10QSB 1 cyttaqsb63008final.htm 10QSB File No



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

Quarterly Report under Section 13 or 15 (d) of

Securities Exchange Act of 1934


For the quarterly period ended June 30, 2008


Commission File Number 333-139699


CYTTA CORP.

(Name of small business issuer in its charter)


Nevada                        

  98-0505761

(State of incorporation)

   (IRS Employer ID Number)

                                                 


710 West 16th Avenue

Vancouver, British Columbia, Canada, V5Z 1S7

604-760-4440

(Address and telephone number of principal executive offices)



Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


  Yes          X    No  _____         



Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


  Yes            X     No  ______       


There were 6,050,000 shares of Common Stock outstanding as of August 1, 2008.


Transitional Small Business Disclosure Format: [   ] Yes [X] No


 





ITEM 1.  FINANCIAL STATEMENTS.



The accompanying condensed unaudited financial statements of Cytta Corp., a Nevada corporation are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's most recent annual financial statements for the year ended September 30, 2007 included in a Form 10-KSB filed with the U.S. Securities and Exchange Commission (“SEC”) on December 27, 2007. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed financial statements for the period ended June 30, 2008 are not necessarily indicative of the operating results that may be expected for the full year ending September 30, 2008.



2














CYTTA CORP.

(A Development Stage Company)


INTERIM FINANCIAL STATEMENTS


JUNE 30, 2008


(Unaudited)










3




Cytta Corp.

(A Development Stage Company)

Interim Balance Sheets






ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at

 

 

As at

 

 

 

 

 

June 30,

 

 

September 30,

 

 

 

 

 

2008

 

 

2007

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

34,706

 

$

63,009

 

 

Prepaid expenses

 

-

 

 

               818

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

$

34,706

 

$

             63,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

$

2,675

 

$

4,174

 

 

Due to shareholder

 

-

 

 

               -

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

2,675

 

 

4,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

   Capital Stock (Note 3)

 

 

 

 

 

 

 

Authorized:

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Issued and outstanding shares:

 

 

 

 

 

 

 

   6,050,000 common shares

 

6,050

 

 

6,050

 

 

Additional paid-in capital

 

79,950

 

 

79,950

 

 

Deficit accumulated during the development stage

 

(53,969)

 

 

(26,347)

 

  Total Stockholders' Equity

 

32,031

 

 

59,653

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

34,706

 

$

63,827






-The accompanying notes are an integral part of these financial statements -




4




Cytta Corp.

(A Development Stage Company)

Interim Statements of Operations

(Unaudited)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inception

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(May 30, 2006) to

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Nine Months Ended June 30,

 

 

June 30,

 

 

 

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

                     -   

 

$

                     -   

 

$

-

 

$

-

 

$

                     -   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

 

3,040

 

 

1,965

 

 

8,295

 

 

7,007

 

 

31,500

 

 

General and administrative

 

 

5,567

 

 

502

 

 

19,327

 

 

1,314

 

 

22,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

8,607

 

 

2,467

 

 

27,622

 

 

8,321

 

 

53,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss for the Period

 

$

(8,607)

 

$

(2,467)

 

$

(27,622)

 

$

(8,321)

 

$

(53,969)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

common share

 

$

(0.001)

 

$

(0.001)

 

$

(0.005)

 

$

(0.003)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

common shares outstanding

 

 

6,050,000

 

 

3,000,000

 

 

6,050,000

 

 

3,000,000

 

 

 





-The accompanying notes are an integral part of these financial statements -




5




Cytta Corp.

(A Development Stage Company)

Interim Statement of Changes in Stockholders’ Equity

For the Period of May 30, 2006 (Inception) to June 30, 2008






 

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

During the

 

 

 

 

 

Common Stock

 

Paid-in

 

Development

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Stage

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inception - May 30, 2006

 

 

                  -

 

$

                  -

 

$

                  -

 

$

              -

 

$

-

   Common shares issued to a founder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      at $0.005 cash per share

 

 

    1,000,000

 

 

           1,000

 

 

           4,000

 

 

              -

 

 

5,000

   Common shares issued to founders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      at $0.01 cash per share

 

 

    2,000,000

 

 

           2,000

 

 

         18,000

 

 

              -

 

 

20,000

   Loss for the period

 

 

                  -

 

 

                  -

 

 

                  -

 

 

      (3,032)

 

 

(3,032)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - September 30, 2006

    3,000,000

 

$

3,000

 

$

22,000

 

$

(3,032)

 

$

21,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Common shares issued for cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      at $0.02 per share

 

 

    3,050,000

 

 

           3,050

 

 

57,950

 

 

              -

 

 

61,000

   Loss for the year

 

 

                  -

 

 

                  -

 

 

                  -

 

 

    (23,315)

 

 

(23,315)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - September 30, 2007

 

    6,050,000

 

$

           6,050

 

$

         79,950

 

$

    (26,347)

 

$

59,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Loss for the period

 

-

 

 

-

 

 

-

 

 

(27,622)

 

 

(27,622)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – June 30, 2008 (unaudited)

 

6,050,000

 

$

6,050

 

$

79,950

 

$

(53,969)

 

$

32,031







-The accompanying notes are an integral part of these financial statements -




6




Cytta Corp.

(A Development Stage Company)

Interim Statements of Cash Flows

(Unaudited)






 

 

 

 

 

 

 

 

 

 

Cumulative from

 

 

 

 

 

 

 

 

 

 

Inception

 

 

 

 

 

 

 

 

 

 

(May 30, 2006) to

 

 

 

 

 

Nine Months Ended June 30,

 

June 30,

 

 

 

 

 

2008

 

 

2007

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Net loss

$

(27,622)

 

$

(8,321)

 

$

(53,969)

 

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

 

 

 

 

 

Decrease in prepaid expenses

 

818

 

 

3,266

 

 

-

 

 

Increase (decrease) in accounts payable and accrued liabilities

 

(1,499)

 

 

550

 

 

2,675

 

 

 

Net Cash Used in Operating Activities

 

(28,303)

 

 

(4,505)

 

 

(51,294)

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by (Used in) Investing Activities

 

-

 

 

                   -

 

 

                   -

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Issuance of capital stock

 

-

 

 

-

 

 

86,000

 

 

Advances from related party

 

-

 

 

900

 

 

-

 

 

Share subscriptions received in advance

 

-

 

 

51,500

 

 

-

 

 

 

Net Cash Provided by Financing Activities

 

-

 

 

52,400

 

 

86,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(28,303)

 

 

47,895

 

 

34,706

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

63,009

 

 

19,993

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

34,706

 

$

67,888

 

$

34,706

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents Consist of:

 

 

 

 

 

 

 

 

 

 

Cash

 

-

 

 

16,388

 

 

-

 

 

Funds held in trust

 

-

 

 

51,500

 

 

-

 

 

 

$

-

 

$

67,888

 

$

-

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures:

 

 

 

 

 

 

 

 

 

 

Cash paid for Interest

$

                   -

 

$

                   -

 

$

                   -

 

 

Cash paid for Income Taxes

$

                   -

 

$

                   -

 

$

                   -



-The accompanying notes are an integral part of these financial statements -




7




Cytta Corp.

(A Development Stage Company)

Notes to Interim Financial Statements

June 30, 2008




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 $34,706 and $63,827 in cash and cash equivalents at June 30, 2008 and September 30, 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.





8




Cytta Corp.

(A Development Stage Company)

Notes to Interim Financial Statements

June 30, 2008




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 June 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 June 30, 2008, the Company had no items of other comprehensive income.  Therefore, net loss equals comprehensive loss from inception (May 30, 2006) to June 30, 2008.


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



9




Cytta Corp.

(A Development Stage Company)

Notes to Interim Financial Statements

June 30, 2008



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.




10




Cytta Corp.

(A Development Stage Company)

Notes to Interim Financial Statements

June 30, 2008



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.


In February 2007, FASB issued Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.”  This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments.  SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.



11




Cytta Corp.

(A Development Stage Company)

Notes to Interim Financial Statements

June 30, 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.


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 June 30, 2008. 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 June 30, 2008 of approximately $53,969 will begin to expire in 2026. Accordingly, deferred tax assets of approximately $18,400 were offset by the valuation allowance that increased by approximately $9,400 and $2,900 during the nine month period ended June 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 June 30, 2008, the Company has a loss from operations of $27,622, an accumulated deficit of $53,969, and working capital of $32,031 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.



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ITEM 2.  PLAN OF OPERATION.


Results of Operations


We are a development stage corporation.  We have generated no revenues from our business operations since inception and have incurred $53,969 in expenses through June 30, 2008.

The following table provides selected financial data about our company for the period ended June 30, 2008.  

Balance Sheet Data

June 30, 2008

June 30, 2007

Cash and cash equivalents

$

34,706

$

16,388

Total assets

$

34,706

$

17,972

Total liabilities

$

2,675

$

55,825

Shareholders’ equity

$

32,031

$

69,472


Net cash provided by financing activities since inception (May 30, 2006) through June 30, 2008 was $86,000, raised from the sale of our common stock.

Plan of Operation

Our auditors have issued a going concern opinion on our September 30, 2007 audited financial statements, refer to note 5. This means that there is substantial doubt that we can continue as an ongoing 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 and there is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from other sources. Our only other source for cash at this time is investments by others. We must raise cash to stay in business. We raised $61,000 from our public offering. Under this offering we sold 3,050,000 shares at $0.02 per share to 41 shareholders. These shares, together with 3,000,000 shares sold to two directors upon inception for $25,000, brings the total proceeds received from stock sales to $86,000, the total number of shares issued to 6,050,000 shares, and the total number of shareholders to 43.

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.



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During the next 12 months from the date of this filing, Cytta will concentrate on developing its website, finding advertisers, and marketing those services offered by our customers.  We have begun development of the website www.greattradespeople.com.  

We have been unable to effectively launch our website, due to deteriorating economic conditions,  When conditions improve, 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 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 first year of operations, our officers and directors will also provide their labor at a charge of $15,000. We do not anticipate hiring any staff during the first twelve 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 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 in the Use of Proceeds section of the prospectus filed pursuant to our SB-2 registration statement. 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.



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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 June 30, 2008, our cash was $34,706, our total assets were $34,706 and our total liabilities were $2,675.

ITEM 3.  CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our principal executive officer and 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 and 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, particularly during the period when this report was being prepared.


Additionally, 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.



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PART II – OTHER INFORMATION


ITEM 6.   EXHIBITS


The following exhibits are included with this quarterly filing.


Those marked with an asterisk(*) and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our Form SB-2 Registration Statement, SEC File Number 333-139699, on the SEC website at www.sec.gov:


Exhibit

Number

Description


3.1

Articles of Incorporation*

3.2

Bylaws*

31.1

Rule 13a-14(a)/15d-14a(a) Certifications

32.1

Section 1350 Certifications



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SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 11th day of August, 2008.





    

CYTTA CORP. (Registrant)


By:

/s/ Chad Rutherford

______________________________

President (principal executive officer),

Chief Financial Officer (principal financial officer),

Treasurer, and member of the Board of Directors



/s/ Brad Prystupa

______________________________

Secretary and member of the Board of Directors