ITEM 1. BUSINESS.
Business Development
Cytta Corp. was incorporated in the State of Nevada on May 30, 2006, and our fiscal year-end is September 30th. The company's administrative offices are located at Suite 640, 602 - 12th Avenue SW, Calgary, Alberta, T2R 1J3 and the telephone number is (403) 613-7950.
Cytta Corp. has no revenues or operations, and has only limited cash on hand. We have sustained losses since inception and rely solely upon the sale of securities and loans from our corporate officers and directors for funding.
Cytta has never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding. Cytta, its directors, officers, affiliates and promoters have not and do not intend to enter into negotiations or discussions with representatives or owners of any other businesses or companies regarding the possibility of an acquisition or merger.
Business of Issuer
Cytta Corp. is a web based service provider in which general contractors in local areas can market their services and users of their services can search for contractors in their area and post remarks regarding timeliness, quality, and any other positive or negative feedback regarding their experience or quality of craftsmanship with that particular contractor. It will allow users of this service to find reputable and quality contractors and it will give contractors a way to build business through referrals outside of their immediate network not currently available to them.
Principal Products, Services and Their Markets
Cytta will accomplish its goal by creating a user friendly website whereby contractors will purchase advertising within their area of expertise and customers of those services will be able to search for a contractor.
We have concluded from the $61,000 that we raised from our offering that this will be sufficient to develop a user friendly and interactive web site, www.greattrades.com and our corporate site www.cytta.com. It will also allow us to purchase computer servers, advertise for customers and suppliers and promote our site.
We anticipate that development of the website will take approximately four months, and sourcing customers will begin upon completion of the website. We will advertise for customers through trade magazines and other industry related websites, and approach the other websites to engage in co-marketing agreements. Once we achieve a minimum of 10 contractors in a local market, we will release the website as a live interactive platform. We will work on two geographical markets at one time. We expect to have enough contractors for our first two geographical areas in two to three months, and then expect to begin generating near the end of 2009. Our primary focus is to attract the very best contractors and allow them to grow their businesses and achieve a premium price for providing outstanding service and quality of craftsmanship.
Distribution Methods
We will offer our services to contractors via our website www.greattradespeople.com.
Status of Publicly Announced New Products or Services
Cytta currently has no new publicly announced products or services.
Competitive Business Conditions and Strategy; Cytta 's Position in the Industry
Cytta intends to establish itself as a competitive company in an already existing online advertising market. Cytta's main competitors will be classified and less specific websites such as craigslist.
Our strategic approach is to offer a promoted industry specific service and advertising dedicated to the home renovation and/or construction sector.
Sources and Availability of Raw Materials and Names of Principal Suppliers
Cytta will be selling ad space on our own website www.greattradespeople.com. We do not expect to have any principal suppliers.
Dependence on one or a few major customers
Cytta's business plan is dependent upon finding customers who are all located in a single industry concentrating initially on major U.S. cities with a population base of 3,000,000 or more.
Patents, Trademarks, Licenses, Agreements or Contracts
There are no aspects of our business plan which require a patent, trademark, or product license. We have not entered into any vendor agreements or contracts that give or could give rise to any obligations or concessions.
Governmental Controls, Approval and Licensing Requirements
We are not currently subject to direct federal, state or local regulation other than regulations applicable to businesses generally or directly applicable to electronic commerce. However, the Internet is increasingly popular. As a result, it is possible that a number of laws and regulations may be adopted with respect to the Internet. These laws may cover issues such as user privacy, freedom of expression, pricing, content and quality of products and services, taxation, advertising, intellectual property rights and information security. Furthermore, the growth of electronic commerce may prompt calls for more stringent consumer protection laws. Several states have proposed legislation to limit the uses of personal user information gathered online or require online services to establish privacy policies. The Federal Trade Commission has also initiated action against at least one online service regarding the manner in which personal information is collected from users and provided to third parties. We will not provide personal information regarding our users to third parties. However, the adoption of such consumer protection laws could create uncertainty in Web usage and reduce the demand for our products.
We are not certain how our business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption and other intellectual property issues, taxation, libel, obscenity and export or import matters. The vast majority of such laws were adopted prior to the advent of the Internet. As a result, they do not contemplate or address the unique issues of the Internet and related technologies. Changes in laws intended to address such issues could create uncertainty in the Internet market place. Such uncertainty could reduce demand for services or increase the cost of doing business as a result of litigation costs or increased service delivery costs.
In addition, because our services will result in the distribution of advertisements over the Internet in multiple states and foreign countries, other jurisdictions may claim that we are required to qualify to do business in each such state or foreign country. We are qualified to do business only in Nevada. Our failure to qualify in a jurisdiction where it is required to do so could subject it to taxes and penalties. It could also hamper our ability to enforce contracts in such jurisdictions. The application of laws or regulations from jurisdictions whose laws currently apply to our business could have a material adverse affect on our business, results of operations and financial condition.
Research and Development Activities and Costs
Cytta has not and does not plan to incur any research and development costs in the next year.
Compliance with Environmental Laws
There are no special environmental laws for offering advertising services on the internet.
Number of Employees
Cytta has no employees. Current officers and directors are donating their time to the development of the Company, and intend to do whatever work is necessary in order to bring us to the point of earning revenues. We have no other employees, and we will not hire any employees until the business generates revenue.
Reports to Security Holders
The Company is not required to provide annual reports to security holders.
We are subject to the reporting requirements of the Securities and Exchange Commission (“SEC”) and will file reports including, but not limited to, Annual Reports of Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Proxy Statements on Schedule 14.
The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and the address of that site is www.sec.gov.
ITEM 1A.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2.
ITEM 2. PROPERTIES.
Cytta's principal place of business and corporate offices are located at Suite 640, 602 - 12th Avenue SW, Calgary, Alberta, Canada, T2R 1J3 and the telephone number is (403) 613-7950. The office is the principle business of Robert Gosine and the Company does not pay any rent. We have no intention of finding another office space to rent during the development stage of the company.
Cytta does not currently have any investments or interests in any real estate, nor do we have investments or an interest in any real estate mortgages or securities of persons engaged in real estate activities
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending or, to our knowledge, threatened legal proceedings.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of the fiscal year ended September 30, 2008, to a vote of security holders, through the solicitation of proxies or otherwise.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is quoted on the OTC Bulletin Board under the symbol “CYTA.OB”. However, our common stock has not been traded since our inception. Accordingly, there is no present market for our securities.
Any quotations on the OTC Bulletin Board would reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
As of November 15, 2008, there were 43 record holders of our common stock.
Status of our public offering
On January 10, 2007, our Form SB-2 registration statement (SEC file no. 333-139699) was declared effective by the SEC. From January 2007 to July 2007, we partially completed our public offering by selling 3,050,000 shares of common stock to 41 persons in consideration of $61,000. We closed our offering on July 6th, 2007.
Common Stock
The holders of Common Stock currently (i) have equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote. All shares of Common Stock now outstanding are fully paid for and non-assessable and all shares of Common Stock which are the subject of this Offering, when issued, will be fully paid for and non-assessable. Reference is made to the Company's Articles of Incorporation, By-Laws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of the Company's securities.
Preferred Stock
While our Certificate of Incorporation authorizes the issuance of 100,000,000 shares of preferred stock, $0.001 par value per share, no preferred shares have been issued nor are contemplated to be issued in the near future.
Non-cumulative Voting
The holders of shares of Common Stock of the Company do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of the Company's directors. As of November 15, 2008, the 2 officers and directors own 1.7% of the outstanding shares.
Dividends
We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1.
We would not be able to pay our debts as they become due in the usual course of business; or
2.
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
Securities Authorized for Issuance Under Equity Compensation Plans
We have no authorized equity compensation plans and no outstanding options, warrants or similar rights.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during the year ended September 30, 2008.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
We are a development stage corporation. We have generated no revenues from our business operations since inception and have incurred $60,629 in expenses through September 30, 2008.
The following table provides selected financial data about our company for the fiscal year ended September 30, 2008 and 2007, respectively.
Balance Sheet Data
September 30, 2008
September 30, 2007
Cash and cash equivalents
$
34,536
$
63,009
Total assets
$
34.536
$
63,827
Total liabilities
$
9,165
$
4,174
Shareholders’ equity
$
25,371
$
59,653
Our cash in the bank at September 30, 2008 was $34,536. Net cash provided by financing activities since inception (June 21, 2006) through September 30, 2008 was $86,000, raised from the sale of our common stock.
Our auditors have issued an opinion that there is a substantial doubt that we can continue as an on-going business for the next 12 months, please refer to note 5 of our financial statements.
Plan of Operation
Statements contained herein which are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.
The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-K. Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K. The Company's actual results could differ materially from those discussed here.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for our expenses. This is because we have not generated any revenues from the sale of minerals and no sales are yet possible. There is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from sources. Our only other source for cash at this time is investments by others. We must raise cash to stay in business. In response to these problems, management intends to raise additional funds through public or private placement offerings.
Cytta is a development stage company that has no operations, no revenue, no financial backing and limited assets. Our plan is to develop a web-based advertising service to provide contractors with opportunity to grow their businesses and achieve a premium price for providing outstanding service and quality of craftsmanship. End users will have the ability to hire or choose a contractor with the aid of reviewing information available from other customers that have used those contractors’ services.
We will start operations by contracting out the development of the website, as we have raised $61,000 from our recent offering.
During the next 12 months from the date of this filing, Cytta will continue to concentrate on developing its website, finding advertisers, and marketing those services offered by our customers.
We anticipate that development of the website will take approximately four months from the date of this filing, and sourcing customers will begin upon completion of the website. We will advertise for customers through trade magazines and other industry related websites, and approach the websites to engage in co-marketing agreements. Once we achieve a minimum of 10 contractors in a local market, we will release the website as a live interactive platform. We will work on two geographical markets at one time. We expect to have enough contractors for our first two geographical areas in two to three months and then expect to begin generating revenue.
During the next year of operations, our officers and directors will provide their labor at no charge. We do not anticipate hiring any staff during the first 12 months of operation. The difference between having the ability to sustain our cash flow requirements over the next twelve months and the need for additional outside funding will depend on how fast we can generate sales revenue.
To meet our need for cash we have raised $61,000 from our initial offering. We cannot guarantee that we raised enough money through this offering to stay in business. The money we raised will be applied to the items set forth
herein.. If the $61,000 we raised from our offering is not sufficient to proceed with the full implementation of our business plan, we will have to find alternative sources, like a second public offering, a private placement of securities, or loans from our officers or others. Equity financing could result in additional dilution to existing shareholders. If we are unable to meet our needs for cash from either the money that we raised from our offering, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.
We have no plans to undertake any product research and development and we have no plans or expectations to acquire or sell any plant or significant equipment in the first year of operations.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have not generated any revenues from business operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Currently, we have no financing plans.
Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our business operations.
Since inception our main source for cash has been the sale of our equity securities. Upon inception, we issued 3,000,000 shares of common stock to two directors for $25,000. Between January 2007 to July 2007, we issued 3,050,000 shares of common stock to 41 persons in consideration of $61,000. These shares were issued pursuant to our Prospectus. We raised a total of $86,000 from the sale of our common stock.
As of the date of this filing, we have yet to begin operations and therefore have not generated any revenues.
As of September 30, 2008, our cash was $34,536, our total assets were $34,536 and our total liabilities were $9,165.
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $34,536 in cash and cash equivalents at September 30, 2008 ($63,009 - September 30, 2007).
Start-Up Costs
In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.
Segmented Reporting
SFAS Number 131, “Disclosure About Segments of an Enterprise and Related Information”, changed the way public companies report information about segments of their business in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers. The company presently operates only in Canada.
Earnings (Loss) Per Share of Common Stock
The Company has adopted Financial Accounting Standards Board (“FASB”) Statement Number 128, “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
Foreign Currency Transactions
The Company’s functional currency is the Canadian Dollar. The Company’s reporting currency is the U.S. Dollar. All transactions initiated in Canadian Dollars are translated to U.S. Dollars in accordance with SFAS No. 52 “Foreign Currency Translation” as follows:
(i)
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date;
(ii)
Equity at historical rates; and
(iii)
Revenue and expense items at the average rate of exchange prevailing during the period.
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
No significant realized exchange gains or losses were recorded from inception (May 30, 2006) to September 30, 2008.
Comprehensive Income (Loss)
SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. For the year ended September 30, 2008 and the period ended September 30, 2007, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss for the year ended September 30, 2008 and the period ended September 30, 2007.
Stock-Based Compensation
The Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). The Company accounts for share-based payments to non-employees, in accordance with SFAS 123 (as originally issued) and Emerging Issues Task force Issue No 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.
Revenue Recognition
The Company recognizes revenue from the sale of products and services in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial Statements.” Revenue will consist of plant sales income and will be recognized only when all of the following criteria have been met:
(i)
Persuasive evidence for an agreement exists;
(ii)
Delivery has occurred;
(iii)
The fee is fixed or determinable; and
(iv)
Revenue is reasonably assured.
Recent Accounting Pronouncements
None of the following new pronouncements has current application to the Company, but will be implemented in the Company’s future financial reporting when applicable.
In May 2008, FASB issued Financial Accounting Standards No. 163, “Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.
In May 2008, FASB issued Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.
In March 2008, FASB issued Financial Accounting Standards No. 161, “Disclosure about Derivative Instruments and Hedging Activities - an amendment to FASB Statement No. 133.” The use and complexity of derivative instruments and hedging activities have increased significantly over the past several years. Constituents have expressed concerns that the existing disclosure requirements in FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”, do not provide adequate information about how derivative and hedging activities affect an entity’s financial position, financial performance, and cash flows. Accordingly, this Statement requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.
In December 2007, FASB issued Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51.” This statement amends ARB No. 51 to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards of the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 is effective for fiscal years, and interim periods with those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends).
In December 2007, FASB issued a revision to Financial Accounting Standards No. 141 (revised 2007), “Business Combinations.” The objective of this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITTATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CYTTA CORP.
(A Development Stage Company)
AUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2008 and 2007
CYTTA CORP.
(A Development Stage Company)
INDEX TO AUDITED FINANCIAL STATEMENTS
FOR THE PERIOD OF MAY 30, 2006 (INCEPTION) TO SEPTEMBER 30, 2008
Page(s)
Report of Independent Registered Public Accounting Firm
Balance Sheets as of September 30, 2008 and 2007
Statements of Operations for the Year Ended September 30, 2008 and 2007
and from Inception (May 30, 2006) to September 30, 2008
Statement of Changes in Stockholders’ Equity for the Period of May 30, 2006
(Inception) to September 30, 2008
Statements of Cash Flows for the Year Ended September 30, 2008 and 2007
and from Inception (May 30, 2006) to September 30, 2008
Notes to Financial Statements
20 - 24
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Cytta Corp.
(A Development Stage Company)
We have audited the accompanying balance sheets of Cytta Corp. (A Development Stage Company) as of September 30, 2008 and September 30, 2007, and the related statements of operations, stockholders’ equity and cash flows for the years ended September 30, 2008, September 30, 2007 and since inception on May 30, 2006 through September 30, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cytta Corp. (A Development Stage Company) as of September 30, 2008 and September 30, 2007, and the related statements of operations, stockholders’ equity and cash flows for the years ended September 30, 2008, September 30, 2007 and since inception on May 30, 2006 through September 30, 2008, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has a loss from operations of $34,282, an accumulated deficit of $60,629 and working capital of $25,371, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates, Chartered
Las Vegas, Nevada
November 18, 2008
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
Cytta Corp.
(A Development Stage Company)
Balance Sheets
As of September 30,
-The accompanying notes are an integral part of these financial statements -
Cytta Corp.
(A Development Stage Company)
Statements of Operations
-The accompanying notes are an integral part of these financial statements -
Cytta Corp.
(A Development Stage Company)
Statement of Stockholders’ Equity
For the Period of May 30, 2006 (Inception) to September 30,
-The accompanying notes are an integral part of these financial statements -
Cytta Corp.
(A Development Stage Company)
Statements of Cash Flows
-The accompanying notes are an integral part of these financial statements -
Cytta Corp.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
NOTE 1 -
ORGANIZATION AND DESCRIPTION OF BUSINESS
Cytta Corp., (the “Company”) was incorporated on May 30, 2006 under the laws of the State of Nevada. It is located in Vancouver, British Columbia, Canada. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is September 30.
The Company is a development stage company that intends to develop and operate a website where tradespeople/contractors can offer their services. To date, the Company’s activities have been limited to its formation and the raising of equity capital.
NOTE 2 -
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $34,536 and $63,009 in cash and cash equivalents at September 30, 2008 and 2007, respectively.
Start-Up Costs
In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.
Segmented Reporting
SFAS Number 131, “Disclosure About Segments of an Enterprise and Related Information”, changed the way public companies report information about segments of their business in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers. The company presently operates only in Canada.
Cytta Corp.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Earnings (Loss) Per Share of Common Stock
The Company has adopted Financial Accounting Standards Board (“FASB”) Statement Number 128, “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
Foreign Currency Transactions
The Company’s functional currency is the Canadian Dollar. The Company’s reporting currency is the U.S. Dollar. All transactions initiated in Canadian Dollars are translated to U.S. Dollars in accordance with SFAS No. 52 “Foreign Currency Translation” as follows:
(i)
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date;
(ii)
Equity at historical rates; and
(iii)
Revenue and expense items at the average rate of exchange prevailing during the period.
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
No significant realized exchange gains or losses were recorded from inception (May 30, 2006) to September 30, 2008.
Comprehensive Income (Loss)
SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. From inception (May 30, 2006) to September 30, 2008, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from inception (May 30, 2006) to September 30, 2008.
Cytta Corp.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-Based Compensation
The Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). The Company accounts for share-based payments to non-employees, in accordance with SFAS 123 (as originally issued) and Emerging Issues Task force Issue No 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.
Revenue Recognition
The Company recognizes revenue from the sale of products and services in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial Statements.” Revenue will consist of plant sales income and will be recognized only when all of the following criteria have been met:
(i)
Persuasive evidence for an agreement exists;
(ii)
Delivery has occurred;
(iii)
The fee is fixed or determinable; and
(iv)
Revenue is reasonably assured.
Recent Accounting Pronouncements
None of the following new pronouncements has current application to the Company, but will be implemented in the Company’s future financial reporting when applicable.
In May 2008, FASB issued Financial Accounting Standards No. 163, “Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.
Cytta Corp.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements (continued)
In May 2008, FASB issued Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.
In March 2008, FASB issued Financial Accounting Standards No. 161, “Disclosure about Derivative Instruments and Hedging Activities - an amendment to FASB Statement No. 133.” The use and complexity of derivative instruments and hedging activities have increased significantly over the past several years. Constituents have expressed concerns that the existing disclosure requirements in FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”, do not provide adequate information about how derivative and hedging activities affect an entity’s financial position, financial performance, and cash flows. Accordingly, this Statement requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.
In December 2007, FASB issued Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51.” This statement amends ARB No. 51 to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards of the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 is effective for fiscal years, and interim periods with those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends).
In December 2007, FASB issued a revision to Financial Accounting Standards No. 141 (revised 2007), “Business Combinations.” The objective of this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
NOTE 3 - CAPITAL STOCK
Authorized Stock
The Company has authorized 100,000,000 common shares and 100,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
Cytta Corp.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008 and 2007
NOTE 3 - CAPITAL STOCK (continued)
Share Issuance
From inception of the Company on May 30, 2006, the Company has issued 1,000,000 common shares at $0.005 per share, 2,000,000 common shares at $0.01 per share and 3,050,000 common shares at $0.02 per share resulting in total proceeds of $86,000 and 6,050,000 common shares issued and outstanding at September 30, 2008 and 2007. Of these shares, 3,000,000 were issued to directors and officers of the Company and 3,050,000 were issued to independent investors.
There are no preferred shares outstanding. The Company has issued no authorized preferred shares. The Company has no stock option plan, warrants, or other dilutive securities.
NOTE 4 -
PROVISION FOR INCOME TAXES
The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under SFAS No. 109 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Minimal development stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carryforwards generated during the period from May 30, 2006 (date of inception) through September 30, 2008 of approximately $60,629 will begin to expire in 2026. Accordingly, deferred tax assets of approximately $21,000 were offset by the valuation allowance that increased by approximately $12,100 and $7,900 during the year ended September 30, 2008 and 2007, respectively.
NOTE 5 -
GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As at September 30, 2008, the Company has a loss from operations of $34,282, an accumulated deficit of $60,629, and working capital of $25,371 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending September 30, 2008.
The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.
In response to these problems, management intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None. Not applicable.
ITEM 9AT. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have 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 of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared.
Management’s Annual Report on Internal Control Over Financial Reporting.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2008, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of September 30, 2008 was effective.
Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment. The internal controls for the Company are provided by executive management’s review and approval of all transactions.
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisitions, use, or disposition of the Company’s assets that could have a material affect on the Company’s financial statements are prevented or timely detected.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting.
There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
No items required to be reported on Form 8-K during the fourth quarter of the year covered by this report were not previously reported on Form 8-K.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
Executive Officers and Directors
Directors are elected by the stockholders to a term of one year and serve until their successor is elected and qualified. Officers are elected by the Board of Directors to a term of one year and serve until their successor is duly elected and qualified, or until they are removed from office. The Board of Directors has no nominating, auditing or compensation committees.
The following table sets forth certain information, as of November 15, 2008, with respect to our two officers and directors:
Name and Address
Age
Positions
Robert Gosine
Suite 640, 602-12th Avenue,
Calgary, AB, Canada, T2R 1J3
President, Chief Executive Officer, Chief Financial Officer, Treasurer and member of the Board of Directors
Amber-Dawn Bear Robe
3102 East Seneca Street
Tuscan, AZ, USA, 85716
Secretary and member of the Board of Directors
Robert Gosine has held the positions of President, CEO, CFO, Treasurer, and director since September 9, 2008. Amber-Dawn Bear Robe has held the position of Secretary and director since September 9, 2008. The persons named above are expected to hold said offices/positions until the next annual meeting of our stockholders.
Background of our Officer and Directors
Robert Gosine
Robert Gosine is a founding partner of Summit Search Group. He brings over twenty years of executive search experience. Prior to starting Summit Search Group, Robert was instrumental in establishing the premier search firm in the management, information technology, sales, and engineering fields within Atlantic Canada. Robert has been instrumental in building leading sales teams for large multi-national, national, and regional clients. He spent his early professional years in sales management roles within the consumer goods, high tech and service industries. Robert graduated from Dalhousie University with a Bachelor of Commerce.
Amber Bear Robe
Amber-Dawn Bear Robe is currently completing her MA thesis in American Indian Studies at the University of Arizona, Tucson. She completed a Curatorial Work-Study program at The Banff Centre's, Walter Phillips Gallery and interned at the University of British Columbia's Museum of Anthropology. Bear Robe received her Bachelor of Fine Arts in 1996 from The Alberta College of Art & Design and has since curated exhibitions of works from the
Walter Phillips Gallery's collection titled Ksakom Itapiks (Earth Beings) and LOGOINDIAN, an exhibition at the Glenbow Museum.
Involvement in Certain Legal Proceedings
To our knowledge, during the past five years, no present or former director or executive officer of our company: (1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer within two years before the time of such filing; (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodity laws; (4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment was not subsequently reversed, suspended or vacated; (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.
Board of Directors
None of our directors receive any remuneration for acting as such. Directors may however be reimbursed for their expenses, if any, for attendance at meetings of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees. No such committees have been appointed to date. Accordingly, we do not have an audit committee or an audit committee financial expert. We are presently not required to have an audit committee financial expert and do not believe we otherwise need one at this time due to our lack of material business operations. Similarly we do not have a nominating committee or a committee performing similar functions. Our entire board serves the functions of an audit committee and a nominating committee. We have not implemented procedures by which our security holders may recommend board nominees to us but expect to do so in the future, when and if we engage in material business operations.
We are not presently required to have independent directors. Our two directors, Robert Gosine and Amber-Dawn Bear Robe are not independent. If we ever become a listed issuer whose securities are listed on a national securities exchange or on an automated inter-dealer quotation system of a national securities association, which has independent director requirements, we intend to comply with all applicable requirements relating to director independence.
Employment Agreements
We have no employment contracts with any of our officers or employees.
Control Persons
The following shareholders are considered control persons, as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933.
Name and Address
Age
Positions
Chad Rutherford
710 West 16th Avenue,
Vancouver, BC, Canada, V5Z 1S7
Shareholder
Brad Prystupa
19 - 2100 Boucherie Road
Westbank, BC, Canada, V4T 2X1
Shareholder
Compliance with Section 16(a) of the Exchange Act
Because we do not have a class of equity securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership with the SEC under Section 16(a) of the Exchange Act.
Audit Committee and Audit Committee Financial Expert Disclosure
The Company’s Board of Directors does not have a separately designated audit committee and an “audit committee financial expert”. Audit committee functions are performed by our board of directors. None of our directors are deemed independent. All directors also hold positions as our officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.
The Board of Directors does not have an audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services of a financial expert are not warranted.
Code of Ethics
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrong doing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics is attached as Exhibit 14.1, to our 10-KSB filed on December 27, 2007 with the Securities and Exchange Commission. We will also provide to any person, without charge and upon request, a copy of the code of ethics. Any such request must be made in writing to us at, Suite 640, 602-12th, Avenue, Calgary, Alberta, T2R 1J3.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information concerning the total compensation paid or accrued by us during the year ended September 30, 2008 and the period ended September 30, 2007 to
(i)
all individuals serving as Cytta’s principal executive officer or acting in a similar capacity during the last completed fiscal year (“PEO”), regardless of compensation level;
(ii)
Cytta’s two most highly compensated executive officers other than the PEO who (A) served as executive officers at the end of the last completed fiscal year and (B) received annual compensation during the last completed fiscal year in excess of $100,000; and
(iii)
up to two additional individuals for whom disclosure would have been provided pursuant to subsection (ii) of this paragraph but for the fact that the individual was not serving as an executive officer of Cytta at the end of the last completed fiscal year.
Mr. Rutherford was paid a management fee for services rendered prior to his resignation. However, none or our current our officers and/or directors is being compensated for their services during the development stage of our business operations.
The officers and directors are reimbursed for any out-of-pocket expenses they incur on our behalf. In addition, in the future, we may approve payment of salaries for our officers and directors, but currently, no such plans have been approved. We also do not currently have any benefits, such as health insurance, life insurance or any other benefits available to our employees.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards
Stock Awards
Name
Number of Securities Underlying Unexercised Options (#) Exercisable
Number of Securities Underlying Unexercised Options (#) Unexercisable
Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options (#)
Option Exercise Price ($)
Option Expiration Date
Number of Shares or Units of Stock That Have Not Vested (#)
Market Value of Shares or Units of Stock That Have Not
Vested ($)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)
Robert Gosine
Amber-Dawn Bear Robe
Brad Prystupa
Chad Rutherford
We have not issued any stock options or maintained any stock option or other incentive plans since our inception. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Similarly, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer’s responsibilities following a change in control.
As of the date hereof, we have not entered into employment contracts with any of our officers and do not intend to enter into any employment contracts until such time as it profitable to do so.
Compensation of Directors
None of our directors receive any compensation for serving as such, for serving on committees of the Board of Directors or for special assignments. During the fiscal year ended September 30, 2008, there were no other arrangements between us and our directors that resulted in our making payments to any of our directors for any services provided to us by them as directors.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of November 15, 2008 by (i) each person or entity known by us to be the beneficial owner of more than 5% of our common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directors and executive officers as a group. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on such date and all shares of our common stock issuable to such holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by such person at said date which are exercisable within 60 days of such date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.
Title of Class
Name of Beneficial Owner
Amount and Nature of Beneficial Ownership
Percent of Class
Common Stock
Robert Gosine
100,000
1.7%*
Common Stock
Amber-Dawn Bear Robe
0%
All officers and directors as a group (2 people)
100,000
1.7%
Common Stock
Chad Rutherford
2,000,000
33.1%
Common Stock
Brad Prystupa
1,000,000
16.5%
* The percentage ownership is calculated based on 6,050,000 shares of our common stock issued and outstanding as of November 15, 2008.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
In May and September, 2006, we issued a total of 3,000,000 shares of restricted common stock to Chad Rutherford and Brad Prystupa, our then directors and officers. This was accounted for as an acquisition of shares of common stock in the amount of $25,000. These shares of common stock are restricted securities, as defined in Rule 144 of the Rules and Regulations of the SEC (“Rule 144”) promulgated under the Securities Act. Robert Gosine’s shares were purchased from our public offering and are not restricted, but the re-sale of such shares may be limited pursuant to the volume restrictions of Rule 144.
Mr. Gosin and Ms. Bear Robe, our sole directors, are not independent under the independence standards under Item 407(a)(1) of Regulation S-B.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
The aggregate fees billed by our principal accountant for services rendered during the fiscal year ended September 30, 2008 and 2007, respectively, are set forth in the table below:
Fee Category
Year ended
September 30, 2008
Year Ended
September 30, 2007
Audit fees (1)
$ 6,875
$ 4,250
Audit-related fees (2)
$
$
Tax fees (3)
$ 500
$ 507
All other fees (4)
Total fees
$ 7,375
$ 4,757
(1)
“Audit fees” consists of fees incurred for professional services rendered for the audit of annual financial statements, for reviews of interim financial statements included in our quarterly reports on Form 10-QSB and for services that are normally provided in connection with statutory and regulatory filings or engagements.
(2)
“Audit-related fees” consists of fees billed for professional services that are reasonably related to the performance of the audit or review of our financial statements, but are not reported under “Audit fees.”
(3)
“Tax fees” consists of fees billed for professional services relating to tax compliance, tax advice and tax planning, consisting of preparation of our corporate tax returns for the year ended September 30,
2007 and the period ended September 30, 2006. Our principal accountants are currently preparing the 2008 tax return.
(4)
“All other fees” consists of fees billed for all other services.
Audit Committee’s Pre-Approval Policies and Procedures
We do not at this time have an audit committee, therefore, no policies or procedures other than those required by SEC rules on auditor independence, have been implemented. The Board of Directors will have to pre-approve the engagement of our principal independent accountants to provide non-audit services. Non-audit services, consisting of the preparation of corporate tax returns by our principal independent accountants in 2007 and 2006, were not pre-approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. Section 10A(i) of the Securities Exchange Act of 1934 prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the Board of Directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibits
The following Exhibits are being filed with this report on Form 10-K:
Exhibit No.
SEC Report Reference Number
Description
3.1
3.1
Articles of Incorporation of Registrant. (1)
3.2
3.2
Bylaws of Registrant. (1)
14.1
14.1
Code of Ethics. (2)
Consent of Moore & Associates, Chartered. (3)
31.1
Rule 13(a) - 14(a)/15(d) - 14(a) Certification of Principal Executive and Financial Officer. (3)
32.1
Rule 1350 Certification of Chief Executive and Financial Officer. (3)
(1)
Filed with the Securities and Exchange Commission on December 28, 2006 as an exhibit, numbered as indicated above, to the Registrant’s registration statement on the Registrant’s Registration Statement on Form SB-2 (file no. 333-139699), which exhibit is incorporated herein by reference.
(2)
Filed with the Securities and Exchange Commission on December 27, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Annual Report on Form 10-KSB (file no. 333-139699), which exhibit is incorporated herein by reference.
(3)
Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: December ___,2008
CYTTA CORP.
By:/s/ Robert Gosine
Name:
Robert Gosine
Title:
President (principal
Executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Robert Gosine
Robert Gosine
President (principal executive officer), Chief Financial Officer (principal financial officer), Treasurer, and member of the Board of Directors
December 1, 2008
/s/ Amber-Dawn Bear Robe
Amber-Dawn Bear Robe
Secretary, and member of the Board of Directors
December 1, 2008