UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~Washington~~WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~July~~January 31, ~~2025~~2026

☐ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE 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 incorporation or organization)		(IRS Employer Identification No.)

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

(Address of principal executive offices)

(888) 702-7851

(Issuer's telephone number)

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐

Yes: ☒ No: ☐

Indicate by check mark whether the Company is a large accelerated filer, an accelerated file, non-accelerated filer, or a smaller reporting company.

Large accelerated filer	☐	Accelerated filed	☐
Non-accelerated filer	☒	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 Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒

As ~~September~~March 1517, ~~2025~~2026, there were 53,143,822 shares of Common Stock and 193,661 shares of series B preferred of the issuer outstanding.

		~~Page~~	Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Item 1.	Financial Statements		4
Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and October 31, 2024 (Audited)		4
	Condensed Consolidated Balance Sheets as of January 31, 2026 (Unaudited) and October 31, 2025 (Audited)		4
Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended July 31, 2025 and 2024 (Unaudited)		5
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended January 31, 2026 and 2025 (Unaudited)		5
Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended July 31, 2025 and 2024 (Unaudited)		6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended January 31, 2026 and 2025 (Unaudited)		6
Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2025 and 2024 (Unaudited)		7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended January 31, 2026 and 2025 (Unaudited)		7
Notes to Consolidated Financial Statements(Unaudited)		8
	Notes to Condensed Consolidated Financial Statements (Unaudited)		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		15
Item 3	Quantitative and Qualitative Disclosures About Market Risk		14
Item 4. Controls and Procedures		15
Item 4.	Controls and Procedures		14
PART II: OTHER INFORMATION
Item 1. Legal Proceedings		16
Item 1.	Legal Proceedings		15
Item 1A. Risk Factors		16
Item 1A.	Risk Factors		15
Item 2. Sales of Equity Securities and Use of Proceeds		16
Item 2.	Sales of Equity Securities and Use of Proceeds		15
Item 3. Defaults upon Senior Securities		16
Item 3.	Defaults upon Senior Securities		15
Item 4. Mine Safety Information		16
Item 4.	Mine Safety Information		15
Item 5. Other Information		16
Item 5.	Other Information		15
Item 6. Exhibits		17
Item 6.	Exhibits		16
Signatures		18	17

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FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical, or current facts are forward-looking statements. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. Among the factors that could cause actual results to differ materially from the forward-looking statements are the following: the Company’s ability to obtain necessary capital, the Company’s ability to meet anticipated development timelines, the Company’s ability to protect its proprietary technology and knowhow, the Company’s ability to establish a global market, the Company’s ability to successfully consummate future acquisitions, and such other risk factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission, including those filed with this Form 10-Q quarterly report. We disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

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PART I

ITEM 1: FINANCIAL STATEMENTS

SKKYNET CLOUD SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	July 31, 2025			October 31, 2024
	January 31,2026			October 31,2025
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,~~352~~390,~~883~~791		$	1,~~158~~427,~~255~~321
Accounts receivable		~~230~~365,~~408~~651			~~361~~376,~~480~~830
Prepaid expenses		3224,~~289~~499			2726,~~595~~863
Total current assets		1,~~615~~780,~~580~~941			1,~~547~~831,~~330~~014
Property and equipment, net of accumulated depreciation of $90,893 and $88,746 respectively		384			2,156
Total Assets	$	1,780,941		$	1,831,014
Total Assets	$	1,615,964		$	1,549,486
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	~~146~~213,~~852~~799		$	~~154~~209,~~634~~901
Accrued liabilities – related party		~~182~~273,~~485~~754			~~166~~245,~~940~~712
Deferred revenue		~~339~~424,~~609~~545			~~338~~347,~~382~~686
Total current liabilities		~~668~~912,~~946~~098			~~659~~803,~~956~~299
Total Liabilities		~~668~~912,~~946~~098			~~659~~803,~~956~~299
Commitments and contingencies		-			-
Stockholders’ Equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively		5			5
Series B Preferred convertible stock: $0.001 par value, 500,000 shares authorized, 193,661 issued and outstanding, respectively		194			194
Common stock; $0.001 par value, 70,000,000 shares authorized, 53,143,822 shares issued and outstanding, respectively		53,145			53,145
Additional paid-in capital		7,~~315~~413,~~687~~204			7,~~226~~348,~~547~~775
Accumulative other comprehensive income		7279,~~114~~285			8073,~~946~~172
Accumulated deficit		(6,~~494~~676,~~127~~990	)		(6,~~471~~447,~~307~~576	)
Total stockholders’ equity		~~947~~868,~~018~~843			~~889~~1,~~530~~027,715
Total Liabilities and Stockholders’ Equity	$	1,~~615~~780,~~964~~941		$	1,~~549~~831,~~486~~014

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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SKKYNET CLOUD SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

	As of July 31,
	For Three Months EndedJanuary 31,
	Three Months						Nine Months
	2026			2025
	2025			2024			2025			2024
Revenue	$	549,393		$	828,052
Revenue	$	482,682		$	666,359		$	1,897,446		$	1,898,701
Operating Expenses:
Operating Expenses:
Depreciation		-			580
Depreciation		600			603			1,761			1,821
Consultants & directors		119,714			95,573
Compensation expense		318,519			424,279			1,206,261			1,190,888
Salaries and wages		270,801			228,359
Advertising		55102,~~001~~961			1108,~~790~~560			~~243,480~~			~~235,800~~
Stock compensation		34,503			19,889			89,140			59,667
General & administrative expenses		273,132			196,743
General & administrative expenses		126,462			109,713			405,663			464,157
Operating expense		766,608			629,815
Operating expenses		535,085			556,274			1,946,305			1,952,333
Income (loss) from operations		(217,215	)		198,237
Income (loss) from operations		(52,403	)		110,085			(48,859	)		(53,632	)
Other income (expense):
Other income (expense):
Other income		11,684			9,752
Other income		11,857			6,464			29,966			14,459
Currency exchange		(17,161	)		21,074
Bad debt expense		(157	)		-			(13,631	)		-
Total other income (expense)		(5,477	)		30,826
Currency exchange		(3,532	)		5,169			(9,131	)		(12,502	)
Income (loss) before taxes		(222,692	)		229,063
Total other income (expense)		8,168			11,633			7,204			1,957
Income taxes		(3,817	)		-
Income (loss) before taxes		(44,235	)		121,718			(41,655	)		(51,675	)
Net (loss) income		(226,509	)		229,063
Income taxes refund (expense)		28,790			-			27,550			28,274
Preferred dividends		(2,905	)		(2,905	)
Net income (loss)		(15,445	)		121,718			(14,105	)		(23,401	)
Income to common stockholders		(229,414	)		226,158
Preferred dividends		(2,905	)		(2,905	)		(8,715	)		(8,715	)
Foreign currency translation adjustment		6,113			(4,673	)
Income (loss) to common stockholders		(18,353	)		118,813			(22,820	)		(32,116	)
Comprehensive income	$	(223,301	)	$	221,485
Foreign currency translation adjustment		515			(179	)		(8,832	)		(10,956	)
Net income (loss) per share to common stockholders- basic	$	(0.00	)	$	0.00
Comprehensive income (loss)	$	(17,838	)	$	118,634		$	(31,652	)		(21,160	)
Weighted average common shares outstanding -basic		53,143,822			53,143,822
Net income per share to common stockholders- basic	$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)
Net income (loss) per share to common stockholders - diluted	$	(0.00	)	$	0.00
Weighted average common shares outstanding -basic		53,143,822			53,143,822			53,143,822			53,143,822
Weighted average common shares outstanding – diluted		53,143,822			61,758,522
Net income per share to common stockholders – diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)
Weighted average common stock outstanding- diluted		53,143,822			61,217,272			53,143,822			53,143,822

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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SKKYNET CLOUD SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~JULY~~JANUARY 31, ~~2025~~2026 AND ~~2024~~2025

(Unaudited)

																		Accumulated
									Series B									Accumulated
									Series B Preferred				Additional					Other			Total
									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, 2023		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,146,991	$	(6,558,777	)	$	74,082		$	715,640
Change due to currency translation		--		-		--		-		--		-		-		-			5,472			5,472
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Stock option expense		--		-		--		---		--				19,889		-			-			19,889
Net income		--		-		--		-		--		-		-		21,384						21,384
Balance at January 31, 2024		53,143,822		53,145		5,000		5		193,661		194		7,166,880		(6,540,298	)		79,554			759,480
Change due to currency translation		--		-		--		-		--		-		-		-			5,305			5,305
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Stock option expense		--		-		--		-		--		-		19,889								19,889
														--		--			--			--
Net loss		--		-		--		-		--		-		-		(166,503	)		-			(166,503	)
Balance at April 30, 2024		53,143,822		53,145		5,000		5		193,661		194		7,186,769		(6,709,706	)		84,859			615,266
Change due to currency translation		--		-		--		-		--		-		-		-			179			179
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Stock option expense		--		-		--		-		--		-		19,889		-			-			19,889
Net income		--		-		--		-		--		-		-		121,718			-			121,718
Balance at July 31, 2024		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,206,658	$	(6,590,893	)	$	85,038		$	754,147
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
Change due to currency translation		--		-		--		-		--		-		-		-			(4,673	)		(4,673	)
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Stock option expense		--		-		--		-		--		-		32,098		-			-			32,098
Net income		---		-		--		-		--		-		-		229,063			-			229,063
Balance at January 31, 2025		53,143,822		53,145		5,000		5		193,661		194		7,258,645		(6,245,149	)		76,273			1,143,113
Change due to currency translation		--		-		--		-		--		-		-		-			(4,674	)		(4,674	)
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
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Change due to currency translation		-		-		-		-		-		-		-		-			6,113			6,113
Stock option expense		--		-		--		-		--		-		22,539		-			-			22,539
Dividend accrued on series B preferred shares		-		-	-			-		-		-		-		(2,905	)		-			(2,905	)
Net loss		--		-		--		-		--		-		-		(227,723	)					(227,723	)
Stock option expense		-		-		-		-		-		-		64,429		-			-			64,429
Balance at April 30, 2025		53,143,822		53,145		5,000		5		193,661		194		7,281,184		(6,475,777	)		71,599			930,350
Net loss		-		-		-		-		-		-		-		(226,509	)		-			(226,509	)
Change due to currency translation		--		-		--		-		--		-		-		-			515			515
Balance at January 31, 2026		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,413,204	$	(6,676,990	)	$	79,285		$	868,843
Dividend accrued on series B preferred shares		--		-		--		-		--		-		-		(2,905	)		-			(2,905	)
Stock option expense		--		-		--		-		--		-		34,503		-			-			34,503
Net income		--		-		--		-		--		-		-		(15,445	)		-			(15,445	)
Balance at July 31, 2025		53,143,822	$	53,145		5,000	$	5		193,661	$	194	$	7,315,687	$	(6,494,127	)	$	72,114		$	947,018

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

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SKKYNET CLOUD SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended July 31,
	For the Three Months EndedJanuary 31,
	2025			2024
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(14226,~~105~~509	)	$	~~(23~~229,~~401~~063	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		~~1,761~~-			~~1,821~~580
Stock based compensation		8964,~~140~~429			5932,~~667~~098
Bad debt expense		13,631			-
Changes in operating assets and liabilities:
Accounts receivable		~~117~~11,~~441~~179			78(151,~~213~~699	)
Accounts payable and accrued expenses		(73,~~782~~898	)		592,~~563~~018
Accrued liabilities – related parties		625,~~830~~137			6416,~~870~~051
Prepaid expenses and other assets		(42,~~694~~364	)		114,~~677~~856
Deferred revenue		176,~~227~~859			~~(52~~24,~~908~~301	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		203,449			199,502
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(42,643	)		157,268
Effect of exchange rate changes on cash and cash equivalents		(86,~~821~~113	)		10(4,~~924~~607	)
Net increase in cash and cash equivalents		~~194~~(36,~~628~~530	)		~~210~~152,~~426~~661
Cash and cash equivalents, beginning of period		1,~~158~~427,~~255~~321			~~916~~1,~~780~~158,255
Cash and cash equivalents, end of period	$	1,~~352~~390,~~883~~791		$	1,~~127~~310,~~206~~255
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
NON CASH INVESTING AND FINANCING ACTIVITIES
Dividends accrued on Series B preferred shares	$	82,~~715~~905		$	82,~~715~~905

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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SKKYNET CLOUD SYSTEMS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Skkynet Cloud Systems, Inc. (“Skkynet” or “the Company”) is a Nevada corporation formed on August 31, 2011 and headquartered in Toronto, Canada. Skkynet operates its business through its wholly owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet Corp. (Canada) and Skkynet, Inc. (USA). Skkynet was formed primarily for the purpose of taking the existing business lines of Cogent and its current and future customers and integrating these businesses with Cloud based systems. We also intend to expand the areas of business activity to which the kinds of products and services we provide are applied.

The accompanying unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, ~~2024~~2025 Annual Report on form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the consolidated financial statements for the most recent fiscal year end October 31, ~~2024~~2025 as reported on Form 10-K, have been omitted.

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. The reclassifications have no effect on the net loss or stockholders’ equity.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING ~~POLICIES~~POICIES

~~Recent~~Use ~~adopted~~of ~~accounting standards~~Estimates

InThe ~~June~~preparation ~~2016,~~of ~~the~~financial ~~Financial~~statements ~~Accounting~~in ~~Standards~~conformity ~~Board~~with ~~(FASB)~~accounting ~~issued~~principles ~~Accounting~~generally ~~Standards~~accepted ~~Update~~in ~~(ASU) 2016-13 Financial Instruments- Credit Losses, which replaces~~ the ~~impairment~~United ~~methodology~~States ~~incurred to reflect expected credit losses. The amendments require the measurement~~ of ~~all~~America ~~expected~~requires ~~credit~~management ~~losses for financial assets held at the reporting due~~ to ~~the~~make ~~performance~~estimates ~~based on historical experience, current conditions~~ and ~~reasonable~~assumptions ~~supportable~~that ~~forecasts.~~affect ~~ASU 2016-13~~the isreported ~~effective~~amounts ~~for~~of ~~annual~~assets and ~~interim~~liabilities ~~periods~~at ~~beginning~~the ~~after~~date ~~December~~of ~~31, 2022. The Company adopted~~ the ~~standard~~balance ~~on October 31, 2024~~sheet. ~~The~~Actual ~~adoption~~results ~~did~~could ~~not~~differ ~~have~~from athose ~~material impact on the Company’s consolidated financial statements~~estimates.

InPrinciples November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07 Segment Reporting The change in this announcement requires more detailed profit and loss reporting by business segments used by the Company to determine the allocation of assets. ASU 2016-07 is effective for annual periods beginning after December 15, 2023 and interim periods within the fiscal years beginning after December 15, 2024. The Company is evaluating the adoption of the standard but believe it will not have a material impact on the Company’s consolidated financial statements.Consolidation

~~Accounts~~The ~~Receivable~~consolidated ~~are~~financial ~~carried~~statements atof ~~face~~the ~~value~~Company ~~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 is a recognition of uncollectable receivables based on past years’ experience~~ and ~~management’s~~its ~~estimate~~wholly ofowned ~~likely~~subsidiaries ~~losses~~Cogent ~~for~~Real ~~the~~Time ~~year. No allowance for bad debt was considered necessary for the nine months ended July 31~~Systems, ~~2025~~Inc ~~and the year ended October 31~~(Canada), ~~2024,~~Skkynet ~~respectively~~Corp. ~~However,~~(Canada) ~~the~~and ~~Company~~Skkynet ~~expensed~~Inc ~~$13,631~~(US). inAll ~~credit~~material ~~loss~~intercompany ~~for~~balances ~~the~~and ~~nine~~transactions ~~months~~have ~~ended~~been ~~July 31, 2025 compared to none during the same period in 2024~~eliminated.

~~Basic~~Cash and ~~Diluted~~Cash ~~Net Loss Per Share~~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.

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~~Basic~~Income 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 nine months ended July 31, 2025 and the nine months ended July 31, 2024, 8,737,200 and 8,073,450, respectively, of potentially issuable shares of common stock from stock options have not been included in the calculations due to losses in each respective period. Due to the net profit for the quarter ending July 31, 2024, the Company reported 61,217,272 as the number of shares to calculate the per share earnings on a diluted basis.tax

The Company accounts for income taxes under ASC 740. Current tax expense (benefit) is recognized for taxes payable for the period; deferred tax assets and liabilities are recognized for temporary differences between financial and tax bases of assets and liabilities.

Basic and Diluted Earnings Per Share

Basic earnings per share (EPS) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities, such as stock options and convertible preferred shares, were exercised or converted to common stock. The treasury method is used to calculate the effect of options, and if the converted method is used for convertible preferred shares. Securities that are antidilutive are excluded from the computation of diluted EPS.

Recent adopted accounting standards

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-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) 2023-07 Segment Reporting The change in this announcement requires more detailed profit and loss reporting by business segments used by the Company to determine the allocation of assets. ASU 2016-07 is effective for annual periods beginning after December 15, 2023 and interim periods within the fiscal years beginning December 15, 2024. The Company adopted the standard on October 31, 2025. The adoption did not have a material impact on the Company’s consolidated financial statements.

In July 2025, the FASB issued ASU 2025‑05, which provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions within the scope of ASC 606. The expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the asset when developing reasonable and supportable forecasts. Public business entities are not permitted to elect the optional accounting policy to consider subsequent cash collections The Company adopted ASU 2025‑05 on January 1, 2026, on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial statements. Upon adoption, the Company elected the practical expedient for current accounts receivable and current contract assets. No other changes were made to the Company’s credit‑loss estimation methodologies.

The Company adopted ASU 2023‑09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, in the quarter ended January 31, 2026 consistent with the effective date for public business entities (annual periods beginning after December 15, 2024). The Company applied the amendments on a prospective basis to the condensed consolidated financial statements for the current reporting period. Impact on financial statements and disclosures — Adoption of ASU 2023‑09 did not affect the Company’s measurement of income tax expense, deferred tax assets or liabilities, or its effective tax rate.

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 is 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 considered necessary for the three months ended January 31, 2026 and 2025, respectively.

NOTE 3 – 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.

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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.

9Revenue ~~Table~~for the sale of ~~Contents~~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.

AsRevenue ~~part~~from ofcloud ~~the~~services ~~revenue~~is ~~recognition~~recognized ~~reporting,~~over ~~the~~time ~~Company reports revenue by product line and geographic area. During the nine month periods ended July 31~~(typically, ~~2025,~~on ~~and~~a ~~2024~~monthly ~~the~~basis) ~~revenue~~as byservice ~~product line~~ is ~~as follows:~~provided.

Category	Percentage			2025		Percentage			2024
Product sales		65	%	$	1,240,174		66	%	$	1,246,252
Support		32	%		606,976		30	%		575,346
Cloud & Other		3	%		50,296		4	%		77,103
Total		100	%	$	1,897,446		100	%	$	1,898,701

Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the three months period ended January 31, 2026, $272,654 of sales was classified as deferred revenue and $206,377 of deferred revenue was reported as sales. As of January 31, 2026 and October 31, 2025 the deferred revenue was $424,545 and $347,686, respectively.

~~The~~Payments ~~Company~~for ~~sells~~subscription ~~its~~revenue ~~products~~has onincreased a271% to ~~worldwide~~$73,337 ~~basis.~~in ~~During~~the three months period ending January 31, 2026 from $19,763 in the ~~nine~~same ~~month~~period ~~periods~~in 2025. Perpetual revenue for the three months ended ~~July~~January 31, ~~2025~~2026 was $476,056 ~~and~~compared ~~2024~~to $808,289 for the same period in 2025. The move to subscription revenue from perpetual revenue impacts the Company’s ~~geographic~~revenue ~~concentration~~reported ofas ~~revenue~~subscription islicenses aspay ~~follows:~~ over a three year period while perpetual licenses are paid ,in full, on the purchase of the license.

Area	Percentage			2025		Percentage			2024
Europe		41	%	$	768,937		45	%	$	850,146
North America		37	%		694,013		40	%		764,641
Asia Pacific		10	%		201,671		8	%		153,853
Middle East Africa/Other		10	%		201,469		6	%		107,011
South America		2	%		31,356		1	%		23,050
Total		100	%	$	1,897,446		100	%	$	1,898,701

As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the three month periods ended January 31, 2026, and 2025 the revenue by product line is as follows:

NOTE 4 – RELATED PARTY TRANSACTIONS

Category	Percentage			2026		Percentage			2025
Product sales		62	%	$	338,844		74	%	$	615,865
Support		37	%		204,972		25	%		203,771
Cloud & Other		1	%		6,437		1	%		8,416
Total		100	%	$	549,393		100	%	$	828,052

~~Sakura~~The ~~Software,~~Company asells ~~corporation~~its ~~owned~~products byon ~~our CEO and Chairman of the Board of Directors, Andrew S. Thomas, and Benford Consultancy,~~ a ~~corporation~~worldwide ~~owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72~~basis.~~34%~~ ~~and~~During ~~27.66% of~~ the ~~issued~~three ~~and~~month ~~outstanding~~periods ~~shares~~ended ofJanuary ~~Real Innovations International LLC~~31, ~~(“Real Innovations”) a corporation organized under the laws of Nevis~~2026, ~~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~~2025 ~~technology (~~the ~~“IP”)~~Company’s togeographic ~~Real~~concentration ~~Innovations under an assignment~~ of ~~intellectual~~revenue 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 noas ~~ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement.~~ follows:

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’s agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parties, 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.

Area	Percentage			2026		Percentage			2025
Europe		50	%	$	276,499		46	%	$	379,912
North America		39	%		214,623		19	%		155,199
Asia Pacific		7	%		37,964		15	%		123,484
Middle East Africa/Other		3	%		15,750		19	%		157,488
South America		1	%		4,557		1	%		11,969
Total		100	%	$	549,393		100	%	$	828,952

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. No payments have been made as of July 31, 2025.

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AsNOTE of4 ~~July~~– RELATED ~~31,~~PARTY 2025, the amount due to related parties was $182,485 compared to $166,940 as of October 31, 2024. As of July 31, 2025, the amount consisted of accrued dividends of $116,200 and accrued liabilities of $66,285.TRANSACTIONS

Sakura Software, a corporation owned by our CTO, 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 licenses agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parties, 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.

As of January 31, 2026, the amount due to related parties was $273,754 compared to $245,712 as of October 31, 2025. As of January 31, 2026, the amount consisted of accrued dividends of $122,010, directors fees of $9,000 and accrued liabilities of $142,475.

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.

During the ~~nine~~three ~~month~~months period ended ~~July~~January 31, 2025 the Company issued ~~763~~631,~~750~~250 options to18 19 individuals. The options ~~can~~are beexercisable ~~exercised~~ into common stock of the Company at $0.41- ~~$0.88~~ per share. The Company calculated a fair value of the outstanding options of $53,128 using the Black Scholes option pricing model with computed volatility of ~~126~~128.00%, risk-free interest rate of 4.5%, expected dividend yield 0%, stock price at measurement date of $0.~~41-0.88~~51 and the expected term of ten years. The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year.

As of July 31, 2025 the total number of options was 8,737,200 of which 6,656,700 can be exercised and 2,080,500 not exercisable.

During the nine month period ended July 31, 2025, the Company recognized $89,140 of option expense. The unrecognized future balance to be expensed over the term of the options is $433,666.

The following sets forth the options granted and outstanding as of July 31, 2025:

	Options			Weighted Average Exercise price		Weighted Average Remaining Contract Life		Granted Options Exercisable		Intrinsic value
Outstanding at October 31, 2024		8,073,450		$	0.16		3.35		6,490,700	$	2,822,540
Granted		763,750			0.57		9.50		--		--
Exercised		--			--		--		--		--
Forfeited/Expired by termination		(100,000	)		--		--		--		--
Outstanding as July 31, 2025		8,737,200		$	0.20		3.93		6,656,700	$	4,090,273

NOTE 6 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and indirectly, through resellers. In the nine months ended July 31, 2024, 5 resellers accounted for 51% of sales, of which 1 reseller accounted for 27% of sales. In the nine months ended July 31, 2025, 7 resellers accounted for 52% of sales, of which 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 the nine months ended July 31, 2024, no end user customers were responsible for more than 10% of gross revenue and 32 end user customers were responsible for approximately 50% of gross revenue. In the nine months ended July 31, 2025, no end user customers were responsible for more than 10% of gross revenue and 19 end user customers were responsible for approximately 50% of gross revenue.

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~~NOTE~~During 7the –three ~~EQUITY~~month period ended January 31, 2026 the Company issued 1,595,000 to options 19 individuals. The options are exercisable into common stock of the Company at $0.33-$0.48 per share. The Company calculated a fair value for the outstanding options as of January 31, 2026 of $64,429 using the Black Scholes option pricing model with computed volatility of 142%, risk-free interest rate of 4.5%, expected dividend yield 0%, stock price at measurement date of $0.33-$0.48 and the expected term of ten years. The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year.

OnAs ~~July~~of ~~30,~~January ~~2015~~31, ~~the~~2026 ~~Company designated 500,000 shares of~~ the ~~preferred~~total ~~stock~~number ~~as Series B Convertible preferred. The Series B shares have a par value~~ of ~~$0.001~~options ~~and~~was ~~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~~10, ~~any time at its option~~332,200 ~~redeem~~with ~~the Series B shares at their stated value. The Series B preferred shares hold a 6% per annum accumulative dividend. During the nine months periods ended July 31~~7,315,450 ~~2025~~exercisable and ~~2024~~3,016,750 ~~the Company recognized but did~~ not ~~pay dividends of $2,905 for the respective quarters~~exercisable. ~~As of July 31, 2025, the total amount of dividends due to the preferred shareholders was $116,200.~~

~~NOTE~~During 8the –three ~~SUBSEQUENT~~month ~~EVENTS~~period ended January 31, 2026, the Company recognized $64,429 of option expense. The unrecognized future balance to be expensed over the term of the options is $803,085.

The ~~Company~~following ~~has~~sets ~~evaluated~~forth ~~subsequent~~the ~~events~~options togranted ~~determine~~and ~~events~~outstanding ~~occurring~~as ~~after~~of ~~July~~January 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 other than noted above.~~2026:

	Options		Weighted Average Exercise price		Weighted Average Remaining Contract Life		Granted Options Exercisable		Intrinsic value
Outstanding at October 31, 2025		8,737,200	$	0.20		3.10		7,068,450	$	3,575,987
Granted		1,595,000		0.43		9.75		--		--
Exercised		--		--		--		--		--
Forfeited/Expired by termination		--		--		--		--		--
Outstanding as January 31, 2026		10,332,200		0.24		4.58		7,315,450	$	842,024
Exercisable and vested at January 31, 2026		7,315,450		0.17		2.60		--		--

NOTE 6 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and indirectly, through resellers. In the three months ended January 31, 2026, 7 resellers accounted for 50% of sales, of which one reseller accounted for 23% of sales. In the three months ended January 31st, 2025, 7 resellers accounted for 53% of sales, of which two resellers each accounted for more than 10%, representing 26% 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 the three months ended January 31, 2026, no end user customers were responsible for more than 10% of gross revenue and 17 end user customers were responsible for approximately 50% of gross revenue. In the three months ended January 31, 2025, one end user customer was responsible for 14% gross revenue, and nine end user customers were responsible for approximately 51% of gross revenue.

NOTE 7 – SEGMENT REPORTING

ASC Topic 280, “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 Chief Executive Officer, reviews financial information and assesses the operations of the Company in order to make strategic decisions such as allocation of resources and assessing operating performance.

NOTE 8 – INITIATIVE LOAN

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. As of January 31, 2026 the Company had not received any funding from the loan agreement.

NOTE 9 – SUBSEQUENT EVENTS

On February 24, 2026 the Industrial AI Product Development Initiative authorized a payment of CDN $187,209 ( US $136,649) to the Company for the initiative loan (see Note 8 above)

The Company has evaluated subsequent events to determine events occurring after January 31, 2026 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 other than noted above .

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~~ITEM2~~ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Skkynet’s actual results could differ materially from those set forth on the forward-looking statements as a result of the risks set forth in Skkynet’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

OVERVIEW

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

The Company provides software and related systems and facilities to collect, process, and distribute real-time information over a network. This capability allows the customers to both locally and remotely manage, supervise, and control industrial processes and financial information systems. By using this software and, when requested by a client, our web based assets; our clients and their relevant customers are given the ability and the tools to observe and interact with these processes and services in real-time as they are underway and to give them the power to analyze, alter, stop, or otherwise influence these activities to conform to their plans.

RESULTS OF OPERATIONS

For the three ~~and nine~~ month ~~periods~~period ended ~~July~~January 31, 2025, revenue was $~~482~~828,~~682~~052 ~~and $1,897,446~~ compared to $~~666~~549,~~359~~393 ~~and $1,898,701~~ for the same ~~periods~~period in ~~2024~~2026. Revenue decreased for the ~~nine~~three ~~month~~months period ended ~~July~~January 31, ~~2025~~2026 over the same period in ~~2024~~2025 by ~~less than 1~~34%. ~~During~~For comparison purposes, the ~~nine~~revenue ~~months~~for the quarter ended ~~July~~January 31, 2025, ~~subscription~~was ~~revenue~~approximately ~~accounted for 12~~32% ofgreater ~~sales~~than orthe ~~$224,730~~5 ~~versus~~year 2%average of revenue orof ~~$47,336 for~~ the same ~~period~~periods infrom ~~2024~~2021 through 2025. The decrease in revenue for the ~~nine~~three ~~month~~months period ~~can~~is ~~be partially~~ attributed to ~~the $177,394 increased subscription license agreements over perpetual license in 2025 over 2024. Under the subscription agreement the licensee pays for the license on an annual basis at a~~ lower ~~amount~~sales ~~than~~by ifCogent italong ~~was~~with ~~a perpetual license. Revenue from quarter-to-quarter is dependent on~~ the ~~timing~~move ~~of orders placed~~ by ~~its customers. Additionally, as larger customers place orders,~~ the ~~revenue volume can fluctuate significantly. The~~ Company ~~instituted~~from subscription agreement terms in which the customer’s license is for two years with an option to renew each year thereafter. Payments for the software licenses are made on an annual basis compared to the one-time payment for a perpetual ~~license. Subscription licenses impact the amount of revenue that can be recorded in a specific reporting period and may impact the comparison of revenue when compared~~ to ~~a previous reporting period. During the quarter ending July 31, 2025, the Company had fewer individual software orders plus increased~~ subscription ~~license revenue compared to the third quarter ending July 31, 2024 resulting in 28% less revenue in the second quarter~~licenses. ~~The Company cannot determine if there were any significant external factors in the marketplace that impacted the results.~~

Operating expense was $~~535~~629,~~085~~815 ~~and $1,946,305~~ for the three ~~and nine~~ month periods ended ~~July~~January 31, 2025 compared to $~~556~~766,~~274~~608 ~~and $1,952,333~~ for the same ~~periods~~period in ~~2024~~2026. ~~Compensation~~The ~~expense~~increase ofin ~~$1,206,261~~operating ~~for~~expenses ~~the~~was ~~nine~~impacted ~~months~~by ~~ended~~an ~~July~~increase ~~31,~~in ~~20125~~salary ~~consisted~~and ofwages ~~payroll~~ of $~~875~~42,~~640~~442, ~~and~~ consulting and directors’ fees of $~~330~~24,~~621~~141 ~~compared to compensation of $1,190,888 consisting of payroll of $844,389~~ and ~~consulting~~general and ~~directors’~~administrative ~~fees~~expenses of $~~346~~76,~~499 for the same period in 2024~~389. The change in operating expenses between the nine months in 2025 over 2024 was minimal and no specific category of expense changed significantly except for salaries and wages and general and administrative expenses.

For the three month period ended January 31, 2025, the Company reported an operating income of $198,237 compared to operating loss of $217,215 for the same period in 2026. The operating loss during the three month period ended January 31, 2026 over the operating income for same period in 2025 is attributable to $278,659 lower revenues plus increased expenses of $136,753 in the three month period ended January 31, 2026, versus the same period in 2025.

Other income for the three months period ended January 31, 2025 was $30,826, consisting of other income of $9,752 and a currency gain of $21,074. This compared to other expenses of $5,477 consisting of other income of $11,684 and a currency loss of $17,161 for the same period in 2026. The amount of change in both periods was due mostly to the effect of currency exchange.

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~~For~~Net ~~the~~income, ~~three~~after ~~and~~income ~~nine~~taxes ~~month~~of ~~periods~~$229,063, ~~ended~~was ~~July~~reported ~~31,~~for ~~2025,~~ the ~~Company~~three ~~reported~~month anperiod ~~operating~~ended ~~loss~~January ~~of $52~~31,~~403~~ ~~and $48~~2025,~~859~~ compared to ~~operating~~net ~~income~~loss ofafter ~~$110,085~~income ~~and~~taxes ~~operating loss~~ of $53266,~~632~~509 for the same ~~periods~~period in ~~2024~~2026. The ~~operating~~net loss ~~during~~for the ~~nine~~three month period ~~ended~~in ~~July~~2026 ~~31,~~can ~~2025~~be ~~over~~attributed ~~the~~to ~~operating~~$278,659 ~~loss~~of ~~for~~lower revenue during the same period in ~~2024~~2026 isversus ~~attributable~~the tosame ~~static~~period ~~revenues~~in ~~and~~2025. ~~static~~Additionally, the operating expenses infor ~~both~~the ~~nine~~three month ~~periods~~period ended ~~July~~January 31, ~~2025~~2026 ~~and~~was ~~2024~~$136,753 more than the same period in 2025.

~~Other~~Net income~~/expense~~ ~~for~~to ~~the~~common ~~three~~stockholders ~~and nine month periods ended July 31, 2025~~ was ~~income of~~ $8226,~~168~~158 ~~and~~for ~~$7,204,~~the ~~consisting~~three ofmonth ~~other~~period ~~income~~ended ofJanuary ~~$11~~31,~~857~~ ~~and $29~~2025,~~966,~~ ~~currency loss of $3,532 and $9,131 plus a bad debt expense of $13,631. This~~ compared to ~~other~~net ~~income~~loss of $11229,~~633~~414 ~~and $1,957~~ for the ~~three~~same ~~and nine months~~ period ~~ended~~in ~~July 31, 2024~~2026. ~~Other~~Net income ~~and~~to ~~expense~~common ~~consisted~~shareholders ofincludes ~~other~~the ~~income~~expense of ~~$6,464~~dividend ~~and~~for ~~$14,459,~~preferred ~~currency~~stockholders ~~income~~ of $52,~~169~~905 ~~and~~being ~~currency~~accrued ~~loss of $12,502~~ for the ~~same~~three months period inended ~~2024.~~January ~~The amount of change in both periods was due to the effect of currency exchange~~31, ~~increased~~2025 ~~other income~~ and ~~bad debt expense of $13,631~~2026.

~~Net~~The ~~loss~~Company ~~before~~reported ~~taxes~~comprehensive income of $44221,~~235~~485 ~~and $41,655 was reported~~ for the three ~~and nine~~ month ~~periods~~period ended ~~July~~January 31, 2025, compared to ~~net~~a ~~income~~comprehensive ~~of $121,718 and net~~ loss of $51223,~~675~~301 for the same ~~periods~~period in ~~2024~~2026. ~~Net~~The ~~loss~~comprehensive ~~after~~income ~~tax~~is ~~for~~an ~~the~~adjustment ~~three and nine month periods ended July 31, 2025 was $15,445 and $14,105 compared~~ to net ~~income~~gain ofor ~~$121,718 and net~~ loss ofwith ~~$23,401~~foreign ~~for~~currency ~~the~~translation ~~same periods in 2024~~adjustments. ~~These amounts reflect tax refunds of $28,790 and $28,274 during the nine month periods in 2025 and 2024, respectively.~~

Net loss to common stockholders was $18,353 and $22,820 for the three and nine month periods ended July 31, 2025, compared to net income of $118,813 and net loss of $32,116 for the same periods in 2024. Net income or loss to common shareholders includes the expense of dividend for preferred stockholders of $2,905 and $8,715 being accrued for the three and nine month periods ended July 31, 2025 and 2024.

The Company reported comprehensive losses of $17,838 and $31,652 for the three and nine month periods ended July 31, 2025 compared to a comprehensive income of 118,634 and loss of $21,160 for the same periods in 2024. Comprehensive income is an adjustment to net gain or loss with foreign currency translation adjustments.

LIQUIDITY AND CAPITAL RESOURCES

At ~~July~~January 31, ~~2025~~2026, the Company had current assets of $1,~~615~~780,~~964~~941 and current liabilities of $~~668~~912,~~946~~098, resulting in working capital of $~~946~~868,~~634~~843. Accumulated deficit, as of ~~July~~January 31, ~~2025~~2026, was $6,~~494~~676,~~127~~990 with total stockholders’ equity of ~~$947~~868,~~018~~843. ~~Stockholders’~~This ~~equity~~compares ~~increased~~to bycurrent assets of $571,~~488~~831,014 ~~during~~and ~~the~~current ~~nine~~liabilities ~~month~~of ~~period~~$803,299 ~~ending~~with ~~July~~working ~~31,~~capital ~~2025.~~of ~~The~~$1,027,715 ~~change~~as ~~was~~of ~~primarily~~October ~~due~~31, to2025. ~~the~~Accumulated ~~increase~~deficit inas ~~current~~of ~~assets~~October in31, ~~the~~2025 ~~nine~~was ~~month~~$6,447,576 ~~period~~with ~~ending~~shareholders’ ~~July~~equity ~~31,~~of ~~2025~~$1,027,576.

Net cash provided by operating activities for the ~~nine~~three month period ended ~~July~~January 31, 2025, was $~~203~~157,~~449~~268 compared to net cash ~~provided~~used byin operating activities of $~~199~~42,~~502~~643 for the same period in ~~2024~~2026. The change in cash provided by operating activities for the ~~nine~~three month period ended ~~July~~January 31, 2025 compared to the ~~net~~ cash ~~provided~~used in operating activities over the same period in ~~2024~~2026 was ~~influenced~~primarily bydue ~~the~~to ~~lower~~a ~~loss~~decreased revenue in ~~2025~~2026 ~~over~~compared ~~2024~~to 2025 .

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

14 Table of Contents

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, Skkynet is not required to provide information required under this Item.

ITEM 4: CONTROLS AND PROCEDURES

This report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 under the Securities Exchange Act of 1934 (the “"Exchange Act”"). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Financial Officer, to allow timely decisions regarding required disclosures.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of ~~July~~January 31, ~~2025~~2026 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. 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.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management believes that the Unaudited Financial Statements included herein present, in all material respects, the Company’s financial condition, results of operations and cash flows for the periods presented.

1514 Table of Contents

PART II – OTHER INFORMATION

ITEM 1: 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 1A: RISK FACTORS

There have been no material changes to the Company’s risk factors as previously disclosed in our most recent 10-K filing for the year ended October 31, ~~2024~~2025.

ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4: MINE SAFETY INFORMATION

None.

ITEM 5: OTHER INFORMATION

None.

1615 Table of Contents

ITEM 6: EXHIBITS

EXHIBIT 31.1		Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 31.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
EXHIBIT 32.1		Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 32.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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).

1716 Table of Contents

SIGNATURES

In accordance with the requirements 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.

	SKKYNET CLOUD SYSTEMS INC.
	SKKYNET CLOUD SYSTEMS, INC.
Date: September 15, 2025	By:	/s/ Andrew Thomas
Date: March 17, 2026	By:	/s/ Gary Tillery
	Andrew Thomas, Chief Executive Officer (Duly Authorized, Principal Executive Officer)
	Gary Tillery, Chief Executive Officer
	By:	/s/ Lowell Holden
	(Duly Authorized, Principal Executive Officer)
	Lowell Holden, Chief Financial Officer (Duly Authorized Principal Financial Officer)

18SKKYNET CLOUD SYSTEMS, INC. By: /s/ Lowell Holden Lowell Holden, Chief Financial Officer (Duly Authorized Principal Financial Officer)

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