CYTTA CORP. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Edgar Glimpses Via Acquire Media NewsEdge) 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, 2013. 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
All references in this Form 10-Q to the "Company," "Cytta," "we," "us," or "our"
are to Cytta Corp.
Results of Operations
We are an early stage corporation engaged in perfecting our technological model
and introducing it into the marketplace. We have generated Gross Revenues to
date of $60,892 from our business operations since inception and have incurred $
466,996 in expenses this quarter.
The following table provides selected financial data about our Company as of
June 30, 2014 and September 30th, 2013, respectively.
Balance Sheet Data June 30, 2014 September 30, 2013
Cash and cash equivalents $13,191 $188,068
Total Assets $56,901 $245,704
Total Liabilities $460,256 $476,837Shareholder Equity (Deficit) $(56,901) $(231,133)
Net cash used in operating activities during the quarter was $620,722
Plan of Operation
Cytta Corp currently delivers real-time digital Health and Wellness and Oil &
Gas monitoring information utilizing any manufacturers' Bluetooth enabled
monitoring device through Cellular, Satellite or WiFi connections utilizing our
unlocked Android Smartphones powered by AT&T's new leading edge 4G LTE Sims.
Our recent upgrading of our Agreement with AT&T has allowed Cytta to introduce
the new AT&T 4G LTE voice and data Sims and accompanying Jasper platform real
time SIM monitoring capability.
These new AT&T 4G LTE Subscriber Identity Modules (SIMs) are advanced smart
cards placed inside of our GSM android cellular phones that encrypts voice and
data transmissions and stores data about the specific user so that the user can
be identified and authenticated to the network supplying the phone service. The
SIM also stores data such as personal phone settings specific to the user and
phone numbers. We control our SIMs and thus Android smartphones in real time
through the Jasper web interface.
AT&T SIMs support two layers of 4G technology on their nationwide mobile
broadband network. High Speed Packet Access+ (HSPA+) with enhanced backhaul,
which transfers data throughout our growing network, provides extended and
improved speeds up to 4x faster than 3G and Long Term Evolution (LTE) serves as
the next step following 4G (HSPA+) in increasing speeds up to 10x faster than 3G
to meet the demands of today's users accessing a variety of content over mobile
The new AT&T 4G LTE SIMs provide Cytta with several benefits, such as: Faster
speeds - LTE technology is capable of delivering speeds faster than many other
mobile Internet technologies. Customers can stream, download, upload and game
faster than ever before. Reliability - AT&T not only has the nation's most
reliable 4G LTE network. According to independent third-party data, AT&T has the
highest success rate for delivering mobile content across nationwide 4G LTE
networks. Cool new devices - AT&T's technology works with several
LTE-compatible devices, including appropriate 4G LTE smartphones and tablets.
Faster response time - LTE technology offers lower latency, or the processing
time it takes to move data through a network, such as how long it takes to start
downloading a webpage or file.
Cytta has for several years been designing and building an open source ecosystem
that would allow any Bluetooth device to automatically send its data to our
specially provisioned Android SmartPhone and then instantly (using WiFi,
Cellular or satellite) pass that data from the smartphone to our cloud based
data repository and interactive cloud based display platform. The data is
delivered from there to our client's server based EMR or EOR, which is
automatically populated with the data readings and information, and utilizing
our proprietary interpretation program rendered into actual medical or O&G
readings. The completion of the Cytta Connect system now allows individuals,
patients, their caregiver or medical provider and O&G operators to review and
monitor everything on an ongoing basis.
Our specially programmed android smartphones powered with the new Sims,
utilizing our proprietary software platform deliver the any monitoring
equipment's data automatically to our Cloud based data repository, the
Electronic Data Repository (EDR), and from there to any existing or customized
Electronic Medical Record (EMR) platform or Electronic O&G Record (EOR) located
in the client's computer network. The new Sims also allows each of our
smartphones to deliver full 4G LTE voice capability.
Health and Wellness
The Cytta Connect health and wellness solution is completely HIPAA secure, 100%
reliable, easily portable, and customizable using any FDA or non FDA equipment
that the clients want. Cytta Connect Special Purpose Network and Cloud based
Electronic Data Repository (EDR) connects anyone, anywhere, anytime. Cytta makes
any Bluetooth health, wellness or fitness device report their data from remote
locations seamlessly via our cloud based Instant EBR & proprietary Mobile
Network for instant real-time data access.
Cytta's technology called Cytta ConnectTM is the backbone of the world's first
open source Special Purpose Medical Network. Cytta's proprietary technology
disrupts and innovates the 2 fastest growing health markets that need to collect
data & reduce costs: Our unique and proprietary system allows us to connect all
forms of Bluetooth enabled monitoring devices (FDA and Non FDA) seamlessly
through an Android Smartphone and deliver the data in real-time to a cloud based
data repository which can easily be customized to our client's requirements.
Cytta Connect is a Remote Data Capture system connecting Bluetooth devices to
online Electronic Biometric Records (EBR). Our remote data capture system works
over our Special Purpose NetworkTM, a proprietary Global Mobile, Satellite,
WiFi, and Cloud-based data Network that connects all Bluetooth medical, fitness
and wellness devices to Cytta's open source EBR. Our open source EBR is for use
by patients, doctors, caregivers, health insurers (Professional Care) with our
preprogrammed Cytta smartphones, and any wellness or fitness user (Consumer)
with any cellular carrier's smartphone.
We serve two very large Medical markets:
1) Professional Care (Double FDA approved medical devices) works with our
specially programmed smartphones and provides care for the chronically ill who
need to be remotely monitored. Caregivers have diagnostic capability using our
Instant EBR and secure biometric data transfers via Cytta's Special Purpose
Network. We interconnect patients, their data and caregivers. We manage vital
sign monitoring of chronic care customers and integrate FDA compliant data
results for use by Physicians, Hospitals, Accountable Care Organizations and
2) Consumer Wellness (Any and all Bluetooth devices) works with any Carrier's
mobile phone and leverages our proprietary Universal Application and Instant EBR
to support Wellness & Fitness consumers. We aid in managing Weight Loss,
Wellness, Fitness, Health Data Collection for medical review, Specialized Health
Social Network, Personal Safety & Security.
The Cytta ConnectTM system is a cost effective system that works with any
manufacturers' off the shelf Bluetooth enabled monitoring device and any Android
Smartphone. The Cytta Connect system works seamlessly everywhere there is
cellular or satellite service. Cytta Connect is currently implementing systems
to monitor, COPD, Asthma, Diabetes, Hypertension and Obesity as well as several
major causes of hospital readmission
The Company's Medical Smartphone contains proprietary device resident or
"native" programming, consisting of a "Firmware Client" or downloadable device
resident application or platform for which the Company owns the software. This
application for the phones is designed to automatically receive Bluetooth data
and perform autonomous control and connectivity functions utilizing the voice,
data and SMS capability of the Smartphone or tablet. When the Platform is
installed on the Cytta Medical Smartphone, it automatically receives the medical
data and utilizes the Company's wireless telecommunication services, to transmit
the data through the cellular network to Cytta's proprietary online or Cloud
based Cytta Data repository Dashboard called the 'Instant EMRTM'.
From the Online or Cloud based Cytta Data repository Dashboard or 'Instant
EMRTM' the data can be utilized as part of 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 patient
monitoring. These Medical Groups contract with Cytta and are responsible for
installing, monitoring and financing the system in the homes of their clients
who require monitoring.
The Company has currently entered into agreements with respected medical device
manufacturers A&D Medical, Nonin Medical, ForaCare, and Entra Health, which have
allowed Cytta to design our ecosystem to incorporate their double FDA approved
medical monitoring devices to for measurement of Blood Pressure, Glucose Values,
Weight, Temperature, Pulse, and Oxygen Saturation. The Company is now capable of
adding any Bluetooth remote monitoring device to the Cytta Connect ecosystem
whether FDA approved or Non FDA approved and is currently working to add PT/INR,
ECG Rhythms, Respiration, and a personal emergency response system (PERS) into
the Cytta Ecosystem.
The Company had its first trial installations of the complete Cytta Ecosystems
in September 2011 in the US, with two Medical Group clients wishing to utilize
and or participate in the Company's "medical monitoring ecosystem'.
In March 2012 the Company commenced its first major installation, product
evaluation and Pilot program with a major medical Insurance Co/Payor. The
Company also delivered its second round of orders to its first two medical group
clients. In January 2013 the Company received the final 6 Month Pilot Program
Whitepaper dated September 30, 2012, independently prepared by the major medical
Insurance Co/Payor with whom the Pilot program was conducted. The conclusions
of their Independent Whitepaper stated,
"This trial demonstrated the ability to significantly reduce costs for high risk
patients through use of the CYTTA Connect Ecosystem. The trial demonstrated the
ability to quickly achieve cost savings, decrease resource utilization, improve
care coordination, and increase adherence to evidence based guidelines.
Care costs were reduced on average by $11,078 [or $1,846 per member per month]
for each trial participant. This trial did not specifically address long term
cost of care. However, these patients were selected for the inabilities of the
existing healthcare system and care coordination programs to cost effectively
address their short or long term healthcare needs. One trial participant noted
he realized more value and benefit in 2 months of trial participation compared
to his previous 17 months of participation in the best available care
The rollout of Obamacare has created great interest in the implementation of the
Company's technology. However payment and pricing throughout the Industry is
still being developed and we are still awaiting several implementation decisions
by major players.
The Company has entered into an Agreement with Doctor Direct Inc. to market the
Cytta Connect technology into various medical vertical submarkets. As of June
29th, 2014 Cytta through the Doctor Direct marketing program had entered into
two contracts to supply the Cytta Connect system to two family practices in Las
Vegas. The initial systems were supplied to the two practices and preliminary
presentations to their clients had begun. As of today's date the specific
backend for the medical groups has been completed and the initial client rollout
is proceeding with the first devices now in the hands of the initial
Oil & Gas
After the completion of the technology for the medical marketplace the Company
began examining other unrelated vertical markets who could utilize the Cytta
Connect highway to move data from remote locations. With the addition of the
Home2Phone license and the access to the impressive collection of OrbComm
satellite solutions it was determined that our "Data Highway' could be easily
utilized to provide connectivity in the worldwide O&G industry. Working with
several O&G industry partners we are currently discussing designing systems to
deploy with their clients.
The Cytta Connect O&G solution is a completely secure, encrypted, 100% reliable,
easily portable, and customizable using any form of monitoring equipment that
the clients want. Cytta Connect Special Purpose Network and Cloud based
Electronic Data Repository (EDR) connects anyone, anywhere, anytime. Cytta makes
any monitoring device report their data from remote locations seamlessly for
instant real-time data access. The Cytta Connect Network provides a complete
system for monitoring cellular and or satellite accessible locations worldwide.
Most interestingly because of the design of the Cytta Connect Network, it can
operate as a SCADA system. SCADA is an Acronym for Supervisory Control And Data
Acquisition, and is used to a computer system for gathering and analyzing real
time data and then ultimately controlling the devices providing the data.
Ultimately the two way data transfer capability of the Cytta Special Purpose
Network makes it an ideal SCADA system. SCADA systems are used to monitor and
control a plant or equipment in industries such as telecommunications, water and
waste control, energy, oil and gas refining and transportation. A SCADA system
gathers information, such as where a leak on a pipeline has occurred, transfers
the information back to a central site, alerting the home station that the leak
has occurred, carrying out necessary analysis and control, such as determining
if the leak is critical, and displaying the information in a logical and
organized fashion and then sending the appropriate commands to the site causing
the device to turn on, off or perform some other crucial function remotely.
Cytta currently has limited 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 implementation of our systems in
several medical markets, O&G and other markets and the installation thereof.
Cytta currently has one executed transaction with a medical group and one
medical group discussing implementation. Additionally, the Company has two
contracts in Las Vegas for which it is delivering systems.
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 administration, marketing, health care and O&G arenas.
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 have engaged in significant product research and development over
the past years while the technology and system was being developed. The
Company's business may cause us to engage in further 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 immediate plans to add employees and we will continue
to do so in the future as a result of the operations related to the marketing of
Liquidity and Capital Resources
Our cash and cash equivalents balance as of June 30, 2014 was $13,191.
We currently have limited marketing operations however our business model is to
license these activities to skilled partners in each vertical market.
We have limited funds on hand to pursue our business objectives for the near
future however we cannot commence full scale operations without seeking
additional funding and/or the appropriate business partners. 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, management and other related and
non-related parties to pay general operating costs. As of June 30, 2014, we had
$ 438,100 in loans to these individuals outstanding.
We have minimal operating costs and expenses at the present time due to our
frugal business model. Currently our operating activities (technical integration
and partner development) in the healthcare and O&G arena are conducted by our
senior Officers and engaged consultants who earn equity in the Company for their
endeavors. We will, however, be required to raise additional capital over the
next twelve months to meet our current administrative expenses and to further
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.
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 with the exception of the Cytta Connect
LLC joint venture which has no current operations. We have not guaranteed any
debt or commitments of other entities or entered into any options on
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