10-K: SKYI Reports Increased Revenue, Widening Losses in FY2025

Sky Century Investment, Inc. reported a 47% revenue increase to $76,338 for fiscal year 2025, but net losses widened by 61% to $117,225, alongside significant working capital deficits and internal control weaknesses.

Summary

• Total revenue increased by 47% to $76,338 for the fiscal year ended August 31, 2025, up from $51,800 in 2024, primarily due to business line expansion and customer acquisition.
• Cost of revenues rose by 50% to $51,859 in 2025, driven by acquisitions of new databases, RSS feeds, API, and website update costs.
• Operating expenses increased by 57% to $141,110 in 2025, mainly due to higher software development, consulting services, and professional fees.
• Net loss widened by 61% to $117,225 in 2025, compared to a net loss of $72,920 in 2024.
• The company reported a working capital deficit of $395,472 as of August 31, 2025, an increase from $267,060 in 2024.
• Cash and cash equivalents were $477 as of August 31, 2025, up from $0 in 2024.
• The company's primary revenue streams are selling RSS feeds and Podcasts (89% of total revenue in 2025) and IT Services (11% of total revenue in 2025).
• The Cannabis News application and marketing division are not currently generating revenue.
• Auditors issued a going concern opinion, citing substantial doubt about the company's ability to continue operations without additional capital.
• The company has an accumulated deficit of $922,691 as of August 31, 2025.

Sentiment

Score: 2

Explanation: Despite revenue growth, the company faces significant financial challenges including widening net losses, a substantial working capital deficit, and a going concern opinion from auditors. Operational risks are high due to reliance on a single employee and identified material weaknesses in internal controls. While there are plans for expansion, the current financial health and governance issues present a very negative outlook.

Positives

• Total revenue increased by 47% to $76,338 in fiscal year 2025, driven by business expansion and new customer acquisition.
• Cash and cash equivalents increased from $0 in 2024 to $477 in 2025.
• Net cash provided by operating activities improved significantly to $46,481 in 2025, compared to a net cash used of $501 in 2024.
• The company is actively expanding its IT service offerings and RSS feed content, and developing its marketing services.

Negatives

• Net loss widened by 61% to $117,225 in fiscal year 2025, from $72,920 in 2024.
• Working capital deficit increased by $128,412 to $395,472 as of August 31, 2025.
• The company has an accumulated deficit of $922,691 as of August 31, 2025.
• Auditors issued a going concern opinion, indicating substantial doubt about the company's ability to continue operations.
• The company is highly dependent on a single employee, Nataliia Petranetska, for all business operations and future project development.
• Material weaknesses in internal control over financial reporting were identified, including inadequate segregation of duties, lack of an audit committee, and insufficient accounting expertise.
• Lack of appropriate information technology controls, specifically no formal data backup or off-site storage procedures.
• The Cannabis News application and marketing division are not currently generating revenue.

Risks

• Intense competition in the IT services, marketing, RSS feed services, and cannabis industries.
• Failure to predict and react to customer demand for new products and services could adversely affect business.
• Operating in multiple focus areas introduces operational complexity that may reduce efficiency, effectiveness, and overall performance.
• Workforce limitations and challenges in talent acquisition, with dependence on a single employee, Nataliia Petranetska.
• The limited availability or potential loss of Mrs. Petranetska could adversely affect business operations.
• Improper conduct of associates, agents, or business partners could result in financial costs or reputational damage.
• Market competition may materially and adversely affect operating results.
• Credit and counterparty risks pose potential harm to business, affecting the ability to market products, collect receivables, or leading to order cancellations.
• Legal and regulatory challenges may affect business operations across multiple sectors and cross-border environments.
• Success depends on executive management and the ability to attract and retain top talent.
• Information systems failures may disrupt business operations and result in financial losses or customer liabilities.
• Cybersecurity attacks could lead to loss of confidential information and other business operational disruptions.
• The ongoing effects of the COVID-19 pandemic could impact business, financial condition, operations, and prospects.
• Unspecified and unascertainable risks may affect business operations, especially concerning potential business combinations.
• Risks related to Rule 144, particularly if the company is deemed a Shell Company.

Future Outlook

The company plans to expand its online services, including marketing (social media, content, web design), SEO (local, mobile, voice search, international), analytics and reporting, and IT solutions (consulting, support, network security). It also intends to enhance and scale its existing application and expand/optimize its RSS feed offerings by broadening content and sources. These enhancements and expansions for Marketing and IT services are expected by the end of 2026.

Management Comments

• The Company continues to expand its IT service offerings as there is a growing demand for cloud solutions, data management and network infrastructure.
• The Company expects to enhance and expand these services [Marketing and IT] by the end of 2026.
• Management believes the existing shareholders will provide additional cash to meet the Company’s obligations as they become due.
• Although she [Mrs. Petranetska] presently manages our affairs effectively, there exists the possibility that increased demands from other commitments may limit her availability to oversee our business adequately.
• In the event of high demand, if Mrs. Petranetska is unable to manage the workload, the Company plans to expand its staff to support operations.

Industry Context

Sky Century Investment, Inc. operates in diverse sectors including IT services, digital marketing, and cannabis-related news/content syndication. The IT services sector is experiencing growing demand for cloud solutions, data management, and network infrastructure. The cannabis industry is also seeing increased demand for reliable information and specialized services. The company faces competition from specialized providers and technology giants in IT, various agencies in marketing, and general/niche content syndication entities in RSS feeds. Its focus on curated, industry-specific cannabis content aims to provide a competitive edge.

Comparison to Industry Standards

• NA

Corporate Governance

Related Party Transactions

• Nataliia Petranetska, the sole director and executive, advanced $121,105 to the company as of August 31, 2025, for working capital. These advances are unsecured, interest-free, and have no fixed repayment terms.
• Payroll liabilities to Nataliia Petranetska amounted to $220,000 as of August 31, 2025.
• Debt conversions to common stock for Nataliia Petranetska: $65,000 converted into 15,116,279 shares on July 1, 2022, and again on November 23, 2023.
• Debt conversions to common stock for Khamijon Alimzhanov: $74,000 converted into 21,142,857 shares on November 1, 2022; $65,000 converted into 15,116,279 shares on December 12, 2022; $60,000 converted into 13,333,333 shares on January 5, 2023.
• Debt conversions to common stock for ITEQ Logic Ltd.: $52,500 converted into 15,000,000 shares on May 1, 2023; $29,095 converted into 2,909,500 shares on December 22, 2024.
• Debt conversions to common stock for Marketbiz Limited: $56,000 converted into 16,000,000 common shares on May 1, 2023.
• Yan Tie Ying received 5,000,000 preferred stock with 15 votes each in exchange for 5,000,000 restricted common stock on June 15, 2022.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future equity financing. The going concern opinion and widening losses indicate high investment risk. No dividends are expected in the foreseeable future.
• Employees (currently only one, Nataliia Petranetska) bear the full operational burden, posing a risk to business continuity if she becomes unavailable. Future plans include potential staff expansion.
• Customers may be impacted by operational inefficiencies due to workforce limitations or information system failures. The company aims to enhance services and improve customer satisfaction.
• Creditors, particularly related parties, face higher risk as loans are unsecured, interest-free, and lack fixed repayment terms.

Next Steps

• Expand the range of online services, including marketing, SEO, analytics, web design, and email marketing.
• Expand IT services to include consulting, support, and network security.
• Enhance and implement new features for the existing application.
• Scale the application to accommodate a larger user base by optimizing infrastructure and server capacity.
• Expand and optimize existing RSS feed offerings by broadening sources and content, and updating/replacing current feeds.
• Potentially hire additional employees or expand the Board to support future project development.
• Address material weaknesses in internal control over financial reporting, including segregation of duties and IT controls.

Key Dates

Recommendation

The company exhibits severe financial distress, evidenced by widening net losses, a substantial and increasing working capital deficit, and an accumulated deficit nearing $1 million. The auditor's 'going concern' opinion highlights significant doubt about its ability to continue operations without external capital, which is not assured. operational risks are exceptionally high due to the company's sole employee managing all functions, leading to critical internal control weaknesses including a lack of segregation of duties and an independent audit committee. While revenue increased, it was outpaced by cost of revenues and operating expenses, leading to a larger net loss. The reliance on related party loans and debt conversions for financing, coupled with the explicit mention of potential future dilution, further underscores the precarious financial position. These factors collectively point to a highly speculative and risky investment, warranting a strong sell recommendation.

Keywords

IT Services, RSS Feeds, Cannabis News, Marketing Services, Server Leasing, Financial Reporting, SEC Filing, Going Concern, Small Cap, Technology, Digital Media, Corporate Governance, Risk Management