	----		----	----		21,00030,000
Xavier Mesrobin,	2024		113,259			36,736			32,906			--			--		--		--		182,901
Gary Tillery, Chief Executive Officer andDirector (4,8)	20252024	----		----	13,500--		----	----		----	----		13,500--
Vice President Sales (5,6)	2023		130,856			--			29,244			--			--		--	----			160,100
Lee Testone, Director (9)	20252024	----		----	----		----	----		----	----		----
Norman Evans,	2043		--			-			30,000			-			-		-		--		30,000
Director (4)	2023		--			-			30,000			-			-		-		-		30,000
Kenneth Jennings,	2024		--			--			30,000			--			--		--		--		30,000
Director (4)	2023		--			--			30,000			--			--		--		--		30,000
John X Adiletta,	2024		--			--			30,000			--			--		--		--		30,000
Director (4)	2023		-			--			30,000			--			--		--		--		30,000

(1)	Mr. Andrew S. Thomas and Mr. Benford each received cash payments paid by Cogent Real-Time Systems Inc. of $~~129~~152,~~817~~158, respectively.
(2)	Mr. Holden through, LSMayday ~~Enterprises~~Management, Inc., a company of which he is President, received $5657,~~616~~595.
(3)	Mr. Paul E. Thomas received cash payments of $~~129~~152,~~817~~158 for consulting services through LifeCycle IP Management Inc., which he owns.
(4)	Directors’ fees of $3036,000 per ~~year per~~ director were paid in cash to ~~three~~two outside directors.
(5)	Mr. ~~Mesrobin~~Mesrobian during the year ending October 31, 2025,was paid $~~113~~36,~~259~~000 in ~~salary,~~director fees and $3657,~~736~~600 in bonus. He was elected to the board of directors on November 1, 2024 and ~~$32~~resigned as Vice President of Sales and Marketing. On November 21,~~906~~ in2025 ~~commissions~~he was elected Chairman of the Board of Directors.
(6)	Compensation is calculated in US dollars for reporting purposes causing a variance from year to year on persons paid in Canadian dollars.
(7)	Mr. Adiletta resigned as a Director on May 31, 2025 for personal reasons and was paid $21,000 in Director fees prior to his resignation.
(8)	Mr. Tillery was appointed a Director on June 18, 2025 and was paid $13,500. He was elected Chief Executive Officer on December 8, 2025.
(9)	Mr. Tedstone was appointed a Director on December 2, 2025.

Table of Contents

Employment Agreements

We and our subsidiary, Cogent, have employment agreements with all of our executive officers. The terms and conditions of each such agreement are described below.

Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with our ~~CEO~~CTO, Andrew S. Thomas commencing January 1, 2012. Mr. Thomas will perform identical duties for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Thomas is to receive an annual base salary of CDN$140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Thomas is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Thomas’s performance. While employed with the Company, the Agreement allows Mr. Thomas to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Thomas to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.

Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with our COO, Paul Benford commencing January 1, 2012. Mr. Benford will perform identical duties for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Benford is to receive an annual base salary of CDN $140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Benford is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Benford’s performance. While employed with the Company, the Agreement allows Mr. Benford to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Benford to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.

Effective January 1, 2012, our subsidiary, Cogent, entered into an Employment Agreement (the “Agreement”) with its Vice President of Intellectual Property, Paul E. Thomas commencing January 1, 2012. Mr. Paul Thomas will also serve as President for our Company as well. The Agreement is for a three-year term commencing on January 1, 2012 and provides for automatic renewal of successive one-year terms unless notice is provided ninety (90) days prior to the expiration of the then current term. The agreement provides that Mr. Paul Thomas is to receive an annual base salary of CDN $140,000, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Thomas is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Paul Thomas’s performance. While employed with the Company, the Agreement allows Mr. Paul Thomas to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Paul Thomas to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.

Effective April 16, 2012, the Company entered into an Employment Agreement (the “Agreement”) with our Chief Financial Officer, Lowell T. Holden commencing April 16, 2012. The Agreement is for an eight-month term commencing on April 16, 2012 and provides for automatic renewal of successive quarterly terms unless notice is provided ninety (90) days prior to the expiration of the ~~then~~ current term. The agreement provides that Mr. Holden is to receive an annual base salary of $4849,~~000~~920, subject to annual increase at the discretion of our Board of Directors. In addition, Mr. Holden is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Holden’s performance. While employed with the Company, the Agreement allows Mr. Holden to engage in other limited business activities that are not competitive with and do not involve the Company, subject to the prior disclosure to the Company. The Employment Agreement permits Mr. Holden to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company.

Table of Contents

Effective October 1, 2013, the Company entered into an Employment Agreement (the “Agreement”) with our Vice President, Sales & Marketing, Xavier Mesrobian commencing November 1, 2013, for an indefinite term. The agreement provides that Mr. Mesrobian is to receive an annual base salary of CDN$100,000, subject to annual increase at the discretion of our Board of Directors, and a commission calculated quarterly based on sales/revenue growth of the Company. In addition, Mr. Mesrobian is eligible for an annual cash bonus in an amount to be determined by and otherwise subject to the discretion of the Board of Directors. Under the Agreement, this determination is to be based upon the Board of Directors review of Mr. Mesrobian’s performance. The Employment Agreement permits Mr. Mesrobian to terminate his employment in the event of a change of control or certain enumerated material breaches thereof by the Company. On November 1, 2024, Mr. Mesrobian resigned as Vice President of Sales and Marketing and was appointed to the Board of Directors. On November 21, 2025, Mr. Mesrobian was elected Chairman of the Board of Directors.

Directors ~~receive~~received $2,500 per month each in fees for the first quarter ending January 31, 2025 and $3,000 per month thereafter. They are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meeting of the Board of Directors.

The Company has no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company’s directors or executive officers.

The Company has no compensatory plan or arrangements, including payments to be received from the Company, with respect to any executive officer or director, where such plan or arrangement would result in any compensation or remuneration being paid resulting from the resignation, retirement or any other termination of such executive officer’s employment or from a change-in-control of the Company or a change in such executive officer’s responsibilities following a change-in-control and the amount, including all periodic payments or installments where the value of such compensation or remuneration exceeds $100,000 per executive officer.

During the last completed fiscal year, no funds were set aside or accrued by the Company to provide pension, retirement, or similar benefits for Directors or Executive Officers.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT and RELATED STOCKHOLDER MATTERS

The following table sets forth, , certain information concerning the beneficial ownership of our common stock, by (I) each person known by us to own beneficially five per cent (5%) or more of the outstanding shares of each class, (ii) each of our directors and executive officers, and (iii) all of our executive officers and directors as a group.

The number of shares beneficially owned by each 5% stockholder, director or executive officer is determined under the rules of the Securities and Exchange Commission, or SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual or entity has the right to acquire through the exercise of any stock option, warrant or other right, or the conversion of any security. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

Table of Contents

Name and Address (1)	Shares of Common Stock Beneficially Owned			Percent of Common Stock		Exercisable Options
Andrew S. Thomas (1)(2)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		22,308,300			41.81		300,000
Paul E. Thomas (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		5,338,900			10.05		290,000
Paul Benford (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		8,660,400			16.29		250,000
Lowell Holden (1)(3)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		218,989	(3)		0.39		172,500
Norman Evans (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		245,600			0.46		74,000
Kenneth Jennings (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7		308,600			0.58		83,750
Xavier Mesrobian2233 Argentia Road, Suite 306Mississauga, Ontario, Canada, L5N 2X7		86,400			0.00		603,000
John X Adiletta (1)
2233 Argentia Road Suite 306
Mississauga, Ontario, Canada L5N2X7		183,533			0.35		64,750
All directors and officers as a group		37,342,722			70.27		1,838,000

(1)	Denotes officer or director.
Name and Address (1)		Shares of Common Stock Beneficially Owned			Percent of Common Stock		Exercisable Options
(2)	Mr. Andrew Thomas’s shares are held by Sakura Software, which is owned by Mr. Thomas.
Andrew S. Thomas (1)(2)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7			22,308,300			41.81		300,000
(3)	Mr. Holden holds 208,989 of his shares directly and 10,000 indirectly through a related party.
Paul E. Thomas (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7			5,338,900			10.05		290,000
Paul Benford (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7			8,660,400			16.29		250,000
Lowell Holden (1)(3)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7			218,989	(3)		0.39		228,500
Norman Evans (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N
2X7			245,600			0.46		86,500
Kenneth Jennings (1)2233 Argentia Road, Suite 306, Mississauga, Ontario, Canada, L5N 2X7			308,600			0.58		83,750
Xavier Mesrobian2233 Argentia Road, Suite 306Mississauga, Ontario, Canada, L5N 2X7			86,400			0.00		764,750
John X Adiletta (1,4)
2233 Argentia Road Suite 306
Mississauga, Ontario, Canada L5N2X7			183,533			0.35		74,500
Gary Tillery (1)2233 Argentia Road, Suite 306Mississauga, Ontario, Canada, L5N 2X7			--			0.00		20,000
All directors and officers as a group			37,342,722			70.27	2.098,000

(1)	Denotes officer or director.
(2)	Mr. Andrew Thomas’s shares are held by Sakura Software, which is owned by Mr. Thomas.
(3)	Mr. Holden holds 208,989 of his shares directly and 10,000 indirectly through a related party.
(4)	Mr. Adiletta resigned as a director during the year ended October 31, 2025.

Change in Control:

There are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change of control of the Company.

Options

We have adopted a 2012 Stock Option Plan (the “2012 Plan”) under which we are authorized to issue up to a maximum of 10,000,000 incentive stock options and non-qualified stock options to our directors, officers, employees and consultants. The 2012 Plan has been approved by our stockholders. The 2012 Plan authorizes the Board of Directors or a committee thereof, to grant awards of incentive stock options and non-qualified stock options upon such terms and conditions as the Board may determine. The total number of options granted and outstanding as of October 31, ~~2024~~2025, is 8,~~073~~737,~~450~~200 options. Currently, the 2012 Plan is administered by the Board of Directors.

Table of Contents

We currently have 8,~~073~~737,~~450~~200 options issued and outstanding under our 2012 Stock Option Plan which have been granted to four key employees, four officers, two consultants and three directors. Each of the foregoing individuals has been awarded options which will vest in equal annual installments over a five-year period with the first 20% vesting at the date of grant. All of the options are exercisable at a purchase price range of $0.~~001~~10 to $0.6488 per share.

The following table sets forth the option holder as of ~~October~~the ~~31,~~date ~~2024~~of this filing:

Recipient	Title		Number Options
Andrew Thomas	Officer and Director			300,000
Paul Benford	Officer and Director			250,000
Paul Thomas	Officer and Director			290,000
Lowell Holden	Officer			~~252~~292,500
Xavier Mesrobian	~~Officer~~Director			1,~~475~~580,000
Kenneth Jennings	Director			9395,~~500~~000
Norman Evans	Director			93103,~~500~~750
John X Adiletta	Director			83,500
Gary Tillery	Officer and Director			100,000
Employees and consultant as a group	--	--		5,~~235~~725,~~450~~950
Total				8,~~073~~737,~~450~~200

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	10,000,000	--	1,~~926~~262,~~550~~800
Equity compensation plans not approved by security holders	--	--
Total	10,000,000	--	1,~~926~~262,~~550~~800

The Company utilizes the shares available under the Plan described above to issue shares of stock as compensation to employees, consultants and officers and directors. At the end of each quarter, the Board of Directors of the Company determines the number of shares to be issued pursuant to the Plan.

Table of Contents

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Sakura Software, a corporation owned by our ~~CEO~~CTO and ~~Chairman of the Board of Directors~~Director, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72.34% and 27.66% of the issued and outstanding shares of Real Innovations International LLC, (“Real Innovations”) a corporation organized under the laws of Nevis, West Indies. In March 2012, Cogent, our operating subsidiary, assigned all of its intellectual property including the pending patent applications for its real-time data transmission and display technology (the “IP”) to Real Innovations under an assignment of intellectual property agreement (the “Assignment Agreement”). In return for the assignment Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment, allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement.

Real Innovations, in turn, entered into a master intellectual property license agreement (the “License Agreement”) with Cogent for all of the same IP. Under the License Agreement Real Innovations granted a royalty-free license in perpetuity to Cogent for the use and exploitation of the IP in return for which Cogent agreed to: (i) pay all operating expenses of Real Innovations incurred in connection with the continued prosecution of pending patent applications and others that may be prepared; (ii) prosecute all claims for infringement of the IP; (iii) defend and indemnify Real Innovations from and against all claims of infringement of the IP asserted by third parties against Real Innovations, Cogent or our Company; (iv) purchase liability insurance in favor of Real Innovations for this purpose. Under the termination provision of the license agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parities, the Company ceasing doing business, by breach by the Company or by the Company failing to maintain the license and the support to prosecute and protect the license under applicable laws.

Under the License Agreement, Messrs. Andrew S. Thomas and Paul Benford will benefit indirectly from their indirect ownership of all of the shares of Real Innovations to the extent of any such payments or other undertakings by Cogent on behalf of Real Innovations, but the exact amount of these benefits cannot be determined at this time. As of October 31, ~~2024~~2025 the Company has not made payments per the agreement.

Mr. Andrew S. Thomas and Mr. Paul Benford were each paid $129,897 as salary for the fiscal year ended October 31, ~~2024~~2025 for serving as the CEO and COO of Cogent.

Mr. Lowell Holden, the Chief Financial Officer of the Company, was paid $4849,~~000~~920 during the year ended October 31, ~~2024~~2025 in consulting fees by the Company

Mr. Paul E. Thomas, the President of the Company was paid $129,897 for services for the fiscal year ended October 31, ~~2024~~2025.

Mr. Xavier Mesrobin was paid $149,995 in salary and $36,736 in commissions for services for the fiscal year ended October 31, 2024.

ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES

	2024		2023
	2025		2024
Audit fees	$	4967,~~250~~650	$	4249,~~500~~250
Audit related fees		--		--
Tax fees		--		--
All other fees	$	--	$	--

Audit fees represent the professional services rendered for the audit of our annual financial statements and the review of our financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees. Services provided by the audit firm are reviewed and approved by the audit committee prior to engagement of the audit firm.

Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for in the other categories.

Table of Contents

PART IV

ITEM 15: EXHIBITS, FINANCIAL STATEMENT SECHEDULES.

(a) The following financial statements and schedules are filed as part of this report:

Consolidated Audited Financial Statements of Skkynet Cloud Systems Inc. for years ended October 31, ~~2024~~2025 and ~~2023~~2024.

(b)

Exhibit Number		Description
(31)		Section 302 Certifications
31.1*		Section 302 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)		Section 906 Certification
32.1*		Section 906 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101**		Interactive Data Files
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit Number		Description
(31)		Section 302 Certifications
31.1*		Section 302 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)		Section 906 Certification
32.1*		Section 906 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101**		Interactive Data Files
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized, in the City of Las Vegas, State of Nevada, on January 3127, ~~2025~~2026.

SKKYNET CLOUD SYSTEMS, INC. By: /s/ ~~Andrew~~Gary ~~Thomas Andrew Thomas~~Tillery, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on January 3127, ~~2025~~ 2026

~~Signature Title~~ /s/ Andrew Thomas ~~Chairman,~~ Chief ~~Executive~~Technology Officer ~~Andrew Thomas (Principal Executive Officer)~~ and Director Andrew Thomas /s/ Paul Thomas Director, President Paul Thomas /s/ Paul Benford Director and ~~COO~~Chief Operating Officer Paul Benford /s/ Lowell Holden Chief Financial Officer (Principal Financial Officer), Lowell Holden Principal Accounting Officer, Treasurer /s/ Norman Evans Independent Director Norman Evans /s/ Kenneth Jennings Independent Director Kenneth Jennings /s/ ~~John~~Gary XTillery ~~Adiletta~~Chief Executive Officer and Director ~~John~~Gary XTillery ~~Adiletta~~(Principal Executive Officer) /s/ Xavier ~~Mesrobin~~Mesrobian Chairman of the Board and Director Xavier ~~Mesrobin~~Mesrobian /s/ Lee Tedstone Independent Director Lee Tedstone

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firms		F-2
Report of Independent Registered Public Accounting Firm		F-2&3
Consolidated Balance Sheets as of October 31, 2024 and 2023		F-4
Consolidated Balance Sheets as of October 31, 2025 and 2024		F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended October 31, 2024 and 2023		F-5
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended October 31, 2025 and 2024		F-5
Consolidated Statements of Stockholders’ Equity for the Years Ended October 31, 2024 and 2023		F-6
Consolidated Statements of Stockholders’ Equity for the Years Ended October 31, 2025 and 2024		F-6
Consolidated Statements of Cash Flows for the Years Ended October 31, 2024 and 2023		F-7
Consolidated Statements of Cash Flows for the Years Ended October 31, 2025 and 2024		F-7
Notes to the Consolidated Financial Statements		F-8

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Skkynet Cloud Systems, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Skkynet Cloud Systems, Inc. (“the Company”) as of October 31, ~~2024~~2025 and ~~2023~~2024, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the two-year period ended October 31, ~~2024~~2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, ~~2024~~2025 and ~~2023~~2024 and the results of its operations and its cash flows for each of the years in the two-year period ended October 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Refer to Note 2 in the financial statements

Description of the Critical Audit Matter

As discussed in Note 2, the Company recognizes revenue when (or as) the entity satisfies its performance obligations.

F-2

Table of Contents

Significant judgment is exercised by the Company in determining revenue recognition for its software and services, and includes the following:

	·	Determination of whether software and services (including installation, maintenance support, and cloud services) are considered distinct performance obligations that should be accounted for separately.

	·	Identification and treatment of contract terms that may impact the timing and amount of revenue recognized.

	·	Determination of stand-alone selling prices for each distinct performance obligation and for software and services that are not sold separately.

Auditing management’s revenue recognition was highly judgmental due to the significant estimation required for the recognition of revenue.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the Company’s revenue recognition for these customer agreements included the following, among other things:

· We evaluated management’s significant accounting policies related to revenue recognition and reviewed the underlying customer invoices for reasonableness of the application of ASC 606. · We obtained an understanding of the process by which accounting estimates are utilized by management in determining when performance obligations are satisfied for the Company’s various revenue streams and how this affects the related recognition of revenue over time. · We obtained and read contract source documents for selected revenue invoices and tested management’s treatment of those terms. · We evaluated and tested the mathematical accuracy of management’s calculations and consistency of applied methodology for revenue and the associated timing of revenue and deferred revenue recognized in the financial statements.

Fruci & Associates II, PLLC – PCAOB ID #~~5525~~05525We have served as the Company’s auditor since 2020. Spokane, Washington January 27, 2026

We have served as the Company’s auditor since 2020.

Spokane, Washington

January 31, 2025

F-3

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

	October 31,
	2024			2023
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,~~158~~427,~~255~~321		$	~~916~~1,~~780~~158,225
Accounts receivable		~~361~~376,~~480~~830			~~306~~361,~~255~~480
Receivables – related parties		-			4,695
Prepaid expenses		26,863			27,595
Prepaid expenses		27,595			24,261
Total current assets		1,831,014			1,547,330
Total current assets		1,547,330			1,251,991
Property and equipment, net of accumulated depreciation of $ 90,686 and $88,746, respectively		-			2,156
Property and equipment, net of accumulated depreciation of $ 88,746 and $86,930, respectively		2,156			4,554
Total assets	$	1,831,014		$	1,549,486
Total assets	$	1,549,486		$	1,256,545
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expense	$	~~154~~209,~~634~~901		$	84154,~~870~~634
Accrued liability - related parties		~~166~~245,~~940~~712			95166,~~865~~940
Deferred revenue		~~338~~347,~~382~~686			~~360~~338,~~170~~382
Total current liabilities		~~659~~803,~~956~~299			~~540~~659,~~905~~956
Total liabilities		~~659~~803,~~956~~299			~~540~~659,~~905~~956
Commitments and Contingencies		-			-
Stockholders’ equity:
Preferred stock; $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding		5			5
Series B Preferred convertible stock: $0.001 par value, 500,000 shares authorized, 193,661 issued and 193,661 outstanding, respectively		194			194
Common stock, $0.001 par value, 70,000,000 authorized, 53,143,822 and 53,143,822 issued and outstanding, respectively		53,145			53,145
Additional paid-in capital		7,~~226~~348,~~547~~775			7,~~146~~226,~~991~~547
Accumulated other comprehensive income (loss)		8073,~~946~~172			7480,~~082~~946
Accumulated deficit		(6,~~471~~447,~~307~~576	)		(6,~~558~~471,~~777~~307	)
Total stockholders’ equity		~~889~~1,~~530~~027,715			~~715~~889,~~640~~530
Total liabilities and stockholders’ equity	$	1,~~549~~831,~~486~~014		$	1,~~256~~549,~~545~~486

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Years Ended October 31,
	2024			2023
	2025			2024
Revenue	$	2,~~561~~550,~~745~~951		$	2,~~374~~561,~~216~~745
Operating expenses:
Salary and wages		1,~~302~~397,~~904~~572			1,~~241~~302,~~416~~904
Consultants		139,193			138,000
Consultants and directors		153,645			139,193
Advertising		~~315~~309,~~259~~635			~~425~~315,~~972~~259
Option discount		79,556			98,677
General and administrative expense		694,656			743,267
General and administrative expense		663,711			585,647
Depreciation		1,931			2,425
Depreciation		2,425			2,447
Operating expense		2,557,439			2,503,048
Operating expense		2,503,048			2,492,159
Income (loss) from operations		(6,488	)		58,697
Income (loss) from operations		58,697			(117,943	)
Other income (expense):
Other income		2537,~~606~~761			~~145~~25,606
Debt recovery (expense)		-(13,675	)		~~(18,712~~-	)
Canadian emergency business relief account		-			14,828
Currency exchange		(7,172	)		(11,341	)
Currency exchange		(11,341	)		(6,087	)
Total other income (expense)		16,914			14,265
Total other income (expense)		14,265			(9,826	)
Income (loss) before taxes		10,426			72,962
Income (loss) before taxes		72,962			(127,769	)
Income tax refund		24,925			26,128
Income tax refund		26,128			29,897
Net income (loss)		35,351			99,090
Net income (loss)		99,090			(97,872	)
Preferred dividends		(11,620	)		(11,620	)
Income (loss) to common shareholders		8723,~~470~~731			~~(109~~87,~~492~~470	)
Foreign currency translation adjustments		6(7,~~864~~774	)		16,~~929~~864
Comprehensive income (loss)	$	9415,~~334~~957		$	~~(107~~94,~~564~~334	)
Net income (loss) per share to common shareholders, basic	$	0.00		$	(0.00	)
Net income (loss) per share to common shareholders, diluted	$	0.00		$	(0.00	)
Weighted average number of shares outstanding, basic		53,143,822			53,143,822
Weighted average number of shares outstanding, diluted		6159,~~217~~771,~~272~~458			5361,~~143~~217,~~822~~272

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED OCTOBER 31, ~~2024~~2025 AND ~~2023~~2024

																		Accumulated
									Series B Preferred				Additional					Other			Total
	Common Stock				Preferred Stock				Convertible Stock				Paid-In		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Income (Loss)			Equity
Balance at October 31, 2022		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	6,990,526	($6,449,285)			$	76,011		$	670,596
Balance at October 31, 2023		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,146,991	$	(6,558,777	)	$	74,082		$	715,640
Stock option expense		-		-		-		-		-		-		98,677		-			-			98,677
Option issued for liabilities-RP		-		-		-		-		-		-		57,788		-			-			57,788
Change due to currency exchange		-		-		-		-		-		-		-		-			(1,929	)		(1,929	)
Dividend accrued on series B preferred shares		-		-		-		-		-		-		-		(11,260	)		-			(11,620	)
Net income (loss)		-		-		-		-		-		-		-		(97,872	)		-			(97,872	)
Balance at October 31, 2023		53,143,822		53,145		5,000		5		193,661		194		7,146,991		(6,558,777	)		74,082			715,640
Stock option expense		-		-		-		-		-		-		79,556		-			-			79,556
Change due to currency exchange		-		-		-		-		-		-		-		-			6,864			6,864
Dividend accrued on series B preferred shares		-		-		-		-		-		-		-		(11,620	)		-			(11,620	)
Net income (loss)		-		-		-		-		-		-		-		99,090			-			99,090
Net income		-		-		-		-		-		-		-		99,090			-			99,090
Balance at October 31, 2024		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,226,547	$	(6,471,307	)	$	80,946		$	889,530
Stock option expense		-		-		-		-		-		-		122,228		-			-			122,228
Change due to currency exchange		-		-		-		-		-		-		-		-			(7,774	)		-
Dividend accrued on series B preferred share		-		-		-		-		-		-		-		(11,620	)		-			(11,620	)
Net income		-		-		-		-		-		-		-		35,351			-			35,351
Balance at October 31, 2025		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,348,775	$	(6,447,576	)	$	73,172		$	1,027,715

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended October 31,
	2024			2023
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	99,090		$	(97,872	)
Net income	$	35,351		$	99,090
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		21,~~425~~931			2,~~447~~425
Option based compensation		79122,~~556~~228			9879,~~677~~556
Bad debt expense		13,631			-
Changes in operating assets and liabilities:
Accounts receivable		(5528,~~225~~981	)		71(55,~~236~~225	)
Prepaid and other assets		~~(3,334~~732	)		1(3,~~472~~334	)
Accounts payable and accrued expense		6955,~~764~~479			2669,~~668~~764
Accrued liability-related party		6467,~~150~~152			2664,~~639~~150
Deferred revenue		~~(21~~9,~~788~~304	)		78(21,~~555~~788	)
Net cash provided by (used in) operating activities		~~234~~276,~~638~~827			~~207~~234,~~822~~638
Cash flows from financing activities:
Effect of foreign exchange on cash and cash equivalents		(7,761	)		6,837
Repayment of loan		-			(19,106	)
Net increase in cash and cash equivalents		269,066			241,475
Net cash provided by (used in) financing activities		-			(19,106	)
Cash and cash equivalents– beginning of year		1,158,255			916,780
Effect of foreign exchange on cash and cash equivalents		6,837			(1,872	)
Cash and cash equivalents– end of year	$	1,427,321		$	1,158,255
Net increase (decrease) in cash and cash equivalents		241,475			186,844
Cash and cash equivalents– beginning of year		916,780			729,936
Cash and cash equivalents– end of year	$	1,158,255		$	916,780
SUPPLEMENT DISCLOSURES:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
NON MONETARY TRANSACTIONS
Dividends accrued on series B preferred shares	$	11,620		$	11,620

The accompanying notes are an integral part of these consolidated financial statements

F-7

Table of Contents

SKKYNET CLOUD SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF BUSINESS

Skkynet Cloud Systems, Inc. (“Skkynet”, the “Company”), a Nevada Corporation headquartered in Toronto, Canada was formed on August 31, 2011. Skkynet operates it business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (Cogent)(Canada), 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.

In March 2012, we completed the acquisition of all of the issued and outstanding shares of common stock of Cogent from Sakura Software Inc. and Benford Consultancy Inc. in exchange for a total of thirty million (30,000,000) restricted shares of our common stock, as a result of which Cogent became our wholly owned subsidiary. As part of the exchange transaction, we also issued 5,000 Series A Preferred share to Sakura Software and Benford Consultancy. Prior to the closing of the exchange transaction, we did not have any operating revenues, and we had nineteen million (19,000,000) shares outstanding and $8,720 of net assets. This transaction was accounted for as a reverse merger and recapitalization. At the acquisition closing, Cogent’s business consisted primarily of 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. Cogent currently markets its products and services primarily to manufacturers in industrial processes and financial services companies.

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 – CRITICAL AND SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries Cogent Real Time Systems, Inc (Canada), Skkynet Corp. (Canada) and Skkynet Inc (US). All material intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Cash deposits are insured up to US$250,000 in US banks and CDN$100,000 in Canadian banks. The concentration of the Company’s cash deposits at times may exceed the insured amount, leaving the Company exposed to a credit risk on its deposits.

F-8

Table of Contents

Revenue Recognition

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.

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.

Revenues from cloud services and subscription service are 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. During the year ended October 31, ~~2024~~2025, $~~274~~271,~~083~~683 of deferred revenue was returned to sales and $284,540 was added to deferred revenue from sales. As of October 31, ~~2024~~2025 and ~~2023~~2024 the deferred revenue was $~~338~~347,~~382~~686 and $~~360~~338,~~170~~382, respectively.

~~Management~~Payments ~~considers~~for ~~that~~subscription ofrevenue has increased 268% to $364,395 in the ~~Company’s~~year ~~significant~~ended ~~accounting~~October ~~policies~~31, ~~and~~2025 ~~estimates~~from $136,770 in 2024. Perpetual revenue ~~recognition~~for ~~involves~~the ayear ~~higher~~ended ~~degree~~October of31, ~~judgment~~2025 orwas ~~complexity~~$2,186,556 ~~and~~compared isto ~~believed~~$2,424,975 in 2024. The move to besubscription arevenue ~~critical~~from ~~accounting~~perpetual ~~policy:~~revenue impacts near term revenue .

F-9

Table of Contents

Accounts Receivable

Accounts Receivable are carried at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable include receivables from customers that have received software and support from the Company. Credit losses are a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the year. No allowance for ~~bad debt was~~ credit losses were considered necessary ~~for~~in ~~the~~previous years ~~ended~~as ~~October~~the ~~31,~~Company ~~2024~~had ~~and~~not ~~October~~experienced ~~31,~~credit ~~2023,~~losses ~~respectively.~~during ~~However~~those periods Although, the Company expensed ~~zero~~$13,675 in bad debt for the year ending in ~~2024~~2025 compared to ~~the~~none ~~recovery~~during ofprevious ~~$18~~periods,~~712~~ ~~during~~the Company considers the ~~same~~risk ~~period~~to inbe ~~2023~~minimal and insignificant to the financial statements. The company has adopted (ASU) 2016-13 Financial Instruments- Credit Losses as noted below.

Advertising

Advertising costs are expensed as incurred. Advertising expenses for the years ended October 31, ~~2024~~2025 and ~~2023~~2024 were $~~315~~309,~~259~~635 and $~~425~~315,~~972~~259, respectively.

Property and Equipment

Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

Foreign Currency Translation

The Company’s reporting currency is in U.S. dollars. The functional currency of the Company’s foreign operations is their local currency. The financial statements of the Company’s subsidiaries in Canada are translated to U.S. dollars in accordance with ASC 830-30, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date while the income statement accounts are translated using the average exchange rate for the year. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

~~Impairment~~Basic ofand ~~Long-lived~~Diluted ~~Assets~~Earnings Per Share

~~The~~Basic ~~Company~~earnings ~~reviews~~per ~~the~~share ~~carrying~~(EPS) ~~value~~is ofcomputed ~~its~~by ~~long-lived~~dividing ~~assets~~net ~~annually~~income oravailable ~~whenever~~to ~~events~~common orstockholders ~~changes~~by ~~in circumstances indicate that~~ the ~~historical~~weighted ~~cost~~average ~~carrying~~number ~~value~~ of ancommon ~~asset~~shares ~~may~~outstanding noduring ~~longer~~the ~~be appropriate~~period. ~~The~~Diluted ~~Company~~EPS ~~assesses~~reflects ~~recoverability of~~ the ~~asset~~potential bydilution ~~comparing~~that ~~the~~could ~~undiscounted~~occur ~~future~~if ~~net~~dilutive ~~cash~~securities, ~~flows~~such ~~expected~~as tostock ~~result~~options ~~from~~and ~~the~~convertible ~~asset~~preferred ~~to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset~~shares, anwere ~~impairment~~exercised ~~loss~~or isconverted ~~measured~~to ~~and~~common ~~recognized~~stock. The Antreasury ~~impairment~~method ~~loss~~ is ~~measured~~used asto ~~the~~calculate ~~difference between~~ the ~~net~~effect ~~book~~of ~~value~~options, and if the ~~fair~~converted ~~value~~method ofis ~~the~~used ~~long-lived~~for ~~asset.~~convertible ~~Fair~~preferred ~~value~~shares. isSecurities ~~estimated~~that ~~based~~are ~~upon~~antidilutive ~~either~~are ~~discounted~~excluded ~~cash~~from ~~flow~~the ~~analysis~~computation orof ~~estimated~~diluted ~~salvage value~~EPS.

~~Basic~~The following table reconciles the numerator and ~~Diluted~~denominators ~~Net~~used ~~Loss~~in ~~Per~~the ~~Share~~computation of basic and diluted EPS for the income from continuing operations.

Basic and diluted net income per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. For the years ended October 31, 2024 and 2023, 8,220,163 respectively, of potentially issuable shares of common stock from stock options have been included in the calculations.

	Income			Shares		Per -Share
For Year Ended October 31, 2025	(Numerator)			(Denominator )		Amount
Income from continuing operations		35,351
Less: preferred share dividends		(11,620	)
Income available to common stockholders - basic EPS		23,731			53,143,822	$	0.00

Effect of dilutive securities
Stock options					6,433,975
Convertible preferred stock		11,620			193,661
Income available to common stockholders- diluted EPS		35,351			59,771,458	$	0.00

F-10 Table of Contents

Income Taxes

Income taxes are provided in accordance with Accounting Standards Codification (“ASC”), Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

~~Income taxes for subsidiaries Cogent Real~~F-~~Time~~10 ~~Systems~~Table ~~and Skkynet Corp are subject to the tax statutes in their country~~ of ~~domicile which is Canada.~~Contents

Income taxes for subsidiaries Cogent Real-Time Systems , Inc. and Skkynet Corp are subject to the tax statutes in their country of domicile which is Canada.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with the fair value recognition provision of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No 718. The Company issues restricted stock to employees and consultants for their services. Cost of these transactions are measured at fair value of the equity instrument issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as the expense in the period granted. The Company recognized consulting expense and a corresponding increase to the additional paid in capital related to the stock issued for services. For agreements requiring future services the consulting expense is to be recognized ratably over the requisite service period.

Fair Value Measurement

As defined in (Financial Accounting Standards Board ASC 820), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1	–	Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities.

Level 2	–	Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options, and collars.

Level 3	–	Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The Company’s stock option awards are measured at fair value using the Black Scholes option pricing model and are classified as Level 3 fair value measurements due to the use of significant unobservable inputs

Related Parties

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.”

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13 Financial Instruments- Credit Losses, which replaces the incurred impairment methodology to reflect expected credit losses. The amendments requires the measurement of all expected credit losses for financial assets held at the reporting due to the performance based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 31, 2022. The Company adopted the standard on October 31, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~22023~~2023-07 ~~“Improvements~~Segment Reporting This amendment is an update on all public entities that are required to ~~Reportable~~report ~~Segment~~segment ~~Disclosure~~information (in accordance with Topic 280)” Segment Reporting. The ~~change~~amendment inimproves ~~this~~reportable ~~announcement~~segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU on an annual and interim bases requires ~~more~~disclosure ~~detailed~~of ~~profit~~significant revenue and ~~loss~~expenses on segmented basis. In addition to the measurements that are most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting byadditional ~~business~~measures ~~segments~~of a segment’s profit or loss that are used by the ~~Company~~CODM toin ~~determine~~assessing ~~the~~segment ~~allocation~~performance ofand ~~assets~~deciding how to allocate resources. This Amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. The Company isadopted ~~presently~~ASU ~~evaluating~~2023‑07 on January 1, 2025, applying the ~~pronouncement~~guidance retrospectively to ~~determine~~all ifperiods itpresented. ~~will~~The ~~have~~adoption andid not impact on the Company’s consolidated financial statements, as the amendments relate solely to disclosure. The segment reporting is disclosed in these financials.

F-11

Table of Contents

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at October 31, ~~2024~~2025 and ~~2023~~2024:

	2024			2023
	2025			2024
Property and equipment	$	90,~~902~~686		$	9190,~~484~~902
Less: accumulation depreciation		(8890,~~746~~686	)		(8688,~~930~~746	)
Net property and equipment	$	~~2,156~~-		$	42,~~554~~156

Depreciation expense totaled $21,~~425~~931 and $2,~~447~~156 for the years ended October 31, ~~2024~~2025 and ~~2023~~2024, respectively.

NOTE 4 – INCOME TAXES

The Company follows Accounting Standards Codification 740, Accounting for Income Taxes. During 2009, there was a change in control of the Company.

Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. For federal income tax purposes, the Company uses the accrual basis of accounting, the same that is used for financial reporting purposes.

The Company’s deferred tax assets for the U.S. parent company and its US subsidiary consisted of the following as of October 31, ~~2024~~2025, and ~~2023~~2024:

	2024			2023
	2025			2024
Income/(Loss) Before Income Taxes	$	~~347~~372,~~249~~505		$	~~294~~347,~~562~~249
Income Tax Recovery		72,922			61,858
Income Tax Expense		78,226			72,922
Valuation Allowance		(7278,~~922~~226	)		(6172,~~858~~922	)
Net Amount	$	-		$	-
Net Operating Losses	$	~~870~~1,~~579~~288,248		$	21,~~008~~660,~~102~~753
Tax Rate		21	%		21	%
Deferred Tax Assets		~~230~~270,~~703~~532			~~421~~348,~~701~~779
Valuation Allowance		(~~230~~270,~~703~~532	)		(~~421~~348,~~701~~779	)
Net Deferred Tax Assets	$	-		$	-

The US companies had a net income of $~~347~~372,~~249~~505 and $~~294~~347,~~562~~ 249 for the years ended October 31, ~~2024~~2025 and ~~2023~~2024, respectively. As of October 31, ~~2024~~2025, the US Companies had a net operating loss carry forward of $~~870~~1,~~579~~288,248, which can be used to offset future taxable income. Beginning December 31, 2022, 80% of the qualified net operating loss can be carried forward and applied against future net income.

F-12

Table of Contents

A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, ~~2024~~2025 and ~~2023~~2024 is as follows:

	2024			2023
	2025			2024
U.S. federal statutory rate		21	%		21	%
Net operating loss	~~(21~~	(21	)%	~~(21~~	(21	)%
Effective tax rate	-		%	-		%

The US Companies, due to their losses, have not filed US Corporate tax returns and are subject to examination back to October 31, 2012.

The Company’s deferred tax assets for the Canadian subsidiary companies consisted of the following as of October 31, ~~2024~~2025 and ~~2023~~2024:

	2024			2023
	2025			2024
Income/(Loss) Before Income Taxes	$	(~~259~~349,~~816~~413	)	$	(~~404~~259,~~055~~816	)
Income Tax Expense		68,851			107,074
Income Tax Benefit		92,594			68,851
Valuation Allowance		(6892,~~851~~594	)		(~~107~~68,~~074~~851	)
	$	-		$	-
Net Operating Losses	$	963,595		$	614,182
Net Operating Losses	$	(259,816	)	$	(404,055	)
Tax Rate		26.5	%		26.5	%
Deferred Tax Assets		~~230~~255,~~703~~353			~~161~~162,~~852~~758
Valuation Allowance		(~~230~~255,~~703~~353	)		(~~161~~162,~~852~~758	)
Net Deferred Tax Assets	$	-		$	-

The Canadian Companies had net loss of $~~259~~349,~~816~~413 and $~~404~~259,~~055~~816 for the years ended October 31, ~~2024~~2025 and ~~2023~~2024, respectively. As of October 31, ~~2024~~2025, the Company had a net operating loss carry forward of $~~614~~963,~~182~~595 which can be used to offset future taxable income. The carry forwards will begin to expire in 2038, or twenty years after the loss is first incurred, if not used prior to that date.

A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, ~~2024~~2025 and ~~2023~~2024 is as follows:

	2024			2023
	2025			2024
Canadian federal statutory rate		26.5	%		26.5	%
Net operating loss	~~(26.5~~	(26.5	)%	~~(26.5~~	(26.5	)%
Effective tax rate	-	-	%	-	-	%

The Canadian Companies have filed corporate tax returns through October 31, ~~2024~~2025 and returns since 2017 are open to examination.

During the years ended October 31, ~~2024~~2025 and ~~2023~~2024 Cogent received tax refunds of $2624,~~128~~925 and $2926,~~897~~128, respectively. The refunds are received under a scientific research and development program.

F-13 Table of Contents

NOTE 5 – OPTIONS

The Company, under its 2012 Stock Option Plan, issues options to various officers, directors, and consultants. The options vest in equal annual installments over a five year period with the first 20% vested when the options are granted. All of the options are exercisable at a purchase price based on the last trading price of the Company’s common stock.

OnThe ~~December 7, 2022 the~~ Company ~~granted~~has ~~100,000~~elected ~~options~~ to anamortize ~~officer,~~the ~~7,500 to three directors and 130,000~~ options toover 4the ~~employees.~~vesting ~~The~~period ~~Company calculated a fair value~~ of the ~~options~~option ofas ~~$53,128~~stock-based ~~using~~compensation. During the ~~Black~~year ~~Scholes~~ended ~~option~~October ~~pricing model with computed volatility of 192%~~31, ~~risk-free interest rate of 4.42%~~2025, ~~expected~~the ~~dividend~~Company ~~yield~~expensed 0%$122,228 ~~stock~~for ~~price at measurement date of $0~~options.22 ~~and~~The ~~the~~unrecognized ~~expected~~future ~~term~~balance ofto ~~ten~~be ~~years. The options are~~ expensed over athe ~~five-year~~term ~~period~~of ~~with 20% upon issuance and 20% for~~ the ~~first~~options ~~and~~is ~~each subsequent year~~$400,578.

OnDuring ~~August 21, 2023,~~ the Company granted 1,517,250 options to 13 employees, three directors and 5 officers. Of the options granted, 313,750 were granted for options cancelled, leaving a net increase of options granted for the year ended October 31, ~~2023 of 1~~2025,~~203,500. The~~ ~~Company calculated a fair value of~~ the ~~options~~Company ofissued ~~$271~~763,~~063~~750 ~~using~~options ~~the~~to ~~Black~~20 ~~Scholes~~individuals ~~option pricing model~~ with ~~computed~~an ~~volatility~~exercise ofprice ~~166.24%, risk-free interest rate~~ of 4$0.~~42%,~~89 ~~expected~~per ~~dividend~~share ~~yield~~for 0%132,500 ~~stock~~options ~~price~~and ~~at measurement date of~~ $0.1851 ~~and~~for ~~the~~531,250 ~~expected term of ten years~~options. The ~~options~~Company ~~are~~cancelled ~~expensed~~100,000 ~~over~~options aduring ~~five-year period with 20% upon issuance and 20% for~~ the ~~first~~year ~~and~~ending ~~each~~October ~~subsequent~~31, ~~year~~2025.

The ~~Company~~number ~~has~~of ~~elected~~outstanding ~~to amortize the~~ options ~~over~~as ~~the vesting period~~ of ~~the option as stock-based compensation. During the~~ year ended October 31, ~~2024,~~2025 ~~the~~was ~~Company expensed $79~~8,~~556 for options. The unrecognized future balance to be expensed over the term of the options is $293~~737,~~326.~~200

The ~~number~~following ofsets ~~outstanding~~forth the options as ofgranted ~~year~~and ~~ended~~outstanding as of October 31, ~~2024 was 8,073,450~~2025:

The following sets forth the options granted and outstanding as of October 31, 2024:

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contract		Intrinsic
	Options			Price		Life		Value
Outstanding at October 31, 2023		8,073,450			0.16		4.60	$	1,320,431
Granted		-			-		-		-
Exercises		-			-		-		-
Forfeited/ Expired by termination		-			-		-		-
Outstanding at October 31, 2024		8,073,450			0.16		3.60	$	2,822,540
Granted		763,750			0.50		9.06		-
Exercised		-			-		-		-
Forfeited/Expired by termination		(100,000	)		-		-		-
Outstanding at October 31, 2025		8,737,200			0.20		3.10	$	3,576,987
Exercisable and vested at October 31, 2025		7,068,450			0.16		2.85		-

						Weighted
				Weighted		Average
				Average		Remaining		Granted
				Exercise		Contract		Options		Intrinsic
	Options			Price		Life		Exercisable		Value
Outstanding at October 31, 2022		6,632,450			0.15		4.25		5,100,960	$	256,000
Granted		1,754,750			0.19		9.25		-		-
Exercised		-			-		-		-
Forfeited/Expired by termination		(313,750	)		-		-		-		-
Outstanding at October 31, 2023		8,073,450			0.16		4.60		6,157,950		1,320,431
Granted		-			-		-		-		-
Exercises		-			-		-		-		-
Forfeited/ Expired by termination		-			-		-		-		-
Outstanding at October 31, 2024		8,073,450			0.16		3.60		6,490,700	$	2,822,540

F-14 Table of Contents

NOTE 6 – RELATED PARTY TRANSACTIONS

Sakura Software, a corporation owned by our ~~CEO~~Chief ~~and~~Technology ~~Chairman~~Officer ofand ~~the Board of Directors~~Director, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72.34% and 27.66% of the issued and outstanding shares of Real Innovations International LLC, (“Real Innovations”) a corporation organized under the laws of Nevis, West Indies. In March 2012, Cogent, our operating subsidiary, assigned all of its intellectual property including the pending patent applications for its real-time data transmission and display technology (the “IP”) to Real Innovations under an assignment of intellectual property agreement (the “Assignment Agreement”). In return for the assignment Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment, allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement.

F-13

Table of Contents

On July 30, 2015 the Company designated 500,000 shares of the preferred stock as Series B Convertible preferred. The Series B shares have a par value of $0.001 and issue value of $1.00 per share. Series B is convertible by the holder into common stock at $1.32 per share. The Company may, any time at its option, redeem the Series B shares at their stated value. The Series B preferred shares hold a 6% per annum accumulative dividend. During the years ended October 31, 2024 and 2023 the Company recognized but did not pay dividends of $11,620 each year. As of the year ended October 31, ~~2024~~2025, the total amount of dividends due to the preferred shareholders was $~~107~~119,~~485~~105.

During the year ended October 31, ~~2023~~2025, ~~the~~Mr. ~~Company~~Paul ~~granted~~E. ~~300~~Thomas received cash payments of $152,~~000~~158 ~~options~~for toconsulting ~~three~~services ~~officers~~through inthe ~~lieu~~Company ofhe ~~payment~~owns, ofLifeCycle ~~accrued~~IP ~~salaries~~Management ofInc plus accrued $57126,~~788~~607 in services and expenses.

~~During~~As ~~the~~of ~~year ended~~ October 31, ~~2023~~2025 and 2024, the Company ~~granted~~had ~~two~~the ~~officers~~following ~~280,000~~outstanding ~~options~~accrued ~~and~~liabilities ~~three~~due ~~directors~~to ~~22,500~~related ~~options.~~parties:

During the year ended October 31, 2023, Ms. Shizuka Thomas, wife of Mr. Andrew S. Thomas, was paid $40,035 for services as a Japanese business manager and translator.

	2025		2024
Accrued liabilities - related parties	$	126,607	$	59,455
Accrued commissions		-		-
Accrued dividends preferred shares		119,105		107,485
Total accrued liabilities- related parties	$	245,712	$	166,940

As of October 31, 2024 and 2023, the Company had the following outstanding accrued liabilities due to related parties:

	2024		2023
Accrued liabilities - related parties	$	59,455	$	-
Accrued commissions		-		-
Accrued dividends preferred shares		107,485		95,865
Total accrued liabilities- related parties	$	166,940	$	95,865

F-15 Table of Contents

NOTE 7 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and indirectly, through resellers. ~~Seven~~ In (the twelve months ended October 31, 2024, 7) resellers accounted for 51% of sales, inof ~~fiscal~~which ~~2024~~1 ~~and~~reseller ~~nine~~accounted ~~(9)~~for 25% of sales. In the twelve months ended October 31, 2025, 11 resellers accounted for 50% of sales, inof ~~fiscal~~which ~~2023~~1 reseller accounted for 20% of sales. The Company maintains all the information on their end user customers, and should a reseller discontinue operations, the Company can sell directly to the end user. No reseller has exclusivity in their territory. In ~~fiscal~~the twelve months ended October 31, 2024, no end user customers were responsible for more than 10% of ~~our~~gross ~~revenues~~revenue and ~~thirty-five (~~35) end user customers were responsible for approximately 50% of gross revenue. In ~~fiscal~~the ~~2023~~twelve months ended October 31, 2025, no end user ~~customer~~customers ~~was~~were responsible for more than 10% of gross revenue and ~~thirty-one~~25 ~~(31)~~ end user customers were responsible for approximately 50% of gross revenue.

F-14

Table of Contents

NOTE 8 – REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS

The Company revenue by product line during the years ended October 31, ~~2024~~2025, and ~~2023~~2024 was as follows:

	2024					2023
	2025					2024
Category	Percent			Amount		Percent			Amount
Software sales		6766	%	$	1,~~708~~689,~~579~~653		7167	%	$	1,~~679~~708,~~856~~579
Support sales		3033	%		~~766~~806,~~351~~614		2730	%		~~639~~766,~~066~~351
Other sales		32	%		8654,~~815~~684		23	%		5586,~~294~~815
Total		100	%	$	2,~~561~~550,~~745~~951		100	%	$	2,~~374~~561,~~216~~745

The Company sells its products on a worldwide basis. During the years ended October 31, ~~2024~~2025, and ~~2023~~2024 the Company’s revenue resulted in the following amounts geographically:

	2024					2023
	2025					2024
Area	Percent			Amount		Percent			Amount
North America		3735	%	$	~~942~~887,~~794~~829		3637	%	$	~~850~~942,~~790~~794
Europe		4538	%		1986,~~156,230~~324		3545	%		~~835~~1,~~155~~156,230
Asia Pacific		917	%		~~238~~421,~~853~~850		199	%		~~447~~238,~~766~~853
South America		32	%		6749,~~234~~551		3	%		6067,~~915~~234
Other		68	%		~~156~~205,~~634~~397		76	%		~~179~~156,~~590~~634
Total		100	%	$	2,~~561~~550,~~745~~951		100	%	$	2,~~374~~561,~~216~~745

NOTE 9 – EQUITY

The Company’s authorized shares of common stock is 70,000,000 with a par value of $0.001. asAs of October 31, ~~2024~~2025 the total shares outstanding were 53,143,822.

The Company’s authorized shares of preferred stock is 5,000,000 with a par value of $0.001. On March 31, 2012, the Company issued 5,000 shares of Series A preferred stock at $0.001 per share with a value of $5 as founders to two related parties. The preferred shares ~~contain~~contained certain voting rights allowing the holders of the shares to elect a majority of the Board of Directors until December 31, 2016 at which time the voting rights expired.

On July 30, 2015, the Company designated 500,000 shares of the preferred stock as Series B Convertible preferred. The Series B shares have a par value of $0.001 and issue value of $1.00 per share. Series B is convertible by the holder into common stock at $1.32 per share. The Company may, any time at its option, redeem the Series B shares at their stated value. The Series B preferred shares hold a 6% per annum accumulative dividend. During the years ended October 31, ~~2024~~2025 and ~~2023~~2024 the Company recognized but did not pay dividends of $11,620 each year. As of the year ended October 31, ~~2024~~2025, the total amount of dividends due to the preferred shareholders was $~~107~~119,~~485~~105.

F-1615 Table of Contents

NOTE 10- ~~SUBSEQUENT~~– ~~EVENTS~~SEGMENT REPORTING

OnASC ~~November~~Topic 11280, ~~2024~~“Segment Reporting” establishes the standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company is managed as one operating unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making and discloses its operating results in a single reportable segment. The Company’s chief operating decision maker (“CODM”), represented by the Company’s ~~issued~~Chief ~~631~~Executive Officer,~~250~~ ~~options~~reviews financial information and assesses the operations of the Company in order to 18make ~~individuals~~strategic ~~with~~decisions ansuch ~~exercise~~as ~~price~~allocation of ~~$0.51~~resources ~~per~~and ~~share.~~assessing operating performance.

~~The~~NOTE ~~Company~~11 – ~~has~~SUBSEQUENT evaluated subsequent events to determine events occurring after October 31, 2024 through the filing of this report that would have a material impact on the Company’s financial results or require disclosure and have determined none exist. EVENTS

~~F-17~~On December 2, 2025 the Company granted 100,000 options to a new director with a conversion price of $0.48 per share.

On December 8, 2025 the Company granted 900,000 options to the new Chief Executive Officer with a conversion price of $0.45 per share.

On December 15, 2025 the Company granted 435,000 options to 11 employees with a conversion price of $0.40 per share.

On December 18, 2025, the Company received a $1.9 million Industrial AI Product Development Initiative funding through FedDev Ontario’s Regional Artificial Intelligence Initiative. The Company and FedDev Ontario entered into a loan agreement whereby up to $750,000 will be provided to the Company over the Project period in the form of an interest-free repayable loan after the Project completion.

On January 7, 2026 the Company granted 160,000 options to 10 individuals with a conversion price of $0.33 per share.

The Company has evaluated subsequent events to determine events occurring after October 31, 2025 through the filing of this report that would have a material impact on the Company’s financial results or require disclosure and have determined none exist.

F-16

Filing Compare · Skkynet Cloud Systems, Inc.