CYTTA CORP 10-K for FY2021

CYTTA CORP. (CYCA)

10-K 2022-01-12 For: 2021-09-30

Added on April 06, 2026

About this 10-K

CYTTA CORP filed this 10-K on January 12, 2022, covering the fiscal year ended September 30, 2021 (FY2021).

Headline figures

Fiscal year ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $94.63K; up 95.1% from $48.51K a year earlier
Net loss: $2.59M; compared with a net loss of $1.27M a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Not applicable.	Not applicable.	Not applicable.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

		Page
PART I

Item 1	Business	4
Item 1A	Risk Factors	7
Item 1B	Unresolved Staff Comments	13
Item 2	Properties	13
Item 3	Legal Proceedings	13
Item 4	Mine Safety Disclosures	13

PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6	Selected Financial Data	15
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	19
Item 8	Financial Statements and Supplementary Data	19
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A	Controls and Procedures	19
Item 9B	Other Information	20

PART III

Item 10	Directors, Executive Officers and Corporate Governance	21
Item 11	Executive Compensation	23
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13	Certain Relationships and Related Transactions, and Director Independence	25
Item 14	Principal Accountant Fees and Services	25

PART IV

Item 15	Exhibits and Financial Statement Schedules	26
	Signatures	28

	·	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

	·	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.

	·	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

	·	Phone, e-mail and back-office technical support

	·	Onsite troubleshooting

	·	Software maintenance releases

	·	Software upgrades

	·	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

	For the Years Ended September 30,
	2021				2020
	High		Low		High		Low

First Quarter	$	0.097	$	0.07	$	0.035	$	0.0141
Second Quarter	$	0.168	$	0.052	$	0.031	$	0.0172
Third Quarter	$	0.2358	$	0.134	$	0.0425	$	0.02
Fourth Quarter	$	0.1301	$	0.0876	$	0.1295	$	0.045

	2021			%		2020			%

Revenue	$	94,626			100.0	$	48,531			100.0
COGS	$	41,872			44.3	$	24,037			49.6
Gross Profit	$	52,754			55.7	$	24,476			50.4

Operating Expenses	$	2,625,302			2,774.4	$	1,289,826			2,658.7

Operating Loss	$	(2,572,548	)		-2,718.7	$	(1,265,350	)		-2,608.3

Net Loss	$	(2,593,537	)		-2,740.8	$	(1,266,844	)		-2,611.3

	September 30,
Description	2021		2020		Increase
Stock based expenses	$	1,365,667	$	701,641	$	664,026
Professional fees		196,317		24,825		171,492
Consulting expenses (excluding stock expenses)		166,823		18,007		148,816
Related party expenses (excluding stock expenses)		492,579		371,760		120,819
Depreciation expense		40,866		6,472		34,394
Equipment and demo expenses		69,035		8,779		60,256
General and Administrative officers		113,285		39,579		73,706
Auto, Travel and Meals and Entertainment		70,142		47,894		22,248
Rent expense		16,732		16,146		586
Bad debt expense		20,040		8,000		12,040
Other operating expenses		73,816		46,723		27,093
Total Operating expenses	$	2,625,302	$	1,289,826	$	1,335,476

	2021		2020

Current Assets	$	1,102,449	$	1,441,288

Property and Equipment	$	170,605	$	143,058

Total Assets	$	1,273,054	$	1,584,346

Current Liabilities	$	406,810	$	584,440

Total Liabilities	$	406,810	$	584,440

Stockholders’ Equity	$	866,244	$	999,906

Total Liabilities and Stockholders’ Equity	$	1,273,054	$	1,584,346

	●	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of our assets;
	●	Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
	●	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Name	Age	Position
Gary Campbell	67	CEO, CFO, Secretary and Director
Erik Stephansen	57	President and Director
Michael Collins	51	Chief Visionary Officer/CTO
Michael Chermak	62	Chief Administrative Officer

Name & Principal Position	Year	Salary ($)			Bonus ($)		Stock Awards ($)			Option Awards ($)		Nonequity Incentive Plan Compensation ($)		All Other Compensation ($)			Total ($)

Gary Campbell	2021		156,000	(1)		-		-			-		-		-			156,000
Chief Executive Officer	2020		5,750			-		-			-		-		288,000	(2)		293,750

Michael Collins	2021		156,000	(3)		-		-			-		-		-			156,000
Chief Technology Officer	2020		58,010			-		500,000	(4)		-		-		-			558,010

Michael Chermak	2021		120,000			-		-			-		-		-			120,000
Chief Administration Officer	2020		20,000			-		312,500	(5)		-		-		-			332,500

(1)	In 2021, the Company incurred management fees to Mr. Campbell based on $12,000 per month from October 1, 2020, through May 31, 2021, and $15,000 per month beginning June 1, 2021.

(2)	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).
(3)	In 2021, the Company incurred management fees to Mr. Collins based on $12,000 per month from October 1, 2020 through May 31, 2021, and $15,000 per month beginning June 1, 2021.

(4)	On August 15, 2020, the Company issued 20,000,000 shares of common stock to the Company’s CTO for the use of technology. The shares were valued at $0.025 per share based upon the price the Company sold shares in the most recently completed private placement at such time. The Company recorded stock-based compensation of $500,000 for the year ended September 30, 2020, for this issuance.

(5)	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.

Name and Title:	Class of Security	Amount of beneficial ownership			Percent of Class (1)
*Executive Officers and Directors:*

Gary Campbell, CEO, CFO and Director	Common Stock		62,184,875	(2)		20.56	%
	Series D Preferred Stock		50,000			100.0	%

Michael Collins, CTO	Common Stock		30,100,000			9.95	%

Eric Stephanson, Director	Common Stock		7,770,081			2.57	%

Michael Chermak, CAO	Common Stock		12,500,000	(3)		4.13	%

All directors and officers as a group	Common Stock		112,504,956	(2)		37.19	%
	Series D Preferred Stock		50,000			100.0	%

Harvey Sussman, 5% shareholder (3)	Common Stock		15,396,669			5.09	%

	(1)	Percentages are based on 302,486,627 shares of the Company’s common stock, and 50,000 shares of Series D Preferred stock issued and outstanding as of December 27, 2021. Holder(s) of the Series D Preferred Stock 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 and each share of Series D Preferred Stock is convertible into 1 share of common stock.

	(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.

	Years ended September 30,
	2021		2020
CEO-Management fees	$	156,000	$	205,750
Chief Technology Officer (CTO), includes $500,000 stock-based expense (2020)		156,000		558,010
Chief Administration Officer (CAO)		276,252		20,000
Public relations		-		60,000
Office rent and expenses		60,579		28,000
Total	$	648,831	$	871,760

	2021		2020
Audit Fees ⁽¹⁾	$	30,000	$	28,000
Total Fees	$	30,000	$	28,000

(a)	1.	Financial Statements

		The financial statements and Reports of Independent Registered Public Accounting Firms are listed in the “Index to Financial Statements and Schedules” on page F-1 and included on pages F-2 to F-30.

	2.	Financial Statement Schedules

		All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission (the “Commission”) are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included herein.

	3.	Exhibits (including those incorporated by reference).

Exhibit No.		Description
3.1		Articles of Incorporation of Cytta Corp.*
3.2		Bylaws of the Company *
3.3		Amendment to Articles of Incorporation Amending Authorized Common and Preferred Stock *
3.4		Amended and Restated Certificate of Designation of Series D Preferred Stock *
3.5		Amended and Restated Certificate of Designation of Series E Preferred Stock *
10.1		Agreement by and between Cytta Corp and Makena Investment Advisors, LLC dated April 1, 2020 *
10.2		Sublease Agreement by and between Cytta Corp and Michael Collins dated October 25, 2020 *
10.3		Agreement by and between Cytta Corp and Peter Rettman dated August 27, 2020 *
10.4		Share Issuance agreement by and between Cytta Corp and United Financial Inc., dated September 30, 2020 *
10.5		Technology Access Agreement by and between Cytta Corp and Michael Collins dated July 19, 2018 *
14.1		Code of Ethics *
31.1		Certification of Chief Executive Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
31.2		Certification of Chief Financial Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
32.1		Certification of Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63**
101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

	Cytta Corp.
Date: January 12, 2022
	By:	/s/ Gary Campbell
		Gary Campbell
		Chief Executive Officer & Chief Financial Officer

		Page
Report of Independent Registered Public Accounting		F-2

Balance Sheets as of September 30, 2021 and 2020		F-3

Statements of Comprehensive Loss for the years ended September 30, 2021 and 2020		F-4

Statements of Stockholders’ Equity (Deficit) as of September 30, 2021 and 2020		F-5

Statements of Cash Flows for the years ended September 30, 2021 and 2020		F-6

Notes to Financial Statements		F-7

/s/ Prager Metis CPA’s LLC

We have served as the Company’s auditor since 2020

Hackensack, New Jersey
January 12, 2022

	For the Year Ended September 30,
	2021			2020

Revenues	$	94,626		$	48,513
Cost of goods sold		41,872			24,037
Gross Profit		52,754			24,476

Operating expenses
Related party		648,831			871,760
General and administrative, other		1,976,471			418,066
Total Operating Expenses		2,625,302			1,289,826

Loss from operations		(2,572,548	)		(1,265,350	)

Other expenses
Interest expense		20,989			1,494
Total Other Expenses		20,989			1,494

Loss before income taxes		(2,593,537	)		(1,266,844	)

Provision for income taxes		-			-

Net Loss	$	(2,593,537	)	$	(1,266,844	)

Loss per share, basic and fully diluted	$	(0.01	)	$	(0.01	)

Weighted average shares outstanding
Basic and diluted		294,491,512			206,980,736

	Series C Preferred Stock				Series D Preferred Stock				Series E Preferred Stock				Common Stock						Additional Paid-in		Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balance September 30, 2020		600,000	$	600		50,000	$	50		-	$	-		289,147,675		$	289,148		$	20,891,476	$	(20,181,368	)		999,906

Common stock issued for services		-		-		-		-		-		-		16,750,000			16,750			1,283,625		-			1,300,375

Common stock issued for stock payable		-		-		-		-		-		-		17,280,000			17,280			414,720		-			432,000

Common stock issued for cash		-		-		-		-		-		-		1,000,000			1,000			24,000		-			25,000

Common stock issued for accounts payable		-		-		-		-		-		-		106,952			107			19,893		-			20,000

Series E Preferred Stock sold for cash		-		-		-		-		13,650,000		13,650		-			-			668,850		-			682,500

Common stock cancelled		-		-		-		-		-		-		(28,048,000	)		(28,048	)		28,048		-			-

Net loss for the year ended September 30, 2021		-		-		-		-		-		-		-			-			-		(2,593,537	)		(2,593,537	)

Balances September 30, 2021		600,000	$	600		50,000	$	50		13,650,000	$	13,650		296,236,627		$	296,237		$	23,330,612	$	(22,774,905	)	$	866,244

	For the Year Ended September 30,
	2021			2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$	(2,593,537	)	$	(1,266,844	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for technology		-			500,000
Stock-based compensation expenses for services		1,365,667			201,641
Depreciation expense		40,866			6,472
Changes in Operating Assets and Liabilities:
Inventory		(44,566	)		(33,582	)
Accounts Receivable		(27,694	)		8,000
Prepaid expenses		(9,410	)		(22,334	)
Vendor deposits		(50,400	)		-
Accounts payable and accrued liabilities		18,846			322,215
Accounts payable-related party		12,551			-
Dividend payable		21,033			-
Deferred revenue		3,588			-
Customer deposits		(50,480	)		50,480
Net cash used in operating activities		(1,313,536	)		(233,952	)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment		(68,414	)		(133,456	)
Net cash used in investing activities		(68,414	)		(133,456	)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from stock subscriptions		707,500			1,198,000
Net cash provided by financing activities		707,500			1,198,000

NET CHANGE IN CASH		(674,450	)		830,592
CASH AT BEGINNING OF YEAR		847,646			17,054
CASH AT END OF YEAR	$	173,196		$	847,646

SUPPLEMENTAL CASH FLOW DISCLOSURES

Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES

Common stock issued for services	$	1,300,375		$	738,750
Common stock issued for accounts payable	$	20,000		$	288,000

	●	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.

	September 30, 2021			September 30, 2020
Property and equipment	$	230,900		$	162,487
Accumulated depreciation		(60,295	)		(19,429	)
Property and equipment, Net	$	170,605		$	143,058

	Year Ended
	September 30,
	2021			2020
Pre-tax loss	$	(2,593,537	)	$	(1,266,844	)
U.S. federal corporate income tax rate		21	%		21	%
Expected U.S. income tax credit		(544,643	)		(266,038	)
Permanent differences		286,790			147,345
Change of valuation allowance		257,853			118,693
Effective tax expense	$	—		$	—

	September 30, 2021			September 30, 2020
Net operating losses carried forward	$	1,025,441		$	767,588
Less: Valuation allowance		(1,025,441	)		(767,588	)
Net deferred tax assets	$	—		$	—

1.	I have reviewed this annual report on Form 10-K of the registrant for the period ended September 30, 2021;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.