On July 9, 2019 the Company entered into an agreement, effective August 1, 2019, to sell the Company’s wholly owned subsidiary Skkynet Japan to the former owners. Under terms of the agreements, 22,500 shares of common stock and 272,500 options of the Company held by the former owners will be returned to the Company for 100% ownership of Skkynet Japan. In addition, the intellectual property, software documentation and source code of the Company will be returned to the Company with the balance of the assets and liabilities remaining in Skkynet Japan. As part of the agreement, the name of Skkynet Japan will be changed to exclude Skkynet in its new name. The Company will forgive the indebtedness owed to the Company by its subsidiary Skkynet Japan.

The Company determined that the sale of the subsidiary in Japan represented a significant portion of its business and will have a major effect on the Company’s operations and financial results and, therefore, classified its Skkynet Japan subsidiary as held for sale on July 30, 2019 thus meeting the criteria for discontinued operations.

Assts and Liabilities of Discontinued Operations

	July 31, 2019		October 31, 2018
Carrying amounts of assets included in discontinued operations
Cash	$	6,773	$	6,476
Accounts receivable		32,856		30,141
Inventory		2,425		2,319
Prepaid		12,194		1,733
Other assets		6,279		7,221
Total assets of Discontinued Operations	$	60,527	$	47,890

Carrying amounts of liabilities included in discontinued operations
Accounts payable	$	2,117	$	518
Accrued liabilities		80,713		36,584
Deferred revenue		1,454		2,692
Total liabilities of Discontinued Operations	$	84,284	$	39,794

Operating Results of Discontinued Operations
For Three and Nine Months Ended July 31,

	Three Months						Nine Months
	2019			2018			2019			2018
Revenue included in discontinued operations	$	41,277		$	34,263		$	106,661		$	168,959

Operating costs and expenses included in discontinued operations
Cost of goods sold		5,913			22,721			16,227			47,157
General and administrative cost		51,625			47,232			149,301			148,485
Net loss from Discontinued operations		(16,261	)		(35,690	)		(58,867	)		(26,683	)
Net loss per share of discontinued operations basic & diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Cash flows from Discontinued Operations	March 31, 2019		March 31, 2018
Operating costs and expenses included in discontinued operations
Net cash used in operating activities	$	27,014	$	876
Net cash used in financing activities		--		--
Net cash used in discontinued operations	$	27,014	$	876