CYTTA CORP S-1, filed Jun 28, 2021
CYTTA CORP. (CYCA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
| CYTTA CORP. |
| (Exact name of Registrant as specified in its charter) |
| Nevada |
| 7389 |
| 98-0505761 |
| (State or other jurisdiction of |
| (Primary Standard Industrial Classification Code) |
| (I.R.S. Employer Identification No.) |
5450 W Sahara Avenue, Suite 300A
Las Vegas, NV 89146
Telephone: (702) 900-7022
(Address and Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)
NPC World Services Inc.
5450 W Sahara Avenue, Suite 300
Las Vegas, NV 89146
Telephone: (702) 866-2500
(Name, Address, and Telephone Number for Agent of Service)
Copies to:
BRUNSON CHANDLER & JONES, PLLC
Walker Center
175 S. Main Street, Suite 1410
Salt Lake City, UT 84111
Attn: Lance Brunson, Esq.
Telephone: (801) 303-5737
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company smaller reporting, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated Filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
Calculation of Registration Fee
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| Proposed Maximum Aggregate Price Per Share |
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| Common Stock, par value $0.001 (2) |
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| 44,600,000 |
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| $ | 0.15 | (3) |
| $ | 6,690,000 | $ | 729.88 |
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| $ | 6,690,000 | $ | 729.88 |
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________________
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| (1) | In accordance with Rule 416(a), this registration statement shall also cover an indeterminate number of shares that may be issued and resold resulting from stock splits, stock dividends or similar transactions. |
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| (2) | Shares of common stock issued and outstanding to be sold by the selling stockholders. |
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| (3) | Based on the average of the high and low prices of the registrant’s common stock on June 24, 2021, in accordance with Rule 457(c). After our shares are either listed on a national securities exchange or quoted on the OTC Bulletin Board, OTCQX, or OTCQB, the shares offered hereunder may be sold by the selling stockholders from time to time in the open market, through privately negotiated transactions, via a combination of these methods at market prices prevailing at the time of sale, or at negotiated prices. |
The offering price of the common stock has been arbitrarily determined and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, historical earnings or net worth. The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING SECURITY HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY OR SELL THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED _______________, 2021
CYTTA CORP.
44,600,000 Shares
This prospectus relates to the offer for sale of up to 44,600,000 shares of our common stock by certain existing holders of the securities, referred to as “Selling Security Holders” throughout this document. The total number of shares registered in this prospectus is 44,600,000 shares of common stock. We will not receive any of the proceeds of this offering.
Our common stock is quoted on the OTC Link LLC alternative trading system (“OTC Link”), operated by OTC Markets Group, Inc., under the symbol “CYCA”. As of June 24, 2021, the last reported sale price for our common stock was $0.165 per share. Prior to this offering, there has been a limited market for our securities. While our common stock is quoted on the OTC Link, there has been negligible trading volume, and the price at which the shares are being offered bears no relationship to conventional criteria such as book value or earnings per share. The Company has determined the offering price based primarily on the limited historical trading of our common stock. There can be no assurance that the offering price bears any relation to the current fair market value of the common stock.
Therefore, purchasers of our shares registered hereunder may be unable to sell their securities, because there may not be a public market for our securities. As a result, you may find it more difficult to dispose of, or obtain accurate quotes for, our common stock. Any purchasers of our securities should be in a financial position to bear the risks of losing their entire investment.
The Selling Security Holders will be offering their shares of common stock at a price of $0.15 per share until our shares are either listed on a national securities exchange or quoted on the OTC Bulletin Board, OTCQX, or OTCQB, and thereafter at prevailing market prices or privately negotiated prices. No underwriting arrangements have been entered into by any of the Selling Security Holders. The Selling Security Holders and any intermediaries through whom such securities are sold may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) with respect to the securities offered, and any profits realized or commissions received may be deemed underwriting compensation. For more information regarding the Selling Security Holders, see the section titled “Selling Security Holders” herein.
This offering is highly speculative, and these securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” beginning on page 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of This Prospectus is: ___________________
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You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. The Selling Security Holders are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
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| Table of Contents |
This summary highlights some information from this prospectus, and it may not contain all of the information that is important to you. You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering, including “Risk Factors” and our consolidated financial statements and related notes, included elsewhere in, or incorporated by reference into, this prospectus.
ABOUT OUR COMPANY
Overview
Cytta Corp. (“Cytta”) was founded in 2006, and since 2014, Cytta has focused on developing and marketing video compression-based software and hardware products, using technology based upon the SUPR (Superior Utilization of Processing Resources) video compression codec/algorithm. Cytta currently develops, markets, and distributes proprietary video streaming products and services that improve how video is streamed, consumed, transferred, and stored in enterprise environments.
Cytta’s primary business focus is the development of video streaming products and services that utilize our SUPR compression codec/algorithm and our related industry experience. We design and develop innovative and effective video compression-based software, and hardware products utilizing our software and video-streaming technological knowledge. We also offer a combination of technical and consulting services, proprietary software products, hardware products utilizing our software and system integration team to meet the needs of customers. Cytta places extreme value on satisfying our customers’ needs with innovative well-engineered, high-quality products and service solutions.
Company Information
Our products and services include advanced video streaming systems, video/audio collaboration software, and integrated hardware systems utilizing both on-premise deployments or cloud-based deployments, that are delivered widely through a variety of flexible and interoperable technology deployment models. These models include software deployments, combined software/hardware deployments, utilizing either on-premises deployments, or cloud-based deployments. We have created advanced video compression systems, video/audio collaboration software, and integrated hardware systems to solve streaming problems in various markets.
The Company’s access to the SUPR Compression codec/algorithm enabled it to utilize the video streaming capabilities of this proprietary technology to develop new software and hardware technology, methodologies, and products. Our advanced video compression systems, video/audio collaboration software, and integrated hardware systems solve streaming problems in various markets. These products are being developed, sold, licensed, and serviced by Cytta today. Our access to this streaming technology has also created access to a network of people in the video streaming industry or those that utilize critical video streaming services that generate sales leads and ultimately revenue for Cytta.
Further company information, including a description of the Company’s products and customers, is found on page 26.
Use of Certain Defined Terms
Except as otherwise indicated by the context, references in this report to:
| • | “Cytta,” “Cytta Corp.,” “we,” “us,” or “our,” “registrant,” “Successor” and the “Company” are references to the business of Cytta Corp. |
| • | “Securities Act” refers to the Securities Act of 1933, as amended, and “Exchange Act” refers to the Securities Exchange Act of 1934, as amended. |
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Commission’s Position on Indemnification for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions of its Articles of Incorporation, Bylaws, and the relevant provisions of Chapter 78 of the Nevada Revised Statutes governing corporations, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer of controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Where You Can Find Us
Our corporate headquarters are located at 5450 W Sahara Avenue, Suite 300A, Las Vegas, Nevada, 89146. Our telephone number is (702) 900-7022.
The following risk factors should be considered carefully in addition to the other information contained in this report. This report contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. “Risk Factors,” “Management’s Discussion and Analysis” and “Business,” as well as other sections in this report, discuss some of the factors that could contribute to these differences.
The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
An investment in our common stock is highly speculative and involves a high degree of risk. Therefore, you should consider all of the risk factors discussed below, as well as the other information contained in this document. You should not invest in our common stock unless you can afford to lose your entire investment and you are not dependent on the funds you are investing.
Going Concern.
The Company sustained losses of $766,844 and $648,200 for the years ended September 30, 2020 and 2019, respectively. As of September, 30, 2020 and 2019, the Company had an accumulated deficit of $19,681,368 and $18,914,524, respectively. These conditions factors raise substantial doubt that we will be able to continue operations as a going concern. Our ability to continue as a going concern is dependent upon our generating cash flow sufficient to fund operations and reducing operating expenses. Our business strategy may not be successful in addressing these issues. If we cannot continue as a going concern, our stockholders may lose their entire investment.
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Our growth plan is based upon Management’s projection of what may happen in the future, and such predictions may not occur.
Our growth plan is based upon Management’s projections of estimated available cash flow, expenses, revenue, revenue over profit, earnings before interest, taxes and depreciation, sales cycle time and other measures of projected economic performance. These projections are made in Management’s view of what may happen in the future, and are not based upon historical projections. Projections or predictions of future events may not occur and actual results may differ materially from those expressed in or implied by such forward-looking statements.
Our lack of operating/sales history makes it difficult to evaluate our future prospects.
The Company was formed on May 30, 2006. Since July 2009, substantially all of the Company’s efforts have been devoted to designing and developing its technologies and products. The Company has currently generated limited sales revenue from the sale of its products. Accordingly, the Company has a limited operating history, which makes it difficult to evaluate the Company’s business and future prospects. An investor should consider and evaluate the Company’s prospects in light of the risks and uncertainties frequently encountered by companies introducing new products in intensely competitive markets.
Investors may lose their entire investment if we fail to implement our business plan.
Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. These risks include, without limitation, competition, the absence of ongoing revenue streams, a competitive market environment, and lack of brand recognition. If we fail to implement and create a base of operations for our proposed business, we may be forced to cease operations, in which case investors may lose their entire investment.
Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and OTC Link rules, and regulations governing our technologies and data protection are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Also, while there is limited regulation of our business at the state and federal level, any change to such regulation could adversely affect our business. Also, our clients are often tightly regulated governments or government agencies, and their ability to pay us or our ability to provide services may be impacted by changes in regulations and laws applying to them, which restrict the types of vendors they contract with. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our business may be materially impacted and our reputation may be harmed.
We will require additional financing to accomplish our business strategy.
We require substantial working capital to fund our business development plans, and we expect to experience significant negative cash flow from operations for at least the next six (6) months. We currently estimate that current available capital will be sufficient to meet our anticipated capital needs through September 30, 2021. Depending upon sales volume generated by our business during that time, we also anticipate the possibility of having to raise additional funds in order to achieve our plans and accomplish our immediate and longer-term business strategy. These additional funds likely will be raised through the issuance of Company’s securities in debt and/or equity financings. If we are unable to raise these additional funds on terms acceptable to us, we will be required to limit our expenditures for continuing our product development activities and expanding our sales and marketing operations, reduce our work force, or find alternatives to fund our business on terms that are not as favorable to the Company. Any such actions would impair our product development and expansion plans, reduce potential revenues, increase operating losses, and adversely affect the value of the Company.
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Our success depends on the reception by market for our technology products.
Our ability to generate revenues will depend significantly on our ability to attract a sufficient number of users of the Company’s IGAN ICS and SUPR ISR video-compression products. If we are unable to successfully market our products to our target markets and gain a sufficient number of users, any future revenues will be significantly impacted. In addition, any factors adversely affecting the demand for, or market acceptance of, our products could materially reduce our revenues and result in adverse market perceptions of our Company and its products.
We face significant competition.
We believe that our success will depend heavily upon achieving market acceptance of our IGAN ICS and SUPR ISR compression products before our competitors introduce more advanced competing products. Current and new competitors, however, may be able to develop and introduce better or more desirable products in advance of us or at a lower cost. In addition, some of our current and potential competitors have longer and/or more established operating histories, greater industry experience, greater name recognition, established customer bases, and significantly greater financial, technical, marketing and other resources than we do. To be competitive, we must respond promptly and effectively to the challenges of technological change, evolving standards and regulations, and our competitors’ innovations by continually working to improve the design of our products, enhancing our products, as well as improving and increasing our marketing and distribution channels. Increased competition could result in a decrease in the desirability of our products, a decrease in the use of our products by customers, loss of market share and brand recognition, and a reduction in the projected revenues from our products. We cannot assure you that we will be able to compete successfully against current and future competitors. Competitive pressures faced by us could have a material adverse effect on our business, operating results and financial condition.
If we do not build brand awareness and brand loyalty, our business may suffer.
Due in part to the substantial resources available to many of our competitors, our opportunity to achieve and maintain a significant market share may be limited. The importance of brand recognition will increase as competition in our market increases. Successfully promoting and positioning of our brand will depend largely on the effectiveness of our marketing efforts, our ability to offer reliable and desirable products at competitive rates, and customer perceptions of the value of our products. If our planned marketing efforts are ineffective or if customer perceptions change, we may need to increase our financial commitment to creating and maintaining brand awareness and loyalty among customers, which could divert financial and management resources from other aspects of our business or cause our operating expenses to increase disproportionately to our revenues. This would cause our business and operating results to suffer.
Our success depends in large part on the continuing efforts of a few individuals and our ability to attract, retain and motivate new personnel to expand our operations.
We depend substantially on the continued services and performance of our existing management team, and we do not currently have formal employment agreements with them, and there is no guarantee that they will continue to be employed by us in the future. The loss of services of any of our non-long term current management team could hurt our business and our financial condition, and results of operations could suffer. Our success also will depend on our ability to attract, hire, train, retain and motivate other skilled technical, managerial, sales and marketing, and business development personnel. Competition for such personnel is intense. If we fail to successfully attract, assimilate and retain a sufficient number of qualified technical, managerial, sales and marketing, business development and administrative personnel, our ability to manage, maintain and expand our business could suffer.
Supply limitations may adversely affect our operations.
Our business strategy depends, to a significant extent, on the availability of relatively stable prices for costs of creative and technical contract workers used in the design, update and creation of our products. As a small company, we may not have much leverage in dealing with these third parties with respect to timeliness of delivery, costs, or quality or quantity of supplies or services. Our inability to acquire quality supplies or services in sufficient quantity and/or on a timely and/or cost-effective basis could materially adversely affect our financial performance.
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If we fail to protect our proprietary rights, our business will suffer.
Our success depends in significant part on our ability to develop and introduce innovative and competitive products. Our ability to compete and to achieve and maintain profitability depends significantly on our ability to protect our product designs through obtaining and enforcing patent rights, obtaining trademark and copyright protection, maintaining our trade secrets, and operating without infringing the intellectual property rights of others.
We also rely on trade secret protection for our confidential and proprietary information. The Company protects its trade secrets through access control as well as confidentiality and non-disclosure agreements with its employees, consultants and advisors. These agreements, however, may be breached, and the Company may not have adequate remedies for such a breach. In addition, the Company’s trade secrets may otherwise become known or be independently developed by competitors. Accordingly, it is uncertain whether the Company’s reliance on trade secret protection will be adequate to safeguard its confidential and proprietary information.
Our ability to obtain and defend our patent position and to maintain our trade secrets will have a significant effect on the success of the Company. Although we intend to pursue patent protection and to aggressively enforce any issued patent against infringement by third parties, our ability to do so is dependent on our financial condition. Such efforts usually are both time consuming and consume significant financial resources. If third parties either challenge the Company’s patents, claim ownership of any Company intellectual property (including but not limited to design patents), proceed to make competitive products using the Company’s patents or other intellectual property, or in any other way impinge on the Company’s proprietary rights, substantial Company resources, in both time and money, are likely to be consumed. If any infringement claims against the Company are resolved unfavorably to the Company, we could be (a) enjoined from manufacturing or selling our products, (b) required to pay damages, (c) required to develop new designs, and/or (d) required to acquire licenses to intellectual property that are the subject of the infringement claims. These licenses, if required, may not be available on acceptable or commercially reasonable terms, or at all. As a result, intellectual property claims, whether initiated by us against third parties or asserted against us by others, could have a material adverse effect on our business, financial condition and operating results.
A small group of Company officers and directors hold a majority of the control of the Company.
As of June 25, 2021, the Company’s executive officers and directors beneficially owned approximately 43% of the Company’s outstanding common stock. Additionally, we have issued 50,000 shares of Series D Preferred Stock to our CEO and member of the Board of Directors, Gary Campbell, which shares entitle Mr. Campbell to two-thirds of the total votes of all outstanding capital stock of the Company. By virtue of such stock ownership, our CEO is able to control the election of the members of the Company’s Board of Directors and to generally exercise control over the affairs of the Company. Such concentration of ownership could also have the effect of delaying, deterring or preventing a change in control of the Company that might otherwise be beneficial to stockholders. There can be no assurance that conflicts of interest will not arise with respect to such directors or that such conflicts will be resolved in a manner favorable to the Company.
Our officers and directors may have conflicts of interest.
Our officers and directors will devote such time as they deem necessary to the business and affairs of the Company. In most companies, there are certain inherent conflicts between the officers and directors and the investors which cannot be fully mitigated. Our directors and officers have interests in other businesses, and/or provide consulting or other services for their individual benefit and account. Because the officers and directors will engage in operations independent of the Company, some of these activities may conflict with those of the Company. The officers and directors thus may be placed in the position where their decisions could favor their own operations or other operations with which they are associated over those of the Company. The officers and directors of the Company are free to engage generally in business for their own account in addition to any participation arising out of the Company’s activities.
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Our ability to protect our intellectual property is crucial to our operations.
Our success will depend in significant part on our ability to maintain intellectual property and maintain protection for our products and processes in order to preserve our trade secrets and proprietary technology and establish brand identity and to operate without infringing upon the patents, trademarks or proprietary rights of third parties in the United States and other countries. It is also possible that others could successfully sue the Company for violating their rights in such types of technology. In either case, such litigation can be expensive and time-consuming, and can be used by well-funded adversaries as a strategy for depleting the resources of a small enterprise such as ours. It is also possible that our competitors will develop products using a technology that would provide the same end results, without violating our intellectual property rights. Failure to obtain or subsequent loss of our intellectual property protection could seriously harm our business.
Our products could become obsolete.
Technological obsolescence of our technologies and products is always a possibility. There is no assurance that our competitors will not succeed in developing related products using similar processes and marketing strategies, or that they will not develop technologies and products that are more effective than any which we are developing or will develop. Our ability to compete will depend on the continued timely enhancement and development of technologies and products. There is no assurance that we will be able to keep pace with technological developments or that our products will not become obsolete.
Our initial product introductions could result in increased costs in the future.
Because we are still in the initial phase of introducing our initial SUPR and IGAN products to the market, we do not know whether there will be design defects or problems with programming, which we are not currently aware of but which could be identified by our customers, which problems could delay future sales, or result in product redesign, recall or repair, and, ultimately, loss of market share, and any of which could have a material adverse effect on our financial performance.
Difficult economic conditions could harm our business.
The coronavirus pandemic and consequent societal disruptions resulting therefrom could continue to adversely impact our operations, supply chains and distribution systems and demand for our products and services. Global, national, and local economic conditions continue to be challenging in the aftermath of the COVID-19 pandemic. Although the economy appears to be recovering in some areas of the USA and in some countries, it is not possible for us to predict the extent and timing of any improvement in economic conditions which would lead to greater demand for our software. A continued economic downturn could adversely impact our business in the future by causing a decline in demand for our software as our life science customers seek to cut costs, particularly if the economic conditions are prolonged or worsen. In addition, such poor economic conditions may adversely impact our access to capital, which is needed for us continue operations as we have relatively low levels of working capital.
We have a single customer, a related party, that accounts for the majority of our revenues, and our business would be harmed were we to lose this customer.
For the six months ended March 31, 2021, three (3) customers, accounted for approximately thirty- six percent (36%), thirty-six percent (36%) and twenty-eight percent (28%) of our revenues, respectively. As the Company is just beginning to sell its products, the loss of any one if these customers from a historical perspective would be significant.
Our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems.
Our business is highly dependent on maintaining effective information systems as well as the integrity and timeliness of the data we use to serve our customers, support them and operate our business. Because of the large amount of data that we collect and manage, it is possible that hardware or software failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain significant inaccuracies. If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party service providers we engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our participants and providers and hinder our ability to provide services, retain and attract participants, manage our participant risk profiles, establish reserves, report financial results timely and accurately and maintain regulatory compliance, among other things.
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Our information technology strategy and execution are critical to our continued success. We must continue to invest in long-term solutions that will enable us to anticipate participant needs and expectations, enhance the participant experience, act as a differentiator in the market and protect against cybersecurity risks and threats. Our success is dependent, in large part, on maintaining the effectiveness of existing technology systems and continuing to deliver technology systems that support our business processes in a cost-efficient and resource-efficient manner, including through maintaining relationships with third-party providers of technology. Increasing regulatory and legislative changes will place additional demands on our information technology infrastructure that could have a direct impact on resources available for other projects tied to our strategic initiatives. In addition, recent trends toward greater participant engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices. Connectivity among technologies is becoming increasingly important. Our failure to effectively invest in and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems could adversely affect our results of operations, financial position and cash flow.
Our common shares will be subject to the “Penny Stock” Rules of the SEC, and the trading market in our securities will be limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
We will be subject to the penny stock rules adopted by the Securities and Exchange Commission (“SEC”) that require brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000, or annual income exceeding $200,000 individually, or $300,000 together with his or her spouse, is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
|
| · | Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt; |
|
| · | Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; |
|
| · | Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; |
|
| · | Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account. |
Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our stockholders will, in all likelihood, find it difficult to sell their securities.
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| Table of Contents |
There has been no independent valuation of the stock, which means that the stock may be worth less than the purchase price.
The per share purchase price has been determined by us without independent valuation of the shares. We established the offering price based on the historic trading prices for our shares. The historic trading prices of our common stock are highly volatile and are not indicative of financial operating results. Similarly, there is no relation to the market value, book value, or any other established criteria. We did not obtain an independent appraisal opinion on the valuation of the shares. The shares may have a value significantly less than the offering price, and the shares may never obtain a value equal to or greater than the offering price. Please review the financial and other information contained in this prospectus with qualified persons to determine the suitability of our shares as an investment before purchasing any shares in this offering.
Investors may never receive cash distributions, which could result in an investor receiving little or no return on his or her investment.
Distributions are payable at the sole discretion of our board of directors. We do not know the amount of cash that we will generate, if any, once we have more productive operations. Cash distributions are not assured, and we may never be in a position to make distributions.
We have issued Series D Preferred Stock, whose holders have rights superior to investors in our Common Stock.
We have issued 50,000 shares of Series D Preferred Stock to our CEO and member of the Board of Directors, Gary Campbell. While each share of Series D Preferred Stock is convertible into one share of fully paid and non-assessable Common Stock, the Series D Preferred Stock is super-voting preferred stock. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to two times the sum of all the number of shares of other classes of Company capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Company, meaning that the holders of the Series D Preferred Stock have two-thirds of the total votes associated with the capital stock of the Company.
Even if a market develops for our shares, our shares may be thinly traded with wide share price fluctuations, low share prices and minimal liquidity.
If an established market for our shares develops, the share price may be volatile with wide fluctuations in response to several factors, including potential investors’ anticipated feeling regarding our results of operations; increased competition; and our ability or inability to generate future revenues. In addition, our share price may be affected by factors that are unrelated or disproportionate to our operating performance. Our share price might be affected by general economic, political, and market conditions, such as recessions, interest rates, commodity prices, or international currency fluctuations. Additionally, stocks traded on the OTC Link are usually thinly traded, highly volatile and not followed by analysts. These factors, which are not under our control, may have a material effect on our share price.
We could potentially need to sell shares in the future, which would result in a dilution to our existing shareholders.
We may seek additional funds through the sale of our common stock. This will result in a dilution effect to our shareholders whereby their percentage ownership interest in Cytta is reduced. The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required. The sale of additional stock to new shareholders will reduce the ownership position of the current shareholders. The price of each share outstanding common share may decrease in the event we sell additional shares.
Since our securities are subject to penny stock rules, you may have difficulty reselling your shares.
Our shares are “penny stocks” and are covered by Section 15(d) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers including: disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder’s ability to dispose of his stock.
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| Table of Contents |
Current and future legal action would cause our costs to increase.
On November 24, 2020, Lee Skoblow (the “Plaintiff”) filed a complaint in the State District Court for Clark County, Nevada, naming Cytta as a Defendant. The Plaintiff contends that the Company had breached an agreement. On or about January 15, 2021, the Defendant filed an Answer and Counterclaim in the litigation and also contended that in fact the Plaintiff owed money to Cytta having breached an earlier services agreement, of limited scope and duration, and other obligations owed to Cytta, and was liable for defaming Cytta in various communications he had sent to certain persons or entities prior to his demand being asserted. Management intends to contest the matter vigorously.
Other than the above, there are presently no legal actions pending against the Company or to which it or any of its property are subject, nor to its knowledge are any such proceedings contemplated. However, the above legal proceeding and any other legal action in the future will result costs of defense that would be variable and would be expected to increase as compared to historic legal expenses incurred by the Company. Additionally, the Company anticipates a general increase in legal counsel cost going forward due to the increased compliance costs of running a public company and the legal work that may be necessary for implementing the Company’s business plan of expansion.
In the event of an investor’s life crisis, the Board may not buy back shares from the investor.
If crisis occurs, such as death of investor spouse or family member, at the request of the investor, Board of Directors may meet to discuss the possibility of buying back shares from investor, but is not required to do so.
All of these risks are uncertain, and there may be other risks that we have not identified.
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all such risk factors before making an investment decision with respect to our Common Stock.
You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.
Unless we file a registration statement on Form 8-A, which we have no obligation to file, we will not be a fully reporting company but will only comply with the limited reporting requirements of Exchange Act requiring us to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. We would not be required to furnish proxy statements to security holders, and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act. Previously, a company with more than 500 shareholders of record and $10 million in assets had to register under the Exchange Act. However, the JOBS Act raises the minimum shareholder threshold from 500 to either 2,000 persons or 500 persons who are not “accredited investors,” excluding securities received by employees pursuant to employee stock incentive plans for purposes of calculating the shareholder threshold. This means that unless we file a Form 8-A, access to information regarding our business and operations will likely be limited.
As of the effective date of our registration statement of which this prospectus is a part, we will become subject to limited reporting requirements of the Exchange Act identified above (i.e., annual, quarterly and material events). Except during the year that our registration statement becomes effective, even these limited reporting obligations would be automatically suspended under Section 15(d) of the Exchange Act if we have less than 500 shareholders and do not file a registration statement on Form 8-A (which we have no obligation to file). We would then no longer be obligated to file periodic reports with the SEC and your access to our business information would then be even more limited.
| 13 |
| Table of Contents |
EARNINGS TO FIXED CHARGES
In accordance with §229.10(f) and §229.503(d) of Regulation S-K promulgated under the Securities Act, a registrant, such as ourselves, that qualifies as a smaller reporting company need not comply with this item.
Information included or incorporated by reference in this prospectus may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “should,” ”expect,” ”anticipate,” ”estimate,” ”believe,” ”intend” or “project” or the negative of these words or other variations on these words or comparable terminology.
This prospectus contains forward-looking statements, including statements regarding, among other things, (a) our projected sales and profitability, (b) our technology, (c) our manufacturing, (d) the regulation to which we are subject, (e) anticipated trends in our industry and (f) our needs for working capital. These statements may be found under “Management’s Discussion and Analysis or Plan of Operations” and “Business,” as well as in this prospectus generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this prospectus generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this prospectus will in fact occur.
Except as otherwise required by applicable laws, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in the prospectus, whether as a result of new information, future events, changed circumstances or any other reason after the date of this prospectus.
Each of the Selling Security Holders will receive all of the net proceeds from the sale of shares by that shareholder. We will not receive any of the net proceeds from the sale of the shares. The Selling Security Holders will pay any underwriting discounts and commissions and expenses incurred by the Selling Security Holders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Security Holders in offering or selling their shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by this prospectus, including without limitation blue sky registration and filing fees, and fees and expenses of our legal counsel and accountants.
We have never declared dividends or paid cash dividends on our common stock, and our board of directors does not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
While there is no established public trading market for our common stock, our common stock is quoted on the OTC Link alternative trading system operated by OTC Markets Group, Inc., at the “Pink” level under the symbol “CYCA”.
The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.
| 14 |
| Table of Contents |
Holders of Our Common Stock
As of June 25, 2021, we had approximately 194 shareholders of record of our common stock and 295,629,875 shares of common stock issued and outstanding.
Securities Authorized for Issuance under Equity Compensation Plans
We have not adopted or approved an equity compensation plans, and there are no shares authorized for issuance under any such plans.
DETERMINATION OF OFFERING PRICE
The Selling Security Holders will be offering the shares of common stock being covered by this prospectus at a price of $0.15 per share until our shares are either listed on a national securities exchange or quoted on the OTC Bulletin Board, OTCQX, or OTCQB, after which the shares offered hereunder may be sold by the Selling Security Holders from time to time in the open market, through privately negotiated transactions, or via a combination of these methods, at market prices prevailing at the time of sale or at negotiated prices.
In determining the initial public offering price of the shares, we considered several factors including the following:
|
| • | Our operational history; |
|
| • | Prevailing market conditions, including the history and prospects for the industry in which we compete; |
|
| • | Our future prospects; |
|
| • | Our capital structure; and |
|
| • | Primarily, recent trading prices of our common stock. |
Therefore, the public offering price of the shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this offering.
We are not selling any shares in this offering. All of the shares sold in this offering will be held by the Selling Security Holders at the time of the sale, so that no dilution will result from the sale of the shares.
The following table sets forth the shares beneficially owned, as of June 25, 2021, by the Selling Security Holders prior to the offering contemplated by this prospectus, the number of shares each Selling Security Holder is offering by this prospectus, and the number of shares which each would own beneficially if all such offered shares are sold.
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
None of the Selling Security Holders is a registered broker-dealer or an affiliate of a registered broker-dealer. Each of the Selling Security Holders acquired their shares for cash pursuant to the Company’s private placement conducted in June and July of 2020 at $0.025/share, solely for investment and not with a view to or for resale or distribution of such securities.
| 15 |
| Table of Contents |
The percentages below are calculated based on 295,629,675 shares of our common stock issued and outstanding as of June 25, 2021. Additionally, as of that date, we have 50,000 shares of Series D Preferred Stock issued and outstanding that is convertible into 50,000 shares of our common stock, and 13,650,000 shares of Series E Preferred Stock issued and outstanding that is convertible into 13,650,000 shares of our common stock.
| Name of Selling Security Holder |
| Common Shares owned by the Selling Security Holder |
|
| Number of Shares Offered by Selling Security Holder |
|
| Number of Shares and Percent of Total Issued and Outstanding Held After the Offering (1) |
| |||||||
|
|
|
|
|
|
|
|
| # of Shares |
|
| % of Class |
| ||||
| Billy Anders |
|
| 500,000 |
|
|
| 500,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| C. James Jensen |
|
| 2,000,000 |
|
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0.3 | % |
| Derek Leffler |
|
| 2,200,000 |
|
|
| 1,600,000 |
|
|
| 600,000 |
|
|
| 0.2 | % |
| Donald L Shifrin |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Douglas Pat Cerretti |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Dr. Bret Shupack |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Ed Stoughton |
|
| 3,600,000 |
|
|
| 2,600,000 |
|
|
| 1,000,000 |
|
|
| 0.3 | % |
| Elaine & Edward Epstein |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Etzion Genauer |
|
| 1,500,000 |
|
|
| 1,500,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| James Polack |
|
| 11,500,000 |
|
|
| 11,500,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Jingwen Chen (2) |
|
| 400,000 |
|
|
| 400,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Lisa Chen (3) |
|
| 600,000 |
|
|
| 600,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Martin Goldberg |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Martin Joe Campbell |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Michael and Henrika Sandorffy |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Michael Glorioso |
|
| 500,000 |
|
|
| 500,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Natacha Furlan |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Peter Rettman |
|
| 6,750,000 |
|
|
| 2,000,000 |
|
|
| 4,750,000 |
|
|
| 1.6 | % |
| Robert B. Spitzer |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Roland Wheeler |
|
| 1,000,000 |
|
|
| 1,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| The Diane Rosencrantz Family Trust (4) |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| The Friendship Circle of Washington (5) |
|
| 4,000,000 |
|
|
| 4,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| The Spitzer Foundation (6) |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 0 |
|
|
| 0.0 | % |
| Toalei Talataina |
|
| 400,000 |
|
|
| 400,000 |
|
|
| 0 |
|
|
| 0.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
| 51,950,000 |
|
|
| 44,600,000 |
|
|
| 7,350,000 |
|
|
| 2.51 | % |
__________________
| (1) | Assumes all of the shares of common stock offered in this prospectus are sold and no other shares of common stock are sold or issued during this offering period. Based on 295,629,675 shares of common stock issued and outstanding as of June 25, 2021. |
| (2) | Jingwen Chen is the father of the shareholder, Lisa Chen, but upon information and belief, is not a dependent of, in a position of control over, or controlled by Ms. Chen. |
| (3) | Lisa Chen is the adult child of the shareholder Jingwen Chen, but upon information and belief, is not a dependent of, in a position of control over, or controlled by Mr. Chen. |
| (4) | These shares are beneficially owned by David and Diane Rosencrantz. |
| (5) | These shares are beneficially owned by Elazar Bogomilsky. |
| (6) | These shares are beneficially owned by Robert B. Spitzer. |
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| Table of Contents |
We may require the Selling Security Holders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus, or the related registration statement, untrue in any material respect, or that requires the changing of statements in these documents in order to make statements in those documents not misleading. We will file a post-effective amendment to this registration statement to reflect any material changes to this prospectus.
Our common stock is not traded on any exchange and is currently quoted for trading on the OTC Link at the “Pink” level. The Selling Security Holders will be offering the shares of common stock being covered by this prospectus at a fixed price of $0.15 per share until our shares are either listed on a national securities exchange or quoted on the OTC Bulletin Board, OTCQX, or OTCQB, after which the shares offered hereunder may be sold by the Selling Security Holders from time to time in the open market, through privately negotiated transactions, or via a combination of these methods, at market prices prevailing at the time of sale or at negotiated prices. The fixed price of $0.15 has been determined arbitrarily.
Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling security holders directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods: (a) ordinary brokerage transactions and transactions in which the broker solicits purchasers; (b) privately negotiated transactions; (c) market sales (both long and short to the extent permitted under the federal securities laws); (d) at the market to or through market makers or into an existing market for the shares; (e) through transactions in options, swaps or other derivatives (whether exchange listed or otherwise); and (f) a combination of any of the aforementioned methods of sale.
In the event of the transfer by any of the selling security holders of its common shares to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling security holder who has transferred his, her or its shares.
In effecting sales, brokers and dealers engaged by the selling security holders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from a selling security holder or, if any of the broker-dealers act as an agent for the purchaser of such shares, from a purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with a selling security holder to sell a specified number of the shares of common stock at a stipulated price per share. Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfill the broker-dealer commitment to the selling security holder if such broker-dealer is unable to sell the shares on behalf of the selling security holder. Broker-dealers who acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above.
Such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. In connection with such resales, the broker-dealer may pay to or receive from the purchasers of the shares commissions as described above.
The selling security holders and any broker-dealers or agents that participate with the selling security holders in the sale of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
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| Table of Contents |
From time to time, any of the selling security holders may pledge shares of common stock pursuant to the margin provisions of customer agreements with brokers. Upon a default by a selling security holder, their broker may offer and sell the pledged shares of common stock from time to time. Upon a sale of the shares of common stock, the selling security holders intend to comply with the prospectus delivery requirements under the Securities Act by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act which may be required in the event any of the selling security holders defaults under any customer agreement with brokers.
To the extent required under the Securities Act, a post-effective amendment to this registration statement will be filed disclosing the name of any broker-dealers, the number of shares of common stock involved, the price at which the common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.
We and the selling security holders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5, and, insofar as a selling security holder is a distribution participant, that holder may be a distribution participant under Regulation M. All of the foregoing may affect the marketability of the common stock.
All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling security holders, the purchasers participating in such transaction, or both.
Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the Twelve-month Periods Ended September 30, 2020 and 2019
The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of sales revenue for the periods indicated in dollars.
|
|
| 2020 |
|
| % |
|
| 2019 |
|
| % |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Revenue |
| $ | 48,513 |
|
|
| 100.0 |
|
| $ | 27,565 |
|
|
| 100.0 |
|
| COGS |
| $ | 24,037 |
|
|
| 49.6 |
|
| $ | 9,130 |
|
|
| 33.1 |
|
| Gross Profit |
| $ | 24,476 |
|
|
| 50.4 |
|
| $ | 18,435 |
|
|
| 66.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
| $ | 789,826 |
|
|
| 1,628.1 |
|
| $ | 664,807 |
|
|
| 2,411.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Income/(Loss) |
| $ | (765,350 | ) |
|
| -1,577.6 |
|
| $ | (646,372 | ) |
|
| -2,334.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income/(Loss) |
| $ | (766,844 | ) |
|
| -1,584.0 |
|
| $ | (648,200 | ) |
|
| -2,351.5 |
|
Revenues consist of hardware imbedded with our proprietary software, integration consulting services, tech support and product maintenance billed to the customer. Revenues increased for the year ended September 30, 2020 by $20,948 from the year ended September 30, 2019 due to additional customer sales. Gross profit increased due to the increase in sales for the year ending September 30, 2020. Operating expenses increased by $125,019 for the year ended September 30, 2020 over 2019 due to increased consulting fees of approximately $194,000 and general and administrative costs of approximately $26,000 partially offset by management fees and expenses from related parties of approximately $95,000.
| 18 |
| Table of Contents |
The following tables set forth key components of our balance sheet as of September 30, 2020 and 2019, both in dollars.
|
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
|
| ||
| Current Assets |
| $ | 1,441,288 |
|
| $ | 25,671 |
|
|
|
|
|
|
|
|
|
|
|
| Property and Equipment |
| $ | 143,058 |
|
| $ | 16,074 |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets |
| $ | 1,584,386 |
|
| $ | 41,745 |
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
| $ | 97,689 |
|
| $ | 12,995 |
|
|
|
|
|
|
|
|
|
|
|
| Total Liabilities |
| $ | 97,689 |
|
| $ | 12,995 |
|
|
|
|
|
|
|
|
|
|
|
| Stockholder’s Equity |
| $ | 1,486,657 |
|
| $ | 28,750 |
|
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Equity |
| $ | 1,584,386 |
|
| $ | 41,745 |
|
As of September, 30, 2020, current assets increased $1,417,477 from September 30, 2019. The significant change was primarily due to increases in cash of $830,592 and in prepaid assets of $559,443. As of September, 30, 2020, current liabilities increased by $84,694 from September 30, 2019, due to a decrease in accrued liabilities and expenses based on timing of the payment of expenses.
At September 30, 2020, the Company had cash funds of $847,646.
For the Six-month Periods Ended March 31, 2021 and 2020
The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of sales revenue for the periods indicated in dollars.
|
|
| For the Six Months Ended March 31, |
|
|
| |||||||||||
|
|
| 2021 |
|
| % |
|
| 2020 |
|
| % |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Revenue |
| $ | 70,520 |
|
|
| 100 |
|
| $ | 20,040 |
|
|
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COGS |
| $ | 25,277 |
|
|
| 36 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
| $ | 45,243 |
|
|
| 64 |
|
| $ | 20,040 |
|
|
| 100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
| $ | 1,059,737 |
|
|
| -1,503 |
|
| $ | 357,000 |
|
|
| -1,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Income (Loss) |
| $ | (1,014,494 | ) |
|
| -1,439 |
|
| $ | (336,960 | ) |
|
| 1,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) |
| $ | (1,014,236 | ) |
|
| -1,438 |
|
| $ | (337,929 | ) |
|
| -1,686 |
|
| 19 |
| Table of Contents |
Revenues consist of hardware imbedded with our proprietary software, integration consulting services, tech support and product maintenance billed to the customer. Revenues increased for the six months ended March 31, 2021, by $50,480 from the six months ended March 31, 2020 due to additional customer sales. Gross profit increased due to the increase in sales for the six months ending March 31, 2021. Operating expenses increased by $702,737 for the six months ended March 31, 2021 over 2020. The majority of the increase was due to increases in stock- based compensation of $469,000, consulting and professional fees of approximately $148,000 and general and administrative costs of approximately $170,000 partially offset by management fees and expenses from related parties of approximately $84,000.
The following tables set forth key components of our balance sheet as of March 31, 2021 and September 30, 2020, both in dollars.
|
|
| March 31, 2021 |
|
| September 30, 2020 |
| ||
|
|
|
|
|
|
|
| ||
| Current Assets |
| $ | 1,645,773 |
|
| $ | 1,441,288 |
|
|
|
|
|
|
|
|
|
|
|
| Property and Equipment |
|
| 159,397 |
|
|
| 143,058 |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
| 1,805,170 |
|
|
| 1,584,386 |
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
| 2,749 |
|
|
| 97,689 |
|
|
|
|
|
|
|
|
|
|
|
| Total Liabilities |
|
| 2,749 |
|
|
| 97,689 |
|
|
|
|
|
|
|
|
|
|
|
| Stockholder’s Equity |
|
| 1,802,421 |
|
|
| 1,486,657 |
|
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Equity |
| $ | 1,805,170 |
|
| $ | 1,584,386 |
|
As of March 31, 2021, current assets increased by $204,485 from September 30, 2020, primarily due to increases in prepaid assets of $485,373, inventory of $29,790 and accounts receivable of $20,040, partially offset by a decrease in cash of $330,718 and accounts receivable of $132,248. As of March 31, 2021, current liabilities decreased by $94,940 from September 30, 2020, due to a decrease in accounts payable and accrued expenses.
At March 31, 2021, the Company had cash funds of $516,928.
Liquidity and Capital Resources
The Company has been and is currently operating with a relatively low level of cash and liquidity and that could lead to difficulty if not favorably resolved. The Company desires to improve this situation through additional equity and debt investments in the Company and cash generated from higher revenues.
The Company anticipates that its cash needs for the next twelve months for working capital and capital expenditures will be approximately $1,200,000. As of March 31, 2021, the Company has $516,928 in cash and believes its current cash and cash flow from operations will only be sufficient to meet anticipated cash needs for the next nine months for working capital and capital expenditures. From April 1, 2021, through June 6, 2021, the Company raised an additional $322,500 from the sale of 645,000 shares of Series E Preferred Stock at $0.05 per share. The Company will likely require additional cash resources due to possible changed business conditions or other future developments. The Company may seek to sell additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.
| 20 |
| Table of Contents |
The Company’s ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including: investors’ perception of, and demand for, securities of web hosting and related service companies; conditions of the U.S. and other capital markets in which we may seek to raise funds; future results of operations, financial condition and cash flow. Therefore, the Company’s management cannot assure that financing will be available in amounts or on terms acceptable to the Company, or if at all. Any failure by the Company’s management to raise additional funds on terms favorable to the Company could have a material adverse effect on the Company’s liquidity and financial condition.
In the event we are not successful in reaching our sustained revenue targets, we anticipate that depending on market conditions and our plan of operations, we will likely incur continued operating losses. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit to cover our operating expenses. Consequently, there remains the possibility that the Company may not continue to operate as a going concern in the long term. As described in our market risks, we are subject to many factors which could detrimentally affect us. Many of these risk factors are outside management’s control, including demand for our products and services, our ability to hire and retain talented and skilled employees and service providers, as well as other factors.
Subsequent Events
From April 1, 2021, through June 21, 2021, the Company sold 6,450,000 shares of Series E Preferred Stock at $0.05 per share and received proceeds of $322,500.
We have reviewed all events subsequent to our report date and other than the above, do not have any material transactions or events requiring disclosure.
Critical Accounting Policies
Our financial statements are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 3 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report.
Inventory
Inventories are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis. Inventory costs include finished goods and component parts. In evaluating the net realizable value of inventory, management also considers, if applicable, other factors, including known trends, market conditions, currency exchange rates and other such issues. Inventory as September 30, 2020, and 2019 was $34,199 and $617, respectively.
Property and Equipment
Property and equipment are stated at cost, and depreciation is provided by use of a straight-line method over the estimated useful lives of the assets.
| 21 |
| Table of Contents |
The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. The estimated useful lives of property and equipment is as follows:
Vehicles and equipment 5 years
Software 3 years
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products by: (1) identify the contract (if any) with a customer; (2) identify the performance obligations in the contract (if any); (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract (if any); and (5) recognize revenue when each performance obligation is satisfied. Under ASC 606, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. Other than The Company has no outstanding contracts with any of its’ customers. The Company recognizes revenue when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and is based on the applicable shipping terms.
Stock-Based Compensation
The Company accounts for its stock based compensation under the recognition and measurement principles of the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (“SFAS No. 123R”)(ASC 718) using the modified prospective method for transactions in which the Company obtains employee services in share-based payment transactions and the Financial Accounting Standards Board 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” (“EITF No. 96-18”) for share-based payment transactions with parties other than employees provided in SFAS No. 123(R) (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.
| 22 |
| Table of Contents |
BUSINESS AND RECENT DEVELOPMENTS
About Cytta
Cytta Corp. was founded in 2006. Since 2014, Cytta has developed and marketed video compression-based software and hardware products, using technology based upon the SUPR (Superior Utilization of Processing Resources) video compression codec/algorithm. Cytta currently develops, markets, and distributes proprietary video streaming products and services that improve how video is streamed, consumed, transferred, and stored, in enterprise environments.
Our products and services include advanced video streaming systems, video/audio collaboration software, and integrated hardware systems utilizing both on premise deployments or cloud-based deployments, that are delivered widely through a variety of flexible and interoperable technology deployment models. These models include software deployments, combined software/hardware deployments, utilizing either on-premises deployments, or cloud-based deployments. We have created advanced video compression systems, video/audio collaboration software, and integrated hardware systems that solve streaming problems in various markets.
Accordingly, we offer choice and flexibility to our customers and facilitate the product, service and deployment combinations that we believe best suit our customers’ needs. Our customers include businesses of many sizes, government agencies, military, first responders, utilities, environmental technology entities and emergency management organizations. We market and sell to all entities directly through our direct sales force and indirectly through our sales partner network.
Cytta also offers services to assist our customers and partners to maximize the performance of their Cytta purchases. Providing choice and flexibility to Cytta customers as to when and how they deploy Cytta software, hardware and services solutions is an important element of our corporate strategy. We believe that offering customers broad, comprehensive, flexible, and interoperable deployment models for Cytta products and solutions is important to our growth strategy and better addresses customer needs relative to our competitors, many of whom provide fewer offerings, more restrictive deployment models and less flexibility for a customer’s transition to advanced video streaming environments.
Our investments in, and innovation with respect to, Cytta products and services that we offer through our software, hardware and services offerings are another important element of our corporate strategy. We have a deep understanding as to how compression applications and streaming technologies interact and function with one another. We focus our development efforts on improving the performance, security, operation, integration and cost-effectiveness of our offerings relative to our competitors. Cytta attempts to make it easier, in our view, for organizations to deploy, use, manage and maintain our product offerings. Additionally, we also attempt to incorporate emerging technologies within our offerings to enable leaner business processes, automation and innovation.
After an initial purchase of Cytta products and services, our customers can continue to benefit from our research and development efforts and deep streaming expertise by electing to purchase and renew Cytta support offerings for their license and hardware deployments. These offerings may include product enhancements that we periodically deliver to our products, and by renewing their services contracts with us.
The Company’s access to the SUPR Compression codec/algorithm enabled it to utilize the video streaming capabilities of this proprietary technology to develop new software and hardware technology, methodologies, and products. Our advanced video compression systems, video/audio collaboration software, and integrated hardware systems solve streaming problems in various markets. These products are being developed, sold, licensed, and serviced by Cytta today. Our access to this streaming technology has also created access to a network of people in the video streaming industry or those that utilize critical video streaming services, that have generated sales leads and ultimately revenue for Cytta.
The original SUPR compression codec/algorithm and related industry knowhow and experience was acquired from Michael Collins, our current Chief Technology Officer, in 2013. Our current SUPR software codec/algorithm video compression technology is wholly owned by Cytta and is sold and licensed to customers, in all product configurations free of any encumbrances or limitations (other than normal software security requirements).
Cytta’s primary business focus is the development of video streaming products and services that utilize our SUPR compression codec/algorithm and our related industry experience. We design and develop innovative and effective video compression-based software and hardware products utilizing our software and video streaming technological knowledge. We also offer a combination of technical and consulting services, proprietary software products, hardware products utilizing our software and a system integration team to meet the needs of customers. Cytta places extreme value on satisfying our customers’ needs with innovative well engineered, high-quality products and service solutions.
Cytta employs independent contractors to perform all business, technology and management functions within the company consisting of, inter alia, businessmen, accountants, lawyers, software designers, programmers, technical writers, automation engineers and scientists. Our technical independent contractors work with management in developing and deploying custom and off-the-shelf software and hardware streaming and imaging systems for clients.
| 23 |
| Table of Contents |
CYTTA PRODUCTS
SUPR (Superior Utilization of Processing Resources) Product
Cytta’s proprietary, secure video compression technology offers, what we believe is, superior streaming in HD/4K/8K as compared to common open standard codec/algorithms. SUPR is an entirely unique, ground-up design that is a patented software codec/algorithm for video compression, which operates differently from MPEG-based codec/algorithms (H.264, H.265, VP9). SUPR performs exceptionally well in bandwidth-challenged environments where other video compression solutions cannot operate or do so poorly.
SUPR delivers video streaming for airborne ISR (Intelligence, Surveillance, and Reconnaissance) applications including environments where video streams are transmitted beyond line-of-sight. By utilizing a SUPR-enabled encoder onboard an aircraft, video can be securely streamed in high-definition to a SUPR-enabled decoder. Compared to MPEG-based video compression solutions, SUPR offers the following technological advantages:
|
| · | Clear and superior imagery in lower bandwidths |
|
|
|
|
|
| · | Lossless video stream |
|
|
|
|
|
| · | Lower video latency |
|
|
|
|
|
| · | Proprietary video stream |
|
|
|
|
|
| · | Fewer instances of blocking artifacts and pixilation issues as compared to MPEG-based codec/algorithms (H.264, H.265, VP9) and alternatives |
|
|
|
|
|
| · | Processor operates more efficiently (SUPR utilizes only 2% of calculations per pixel vs. MPEG-based codec/algorithms (H.264, H.265, VP9) |
|
|
|
|
|
| · | Computer runs cooler during compression due to less processor-intense operation |
IGAN (Incident Global Area Network) Product
The IGAN (Incident Global Area Network) ICS (Incident Command System) system is designed to deliver communications composed of multiple streams of voice and video delivered with low latency and viewable by multiple parties over one unified secure communication system. IGAN seamlessly streams all relevant video and audio into a single web (or mobile app) interface. It is designed to work as a common interface for daily operations or can scale up to support hundreds of participants from separate organizations during an emergency. IGAN connects people-to-people, people-to-groups, and facilitates conferences independent of device or location. IGAN offers a distributed and easily customized solution for integrating disparate communications systems in multiple locations into a seamless and rapidly re-configurable solution.
IGAN’s distributed platform architecture allows individual communications systems to be located anywhere that a network connection can be established, and the interconnection of these systems can be controlled from any location or multiple locations. The robust platform is fully redundant such that if a site is lost, a backup is immediately established. IGAN is an IP-software multi-channel / multi-access communications and tactical conferencing solution for professional and mission critical applications. The solution is highly scalable to multiple users, and supports multiple channels and conferences.
IGAN is a secure, advanced ICS (Incident Command System) offering low latency, multidirectional communications, integrating multiple video and voice devices including video cameras, smartphones, tablets, computers, and 2-way radios. IGAN is a tool for video collaboration when requiring the integration of video feeds from sUAS (Small Unmanned Aerial Systems) unmanned drone operations. IGAN is designed to upload a video feed in real-time. It then allows remote participants to not only see low latency remote aerial video, but to guide flight video instruction such as video zoom on a target or areas of inspection.
| 24 |
| Table of Contents |
The IGAN ICS system resides in Cytta’s secure cloud or can be privately hosted on a customer’s server. The IGAN hosting architecture is offered two ways:
|
| · | Cytta Cloud; where we manage (but do not store) daily operations. |
|
|
|
|
|
| · | Customer Hosted; where we provide clients with a stand-alone server fully integrated with IGAN software, or we can install on an existing server within the client’s network. IGAN can also be installed in a mobile command vehicle making it a completely mobile solution for remote incident communications. |
IGAN operating through Cytta’s secure cloud offers secure FIPS (Federal Information Processing Standard) 140-2 and is CJIS (criminal justice information services) compliant.
IGAN offers the following technical advantages:
|
| · | Creates a unified communications system for sharing video and voice using advanced compression and SIP (Session Initiation Protocol) technologies. |
|
|
|
|
|
| · | No client application program is required. Utilizes a web browser to join an IGAN session. |
|
|
|
|
|
| · | Multiple device flexibility in that any video device, 2-way radio, etc. can be added |
|
|
|
|
|
| · | Offers secure FIPS 140-2 and CJIS compliance |
CYTTA PRODUCT LINES
The video compression and streaming product lines are comprised of three main types of products, each aimed at the different phases of selling to and supporting the customer.
Custom Software Development
Custom software development is a type of professional service product. Using software development and product management staff, solutions are created that are either based on a packaged system (and therefore are extensions of an existing product), or are new workflow systems that are intended to work stand alone or possibly in conjunction with other packaged products. Custom software is also developed to add future support to a customer’s system that is not being addressed via standard product upgrades or follow-on product development. Recent examples include adding specific configuration files to a customer’s SUPR software hardware product. Our custom software solutions are compatible with packaged systems, which is accomplished through the use of the common underlying software platform.
Software Maintenance Plans (SMPs)
Our products follow industry norms for high-end software systems. SMPs (Software Maintenance Plans) are comprised of service promises and software upgrades such as the following:
|
| · | Phone, e-mail and back-office technical support |
|
|
|
|
|
| · | Onsite troubleshooting |
|
|
|
|
|
| · | Software maintenance releases |
|
|
|
|
|
| · | Software upgrades |
Integrated Portable Hardware/Software Systems
Our combined products are designed and built to create complete and integrated systems that are marketed to provide complete portable solutions to client requirements. Our integrated hardware/software products bring advantages to HD, 4K and 4K+ wireless live video streaming and a centralized video/audio interaction system to a variety of industries.
| 25 |
| Table of Contents |
TARGET CUSTOMER BASE
Our current customers fall within these areas of video communications technology market:
|
| · | First Responders |
|
|
|
|
|
| · | Emergency Management |
|
|
|
|
|
| · | Utilities |
|
|
|
|
|
| · | Environmental |
|
|
|
|
|
| · | Military and Security |
FIRST RESPONDERS
Cytta products provide unified communications for first responders and provide a comprehensive Incident Command System (ICS) allowing remote visibility and multidirectional communications. Our SUPR software solution is designed to integrate seamlessly with our IGAN streaming solution and is utilized where streaming higher resolution is required. However, the IGAN also streams from other video and compressed video sources not utilizing SUPR. Our IGAN solution empowers near real-time communications in a single platform that creates an ability to place experts on-site, allowing stakeholders to preemptively act to guide front line staff during tactical responses, and for use as a training overwatch tool.
As a comprehensive Incident Command System (ICS), IGAN allows first responders to establish a near real-time unified communications platform where multiple feeds of video and voice enabled devices are merged into one single unified communications dashboard. Connected audio/video devices can securely connect and interact over the highly secure IGAN platform including Drone video, Smartphones, Bodycams, Dashcams, 2-way radios, Laptops and Bomb robots.
Law Enforcement
IGAN is designed for team communications during law enforcement activities. IGAN places eyes-on-site, which allows remote participants to view and participate as if on-scene. These advantages include sharing drone video, providing first-on-scene video/audio from an incident, observing surveillance activity, private voice communications, and/or inter-departmental communications.
Fire Departments
IGAN represents a new capability in unified communications for fire department operations. It introduces the ability to provide remote guidance to incidents, share drone video, mapping data for buildings and/or terrain. It also allows teams to tactically respond to calls with necessary personnel and specialized vehicles, which promotes improved efficiencies and enhances public safety.
EMS (Emergency Medical Services)
The ability to provide near real-time ambulance video has long been a goal for Emergency Medical Services professionals. The ability to share near real time HD and 4K+ video with the hospital and better prepare for critical patient care is a solution that potentially saves lives.
Mental Health Support
The effective response and treatment of the mentally challenged has become a recurrent and sensitive topic. Historically, a first responder, who may not be well trained for these mentally challenged individuals and stressful incidents, makes the initial contact. As a remote solution, IGAN provides an efficient and cost-effective tool for placing mental health experts on site via our remote communications system. A care worker located elsewhere can participate in the on-scene video/audio conversation remotely.
EMERGENCY MANAGEMENT
When disaster strikes and networks are down, IGAN provides a multi-agency communications tool through a command vehicle as a local access network or satellite uplink. Cytta products provide multi-agency secure ad-hoc networking. Cytta SUPR and IGAN products provide the ability to coordinate and respond to natural disasters and catastrophes. Existing solutions are primarily focused on the integration of voice and two-way Land-Mobile-Radio (LMR) systems. The use of IGAN allows for various multi-agency participants along with the inclusion of multiple streams of real-time video/audio. When time is a critical element, being able to unify local and remote personnel creates a more efficient tool that affords better coordination.
| 26 |
| Table of Contents |
Disaster Management
While there is no way to be completely prepared for a disaster, it does help to be prepared to return to normal as quickly as possible. Disaster response and site communications with today’s tools require a method to include video and audio collaboration agnostic of the communications technology deployed. The IGAN platform accelerates the ability to see and communicate with each team member, to identify priorities, direct responses, and organize cleanup.
State & Federal (FEMA - Federal Emergency Management Agency)
Getting the right people with the right tools to the right place is a major challenge in any crisis. Often the lack of telecom infrastructure introduces a greater challenge to crisis management. As a field-deployable system, IGAN can operate as a mobile server. By integrating an IGAN server into customers’ mobile command operations, they can form a private communications hub independent of the Internet. IGAN creates an entirely secure, FIPS 140-2 and CJIS compliant system that allows rapid inter-agency unified comms (voice, video, and data).
UTILITIES & CRITICAL INFRASTRUCTURE
Power, Oil & Gas, Water, and Critical Infrastructure entities utilize IGAN for auditing, maintenance, and response with near real-time live communications to personnel on site. Cytta provides utility companies with the ability to stream high resolution low latency video from their high-precision, remote sensing technologies (drones/sUAS).
Cytta’s SUPR technology allows the integration of low latency streaming of high-resolution video. Cytta’s IGAN platform allows management personnel to virtually participate from anywhere and view their utility/infrastructure assets in near real time. Cytta products assist with streamlining audits, decisions, resource planning, and operational priorities. By participating remotely on our near real-time video communications platform, utility managers can see what is happening in the field and provide guidance or direction from their remote location.
Power
Our technology assists power utilities in reviewing and managing critical infrastructure. Cytta’s IGAN and SUPR create the ability to identify potential power transmission problems and liabilities.
Water
Drones are introducing efficiencies and helping decrease costs in the management of many bodies of water. An operator can now stream high-resolution video and identify potential problems while sharing those images in near-real-time with decision makers in a Headquarters observation facility. SUPR and IGAN are efficient solutions for utility evaluation and communications systems. Evaluating rivers, lakes, oceans pipelines, sewage, drainage channels, and other critical water infrastructure can enhance environmental activities while improving operational responses.
Oil & Gas
Oil and Gas producers have multiple responsibilities, from detecting leaks to meeting environmental regulations, maintaining site security and system integrity. IGAN and SUPR deliver the ability for remote response to evaluate these issues protecting the environment, while saving time and costs of getting personnel on site. A person viewing high resolution video remotely (via drone, smartphone, or thermal imaging camera – transmitted over cellular or satellite) allows near real-time identification of problems, issues, and solutions.
ENVIRONMENTAL
Working to protect resources requires visibility into remote areas allowing for an improved response. The use of drones and remote sensors in the environmental service industries is evolving rapidly. Their utilization creates the need for near real-time multidirectional communications with high resolution that is becoming a service element. Onsite video (IGAN) and the utilization of high-resolution sensors (SUPR) allows more rapid evaluation and response to waste violations, surveillance, illegal dumping, and an evaluation of the impact that each of these has on natural resources.
Monitoring & Tracking
The ability to monitor and track leaks, spillage, or flood waters in near real-time is a new concept and can dictate the difference between environmental catastrophe or quick resolution and repair. IGAN can place eyes on areas under observation by allowing for a more rapid response from the appropriate authority or engineering resource, while SUPR allows the application of near real-time high resolution data examination.
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Regulation Management
In order to coordinate a response to individuals who violate perimeters, impact wildlife or natural resources, and violate environmental safeguards, it’s important to be able to identify violations and get support in the dispatch of authorities. By implementing an IGAN with SUPR video monitoring capabilities, field personnel can communicate and share relevant video back to headquarters.
MILITARY & SECURITY
Cytta’s technology enables high-definition (HD/4K) streaming in non-line-of-sight environments where it was previously difficult. Cytta’s proprietary SUPR Stream video codec/algorithm offers improved results over traditional MPEG-based technologies [H.264/H.265 (HEVC)]. A SUPR enabled encoder at the video camera side, improves the ability to stream HD, 4K and higher resolution videos over low bandwidths.
Military
A key element to mission success is the dependence upon ISR (Intelligence, Surveillance, and Reconnaissance) video for mission critical decisions and operational decision-making. Our SUPR hardware/software system is available in a 0.5-LB package and improves ISR capabilities. SUPR improves the capability to stream high-definition (HD/4k/4K+) in non-line-of-sight environments at ultra-low bandwidths.
Additionally, Cytta’s IGAN Incident Command system allows for secure collaboration between forward and base operations. Communicating over a secure communications link utilizing voice and video is offered by Cytta’s IGAN.
Security & Protection
The transmission of HD/4K/4K+ video in remote or temporary locations is improved by the use of SUPR.
Customer Focus
One of Cytta’s primary goals is to meet the requirements and expectations of our customers. Our success depends upon this.
Customer feedback is gathered by Cytta’s Support, Sales & Marketing, and Product Management groups. Input is also gathered from partner companies’ support and deployment organizations. These groups are accountable for collecting customer inputs from a variety of sources including direct contact with the customer.
Cytta’s Product Management group spends time at customer locations observing their experiences, synthesizing information, and using it to improve the Company’s products. These experiences are reviewed in technical engineering design meetings and appropriate changes subsequently flow through all areas of the Company.
Government Approval of Principal Products or Services
The Arms Export Control Act requires that all manufacturers and exporters of defense articles (including technical data) as defined on the United States Munitions List (ITAR part 121) and furnishers of defense services are required to register with the Directorate of Defense Trade Controls (DDTC). It is primarily a means to provide the U.S. Government with necessary information on who is involved in certain ITAR controlled activities and does not confer any export or temporary import rights or privileges. Registration is generally a precondition for the issuance of any license or other approval and use of certain exemptions. Cytta’s ITAR registration expires April 30, 2022. Cytta is now positioned to receive ITAR-controlled technical data from U.S. Government Department of Defense entities seeking affordable commercial off-the-shelf video surveillance solutions. In order to ensure compliance to export regulations, Cytta has in place a written Export Compliance and Management System.
Effect of Existing Governmental Regulation on our Business
There is no one regulation of this specific type of business other than the normal business restrictions that apply to all businesses. We are, however, subject to export control regulations which affect the export of technical data, defense services, software, and items. In order to alleviate any possible risk of an erroneous export classification and in order to satisfy an open inquiry from Airbus Advanced Development Group in the United Kingdom, Cytta has a pending Commodity Classification Automated Tracking System (CCATS) with the United States Bureau of Industry and Security (BIS). The CCATS was submitted on March 29, 2021. The CCATS response will provide the formal export classification of the SUPR product.
Cytta is also in the process of upgrading its cloud service to provide ITAR-compliant cybersecurity in order to achieve Cybersecurity Maturity Model Certification (CMMC) Level 1. CMMC is the verification mechanism to ensure that Defense Industrial Base (DIB) companies implement appropriate cybersecurity practices and processes to protect Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) within their unclassified networks.
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Number of Total Employees and Part-Time Employees
We currently employ seven (7) independent contractors in the United States to conduct our operations.
INDUSTRY SUMMARY
The core industry in which Cytta operates is the data (video/audio) compression industry. Data compression is the process of encoding, restructuring or otherwise modifying data in order to reduce its size. Fundamentally, it involves re-encoding information using fewer bits than the original representation.
Compression is done by a program that uses functions or an codec/algorithm to effectively discover how to reduce the size of the data. For example, an codec/algorithm might represent a string of bits with a smaller string of bits by using a ‘reference dictionary’ for conversion between them. Another example involves a formula that inserts a reference or pointer to a string of data that the program has already seen. A good example of this often occurs with image compression. When a sequence of colors, like ‘blue, red, red, blue’ is found throughout the image, the formula can turn this data string into a single bit, while still maintaining the underlying information. SUPR is such a codec/algorithm.
For data/video transmission, compression can be run on the content or on the entire transmission. When information is sent or received via the internet, larger files, either on their own or with others, or as part of an archive file, may be transmitted in one of many compressed formats.
Lossy vs Lossless Video/Image Compression
Video/Image Compression is often broken down into two major forms, “lossy” and “lossless”. When choosing between the two methods, it is important to understand their strengths and weaknesses:
|
| · | Lossless Compression: Removes bits by locating and removing statistical redundancies. Because of this technique, no information is actually removed. Lossless compression will often have a smaller compression ratio, with the benefit of not losing any data in the file. This is often particularly important when needing to maintain absolute quality, as with database information or professional media files. |
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| · | Lossy Compression: Lowers size by deleting unnecessary information and reducing the complexity of existing information. Lossy compression can achieve much higher compression ratios at the cost of possible degradation of file quality. |
Data (Video/Audio) Compression Uses
Many businesses today rely on data compression in some major way; especially as the functional quality of data increases, storage capacity concerns must be resolved. Data compression is one of the major tools that helps with this. These file types are frequently compressed:
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| · | Audio Compression: Implemented as audio codec/algorithms, compression of audio files is necessary to guarantee bandwidth and storage limits are not exceeded. Audio compression can be either lossy or lossless. |
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| · | Video Compression: Videos may or may not combine image compression with audio compression depending upon utilization. There are usually separate codec/algorithms for each aspect of a video, which are often wrapped together as a single compression codec/algorithm. Because of the high data rate required for uncompressed video, most video files are usually compressed before transmission. |
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Why Data (Video/Audio) Compression is Important
The main advantages of compression are reductions in storage hardware, data transmission time, and communication bandwidth. This can result in significant cost savings. Compressed files require significantly less storage capacity than uncompressed files, meaning a significant decrease in expenses for storage. A compressed file also requires less time for transfer while consuming less network bandwidth. This can also help with costs and also increases productivity.
The main disadvantage of data compression is the increased use of computing resources to apply compression to the relevant data. Because of this, compression vendors prioritize speed and resource efficiency optimizations in order to minimize the impact of intensive compression tasks.
Compression or file compression utility programs are utilized by enterprises for the high volume of data required for video transmission. Data compression, which enables faster file transfer with minimum data loss, is utilized extensively. a. The prevalence of high-speed connectivity, utilizing communication networking technologies, has increased the need for data compression software.
ISR (INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE) MARKETPLACE
The airborne intelligence, surveillance, and reconnaissance (ISR) sector is a segment of the defense industry. The US Department of Defense (DoD)—and defense ministries elsewhere utilize ISR collection. Many ISR missions are currently carried out by large expensive drones that are vulnerable in certain operating environments.
In response, several new technologies and platforms are emerging to meet the evolving collection requirements of the military. These new technology, platform, and procurement options offer increased ISR capabilities.
To maintain continuous coverage over a given ISR target, the military creates operational “orbits” that use drones to collect multiple forms of ISR, including electronic signals (SIGINT), images (IMINT), and full-motion video (FMV). This is where SUPR adds very useful capability.
Another major area of technological innovation is in the collection capabilities of ISR platforms, particularly in how they analyze, exploit, and disseminate intelligence. For example, cloud-based systems (provided they are adequately secure) can increase access to data from disparate sources, enabling better information sharing and collaboration among multiple stakeholders.
Additionally, artificial intelligence (AI) can make the analysis of information far more effective, efficient, and accurate, synthesizing vast quantities of raw data into actionable intelligence at a scale that no human analyst could achieve. Given that increases in collection capabilities are leading to a corresponding increase in the amount of data captured, AI is becoming critical in enabling the military to sift through the raw data and effectively exploit sensitive information. Similarly, machine learning can refine the processing of raw data over time, increasing a force’s ability to distinguish critical signals from noise. The higher the quality or resolution of the video collected, the better the AI performs. Established firms and those seeking to enter the market in the military airborne Intelligence, Surveillance & Reconnaissance (ISR) technologies market include: Lockheed Martin Corporation, Airbus SE, The Boeing Company, General Electric, General Dynamics, Northrop Grumman Corporation, BAE Systems, Thales Group SA, Leonardo S.p.A., and Textron, Inc. Technologies
The Crucial ISR Market Drivers
The growing importance of airborne ISR services is leading to increased market demand. The rising demand for the UAV systems is a crucial demand driving factor for the airborne ISR market. Manned ISR aircraft are no longer a trend in the defense sector. Unmanned-aerial vehicles are the current trend of the market. The UAVs is fully equipped with an engine, autopilot, ISR platforms and sensors.
Aerial vehicles offer better information to the decision maker. The growing investment of these UAV’s improves demand for airborne ISR. Airborne ISR is a useful technology that can detect any trespasses. Also, it can effectively gather the information of the intruder.
ISR Market Growth Opportunities
Airborne ISR is composed of multiple sophisticated technologies including compression. Technological advancements create growth opportunities for the market.
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The ISR Market Restraints
The ISR airborne technology needs to address the current threats and the solutions to act effectively on them. Therefore, there is a need to increase the compression, data storage, accessibility, analyzation and communication of this information.
ISR Competitive Landscape
There are multiple competitors in the airborne ISR market. There are major key players with effective market strategies. The key players in the market include, Airbus (UK and France), Boeing (US), BAE Systems (UK), Elbit Systems Ltd (Israel), FLIR Systems Inc (US), Northrop Grumman (US), General Dynamics (US), Thales (France), Raytheon (US), UTC Aerospace Systems (US)
ICS- INCIDENT COMMAND SYSTEM MARKETPLACE
Incident Command Systems (ICS) are a standardized approach to the command, control, and coordination of on-scene incident management, providing a common hierarchy within which personnel from multiple organizations can be effective. ICS is the combination of procedures, personnel, facilities, equipment, and communications operating within a common organizational structure, designed to aid in the management of on-scene resources during incidents. Cytta’s IGAN system is a portable hardware/software system designed to provide unified command as the connection nexus for ICS.
ICS is used for all kinds of incidents and is applicable to small, as well as large and complex, incidents, including planned events. ICS is a standardized approach to the command, control, and coordination of on-scene incident management that provides a common hierarchy within which personnel from multiple organizations can be effective.
ICS specifies an organizational structure for incident management that integrates and coordinates a combination of procedures, personnel, equipment, facilities, and communications. Using ICS for every incident helps hone and maintain skills needed to coordinate efforts effectively. ICS is used by all levels of government as well as by many Non-Governmental Organizations (NGOs) and private sector organizations. ICS applies across disciplines and enables incident managers from different organizations to work together. This system includes five major functional areas, staffed as needed, for a given incident: Command, Operations, Planning, Logistics, and Finance/Administration.
ICS has since been incorporated as part of the National Incident Management System (NIMS) of the U.S. Department of Homeland Security. NIMS is a comprehensive national approach to incident management that is applicable at all jurisdictional levels and across functional disciplines where federal funding is involved. The Incident Command System (ICS) is a standardized approach to the command, control, and coordination of emergency response providing a common hierarchy within which responders from multiple agencies can be effective.
Electric utilities began adopting ICS in earnest on the East Coast following Superstorm Sandy in 2012. FEMA outlined four key action items the agency planned to achieve following Sandy. Two of the items addressed the need to achieve a unity of effort by local communities and the federal government in responding to storms and disasters.
ICS is especially useful when interdisciplinary crews from multiple geographic areas converge for storm mitigation. Using ICS incident responders — utility, fire department or police — can share a common language and protocols to tackle the emergency as a united team.
ICS Unified Command
When no one jurisdiction, agency or organization has primary authority and/or the resources to manage an incident on its own, ‘Unified Command” may be established. In Unified Command, there is no one “commander.” Instead, the Unified Command manages the incident by jointly approved objectives. A Unified Command allows these participating organizations to set aside issues such as overlapping and competing authorities, jurisdictional boundaries, and resource ownership to focus on setting clear priorities and objectives for the incident. The resulting unity of effort allows the Unified Command to allocate resources regardless of ownership or location. Cytta’s IGAN is to tool to make Unified Command more efficient.
At its core, ICS is meant to enable the effective and efficient management of incidents, irrespective of jurisdiction, kind, complexity, or size. The system codifies emergency management best practices into a unified approach to incident response, integrating a combination of facilities, equipment, personnel, procedures, and communications, which then all operate under a common organizational structure. IGAN provides the communication nexus.
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General Competitive Strengths within the Industry
When a customer chooses Cytta, they choose a team of experienced individuals who possess expertise in the field of video streaming and utilization of our proprietary compression technologies. We pride ourselves on being solution providers as well as being product developers.
Cytta’s current client list includes various military organizations, several police departments, and industry clients.
We also distinguish ourselves by being able to adapt quickly to our customers’ specific environment and requirements. We achieve this adaptability by not being tied to our own specific products but rather by creating product variations necessary to solve the exact needs of our clients.
PRIMARY BUSINESS STRATEGY
Core Strategic Vision
Cytta’s core strategic vision is to make SUPR and IGAN industry standards for initially managing ISR and ICS information and data integration.
We combine our domain knowledge with software/hardware capability in order to create our products.
Quality Objectives
Our quality objectives are to:
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| · | Create products that meet our customers’ requirements and are delivered on time within cost budget. |
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| · | Educate our customers on the high quality and reliability of our systems. |
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| · | Promote our high standards and professionalism to our customers. |
Sales Model
Cytta’s sales model is process-orientated and is designed to penetrate vertical opportunities emerging in the ISR, and ICS markets as these opportunities mature from basic research to the introduction of our market specific products.
As a partner-centric organization, we are committed to properly ensuring Cytta clients are well-served by Cytta and our channel partners. That is why our mission is to work together to understand the larger client marketplace and deliver a customer-first and industry-relevant experience that is tailored to our initial reference consumer base. As part of our initial sales process, we leverage channel partners to identify suitable reference clients that have demonstrated an immediate and urgent need for our innovative technologies, with the capability of operating as reference point for all other entities in their respective industry.
Cytta follows a six-phase gated process on all sales to its customers. These sales initially involve a demonstration of the Cytta technologies either through the internet or on premises. This leads to a sale of the license and software/hardware followed by a sale of ongoing services associated with the use of the licensed software/hardware. The Phase 0 and 1 of this process are sales processes.
Phase 0 of the process converts a lead into a potential customer by identifying a customer need that Cytta’s software/hardware and services could fill.
Phase 1 is a product demonstration that demonstrates to the customer and Cytta that the software/hardware and services do indeed provide a timely and cost-effective solution to their need.
Phase 2 results in a product and services determination to achieve a detailed implementation plan and specification requirements for the project.
Phase 3 results in a software/hardware license sale and delivery along with additional services.
Phase 4 results in software maintenance and upgrades.
Phase 5 is a systematic annual review with the customer of our products and services to ensure longevity and ongoing customer satisfaction.
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Principal Executive Offices
Our corporate headquarters are located at 5450 W Sahara Avenue, Suite 300A, Las Vegas, Nevada, 89146. Our telephone number is (702) 900-7022.
The Company manages all operations from within approximately 500 square feet of leased space located in an office building in Las Vegas, Nevada.
The directors and executive officers of the Company are:
| Name |
| Age |
| Position |
| Gary Campbell |
| 67 |
| CEO, CFO, Secretary and Director |
| Erik Stephansen |
| 56 |
| President and Director |
| Michael Collins |
| 51 |
| Chief Visionary Officer/CTO |
| Michael Chermak |
| 62 |
| Chief Administrative Officer |
Gary Campbell, CEO, CFO, Secretary and Director
Mr. Campbell, age 67, was President, Secretary and Director of Cytta from 2010 to 2013. In 2013, Mr. Campbell became CEO and CFO, as well as Secretary and Director, a status he maintains today. Since joining Cytta, Mr. Campbell has led the development of Cytta’s video compression and remote patient monitoring technology. Mr. Campbell has over 30 years’ experience in leadership roles in the technology industry. Mr. Campbell has degrees in both Commerce and Law from the University of British Columbia, Canada.
Erik Stephansen, President and Director
Mr. Stephansen, age 57, joined Cytta as President and Director in 2013. Mr. Stephansen assists with the development and integration of Cytta technologies. Mr. Stephansen is also currently CEO and President of LAM Aviation, a FAA technology partner developing Angle-of-Attack and Loss of Control prevention wing systems.
Previously, Mr. Stephansen worked in Private Equity advising buyers on technology integration. Mr. Stephansen is a Business Economics graduate of University of California, Santa Barbara, with specialized studies from UC Berkeley and advanced engineering Certificates from Stanford University.
Michael Collins, Chief Technology Officer
Mr. Collins, age 51, currently leads the Cytta SUPR ISR and IGAN ICS design and implementation team. Mr. Collins works directly with the technical team responsible for all updates and revisions to the products and the underlying algorithms. Mr. Collins has over 20 years of experience in developing, designing, integrating and operating digital imaging, network and telecommunications technologies. Mr. Collins also has extensive film and imaging experience including working in the entertainment industry in video and digital image production. Mr. Collins served for many years as an active volunteer fireman, and emergency medical technician (EMT) volunteering as part of the US First Responder network.
Michael Chermak, Chief Administrative Officer
Mr. Chermak, age 62, has 30 years of experience in leadership roles in the healthcare industry. He has served as the Chief Administrative Officer of Cytta Corp. since April 2020. Previously, he was a director and officer of Ozop Surgical Corp (OTCQB:OZSC) from June 2016 to April 2020.
He worked in China for over 6 years and was the former Chairman and CEO of Bridgetech Holdings International (OTC: BGTH), which focused on introducing Western medicine into China. He has served on the Board of Directors and as an Audit Committee member of Beijing Origin Seed (NASDAQ: SEED). Mr. Chermak graduated from the University of New Mexico, Anderson School of Management.
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None of our directors qualify as “independent” as that term is defined under the applicable rules and regulations of the SEC, meaning that our directors may have business interests in the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. We believe that the members of our executive team are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material income to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors. Further, we are not a “listed company” under SEC rules and thus we are not required to have a compensation committee or a nominating committee.
We do not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. Our board of directors believes that, given the early stages of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. We do not currently have any specific or minimum criteria for the election of nominees to our board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors assesses all candidates, whether submitted by management or shareholders, and makes recommendations for election or appointment.
A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our Chief Executive Officer at the address appearing on the face page of this Prospectus.
Term of Office
Our directors are appointed to hold office until removed from office or until his successor has been elected and qualified in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.
None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.
Audit Committee
We do not have an audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Section 407 of the Sarbanes-Oxley Act of 2002 and Item 407(d) of Regulation S-K is beyond our limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in our financial statements at this stage of our development.
Certain Legal Proceedings
No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.
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Compliance with Section 16(A) Of the Exchange Act.
Upon the effectiveness of this Registration Statement, we intend to file a Form 8-A registration statement under Section 12 of the Securities Exchange Act of 1934, as amended, Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file.
Code of Ethics
The Board of Directors has established a written code of ethics that applies to the Company’s officers. A copy of the Code of Ethics is filed as Exhibit 14.1.
Summary Table. The following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to the named executive officer for all services rendered in all capacities to our company, or any of its subsidiaries, for the years ended September 30, 2020, and 2019:
| Summary Compensation Table | ||||||||||||||||||||||||||||||
| Name & Principal Position |
| Year |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
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| Nonequity Incentive Plan Compensa- tion ($) |
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| All Other Compen- sation ($) |
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| Total ($) |
| |||||||
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| Gary Campbell |
| 2020 |
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| 5,750 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 288,000 | (1) |
|
| 293,750 |
|
| Chief Executive Officer |
| 2019 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 432,000 | (2) |
|
| 432,000 |
|
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|
|
|
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|
|
|
|
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| Michael Collins |
| 2020 |
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| 58,010 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 58,010 |
|
| Chief Technology Officer |
| 2019 |
|
| 15,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,000 |
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
| Michael Chermak |
| 2020 |
|
| 20,000 |
|
|
| - |
|
|
| 312,500 | (3) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 332,500 |
|
| Chief Administration Officer |
| 2019 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
_____________
| (1) | In 2020, the Company accrued $140,000, $120,000 and $28,000 to companies controlled by Mr. Campbell for management fees, public relation services and office rent and administration expenses, respectively. These accrued amounts were subsequently satisfied by the issuance of shares of common stock (see Certain Relationships and Related Transactions below). |
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| (2) | In 2019, the Company accrued $210,000, $180,000 and $42,000 to companies controlled by Mr. Campbell for management fees, public relation services and office rent and administration expenses, respectively. These accrued amounts were subsequently satisfied by the issuance of shares of common stock (see Certain Relationships and Related Transactions below). |
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| (3) | On April 1, 2020, the Company entered into an agreement with Makena Investment Advisors, LLC (“Makena”). Makena is controlled by Mr. Chermak. Pursuant to the agreement, the Company issued Makena 12,500,000 shares of common stock and agreed to compensate Makena $10,000 per month beginning in August 2020. The shares were valued at $312,500 based on the market price of the common stock on the date of the agreement. |
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Employment Agreements
The Company has no formal employment agreements with its officers and directors; however, the Company has orally agreed to compensate Mr. Campbell and Mr. Collins $12,000 each per month, effective August 1, 2020. On June 1, 2021, this amount was increased to $15,000 per month.
On April 1, 2020, the Company entered into an agreement with Makena Investment Advisors, LLC (“Makena”). Makena is controlled by Mr. Chermak. Pursuant to the agreement, the Company issued Makena 12,500,000 shares of common stock and agreed to compensate Makena $10,000 per month beginning in August 2020.
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity during the last three years.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial ownership of our Common Stock as of June 25, 2021, for:
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| · | each of our executive officers and directors; |
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| · | all of our executive officers and directors as a group; and |
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| · | any other beneficial owner of more than 5% of our outstanding Common Stock. |
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of stock options that are immediately exercisable or exercisable within 60 days. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated, the address of each individual identified is care of the Company.
| Title of Class |
| Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Owner |
|
| Percent of Class (1) |
| ||
| Common Stock |
| Gary Campbell |
|
| 62,184,875 | (2) |
|
| 21.1 | % |
| Common Stock |
| Michael Collins |
|
| 30,100,000 |
|
|
| 10.2 | % |
| Common Stock |
| Erik Stephansen |
|
| 7,770,081 |
|
|
| 2.6 | % |
| Common Stock |
| Michael Chermak |
|
| 12,500,000 | (3) |
|
| 4.2 | % |
| Common Stock |
| Harvey Sussman 2719 Hawks Landing Blvd Palm Harbor FL 34685 |
|
| 15,396,669 |
|
|
| 5.2 | % |
| Series D Preferred Stock (4) |
| Gary Campbell |
|
| 50,000 |
|
|
| 100.0 | % |
___________________
| (1) | Based on 295,629,675 shares of common stock issued and outstanding as of June 25, 2021. |
|
|
|
| (2) | Includes 25,100,000 shares of common stock issued in the name of Lando Technologies, Inc. (“Lando”), 19,800,000 shares of common stock issued in the name of Unified Assets, Inc. (“Unified”), 5,668,208 shares of common stock issued in the name of TEKM Services, Inc. (“TEKM”), 166,667 shares of common stock issued in the name of Unified Financial, Inc. (“Financial”), 1,500,000 shares of common stock issued in the name Cytta Foundation (“CF”) and 50,000 shares of Series D Preferred Stock that are convertible into 50,000 shares of common stock, issued in the name of Financial. Lando, Unified, TEKM, CF and Financial are all controlled by Gary Campbell. |
|
|
|
| (3) | Includes 12,500,000 shares of common stock issued to Makena Investment Advisors, LLC, a limited liability corporation managed by Michael Chermak. |
|
|
|
| (4) | Includes 50,000 shares issued to Financial. The Series D Preferred Stock is convertible into 50,000 shares of common stock and has voting rights equal to two (2) times the number of other shares of the Company eligible to vote. Gary Campbell has voting control over shares issued to Financial. |
| 36 |
| Table of Contents |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party agreements and fees
For the years ended September 30, 2020, and 2019, the Company recorded expenses to related parties in the following amounts:
|
|
| Years ended |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
| CEO-Management fees |
| $ | 205,750 |
|
| $ | 300,000 |
|
| Chief Technology Officer (CTO) |
|
| 58,010 |
|
|
| 15,000 |
|
| Chief Administration Officer (CAO) |
|
| 20,000 |
|
|
| - |
|
| Public relations |
|
| 60,000 |
|
|
| 90,000 |
|
| Office rent and expenses |
|
| 28,000 |
|
|
| 42,000 |
|
| Total |
| $ | 371,760 |
|
| $ | 447,000 |
|
For the six months ended March 31, 2021, and 2020, the Company recorded expenses to related parties in the following amounts:
|
|
| Six months ended March 31, |
| |||||
| Description |
| 2021 |
|
| 2020 |
| ||
| CEO-Management fees |
| $ | 72,000 |
|
| $ | 156,010 |
|
| Chief Technology Officer (CTO) |
|
| 72,000 |
|
|
| 6,000 |
|
| Chief Administration Officer (CAO) |
|
| 60,000 |
|
|
| - |
|
| Public relations |
|
| - |
|
|
| 45,000 |
|
| Office rent and expenses |
|
| - |
|
|
| 21,000 |
|
| Total |
| $ | 204,000 |
|
| $ | 228,010 |
|
For the six months ended March 31, 2021, the Company paid $12,000 per month to its CEO and CTO, respectively, and $10,000 per month to its CAO) For the six months ended March 31, 2020, expenses for management fees, public relations and office rent and expenses were all accrued (non-cash). The amounts owed were recorded as expenses with the offset to capital stock to be issued, which is included in the equity section on the balance sheet. In May 2020, the agreements with the CEO, the public relations company and the office rent expense ceased and the Company was no longer accruing such expenses.
On April 1, 2020, the Company entered into an agreement with Makena Investment Advisors, LLC (“Makena”). Makena is controlled by Mr. Chermak. Pursuant to the agreement, the Company issued Makena 12,500,000 shares of common stock and agreed to compensate Makena $10,000 per month beginning in August 2020. The shares were valued at $312,500 based on the market price of the common stock on the date of the agreement.
During the year ended September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock to a Company controlled by our CEO in satisfaction of $1,347,894 of capital stock to be issued. As of September 30, 2020, included in capital stock to be issued was $432,000 due to related parties. On November 12, 2020, the Company issued 17,280,000 shares of restricted common stock for payment of the $432,000 in capital stock to be issued.
On October 25, 2020, the Company entered into a sublease with its CTO, whereby the Company agreed to annual lease payment of $50,000. For the six months ended March 31, 2021, the Company expensed $20,835 to rent expense pursuant to this sublease.
| 37 |
| Table of Contents |
General
Our authorized capital stock consists of 500,000,000 shares of common stock, $0.001 par value per share, and 100,000,000 shares of preferred stock, $0.001 par value per share, 10,000,000 of which authorized preferred shares have been designated as Series D Preferred Stock and 13,650,000 have been designated as Series E Preferred Stock.
Common Stock
As of June 25, 2021, 295,629,875 shares of common stock are issued and outstanding. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote.
Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. The presence, in person or by proxy, of shareholders holding at least fifty-one (51%) percent of the shares entitled to vote shall be necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our articles of incorporation.
Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or corporate wind up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.
Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Preferred Stock
The Company is authorized to issue 100,000,000 shares of preferred stock, $0.001 par value per share, 10,000,000 of which authorized preferred shares have been designated as Series D Preferred Stock, and 13,650,000 of which authorized preferred shares have been designated as Series E Preferred Stock. As of June 25, 2021, there were 50,000 shares of Series D Preferred Stock issued and outstanding, and 13,650,000 shares of Series E Preferred Stock issued and outstanding.
Series D Preferred Stock
Each share of Series D Preferred Stock is convertible into one share of fully paid and non-assessable Common Stock. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the Holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to two times the sum of all the number of shares of other classes of Corporation capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Corporation.
Series E Preferred Stock
Each share of Series E Preferred Stock is convertible into one share of fully paid and non-assessable Common Stock, and each holder is entitled to one vote for each share of Series E Preferred Stock held.
Warrants
None.
Options
None.
| 38 |
| Table of Contents |
Registration Expenses
All fees and expenses incident to the registrations will be paid by us whether or not any securities are sold pursuant to a registration statement.
SHARES ELIGIBLE FOR FUTURE SALE
As of June 25, 2021, we had outstanding 295,629,875 shares of common stock.
Shares Covered by this Prospectus
All of the 44,600,000 shares of Common Stock being registered in this offering may be sold without restriction under the Securities Act.
Rule 144
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Rule 144 allows for the public resale of restricted and control securities if a number of conditions are met. Meeting the conditions includes holding the shares for a certain period of time, having adequate current information, looking into a trading volume formula, and filing a notice of the proposed sale with the SEC.
In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale, (ii) we are subject to the Exchange Act periodic reporting requirements and have filed all required reports for a least 90 days before the sale, and (iii) we are not a shell company (a company having no or nominal operations and either (1) no or nominal assets, (2) assets consisting solely of cash and cash equivalents, or (3) assets consisting of any amount of cash and cash equivalents and nominal other assets), and have complied with the shell company requirements in Rule 144(i). As we were previously a shell company, under Rule 144(i), Rule 144 would be unavailable until one year following the date we cease to be a shell company and file Form 10 information with the SEC ceasing to be a shell company, provided that we are then subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and have filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that we were required to file such reports and materials), other than Form 8-K reports.
Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:
| - | 1% of the number of shares of our common stock then outstanding, which would equal approximately 2,956,297 shares, based on the number of shares of our common stock outstanding as of June 25, 2021 (295,629.675); or |
| - | The average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
At the expiration of the one-year holding period (following filing Form 10 information with SEC regarding the Company’s cessation as a shell company and provided the other requirements of Rule 144(i) are met), a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an unlimited number of shares of our common stock without restriction. A person who was one of our affiliates at any time during the three months preceding a sale would remain subject to the volume restrictions described above.
Sales under the Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.
| 39 |
| Table of Contents |
The Selling Security Holders will sell the shares from time to time through independent brokerage firms in the over-the-counter market or in private transactions at $0.15 per share, until the shares are quoted on the OTC Bulletin Board, in which case the shares will be sold at market prices prevailing at the time of sale. The Selling Security Holders may use any one or more of the following methods when selling shares:
|
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits Investors; |
|
| · | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
|
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
|
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
|
| · | privately negotiated transactions; |
|
| · | to cover short sales made after the date that this prospectus is declared effective by the Commission; |
|
| · | broker-dealers may agree with the Selling Security Holders to sell a specified number of such shares at the stipulated price per share; |
|
| · | a combination of any such methods of sale; and |
|
| · | any other method permitted pursuant to applicable law. |
The Selling Security Holders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Security Holders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Security Holders, or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser, in amounts to be negotiated. The Selling Security Holders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.
The Selling Security Holders may from time to time pledge or grant a security interest in some or all of the shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of our common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling security holders to include the pledgee, transferee or other successors in interest as selling security holders under this prospectus.
Upon our being notified in writing by a Selling Security Holder that any material arrangement has been entered into with a broker-dealer for the sale of our common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Security Holder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of our common stock were sold, (iv)the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon our being notified in writing by a Selling Security Holder that a donee or pledgee intends to sell more than 500 shares of our common stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.
The Selling Security Holders also may transfer the shares of our common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The Selling Security Holders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of Securities will be paid by the Selling Security Holder and/or the purchasers. Each Selling Security Holder has represented and warranted to us that it acquired the securities subject to this prospectus in the ordinary course of such Selling Security Holder’s business and, at the time of its purchase of such securities such Selling Security Holder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.
| 40 |
| Table of Contents |
We have advised each Selling Security Holder that it may not use shares registered on this prospectus to cover short sales of our common stock made prior to the date on which this prospectus shall have been declared effective by the Commission. If a Selling Security Holder uses this prospectus for any sale of our common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The Selling Security Holders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Security Holders in connection with resales of their respective shares under this prospectus.
We are required to pay all fees and expenses incident to the registration of the shares, but we will not receive any proceeds from the sale of our common stock. We have agreed to indemnify the Selling Security Holders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
On November 24, 2020, Lee Skoblow (the “Plaintiff”) filed a complaint in the State District Court for Clark County, Nevada, naming Cytta as a Defendant. The Plaintiff contends that the Company had breached an agreement. On or about January 15, 2021, the Defendant filed an Answer and Counterclaim in the litigation and also contended that in fact the Plaintiff owed money to Cytta having breached an earlier services agreement, of limited scope and duration, and other obligations owed to Cytta, and was liable for defaming Cytta in various communications he had sent to certain persons or entities prior to his demand being asserted. Management intends to contest the matter vigorously.
Other than the above, we know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Except as disclosed herein, no expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The financial statements of Cytta Corp. as of September 30, 2020, and 2019, have been included herein in reliance on the report of Prager Metis CPA’s LLC, an independent registered public accounting firm, given on the authority of those firms as experts in auditing and accounting. The legal opinion rendered by Brunson Chandler & Jones, PLLC, regarding our common stock to be registered on Form S-1 is as set forth in its opinion letter included in this prospectus. The address of Brunson Chandler & Jones, PLLC, is Walker Center, 175 S. Main Street, Suite 1410, Salt Lake City, Utah, 84111.
The transfer agent and registrar for our Common Stock is Securities Transfer Corporation. It is located at 2901 N. Dallas Parkway, Suite 380, Plano, Texas, 75093. Its phone number is (469) 633-0101. Its website is www.stctransfer.com.
| 41 |
| Table of Contents |
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered hereby. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedule thereto, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information regarding our common stock and our company, please review the registration statement, including exhibits, schedules and reports filed as a part thereof. Statements in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement set forth the material terms of such contract or other document but are not necessarily complete, and in each instance, reference is made to the copy of such document filed as an exhibit to the registration statement.
We will also be subject to the informational requirements of the Exchange Act upon the registration statement’s effectiveness, which requires us to file reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information along with the registration statement, including the exhibits and schedules thereto, may be inspected at public reference facilities of the SEC at 100 F Street N.E, Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC’s Internet website at http://www.sec.gov.
| 42 |
| Table of Contents |
| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Cytta Corp.
Opinion on the Consolidated Financial Statements
We have audited the accompanying balance sheets of Cytta Corp. (the Company) as of September 30, 2020 and 2019, and the related statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as September 30, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements, As of September 30, 2020 the Company had an accumulated deficit of $19,681,368 and has also generated losses since inception. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ Prager Metis CPA’s LLC | |
|
|
|
| We have served as the Company’s auditor since 2020 | |
|
|
|
| Hackensack, New Jersey | |
| June 25, 2021 | |
| F-2 |
| Table of Contents |
| Cytta Corp. | ||||||
|
|
| September 30, |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
| ASSETS |
|
|
|
|
|
| ||
| Current assets |
|
|
|
|
|
| ||
| Cash |
| $ | 847,646 |
|
| $ | 17,054 |
|
| Accounts Receivable |
|
| - |
|
|
| 8,000 |
|
| Inventory |
|
| 34,199 |
|
|
| 617 |
|
| Prepaid Expenses |
|
| 559,443 |
|
|
| - |
|
| Total Current Assets |
|
| 1,441,288 |
|
|
| 25,671 |
|
|
|
|
|
|
|
|
|
|
|
| Property and Equipment |
|
| 143,058 |
|
|
| 16,074 |
|
| TOTAL ASSETS |
| $ | 1,584,346 |
|
| $ | 41,745 |
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
| $ | 47,209 |
|
| $ | 12,994 |
|
| Customer deposits |
|
| 50,480 |
|
|
| - |
|
| Total current liabilities |
|
| 97,689 |
|
|
| 12,994 |
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| Preferred stock: |
|
|
|
|
|
|
|
|
| 100,000,000 shares authorized, $0.001 par value Series C Preferred Stock (600,000 issued and outstanding, par value $0.001) |
|
| 600 |
|
|
| 600 |
|
| Series D Preferred Stock (10,000,000 shares authorized, par value $0.001 and 50,000 and 0 issued and outstanding as of September 30, 2020 and 2019, respectively) |
|
| 50 |
|
|
| - |
|
| Common stock: |
|
|
|
|
|
|
|
|
| (500,000,000 shares authorized par value $0.001; 289,147,675 and 185,547,675 shares issued and outstanding as of September 30, 2020 and 2019, respectively) |
|
| 289,148 |
|
|
| 185,548 |
|
| Additional paid-in capital |
|
| 20,391,477 |
|
|
| 16,383,483 |
|
| Accumulated Deficit |
|
| (19,681,368 | ) |
|
| (18,914,524 | ) |
| Stock to be issued |
|
| 486,750 |
|
|
| 2,373,644 |
|
| Total Stockholders' Equity |
|
| 1,486,657 |
|
|
| 28,751 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 1,584,346 |
|
| $ | 41,745 |
|
The accompanying notes are an integral part of these statements
| F-3 |
| Table of Contents |
| Cytta Corp. | ||||||||
|
|
|
|
|
|
|
| ||
|
|
| For Year Ended September 30, |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
|
| ||
| Revenues |
| $ | 48,513 |
|
| $ | 27,565 |
|
| Cost of goods sold |
|
| 24,037 |
|
|
| 9,130 |
|
| Gross profit |
|
| 24,476 |
|
|
| 18,435 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| General and Administrative expenses: |
|
|
|
|
|
|
|
|
| Related party |
|
| 371,760 |
|
|
| 447,000 |
|
| Other |
|
| 418,066 |
|
|
| 217,807 |
|
|
|
|
|
|
|
|
|
|
|
| Total Operating Expenses |
|
| 789,826 |
|
|
| 664,807 |
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
| (765,350 | ) |
|
| (646,372 | ) |
|
|
|
|
|
|
|
|
|
|
| Other expenses |
|
|
|
|
|
|
|
|
| Interest expense |
|
| 1,494 |
|
|
| 1,828 |
|
| Total Other Expenses |
|
| 1,494 |
|
|
| 1,828 |
|
|
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
| (766,844 | ) |
|
| (648,200 | ) |
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
| $ | (766,844 | ) |
| $ | (648,200 | ) |
|
|
|
|
|
|
|
|
|
|
| Loss per share, basic and flly diluted |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
| 206,980,736 |
|
|
| 178,413,428 |
|
|
|
|
|
|
|
|
|
|
|
| The accompanying notes are an integral part of these statements | ||||||||
| F-4 |
| Table of Contents |
| CYTTA CORP | ||||||||||||||||||||||||||||||
| Year Ended September 30, 2020 |
|
|
| Common Stock |
|
| Series C Preferred Stock |
|
| Series D Preferred Stock |
|
| Stock to be |
|
| Additional Paid-in |
|
| Retained |
|
| Total Stockholders' |
| |||||||||||||||||||
|
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| issued |
|
| Capital |
|
| Earnings |
|
| Equity |
| ||||||||||
| Balance October 1, 2019 |
|
| 185,547,675 |
|
| $ | 185,548 |
|
|
| 600,000 |
|
| $ | 600 |
|
|
| - |
|
| $ | - |
|
| $ | 2,373,644 |
|
| $ | 16,383,483 |
|
| $ | (18,914,524 | ) |
| $ | 28,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock to be issued for accounts payable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 288,000 |
|
|
| - |
|
|
| - |
|
|
| 288,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued and to be issued for cash |
|
| 44,600,000 |
|
|
| 44,600 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 223,000 |
|
|
| 930,400 |
|
|
| - |
|
|
| 1,198,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued for stock to be issued |
|
| 29,150,000 |
|
|
| 29,150 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,050,000 | ) |
|
| 1,020,850 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued to consultants |
|
| 29,850,000 |
|
|
| 29,850 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 708,900 |
|
|
| - |
|
|
| 738,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Series D Preferred Stock issued for subscriptions payable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 50,000 |
|
|
| 50 |
|
|
| (1,347,894 | ) |
|
| 1,347,844 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (766,844 | ) |
|
| (766,844 | ) |
| Balance September 30, 2020 |
|
| 289,147,675 |
|
| $ | 289,148 |
|
|
| 600,000 |
|
| $ | 600 |
|
|
| 50,000 |
|
| $ | 50 |
|
| $ | 486,750 |
|
| $ | 20,391,477 |
|
| $ | (19,681,368 | ) |
| $ | 1,486,657 |
|
| CYTTA CORP | ||||||||||||||||||||||||||||||
| Statement of Changes in Stockholders' Equity | ||||||||||||||||||||||||||||||
| Year Ended September 30, 2019 |
|
|
| Common Stock |
|
| Series C Preferred Stock |
|
| Series D Preferred Stock |
|
| Stock to be |
|
| Additional Paid-in |
|
| Retained |
|
| Total Stockholders' |
| |||||||||||||||||||
|
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| issued |
|
| Capital |
|
| Earnings |
|
| Equity |
| ||||||||||
| Balance at September 30, 2018 |
|
| 157,547,670 |
|
| $ | 157,548 |
|
|
| 600,000 |
|
| $ | 600 |
|
|
| - |
|
| $ | - |
|
| $ | 2,148,644 |
|
| $ | 15,987,483 |
|
| $ | (18,266,324 | ) |
| $ | 27,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock subscriptions issued for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| accounts payable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 432,000 |
|
|
| - |
|
|
| - |
|
|
| 432,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued for subscriptions |
|
| 25,000,005 |
|
|
| 25,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (379,000 | ) |
|
| 354,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued to consultants |
|
| 3,000,000 |
|
|
| 3,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 42,000 |
|
|
| - |
|
|
| 45,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subscriptions issued for cash |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 172,000 |
|
|
| - |
|
|
| - |
|
|
| 172,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (648,200 | ) |
|
| (648,200 | ) |
| Balance at September 30, 2019 |
|
| 185,547,675 |
|
| $ | 185,548 |
|
|
| 600,000 |
|
| $ | 600 |
|
|
| - |
|
| $ | - |
|
| $ | 2,373,644 |
|
| $ | 16,383,483 |
|
| $ | (18,914,524 | ) |
| $ | 28,751 |
|
The accompanying notes are an integral part of these consolidated financial statements
| F-5 |
| Table of Contents |
Cytta Corp.
|
|
| For the Year Ended September 30, |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
|
| ||
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Net loss |
| $ | (766,844 | ) |
| $ | (648,200 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Stock-based compensation expense |
|
| 201,641 |
|
|
| 45,000 |
|
| Depreciation expense |
|
| 6,472 |
|
|
| 6,467 |
|
| Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
|
|
| Inventory |
|
| (33,582 | ) |
|
| 2,755 |
|
| Accounts Receivable |
|
| 8,000 |
|
|
| - |
|
| Prepaid expenses |
|
| (22,334 | ) |
|
| - |
|
| Accounts payable and accrued liabilities |
|
| 322,216 |
|
|
| 432,000 |
|
| Customer deposits |
|
| 50,480 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net cash used in operating activities |
|
| (233,951 | ) |
|
| (161,978 | ) |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Purchase of property and equipment |
|
| (133,456 | ) |
|
| (2,634 | ) |
|
|
|
|
|
|
|
|
|
|
| Net cash used in investing activities |
|
| (133,456 | ) |
|
| (2,634 | ) |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from stock subscriptions |
|
| 1,198,000 |
|
|
| 172,000 |
|
| Net cash provided by financing activities |
|
| 1,198,000 |
|
|
| 172,000 |
|
|
|
|
|
|
|
|
|
|
|
| NET INCREASE IN CASH |
|
| 830,592 |
|
|
| 7,388 |
|
| CASH AT BEGINNING OF YEAR |
|
| 17,054 |
|
|
| 9,666 |
|
| CASH AT END OF YEAR |
| $ | 847,646 |
|
| $ | 17,054 |
|
|
|
|
|
|
|
|
|
|
|
| SUPPLEMENTAL CASH FLOW DISCLOSURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for interest |
| $ | - |
|
| $ | - |
|
| Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
| SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
| Common stock issued for services |
| $ | 738,750 |
|
| $ | 45,000 | |
| Stock to be issued for accounts payable |
| $ | 288,000 |
|
| $ | 432,000 | |
The accompanying notes are an integral part of these statements
| F-6 |
| Table of Contents |
Cytta Corp.
September 30, 2020
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Cytta Corp., (“Cytta” or the “Company”) was incorporated on May 30, 2006 under the laws of the State of Nevada. It is located in Las Vegas, Nevada. Cytta is in the business of imagineering, developing and securing disruptive technologies.
NOTE 2 – GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2020, the Company had an accumulated deficit of $19,681,368 and has also generated losses since inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern.
In December 2019, a novel strain of coronavirus (COVID-19) emerged. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but it may have a material adverse impact on our business, financial condition and results of operations. Management expects that its business will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time.
The Company develops and integrates its video/image compression technologies for use in the Military, First Responder and commercial markets. Utilizing its SUPR (Superior Utilization of Processing Resources) video/Image compression technology, Cytta has finished the design, build and integration of the SUPR compression technology into its first operational product, a Live 4K Streaming Drone and has completed the first product sales. The second-generation version of its SUPR compression system is currently being introduced to clients. Cytta has developed and built out the EvrCare platform to address the market need for a complete and comprehensive telecom-based monitoring, evaluation and interpretation solution to manage a wide range of biometric data, including ECGs, within military, consumer, wellness and healthcare markets. Complementing these capabilities, Cytta's new Wi-VHF broadband technology, gives us the capability of moving broadband signals in a significantly more efficient manner than other broadband technologies. This Wi-VHF technology extends the range and capabilities of how information is delivered throughout the world. Ultimately our technologies are all capable of interfacing to create a new communications paradigm.
The Company intends to fund operations through equity financing arrangements, which may not be insufficient to fund its capital expenditures, working capital and other cash requirements for the foreseeable future.
| F-7 |
| Table of Contents |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“US GAAP”).
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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. Cash and cash equivalent balances may, at certain times, exceed federally insured limits. The Company has no cash equivalents at September 30, 2020, and 2019.
Prepaid expenses
The Company considers expenses or services paid for prior to the period the expense is completed to be recorded as a prepaid expense. Included in this account is the value of common stock issued to consultants. Such issuances are pursuant to consulting agreements that can have a one-to-two-year term. The Company amortized the value of the stock issued over the term of the agreement. The activity for the year ended September 30, 2020 is summarized as:
| Balance October 1, 2019 |
| $ | - |
|
| Value of common stock issued |
|
| 738,750 |
|
| Amortization of stock-based compensation |
|
| (201,641 | ) |
| Vendor deposit |
|
| 20,000 |
|
| Other prepaid expenses |
|
| 2,334 |
|
| Balance September 30, 2020 |
| $ | 559,443 |
|
Inventory
Inventories are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis. Inventory costs include finished goods and component parts. In evaluating the net realizable value of inventory, management also considers, if applicable, other factors, including known trends, market conditions, currency exchange rates and other such issues. Inventory as September 30, 2020, and 2109 was $34,199 and $617, respectively.
Property and equipment
Property and equipment are stated at cost, and depreciation is provided by use of a straight-line method over the estimated useful lives of the assets.
The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. The estimated useful lives of property and equipment is as follows:
|
| Vehicles and equipment | 5 years |
|
| Software | 3 years |
| F-8 |
| Table of Contents |
Fair value of financial instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
|
| ● | Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. |
|
| ● | Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
|
| ● | Level 3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets and accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.
Revenue recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products by: (1) identify the contract (if any) with a customer; (2) identify the performance obligations in the contract (if any); (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract (if any); and (5) recognize revenue when each performance obligation is satisfied. Under ASC 606, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. Other than The Company has no outstanding contracts with any of its’ customers. The Company recognizes revenue when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and is based on the applicable shipping terms.
Revenues are derived from the sale of hardware products embedded with our software and video streaming technology. We also offer a combination of technical and consulting services, proprietary software products, hardware products utilizing our software, to meet the needs of customers.
Stock-based compensation
The Company accounts for its stock based compensation under the recognition and measurement principles of the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (“SFAS No. 123R”)(ASC 718) using the modified prospective method for transactions in which the Company obtains employee services in share-based payment transactions and the Financial Accounting Standards Board 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” (“EITF No. 96-18”) for share-based payment transactions with parties other than employees provided in SFAS No. 123(R) (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur.
| F-9 |
| Table of Contents |
Income taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”) (ASC 740). Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Cash flows reporting
The Company follows the provisions of ASC 230 for cash flows reporting and accordingly classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
Reporting segments
ASC 280 establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. Currently, ASC 280 has no effect on the Company’s financial statements as substantially all of the Company’s operations are conducted in one industry segment.
Concentrations of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Earnings (Loss) Per Share of Common Stock
The Company has adopted ASC 260-10-20, “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.
Recent Accounting Pronouncements
There have no recent accounting pronouncements or changes in accounting pronouncements during the period ended September 30, 2020, that are of significance or potential significance to the Company.
| F-10 |
| Table of Contents |
NOTE 4 – PROPERTY AND EQUIPMENT
The following table represents the Company’s property and equipment as of September 30, 2020, and 2019:
|
|
| September 30, 2020 |
|
| September 30, 2019 |
| ||
| Property and equipment |
| $ | 162,487 |
|
| $ | 29,030 |
|
| Accumulated depreciation |
|
| (19,429 | ) |
|
| (12,956 | ) |
| Property and equipment, Net |
| $ | 143,058 |
|
| $ | 16,074 |
|
Depreciation expense was $6,472 and $6,467 for the years ended September 30, 2020, and 2019, respectively.
NOTE 5 – RELATED PARTY TRANSACTIONS
Related Party agreements and fees
For the years ended September 30, 2020, and 2019, the Company recorded expenses to related parties in the following amounts:
|
|
| Years ended |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
| Management fees, Chief Executive Officer (CEO) |
| $ | 205,750 |
|
| $ | 300,000 |
|
| Chief Technology Officer (CTO) |
|
| 58,010 |
|
|
| 15,000 |
|
| Chief Administration Officer (COO) |
|
| 20,000 |
|
|
| - |
|
| Public relations |
|
| 60,000 |
|
|
| 90,000 |
|
| Office rent and expenses |
|
| 28,000 |
|
|
| 42,000 |
|
| Total |
| $ | 371,760 |
|
| $ | 447,000 |
|
Expenses for management fees, public relations and office rent and expenses were all accrued (non-cash). The amounts owed were recorded as expenses with the offset to stock to be issued, which is included in the stockholders’ equity section on the accompanying balance sheet. During the year ended September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock (see Note 5) to a Company controlled by our CEO in satisfaction of $1,347,894 of stock to be issued. As of September 30, 2020, included in capital stock to be issued was $432,000 due to related parties. On November 12, 2020, the Company issued 17,280,000 shares of restricted common stock for payment of the $432,000 in stock to be issued. In May 2020, the agreements with the CEO, the public relations company and the office rent expense ceased and the Company was no longer accruing such expenses.
| F-11 |
| Table of Contents |
On April 1, 2020, the Company entered into an agreement with Makena Investment Advisors, LLC (“Makena”). Makena is controlled by Mr. Chermak. Pursuant to the agreement, the Company issued Makena 12,500,000 shares of common stock and agreed to compensate Makena $10,000 per month beginning in August 2020. The shares were valued at $312,500 based on the market price of the common stock on the date of the agreement.
On August 1, 2020, the Company agreed to compensate the CTO and COO $12,000 and $10,000 per month respectively. Beginning October 1, 2020, the Company agreed to compensate the CEO $12,000 per month.
Series D Preferred Stock
On September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock (see Note 6) to a Company controlled by the Company’s CEO, in satisfaction of $1,347,894 of capital stock to be issued. The holder(s) of the Series D Preferred Stock have voting control of the Company.
NOTE 6 – STOCKHOLDERS’ EQUITY
Common Stock
The Company has authorized 500,000,000 common shares, par value $0.001. 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. As of September 30, 2020, and 2019, there were 289,147,675 and 185,547,675, respectively, common shares issued and outstanding.
During the year ended September 30., 2019 the Company issued:
|
| · | 16,000,005 shares of common for stock to be issued for $244,000 of subscription payable amounts received prior to October 1, 2018. |
|
| · | 3,000,000 for consulting services, the shares were valued at $0.15 per share and the Company recorded $45,000 of stock-based compensation. |
|
| · | 9,000,000 shares of common stock issued for stock to be issued to the Company’s CTO for the acquisition of technology from him. |
During the year ended September 30, 2020, the Company issued:
|
| • | 44,600,000 shares of common stock issued for subscription agreements in exchange for cash of $1,198,000. |
|
| • | 9,150,000 shares of common stock issued for stock to be issued for subscription agreements issued prior to October 1, 2019. |
|
| • | 20,000,000 shares of common stock issued for stock to be issued to the Company’s CTO for the acquisition of technology from him. |
|
| • | 29,850,000 shares of common issued to consultants for services. The shares were valued at $738,750, based upon the market price of the common stock on their dates of issuance, and will be amortized over the term of the consultant’s agreements. For the year ended September 30, 2020, the Company recognized $201,641 of stock-based compensation expense. |
Preferred Stock
The Company has 100,000,000 shares authorized as preferred stock, par value $0.001 (the “Preferred Stock”), which such Preferred Stock shall be issuable in such series, and with such designations, rights and preferences as the Board of Directors may determine from time to time.
Series D Preferred Stock
On September 30, 2020, the Company filed an Amended and Restated Certificate of Designation with the State of Nevada of the Company’s Series D Preferred Stock. Under the terms of the Amendment to Certificate of Designation of Series D Preferred Stock, 50,000 shares of the Company’s preferred shares are designated as Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into one share of fully paid and non-assessable Common Stock. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the Holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to two times the sum of all the number of shares of other classes of Corporation capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Corporation. On September 30, 2020, the Company issued 50,000 shares of Series D preferred Stock to a Company controlled by the Company’s CEO, in satisfaction of $1,347,894 of capital stock to be issued. As of September 30, 2020, there were 50,000 shares of Series D Preferred Stock issued and outstanding.
| F-12 |
| Table of Contents |
NOTE 7 - COMMITMENTS AND CONTINGENCIES
On November 24, 2020, a plaintiff (the “Plaintiff”) filed a complaint in the State District Court for Clark County, Nevada, naming Cytta as a Defendant. The Plaintiff contends that the Company had breached an agreement. On or about January 15, 2021, the Defendant filed an Answer and Counterclaim in the litigation and also contended that in fact the Plaintiff owed money to Cytta having breached an earlier services agreement, of limited scope and duration, and other obligations owed to Cytta, and was liable for defaming Cytta in various communications he had sent to certain persons or entities prior to his demand being asserted. Management intends to contest the matter vigorously.
NOTE 8 - INCOME TAXES
A reconciliation of the provision for income taxes determined at the U.S. statutory rate to the Company’s effective income tax rate is as follows:
|
|
| Year Ended |
| |||||
|
|
| September 30, |
| |||||
|
|
| 2020 |
|
| 2019 |
| ||
| Pre-tax loss |
| $ | (766,844 | ) |
| $ | (648,200 | ) |
| U.S. federal corporate income tax rate |
|
| 21 | % |
|
| 21 | % |
| Expected U.S. income tax credit |
|
| (161,037 | ) |
|
| (136,122 | ) |
| Permanent differences |
|
| 42,435 |
|
|
| 9,450 |
|
| Change of valuation allowance |
|
| 118,693 |
|
|
| 126,672 |
|
| Effective tax expense |
| $ | — |
|
| $ | — |
|
The Company had deferred tax assets as follows:
|
|
| September 30, |
|
| September 30, 2019 |
| ||
| Net operating losses carried forward |
| $ | 758,138 |
|
| $ | 639,445 |
|
| Less: Valuation allowance |
|
| (758,138 | ) |
|
| (639,445 | ) |
| Net deferred tax assets |
| $ | — |
|
| $ | — |
|
In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the realization of deferred tax assets. Based upon the historical and anticipated future income, management has determined that the deferred tax assets meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s deferred tax assets as of September 30, 2020.
| F-13 |
| Table of Contents |
As of September 30, 2020, the Company has approximately $3,610,000 net operating loss carryforwards available to reduce future taxable income. As of September 30, 2020, and 2019, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods, and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during the years ended September 30, 2020, and 2019, and no provision for interest and penalties is deemed necessary as of September 30, 2020, and 2019.
NOTE 9 - SUBSEQUENT EVENTS
On October 22, 2020, the Company entered into the First Amendment to a Placement Agent Agreement with Boustead Securities, LLC (“Boustead”). Pursuant to the terms of the amendment, the Company agreed to compensate Boustead $10,000 and to issue Boustead 13,500,000 shares of common stock. The amendment also states that no additional compensation would be paid to Boustead on the first $1,150,000 of financing proceeds received by the Company on or after March 20, 2020. The agreement terminates on March 2, 2022.
On October 25, 2020, the Company entered into a sublease with its CTO, whereby the Company agreed to annual lease payment of $50,000.
On November 12, 2020, the Company issued in the aggregate 17,280,000 shares of common stock to related parties in exchange for $432,000 of stock to be issued.
On November 17, 2020, pursuant to a court order, that deemed a 2014 transaction to be null and void by the court due to misrepresentations, the Company cancelled 28,040,000 shares of common stock that were previously issued in connection with the 2014 transaction.
On February 12, 2021, the Company sold 1,000,000 shares of restricted common to an accredited investor in exchange for $25,000. The Company sold the shares at $0.025 per share.
From March 15, 2021 through June 24, 2021, the Company sold 13,650,000 shares of Series E Preferred Stock at $0.05 per share and received proceeds of $682,500.
The Company has evaluated subsequent events through June 24, 2021, the date the financial statements were issued. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.
| F-14 |
| Table of Contents |
| Cytta Corp. | ||||||
| (Unaudited) |
|
|
| March 31, |
|
| September 30, |
| ||
|
|
| 2021 |
|
| 2020 |
| ||
| ASSETS |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| CURRENT ASSETS |
|
|
|
|
|
| ||
| Cash |
| $ | 516,928 |
|
| $ | 847,646 |
|
| Accounts Receivables |
|
| 20,040 |
|
|
| - |
|
| Inventory |
|
| 63,989 |
|
|
| 34,199 |
|
| Prepaid Expenses |
|
| 1,044,816 |
|
|
| 559,443 |
|
| Total Current Assets |
|
| 1,645,773 |
|
|
| 1,441,288 |
|
|
|
|
|
|
|
|
|
|
|
| Property and Equipment |
|
| 159,397 |
|
|
| 143,058 |
|
|
|
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
| $ | 1,805,170 |
|
| $ | 1,584,346 |
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
| 2,749 |
|
|
| 47,209 |
|
| Customer deposits |
|
| - |
|
|
| 50,480 |
|
| Total current liabilities |
|
| 2,749 |
|
|
| 97,689 |
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| Preferred stock |
|
|
|
|
|
|
|
|
| 100,000,000 shares authorized, $0.001 par value |
|
|
|
|
|
|
|
|
| Series C Preferred Stock (600,000 issued and outstanding, par value $0.001) |
|
| 600 |
|
|
| 600 |
|
| Series D Preferred Stock (10,000,000 shares authorized and 50,000 issued and outstanding, par value $0.001) |
|
| 50 |
|
|
| 50 |
|
| Common stock: |
|
|
|
|
|
|
|
|
| (500,000,000 shares authorized par value $0.001; 292,879,675 and 289,147,675 shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively) |
|
| 292,880 |
|
|
| 289,148 |
|
| Additional paid-in capital |
|
| 21,789,745 |
|
|
| 20,391,477 |
|
| Accumulated Deficit |
|
| (20,695,604 | ) |
|
| (19,681,368 | ) |
| Stock to be issued |
|
| 414,750 |
|
|
| 486,750 |
|
| Total Stockholders' Equity |
|
| 1,802,421 |
|
|
| 1,486,657 |
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 1,805,170 |
|
| $ | 1,584,346 |
|
| The accompanying notes are an integral part of these statements |
| F-15 |
| Table of Contents |
| Cytta Corp. | ||||||||
| (Unaudited) | ||||||||
|
|
|
|
|
| ||||
|
|
| For the Six |
|
| For the Six |
| ||
|
|
| Months Ended |
|
| Months Ended |
| ||
|
|
| March 31, |
|
| March 31, |
| ||
|
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
|
| ||
| Revenues |
| $ | 70,520 |
|
| $ | 20,040 |
|
| Cost of goods sold |
|
| 25,277 |
|
|
| - |
|
| Gross Profit |
|
| 45,243 |
|
|
| 20,040 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
| General and Administrative expenses |
|
|
|
|
|
|
|
|
| Related party |
|
| 204,000 |
|
|
| 228,010 |
|
| Other |
|
| 855,737 |
|
|
| 128,990 |
|
| Total Operating Expenses |
|
| 1,059,737 |
|
|
| 357,000 |
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
| (1,014,494 | ) |
|
| (336,960 | ) |
|
|
|
|
|
|
|
|
|
|
| Other expenses |
|
|
|
|
|
|
|
|
| Interest expense (income) |
|
| (258 | ) |
|
| 969 |
|
| Total Other Expenses (Income) |
|
| (258 | ) |
|
| 969 |
|
|
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
| (1,014,236 | ) |
|
| (337,929 | ) |
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
| $ | (1,014,236 | ) |
| $ | (337,929 | ) |
|
|
|
|
|
|
|
|
|
|
| Loss per share, basic and fully diluted |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
| 293,846,505 |
|
|
| 194,947,675 |
|
|
|
|
|
|
|
|
|
|
|
| The accompanying notes are an integral part of these statements | ||||||||
| F-16 |
| Table of Contents |
| Cytta Corp. |
| (Unaudited) |
| Six Months Ended March 31, 2021 |
|
|
| Series C Preferred Stock |
|
| Series D Preferred Stock |
|
| Common Stock |
|
| Additional Paid-in |
|
| Stock to be |
|
| Accumulated |
|
| Total Stockholders' |
| |||||||||||||||||||
|
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Issued |
|
| Deficit |
|
| Equity |
| ||||||||||
| Balance September 30, 2020 |
|
| 600,000 |
|
| $ | 600 |
|
|
| 50,000 |
|
| $ | 50 |
|
|
| 289,147,675 |
|
| $ | 289,148 |
|
| $ | 20,391,477 |
|
| $ | 486,750 |
|
| $ | (19,681,368 | ) |
| $ | 1,486,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued for services |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 13,500,000 |
|
|
| 13,500 |
|
|
| 931,500 |
|
|
| - |
|
|
| - |
|
|
| 945,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued for stock to be issued |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 18,280,000 |
|
|
| 18,280 |
|
|
| 438,720 |
|
|
| (457,000 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock cancelled |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (28,048,000 | ) |
|
| (28,048 | ) |
|
| 28,048 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock to be issued for cash |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 385,000 |
|
|
| - |
|
|
| 850,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss for the six months ended March 31, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,014,236 | ) |
|
| (1,014,236 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balances March 31, 2021 |
|
| 600,000 |
|
| $ | 600 |
|
|
| 50,000 |
|
| $ | 50 |
|
|
| 292,879,675 |
|
| $ | 292,880 |
|
| $ | 21,789,745 |
|
| $ | 414,750 |
|
| $ | (20,695,604 | ) |
| $ | 1,802,421 |
|
| Cytta Corp. |
| Statement of Changes in Stockholders' Equity |
| (Unaudited) |
| Six Months Ended March 31, 2020 |
|
|
| Series C Preferred Stock |
|
| Series D Preferred Stock |
|
| Common Stock |
|
| Additional Paid-in |
|
| Stock to be |
|
| Accumulated |
|
| Total Stockholders' |
| |||||||||||||||||||
|
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Issued |
|
| Deficit |
|
| Equity |
| ||||||||||
| Balance September 30, 2019 |
|
| 600,000 |
|
| $ | 600 |
|
|
| - |
|
| $ | - |
|
|
| 185,547,675 |
|
| $ | 185,548 |
|
| $ | 16,383,483 |
|
| $ | 2,373,644 |
|
| $ | (18,914,524 | ) |
|
| 28,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock to be issued for cash |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,000 |
|
|
| - |
|
|
| 8,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock to be issued for accounts payable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 216,000 |
|
|
| - |
|
|
| 216,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock issued for stock to be issued |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5,400,000 |
|
|
| 5,400 |
|
|
| 129,600 |
|
|
| (135,000 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issued for services |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,000,000 |
|
|
| 4,000 |
|
|
| 76,000 |
|
|
| - |
|
|
| - |
|
|
| 80,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock to be issued for cash |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 75,000 |
|
|
| - |
|
|
| 75,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss for the six months ended March 31, 2020 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (337,929 | ) |
|
| (337,929 | ) |
|
|
|
| 600,000 |
|
| $ | 600 |
|
|
| 0 |
|
| $ | - |
|
|
| 194,947,675 |
|
| $ | 194,948 |
|
| $ | 16,589,083 |
|
| $ | 2,537,644 |
|
| $ | (19,252,453 | ) |
| $ | 69,822 |
|
The accompanying notes are an integral part of these statements
| F-17 |
| Table of Contents |
| Cytta Corp. |
| (Unaudited) |
|
|
| For the |
|
| For the |
| ||
|
|
| Six Months Ended |
|
| Six Months Ended |
| ||
|
|
| March 31, |
|
| March 31, |
| ||
|
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
|
| ||
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Net loss |
| $ | (1,014,236 | ) |
| $ | (337,929 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Stock-based compensation expense |
|
| 469,375 |
|
|
| 80,000 |
|
| Depreciation expense |
|
| 17,910 |
|
|
| - |
|
| Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
|
|
| Inventory |
|
| (29,790 | ) |
|
| - |
|
| Accounts Receivable |
|
| (20,040 | ) |
|
| - |
|
| Prepaid expenses |
|
| (9,749 | ) |
|
| - |
|
| Accounts payable and accrued liabilities |
|
| (44,459 | ) |
|
| 225,751 |
|
| Customer deposits |
|
| (50,480 | ) |
|
| - |
|
| Net cash used in operating activities |
|
| (681,469 | ) |
|
| (32,178 | ) |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Purchase of property and equipment |
|
| (34,249 | ) |
|
| (2,458 | ) |
| Net cash used in investing activities |
|
| (34,249 | ) |
|
| (2,458 | ) |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from stock subscriptions |
|
| 385,000 |
|
|
| 83,000 |
|
| Net cash provided by financing activities |
|
| 385,000 |
|
|
| 83,000 |
|
|
|
|
|
|
|
|
|
|
|
| INCREASE (DECREASE) IN CASH |
|
| (330,718 | ) |
|
| 48,364 |
|
| CASH AT BEGINNING OF PERIOD |
|
| 847,646 |
|
|
| 17,054 |
|
| CASH AT END OF PERIOD |
| $ | 516,928 |
|
| $ | 65,418 |
|
|
|
|
|
|
|
|
|
|
|
| SUPPLEMENTAL CASH FLOW DISCLOSURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for interest |
| $ | - |
|
| $ | - |
|
| Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| $ | 945,000 |
|
| $ | - |
| |
| Stock to be issued for accounts payable |
| $ | - |
|
| $ | 216,000 |
|
The accompanying notes are an integral part of these statements
| F-18 |
| Table of Contents |
Cytta Corp.
March 31, 2021
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Cytta Corp., (“Cytta” or the “Company”) was incorporated on May 30, 2006 under the laws of the State of Nevada. It is located in Las Vegas, Nevada. The Company is in engaged in the creation, manufacture, distribution, and marketing of our proprietary streaming products.
NOTE 2 – GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of March 31, 2021, the Company had an accumulated deficit of $20,695,604 and has also generated losses since inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern.
In December 2019, a novel strain of coronavirus (COVID-19) emerged. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but it may have a material adverse impact on our business, financial condition and results of operations. Management expects that its business will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined at this time.
The Company develops and distributes proprietary technology that radically shifts how video is streamed, consumed, transferred and stored. Our proprietary SUPR Stream is the technology at the core of our products, designed specifically for streaming and storing HD, 4K, and higher resolution video. The IGAN (Incident Global Area Network) Incident Command System (ICS) seamlessly streams and stores all relevant video and audio during emergency situations. This creates real-time situational awareness for police, firefighters, first responders, EMS, and their command centers. Our products work in size, weight, and power-constrained (SWaP) operating environments, and evolved through use in the military by meeting the need to stream multiple HD, 4K, and 4K+ video feeds with ultra-low latency, bandwidth, and power consumption. The Company is taking this streaming, storage, and transfer technology to enterprises that would like to send more high-quality videos with fewer resources. All of our products are manufactured in the USA.
The Company intends to fund operations through equity financing arrangements, which may not be insufficient to fund its capital expenditures, working capital and other cash requirements for the foreseeable future. For the six months ended March 31, 2021, the Company sold 7,200,000 shares of preferred stock at $0.05 per share and received $360,000. Since March 31, 2021, the Company sold 6,450,000 shares of preferred stock at $0.05 per share and received an additional $322,500.
| F-19 |
| Table of Contents |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements. Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2021, and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the operating results for the full fiscal year or any future period.
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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. Cash and cash equivalent balances may, at certain times, exceed federally insured limits. The Company has no cash equivalents at March 31, 2021, and September 30, 2020.
Prepaid expenses
The Company considers expenses or services paid for prior to the period the expense is completed to be recorded as a prepaid expense. Included in this account is the value of common stock issued to consultants. Such issuances are pursuant to consulting agreements that can have a one-to-two-year term. The Company amortized the value of the stock issued over the term of the agreement. The activity for the six months ended March 31, 2021 is summarized as:
| Balance October 1, 2020 |
| $ | 559,443 |
|
| Value of common stock issued |
|
| 945,000 |
|
| Amortization of stock-based compensation |
|
| (469,375 | ) |
| Prepaid rent |
|
| 29,167 |
|
| Other prepaid expense activity, net |
|
| (19,419 | ) |
| Balance March 31, 2021 |
| $ | 1,044,816 |
|
Inventory
Inventories are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis. Inventory costs include finished goods and component parts. In evaluating the net realizable value of inventory, management also considers, if applicable, other factors, including known trends, market conditions, currency exchange rates and other such issues. Inventory as of March 31, 2021, and September 30, 2020, was $63,989 and $34,199, respectively.
Property and equipment
Property and equipment are stated at cost, and depreciation is provided by use of a straight-line method over the estimated useful lives of the assets.
The Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. The estimated useful lives of property and equipment is as follows:
|
| Vehicles and equipment | 5 years |
|
| Software | 3 years |
| F-20 |
| Table of Contents |
Fair value of financial instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
|
| ● | Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. |
|
| ● | Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
|
| ● | Level 3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets and accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.
Revenue recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products by: (1) identify the contract (if any) with a customer; (2) identify the performance obligations in the contract (if any); (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract (if any); and (5) recognize revenue when each performance obligation is satisfied. Under ASC 606, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. Other than The Company has no outstanding contracts with any of its’ customers. The Company recognizes revenue when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and is based on the applicable shipping terms.
Revenues are derived from the sale of hardware products embedded with our software and video streaming technology. We also offer a combination of technical and consulting services, proprietary software products, hardware products utilizing our software, to meet the needs of customers.
Stock-based compensation
The Company accounts for its stock based compensation under the recognition and measurement principles of the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (“SFAS No. 123R”)(ASC 718) using the modified prospective method for transactions in which the Company obtains employee services in share-based payment transactions and the Financial Accounting Standards Board 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” (“EITF No. 96-18”) for share-based payment transactions with parties other than employees provided in SFAS No. 123(R) (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur.
| F-21 |
| Table of Contents |
Income taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”) (ASC 740). Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Cash flows reporting
The Company follows the provisions of ASC 230 for cash flows reporting and accordingly classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
Reporting segments
ASC 280 establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. Currently, ASC 280 has no effect on the Company’s financial statements as substantially all of the Company’s operations are conducted in one industry segment.
Concentrations of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Earnings (Loss) Per Share of Common Stock
The Company has adopted ASC 260-10-20, “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.
Recent Accounting Pronouncements
Other than the above there have no recent accounting pronouncements or changes in accounting pronouncements during the period ended March 31, 2021, that are of significance or potential significance to the Company.
| F-22 |
| Table of Contents |
NOTE 4 – PROPERTY AND EQUIPMENT
The following table represents the Company’s property and equipment as of March 31, 2021, and September 30, 2020:
|
|
| March 31, 2021 |
|
| September 30, 2020 |
| ||
| Property and equipment |
| $ | 196,736 |
|
| $ | 162,847 |
|
| Accumulated depreciation |
|
| (37,339 | ) |
|
| (19,429 | ) |
| Property and equipment, Net |
| $ | 159,397 |
|
| $ | 143,058 |
|
Depreciation expense was $9,920 and $17,910 for the three and six months ended March 31, 2021.
NOTE 5 – RELATED PARTY TRANSACTIONS
Related Party agreements and fees
For the six months ended March 31, 2021, and 2020, the Company recorded expenses to related parties in the following amounts:
|
|
| Six months ended March 31, |
| |||||
| Description |
| 2021 |
|
| 2020 |
| ||
| CEO-Management fees |
| $ | 72,000 |
|
| $ | 156,010 |
|
| Chief Technology Officer (CTO) |
|
| 72,000 |
|
|
| 6,000 |
|
| Chief Administration Officer (CAO) |
|
| 60,000 |
|
|
| - |
|
| Public relations |
|
| - |
|
|
| 45,000 |
|
| Office rent and expenses |
|
| - |
|
|
| 21,000 |
|
| Total |
| $ | 204,000 |
|
| $ | 228,010 |
|
For the six months ended March 31, 2021, the Company paid $12,000 per month to its CEO and CTO, respectively, and $10,000 per month to its CAO. For the six months ended March 31, 2020, expenses for management fees, public relations and office rent and expenses were all accrued (non-cash). The amounts owed were recorded as expenses with the offset to stock to be issued, which is included in the stockholders’ equity section on the accompanying balance sheet. In May 2020, the agreements with the CEO, the public relations company and the office rent expense ceased and the Company was no longer accruing such expenses. During the year ended September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock to a Company controlled by our CEO in satisfaction of $1,347,894 of stock to be issued. As of September 30, 2020, included in stock to be issued was $432,000 due to related parties. On November 12, 2020, the Company issued 17,280,000 shares of restricted common stock for payment of the $432,000 stock to be issued.
On October 25, 2020, the Company entered into a sublease with its CTO, whereby the Company agreed to annual lease payment of $50,000. For the six months ended March 31, 2021, the Company expensed $20,835 to rent expense pursuant to this sublease.
NOTE 6 - STOCKHOLDERS’ EQUITY
Common Stock
The Company has authorized 500,000,000 common shares, par value $0.001. 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. As of March 31, 2021 and September 30, 2020, there were 292,879,675 and 289,147,675, respectively, common shares issued and outstanding.
During the six months ended March 31, 2021, the following shares of common stock were issued:
|
| • | 17,280,000 shares of common stock issued for common stock to be issued. |
|
| • | 1,000,000 shares of common stock were issued pursuant to a subscription agreement in exchange for $25,000. The shares were sold at $0.025 per share. |
|
| • | 13,500,000 shares of common issued to a consultant for services. The shares were valued at $945,000, based on the market price of the common stock on the date of the agreement, and will be amortized over the term of the agreement. For the six months ended March 31, 2021, the Company recognized $295,313 of stock-based compensation expense related to these shares. |
The Company also cancelled 28,040,000 shares of common stock pursuant to a court order, that deemed a 2014 transaction to be null and void by the court due to misrepresentations.
| F-23 |
| Table of Contents |
Preferred Stock
The Company has 100,000,000 shares authorized as preferred stock, par value $0.001 (the “Preferred Stock”), which such Preferred Stock shall be issuable in such series, and with such designations, rights and preferences as the Board of Directors may determine from time to time.
Series D Preferred Stock
On September 30, 2020, the Company filed an Amended and Restated Certificate of Designation with the State of Nevada of the Company’s Series D Preferred Stock. Under the terms of the Amendment to Certificate of Designation of Series D Preferred Stock, 50,000 shares of the Company’s preferred shares are designated as Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into one share of fully paid and non-assessable Common Stock. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the Holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to two times the sum of all the number of shares of other classes of Corporation capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Corporation. On September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock to a Company controlled by the Company’s CEO, in satisfaction of $1,347,894 of capital stock to be issued. As of March 31, 2021, and September 30, 2020, there were 50,000 shares of Series D Preferred Stock issued and outstanding.
Capital stock to be issued
As of September 30, 2020, the Company has $486,750 of capital stock to be issued. During the six months ended March 31, 2021, 17,280,000 shares of common stock was issued, which reduced the capital stock to be issued by $432,000. During the six months ended March 31, 2021, the Company sold 7,200,000 shares of preferred Stock at $0.05 and received $360,000. As of March 31, 2021, the Company has $414,750 of capital stock to be issued, which is included in the equity section of the condensed balance sheet presented herein.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
On October 22, 2020, the Company entered into the First Amendment to a Placement Agent Agreement with Boustead Securities, LLC (“Boustead”). Pursuant to the terms of the amendment, the Company agreed to compensate Boustead $10,000 and to issue Boustead 13,500,000 shares of common stock. The amendment also states that no additional compensation would be paid to Boustead on the first $1,150,000 of financing proceeds received by the Company on or after March 20, 2020. The agreement terminates on March 2, 2022.
On November 24, 2020, a plaintiff (the “Plaintiff”) filed a complaint in the State District Court for Clark County, Nevada, naming Cytta as a Defendant. The Plaintiff contends that the Company had breached an agreement. On or about January 15, 2021, the Defendant filed an Answer and Counterclaim in the litigation and also contended that in fact the Plaintiff owed money to Cytta having breached an earlier services agreement, of limited scope and duration, and other obligations owed to Cytta, and was liable for defaming Cytta in various communications he had sent to certain persons or entities prior to his demand being asserted. Management intends to contest the matter vigorously.
NOTE 8 - INCOME TAXES
The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the realization of deferred tax assets. Based upon the historical and anticipated future income, management has determined that the deferred tax assets meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s deferred tax assets as of March 31, 2021.
NOTE 9 - SUBSEQUENT EVENTS
From April 1, 2021 through June 21, 2021, the Company sold 6,450,000 shares of Series E Preferred Stock at $0.05 per share and received proceeds of $322,500.
On May 17, 2021, the Company issued in the aggregate 2,750,000 shares of restricted common stock to consultants.
The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.
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Cytta Corp.
44,600,000 SHARES OF COMMON STOCK
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES WHETHER OR NOT PARTICIPATING IN THIS OFFERING MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALER’S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
| Securities and Exchange Commission registration fee |
| $ | 1,070 |
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| Transfer Agent Fees |
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| 5,000 |
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| Accounting fees and expenses |
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| 15,000 |
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| Legal fees and expenses |
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| 15,000 |
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| Total |
| $ | 36,070 |
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All amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the offering listed above.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The only statue, charter provision, by-law, contract, or other arrangement under which any controlling person, director or officers of the Registrant is insured or indemnified in any manner against any liability which he may incur in his capacity as such, is as follows:
Our certificate of incorporation limits the liability of our directors and officers to the maximum extent permitted by Utah law. Utah law provides that any corporation shall have the power to indemnify a corporate agent against his expenses and liabilities in connection with any proceeding involving the corporate agent if the agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; and with respect to any criminal proceeding, such corporate agent had no reasonable cause to believe his conduct was unlawful.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On January 2, 2019, the Company issued 7,066,667 shares of restricted common stock to a third-party investor, in exchange for $106,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 2,666,667 shares of restricted common stock to a third-party investor, in exchange for $40,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 1,666,667 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $15,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $15,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 666,667 shares of restricted common stock to a third-party investor, in exchange for $10,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 333,334 shares of restricted common stock to a third-party investor, in exchange for $5,000. The shares were issued at $0.015 per share.
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On January 2, 2019, the Company issued 300,000 shares of restricted common stock to a third-party investor, in exchange for $6,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 266,667 shares of restricted common stock to a third-party investor, in exchange for $4,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 266,667 shares of restricted common stock to a third-party investor, in exchange for $4,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 250,000 shares of restricted common stock to a third-party investor, in exchange for $5,000. The shares were issued at $0.02 per share.
On January 2, 2019, the Company issued 250,000 shares of restricted common stock to a third-party investor, in exchange for $5,000. The shares were issued at $0.02 per share.
On January 2, 2019, the Company issued 133,334 shares of restricted common stock to a third-party investor, in exchange for $2,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 133,334 shares of restricted common stock to a third-party investor, in exchange for $2,000. The shares were issued at $0.015 per share.
On January 2, 2019, the Company issued 9,000,000 shares of restricted common stock to the Company’s Chief Technology Officer in exchange for the acquisition of technology from him.
On January 2, 2019, the Company issued 3,000,000 shares of restricted common stock to a third-party in exchange for services provided. The shares were valued at $0.015 per share.
On January 2, 2020, the Company issued 5,400,000 shares of restricted common stock to an existing Company investor, in exchange for $135,000. The shares were issued at $0.052 per share.
On January 2, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.02 per share.
On January 2, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.02 per share.
On January 2, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.02 per share.
On January 2, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.02 per share.
On January 2, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.03 per share.
On May 6, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.03 per share.
On May 6, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were valued at $0.03 per share.
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On May 6, 2020, the Company issued 1,250,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.02 per share.
On May 6, 2020, the Company issued 1,250,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.02 per share.
On May 6, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for $10,000. The shares were issued at $0.02 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to an existing Company investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to an existing Company investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 600,000 shares of restricted common stock to a third-party investor, in exchange for $15,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 10,000,000 shares of restricted common stock to a third-party investor, in exchange for $250,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 2,000,000 shares of restricted common stock to a third-party investor, in exchange for $50,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 2,000,000 shares of restricted common stock to a third-party investor, in exchange for $50,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 2,000,000 shares of restricted common stock to a third-party investor, in exchange for $50,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 2,000,000 shares of restricted common stock to a third-party investor, in exchange for $50,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to an existing Company investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,500,000 shares of restricted common stock to an existing Company investor, in exchange for $37,500. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,500,000 shares of restricted common stock to a third-party investor, in exchange for $37,500. The shares were issued at $0.025 per share.
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On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 2,000,000 shares of restricted common stock to a third-party investor, in exchange for $50,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for $12,500. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,500,000 shares of restricted common stock to a third-party investor, in exchange for $37,500. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 600,000 shares of restricted common stock to an existing Company investor, in exchange for $15,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to an existing Company investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 400,000 shares of restricted common stock to a third-party investor, in exchange for $10,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for $12,500. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 600,000 shares of restricted common stock to a third-party investor, in exchange for $15,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 400,000 shares of restricted common stock to a third-party investor, in exchange for $10,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for $25,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 3,000,000 shares of restricted common stock to a third-party investor, in exchange for $75,000. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to an existing Company investor, in exchange for $12,500. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party, in exchange for services provided. The shares were issued at $0.025 per share.
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On August 15, 2020, the Company issued 3,750,000 shares of restricted common stock to an existing Company investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 12,500,000 shares of restricted common stock to a related party, in exchange for services provided. The shares were valued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to an existing Company investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to a third-party investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 1,000,000 shares of restricted common stock to an existing Company investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 600,000 shares of restricted common stock to an existing Company investor, in exchange for services provided. The shares were issued at $0.025 per share.
On August 15, 2020, the Company issued 20,000,000 shares of restricted common stock to a related party, in exchange for the acquisition of certain technology. The shares were valued at $0.025 per share.
On August 15, 2020, the Company issued 250,000 shares of restricted common stock to a third-party investor, in exchange for $5,000. The shares were issued at $0.02 per share.
On August 15, 2020, the Company issued 500,000 shares of restricted common stock to a third-party investor, in exchange for $10,000. The shares were issued at $0.02 per share.
On September 30, 2020, the Company issued 50,000 shares of Series D Preferred Stock to the Company’s CEO.
On November 2, 2020, the Company issued 13,500,000 shares of restricted common stock to a third- party in exchange for services provided. The shares were valued at $0.07 per share.
On November 12, 2020, the Company issued 1,680,000 shares of restricted common stock to a related party in exchange for $42,000 of capital stock to be issued. The shares were valued at $0.025 per share.
On November 12, 2020, the Company issued 7,200,000 shares of restricted common stock to a related party in exchange for $180,000 of capital stock to be issued. The shares were valued at $0.025 per share.
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On November 12, 2020, the Company issued 8,400,000 shares of restricted common stock to a related party in exchange for $210,000 capital stock to be issued. The shares were valued at $0.025 per share.
On January 13, 2021, the Company issued 1,000,000 shares of restricted common stock to a third-party investor in exchange for $25,000. The shares were issued at $0.025 per share.
On March 15, 2021, the Company issued 450,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $22,500. The shares were issued at $0.05 per share.
On March 15, 2021, the Company issued 1,250,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $62,500. The shares were issued at $0.05 per share.
On March 15, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 17, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 17, 2021, the Company issued 1,000,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $50,000. The shares were issued at $0.05 per share.
On March 17, 2021, the Company issued 200,000 shares of Series E Preferred Stock to a third- party investor in exchange for $10,000. The shares were issued at $0.05 per share.
On March 19, 2021, the Company issued 500,000 shares of Series E Preferred Stock to a third- party investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 24, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 24, 2021, the Company issued 1,000,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $50,000. The shares were issued at $0.05 per share.
On March 24, 2021, the Company issued 200,000 shares of Series E Preferred Stock to a third- party investor in exchange for $10,000. The shares were issued at $0.05 per share.
On March 24, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 26, 2021, the Company issued 500,000 shares of Series E Preferred Stock to a third- party investor in exchange for $25,000. The shares were issued at $0.05 per share.
On March 29, 2021, the Company issued 100,000 shares of Series E Preferred Stock to a third- party investor in exchange for $5,000. The shares were issued at $0.05 per share.
On April 5, 2021, the Company issued 100,000 shares of Series E Preferred Stock to a third- party investor in exchange for $5,000. The shares were issued at $0.05 per share.
On April 12, 2021, the Company issued 500,000 shares of Series E Preferred Stock to a third- party investor in exchange for $25,000. The shares were issued at $0.05 per share.
On April 12, 2021, the Company issued 100,000 shares of Series E Preferred Stock to a third- party investor in exchange for $5,000. The shares were issued at $0.05 per share.
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On April 19, 2021, the Company issued 200,000 shares of Series E Preferred Stock to a third- party investor in exchange for $10,000. The shares were issued at $0.05 per share.
On April 27, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On April 30, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On May 6, 2021, the Company issued 500,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $25,000. The shares were issued at $0.05 per share.
On May 10, 2021, the Company issued 400,000 shares of Series E Preferred Stock to a third- party investor in exchange for $20,000. The shares were issued at $0.05 per share.
On May 10, 2021, the Company issued 500,000 shares of Series E Preferred Stock to a third- party investor in exchange for $25,000. The shares were issued at $0.05 per share.
On May 12, 2021, the Company issued 1,000,000 shares of Series E Preferred Stock to a third -party investor in exchange for $50,000. The shares were issued at $0.05 per share.
On May 17, 2021, the Company issued 500,000 shares of Series E Preferred Stock to a third- party investor in exchange for $25,000. The shares were issued at $0.05 per share.
On May 17, 2021, the Company issued 100,000 shares of Series E Preferred Stock to a third- party investor in exchange for $5,000. The shares were issued at $0.05 per share.
On May 19, 2021, the Company issued 200,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $10,000. The shares were issued at $0.05 per share.
On May 20, 2021, the Company issued 150,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $7,500. The shares were issued at $0.05 per share.
On May 21, 2021, the Company issued 1,000,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $50,000. The shares were issued at $0.05 per share.
On May 21, 2021, the Company issued 200,000 shares of Series E Preferred Stock to an existing Company investor in exchange for $10,000. The shares were issued at $0.05 per share.
These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation, and the transactions did not involve a public offering.
ITEM 16. EXHIBITS.
________
* Filed herewith.
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ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”).
(ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the change in volume and price represents no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) to include any additional or changed material information with respect to the plan of distribution.
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) that, for the purpose of determining liability under the Securities Act to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions of its Certificate of Incorporation, By-Laws, the General Corporation Law of the State of Utah or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer of controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Las Vegas, Nevada, on the 25th of June, 2021.
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| Cytta Corp. |
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| By: | /s/ Gary Campbell |
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| Gary Campbell |
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| Chief Executive Officer & Chief Financial Officer |
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Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| June 25, 2021 | By: | /s/ Gary Campbell |
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| Gary Campbell |
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| Chief Executive Officer, Chief Financial Officer, and Director |
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| By: | /s/ Erik Stephansen |
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| Erik Stephansen |
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EXHIBIT 3.1
| State Seal |
| DEAN HELLER Secretary of State
206 North Carson Street Carson City, Nevada 89701-4299 (775) 684 5708 |
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| Articles of Incorporation (PURSUANT TO NRS CHAPTER 78) | ||||
| USE BLACK INK ONLY- DO NOT HIGHLIGHT | ABOVE SPACE IS FOR OFFICE USE ONLY | |||
| 1. Name of Corporation: | CYTTA Corp. | |||
| 2. Registered Agent Name and Street Address: (must be a Nevada address where process may be served) | Laughlin Associates, Inc. Name 2533 North Carson Street Carson City Nevada 89706 Street Address City State Zip Code | |||
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| 3. Shares: (number of shares corporation authorized to issue) | Number of shares with par value: __________ | Par value per share: $ ______ | Number of shares without par value: 75,000 | |
| 4. Names and Addresses of the Board of Directors/Trustees: (attach additional page if more than three directors/trustees) | 1. | Brent Buscay Name 2533 North Carson Street Carson City Nevada 89706 Street Address City State Zip Code |
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| 5. Purpose: (optional-see instructions) | The purpose of this Corporation shall be:
To engage in any lawful activity. |
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| 6. Names, Address and Signature of Incorporator: (attach additional page if there is more than 1 incorporator) | Brent Buscay | /s/ Brent Buscay |
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| 2533 North Carson Street Carson City Nevada 89706 | ||||
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| 7. Certificate of Acceptance of Appointment of Resident: | I hereby accept appointment as Registered Agent for the above named corporation. | |||
| X /s/ Laughlin Associates, Inc. | May 30, 2006 | |||
| Authorized Signature of R.A. or On Behalf of R.A. Company | Date | |||
| This form must be accompanied by appropriate fees. See attached fee schedule. | Nevada Secretary of State Form 78 ARTICLES 2003 Revised on: 09/29/03 |
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ATTACHMENT TO
ARTICLES OF INCORPORATION
FIRST. The name of the corporation is:
CYTTA Corp.
SECOND. Its registered office in the State of Nevada is located at 2533 North Carson Street, Carson City, Nevada 89706 the Corporation may maintain an office, or offices, in such other place within or without the State of Nevada as may be from time to time designated by the Board of Directors, or by the By-Laws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of Directors and Stockholders, outside the State of Nevada as well as within the State of Nevada
THIRD. The objects for which this Corporation is formed are: To engage in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon corporations by any existing law.
(B} May at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized.
(C) Shall have power to have succession by its corporate name for the period limited in its certificate or articles of incorporation, and when no pe1iod is limited, perpetually, or until dissolved and its affairs woW1d up according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
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(E) Shall have power to make contracts.
(F) Shall have power to bold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same by devise or bequest in the State of Nevada, or in any other state, territory or country.
(G) Shall have power to appoint such officers and agents as the affairs of the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the constitution or laws of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter the same at pleasure. The use of a seal or stamp by the corporation on any corporate documents is not necessary. The corporation may use a seal or stamp, if it desires, but such use or nonuse shall not in any way affect the legality of the document.
(K) Shall have power to borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object.
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(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bonds, securities or evidences of the indebtedness created by, any other corporation or corporations of the State of Nevada, or any other state or government, and, while owners of such stock, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own capital stock, and use therefor its capital, capital surplus, surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in the State of Nevada, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries.
(0) Shall have power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its certificate or articles of incorporation, or any amendment thereof or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, whether or not such business is similar in nature to the objects set forth in the certificate or articles of incorporation of the corporation, or any amendment thereof.
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(P) Shall have power to make donations for the public welfare or for charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities, as may be allowed by law.
FOURTH. That the total number of common stock authorized that may be issued by the Corporation is SEVENTY FIVE THOUSAND (75,000) shares of stock without nom1nal par value and no other class of stock shall be authorized. Said shares may be issued by the corporation, from time to time, for such considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the By-Laws of this Corporation, providing that the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first board of Directors shall be one (1) in number and listed as follows:
| NAME | POST OFFICE ADDRESS | |
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| Brent Buscay | 2533 North Carson Street Carson City, Nevada 89706 |
SIXTH. The capital stock, after the amount of the subscription price, or par value, has been paid in, shall not be subject to assessment to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the Articles of Incorporation is as follows:
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| NAME | POST OFFICE ADDRESS | |
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| Brent Buscay | 2533 North Carson Street Carson City, Nevada 89706 |
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this corporation in the state of Nevada, shall be:
2533 North Carson Street Carson
City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its capital stock paid in; to authorize and cause to be executed, mortgages and liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1) or more committees, each committee to consist of one or more of the Directors of the Corporation, which, to the extent provided in the resolution, or in the By Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee, or committees, shall have such name, or names, as may be stated in the By Laws of the Corporation, or as may be determined from time to time by resolution adopted by the Board of Directors.
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When and as authorized by the affirmative vote of the Stockholders holding stock entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of Directors deems expedient and for the best interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to subscribe for or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock, but such additional shares of stock or other securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as in its discretion it shall deem advisable.
TWELFI'H. No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or repeal any provision contained in the Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon Stockholders herein are granted subject to this reservation.
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EXHIBIT 3.2
CYTTA Corp.
BY-LAWS
ARTICLE I MEETINGS OF SHAREHOLDERS
1. Shareholders' Meetings shall be held in the office of the corporation, at Carson City, NV, or at such other place or places as the Directors shall, from time to time, determine.
2. The annual meeting of the shareholders of this corporation shall be held on the incorporation date each year beginning in 2006, at which time there shall be elected by the shareholders of the corporation a Board of Directors for the ensuing year, and the shareholders shall transact such other business as shall properly come before them. If the day fixed for the annual meeting shall be a legal holiday such meeting shall be held on the next succeeding business day.
3. A notice signed by any Officer of the corporation or by any person designated by the Board of Directors, which sets forth the place of the annual meeting, shall be personally delivered to each of the shareholders of record, or mailed postage prepaid, at the address as appears on the stock book of the corporation, or if no such address appears in the stock book of the corporation, to his last known address, at least ten (10) days prior to the annual meeting.
Whenever any notice whatever is required to be given under any article of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time of the meeting of the shareholders, shall be deemed equivalent to proper notice.
4. A majority of the shares issued and outstanding, either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the shareholders.
5. If a quorum is not present at the annual meeting, the shareholders present, in person or by proxy, may adjourn to such future time as shall be agreed upon by them, and notice of such adjournment shall be mailed, postage prepaid, to each shareholder of record at least ten (10) days before such date to which the meeting was adjourned; but if a quorum is present, they may adjourn from day to day as they see fit, and no notice of such adjournment need be given.
By-Laws
Page 1
6. Special meetings of the shareholders may be called at anytime by the President; by all of the Directors provided there are no more than three, or if more than three, by any three Directors; or by the holder of a majority share of the capital stock of the corporation. The Secretary shall send a notice of such called meeting to each shareholder of record at least ten (10) days before such meeting, and such notice shall state the time and place of the meeting, and the object thereof. No business shall be transacted at a special meeting except as stated in the notice to the shareholders, unless by unanimous consent of all shareholders present, either in person or by proxy.
7. Each shareholder shall be entitled to one vote for each share of stock in his own name on the books of the corporation, whether represented in person or by proxy.
8. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting.
9. The following order of business shall be observed at all meetings of the shareholders so far as is practicable:
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| a. | Call the roll; |
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| b. | Reading, correcting, and approving of the minutes of the previous meeting; |
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| c. | Reports of Officers; |
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| d. | Reports of Committees; |
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| e. | Election of Directors; |
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| f . | Unfinished business; and |
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| g. | New business. |
By-Laws
Page 2
10. Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action to be taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE II STOCK
1. Certificates of stock shall be in a form adopted by the Board of Directors and shall be signed by the President and Secretary of the corporation.
2. All certificates shall be consecutively numbered; the name of the person owning the shares represented thereby, with the number of such shares and the date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsem1 n t th ereon shall be surrendered by cancellation and new certificates issued to the purchaser or assignee.
4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation.
5. The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of this state.
By-Laws
Page 3
ARTICLE III DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall be chosen annually by the shareholders at their meeting to manage the affairs of the corporation. The Directors' term of office shall be one(I) year, and Directors may be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation or other causes shall be filled by the remaining Director or Directors choosing a Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1:00 p.m., on the incorporation date each year beginning in 2006 at the office of the company at Carson City, NV, or at such other time or place as the Board of Directors shall by resolution appoint; special meetings may be called by the President or any Director giving ten (10) days notice to each Director. Special meetings may also be called by execution of the appropriate waiver of notice and called when executed by a majority of the Directors of the company. A majority of the Directors shall constitute a quorum.
4. The Directors shall have the general management and control of the business and affairs of the corporation and shall exercise all the powers that may be exercised or performed by the corporation, under the statutes, the Articles of Incorporation, and the By-Laws. Such management will be by equal vote of each member of the Board of Directors with each Board member having an equal vote.
5. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Directors.
6. A resolution, in writing, signed by all or a majority of the members of the Board of Directors, shall constitute action by the Board of Directors to effect therein expressed, with the same force and effect as though such resolution had been passed at a duly convened meeting; and it shall be the duty of the Secretary to record every such resolution in the Minute Book of the corporation under its proper date.
By-Laws
Page 4
7. Any or all of the Directors may be removed for cause by vote of the shareholders or by action of the Board. Directors may be removed without cause only by vote of the shareholders.
8. A Director may resign at any time by giving written notice to the Board, the President or the Secretary of the corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such Officer, and the acceptance of the resignation shall not be necessary to make it effective.
9. A Director of the corporation who is present at a meeting of the Directors at which action on any corporate matter is taken shall be presumed to have: assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.
ARTICLE IV OFFICERS
1. The Officers of this company shall consist of: a President, one or more Vice Presidents, Secretary, Treasurer, and such other officers as shall, from time to time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the shareholders and shall have general charge and control over the affairs of the corporation subject to the Board of Directors. He shall sign or countersign all certificates, contracts and other instruments of the corporation as authorized by the Board of Directors and shall perform all such other duties as are incident to his office or are required by him by the Board of Directors.
By-Laws
Page 5
3. The VICE PRESIDENT shall exercise the functions of the President during the absence or disability of the President and shall have such powers and the Board of Directors may assign such duties as to him, from time to time.
4. The SECRETARY shall issue notices for all meetings as required by the By-Laws, shall keep a record of the minutes of the proceedings of the meetings of the shareholders and Directors, shall have charge of the corporate books, and shall make such reports and perform such other duties as are incident to his office, or properly required of him by the Board of Directors. He shall be responsible that the corporation complies with Section 78.105 of the Nevada Revised Statutes and supplies to the Nevada Resident Agent or Registered Office in Nevada, any and all amendments to the corporation's Articles of Incorporation and any and all amendments or changes to the By-Laws of the corporation. In compliance with Section 78.105, he will also supply to the Nevada Resident Agent or Registered Office in Nevada, and maintain, a current statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete Post Office address, including street and number, if any, where such stock ledger or duplicate stock ledger is kept.
5. The TREASURER shall have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the Board of Directors, making proper vouchers for such disbursements and shall render to the Board of Directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform all duties incident to his office or which are properly required of him by the Board of Directors.
By-Laws
Page 6
6. The RESIDENT AGENT shall be in charge of the corporation's registered office in the State of Nevada, upon whom process against the corporation may be served and shall perfo1m all duties required of him by statute.
7. The salaries of all Officers shall be fixed by the Board of Directors and may be changed, from time to time, by a majority vote of the Board.
8. Each of such Officers shall serve for a term of one (1) year or until their successors are chosen and qualified. Officers may be re-elected or appointed for successive annual terms.
9. The Board of Directors may appoint such other Officers and Agents, as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined, from time to time, by the Board of Directors.
10. Any Officer or Agent elected or appointed by the Directors may be removed by the Directors whenever in their judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
11. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Directors for the unexpired portion of the term.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
The corporation shall indemnify any and all of its Directors and Officers, and its former Directors and Officers, or any person who may have served at the corporation's request as a Director or Officer of another corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been Director(s) or Officer(s) of the corporation, or of such other corporation, except, in relation to matters as to which any such Director or Officer or former Director or Officer or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under By-Law, agreement, vote of shareholders or otherwise.
By-Laws
Page 7
ARTICLE VI DIVIDENDS
The Directors may, from time to time, declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law.
ARTICLE VII WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to any shareholder or Director of the corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE VIII AMENDMENTS
I. Any of these By-Laws may be amended by a majority vote of the shareholders at any annual meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the By-Laws or adopt additional By-Laws, but shall not alter or repeal any By-Laws adopted by the shareholders of the company.
By-Laws
Page 8
CERTIFIED TO BE THE BY-LAWS OF:
| CYTTA Corp. | |||
| Date May 30, 2006 | By: | /s/ Chad Rutherford | |
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| Secretary | |
By-Laws
Page 9
EXHIBIT 3.3
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| BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov | Filed in the Office of
Secretary of State State Of Nevada | Business Number E0398992006-6 |
| Filing Number 20200947610 | |||
| Filed On 09/30/2020 11:39:11 AM | |||
| Number of Pages 5 |
| Profit Corporation: Certificate of Amendment (PURSUANT TO NRS 78.380 & 78.385/78.390) Certificate to Accompany Restated Articles or Amended and Restated Articles (PURSUANT TO NRS 78.403) Officer's Statement (PURSUANT TO NRS 80.030) |
| TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT | |||||||||
| 1. Entity information | Name of entity as on file with the Nevada Secretary of State :
Entity or Nevada Business Identification Number (NVID) : NV20061031387 | ||||||||
| 2. Restated or Amended and Restated Articles (Select one): (If amending and restating only, complete section 1, 2 and 6.) | ☐ | Certificate to Accompany Restated Articles or Amended and Restated Articles | |||||||
| ☐ | Restated Articles - No amendments; articles are restated only and are signed by an officer of the corporation who has been authorized to execute the certificate by resolution of the board of directors adopted on: | ||||||||
| The certificate correctly sets forth the text of the articles or certificate as amended to the date of the certificate. | |||||||||
| ☐ | Amended and Restated Articles | ||||||||
| * Restated or Amended and Restated Articles must be included with this filing type. | |||||||||
| 3. Type of amendment filing being completed: (Select only one box):
(If amending, complete section 1,3,5 and 6.)
| ☐ | Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.380 - Before Issuance of Stock) | |||||||
| The undersigned declare that they constitute at least two-thirds of the following: | |||||||||
| (Check only one box) | ☐ | incorporators | ☐ | board of directors | |||||
| The undersigned affirmatively declare that to the date of this certificate, no stock of the corporation has been issued | |||||||||
| ☒ | Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock) | ||||||||
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| The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is: | ||||||||
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| ☐ | Officer's Statement (foreign qualified entities only) - | |||||||
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| Name in home state, if using a modified name in Nevada: | |||||||
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| Jurisdiction of formation: | |||||||
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| Changes to takes the following effect: | |||||||
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| ☐ | The entity name has been amended. | ☐ | Dissolution | |||||
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| ☐ | The purpose of the entity has been amended. | ☐ | Merger | |||||
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| ☐ | The authorized shares have been amended. | ☐ | Conversion | |||||
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| ☐ | Other: (specify changes) | |||||||
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| * Officer's Statement must be submitted with either a certified copy of or a certificate evidencing the filing of any document, amendatory or otherwise, relating to the original articles in the place of the corporations creation. | ||||||||
This form must be accompanied by appropriate fees.
| page 1 of 3 |
| | BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov |
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| Profit Corporation: Certificate of Amendment (PURSUANT TO NRS 78.380 & 78.385/78.390) Certificate to Accompany Restated Articles or Amended and Restated Articles (PURSUANT TO NRS 78.403) Officer's Statement (PURSUANT TO NRS 80.030) |
| 4. Effective date and Time: (Optional) | Date: 09/30/2020 Time:
(must not be later than 90 days after the certificate is filed) | ||||
| 5. Information Being Changed: (Domestic corporations only) | Changes to takes the following effect: | ||||
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| ☐ | The entity name has been amended. | ||
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| ☐ | The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) | ||
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| ☐ | The purpose of the entity has been amended. | ||
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| ☒ | The authorized shares have been amended. | ||
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| ☐ | The directors, managers or general partners have been amended. | ||
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| ☐ | IRS tax language has been added. | ||
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| ☐ | Articles have been added. | ||
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| ☐ | Articles have been deleted | ||
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| ☐ | Other. | ||
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| The articles have been amended as follows: (provide article numbers, if available) | ||
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| 6. Signature: (Required)
| X Gary | Campbell Officer | Officer, |
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| Signature of Incorporator or Authorized Signer | Title |
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| *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof. | |||||
| Please include any required or optional information in space below: (attach additional page(s) if necessary) | |||||
This form must be accompanied by appropriate fees.
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| BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov | Filed in the Office of
Secretary of State State Of Nevada | Business Number E0398992006-6 |
| Filing Number 20200947610 | |||
| Filed On 09/30/2020 11:39:11 AM | |||
| Number of Pages 5 |
| Certificate of Amendment (PURSUANT TO NRS 78.385 AND 78.390) |
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| USE BLACK INK ONLY - DO NOT HIGHLIGHT | ABOVE SPACE IS FOR OFFICE USE ONLY |
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of corporation:
Cytta Corp.
2. The articles have been amended as follows: (provide article numbers, if available)
The authorized Common shares will increase to 500,000,000 (five hundred million) @ $0.001. "Article IV:
The total authorized stock of the Corporation shall be:
500 million Common shares at $0.001 par value.
100 million Preferred shares at $0.001 par value."
The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is: 55.23%
| 4. Effective date and time of filing: (optional) | Date: | Time: | |||
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| Signature of Officer |
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*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.
IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.
| This form must be accompanied by appropriate fees. |
| Nevada Secretary of State Amend Profit-After Revised: 1-5-15 |
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EXHIBIT 3.4
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| BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov |
| Filed in the Office of
Secretary of State State Of Nevada | Business Number E0398992006-6 |
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| Filing Number 20200948232 | |||
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| Filed On 09/30/2020 13:13:28 PM | |||
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| Number of Pages 8 |
| Certificate, Amendment or Withdrawal of Designation
NRS 78.1955, 78.1955(6) ☐ Certificate of Designation
☑ Certificate of Amendment to Designation - Before Issuance of Class or Series ☐ Certificate of Amendment to Designation - After Issuance of Class or Series ☐ Certificate of Withdrawal of Certificate of Designation
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TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT
| 1. Entity information: | Name of entity:
CYTTA CORP.
Entity or Nevada Business Identification Number (NVID): NV20061031387 | |||
| 2. Effective date and time: | For Certificate of Designation or Date: | 09/30/2020 | Time: |
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| Amendment to Designation Only (Optional): (must not be later than 90 days after the certificate is filed) | ||||
| 3. Class or series of stock: (Certificate of Designation only) | The class or series of stock being designated within this filing: | |||
| 4. Information for amendment of class or series of stock: | The original class or series of stock being amended within this filing:
Series D Preferred Stock | |||
| 5. Amendment of class or series of stock: | Certificate of Amendment to Designation- Before Issuance of Class or Series As of the date of this certificate no shares of the class or series of stock have been issued. | |||
| Certificate of Amendment to Designation- After Issuance of Class or Series The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation.
| ||||
| 6.Resolution: (Certificate of Designation and Amendment to Designation only)
| By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.* | |||
| 7. Withdrawal: | Designation being Date of Withdrawn: Designation:
No shares of the class or series of stock being withdrawn are outstanding.
The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: *
| |||
|
8. Signature: (Required) |
X Gary Campbell Date: 09/30/2020
Signature of Officer | |||
| This form must be accompanied by appropriate fees. |
| page1 of 1 Revised: 1/1/2019 |
|
| AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF PR RIGHTS AND LIMITATIONS OF SERIES D PREFERRED STOCK FOR CYTTA CORP. (A NEVADA CORPORATION) | Filed in the Office of
Secretary of State State Of Nevada | Business Number E0398992006-6 |
| Filing Number 20200948232 | |||
| Filed On 09/30/2020 13:13:28 PM | |||
| Number of Pages 8 |
The undersigned, Gary Campbell, does hereby certify that:
1. He is the Chief Financial Officer of Cytta Corp., a Nevada corporation (the “Corporation”.
2. The Corporation is authorized to issue 100,000,000 shares of preferred stock, 10,000,000 shares of which has previously been designated as Series D Preferred Stock, and the remainder of which authorized preferred stock has not been designated as any particular class or series.
3. The following resolutions were duly adopted by the Board of Directors:
WHEREAS, the Articles of Incorporation of the Corporation, as amended, authorize the issuance 100,000,000 shares of preferred stock, $0,001 par value per share, issuable from time to time in one or more series.
WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series of preferred stock and the designation thereof, of any of them;
WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the Corporation’s preferred stock, to authorize, ratify and approve the Amended and Restated Certificate of Designation for the Series D Preferred Stock the Corporation has the authority to issue as attached hereto as Exhibit A;
NOW, THEREFORE, BE IT:
RESOLVED, that the Board of Directors does hereby provide for the issuance of the series of the Corporation’s preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to the Series D Preferred Stock as follows:
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Exhibit A
TERMS OF SERIES D PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Bankruptcy Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Significant Subsidiary thereof; (b) there is commenced against the Corporation or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Corporation or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Commission” means the Securities and Exchange Commission.
“Common Stock" means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.
“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Date” shall have the meaning set forth in Section 6(a).
“Conversion Ratio” shall have the meaning set forth in Section 6(a).
“Conversion Shares” means, collectively, the shares of Common Stock into which the shares of Preferred Stock are convertible in accordance with the terms hereof.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holder” shall have the meaning given such term in Section 2 hereof.
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“Junior Securities” means the Common Stock and all other equity or equity equivalent securities of the Corporation other than those securities that are explicitly senior in rights or liquidation preference to the Preferred Stock.
“Original Issue Date” shall mean the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.
“Person” means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a government or political subdivision thereof or a governmental agency.
“Preferred Stock” shall have the meaning set forth in Section 2.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” shall mean a corporation, limited liability company, partnership, joint venture or other business entity of which the Corporation owns beneficially or of record more than 19% of the equity interest.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Markets.
Section 2. Designation. Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s Series D Preferred Stock (the “Preferred Stock”), and the number of shares so designated shall be ten million (10,000,000) shares, which shall not be subject to increase without the consent of all of the Holders of the Preferred Stock (the “Holders). Each share of such Preferred Stock shall have a par value of $0,001 per share. Capitalized terms not otherwise defined herein shall have the meaning given such terms in Section 1 hereof.
Section 3. Dividends and Other Distributions. When and as any dividend or distribution is declared or paid by the Corporation on Common Stock, whether payable in cash, property, securities or rights to acquire securities, the Holders will be entitled to participate with the holders of Common Stock in such dividend or distribution as set forth in this Section 3. At the time such dividend or distribution is payable to the holders of Common Stock, the Corporation will pay to each Holder such holder’s share of such dividend or distribution equal to the amount of the dividend or distribution per share of Common Stock payable at such time multiplied by the number of shares of Common Stock the shares of Preferred Stock held by such holder are convertible into pursuant to Section 6 herein.
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Section 4. Voting Rights and Holder Approvals.
(a) Subject to the provision for adjustment hereinafter set forth, each share of Preferred Stock shall entitle the holder thereof to have voting rights equal to two times the sum of all the number of shares of other classes of Corporation capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Corporation, divided by the number of shares of Preferred Stock issued and outstanding at the time of voting. In the event the Corporation shall at any time on or after the date that Preferred Stock has been issued (“Distribution Date”) declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Articles of Incorporation, in any other Certificate of Designations creating a series of preferred stock, or by law, the holders of shares of Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(c) In addition to any other rights provided by law, so long as any Preferred Stock is outstanding, the Corporation, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of such outstanding shares of Preferred Stock, will not amend or repeal any provision of, or add any provision to, the Corporation’s amended Articles of Incorporation or By-Laws if such action would materially adversely affect the voting rights of, or the other rights, preferences or restrictions provided for the benefit of, any Preferred Stock.
(d) Except as set forth herein, holders of Preferred Stock shall have no special voting rights, and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holder shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus, for each share of Preferred Stock an amount equal to par value (the “Liquidation Value”) before any distribution or payment shall be made to the holder of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holder shall be distributed among the Holder ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be treated as a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 70 days prior to the payment date stated therein, to each record Holder.
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Section 6. Conversion.
(a) Right to Convert. Subject to Paragraphs 6(c)-(e) below, each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into one share of fully paid and non-assessable Common Stock (the “Conversion Rate”).
(b) Mechanics of Conversion. Before any holder of Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive Common Stock upon conversion of such Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities.
(c) Split. Subdivision and Distribution Adjustments. In the event the Corporation should at any time or from time to time after the Distribution Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the applicable Conversion Rate of the Preferred Stock shall be appropriately adjusted so that the number of shares of Common Stock issuable on conversion of each share of Preferred Stock shall be increased in proportion to such increase of the aggregate number of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents.
(d) Combination Adjustments. If the number of shares of Common Stock outstanding at any time after the Distribution Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Rate for the Preferred Stock shall be appropriately adjusted so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares.
(e) Recapitalizations. If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 6) provision shall be made so that the holders of the Preferred Stock shall thereafter be entitled to receive upon conversion of the Preferred Stock the number of shares of stock or other securities or property of the Company or otherwise, to which a holder of the number of shares of Common Stock deliverable upon conversion of the Preferred Stock would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 6 with respect to the rights of the holders of the Preferred Stock after the recapitalization to the end that the provisions of this Section 4(e) (including adjustment of the Conversion Rate then in effect and the number of shares issuable upon conversion of the Preferred Stock) shall be applicable after that event.
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(I) No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 6 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against impairment.
(g) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, in addition to such other remedies as shall be available to the holder of such Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval of any necessary amendment to the Corporation’s Articles of Incorporation.
(h) Exempt Issuance. Notwithstanding the foregoing, no adjustment will be made under this Section 7 in respect of an Exempt Issuance.
Section 8. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any notice of conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address of record. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
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(b) Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the liquidated damages (if any) on, the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
(d) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(e) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated Certificate of Designation this 30th day of September 2020.
Name: Gary Campbell
Title: Chief Financial Officer
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EXHIBIT 3.5
|
| BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov | Filed in the Office of | Business Number E0398992006-6 |
|
| Filing Number 20211519854 | ||
| Secretary of State | Filed On 06/10/2021 12:58:30 PM | ||
| State Of Nevada | Number of Pages 8 |
| Certificate, Amendment or Withdrawal of Designation
NRS 78.1955, 78.1955(6) ☐ Certificate of Designation ☐ Certificate of Amendment to Designation - Before Issuance of Class or Series ☑ Certificate of Amendment to Designation - After Issuance of Class or Series ☐ Certificate of Withdrawal of Certificate of Designation
|
TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT
| 1. Entity information: | Name of entity: CYTTA CORP.
Entity or Nevada Business Identification Number (NVID): NV20061031387 | |||
| 2. Effective date and time: | For Certificate of Designation or Date: |
| Time: |
|
| Amendment to Designation Only (Optional): (must not be later than 90 days after the certificate is filed) | ||||
| 3. Class or series of stock: (Certificate of Designation only) | The class or series of stock being designated within this filing: | |||
| 4. Information for amendment of class or series of stock: | The original class or series of stock being amended within this filing:
Series E Preferred | |||
| 5. Amendment of class or series of stock: | ☐ Certificate of Amendment to Designation- Before Issuance of Class or Series As of the date of this certificate no shares of the class or series of stock have been issued. | |||
| ☑ Certificate of Amendment to Designation- After Issuance of Class or Series The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | ||||
| 6.Resolution: (Certificate of Designation and Amendment to Designation only) | By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.*
| |||
| 7. Withdrawal: | Designation being Date of Withdrawn: Designation:
No shares of the class or series of stock being withdrawn are outstanding.
The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: * | |||
| 8. Signature: (Required) |
X Gary Campbell Date: 06/10/2021 Signature of Officer | |||
| 1 |
|
| AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES E PREFERRED STOCK FOR CYTTA CORP. (A NEVADA CORPORATION) | Filed in the Office of | Business Number E0398992006-6 |
|
| Filing Number 20211519854 | ||
| Secretary of State | Filed On 06/10/2021 12:58:30 PM | ||
| State Of Nevada | Number of Pages 8 |
The undersigned, Gary Campbell, does hereby certify that:
1. He is the Chief Financial Officer of Cytta Corp., a Nevada corporation (the “Corporation”.
2. The Corporation is authorized to issue 100,000,000 shares of preferred stock, 10,000,000 shares of which has previously been designated, and the remainder of which authorized preferred stock has not been designated as any particular class or series.
3. The following resolutions were duly adopted by the Board of Directors:
WHEREAS, the Articles of Incorporation of the Corporation, as amended, authorize the issuance 100,000,000 shares of preferred stock, $0.001 par value per share, issuable from time to time in one or more series.
WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series of preferred stock and the designation thereof, of any of them;
WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the Corporation’s preferred stock, to authorize, ratify and approve the Amended and Restated Certificate of Designation for the Series E Preferred Stock the Corporation has the authority to issue as attached hereto as Exhibit A;
NOW, THEREFORE, BE IT:
RESOLVED, that the Board of Directors does hereby provide for the issuance of the series of the Corporation’s preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to the Series E Preferred Stock as follows:
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Exhibit A
TERMS OF SERIES E PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Bankruptcy Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Significant Subsidiary thereof; (b) there is commenced against the Corporation or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Corporation or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Commission” means the Securities and Exchange Commission.
“Common Stock" means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.
“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Date” shall have the meaning set forth in Section 6(a).
“Conversion Ratio” shall have the meaning set forth in Section 6(a).
“Conversion Shares” means, collectively, the shares of Common Stock into which the shares of Preferred Stock are convertible in accordance with the terms hereof.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holder” shall have the meaning given such term in Section 2 hereof.
“Junior Securities” means the Common Stock and all other equity or equity equivalent securities of the Corporation other than those securities that are explicitly senior in rights or liquidation preference to the Preferred Stock.
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“Original Issue Date” shall mean the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.
“Series E Original Issue Price” shall mean $0.05 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series E Preferred Stock. In the event of any adjustment to the Series E Original Issue Price, said adjustment shall be reflected in the original issuance price of each subsequent series, if any, of Series E Preferred Stock issued.
“Person” means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a government or political subdivision thereof or a governmental agency.
“Preferred Stock” shall have the meaning set forth in Section 2.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” shall mean a corporation, limited liability company, partnership, joint venture or other business entity of which the Corporation owns beneficially or of record more than 19% of the equity interest.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Markets.
Section 2. Designation. Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s Series E Preferred Stock (the “Preferred Stock”), and the number of shares so designated shall be thirteen million six hundred and fifty thousand (13,650,000) shares, which shall not be subject to increase without the consent of all of the Holders of the Preferred Stock (the “Holders). Each share of such Preferred Stock shall have a par value of $0.001 per share. Capitalized terms not otherwise defined herein shall have the meaning given such terms in Section 1 hereof.
Section 3. Dividends and Other Distributions. From and after the date of the issuance of any shares of Series E Preferred Stock, dividends shall accrue and be payable quarterly, in cash or in shares of Common Stock at the Company’s sole discretion, at the rate per annum of 10% of the Series E Original Issuance Price per share (i.e., 2.5% per quarter), and if not paid, shall accrue on such shares of Series E Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series E Preferred Stock) (collectively, the “Accruing Dividends”) and be compounded quarterly to reflect 10% per annum of the Series E Original Issuance Price (as hereinafter defined) plus any Accruing Dividends which are unpaid..
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Section 4. Voting Rights and Holder Approvals.
(a) General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series E Preferred Stock shall be entitled to cast one (1) vote for each share of Series E Preferred Stock held. Except as provided by law or by the other provisions of this Certificate, holders of Series E Preferred Stock shall vote together with the holders of Common Stock as a single class.
(b) Except as otherwise provided herein, in the Articles of Incorporation, in any other Certificate of Designations creating a series of preferred stock, or by law, the holders of shares of Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, holders of Preferred Stock shall have no special voting rights, and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holder shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus, for each share of Preferred Stock an amount equal to par value (the “Liquidation Value”) before any distribution or payment shall be made to the holder of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holder shall be distributed among the Holder ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be treated as a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 70 days prior to the payment date stated therein, to each record Holder.
Section 6. Conversion and Call (Redemption) Features.
(a) Right to Convert. Subject to Paragraphs 6(c)-(e) below, each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into one share of fully paid and non-assessable Common Stock (the “Conversion Rate”)and shall automatically convert if the market price of CYCA’s common stock trades over a $0.20 average price for 20 consecutive trading days.
(b) Right to Call (Redeem). Corporation shall have the right after one year from the issuance hereof to call (Redeem) the Preferred Stock for a price equivalent to the average market price of the stock determined by calculating the price the stock trades at or over a $0.20 average for 20 consecutive trading days. At any time on or after the one-year anniversary of its issuance the Company may elect to redeem the Preferred Stock.
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(c) Mechanics of Conversion. Before any holder of Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive Common Stock upon conversion of such Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities.
(d) Split. Subdivision and Distribution Adjustments. In the event the Corporation should at any time or from time to time after the Distribution Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the applicable Conversion Rate of the Preferred Stock shall be appropriately adjusted so that the number of shares of Common Stock issuable on conversion of each share of Preferred Stock shall be increased in proportion to such increase of the aggregate number of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents.
(e) Combination Adjustments. If the number of shares of Common Stock outstanding at any time after the Distribution Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Rate for the Preferred Stock shall be appropriately adjusted so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares.
(f) Recapitalizations. If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 6) provision shall be made so that the holders of the Preferred Stock shall thereafter be entitled to receive upon conversion of the Preferred Stock the number of shares of stock or other securities or property of the Company or otherwise, to which a holder of the number of shares of Common Stock deliverable upon conversion of the Preferred Stock would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 6 with respect to the rights of the holders of the Preferred Stock after the recapitalization to the end that the provisions of this Section 4(e) (including adjustment of the Conversion Rate then in effect and the number of shares issuable upon conversion of the Preferred Stock) shall be applicable after that event.
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(I) No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 6 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against impairment.
(g) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, in addition to such other remedies as shall be available to the holder of such Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval of any necessary amendment to the Corporation’s Articles of Incorporation.
(h) Exempt Issuance. Notwithstanding the foregoing, no adjustment will be made under this Section 7 in respect of an Exempt Issuance.
Section 8. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any notice of conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address of record. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b) Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the liquidated damages (if any) on, the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
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(c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
(d) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(e) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated Certificate of Designation this 10th day of June 2021.
Name: Gary Campbell
Title: Chief Financial Officer
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EXHIBIT 5.1
OPINION AND CONSENT OF BRUNSON CHANDLER & JONES, PLLC
June 25, 2021
Cytta Corp.
5450 W Sahara Avenue, Suite 300A
Las Vegas, NV 89146
Re: Cytta Corp., a Nevada corporation (the “Company”)
Ladies and Gentlemen:
We refer to the Company’s Registration Statement on Form S-1 under the Securities Act of 1933, (the “Registration Statement”), which will be filed with the Securities and Exchange Commission on or about the date hereof. The Registration Statement relates to the registration of 44,600,000 issued and outstanding shares of the Company’s $0.001 par value common stock (the “Common Stock”) held by the selling stockholders identified in the Registration Statement (the “Selling Stockholder Shares”).
Assumptions
In rendering the opinion expressed below, we have assumed, with your permission and without independent verification or investigation:
1. That all signatures on documents we have examined in connection herewith are genuine and that all items submitted to us as original are authentic and all items submitted to us as copies conform with originals;
2. Except for the documents stated herein, there are no documents or agreements between the Company and/or any third parties which would expand or otherwise modify the respective rights and obligations of the parties as set forth in the documents referred to herein or which would have an effect on the opinion;
3. That as to all factual matters, each of the representations and warranties contained in the documents referred to herein is true, accurate and complete in all material respects, and the opinion expressed herein is given in reliance thereon.
We have examined the following documents in connection with this matter:
1. The Company’s Articles of Incorporation, as amended;
2. The Company’s Bylaws;
3. The Registration Statement; and
4. Unanimous Consents of the Company’s Board of Directors.
We have also examined various other documents, books, records, instruments and certificates of public officials, directors, executive officers and agents of the Company, and have made such investigations as we have deemed reasonable, necessary or prudent under the circumstances. Also, in rendering this opinion, we have reviewed various statutes and judicial precedent as we have deemed relevant or necessary.
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Conclusions
Based upon our examination mentioned above, and relying on the statements of fact contained in the documents that we have examined, we are of the following opinions:
1. Cytta Corp. is a corporation duly organized and validly existing under the laws of the State of Nevada.
2. The Selling Stockholder Shares covered by the Registration Statement have been duly authorized and are validly issued, fully paid and non-assessable.
The opinions set forth above are subject to the following exceptions, limitations and qualifications: (i) the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, whether enforcement is considered in a proceeding in equity or at law, and the discretion of the court before which any proceeding therefor may be brought; and (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy. We expressly disclaim any obligation to update our opinions herein, regardless of whether changes in the facts or laws upon which this opinion are based come to our attention after the date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and the reference to our firm in the Prospectus in the Registration Statement under the caption “Interests Named Experts and Counsel.” In providing this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, including Item 509 of Regulation S-K.
Very truly yours,
/s/ Brunson Chandler & Jones, PLLC
BRUNSON CHANDLER & JONES, PLLC
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EXHIBIT 10.1
CYTTA CORP
AGREEMENT FOR INDEPENDENT CONTRACTOR SERVICES
AGREEMENT made and entered into as of this 1st day of April 2020 (the “Agreement”), by and between Cytta Corp. a Nevada corporation (the “Company”) with principal offices at 5450 W Sahara Ave Suite 300, Las Vegas Nv, 89146 and Makena Investment Advisors, LLC of PO Box 1241, Ramona CA 92065 (“IC”).
Whereas, the Company is in the business of deploying proprietary and leading-edge compression and incident command system solutions products and other advanced technologies associated therewith; and
Whereas, the IC has the ability to provide finance, accounting, administrative, sales, and/or industry specific advice and internal administrative skills to companies and the Company believes such experience is in its best interest to utilize, and
Whereas, the Company formally desires to engage IC to join the Company and to continue to provide such services in accordance with the terms and conditions hereinafter set forth;
Now, therefore, the Company and IC agree as follows:
I. Engagement. The Company agrees to engage IC and IC agrees to join the Company.
2. Term. The term of this agreement shall commence on the date set out herein and shall continue for a period of two years.
3. Services. IC shall render advice and assistance to the Company consistent with his position, knowledge, and special experience that pertains to furthering the efforts of the Company, including fulfilling internal administrative roles and assuming various Officer titles consistent with the needs of the Company. It is initially agreed that the IC shall be providing Mr. Michael Chermak to the Company to act as and fulfill all the duties and responsibilities of the Chief Administrative Officer (CAO).
In addition, attached as Form A and completed by the IC expresses an outline of areas, he/she plans to investigate and pursue on the Company’s behalf.
4. Compensation.
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| (a) | The Company shall or has issued to the IC or to the IC’s direction, immediately upon the execution hereof and the agreement for performance of services outlined in Form A herein up to 12,500,000 common shares (the “Initial Issuance”), at the rate of 1,250,000 for each $100,000 successfully raised, and for the two-years of services to be rendered. Each IC shall receive their Initial Issuance upon execution and fulfillment of the terms hereof and in consideration of agreeing to provide services to the Company for the two-year period. All the shares shall be considered immediately fully vested upon the successful raise of $1,000,000 in equity capital and the per share closing price on the OTC Markets exceeding $.10 for a minimum of 10 consecutive trading days. |
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| (b) | The Company agrees to pay the IC ten thousand dollars ($10,000) per month for the services of Michael Chermak as the Chief Administrative Officer of Cytta and fulfilling the terms of that office and upon full completion of the terms of clause 4(a) to begin August 1, 2020. |
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| (c) | It is understood and agreed, that the IC shall be eligible to earn additional shares of the Company at the sole determination of management based upon performance. |
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| (d) | All out-of-pocket expenses incurred by the IC in the performance of the Services to be incurred hereunder shall be borne by the Company and paid upon submission of appropriate documentation thereof, provided however, prior authorization is required for amounts in excess of $250. |
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| (e) | The goal of each IC is to assist management in managing the Company and generate business opportunities for the Company and create interactive mechanisms for advancing the Company. Since we are creating a interactive structure, the IC’s themselves shall design their own operational structures in consultation with the management of the Company. |
5. Best Efforts Basis. Subject to Section 7 and the last sentence of Section 5 hereof, IC agrees that he will at all times faithfully and to the best of his experience, ability and talents perform all the duties that may be required of it pursuant to the terms of this Agreement. The Company specifically acknowledges and agrees, however, that the services to be rendered by IC shall be conducted on a “best-efforts” basis and has not, cannot and does not guarantee that his efforts will have any impact on the Company’s business or that any subsequent corporate improvement will result from his efforts.
6. Company’s Right to Approve Transaction. The Company expressly retains the right to approve, in its sole discretion, every transaction introduced by IC that involves the Company as a party to any agreement. IC and the Company mutually agree that IC is not authorized to enter any agreement on behalf of the Company.
7. Non-Exclusive Services. The Company understands that IC is currently providing services to other individuals and entities and agrees that IC is not prevented or barred from rendering services of the same nature or a similar nature to any other individuals or entities and acknowledges that such Services may from time to time conflict with the timing of and the rendering of IC’s services. However, should such a conflict exist IC shall notify Cytta in a timely fashion.
8. Information Regarding Company. IC represents and warrants that he has been made aware of the Company’s recent filings (including management prepared quarterly financial statements dated March 315 \ 2020, other disclosure documents filed at OTCMARKETS.com).
9. IC Not an Agent or Employee. IC’s obligations under this Agreement consist solely of the services described herein. In no event shall IC be considered to be acting as an employee or agent of the Company (unless a separate employee, IC, or agent agreement is entered into) or otherwise representing or binding the Company. For the purposes of the Agreement, IC is independent contractor.
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10. Representations and Warranties of the Company. The Company represents and warrants to IC, each such representation and warranty being deemed to be material, that:
(a) The Company will cooperate fully and timely with IC to enable IC to perform his obligations under this Agreement;
(b) The Board of Directors of the Company in accordance with applicable law has duly authorized the execution and performance of this agreement by the Company;
(c) The performance by the Company of this Agreement will not violate any applicable court decree, law or regulation nor it will violate any provision of the organizational documents of the Company or any contractual obligation by which the Company may be bound;
(d) Because IC will rely upon information being supplied it by the Company, all such information shall be true, accurate, complete and not misleading, in all material respects;
(e) The Shares, when issued, will be duly and validly issued, fully paid and nonassessable with no personal liability to the ownership thereof;
(t) The Company will act diligently and promptly in reviewing materials submitted to it by IC to enhance timely distribution of such materials and will inform IC of any inaccuracies contained therein prior to dissemination.
11. Representations and Warranties of IC. By virtue of the execution hereof, and in order to induce the Company to enter into this Agreement, IC hereby represents and warrants to the Company as follows:
(a) He has full power and authority to enter into this Agreement, to enter into a consulting relationship with the Company and to otherwise perform this Agreement in the time and manner contemplated;
(b) He has the requisite skills and experience as contained in his resume, and all statements in his resume are true in all material respects;
12. Liability of IC. In furnishing the Company with advice and other services as herein provided, IC shall not be liable to the Company or its creditors for errors of judgment or for anything except malfeasance in the performance of his duties or reckless disregard of the obligations and duties under the terms of this Agreement.
13. Confidentiality. Until such time as the same may become publicly known, IC agrees that any information provided it by the Company, of a confidential nature will not be revealed or disclosed to any person or entities, except in the performance of this Agreement, and upon completion of the term of this Agreement and upon the written request of the Company, any original documentation provided by the Company will be returned to it. IC will, where it deems necessary, require confidentiality agreements from any associated persons where it reasonably believes they will come in contact with confidential material.
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14. Notice. All notices, requests, demands and other communications provided for by this Agreement shall, where practical, be in writing and shall be deemed to have been given when mailed at any general or branch United States Post office enclosed in a certified post-paid envelope and addressed to the address of the respective party first above stated. Any notice of change of address shall only be effective however, when received.
15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company, its successors, and assigns, including, without limitation, any corporation which may acquire all or substantially all of the Company’s assets and business or into which the Company may be consolidated or merged and IC and his heirs and administrators.
IC agrees that it will not sell, assign, transfer, convey, pledge or encumber this Agreement or his right, title or interest herein, without the prior written consent of the Company, this Agreement being intended to secure the personal services of IC.
16. Termination. The Services Term and all obligations of CYTTA hereunder, except as hereinafter provided, shall be terminated by:
(a) The death of IC’s representative;
(b) the vote of a majority of the members of the Board of Directors of CYTTA, which determination shall be based upon competent medical evidence, that IC’s representative will be unable to perform the IC’s duties hereunder by reason of injury, illness, or other physical or mental disability after absences for a period or periods aggregating in excess of thirty (30) working days in any 15-month period during the Services Term hereunder;
(c) the vote of a majority of the members of the Board of Directors of CYTTA to so remove IC any time after IC’s representative shall be absent from Services for whatever cause, excluding allowable vacations or sickness and disability, for a period of more than 30 working days in any calendar year;
(d) the vote of a majority of the members of the Board of Directors of CYTTA determining that IC’s representative has become so intemperate in the use of alcohol or drugs as seriously to interfere with the performance of the IC’s duties under this Agreement.
(e) a bona fide decision by the CYTTA to terminate its business and liquidate its assets.
(f) a vote of a majority of the members of CYTTA’s Board of Directors finding that IC has: (1) breached any of the material provisions of this Agreement and has failed to cure such breach within thirty days of notice of such breach; or (2) violated any statute or regulation, materially and adversely affecting CYTTA’s reputation, or earnings or welfare, or has been grossly negligent or engaged in willful misconduct in the performance of the IC’s duties hereunder;
(g) the expiration of the Services term as provided in Section 2 of this Agreement. IC agrees that the Company may terminate this Agreement at any time providing prior written notice of termination to IC. Any notice of termination shall only be effective however, when received. Obligations by Company and owed to IC as a result of his beneficial activities that are in-process but close after the termination date will be recognized for up to six months.
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17. Applicable Law. This Agreement shall be deemed to be a contract made under the laws of the State of Nevada, and for all purposes shall be construed in accordance with the laws of said state. IC:
(i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in Nevada State District Court, County of Clark, or in the United States District Court for the State of Nevada,
(ii) waives any objection which the Company may have now or hereafter to the venue of any such suit, action, or proceeding, and,
(iii) gives irrevocable consent to the jurisdiction of the Nevada State District Court, County of Clark, and the United States District Court for the State of Nevada in any such suit, action or proceeding.
18. Other Agreements. This Agreement supersedes all prior understandings and agreements between the parties. This Agreement may not be amended orally, but only by a writing signed by the parties hereto.
19. Non-Waiver. No delay or failure by either party in exercising any right under this Agreement, and no partial or single exercise of that right shall constitutes a waiver of that or any other right.
20. Heading. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
In Witness Whereof, the parties hereto have executed this Agreement the day set out above.
| Cytta Corp.: | IC: Makena Investment Advisors, LLC | ||||
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| By | /s/ Gary Campbell | By | /s/ Michael Chermak | ||
| Name, Title: Gary Campbell, CEO | Name: Michael Chermak, Managing Director | ||||
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FORM A:
IC’s expressed interest areas that he/she plans to pursue on the Company’s behalf.
Background:
Areas of Interest to pursue, investigate, and/or develop re Cytta:
Prepare and execute capital raises as needed in cooperation with the board of directors and management
Manage the investment relations functions aimed at increasing the liquidity of the company’s common stock
Assist in administrative activities as directed by the CEO.
Manage the S-1 process to enable the company ot achieve fully reporting status
IC will report directly to the CEO
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EXHIBIT 10.2
Property Sublease Cytta/Collins
| Effective Date |
| 10/25/2020 |
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| Michael Collins (“Sublessor”) located at 8056 Redlands St. #2 Playa Del Rey, CA. 90293 |
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| Cytta Corp. (“Sublessee”) a Nevada Corporation located at 5450 W Sahara Ave., Suite 300, Las Vegas NV, 89146 |
Whereas:
Sublessor is executing a Master Lease for premises for certain property to be leased to the Sublessor as the lessee. Given the government and other security requirements of both sublessor and sublessee the address of the premises is intentionally left out of this agreement.
Now, the lessee as Sublessor wishes to provide Cytta Corp. a sublease which permits Cytta Corp to utilize part of the facilities as lab and testing facility, office, video studio, demonstration facility and storage location subject to the direction of the sublessor. In consideration for the mutual promises, covenants, and agreements made below, the parties, intending to be legally bound, agree as follows:
1. Term & Rent
The Sublessor leases to the Sublessee, and the Sublessee leases from the Sublessor, the Premises commencing 10/26/2020, and terminating on 10/26/2021. The sublease agrees to pay the sublessor the sum of $50,000.00 in advance for the annual lease payment.
2. Uses
The Sublessee shall use and occupy the portion of the premises described above.
Understood, Agreed & Accepted
We have carefully reviewed this contract and agree to and accept its terms and conditions. We are executing this Agreement as of the Effective Date first written above.
Accepted and Agreed
| /s/ Gary Campbell | /s/ Michael Collins | |||
| Gary Campbell CEO | Michael Collins CTO | |||
| Cytta Corp. | Cytta Corp. |
EXHIBIT 10.3
| CONSULTING AGREEMENT |
This Consulting Agreement (the “Agreement”) is made and entered into to be effective as August 27, 2020 (the “Effective Date”) between Cytta Corp. (the “Company”) and Peter Rettman (‘‘the Consultant”). The Company and the Consultant are sometimes referred to individually, as a “Party” and collectively, as the “Parties.”
WHEREAS, the Consultant has the professional business and financial expertise and experience to assist the Company, and the Consultant is offering its services as a consultant to the Company; and
WHEREAS, the Company desires to retain the Consultant as an independent consultant to provide services to the Company pursuant to the terms of this Agreement; and.
NOW, THEREFORE, in consideration of the premises and promises, warranties and representations herein contained, it is agreed as follows:
| 1. | DUTIES AND SERVICES. The Company hereby engages the Consultant and the Consultant hereby accepts engagement as a consultant. It is understood and agreed, and it is the express intention of the Parties to this Agreement, that the Consultant is an independent contractor, and not an employee or agent of the Company for any purpose whatsoever. Consultant shall perform all duties and obligations to the extent reasonably required in the conduct of its business with the Company, to place at the disposal of the Company Consultant’s judgment and experience and to provide business development services to the Company including, but not limited, to, the following: |
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| (i) | review the Company’s financial requirements; |
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| (ii) | analyze and assess alternatives for the Company’s financial requirements; |
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| (iii) | provide introductions to professional analysts and money managers; |
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| (iv) | assist the Company in financing arrangement to be determined and governed by separate and distinct financing agreements; |
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| (v) | provide analysis of the Company’s industry and competitors in the form of general industry reports provided directly to Company; |
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| (vi) | assist the Company in advising of potential merger partners and developing corporate partnering relationships. |
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| It is understood by the Parties, however, that the Consultant will maintain Consultant’s own business in addition to providing services to the Company. The Consultant agrees to promptly perform all services required of the Consultant hereunder in an efficient, professional, trustworthy and businesslike manner. In such capacity, Consultant will utilize only materials, reports, financial information or other documentation that is approved in writing in advance by the Company. It is acknowledged and agreed by the Company that Consultant carries no professional licenses and is not rendering legal advice or performing accounting services, nor acting as an investment advisor or brokerage/dealer within the meaning of the applicable state and federal securities laws. Consultant shall not engage in any actions that would be considered “fundraising”, will not solicit investments on behalf of the Company in any way, and will in no way be compensated for any fundraising activities conducted by the Company. | |
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| 2. | CONSULTING SERVICES & COMPENSATION. The Consultant will be retained as a Consultant and independent contractor for the Company. For services rendered hereunder, the Consultant shall receive as consideration for the Duties and Services set forth in Section 1 above: |
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| (i) The Company shall issue the Consultant a total of 3,750,000 shares. |
| 3. | EXPENSES. In addition to the compensation in Section 2 above, the Company agrees to reimburse the Consultant, from time to time, for reasonable out-of-pocket expenses incurred by the Consultant in connection with its activities under this agreement, provided, however the Consultant shall not incur any expense in excess of $1,000 or $2,500 cumulative nickel dime items without prior written company consent. These expenses include but are not limited to airfare, hotel lodging, meals, transportation, outside consultants, printing and overnight express mail. |
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| 4. | CONFIDENTIALITY. All knowledge and information of a proprietary and confidential nature relating to the Company which the Consultant obtains during the Consulting period, from the Company or the Company’s employees, agents or Consultants shall be for all purposes regarded and treated as strictly confidential for so long as such information remains proprietary and confidential and shall be held in trust by the Consultant solely for the Company’s benefit and use and shall not be directly or indirectly disclosed by the Consultant to any person without the prior written consent of the Company, which consent may be withhold by the Company in its sole discretion. |
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| 5. | INDEPENDENT CONTRACTOR STATUS. Consultant understands that since the Consultant is not an employee of the Company, the Company will not withhold income taxes or pay any employee taxes on its behalf, nor will it receive any fringe benefits. The Consultant shall not have any authority to assume or create any obligations, express or implied, on behalf of the Company and shall have no authority to represent the Company as agent, employee or in any other capacity that as herein provided. The Consultant does hereby indemnify and hold harmless the Company from and against any and all claims, liabilities, demands, losses or expenses incurred by the Company if (1) the Consultant fails to pay any applicable income and/or employment taxes (including interest or penalties of whatever nature), in any amount, relating to the Consultant’s rendering of consulting services to the Company, including any attorney’s fees or costs to the prevailing Party to enforce this indemnity or (2) Consultant takes any action or fails to take any action in accordance with the company’s instructions. The Consultant shall also be responsible for obtaining workers’ compensation insurance coverage and agrees to indemnify, defend and hold the Company harmless of and from any and all claims arising out of any injury, disability or death of the Consultant. |
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| 6. | REPRESENATIONS AND WARRANTS. For purposes of this Agreement and the Shares being issued as consideration, the Consultant represents and warrants as follows: |
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| a. | The Consultant (i) has adequate means of providing for the Consultant’s current needs and possible personal contingencies, (ii) has no need for liquidity in this investment, (iii) is able to bear the substantial economic risks of an investment in the Shares for an indefinite period, (iv) at the present time, can afford a complete loss of such investment, and (v) is an “accredited investor” as defined in the Securities Act of 1933, as amended. |
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| b. | The Consultant does not have a preexisting personal or business relationship with the Company or any of its directors or executive officers, or by reason of any business or financial experience or the business or financial experience of any professional advisors who are unaffiliated with and who are compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, could be reasonably assumed to have the capacity to protect the Consultant’s interests in connection with the investment in the Company. |
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| c. | The Consultant is aware that: |
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| i. | The Shares are not transferable under this Agreement and applicable securities laws; and are restricted securities that may only be sold if registered in an effective registration statement or under an exemption from registration; and |
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| ii. | The Articles of Incorporation and Bylaws of the Company contain provisions that limit or eliminate the personal liability of the officers, directors and agents of the Company and indemnify such Parties for certain damages relating to the Company, including damages in connection with the Shares and the good-faith management and operation of the Company. |
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| d. | The Consultant acknowledges that the Shares (other than the Shares to be registered on Form S-8), which are issuable under this Agreement are not currently registered under the Securities Act of 1933, as amended (the “Act”) nor does the Company have any obligation to registered the Shares (other than the S-8 Shares) under the Act. |
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| e. | The Consultant has not been furnished any offering literature and has not been otherwise solicited by the Company. |
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| f. | The Company and its officers, directors and agents have answered all inquiries that the Consultant has made of them concerning the Company or any other matters relating to the formation, operation and proposed operation of the Company and the offering and sale of the Shares. |
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| g. | The Consultant, if a corporation, partnership, trust or other entity, is duly organized and in good standing in the state or country of its incorporation and is authorized and otherwise duly qualified to purchase and hold the Shares. Such entity has its principal place for business as set forth on the signature page hereof and has not been formed for the specific purpose of acquiring the Shares unless all of its equity owners qualify as accredited individual investors. |
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| h. | All information that the Consultant has provided to the Company concerning the Consultant, the Consultant’s financial position and the Consultant’s knowledge of financial and business matters, or, in the case of a corporation, partnership, trust or other entity, the knowledge of financial and business matters of the person making the investment decision on behalf of such entity, including all information contained herein, is correct and complete as of the date set forth at the end hereof and may be relied upon, and if there should be any material adverse change in such information prior to this subscription being accepted, the Consultant will immediately provide the Company with such information. |
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| i. | The Consultant certifies, under penalties of perjury (i) that the taxpayer identification number shown on the signature page of this Consulting Agreement is true, correct and complete, and (ii)that the Consultant is not subject to backup withholding as a result of a failure to report all interest or dividends, or because the Internal Revenue Service has notified the Consultant that the Consultant is no longer subject to backup withholding. |
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| j. | In rendering the services hereunder and in connection with the Shares, the Consultant agrees to comply with all applicable federal and state securities laws, the rules and regulations thereunder, the rules and regulations of any exchange or quotation service on which the Company’s securities are listed ‘and the rules and regulations of the National Association of Securities Dealers, Inc. |
| 7. | TERMINATION. Either Party may terminate this Agreement at any time with or without cause by giving thirty (30) days written notice to the other Party. Should the Consultant default in the performance of this Agreement or materially breach any of its provisions, the Company may, in its sole discretion, terminate this Agreement immediately upon written notice to the Consultant. If this agreement is terminated for any reason, Consultant shall have no right to any shares that have not vested pursuant to Section 2 of this Agreement as of the termination date |
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| 8. | NO THIRD-PARTY RIGHTS. The Parties warrant and represent that they are authorized to enter into this Agreement and that no third parties, other than the Parties hereto, have any interest in any of the services or the Warrant contemplated hereby. |
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| 9. | ABSENCE OF WARRANTIES AND REPRESENTATIONS. Each Party hereto acknowledges that they have signed this Agreement without having relied upon or being induced by any agreement, warranty or representation of fact or opinion of any person not expressly set forth herein. All representations and warranties of either Party contained herein shall survive its signing and delivery. |
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| 10. | GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the law of the State of Nevada. |
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| 11. | ATTORNEY’S FEES. In the event of any controversy, claim or dispute between the Parties hereto, arising out of or in any manner relating to this Agreement, including an attempt to rescind or set aside, the prevailing Party in any action brought to settle such controversy, claim or dispute shall be entitled to recover reasonable attorney’s fees and costs. |
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| 12. | ARBITRATION. Any controversy between the Parties regarding the construction or application of this Agreement, any claim arising out of this Agreement or its breach, shall be submitted to arbitration in Nevada before one arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association, upon the written request of one Party after service of that request on the other Party. The cost of arbitration shall be borne by the losing Party. The arbitrator is also authorized to award attorney’s fees to the prevailing Party. |
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| 13. | VALIDITY. If any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity enforceability of any other paragraph, sentence, term and provision hereof. To the extent required, any paragraph, sentence, term or provision of this Agreement may be modified by the Parties hereto by written amendment to preserve its validity. |
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| 14. | ON-DISCLOSURE OF TERMS. The terms of this Agreement shall be kept confidential, and no Party, representative, attorney or family member shall reveal its contents to any third party except as required by law or as necessary to comply with law or preexisting contractual commitments. |
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| 15. | ENTIRE AGREEMENT. This Agreement contains the entire understanding of the Parties and cannot be altered or amended except by an amendment duly executed by all Parties hereto. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and personal representatives of the Parties. |
IN WITNESS WHEREOF, the Parties hereto have executed this Consulting Agreement effective as of the date first written above.
| Cytta Corp. |
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| By: | /s/ Gary Campbell | By: | /s/ Peter Rettman | ||
| Name: | Gary Campbell, CEO | Name: | Peter Rettman | ||
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| By: | /s/ Michael Chermak, CAO |
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| Name: | Michael Chermak, CAO |
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EXHIBIT 10.4
SHARE ISSUANCE AGREEMENT
Dated for reference September 30th, 2020
BETWEEN:
Cytta Corp.
(hereinafter referred to as “Cytta”)
and
Unified Financial Inc.
(hereinafter referred to as the “Unified”)
RECITALS:
A. Cytta is technology company with its principal offices located 5450 W Sahara Ave, Suite 300 Las Vegas 89146 USA.
B. UNIFIED is a corporation owned and controlled by Gary Campbell with offices at 2500 N Rainbow Blvd., Las Vegas NV 89108.
C. Cytta owes funds for services to Companies controlled by Unified.
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
SHARE ISSUANCE
1.1 Agreement to issue Shares. Subject to the terms and conditions of this Agreement, Cytta agrees to issue 50,000 Shares of Cytta Series D Preferred Stock (the “Cytta Shares”) to UNIFIED, free and clear of any and all encumbrances.
1.2 Ownership of the Cytta Shares. Cytta represents and warrants to UNIFIED as follows and acknowledges that the UNIFIED is relying on these representations and warranties and that UNIFIED would not enter into this Agreement without these representations and warranties, such representations and warranties being: Cytta shall issue the 50,000 Cytta Shares with good and marketable title thereto, free and clear of all encumbrances, and has the necessary approvals to issue the 50,000 Cytta Shares.
1.3 Amounts Outstanding. It is agreed between the parties that these invoices (as parent) for settlement of subsidiary amounts owed as follows:
| Unified Assets Inc. |
| $ | 617,515 |
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| Lando Technologies Inc. |
| $ | 573,875 |
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| TEKM Services Inc. |
| $ | 156,506 |
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shall be set off against the 50,000 Cytta Shares issued as contemplated herein. It is further agreed that the value of the 50,000 Cytta Shares are equivalent to the total of the amounts owed.
ARTICLE 2
CLOSING ARRANGEMENTS
2.1 Closing. The transactions contemplated herein shall be completed (the “Closing”) as of today’s date (the “Closing Date”) at the offices of Cytta or at such other place as may be agreed to by the UNIFIED and the Cytta.
2.2 Cytta’s Closing Deliveries. At the Closing, Cytta shall deliver or cause to be delivered UNIFIED a share certificate representing the 50,000 Cytta Shares, free and clear of all encumbrances and a copy of the Board of Directors Resolution authorizing the issuance thereof.
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ARTICLE 3
GENERAL
3.1 Expense. Each party shall pay all expenses (including Taxes paid on those expenses) it incurs in the authorization, negotiation, preparation, execution and performance of this Agreement, including all fees and expenses of its legal counsel, bankers, investment bankers, brokers, accountants or other representatives or consultants.
3.2 Entire Agreement. This Agreement constitute the entire agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior correspondence, agreements, negotiations, discussions and understanding, written or oral. Except as specifically set out this Agreement, there are no representations, warranties, conditions or other agreements or acknowledgements, whether direct or collateral, express or implied, written or oral, statutory or otherwise, that form part of or affect this Agreement or which induced any party to enter into this Agreement. No reliance is placed on any representation, warranty, opinion, advice or assertion of fact made either prior to, concurrently with, or after entering into, this Agreement, by any party to this Agreement or its representatives, to any other party or its representatives, except to the extent the representation, warranty, opinion, advice or assertion of fact has been reduced to writing andincluded as a term in this Agreement, and none of the parties to this Agreement has been induced to enter into this Agreement or any other agreement or any amendment or supplement by reason of any such representation, warranty, opinion, advice or assertion of fact. There shall be no liability, either in tort or in contract, assessed in relation to the representation, warranty, opinion, advice or assertion of fact, except as contemplated in this Section.
3.3 Amendment. This Agreement may be supplemented, amended, restated or replaced only by a written agreement signed by each party.
3.4 Jurisdiction. Each party irrevocably and unconditionally attorns to the exclusive jurisdiction of the courts of the State of Nevada.
3.5 Governing Law. This Agreement and any dispute arising from or in relation to this Agreement shall be governed by, and interpreted and enforced in accordance with, the law of the State of Nevada and the laws of the United States of America applicable in that state.
3.6 Execution by Counterpart and Facsimile. This Agreement, and any supplementary agreements or documents required by the terms hereof, may be executed by counterpart and, provided all parties execute one copy of the Agreement, each copy bearing an original signature of one party shall be deemed to be an original. This Agreement may be executed by facsimile machine and each facsimile signature shall be deemed to be an original signature.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date last set forth above:
| CYTTA Corp. | |
| /s/Gary Campbell CEO | |
| UNIFIED Financial Inc. | |
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| /s/Gary M Campbell President |
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EXHIBIT 10.5
Memorandum of Addendum to Technology Access Agreement
AGREEMENT (the “Agreement”) made and entered into as of this 19th day of July 2018, by and between Cytta Corp., a Nevada corporation with its principal offices located at 6490 W. Desert Inn Road, Las Vegas NV 89146 (the “Company”), and Michael Collins of 8056 Redlands Street, Playa del Rey, California (“Collins”).
Whereas, the Company is in the business of imagineering, developing, securing, and marketing disruptive technologies. Cytta utilizes these technologies to build specific content collection, storage and communication solutions for use by enterprise level organizations that can implement the technologies into their specific industry segments.
Whereas, pursuant to our Technology Access Memorandum of Agreement (Herein the “Original Agreement”) with Mr. Collins (through his former personal company CIFFBE) and Professor Milan Prokin dated January 30th, 2014 of which this Memorandum of Addendum Agreement (herein “Addendum Agreement”) ratifies, codifies and provides additional details regarding the specific functionality thereof.
Whereas, pursuant to the Original Agreement the specific compression/encryption software (“Original Software Product”) was provided by Professor Prokin to Collins in 2007 in return for Collins funding and actively participating with Professor Prokin in the development thereof over the past 11 years.
Whereas, Collins and Professor Prokin have jointly modified the Original Software Product since then and continue to modify, creating the Current Product (herein “Current Product”) It is specifically acknowledged and agreed by Cytta that the Current Product as it currently exists, and as modified in the future, is the copyright owned technology of Collins pursuant to Collins’ agreement(s) with the Professor.
Whereas, Cytta further acknowledges and understands that the Current Product will be modified and updated on an ongoing basis by Collins and Professor Prokin pursuant to the ongoing agreements between Collins and Professor Prokin, but will still constitute the Current Product for the purposes of this agreement.
Whereas, it is also acknowledged and agreed that Collins has agreements with Professor Prokin whereby the Current Product maybe modified, expanded or altered into additional Products which upon payment of certain to be agreed upon development costs and fees will also become the Copyright Product of Collins and which will be available to Cytta hereunder.
Whereas, pursuant to the Original Agreement and this Addendum Agreement, Cytta and Collins have developed its access to the Current Product into its branded SUPR™ compression technology. Cytta and Collins have finished the design, build and integration of the SUPR™ compression technology into its first Operational Product (herein the “Operational Product”) in the 4K+ video compression marketplace utilizing a drone. This Agreement represents an addendum to the Original Agreement and sets out additional details regarding the development, marketing and sales of the Current Product and Cytta’s obligations to Collins and Collins obligations to Cytta related thereto.
Whereas, the Collins also has the ability to provide technical advice to companies and the Company believes such experience is in its best interest to utilize; and
Whereas, the Company formally wishes to acquire the Current Product and also desires to engage Collins as a Cytta Officer and to have him continue to provide such independent consulting services in accordance with the terms and conditions hereinafter set forth.
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Now, therefore in exchange for good and valuable consideration, the Company and Collins agree as follows:
A. ACQUISITION OF COPYRIGHT CURRENT PRODUCT WITH ABILITY TO LICENSE:
1. RIGHT TO USE AND LICENSE
Subject to the terms and conditions of the Original Agreement and this Addendum Agreement, Collins grants to Cytta an exclusive, right to use and license to use the SUPR™ software as further identified in Exhibit A (the “Acquired Programs”) for the purpose of installation into any and all services or products being sold, licensed, marketed or otherwise provided to their clients in any way. Cytta may use the Acquired Programs in executable format for its own use and for use with Clients
2. NO RIGHT TO MODIFY WITHOUT CONSENT
Cytta may not without written consent from Collins translate or modify the Acquired programs or incorporate them into other software. Cytta may not, transfer or sublicense the Acquired Programs to any third party, in whole or in part, in any form, whether modified or unmodified without the written consent of Collins
3. COPIES
Cytta may make copies of the Acquired Program in executable code form as necessary for use by Cytta and for backup or archive purposes. Cytta agrees to maintain records of the location and use of each copy, in whole or in part, of the Acquired Programs. Each Acquired Program is copyrighted but unpublished by Collins. Cytta agrees to reproduce and apply the copyright notice and proprietary notice of Collins to all copies made hereunder, in whole or in part and in any form, of Acquired Programs.
4. OWNERSHIP
The original and any copies of the Acquired Programs, made by Cytta, including translations, compilations, partial copies, modifications, and updates, are the property of Cytta and Collins.
5. PROPRIETARY RIGHTS
Cytta recognizes that Collins regards the Acquired Programs as his proprietary information and as confidential trade secrets of great value. Cytta agrees not to provide or to otherwise make available in any form the Acquired Programs, or any portion thereof, to any person other than employees of Cytta without the prior written consent of COLLINS except as set out herein. Cytta further agrees to treat the Acquired Programs with at least the same degree of care with which Cytta treats its own confidential information and in no event with less care than is reasonably required to protect the confidentiality of the Acquired Programs.
6. TERM
The rights granted hereunder shall continue. unless and until terminated and subject to Cytta’s proper performance of its obligations hereunder.
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7. MAINTENANCE SUPPORT
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| a. | Collins will provide to Cytta and its clients any and all support required with respect to the Software: |
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| b. | If during this Agreement, Client notifies Cytta of a substantial program error respecting the Software, or Cytta has reason to believe that error exists in the Software and so notifies Collins, Collins shall pursuant to the management and operational terms of this Agreement verify and in conjunction with Professor Prokin attempt to correct such as soon as possible. |
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| c. | In the case that Cytta has technical questions in the use of the Software under this Agreement, Cytta may submit those questions to Collins. Collins shall provide consulting to answer such questions pursuant to his management and operational engagement hereunder for each Acquired program. |
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| d. | Cytta desires to continue the Software support specified in this section, and Cytta shall pay to Collins the fees set out hereunder. |
8. DELIVERY OF ACQUIRED PROGRAMS
COLLINS shall use its best efforts to deliver the Acquired Programs promptly after receipt of the purchase order and export license (if required).
9. WARRANTY DISCLAIMER
COLLINS provides, and Cytta accepts, the Acquired programs “AS IS.” COLLINS PROVIDES NO WARRANTIES AS TO THE FUNCTION OR USE OF THE ACQUIRED PROGRAMS, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE ACQUIRED PROGRAM IS WITH CYTTA. Collins DOES NOT WARRANT THAT THE FUNCTIONS CONTAINED IN THE ACQUIRED PROGRAMS WILL MEET CYTTA’S REQUIREMENTS OR THAT THE OPERATION OF THE ACQUIRED PROGRAMS WILL BE UNINTERRUPTED OR ERROR FREE, however agrees to use his efforts to expeditiously correct and any and all issues with the Acquired Programs.
10. PATENT AND COPYRIGHT INDEMNITY
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| a. | Cytta will defend at its own expense any action brought against Cytta to the extent it is based on a claim that the Acquired Programs used within the scope of the license granted hereunder infringe a United States patent, copyright or other proprietary right of a third party. |
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| b. | Cytta will pay any costs, damages or attorney fees finally awarded against Cytta in such action which are attributable to such claim, provided COLLINS and Professor Prokin is promptly notified in writing of such claim and provide all available assistance. Cytta may control the defense and/or settlement of such claim, as Cytta is provided with all requested assistance, information and authority. |
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| c. | In the event that an Acquired Program becomes, or in Cytta or COLLINS’s opinion is likely to become, the subject of a claim of infringement of a United States patent, copyright or trade secret, Cytta and/or COLLINS may at its option either secure Cytta’s right to continue using the Acquired Programs, replace or modify the Acquired Programs to make them not infringing. |
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| d. | COLLINS shall have no liability for any claim of patent, copyright or trade secret infringement based on the use of a Acquired Program in any form other than the original, unmodified form provided to Cytta or the use of a combination of the Acquired Programs with hardware, software or data not supplied by COLLINS where the used Acquired Programs alone in their original, unmodified form would not constitute an infringement. |
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| e. | The foregoing states Cytta’s and Collins’ entire liability for infringement or claims of infringement of patents, copyright or other intellectual property right. |
11. EXPORT REGULATIONS
Cytta understands that COLLINS/Cytta is subject to regulation by agencies of the U.S. Government, including the
U.S. Departments of Commerce and State, which prohibit export or diversion of certain technical products to certain countries. Cytta warrants that it will comply in all respect with the export and re-export restrictions for the Acquired Programs and all other applicable export regulations. Cytta agrees to indemnify and hold COLLINS harmless from any loss, damages, liability or expenses incurred by COLLINS as a result of Cytta’s failure to comply with any export regulations or restrictions
12. ENGAGEMENT
The Company agrees to engage Collins and Collins agrees to join Cytta as an Officer and Independent contractor of the Company
13. TERM AND TERMINATION
The term of this Agreement shall commence on the date set out herein and shall continue unless and until terminated pursuant to this section and subject to the Parties proper performance of their obligations hereunder. Either Party may terminate this Agreement if the other Party is in default of any of the material terms and conditions of this Agreement and fails to correct such default within one hundred and twenty (120) days after written notice thereof. Either Party may give notice of partial termination hereunder for breach of a material term.
14. SERVICES.
Collins shall render advice and assistance to the Company consistent with his/her position, knowledge, and special experience that pertains to furthering the efforts of the Company specifically with the Acquired Technology (SUPR™) and generally with regard to any and all technologies of the Company.
15. COMPENSATION FOR ACQUIRED PRODUCT AND COLLINS’ SERVICES.
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| a. | The Company shall issue to Collins or to the Collins’s direction upon the date set out above hereof, 10,000,000 Common Shares for the Acquired Product. The shares are due and owing and will be issued as per the instructions of Collins. All out-of-pocket expenses incurred by the Collins in the performance of his/her Services hereunder shall be borne by the Company and paid upon submission of appropriate documentation thereof; provided however, prior authorization is required for amounts in excess of $250. |
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| b. | The Collins may generate business opportunities or other extraordinary benefits for the Company. For those efforts, and upon the successful development of an opportunity or other extraordinary benefit, the Collins will earn a Performance Bonus as determined by the Board of Directors of the Company, as such Collins has been awarded 1,000,000 common shares for his services during the 2017/2018 fiscal year. |
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| c. | Additionally, Collins shall receive a deemed independent contractor fee of $10,000 per month for his efforts in running, managing and coordinating the Cytta SUPR™ program beginning October 1st, 2018. Prior to the Company completing a financing sufficient to formally launch the SUPR™ business on a full-time basis, with Collins managing and running the enterprise, the amount owing shall accrue and be converted in common shares of the Company. |
16. BEST EFFORTS BASIS.
Collins agrees that he/she will at all times faithfully and to the best of his/her experience, ability and talents perform all the duties that may be required of Collins pursuant to the terms of this Agreement. The Company specifically acknowledges and agrees, however, that the services to be rendered by Collins shal1 be conducted on a “reasonable best-efforts” basis and Collins has not, cannot and does not guarantee that such efforts will have any impact on the Company’s business or that any subsequent corporate improvement will result from such efforts.
17. COMPANY’S RIGHT TO APPROVE TRANSACTION.
The Company expressly retains the right to approve, in its sole discretion, each and every transaction introduced by Collins that involves the Company as a party to any agreement. Collins and the Company mutually agree that Collins is not authorized to enter any agreement on behalf of the Company.
18. NON-EXCLUSIVE SERVICES.
The Company understands that Collins is currently providing certain advisory and business development services to other individuals and entities and agrees that Collins is not prevented or barred from rendering services of the same nature or a similar nature to any other individuals or entities and acknowledges that such Services may from time to time conflict with the timing of and the rendering of Collins’s services. However, should such a conflict exist, Collins shall notify the Company in a timely fashion.
19. COLLINS NOT AN AGENT OR EMPLOYEE.
Collins’s obligations under this Agreement consist solely of the services described herein. In no event shall Collins be considered to be acting as an employee or agent of the Company (unless a separate employee, advisor, or agent agreement is entered into) or otherwise representing or binding the Company. For the purposes of the Agreement, Collins is an independent contractor.
20. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Collins, each such representation and warranty being deemed to be material, that:
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| a. | The Company will cooperate fully and timely with Collins to enable Collins to perform his/her obligations under this Agreement; |
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| b. | The Board of Directors of the Company in accordance with applicable law has duly authorized the execution and performance of this Agreement by the Company; |
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| c. | The performance by the Company of this Agreement will not violate any applicable court decree, law or regulation nor it will violate any provision of the organizational documents of the Company or any contractual obligation by which the Company may be bound; |
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| d. | Because Collins will rely upon information being supplied by the Company, all such information shall be true, accurate, complete and not misleading, in all material respects; |
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| e. | The Common Shares, when issued, will be duly and validly issued, fully paid and nonassessable with no personal liability to the ownership thereof; |
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| f. | The Company will act diligently and promptly in reviewing materials submitted to it by Collins to enhance timely distribution of such materials and will inform Collins of any inaccuracies contained therein prior to dissemination; |
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| g. | The services to be provided by Collins to the Company hereunder are not in connection with or related to the offer or sale of securities of the Company in a capital raising transaction. |
21. REPRESENTATIONS AND WARRANTIES OF COLLINS.
By virtue of the execution hereof, and in order to induce the Company to enter into this Agreement, Collins hereby represents and warrants to the Company as follows:
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| i. | He/she has full power and authority to enter into this Agreement, to deal with the Acquired Product hereunder, to enter into a consulting relationship with the Company and to otherwise perform this Agreement in the time and manner contemplated therein. |
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| ii. | He/she has the requisite skills and experience as contained in background and experience; |
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| iii. | The services to be provided by Collins to the Company hereunder are not in connection with or related to the offer or sale of securities of the Company in a capital raising transaction, |
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| iv. | Collins is not an affiliate of or associated with any broker-dealers or associated with any finders which are doing or have done business with the Company. |
22. LIABILITY OF COLLINS.
In furnishing the Company with advice and other services as herein provided, Collins shall not be liable to the Company or its creditors for errors of judgment or for anything except malfeasance in the performance of his/her duties or reckless disregard of the obligations and duties under the terms of this Agreement.
23. CONFIDENTIALITY.
Until such time as the same may become publicly known, Collins agrees that any information provided Collins by the Company of a confidential nature will not be revealed or disclosed to any person or entities, except in the performance of this Agreement, and upon completion of the term of this Agreement and upon the written request of the Company, any original documentation provided by the Company will be returned to it. Collins will, where he/she deems necessary, require confidentiality agreements from any associated persons where Collins reasonably believes they will come in contact with confidential material.
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24. NOTICE AND CYTTA CONTACT INFORMATION.
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| a. | Cytta Corp. contact information |
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| Attn: Gary Campbell CEO Cytta Corp 6490 West Desert Inn Road Las Vegas Nevada 89146 Email: [redacted] Phone: [redacted] |
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| b. | All notices, requests, demands and other communications provided for by this Agreement shall, be acceptable by writing, email or fax. When in writing alone, notice shall be deemed to have been given when mailed at any general or branch United States Post Office enclosed in a certified post- paid envelope and addressed to the address of the respective party first above stated. Any notice of change of address shall only be effective however, when received. |
25. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the Company, its successors, and assigns, including, without limitation, any corporation which may acquire all or substantially all of the Company’s assets and business or into which the Company may be consolidated or merged, and upon the Collins and his/her heirs and administrators.
26. ASSIGNMENT, ETC.
Collins agrees that he/she will not sell, assign, transfer, convey, pledge or encumber this Agreement or his/her right, title or interest herein, without the prior written consent of the Company, this Agreement being intended to secure the personal services and assets of Collins.
27. APPLICABLE LAW.
This Agreement shall be deemed to be a contract made under the laws of the State of Nevada, and for all purposes shall be construed in accordance with the laws of said state. Collins and Cytta:
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| a. | agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in Nevada State District Court, County of Clark, or in the United States District Court for the State of Nevada, |
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| b. | waives any objection which the Company may have now or hereafter to the venue of any such suit, action, or proceeding, and, |
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| c. | gives irrevocable consent to the jurisdiction of the Nevada State District Court, County of Clark, and the United States District Court for the State of Nevada in any such suit, action or proceeding. |
28. OTHER AGREEMENTS.
This Agreement supplements and supports the Memorandum of Agreement dated January 30th, 2014 and supersedes all prior understandings and agreements between the parties. This Agreement may not be amended orally, but only by a writing signed by the parties hereto.
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29. NON-WAIVER.
No delay or failure by either party in exercising any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right.
30. HEADINGS.
Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
31. COUNTERPARTS/SIGNATURES.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. A facsimile signature shall be legally binding upon the party making the same.
In Witness Whereof, the parties hereto have executed this Agreement on the day and year first set out above.
| Cytta Corp: |
| Michael Collins: |
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| By | /s/ Gary Campbell | By | /s/ Michael Collins | ||
| Gary Campbell, CEO | Printed Name Michael Collins | ||||
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EXHIBIT 14.1
CYTTA CORP.
CODE OF ETHICS
TOPICS
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| 1. | Statement of Policy |
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| 2. | Implementation and Enforcement |
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| 3. | Relations with Competitors and Other Third Parties |
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| 4. | Insider Trading, Securities Compliance and Public Statements |
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| 5. | Financial Reporting |
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| 6. | Human Resources |
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| 7. | Environmental, Health and Safety |
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| 8. | Conflicts of Interest |
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| 9. | International Trade |
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| 10. | Government Relations |
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| 11. | Contractors, Consultants, and Temporary Workers |
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| 12. | Conclusion |
1. STATEMENT OF POLICY
The Company has adopted eight Corporate Values (Focus, Respect, Excellence, Accountability, Teamwork, Integrity, Very Open Communications and Enjoying Our Work) to provide a framework for all employees in conducting ourselves in our jobs. These policies are not intended to substitute for those Values, but will serve as guidelines in helping you to conduct the Company's business in accordance with our Values. Compliance requires meeting the spirit, as well as the literal meaning, of the law, the policies and the Values. It is expected that you will use common sense, good judgment, high ethical standards and integrity in all your business dealings.
If you encounter a situation you are not able to resolve by reference to these policies, ask for help. Contact Chad Rutherford, Chairman and Chief Executive Officer, who has been identified as responsible for overseeing compliance with these policies.
Violations of the law or the Company's policies will subject employees to disciplinary action, up to and including termination of employment. In addition, individuals involved may subject themselves and the Company to severe penalties including fines and possible imprisonment. Compliance with the law and high ethical standards in the conduct of Company business should be a top priority for each employee, officer and director.
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2. IMPLEMENTATION AND ENFORCEMENT.
Chad Rutherford, our Chairman and Chief Executive Officer, has been appointed as Compliance Officer of the Company, responsible for overseeing compliance with, and enforcement of, all Company policies.
Employees are expected to be familiar with these policies as they apply to their duties. They should consult with their managers if they need assistance in understanding or interpreting these policies. Each employee is required to follow these policies and to comply with their terms. A refusal by any employee to agree to be bound by these policies shall be grounds for discipline up to and including dismissal.
Any employee who, in good faith, has reason to believe a Company operation or activity is in violation of the law or of these policies must call the matter to the attention of Chad Rutherford our Chairman and Chief Executive Officer. All reports will be reviewed and investigated and as necessary under the circumstances, and the reporting employee should provide sufficient information to enable a complete investigation to be undertaken.
Any employee who makes an allegation in good faith reasonably believing that a person has violated these policies or the law, will be protected against retaliation.
3. RELATIONS WITH COMPETITORS AND OTHER THIRD PARTIES.
The Company's policy is to comply fully with competition and antitrust laws throughout the world. These laws generally prohibit companies from using illegal means to maintain, obtain or attempt to obtain a monopoly in a market. They also prohibit companies from engaging in unfair trade practices. "Unfair trade practices" include fixing prices, dividing markets, agreeing with competitors not to compete, or agreeing to boycott certain customers. It is advised that you consult with the Chairman and Chief Executive Officer before attending a meeting with a party who may be viewed as a competitor.
4. INSIDER TRADING, SECURITIES COMPLIANCE AND PUBLIC STATEMENTS.
Securities laws prohibit anyone who is in possession of material, non-public information ("Insider Information") about a company from purchasing or selling stock of that company, or communicating the information to others. Information is considered "material" if a reasonable investor would consider it to be important in making a decision to buy or sell that stock. Some examples include financial results and projections, new products, acquisitions, major new contracts or alliances prior to the time that they are publicly announced. Employees who become aware of such Inside Information about the Company must refrain from trading in the shares of the Company until the Inside Information is publicly announced.
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Employees must also refrain from disclosing that information to persons who do not have a need to know, whether they are inside the Company or outside, such as spouses, relatives or friends.
The Company makes regular formal disclosures of its financial performance and results of operations to the investment community. We also regularly issue press releases. Other than those public statements, which go through official Company channels, employees are prohibited from communicating outside the Company about the Company's business, financial performance or future prospects. Such communications include questions from securities analysts, reporters or other news media, but also include seemingly innocent discussions with family, friends, neighbors or acquaintances.
5. FINANCIAL REPORTING.
The Company is required to maintain a variety of records for purposes of reporting to the government. The Company requires all employees to maintain full compliance with applicable laws and regulations requiring that its books of account and records be accurately maintained. Specifics of these requirements are available from Chad Rutherford.
6. HUMAN RESOURCES.
The Company is committed to providing a work environment that is free from unlawful harassment and discrimination, and respects the dignity of its employees. The Company has policies covering various aspects of its relationship with its employees, as well as employees' relationships with each other. For more detailed information, you should consult Chad Rutherford. Each employee is expected to be familiar with these policies and to abide by them.
7. ENVIRONMENTAL, HEALTH AND SAFETY.
The Company is committed to protecting the health and safety of our employees, as well as the environment in general. The Company expects employees to obey all laws and regulations designed to protect the environment, and the health and safety of our employees, and to obtain and fully observe all permits necessary to do business.
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At the very least, all employees should be familiar with and comply with safety regulations applicable to their work areas. The Company will make, to the extent possible, reasonable accommodations for the known physical or mental limitations of our employees. Employees who require an accommodation should contact Chad Rutherford. The Company will then engage in an interactive process to determine what reasonable accommodations may exist.
8. CONFLICTS OF INTEREST.
Each employee is expected to avoid any activity, investment or association that interferes with the independent exercise of his or her judgment in the Company's best interests ("Conflicts of Interest"). Conflicts of Interest can arise in many situations. They occur most often in cases where the employee or the employee's family obtains some personal benefit at the expense of the Company's best interests.
No employee, or any member of employee's immediate family, shall accept money, gifts of other than nominal value, unusual entertainment, loans, or any other preferential treatment from any customer or supplier of the Company where any obligation may be incurred or implied on the giver or the receiver or where the intent is to prejudice the recipient in favor of the provider. Likewise, no employee shall give money, gifts of other than nominal value, unusual entertainment or preferential treatment to any customer or supplier of the Company, or any employee or family members thereof, where any obligation might be incurred or implied, or where the intent is to prejudice the recipient in favor of the Company. No such persons shall solicit or accept kickbacks, whether in the form of money, goods, services or otherwise, as a means of influencing or rewarding any decision or action taken by a foreign or domestic vendor, customer, business partner, government employee or other person whose position may affect the Company's business.
No employee shall use Company property, services, equipment or business for personal gain or benefit.
Employees may not: (1) act on behalf of, or own a substantial interest in, any company or firm that does business, or competes, with the Company; (2) conduct business on behalf of the Company with any company or firm in which the employee or a family member has a substantial interest or affiliation. Exceptions require advance written approval.
Employees should not create the appearance that they are personally benefitting in any outside endeavor as a result of their employment by the Company, or that the Company is benefitting by reason of their outside interests. Any employee who is not sure whether a proposed action would present a conflict of interest or appear unethical should consult with Chad Rutherford.
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9. INTERNATIONAL TRADE.
The Company must comply with a variety of laws around the world regarding its activities. In some cases, the law prohibits the disclosure of information, whether the disclosure occurs within the U.S. or elsewhere, and whether or not the disclosure is in writing.
Payments or gifts to non-U.S. government officials are prohibited by law and by Company policy. The Foreign Corrupt Practices Act precludes payments to non-U.S. government officials for the purpose of obtaining or retaining business, even if the payment is customary in that country. This law applies anywhere in the world to U.S. citizens, nationals, residents, businesses or employees of U.S. businesses. Because Cytta Corp. is a U.S. company, this law applies to the Company and all of its subsidiaries. Any questions on this policy should be directed to Chad Rutherford.
10. GOVERNMENT RELATIONS.
The Company is prohibited by law from making any contributions or expenditures in connection with any U.S. national election. This includes virtually any activity that furnishes something of value to an election campaign for a federal office. Use of the Company's name in supporting any political position or ballot measure, or in seeking the assistance of any elected representative, requires the specific approval of the Chairman and Chief Executive Officer of the Company. Political contributions or expenditures are not to be made out of Company funds in any foreign country, even if permitted by local law, without the consent of the Company's Chairman and Chief Executive Officer.
U.S. law also prohibits giving, offering, or promising anything of value to any public official in the U.S. or any foreign country to influence any official act, or to cause an official to commit or omit any act in violation of his or her lawful duty. Company employees are expected to comply with these laws.
11. VENDORS, CONTRACTORS, CONSULTANTS AND TEMPORARY WORKERS.
Vendors, contractors, consultants or temporary workers who are acting on the Company's behalf, or on Company property, are expected to follow the law, Company policies and honor Company Values. Violations will subject the person or firm to sanctions up to and including loss of the contract, contracting or consulting agreement, or discharge from temporary assignment.
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12. CONCLUSION.
This Code of Ethics is not intended to cover every possible situation in which you may find yourself. It is meant to give you the boundaries within which the Company expects you to conduct yourself while representing Cytta Corp. You may find yourself in a situation where there is no clear guidance given by this Code of Ethics. If that occurs, return to the foundations stated earlier: common sense, good judgment, high ethical standards and integrity. And refer to the Company's Values. In addition, there are many resources upon which you may rely: your management chain, Human Resources, Legal or other Cytta Corp. departments, and the CEO. Together we can continue to make Cytta Corp. a company that sets a standard for online contractor services.
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CYTTA CORP.
VALUES
FOCUS We exist only because we are involved in the advertising of honest and reliable tradespeople.
RESPECT We value all people, treating them with dignity at all times.
EXCELLENCE We strive for "Best in Class" in everything we do.
ACCOUNTABILITY We do what we say we will do and expect the same from others.
TEAMWORK We believe that cooperative action produces superior results.
INTEGRITY We are honest with ourselves, each other, our customers, our partners and our shareholders
VERY OPEN COMMUNICATION We share information, ask for feedback, acknowledge good work, and encourage diverse ideas.
ENJOYING OUR WORK We work hard, are rewarded for it, and maintain a good sense of perspective, humor and enthusiasm.
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Reportable Violations - Anonymous Reporting Program
Accounting Error
Accounting Omissions
Accounting Misrepresentations
Auditing Matters
Compliance/Regulation Violations
Corporate Scandal
Domestic Violence
Discrimination
Embezzlement
Environmental Damage
Ethics Violation
Fraud
Harassment
Industrial Accidents
Misconduct
Mistreatment
Poor Customer Service
Poor Housekeeping
Sabotage
Securities Violation
Sexual Harassment
Substance Abuse
Theft
Threat of Violence
Unfair Labor Practice
Unsafe Working Conditions
Vandalism
Waste
Waste of Time and Resources
Workplace Violence
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EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated June 25, 2021, relating to the financial statements of Cytta Corp. (“Company”) as of and for the years ended September 30, 2020 and 2019. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ Prager Metis CPA’s LLC
Hackensack, New Jersey
June 25, 2021