10-Q

SECURITIES AND EXCHANGE COMMISSION

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 31. 2024

OR

☐ 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 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 preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

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 of September 12,  2024, there were 53,143,822 shares of Common Stock and 193,661 shares of series B preferred of the issuer outstanding.

	Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of July 31, 2024 (Unaudited) and October 31, 2023 (Audited)	4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three And Nine Months Ended July 31, 2024 and 2023 (Unaudited)	5
Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended July 31, 2024 and 2023 (Unaudited)	6
Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2024 and 2023 (Unaudited)	7
Notes to Consolidated Financial Statements(Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	13
Item 4. Controls and Procedures	13
PART II: OTHER INFORMATION
Item 1. Legal Proceedings	14
Item 1A. Risk Factors	14
Item 2. Sales of Equity Securities and Use of Proceeds	14
Item 3. Defaults upon Senior Securities	14
Item 4. Mine Safety Information	14
Item 5. Other Information	14
Item 6. Exhibits	15
Signatures	16

2

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 (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.

3

PART I

ITEM 1: FINANCIAL STATEMENTS

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

	July 31, 2024			October 31, 2023
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,127,206		$	916,780
Accounts receivable		228,042			306,255
Receivable - related parties		-			4,695
Prepaid expenses		12,584			24,261
Total current assets		1,367,832			1,251,991
Property and equipment, net of accumulated depreciation of $89,333 and$ 86,930 respectively		2,763			4,554
Total Assets	$	1,370,597		$	1,256,545
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	144,433		$	84,870
Accrued liabilities – related party		164,755			95,865
Deferred revenue		307,262			360,170
Total current liabilities		616,450			540,905
Total Liabilities		616,450			540,905
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		7,206,658			7,146,991
Accumulative other comprehensive income		85,038			74,082
Accumulated deficit		(6,590,893	)		(6,558,777	)
Total stockholders’ equity		754,147			715,640
Total Liabilities and Stockholders’ Equity	$	1,370,597		$	1,256,545

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

4

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THREE AND NINE MONTHS ENDED JULY 31,

(Unaudited)

	Three Months						Nine Months
	2024			2023			2024			2023
Revenue	$	666,359		$	630,040		$	1,898,701		$	1,747,623
Operating Expenses:
Depreciation		603			618			1,821			1,839
Salary and wages		424,279			316,883			1,190,888			1,066,013
Advertising		1,790			127,061			235,800			347,658
Stock based compensation		19,889			12,679			59,667			78,788
General & administrative expenses		109,713			106,916			464,157			438,929
Operating expense		556,274			564,157			1,952,333			1,933,227
Income (loss) from operations		110,085			65,883			(53,632	)		(185,604	)
Other income (expense):
Other income		6,464			14,900			14,459			14,960
Currency exchange		5,169			(15,165	)		(12,502	)		(24,727	)
Total other income (expense)		11,633			(265	)		1,957			(9,767	)
Income (loss) before taxes		121,718			65,618			(51,675	)		(195,371	)
Income taxes refund		-			-			28,274			29,968
Net income (loss)		121,718			65,618			(23,401	)		(165,403	)
Preferred dividends		(2,905	)		(2,905	)		(8,715	)		(8,715	)
Income (loss) to common stockholders		118,813			62,713			(32,116	)		(174,118	)
Foreign currency translation adjustment		(179	)		(6,967	)		(10,956	)		(8,431	)
Comprehensive income (loss)	$	118,634		$	55,746		$	(21,160	)	$	(165,687	)
Net income (loss) per share to common stockholders – basic	$	0.00		$	0.00		$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding – basic		53,143,822			53,143,822			53,143,822			53,143,822
Net income (loss) per share of common stock- diluted	$	0.00		$	0.00		$	(0.00	)	$	(0.00	)
Weighted average common stock outstanding- diluted		61,217,272			60,013,772			53,143,822			53,143,822

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

5

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2024 AND 2023

(Unaudited)

																		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			Loss (Income)			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
Stock option expense		-		-		-		-		-		-		52,283		-			-			52,283
Change due to currency translation		-		-		-		-		-		-		-		-			5,484			5,484
Dividend accrued on series B preferred shares		-		-		-		-		-		-		-		(2,905	)		-			(2,905	)
Net income (loss)		-		-		-		-		-		-		-		(147,206	)		-			(147,206	)
Balance at January 31, 2023		53,143,822		53,145		5,000		5		193,661		194		7,042,809		(6,599,396	)		81,495			578,252
Stock option expense		-		-		-		-		-		-		13,826		-						13,826
Change due to currency translation		-		-		-		-		-		-		-		-			(4,020	)		(4,020	)
Dividend accrued on series B preferred shares		-		-		-		-		-		-		-		(2,905	)		-			(2,905	)
Net income (loss)		-		-		-		-		-		-		-		(83,815	)		-			(83,815	)
Balance at April 30, 2023		53,143,822		53,145		5,000		5		193,661		194		7,056,635		(6,686,116	)		77,475			501,338
Stock option expense		-		-		-		-		-		-		12,679		-						12,679
Change due to currency translation		-		-		-				-		-		-		-			6,967			6,967
Dividend accrued on Series B Preferred		-		-		-		-		-		-		-		(2,905	)		-			(2,905	)
																			-
Net income (loss)		-		-		-		-		-		-		-		65,618			-			65,618
Balance at July 31, 2023		53,143,822		53,145		5,000		5		193,661		194		7,069,314		(6,623,403	)		84,442			583,697
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 (loss)		-		-		-		-		-		-		-		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 income (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		-		-		-		-		-		-		-		(2,905	)		-			(2,905	)
Stock option expense		-		-		-		-		-		-		19,889		-			-			19,889
Net income (loss)		-		-		-		-		-		-		-		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

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

6

SKKYNET CLOUD SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

	For the Nine Months Ended July 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(23,401	)	$	(165,403	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,821			1,839
Stock based compensation		59,667			78,788
Changes in operating assets and liabilities:
Accounts receivable		78,213			53,406
Accounts payable and accrued expenses		59,563			51,576
Accrued liabilities – related parties		64,870			29,013
Prepaid expenses and other assets		11,677			14,857
Deferred revenue		(52,908	)		75,194
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		199,502			139,270
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (payment on) Canadian loan activity		-			(19,106	)
NET CASH USED IN FINANCING ACTIVITIES		-			(19,106	)
Effect of exchange rate changes on cash and cash equivalents		10,924			8,270
Net increase (decrease) in cash and cash equivalents		210,426			128,434
Cash and cash equivalents, beginning of period		916,780			729,936
Cash and cash equivalents, end of period	$	1,127,206		$	858,370
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
NON-CASH INVESTING AND FINANCIAL ACTIVITIES
Dividends accrued on Series B preferred shares	$	8,715		$	8,715

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

7

SKKYNET CLOUD SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

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

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2023 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, 2023 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- RECENT ACCOUNTING POLICIES

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 performed 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, 2023. The adoption did not have a material impact on the Company’s consolidated financial statements.

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.

8

ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are:

1.	Identify the contract(s) with a customer.
2.	Identify the performance obligations in the contract.
3.	Determine the transaction price.
4.	Allocate the transaction price to the performance obligations in the contract.
5.	Recognize revenue when (or as) the entity satisfied the performance obligations.

Effective November 1, 2018, the Company implemented the transition using the modified retrospective method of transition. Under this method, the determination date of open contracts which could affect any adjustments was November 1, 2018. The open contracts at the time period are the unfulfilled portions of the maintenance contracts.

The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:

1.	Sale of software direct to the end customer
2.	Sale of software through distributors and channel partners
3.	Maintenance support services
4.	Cloud services

Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.

Revenue from cloud services is recognized over time (typically, on a monthly basis) as service is provided. 

Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the nine months period ended July 31, 2024, $247,356 of sales was classified as deferred revenue and $194,201 of deferred revenue was reported in sales. As of July 31, 2024 and October 31, 2023, the deferred revenue was $307,262 and $360,170, respectively.

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. Bad debt expense is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the period. No allowance for bad debt was considered necessary for the nine months ended July 31, 2024 and 2023, respectively.

9

NOTE 3- REVENUE RECOGNITION

As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the nine-month periods ended July 31, 2024 and 2023, the revenue by product line is as follows:

Category	Percentage			2024		Percentage			2023
Product sales		66	%	$	1,246,252		71	%	$	1,246,595
Support		30	%		575,346		26	%		449,185
Cloud & Other		4	%		77,103		3	%		51,843
Total		100	%	$	1,898,701		100	%	$	1,747,623

The Company sells its products on a worldwide basis. During the nine months periods ended July 31, 2024 and 2023, the Company’s geographic concentration of revenue is as follows: 

Area	Percentage			2024		Percentage			2023
Europe		45	%	$	850,146		34	%	$	603,926
North America		40	%		764,641		37	%		642,158
Asia Pacific		8	%		153,853		17	%		292,632
Middle East-Africa/Other		6	%		107,011		10	%		175,670
South America		1	%		23,050		2	%		33,237
Total		100	%	$	1,898,701		100	%	$	1,747,623

NOTE 4- RELATED PARTY TRANSACTIONS

Sakura Software, a corporation owned by our CEO and Chairman of the Board of Directors, 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: (a) 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.

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, 2024.

As of July 31, 2024, the amount due related parties were $164,755 compared to $95,865 as of October 31, 2023.

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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 months period ended July 31, 2023, the Company issued 130,000 options to four consultants, 7,500 to three directors and 100,000 to one officer of the Company. The options are exercisable into common stock of the Company at $0.22 per share. The Company calculated a fair value of the options of  $53,128 using the Black Scholes option pricing model with computed volatility of 192.00%, risk-free interest rate of 4.5%, expected dividend yield 0%, stock  price at measurement date of $0.22 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.

During the nine months ended July 31, 2024, no additional option were granted.

As of July 31, 2024 the total number of options outstanding was 8,073,450 of which 6,163,950 were exercisable and 1,909,500 were not exercisable.

During the nine-month period ended July 31, 2024, the Company recognized $59,667 of option expense. The unrecognized future balance to be expensed over the term of the options is $3,725. 

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

	Options			Weighted  Average Exercise price		Weighted Average Remaining Contract Life		Granted Options Exercisable		Intrinsic 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		-			-		-		-		-
Exercised		-			-		-		-		-
Forfeited/Expired by termination		-			-		-		-		-
Outstanding as July 31, 2024		8,073,450		$	0.16		3.85		6,443,200	$	3,064,093

NOTE 6 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and through resellers. Five (5) resellers accounted for 50% of sales in the nine months ending July 31, 2024, of which one (1) reseller accounted for 27% of sales. In the nine months ending July 31, 2023, eight (8) resellers accounted for 51% of sales, of which one (1) reseller accounted for 25% 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 ending July 31, 2024, no end user customers were responsible for more than 10% of our revenues and thirty-two (32) end user customers were responsible for approximately 50% of revenue. In the nine months ending July 31, 2023, no end user customers were responsible for more than 10% of revenue and twenty-five (25) end user customers were responsible for approximately 50% of revenue.

NOTE 7 – LOANS PAYABLE

On December 15, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$15,678 (CDN $20,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. On May 28, 2023, the outstanding balance of the CEBA loans payable of CDN $20,000, US ($14,756) were forgiven per the terms of the notes agreements leaving the balance of the note at $0 as of July 31, 2024.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events to determine events occurring after July 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 that none exist.

11

ITEM2: 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 gives 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 ended July 31, 2024, revenue was $665,359 and $1,898,701 compared to $630,040 and $1,747,623 for the same periods in 2023. Revenue increased for the nine months period ended July 31, 2024 over the same period in 2023 by 8.6%.  The increase in revenue for the nine months period is attributed to higher sales by Cogent. The Company is benefiting from its prior investment in sales and marketing which has contributed to the increase in Cogent’s sales.

Operating expenses were $556,274 and $1,952,333 for the three and nine-month periods ended July 31, 2024 compared to $564,157 and $1,933,227 for the same periods in 2023. The increase in operating expenses for the three and nine-month periods ended July 31, 2024 over the same periods in 2023, resulted mostly from increases in salaries and wages.

For the three and nine-month periods ended July 31, 2024, the Company reported an operating profit before tax considerations of $121,718 and net operating loss of $51,675 compared to an operating profit of $65,618 and net operating loss of $195,371 for the same periods in 2023. The lower operating loss for the nine-month period ended July 31, 2024 can be attributed to increased revenues versus the same period in 2023.

Other income for the three and nine-month periods ended July 31, 2024 was income of $11,633 and $1,957. The three month period in 2024 includes other income of $6,464 and currency exchange of $5,169 while the nine month period includes other income of $14,459 and currency loss of $12,502. This is compared to other loss of $265 and $9,767 for the three and nine- month in 2023. The three-and nine-month periods in 2023 consisted of other income of $14,000 and currency loss $15,165 in the three month period and other income of $14,960 and currency loss of $24,727 in the nine- month period.

For the three and nine-month periods ended July 31, 2024 net income after tax was $121,718 and net loss of $23,401 compared to a net income of $65,618 and net loss of $165,403 for the same periods in 2023. The increase in revenues was the most significant contributor to the reduction in the nine- month losses in 2024 over 2023.

Net income to common shareholder was $118,813 and net loss was $32,116 for the three and nine-month periods ended July 31, 2024, compared to net income of $62,713 and a loss of $174,118 for the same periods in 2023. The reduced amounts include the expense of dividends for preferred stockholders of $2,905 and $8,715 being accrued for the three and nine-months period ended July 31, 2024.

The Company reported comprehensive income of $118,634 and loss of $21,160 for the three and nine-months periods ended July 31, 2024 compared to a comprehensive income of $55,746 and loss of $165,687 for the same periods in 2023. Comprehensive income and  loss reflects the net change with foreign currency translation adjustments.

12

LIQUIDITY AND CAPITAL RESOURCES

At July 31, 2024, Skkynet had current assets of $1,370,597 and current liabilities of $616,450, resulting in working capital of $754,147. Accumulated deficit, as of July 31, 2024, was $6,590,893 with total stockholders’ equity of $754,147.

Net cash provided by operating activities for the nine-months period ended July 31, 2024 was $199,502 compared to net cash provided by operating activities of $139,270 for the same period in 2023.  The net cash provided by operating activities increase in the nine-months period in 2024 over 2023 resulted principally from a reduction of net loss of $89,302 from the previous year along with change in accounts payable and accrued liabilities.

Net cash provided by financing activities for the nine-month period ending July 31, 2024 was zero compared to net cash used in financing activities of $19,106 for the same period in 2023. The repayment of loans during the nine months ended July 31, 2023 accounted for the use of funds during that period.

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.

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 31, 2024 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.

13

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 Skkynet’s risk factors as previously disclosed in our most recent 10-K filing for the year ended October 31, 2023.

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.

14

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)

15

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.
Date: September 12, 2024	By:	/s/ Andrew Thomas
		Andrew Thomas, Chief Executive Officer (Duly Authorized, Principal Executive Officer)
	By:	/s/ Lowell Holden
		Lowell Holden, Chief Financial Officer (Duly Authorized Principal Financial Officer)

16

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Andrew Thomas, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Skkynet Cloud Systems, Inc.
2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	The registrant's other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.
(b)	Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, 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.
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change to the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	Date: September 12, 2024
By:	/s/ Andrew Thomas
	Name: Andrew Thomas
	Title: Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Lowell Holden, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Skkynet Cloud Systems, Inc.
2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	The registrant's other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.
(b)	Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, 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.
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change to the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	Date: September 12, 2024
By:	/s/ Lowell Holden
	Name: Lowell Holden
	Title: Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Skkynet Cloud Systems, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Andrew Thomas, Principal Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

/s/ Andrew Thomas

Andrew Thomas

Chief Executive Officer

(Duly Authorized Principal Executive Officer)

Dated: September 12, 2024

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Skkynet Cloud Systems, Inc. (the “Company”) on Form 10-Q for the period ended July 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lowell Holden, Principal Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Skkynet.

/s/ Lowell Holden

Lowell Holden

Chief Financial Officer

(Duly Authorized Principal Financial Officer)

Dated: September 12, 2024

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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Cover - shares	9 Months Ended
	Jul. 31, 2024	Sep. 12, 2024
Cover [Abstract]
Entity Registrant Name	SKKYNET CLOUD SYSTEMS, INC.
Entity Central Index Key	0001546853
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jul. 31, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		53,143,822
Entity File Number	000-54747
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	45-3757848
Entity Address Address Line 1	2233 Argentia Road Suite 302
Entity Address City Or Town	Mississauga
Entity Address State Or Province	ON
Entity Address Postal Zip Code	L5N 2X7
City Area Code	888
Local Phone Number	702-7851
Document Quarterly Report	true
Document Transition Report	false
Entity Address Country	CA
Entity Interactive Data Current	Yes

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CONSOLIDATED BALANCE SHEETS - USD ($)	Jul. 31, 2024	Oct. 31, 2023
Current Assets:
Cash and cash equivalents	$ 1,127,206	$ 916,780
Accounts receivable	228,042	306,255
Receivable - related parties	0	4,695
Prepaid expenses	12,584	24,261
Total current assets	1,367,832	1,251,991
Property and equipment, net of accumulated depreciation of $89,333 and$ 86,930 respectively	2,763	4,554
Total Assets	1,370,597	1,256,545
Current Liabilities:
Accounts payable and accrued expenses	144,433	84,870
Accrued liabilities - related party	164,755	95,865
Deferred revenue	307,262	360,170
Total current liabilities	616,450	540,905
Total Liabilities	616,450	540,905
Commitments and contingencies	0	0
Stockholders' Equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively	5	5
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	7,206,658	7,146,991
Accumulative other comprehensive income	85,038	74,082
Accumulated deficit	(6,590,893)	(6,558,777)
Total stockholders' equity	754,147	715,640
Total Liabilities and Stockholders' Equity	1,370,597	1,256,545
Series B convertible preferred stock [Member]
Stockholders' Equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively	$ 194	$ 194

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jul. 31, 2024	Oct. 31, 2023
Depreciation on property, plant and equipment	$ 89,333	$ 86,930
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	5,000,000	5,000,000
Preferred stock, Issued	5,000	5,000
Preferred stock, Outstanding	5,000	5,000
Common stock, Par value	$ 0.001	$ 0.001
Common stock, Authorized	70,000,000	70,000,000
Common stock, Issued	53,143,822	53,143,822
Common stock, Outstanding	53,143,822	53,143,822
Series B convertible preferred stock [Member]
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	500,000	500,000
Preferred stock, Issued	193,661	193,661
Preferred stock, Outstanding	193,661	193,661

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
Revenue	$ 666,359	$ 630,040	$ 1,898,701	$ 1,747,623
Operating Expenses:
Depreciation	603	618	1,821	1,839
Salary and wages	424,279	316,883	1,190,888	1,066,013
Advertising	1,790	127,061	235,800	347,658
Stock based compensation	19,889	12,679	59,667	78,788
General & administrative expenses	109,713	106,916	464,157	438,929
Operating expense	556,274	564,157	1,952,333	1,933,227
Income (loss) from operations	110,085	65,883	(53,632)	(185,604)
Other income (expense):
Other income	6,464	14,900	14,459	14,960
Currency exchange	5,169	(15,165)	(12,502)	(24,727)
Total other income (expense)	11,633	(265)	1,957	(9,767)
Income (loss) before taxes	121,718	65,618	(51,675)	(195,371)
Income taxes refund	0	0	28,274	29,968
Net income (loss)	121,718	65,618	(23,401)	(165,403)
Preferred dividends	(2,905)	(2,905)	(8,715)	(8,715)
Income (loss) to common stockholders	118,813	62,713	(32,116)	(174,118)
Foreign currency translation adjustment	(179)	(6,967)	(10,956)	(8,431)
Comprehensive income (loss)	$ 118,634	$ 55,746	$ (21,160)	$ (165,687)
Net income (loss) per share to common stockholders - basic	$ 0.00	$ 0.00	$ (0.00)	$ (0.00)
Weighted average common shares outstanding - basic	53,143,822	53,143,822	53,143,822	53,143,822
Net income (loss) per share of common stock- diluted	$ 0.00	$ 0.00	$ (0.00)	$ (0.00)
Weighted average common stock outstanding- diluted	61,217,272	60,013,772	53,143,822	53,143,822

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited) - USD ($)	Total	Common Stock	Preferred Stock	Series B, Preferred Shares	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss
Balance, shares at Oct. 31, 2022		53,143,822	5,000	193,661
Balance, amount at Oct. 31, 2022	$ 670,596	$ 53,145	$ 5	$ 194	$ 6,990,526	$ (6,449,285)	$ 76,011
Stock option expense	52,283	0	0	0	52,283	0	0
Change due to currency translation	5,484	0	0	0	0	0	5,484
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	(147,206)	$ 0	$ 0	$ 0	0	(147,206)	0
Balance, shares at Jan. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Jan. 31, 2023	578,252	$ 53,145	$ 5	$ 194	7,042,809	(6,599,396)	81,495
Balance, shares at Oct. 31, 2022		53,143,822	5,000	193,661
Balance, amount at Oct. 31, 2022	670,596	$ 53,145	$ 5	$ 194	6,990,526	(6,449,285)	76,011
Net income (loss)	(165,403)
Balance, shares at Jul. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Jul. 31, 2023	583,697	$ 53,145	$ 5	$ 194	7,069,314	(6,623,403)	84,442
Balance, shares at Jan. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Jan. 31, 2023	578,252	$ 53,145	$ 5	$ 194	7,042,809	(6,599,396)	81,495
Stock option expense	13,826	0	0	0	13,826	0
Change due to currency translation	(4,020)	0	0	0	0	0	4,020
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	(83,815)	$ 0	$ 0	$ 0	0	(83,815)	0
Balance, shares at Apr. 30, 2023		53,143,822	5,000	193,661
Balance, amount at Apr. 30, 2023	501,338	$ 53,145	$ 5	$ 194	7,056,635	(6,686,116)	77,475
Stock option expense	12,679	0	0	0	12,679	0
Change due to currency translation	6,967	0		0	0	0	6,967
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	65,618	$ 0	$ 0	$ 0	0	65,618	0
Balance, shares at Jul. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Jul. 31, 2023	583,697	$ 53,145	$ 5	$ 194	7,069,314	(6,623,403)	84,442
Balance, shares at Oct. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Oct. 31, 2023	715,640	$ 53,145	$ 5	$ 194	7,146,991	(6,558,777)	74,082
Stock option expense	19,889	0	0	0	19,889	0	0
Change due to currency translation	5,472	0	0	0	0	0	5,472
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	21,384	$ 0	$ 0	$ 0	0	21,384
Balance, shares at Jan. 31, 2024		53,143,822	5,000	193,661
Balance, amount at Jan. 31, 2024	759,480	$ 53,145	$ 5	$ 194	7,166,880	(6,540,298)	79,554
Balance, shares at Oct. 31, 2023		53,143,822	5,000	193,661
Balance, amount at Oct. 31, 2023	715,640	$ 53,145	$ 5	$ 194	7,146,991	(6,558,777)	74,082
Net income (loss)	(23,401)
Balance, shares at Jul. 31, 2024		53,143,822	5,000	193,661
Balance, amount at Jul. 31, 2024	754,147	$ 53,145	$ 5	$ 194	7,206,658	(6,590,893)	85,038
Balance, shares at Jan. 31, 2024		53,143,822	5,000	193,661
Balance, amount at Jan. 31, 2024	759,480	$ 53,145	$ 5	$ 194	7,166,880	(6,540,298)	79,554
Stock option expense	19,889	0	0	0	19,889	0	0
Change due to currency translation	5,305	0	0	0	0	0	5,305
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	(166,503)	$ 0	$ 0	$ 0	0	(166,503)	0
Balance, shares at Apr. 30, 2024		53,143,822	5,000	193,661
Balance, amount at Apr. 30, 2024	615,266	$ 53,145	$ 5	$ 194	7,186,769	(6,709,706)	84,859
Stock option expense	19,889	0	0	0	19,889	0	0
Change due to currency translation	179	0	0	0	0	0	179
Dividend accrued on series B preferred shares	(2,905)	0	0	0	0	(2,905)	0
Net income (loss)	121,718	$ 0	$ 0	$ 0	0	121,718	0
Balance, shares at Jul. 31, 2024		53,143,822	5,000	193,661
Balance, amount at Jul. 31, 2024	$ 754,147	$ 53,145	$ 5	$ 194	$ 7,206,658	$ (6,590,893)	$ 85,038

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (23,401)	$ (165,403)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,821	1,839
Stock based compensation	59,667	78,788
Changes in operating assets and liabilities:
Accounts receivable	78,213	53,406
Accounts payable and accrued expenses	59,563	51,576
Accrued liabilities - related parties	64,870	29,013
Prepaid expenses and other assets	11,677	14,857
Deferred revenue	(52,908)	75,194
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	199,502	139,270
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (payment on) Canadian loan activity	0	(19,106)
NET CASH USED IN FINANCING ACTIVITIES	0	(19,106)
Effect of exchange rate changes on cash and cash equivalents	10,924	8,270
Net increase (decrease) in cash and cash equivalents	210,426	128,434
Cash and cash equivalents, beginning of period	916,780	729,936
Cash and cash equivalents, end of period	1,127,206	858,370
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid	0	0
Income taxes paid	0	0
Dividends accrued on Series B preferred shares	$ 8,715	$ 8,715

XML

ORGANIZATION AND BASIS OF PRESENTATION

9 Months Ended

Jul. 31, 2024

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

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

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2023 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, 2023 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.

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RECENT ACCOUNTING POLICIES

9 Months Ended

Jul. 31, 2024

RECENT ACCOUNTING POLICIES

RECENT ACCOUNTING POLICIES

NOTE 2- RECENT ACCOUNTING POLICIES

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 performed 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, 2023. The adoption did not have a material impact on the Company’s consolidated financial statements.

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.

Effective November 1, 2018, the Company implemented the transition using the modified retrospective method of transition. Under this method, the determination date of open contracts which could affect any adjustments was November 1, 2018. The open contracts at the time period are the unfulfilled portions of the maintenance contracts.

The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:

1.	Sale of software direct to the end customer
2.	Sale of software through distributors and channel partners
3.	Maintenance support services
4.	Cloud services

Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.

Revenue from cloud services is recognized over time (typically, on a monthly basis) as service is provided. 

Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the nine months period ended July 31, 2024, $247,356 of sales was classified as deferred revenue and $194,201 of deferred revenue was reported in sales. As of July 31, 2024 and October 31, 2023, the deferred revenue was $307,262 and $360,170, respectively.

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. Bad debt expense is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the period. No allowance for bad debt was considered necessary for the nine months ended July 31, 2024 and 2023, respectively.

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REVENUE RECOGNITION

9 Months Ended

Jul. 31, 2024

REVENUE RECOGNITION

REVENUE RECOGNITION

NOTE 3- REVENUE RECOGNITION

As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the nine-month periods ended July 31, 2024 and 2023, the revenue by product line is as follows:

Category	Percentage			2024		Percentage			2023
Product sales		66	%	$	1,246,252		71	%	$	1,246,595
Support		30	%		575,346		26	%		449,185
Cloud & Other		4	%		77,103		3	%		51,843
Total		100	%	$	1,898,701		100	%	$	1,747,623

The Company sells its products on a worldwide basis. During the nine months periods ended July 31, 2024 and 2023, the Company’s geographic concentration of revenue is as follows: 

Area	Percentage			2024		Percentage			2023
Europe		45	%	$	850,146		34	%	$	603,926
North America		40	%		764,641		37	%		642,158
Asia Pacific		8	%		153,853		17	%		292,632
Middle East-Africa/Other		6	%		107,011		10	%		175,670
South America		1	%		23,050		2	%		33,237
Total		100	%	$	1,898,701		100	%	$	1,747,623

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RELATED PARTY TRANSACTIONS

9 Months Ended

Jul. 31, 2024

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 4- RELATED PARTY TRANSACTIONS

Sakura Software, a corporation owned by our CEO and Chairman of the Board of Directors, 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: (a) 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.

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, 2024.

As of July 31, 2024, the amount due related parties were $164,755 compared to $95,865 as of October 31, 2023.

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OPTIONS

9 Months Ended

Jul. 31, 2024

OPTIONS

OPTIONS

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 months period ended July 31, 2023, the Company issued 130,000 options to four consultants, 7,500 to three directors and 100,000 to one officer of the Company. The options are exercisable into common stock of the Company at $0.22 per share. The Company calculated a fair value of the options of  $53,128 using the Black Scholes option pricing model with computed volatility of 192.00%, risk-free interest rate of 4.5%, expected dividend yield 0%, stock  price at measurement date of $0.22 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.

During the nine months ended July 31, 2024, no additional option were granted.

As of July 31, 2024 the total number of options outstanding was 8,073,450 of which 6,163,950 were exercisable and 1,909,500 were not exercisable.

During the nine-month period ended July 31, 2024, the Company recognized $59,667 of option expense. The unrecognized future balance to be expensed over the term of the options is $3,725. 

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

	Options			Weighted  Average Exercise price		Weighted Average Remaining Contract Life		Granted Options Exercisable		Intrinsic 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		-			-		-		-		-
Exercised		-			-		-		-		-
Forfeited/Expired by termination		-			-		-		-		-
Outstanding as July 31, 2024		8,073,450		$	0.16		3.85		6,443,200	$	3,064,093

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MAJOR CUSTOMERS

9 Months Ended

Jul. 31, 2024

MAJOR CUSTOMERS

MAJOR CUSTOMERS

NOTE 6 – MAJOR CUSTOMERS

The Company sells to their end-user customers both directly and through resellers. Five (5) resellers accounted for 50% of sales in the nine months ending July 31, 2024, of which one (1) reseller accounted for 27% of sales. In the nine months ending July 31, 2023, eight (8) resellers accounted for 51% of sales, of which one (1) reseller accounted for 25% 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 ending July 31, 2024, no end user customers were responsible for more than 10% of our revenues and thirty-two (32) end user customers were responsible for approximately 50% of revenue. In the nine months ending July 31, 2023, no end user customers were responsible for more than 10% of revenue and twenty-five (25) end user customers were responsible for approximately 50% of revenue.

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LOANS PAYABLE

9 Months Ended

Jul. 31, 2024

LOANS PAYABLE

LOAN PAYABLE

NOTE 7 – LOANS PAYABLE

On December 15, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$15,678 (CDN $20,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. On May 28, 2023, the outstanding balance of the CEBA loans payable of CDN $20,000, US ($14,756) were forgiven per the terms of the notes agreements leaving the balance of the note at $0 as of July 31, 2024.

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SUBSEQUENT EVENTS

9 Months Ended

Jul. 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events to determine events occurring after July 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 that none exist.

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RECENT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jul. 31, 2024

RECENT ACCOUNTING POLICIES

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 performed 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, 2023. The adoption did not have a material impact on the Company’s consolidated financial statements.

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.

Effective November 1, 2018, the Company implemented the transition using the modified retrospective method of transition. Under this method, the determination date of open contracts which could affect any adjustments was November 1, 2018. The open contracts at the time period are the unfulfilled portions of the maintenance contracts.

The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:

1.	Sale of software direct to the end customer
2.	Sale of software through distributors and channel partners
3.	Maintenance support services
4.	Cloud services

Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement.

Revenue from cloud services is recognized over time (typically, on a monthly basis) as service is provided. 

Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. During the nine months period ended July 31, 2024, $247,356 of sales was classified as deferred revenue and $194,201 of deferred revenue was reported in sales. As of July 31, 2024 and October 31, 2023, the deferred revenue was $307,262 and $360,170, respectively.

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. Bad debt expense is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the period. No allowance for bad debt was considered necessary for the nine months ended July 31, 2024 and 2023, respectively.

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REVENUE RECOGNITION (Tables)

9 Months Ended

Jul. 31, 2024

REVENUE RECOGNITION

Schedule of revenue by product line

Category	Percentage			2024		Percentage			2023
Product sales		66	%	$	1,246,252		71	%	$	1,246,595
Support		30	%		575,346		26	%		449,185
Cloud & Other		4	%		77,103		3	%		51,843
Total		100	%	$	1,898,701		100	%	$	1,747,623

Schedule of geographic concentration of revenue

Area	Percentage			2024		Percentage			2023
Europe		45	%	$	850,146		34	%	$	603,926
North America		40	%		764,641		37	%		642,158
Asia Pacific		8	%		153,853		17	%		292,632
Middle East-Africa/Other		6	%		107,011		10	%		175,670
South America		1	%		23,050		2	%		33,237
Total		100	%	$	1,898,701		100	%	$	1,747,623

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OPTIONS (Tables)

9 Months Ended

Jul. 31, 2024

OPTIONS

Schedule of Options granted and outstanding

	Options			Weighted  Average Exercise price		Weighted Average Remaining Contract Life		Granted Options Exercisable		Intrinsic 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		-			-		-		-		-
Exercised		-			-		-		-		-
Forfeited/Expired by termination		-			-		-		-		-
Outstanding as July 31, 2024		8,073,450		$	0.16		3.85		6,443,200	$	3,064,093

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RECENT ACCOUNTING POLICIES (Details Narrative) - USD ($)	9 Months Ended
	Jul. 31, 2024	Oct. 31, 2023
RECENT ACCOUNTING POLICIES
Deferred revenue	$ 307,262	$ 360,170
Deferred sales adjustment	247,356
Deferred revenue reported in sales	$ 194,201

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REVENUE RECOGNITION (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Revenue	$ 666,359	$ 630,040	$ 1,898,701	$ 1,747,623
Revenue percentage			100.00%	100.00%
Support [Member]
Revenue			$ 575,346	$ 449,185
Revenue percentage			30.00%	26.00%
Cloud & Other [Member]
Revenue			$ 77,103	$ 51,843
Revenue percentage			4.00%	3.00%
Product Sales [Member]
Revenue			$ 1,246,252	$ 1,246,595
Revenue percentage			66.00%	71.00%

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REVENUE RECOGNITION (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Total revenue	$ 666,359	$ 630,040	$ 1,898,701	$ 1,747,623
Revenue percentage			100.00%	100.00%
North America [Member]
Total revenue			$ 764,641	$ 642,158
Revenue percentage			40.00%	37.00%
Europe [Member]
Total revenue			$ 850,146	$ 603,926
Revenue percentage			45.00%	34.00%
Asia Pacific [Member]
Total revenue			$ 153,853	$ 292,632
Revenue percentage			8.00%	17.00%
South America [Member]
Total revenue			$ 23,050	$ 33,237
Revenue percentage			1.00%	2.00%
Middle East-Africa/Other [Member]
Total revenue			$ 107,011	$ 175,670
Revenue percentage			6.00%	10.00%

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Jul. 31, 2024	Oct. 31, 2023
Accrued liabilities - related party	$ 164,755	$ 95,865
Ownership percentage by related parties	72.34%
Real Innovations International LLC [Member]
One time payment to be made by related parties	$ 30,000
Paul Benford [Member]
Ownership percentage by related parties	27.66%

XML

OPTIONS (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jul. 31, 2024	Oct. 31, 2023	Oct. 31, 2022
OPTIONS
Options outstanding beginning balance	8,073,450	6,632,450
Options outstanding Granted		1,754,750
Options outstanding Forfeited/Expired by termination		(313,750)
Options outstanding ending balance	8,073,450	8,073,450	6,632,450
Weighted average exercise price of shares outstanding beginning balance	$ 0.16	$ 0.15
Weighted average exercise price of share granted	0	0.19
Weighted average exercise price of share exercised	0	0
Weighted average exercise price of share Forfeited/Expired by termination	0	0
Weighted average exercise price of shares outstanding ending balance	$ 0.16	$ 0.16	$ 0.15
Weighted average remaining contractual terms of share outstanding	3 years 10 months 6 days	4 years 7 months 6 days	4 years 3 months
Weighted average remaining contractual terms of share granted		9 years 3 months
Granted Options Exercisable beginning balance	6,157,950	5,100,960
Granted Options Exercisable ending balance	6,443,200	6,157,950	5,100,960
Option outstanding aggregate intrinsic value	$ 3,064,093	$ 1,320,431	$ 256,000

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OPTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023	Oct. 31, 2023	Oct. 31, 2022
Stock-based compensation	$ 19,889	$ 12,679	$ 59,667	$ 78,788
Number of options outstanding	8,073,450		8,073,450		8,073,450	6,632,450
Granted options exercisable	6,443,200		6,443,200		6,157,950	5,100,960
2012 Stock Option Plan [Member]
Stock-based compensation			$ 59,667
Options issued				130,000
Number of options outstanding	8,073,450		8,073,450
Options nonvested exercisable	1,909,500		1,909,500
Granted options exercisable	6,163,950		6,163,950
Fair value of the option				$ 53,128
Volatility				192.00%
Risk-free interest rate				4.50%
Expected dividend yield				0.00%
Stock price		$ 0.22		$ 0.22
Option exercise price		$ 0.22		$ 0.22
Expected term				10 years
Options expense description				The options are expensed over a five-year period with 20% upon issuance and 20% for the first and each subsequent year
Options expense term				5 years
2012 Stock Option Plan [Member] | Director [Member]
Unrecognized future balance option expense			$ 3,725
Options issued				7,500
2012 Stock Option Plan [Member] | One Officers [Member]
Options issued				100,000

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MAJOR CUSTOMERS (Details Narrative)	9 Months Ended
	Jul. 31, 2024	Jul. 31, 2023
5 Reseller [Member]
Percentage of sales	50.00%
1 Reseller [Member]
Percentage of sales	27.00%	25.00%
32 End User Customer [Member]
Revenue in percent	50.00%
8 Reseller [Member]
Percentage of sales		51.00%
No end User Customer [Member]
Revenue in percent	10.00%	10.00%
25 End User Customer [Member]
Revenue in percent		50.00%

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LOAN PAYABLE (Details Narrative) - USD ($)		1 Months Ended
	Dec. 15, 2020	May 28, 2023	Jul. 31, 2024
Notes payable			$ 0
Debt forgiven amount		$ 14,756
Cogent Systems [Member]
Description of loan payable	The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022
Notes payable	$ 15,678