8-K

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT 

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

Date of Report (Date of earliest event reported): November 1, 2014

SKKYNET CLOUD SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada	000-54747	45-3757848
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2233 Argentia Road – Suite 306, Toronto, Ontario, Canada L5N 2X7

(Address of Principal Executive Office) (Zip Code)

Registrant’s telephone number, including area code: (888) 628-2028

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On November 1, 2014 (the “Effective Date”), Skkynet Cloud Systems, Inc. (the “Company”), a Nevada corporation, entered into a certain share transfer agreement (the “Share Transfer Agreement”) with Akira Iwata, Takako Nishikawa and Mitsuhaur Sekiguchi, together the shareholders (“Target Shareholders”) of Nic Corporation (the “Target Company” or “NiC”), a Japanese company. Under the terms of the Share Transfer Agreement, the Target Shareholders transferred all of their shares of the Target Company to the Company in exchange for $110,000 and 50,000 shares of the Company’s common stock (“Payment”). The Company delivered Payment to the Target Shareholders, who subsequently transferred all their shares to the Company on November 6, 2014. NiC is now a wholly-owned subsidiary of the Company.

The foregoing description of the Share Transfer Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference. 

The Company believes that NiC’s particular expertise in embedded hardware will further its cloud strategy, and will be particularly helpful in collaborating with its hardware partners and resellers in Japan.

NiC Corporation develops software that runs on a wide variety of embedded hardware devices allowing them to connect to Skkynet's Secure Cloud Service. NiC has been providing software and hardware development services to the embedded computing industry for the past twenty years. The NiC’s staff are skilled in a range of embedded operating systems such as UNIX, VX-Works, pSOS, OS-9, and iTRON. They implement CAD systems, web systems, drivers, and related applications on MC68K, PowerPC, DSP, SH, ARM and other devices. NiC also designs a wide range of hardware boards, logic chips, custom hardware, and networking systems.

NiC has provided software and hardware development services to the embedded computing industry for over twenty years. NiC software development includes expertise in operating systems such as UNIX, VX-Works, Linux, and iTRON, and in implementing CAD systems, web systems, drivers, and related applications on MC68K, PowerPC, DSP, SH, ARM and other devices. NiC also designs a wide range of hardware boards, logic chips, custom hardware, and networking systems.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information contained in Item 1.01 herein is hereby incorporated by reference into this Item 2.01.

Item 9.01 Financial Statements and Exhibits

Exhibit No.	Description of Exhibit
10.1	Share Transfer Agreement, by and between the Company and Nic Corporation, dated November 1, 2014
99.1	November 10, 2014 Press Release

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	SKKYNET CLOUD SYSTEMS, INC.
Date: November 10, 2014	By:	/s/ Paul E. Thomas
		Paul E. Thomas, President

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EX-10.1

EXHIBIT 10.1

CONFIDENTIAL

Share Transfer Agreement

Whereas Skkynet Cloud Systems, Inc. (SKKY:OTCQB), a public reporting company established under the laws of the United States of America (hereinafter referred to as “Transferee”) wants to utilize the technology and know-how of Nic Corporation, established under the laws of Japan (hereinafter referred to as “Target Company”) in manufacturing Transferee’s own products,

Whereas Mr. Akira Iwata, Mrs. Takako Nishikawa and Mr. Mitsuharu Sekiguchi (hereinafter collectively referred to as “Transferor”) want to transfer their shares of Target Company to a third party company which has enough management vitality to ensure Target Company’s management stability and growth,

Therefore, Transferor and Transferee, in consideration herein, agree as follows:

Article 1 (Share Transfer)

1. Both parties confirm that Transferor has a total of 200 outstanding shares of Target Company and Mr. Iwata has 90 shares, Mrs. Nishikawa has 90 shares and Mr. Sekiguchi has 20 shares.

2. Transferor shall transfer all of its shares (hereinafter referred to as “Shares”) to Transferee for US$110,000.00 and 50,000 common shares of Transferee (SKKY:OTCQB) bearing a restricted legend in compliance with SEC Regulations. For clarity, this equates to US$550.00 and 250 common shares of Transferee (SKKY:OTCQB) per share of Target Company.

Article 2 (Representation and Warranty by Transferor)

Transferor represents and warrants to Transferee following matters:

1. The transfer of Shares shall be authorized by the shareholders’ meeting and a copy of the minutes of the meeting shall be given to Transferee. Also, the shareholders’ meetings of Target Company shall be legally held and the decisions shall be valid.

2. The number of the outstanding shares of Target Company is 200 and all of them were legally and validly issued.

3. Transferor has the complete ownership of Shares and there is no security right or other liability on Shares. Also, all the certificates of Shares given by Transferor to Transferee shall be legally and validly issued.

4. The financial statements of Target Company were made according to generally accepted accounting principles and they reflect correctly the financial situations and operating results. After the record date of the last financial statements, Target Company has been conducting business activities in the same manner as before and there is no material bad influence on the Target Company’s financial situations.

5. Target Company has no undisclosed debt. 

Skkynet Cloud Systems 2233 Argentia Road Suite 306 Mississauga ON  L5N 2X7 1.888.628.2028 skkynet.com

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CONFIDENTIAL

6. Target Company has complete ownership of the assets recorded in the balance sheet and there is no security right or other liability on those assets.

7. Target Company is not facing a lawsuit, provisional attachment or temporary injunction, or any other claim by a third party. Also, there is no possibility for Target Company to face such procedures.

8. The intellectual property right owned by Target Company doesn’t infringe upon third party’s intellectual property.

9. Any contracts between Target Company and third parties don’t put the non-competition liability on Target Company or have cancellation clauses due to transfer of shares.

10. There is no legal dispute between labor and management in Target Company. Also, there is no trouble between them which may escalate into legal dispute.

11. Target company complies with any laws and regulations applied to its business activities. Also, Target Company has no relation with antisocial forces.

12. Transferor disclosed to Transferee all material information about transfer of Shares. Also, all the information disclosed by Transferor is true and accurate.

Article 3 (Representation and Warranty by Transferee)

Transferee represents and warrants to Transferor following matters;

1. Transferee was established legally.

2. Transferee was legally given the right necessary to enter into this agreement.

Article 4 (Covenants)

Transferor shall make the covenants to Transferee on following matters:

1. Transferor shall conduct business activities in the same manner as before after the execution of this agreement until the closing date described in Article 5 and cause no material bad influence on the Target Company’s financial situations.

2. Transferor shall fulfill the conditions for closing described in Article 6 by the closing date.

3. Transferor shall not, for 2 years after the closing date in Osaka city, conduct businesses similar to those of Target Company or become employee or officer of companies conducting businesses similar to Target Company.

4. Transferor shall not, without prior consent by Transferee, disclose confidential information of Target Company to a third party.

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CONFIDENTIAL

Article 5 (Closing)

1. Transferee shall pay to Transferor the amount of money described in Article 1 on November 1, 2014 (hereinafter referred to as “Closing Date”) as transfer fee in exchange of delivering the certificates of Shares. Common shares of SKKY (OTCQB) bearing a restricted legend in compliance with SEC Regulations shall be approved by resolution of Transferee’s Board of Directors, and electronically issued and registered with the Transfer Agent of record (Island Stock Transfer, Roosevelt Office Center, 15500 Roosevelt Boulevard, Suite 301, Clearwater, FL 33706), and proof of said registration effective November 1, 2014 shall be provided to Transferor within 15 business days.

2. Transferor shall deliver the certificates of Shares to Transferee in exchange of receiving the transfer fee described in the previous section.

Article 6 (Conditions for Closing)

The closing described in the previous Article shall occur on the following conditions:

1. The representations and warranties described in Article 2 are accurate on both the execution date of this agreement and Closing Date.

2. The covenants described in Article 4 are fulfilled.

Article 7 (Replacement of Directors)

All the directors of Target Company shall resign at the shareholders’ meeting of Target Company held for the first time after Closing Date, and Transferee shall appoint new directors.

Article 8 (Indemnification)

1. If Transferor violates the representation and warranty described in Article 2, Transferor shall be responsible for compensating the damages, including reasonable attorney’s fee, incurred by Transferee due to the violation.

2. If Transferee faces the claim by a third party due to the violation of the representation and warranty described in Article 2 on the part of Transferor, Transferor shall indemnify Transferee against such claim and give no burden on Transferee for it. In this case, if Transferee suffers any damages or costs, including reasonable attorney’s fee, Transferor shall be responsible for compensating such damages or costs.

Article 9 (Miscellaneous)

1. This agreement consists of entire agreement by both parties on the matters covered herein, and prevails against any type of agreement, understanding or undertaking on those matters written or oral.

2. This agreement can be amended only by a written document signed by authorized persons of both parties.

3. The applicable law of this agreement is the law of Japan.

4. Any dispute arising out of this agreement shall be resolved through the arbitration by Japan Commercial Arbitration Association.

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CONFIDENTIAL

IN WITNESS WHEREOF, the parties hereto have executed this agreement in duplicate by placing their signatures and seals hereon, and each party shall keep one of the originals.

November 1, 2014

Transferor (Representative of above 3 and self)
Takeda Bldg, 2-1-2 Minamikubodera-cho, chuo-ku, Osaka
By:	/s/ Akira Iwata
	Akira Iwata
Transferee:
2233 Argentia Road, Suite 306, Mississauga, ON L5N 2X7
Skkynet Cloud Systems, Inc.
By:	/s/ Paul E. Thomas
	Paul E. Thomas, President

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EX-99.1

EXHIBIT 99.1

 

Skkynet Completes Acquisition of Nic Corporation

Adds embedded systems expertise, complementing Skkynet’s Secure Cloud Service™

Mississauga, Ontario, November 10, 2014 – Skkynet Cloud Systems, Inc. (“Skkynet” or “the Company”) (OTC.BB:SKKY), a global leader in real-time cloud information systems, is pleased to announce that it has completed the previously announced acquisition of Nic Corporation of Osaka, Japan (“NiC”). Details of the transaction are available in the company’s Form 8-K filed with the United States Securities and Exchange Commission (SEC).

NiC develops software that runs on a wide variety of embedded hardware devices allowing the devices to connect to Skkynet’s Secure Cloud Service™. NiC has provided software and hardware development services to the embedded computing industry for over twenty years. NiC software development includes expertise in operating systems such as UNIX, VX-Works, Linux, and iTRON, and in implementing CAD systems, web systems, drivers, and related applications on MC68K, PowerPC, DSP, SH, ARM and other devices. NiC also designs a wide range of hardware boards, logic chips, custom hardware, and networking systems.

Mr. Akira Iwata, President of NiC, commented, “Skkynet has developed a disruptive and secure technology for remote access to industrial devices, processes and systems for monitoring and supervisory control in real time. We believe there is significant demand for cloud-based services that enable enterprises to monitor and control industrial devices and systems from anywhere in the world. The future for embedded devices is to connect directly to the Internet (the “Internet of Things”), and only Skkynet provides the robust and secure environment that our customers demand. We look forward to joining the Skkynet team and supporting the Company’s growth plans in Japan and around the world.”

Paul Thomas, President of Skkynet, stated, “We are excited to complete the acquisition of NiC given their particular expertise in embedded hardware. These capabilities will help advance our cloud strategy and will be particularly useful in collaborating with our hardware partners and resellers in Japan. The acquisition will be immediately accretive and the fact that NiC shareholders received a significant portion of the consideration in Skkynet Common Stock illustrates their confidence in the strength of the combined companies.”

About Skkynet Cloud Systems, Inc.:

Skkynet Cloud Systems, Inc., through its wholly owned subsidiaries Cogent Real-Time Systems Inc. and Nic Corporation, is a leading developer of DataHub^® and VINE™ software, Secure Cloud Service™ and related hardware, systems and facilities for collecting, processing and distributing real-time information over networks. This capability allows our clients to both locally and remotely manage, supervise, and control industrial processes, embedded devices, and financial information systems. Through clients’ web-based assets, WebView™ enables data connectivity and visualization over the cloud, providing them and their customers the necessary ability and tools to observe and interact with these processes and services in real time, empowering them to fully control their systems and analyze their data. DataHub^®and WebView™ are trademarks used under license.

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Safe Harbor:

This news release contains “forward-looking statements” as that term is defined in the United States Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. Statements in this press release that are not purely historical are forward-looking statements, including beliefs, plans, expectations or intentions regarding the future, and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors, such as the inherent uncertainties associated with new business opportunities and development stage companies. We assume no obligation to update the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that they will prove to be accurate. Investors should refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

Contact:

Crescendo Communications, LLC 

Telephone: (212) 671-1020 

Email: skky@crescendo-ir.com

or

Skkynet Cloud Systems, Inc. 

Paul E. Thomas, President 

Office: (888) 628-2028 

Fax: (888) 705-5366 

Web: http://skkynet.com 

Email: ir@skkynet.com

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