Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - CYTTA CORP.Financial_Report.xls
EX-32 - EXHIBIT 32.1 - CYTTA CORP.exhibit321garycampbell.htm
EX-31 - EXHIBIT 31.1 - CYTTA CORP.exhibit31garycampbell.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 Q /A

Amendment No. 1

(Mark One)

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

For the quarterly period ended December 31, 2010

or

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

For the transition period from ____________ to ________________

Commission file number: 333-139669

 

 

 

CYTTA CORP.

(Exact name of Registrant as specified in its charter)

 

 

 

Nevada

 

98-0505761

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

 

 

Suite 101- 6490 West Desert Inn Road, Las Vegas Nevada 89146

(Address of principal executive offices)

 

(702) 307-1680

(Registrant’s telephone number, including area code)

 



1






905 Ventura Way, Mill Valley, CA 94941

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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 o No x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act (Check one).


 

 

 

Large accelerated filer o

 

Accelerated filer o

 

 

 

Non-accelerated filer o

 

Smaller reporting company x

(Do not check if a smaller reporting company)

 

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of February 18th, 2011, there were 1,328,078,203 shares of the issuer’s common stock, par value $0.00001, outstanding.





2






EXPLANATORY NOTE

We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 as originally filed with the Securities and Exchange Commission on February 22, 2011 (the “Original Form 10-Q”): (i) Item 1 of Part I “Financial Information,” (ii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (iii) Item 4 of Part I, “Controls and Procedures,” and (iv) Item 6 of Part II, “Exhibits”, and we have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2, and our financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibits 101. No other sections were affected, but for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement described below.

We have determined that our previously reported results for the quarter ended December 31, 2010 required to be restated. The Company originally determined the carrying value of the MVNO License to be less than the fair value of the asset. As such, in accordance with ASC 350-30-35, the Company determined the asset was fully impaired and was written down to zero as of December 31, 2010. The Company subsequently concluded this determination was incorrect and in accordance with ASC 350-30-35 the Company has determined the asset impairment calculations resulted in a write down to $12,960 as of December 31, 2010.The condensed balance sheet as of December 31, 2010 and the condensed statements of operations and cash flows for the quarter ended December 31, 2010 and since inception on May 30, 2006 included in this Form 10-Q/A have been restated to reflect the revised MVNO License asset impairment and write down to $12,960. We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” resulting from the correction of this error.



PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

The accompanying unaudited financial statements 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 ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's September 30, 2010 Form 10-K filed with the SEC on January 13, 2011. 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 periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.



3





Cytta Corp.

(A Development Stage Company)

Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

 

 

 

2010

 

2010

 

 

 

 

Restated

 

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 $       171,493

 

 $         19,927

 

Prepaid fees and services

21,935

 

51,935

 

 

Total Current Assets

          193,428

 

            71,862

 

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

MVNO License

12,960

 

                  -   

 

 

Total Other Assets

            12,960

 

                    -

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 $       206,388

 

 $         71,862

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Accounts payable and accrued liabilities

 $           6,989

 

 $           9,272

 

Due to related parties

            61,912

 

            53,026

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

68,901

 

62,298

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

Authorized:

 

 

 

 

 

100,000,000 preferred shares, $0.001 par value

 

 

 

 

 

1,900,000,000 common shares, $0.00001 par value

 

 

 

 

Issued and outstanding shares:

 

 

 

 

 

1,328,078,203 and 1,078,078,203 common shares

12,721

 

10,221

 

Additional paid-in capital

812,219

 

489,719

 

Subscriptions payable

286,000

 

                  -   

 

Common shares pending cancellation

560

 

560

 

Deficit accumulated during the development stage

(974,013)

 

(490,936)

 

 

Total Stockholders' Deficit

137,487

 

9,564

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 $       206,388

 

 $         71,862




4





Cytta Corp.

(A Development Stage Company)

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative from

 

 

 

 

 

 

 

Inception on

 

 

 

For the Three Months Ended

 

May 30, 2006 to

 

 

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

2010

 

 

 

Restated

 

 

 

Restated

REVENUES

 $                  -

 

 $                -

 

 $                     -

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

            40,675

 

           3,295

 

             177,182

 

Management fees

          119,619

 

                  -

 

             258,504

 

General and administrative

            10,379

 

              168

 

             109,342

 

Impairment of licensing agreement

          312,040

 

                  -

 

             428,621

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

          482,713

 

           3,463

 

             973,649

 

 

 

 

 

 

 

 

NET LOSS FROM OPERATIONS

         (482,713)

 

          (3,463)

 

            (973,649)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest income

                  38

 

                  -

 

                     38

 

Interest expense

               (402)

 

                  -

 

                  (402)

 

 

Total Other Income (Expense)

               (364)

 

                  -

 

                  (364)

 

 

 

 

 

 

 

 

NET LOSS BEFORE TAXES

         (483,077)

 

          (3,463)

 

            (974,013)

 

Provision for income taxes

                    -

 

                  -

 

                        -

 

 

 

 

 

 

 

 

NET LOSS

 $      (483,077)

 

 $        (3,463)

 

 $         (974,013)

PER SHARE DATA:

 

 

 

 

 

 

Basic and diluted income

 

 

 

 

 

 

 

(loss) per common share

 $           (0.00)

 

 $         (0.00)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of

 

 

 

 

 

 

 

common shares outstanding

1,219,382,551

 

605,400,000

 

 

 

 

 

 

 

 

 

 




5





Cytta Corp.

(A Development Stage Company)

Statements of Cash Flows

 

 

 

 

 

 

 

 

Cumulative from

 

 

 

 

 

 

 

 

Inception on

 

 

 

 

For the Three Months Ended

 

May 30, 2006 to

 

 

 

 

December 31,

 

December 31,

 

 

 

 

2010

 

2009

 

2010

 

 

 

 

Restated

 

 

 

Restated

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income (loss)

 $  (483,077)

 

 $   (3,463)

 

 $       (974,013)

 

Adjustments to reconcile net income (loss) to net

 

 

 

 

 

 

cash from operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

                -

 

              -

 

              3,419

 

 

Impairment of licensing agreement

      312,040

 

              -

 

           428,621

 

 

Issuance of common stock

 

 

 

 

 

 

 

 

for services and expenses

                -

 

              -

 

           187,570

 

 

Operating expenses paid on behalf of the

 

 

 

 

 

 

 

 

Company by a related party

      101,000

 

              -

 

           156,392

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

        (2,283)

 

      (8,563)

 

             13,439

 

 

Prepaid fees and services

       30,000

 

              -

 

            (21,935)

 

 

 

Net cash from operating activities

      (42,320)

 

    (12,026)

 

          (206,507)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Common stock issued for cash

                -

 

              -

 

           161,000

 

Proceeds from stock subscriptions payable

      286,000

 

              -

 

           286,000

 

Advances from related parties

         5,600

 

     12,026

 

             28,714

 

Repayment of advances from related parties

      (97,714)

 

              -

 

            (97,714)

 

 

Net cash from financing activities

      193,886

 

     12,026

 

           378,000

NET CHANGE IN CASH

      151,566

 

              -

 

           171,493

CASH AT BEGINNING OF PERIOD

       19,927

 

          136

 

                     -

CASH AT END OF PERIOD

 $   171,493

 

 $       136

 

 $        171,493

SUPPLEMENTAL CASH FLOW DISCLOSURES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 $             -

 

 $           -

 

 $                   -

 

Cash paid for income taxes

 $             -

 

 $           -

 

 $                   -

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for debt

 $             -

 

 $           -

 

 $          31,930

 

Common stock issued for licensing agreement

 $   325,000

 

 $           -

 

 $        445,000




6




CYTTA CORP.
(A Development Stage Company)

Condensed Notes to Restated Financial Statements
December 31, 2010 and September 30, 2010

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying restated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2010, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2010 audited financial statements. The results of operations for the period ended December 31, 2010 is not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



7




NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


RECENT ACCOUNTING PRONOUNCEMENTS

Below is a listing of the most recent accounting pronouncements issued since the September 31, 2009 audited financial statements of the Company were released and through February 18, 2011. The Company has evaluated these pronouncements and does not expect their adoption to have a material impact on the Company's financial position, or statements.

* Accounting Standards Update 2010-17 Revenue Recognition- Milestone Method (Topic 605): Milestone Method of Revenue Recognition - a consensus of the FASB emerging issues task force. Effective for fiscal years on or after June 15, 2010.
* Accounting Standards Update 2010-12 Income Taxes (Topic 740):
Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts (SEC Update). Effective July 1, 2010.
* Accounting Standards Update 2010-11Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. Effective July 1, 2010.
* Accounting Standards Update 2010-09 Subsequent Events (topic 855):
Amendments to Certain Recognition and Disclosure Requirements. Effective July 1, 2010.
* Accounting Standards Update 2010-06 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. Effective July 1, 2010.
* Accounting Standards Update 2010-05 Compensation-Stock Compensation (Topic718): Escrowed share arrangements and the Presumption of Compensation (SEC Update). Effective July 1, 2010.
* Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics-Technical Corrections to SEC Paragraphs. Effective July 1, 2010.

NOTE 4- ACQUISITION OF LICENSING AGREEMENT

On November 10th, 2010, the Company entered into an MVNO Mobile Virtual Network Operator Agreement (herein "MVNO Agreement") with Vonify Inc of Toronto, Canada and Georgetown, Grand Cayman Island, BWI (herein "Vonify") and MVNO Mobile Virtual Network Operator Corp (herein "MVNO") of New Westminster, Canada for a license to provide all the "Services" of the Vonify Network to third parties, in the medical marketplace in the USA. The Vonify Network includes those integrated mobile switching facilities, servers, cell sites, telecom and internet connections, billing systems, validation systems, gateways, landline switches and other related facilities used to provide the Services. The Services to be marketed by Cytta are defined as wireless telecommunications services for the Global System for Mobile (GSM) communications. In exchange for the MVNO Agreement, Cytta issued 250,000,000 shares of the Company's common stock to Vonify on November 10, 2010. This transaction



8




will result in Vonify becoming a greater than 10% shareholder of the Company. In connection with the transaction, a controlling shareholder of Vonify became a Director of the Company.

Subsequent to the transaction, the Company determined the carrying value of the licensing agreement to be less than the fair value of the asset. As such, in accordance with ASC 350-30-35 the Company has determined that the asset impaired and has been written down to $12,960 as of December 31, 2010.


NOTE 5 - RELATED PARTY NOTES PAYABLE

As of December 31, 2010 and September 30, 2010 the Company owed various related parties $61,912 and $53,026, respectively. The notes are unsecured, bear no interest and are due on demand.

NOTE 6 - STOCKHOLDERS' EQUITY

Common Stock Issuances - During the period ended December 31, 2010, the Company's Board of Directors resolved to issue 250,000,000 shares of common stock in a non-monetary transaction to acquire a licensing agreement at $0.0013 per share.

Common Stock Subscriptions - During the period ended December 31, 2010 the Company received $221,000 from related parties, and $65,000 from unrelated third parties in exchange for the issuance of no less than 265,151,516 shares of common stock at a future date. This amount has been recorded as a common stock subscription in the Company's financial statements. As of the date of this report, the Company has not satisfied its subscriptions obligation through the issuance of shares of common stock.

NOTE 7 - RESTATEMENT


The Company has restated its financial statements as of and for the quarter ended December 31, 2010. The financial statements have been restated to reflect the adjusted impairment of the MVNO License Agreement.


a) Balance Sheet

 

 

 

 

As of December 31, 2010

 

 

 

 

As Reported

 

Adjustment

 

Restated

ASSETS

 

Cash and cash equivalents

 $   171,493

 

 $         -   

 

 $ 171,493

 

Prepaid fees and services

21,935

 

            -   

 

21,935

 

MVNO License

              -   

 

     12,960

 

12,960

TOTAL ASSETS

      193,428

 

     12,960

 

   206,388



9







LIABILITIES AND STOCKHOLDERS' DEFICIT

 

Accounts payable and accrued liabilities

         6,989

 

            -   

 

       6,989

 

Due to related parties

       61,912

 

            -   

 

     61,912

TOTAL LIABILITIES

68,901

 

            -   

 

68,901

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Common stock

12,721

 

            -   

 

12,721

 

Additional paid-in capital

812,219

 

            -   

 

812,219

 

Subscriptions payable

286,000

 

            -   

 

286,000

 

Common shares pending cancellation

560

 

            -   

 

560

 

Deficit accumulated during the development stage

(986,973)

 

     12,960

 

(974,013)

TOTALSTOCKHOLDERS' EQUITY

124,527

 

12,960

 

137,487

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

      193,428

 

     12,960

 

   206,388


b) Statement of Operations

 

 

 

Accumulated from Inception on May 30, 2006

 

 

 

to December 31, 2010

 

 

 

As Reported

 

Adjusted

 

Restated

REVENUES

 $                  -

 

 $                  -

 

 $                  -

OPERATING EXPENSES

 

 

 

 

 

 

Professional fees

          177,182

 

                    -

 

          177,182

 

Management fees

          258,504

 

                    -

 

          258,504

 

General and administrative

          109,342

 

                    -

 

          109,342

 

Impairment of licensing agreement

          441,581

 

           (12,960)

 

          428,621



10







Total Operating Expenses

          986,609

 

           (12,960)

 

          973,649

NET LOSS FROM OPERATIONS

         (986,609)

 

            12,960

 

         (973,649)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest income

                  38

 

                    -

 

                  38

 

Interest expense

               (402)

 

                    -

 

               (402)

Total Other Income (Expense)

               (364)

 

                    -

 

               (364)

NET LOSS BEFORE TAXES

         (986,973)

 

            12,960

 

         (974,013)

 

Provision for income taxes

                    -

 

                    -

 

                    -

NET LOSS

         (986,973)

 

            12,960

 

         (974,013)


b) Statement of Operations

 

 

 

Accumulated from Inception on May 30, 2006

 

 

 

to December 31, 2010

 

 

 

As Reported

 

Adjusted

 

Restated

REVENUES

 $                  -

 

 $                  -

 

 $                  -

OPERATING EXPENSES

 

 

 

 

 

 

Professional fees

          177,182

 

                    -

 

          177,182

 

Management fees

          258,504

 

                    -

 

          258,504

 

General and administrative

          109,342

 

                    -

 

          109,342

 

Impairment of licensing agreement

          441,581

 

           (12,960)

 

          428,621

Total Operating Expenses

          986,609

 

           (12,960)

 

          973,649

NET LOSS FROM OPERATIONS

         (986,609)

 

            12,960

 

         (973,649)



11







OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest income

                  38

 

                    -

 

                  38

 

Interest expense

               (402)

 

                    -

 

               (402)

Total Other Income (Expense)

               (364)

 

                    -

 

               (364)

NET LOSS BEFORE TAXES

         (986,973)

 

            12,960

 

         (974,013)

 

Provision for income taxes

                    -

 

                    -

 

                    -

NET LOSS

         (986,973)

 

            12,960

 

         (974,013)

NOTE 8 - SUBSEQUENT EVENTS

On March 31, 2011, the Company provided an offering to potential investors of a maximum of 10 units at $25,000 per unit or $0.001 per share. Each unit consisted of 25,000,000 shares of common stock and 25,000,000 warrants to purchase the Company's common stock at $0.01 per share. The warrants are exercisable at any time from their initial issue date until March 30, 2012.

The Company sold 10.98 units and received $267,000 in cash which has been thus been recorded as a stock subscription payable until upon such time that the Company issues the shares of common stock.

Each warrant is exercisable are exercisable at any time from their initial issue date until March 30, 2012 at an exercise price of $0.01 per shares. The warrants were valued using the Black-Scholes Option Pricing model using the following assumptions: 1 year or less term, $0.09-$0.19 stock price, $0.01 exercise price, 180-221% volatility, 0.22-0.80% risk free rate. The Company has allocated $51,865 of the total $267,000 proceeds to the value of the warrants.

The Company issued 269,500,000 warrants in conjunction with the stock offering. The warrants expired on March 30, 2012.

On June 24, 2011, the Company entered into a joint venture agreement with Promia, Inc., ("Promia") to utilize Promia's proprietary information security technologies to create security enabled software and hardware solutions for the Company. Under the terms of the joint venture agreement, the Company has agreed to install and market the Promia security technology on all systems they deploy in the United States and abroad and Promia has agreed to create the hardware and software development necessary to integrate their technology with the Company's mobile network applications.



12




To fulfill the objectives, the Company and Promia agreed to form a Joint Venture LLC named Cytta Connects, LLC ("JV"), wherein 60 percent of the JV is owned by the Company and 40 percent of the JV is owed by Promia. Under the terms of the agreement, initial funding for the JV was to be $250,000 to be provided by the Company. The Company has funded $25,000 as an Investment in Joint Venture and has been accounted for in accordance with ASC 810.

Per the terms of the agreement, the JV is 60 percent is owned by the Company and 40 percent by Promia. According to ASC 810, the Company is required to consolidate the all the assets, liabilities and operations of the JV and record a noncontrolling interest for the portion of net assets controlled by Promia within stockholders' equity.

The Company recorded a noncontrolling interest of $10,000 or 40% of the net assets of $25,000 as a noncontrolling interest to Promia. The JV has not had any operations or expenses.

During the period ended June 30, 2011, the Company received $301,000, $221,000 from related parties and $80,000 from unrelated third parties in exchange for 267,251,516 shares of common stock and no less than 2,100,000 convertible preferred shares to be issued at a future date. These amounts have been recorded as stock subscriptions in the Company's financial statements.

In accordance with ASC 855-10 the Company has evaluated all material subsequent events from the balance sheet date through the date of this report. There have been no other reportable subsequent events.



13






ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K for the year ended September 30, 2009. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the “Company,” “Cytta,” “we,” “us,” or “our” are to Cytta Corp.

Results of Operations

We are a development stage corporation. We have generated no revenues from our business operations since inception (May 30, 2006) and have incurred $974,013 in expenses through December 31, 2010.

The following table provides selected financial data about our company as of December 31, 2010 and September 30th, 2010, respectively.


Balance Sheet Data

December 31, 2010

September 30, 2010

Cash and cash equivalents

$171,493

$19,927

Total Assets

$206,388

$71,862



14






Total Liabilities

$68,901

$62,298

Shareholder Equity (Deficit)

$137,487

$9,564



Net cash used by operating activities since inception (May 30, 2006) through December 31, 2010 was $206,507.

Plan of Operation

On June 18th, 2009, the Company entered into a Licensing Agreement with Lifespan, Inc.  Through a series of transactions and business developments commencing in 2002 Lifespan had acquired the expertise and licenses to manufacture, distribute and market various technology based internet access and computing products and services, consisting of internet access devices, related software and hardware and a series of medical peripherals designed and adapted to provide remote non-diagnostic monitoring of home based and remote patients.  

Under the terms of the Agreement with Cytta, Lifespan granted the Company the exclusive license to manufacture, sell, distribute, operate, sub-license and market these internet access devices, products and services in the United States.  The Company has been utilizing the License to develop a model for the internet access devices which can incorporate the numerous technology advances which are currently available and is currently pursuing this avenue.  In exchange for the license, Lifespan has received 120,000,000 (6,000,000 pre-split) shares of the Company’s common stock, plus a license fee equal to one half of one percent (.5%) of the net revenue derived from the sale and use of their products and services.  This transaction is more fully described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 19, 2009.

On November 10th, 2010, the Company entered into an MVNO Mobile Virtual Network Operator Agreement (herein “MVNO Agreement”) with Vonify Inc of Toronto, Canada and Georgetown, Grand Cayman Island, BWI (herein “Vonify”) and MVNO Mobile Virtual Network Operator Corp (herein “MVNO”) of New Westminster, Canada for a license to provide all the “Services” of the Vonify Network to third parties, in the medical marketplace in the USA.  

The Vonify Network includes those integrated mobile switching facilities, servers, cell sites, telecom and internet connections, billing systems, validation systems, gateways, landline switches and other related facilities used to provide the Services.   The Services to be marketed by Cytta are defined as wireless telecommunications services for the Global System for Mobile (GSM) communications.     

In exchange for the MVNO Agreement, Cytta issued 250,000,000 shares of the Company’s common stock to Vonify Inc.  This transaction resulted in Vonify Inc. becoming a greater than 10% shareholder of the Company.  Mr. William Becker, a Director of the Company, is a



15




controlling shareholder of Vonify Inc. This transaction is more fully described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 29, 2010.

Since the acquisition of the Lifespan technology, and the rights to utilize the Vonify cellular network through the MVNO Agreement, the Company has developed a remote medical monitoring model designed to deliver seamless, near real-time, medical data transmission from home to Insurer.  The Company’s system seamlessly collects the data generated by the home based medical monitoring devices (such as blood pressure, scale, blood glucose, pulse oxygen etc), utilizing Bluetooth connectivity. This medical data is seamlessly sent from the medical device to the Company’s Medical Smartphone, which is also located in the home. The Company’s Medical Smartphone, contains proprietary programming which automatically receives the medical data and utilizes the Company’s wireless telecommunication services, to transmit the data through the cellular network.  The Data is automatically transmitted to the electronic medical monitoring systems (EMR’s) of the major Medical Groups (such as Insurance Companies, Disease Management Companies, Health Delivery Organizations, Health Plans, Home Health Agencies, Managed Care Organizations, Medical Groups and IPAs) who have placed the systems in the homes of their clients requiring remote monitoring.  These Medical Groups contract with Cytta and are responsible for placing the system in the homes of their clients who require monitoring.

The Company has now finalized the testing of the Vonify network in the US utilizing Vonify SIM cards installed on Nexus One android smartphones deployed in various parts of the US.  After comprehensive testing, the Cytta network was found to be fully functional and compliant in regards to voice, data and SMS connectivity.  The network is suitable in all aspects for utilization by Cytta for the movement of medical information gathered from Bluetooth enabled remote medical monitoring devices.  The Company is working on incorporating medical monitoring devices to measure of Blood Pressure, Glucose Values, Weight, PT/INR, ECG Rhythms, Respiration, Temperature, Pulse, and Oxygen Saturation into the Cytta Ecosystem.  The Cytta Medical smartphones are also fully functional voice, data and SMS cell phones.

The Company’s integrated and completely autonomous system provides numerous advantages over current systems, as well as a pricing structure designed to generate a positive return on investment (ROI) for the Medical Groups utilizing the system.  Cytta is best described as a Medical Health Service Provider (MHSP).  To this end the Company is currently demonstrating the system to numerous potential device manufacturing partners and Medical Group clients wishing to utilize and or participate in the Company’s “medical monitoring ecosystem’.

Cytta currently has minimal operating costs and expenses at the present time due to our relatively new business activities. However we anticipate significantly increasing our activities as a result of the MVNO Agreement. We have entered into certain management and consulting contracts with our senior Officers and non affiliated consultants who will be providing business services to the Company in the health care arena. Additionally, we will be required to raise significant capital over the next twelve months, in connection with our operations resulting from our marketing Agreements. We do not currently engage in any product research and development



16




however the Company’s marketing Agreements may cause us to engage in research and development in the foreseeable future. We have no present plans to purchase or sell any plant or significant equipment although we will have to acquire some equipment related to the marketing Agreements. We also have no immediate plans to add employees, other than the current management and consultants, although we may do so in the future as a result of the operations related to the marketing Agreements.

Liquidity and Capital Resources

Our cash and cash equivalents balance as of December 31, 2010 was $171,493.

We are a development stage company and currently have limited marketing operations.

We do not have sufficient funds on hand to pursue our business objectives for the near future or to commence full scale operations without seeking additional funding. We currently do not have a specific plan of how we will obtain such funding.

Loans to the Company

We have been receiving loans from shareholders of the company to pay general operating costs. As of December 31, 2010, we had $61,912 in loans outstanding.

We have minimal operating costs and expenses at the present time due to our limited business activities. Currently our operating activities in the healthcare arena are conducted by our senior Officers and engaged consultants.  We will, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses and to develop our operations. This financing may take the form of additional sales of our equity or debt securities to, or loans from, stockholders, or from our officers and directors or other individuals. There is no assurance that additional financing will be available from these or other sources, or, if available, that it will be on terms favorable to us.

Going Concern

Our auditors have included an explanatory paragraph in their report on our financial statements relating to the uncertainty of our business as a going concern, due to our limited operating history, our lack of historical profitability, and our limited funds. We believe that we will be able to raise the required funds for operations and to achieve our business plan.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T.

CONTROLS AND PROCEDURES



17




Evaluation of Our Disclosure Controls

Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, Stephen Spalding, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Consideration of Restatement

In light of the restatement discussed in Note 1 to the condensed consolidated financial statements, our principal executive and principal financial officers reevaluated the effectiveness of our disclosure controls and procedures as of December 31, 2010, including whether the error identified was the result of a material weakness in our internal control over financial reporting. As part of this assessment, we reconsidered whether our existing controls around the presentation and disclosure of cumulative effect changes arising from adoption of new accounting standards are expected to provide us with a reasonable level of assurance in meeting their stated objective. Based on this assessment, our Chief Executive Officer and Chief Financial Officer have again concluded that our disclosure controls and procedures were effective as of December 31, 2010.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings which are incidental to our business. We are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.



18




UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended December 31, 2010, the Company sold securities that were not registered under the Securities Act of 1933 as follows:

The Company issued 250,000,000 of its $0.00001 par value common stock for the acquisition of the MVNO License in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended. The Company did not engage in any general solicitation or advertising. The Company issued the stock certificates and affixed the appropriate legends to the restricted stock.

None of the transactions involved any underwriters or underwriting discounts. All of the purchasers were deemed to be sophisticated financially and with regard to an investment in our securities.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

The following exhibits are included as part of this report:

Exhibit No.                                                        Description

31.1 / 31.2  Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial             Officer

32.1 / 32.2      Rule 1350 Certification of Principal Executive and Financial Officer



19





SIGNATURES

Pursuant to 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.

CYTTA CORP.

Dated: May 10th , 201 2

By:/s/ Gary Campbell

Gary Campbell
President , Principal Executive and Financial Officer






20