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[August 29, 2014]
CYTTA CORP. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Edgar Glimpses Via Acquire Media NewsEdge) Forward-Looking Statements Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business - Risk Factors" section in our Annual Report on Form 10-K for the year ended September 30, 2013. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the "Company," "Cytta," "we," "us," or "our" are to Cytta Corp.
Results of Operations We are an early stage corporation engaged in perfecting our technological model and introducing it into the marketplace. We have generated Gross Revenues to date of $60,892 from our business operations since inception and have incurred $ 466,996 in expenses this quarter.
The following table provides selected financial data about our Company as of June 30, 2014 and September 30th, 2013, respectively.
Balance Sheet Data June 30, 2014 September 30, 2013 Cash and cash equivalents $13,191 $188,068 Total Assets $56,901 $245,704 Total Liabilities $460,256 $476,837Shareholder Equity (Deficit) $(56,901) $(231,133) Net cash used in operating activities during the quarter was $620,722 9 Plan of Operation General Business Cytta Corp currently delivers real-time digital Health and Wellness and Oil & Gas monitoring information utilizing any manufacturers' Bluetooth enabled monitoring device through Cellular, Satellite or WiFi connections utilizing our unlocked Android Smartphones powered by AT&T's new leading edge 4G LTE Sims.
Our recent upgrading of our Agreement with AT&T has allowed Cytta to introduce the new AT&T 4G LTE voice and data Sims and accompanying Jasper platform real time SIM monitoring capability.
These new AT&T 4G LTE Subscriber Identity Modules (SIMs) are advanced smart cards placed inside of our GSM android cellular phones that encrypts voice and data transmissions and stores data about the specific user so that the user can be identified and authenticated to the network supplying the phone service. The SIM also stores data such as personal phone settings specific to the user and phone numbers. We control our SIMs and thus Android smartphones in real time through the Jasper web interface.
AT&T SIMs support two layers of 4G technology on their nationwide mobile broadband network. High Speed Packet Access+ (HSPA+) with enhanced backhaul, which transfers data throughout our growing network, provides extended and improved speeds up to 4x faster than 3G and Long Term Evolution (LTE) serves as the next step following 4G (HSPA+) in increasing speeds up to 10x faster than 3G to meet the demands of today's users accessing a variety of content over mobile networks.
The new AT&T 4G LTE SIMs provide Cytta with several benefits, such as: Faster speeds - LTE technology is capable of delivering speeds faster than many other mobile Internet technologies. Customers can stream, download, upload and game faster than ever before. Reliability - AT&T not only has the nation's most reliable 4G LTE network. According to independent third-party data, AT&T has the highest success rate for delivering mobile content across nationwide 4G LTE networks. Cool new devices - AT&T's technology works with several LTE-compatible devices, including appropriate 4G LTE smartphones and tablets.
Faster response time - LTE technology offers lower latency, or the processing time it takes to move data through a network, such as how long it takes to start downloading a webpage or file.
Cytta has for several years been designing and building an open source ecosystem that would allow any Bluetooth device to automatically send its data to our specially provisioned Android SmartPhone and then instantly (using WiFi, Cellular or satellite) pass that data from the smartphone to our cloud based data repository and interactive cloud based display platform. The data is delivered from there to our client's server based EMR or EOR, which is automatically populated with the data readings and information, and utilizing our proprietary interpretation program rendered into actual medical or O&G readings. The completion of the Cytta Connect system now allows individuals, patients, their caregiver or medical provider and O&G operators to review and monitor everything on an ongoing basis.
Our specially programmed android smartphones powered with the new Sims, utilizing our proprietary software platform deliver the any monitoring equipment's data automatically to our Cloud based data repository, the Electronic Data Repository (EDR), and from there to any existing or customized Electronic Medical Record (EMR) platform or Electronic O&G Record (EOR) located in the client's computer network. The new Sims also allows each of our smartphones to deliver full 4G LTE voice capability.
10 Health and Wellness The Cytta Connect health and wellness solution is completely HIPAA secure, 100% reliable, easily portable, and customizable using any FDA or non FDA equipment that the clients want. Cytta Connect Special Purpose Network and Cloud based Electronic Data Repository (EDR) connects anyone, anywhere, anytime. Cytta makes any Bluetooth health, wellness or fitness device report their data from remote locations seamlessly via our cloud based Instant EBR & proprietary Mobile Network for instant real-time data access.
Cytta's technology called Cytta ConnectTM is the backbone of the world's first open source Special Purpose Medical Network. Cytta's proprietary technology disrupts and innovates the 2 fastest growing health markets that need to collect data & reduce costs: Our unique and proprietary system allows us to connect all forms of Bluetooth enabled monitoring devices (FDA and Non FDA) seamlessly through an Android Smartphone and deliver the data in real-time to a cloud based data repository which can easily be customized to our client's requirements.
Cytta Connect is a Remote Data Capture system connecting Bluetooth devices to online Electronic Biometric Records (EBR). Our remote data capture system works over our Special Purpose NetworkTM, a proprietary Global Mobile, Satellite, WiFi, and Cloud-based data Network that connects all Bluetooth medical, fitness and wellness devices to Cytta's open source EBR. Our open source EBR is for use by patients, doctors, caregivers, health insurers (Professional Care) with our preprogrammed Cytta smartphones, and any wellness or fitness user (Consumer) with any cellular carrier's smartphone.
We serve two very large Medical markets: 1) Professional Care (Double FDA approved medical devices) works with our specially programmed smartphones and provides care for the chronically ill who need to be remotely monitored. Caregivers have diagnostic capability using our Instant EBR and secure biometric data transfers via Cytta's Special Purpose Network. We interconnect patients, their data and caregivers. We manage vital sign monitoring of chronic care customers and integrate FDA compliant data results for use by Physicians, Hospitals, Accountable Care Organizations and Employers.
2) Consumer Wellness (Any and all Bluetooth devices) works with any Carrier's mobile phone and leverages our proprietary Universal Application and Instant EBR to support Wellness & Fitness consumers. We aid in managing Weight Loss, Wellness, Fitness, Health Data Collection for medical review, Specialized Health Social Network, Personal Safety & Security.
The Cytta ConnectTM system is a cost effective system that works with any manufacturers' off the shelf Bluetooth enabled monitoring device and any Android Smartphone. The Cytta Connect system works seamlessly everywhere there is cellular or satellite service. Cytta Connect is currently implementing systems to monitor, COPD, Asthma, Diabetes, Hypertension and Obesity as well as several major causes of hospital readmission 11 The Company's Medical Smartphone contains proprietary device resident or "native" programming, consisting of a "Firmware Client" or downloadable device resident application or platform for which the Company owns the software. This application for the phones is designed to automatically receive Bluetooth data and perform autonomous control and connectivity functions utilizing the voice, data and SMS capability of the Smartphone or tablet. When the Platform is installed on the Cytta Medical Smartphone, it automatically receives the medical data and utilizes the Company's wireless telecommunication services, to transmit the data through the cellular network to Cytta's proprietary online or Cloud based Cytta Data repository Dashboard called the 'Instant EMRTM'.
From the Online or Cloud based Cytta Data repository Dashboard or 'Instant EMRTM' the data can be utilized as part of the electronic medical monitoring systems (EMR's) of the major Medical Groups (such as Insurance Companies, Disease Management Companies, Health Delivery Organizations, Health Plans, Home Health Agencies, Managed Care Organizations, Medical Groups and IPAs) who have placed the systems in the homes of their clients requiring remote patient monitoring. These Medical Groups contract with Cytta and are responsible for installing, monitoring and financing the system in the homes of their clients who require monitoring.
The Company has currently entered into agreements with respected medical device manufacturers A&D Medical, Nonin Medical, ForaCare, and Entra Health, which have allowed Cytta to design our ecosystem to incorporate their double FDA approved medical monitoring devices to for measurement of Blood Pressure, Glucose Values, Weight, Temperature, Pulse, and Oxygen Saturation. The Company is now capable of adding any Bluetooth remote monitoring device to the Cytta Connect ecosystem whether FDA approved or Non FDA approved and is currently working to add PT/INR, ECG Rhythms, Respiration, and a personal emergency response system (PERS) into the Cytta Ecosystem.
The Company had its first trial installations of the complete Cytta Ecosystems in September 2011 in the US, with two Medical Group clients wishing to utilize and or participate in the Company's "medical monitoring ecosystem'.
In March 2012 the Company commenced its first major installation, product evaluation and Pilot program with a major medical Insurance Co/Payor. The Company also delivered its second round of orders to its first two medical group clients. In January 2013 the Company received the final 6 Month Pilot Program Whitepaper dated September 30, 2012, independently prepared by the major medical Insurance Co/Payor with whom the Pilot program was conducted. The conclusions of their Independent Whitepaper stated, "This trial demonstrated the ability to significantly reduce costs for high risk patients through use of the CYTTA Connect Ecosystem. The trial demonstrated the ability to quickly achieve cost savings, decrease resource utilization, improve care coordination, and increase adherence to evidence based guidelines.
Care costs were reduced on average by $11,078 [or $1,846 per member per month] for each trial participant. This trial did not specifically address long term cost of care. However, these patients were selected for the inabilities of the existing healthcare system and care coordination programs to cost effectively address their short or long term healthcare needs. One trial participant noted he realized more value and benefit in 2 months of trial participation compared to his previous 17 months of participation in the best available care coordination services." 12 The rollout of Obamacare has created great interest in the implementation of the Company's technology. However payment and pricing throughout the Industry is still being developed and we are still awaiting several implementation decisions by major players.
The Company has entered into an Agreement with Doctor Direct Inc. to market the Cytta Connect technology into various medical vertical submarkets. As of June 29th, 2014 Cytta through the Doctor Direct marketing program had entered into two contracts to supply the Cytta Connect system to two family practices in Las Vegas. The initial systems were supplied to the two practices and preliminary presentations to their clients had begun. As of today's date the specific backend for the medical groups has been completed and the initial client rollout is proceeding with the first devices now in the hands of the initial patients/clients.
Oil & Gas After the completion of the technology for the medical marketplace the Company began examining other unrelated vertical markets who could utilize the Cytta Connect highway to move data from remote locations. With the addition of the Home2Phone license and the access to the impressive collection of OrbComm satellite solutions it was determined that our "Data Highway' could be easily utilized to provide connectivity in the worldwide O&G industry. Working with several O&G industry partners we are currently discussing designing systems to deploy with their clients.
The Cytta Connect O&G solution is a completely secure, encrypted, 100% reliable, easily portable, and customizable using any form of monitoring equipment that the clients want. Cytta Connect Special Purpose Network and Cloud based Electronic Data Repository (EDR) connects anyone, anywhere, anytime. Cytta makes any monitoring device report their data from remote locations seamlessly for instant real-time data access. The Cytta Connect Network provides a complete system for monitoring cellular and or satellite accessible locations worldwide.
Most interestingly because of the design of the Cytta Connect Network, it can operate as a SCADA system. SCADA is an Acronym for Supervisory Control And Data Acquisition, and is used to a computer system for gathering and analyzing real time data and then ultimately controlling the devices providing the data.
Ultimately the two way data transfer capability of the Cytta Special Purpose Network makes it an ideal SCADA system. SCADA systems are used to monitor and control a plant or equipment in industries such as telecommunications, water and waste control, energy, oil and gas refining and transportation. A SCADA system gathers information, such as where a leak on a pipeline has occurred, transfers the information back to a central site, alerting the home station that the leak has occurred, carrying out necessary analysis and control, such as determining if the leak is critical, and displaying the information in a logical and organized fashion and then sending the appropriate commands to the site causing the device to turn on, off or perform some other crucial function remotely.
General Operations Cytta currently has limited operating costs and expenses at the present time due to our relatively new business activities. However we anticipate significantly increasing our activities as a result of the implementation of our systems in several medical markets, O&G and other markets and the installation thereof.
Cytta currently has one executed transaction with a medical group and one medical group discussing implementation. Additionally, the Company has two contracts in Las Vegas for which it is delivering systems.
13 We have entered into certain management and consulting contracts with our senior Officers and non-affiliated consultants who will be providing business services to the Company in administration, marketing, health care and O&G arenas.
Additionally, we will be required to raise significant capital over the next twelve months, in connection with our operations resulting from our marketing Agreements. We have engaged in significant product research and development over the past years while the technology and system was being developed. The Company's business may cause us to engage in further research and development in the foreseeable future.
We have no present plans to purchase or sell any plant or significant equipment although we will have to acquire some equipment related to the marketing Agreements. We also have immediate plans to add employees and we will continue to do so in the future as a result of the operations related to the marketing of our systems.
Liquidity and Capital Resources Our cash and cash equivalents balance as of June 30, 2014 was $13,191.
We currently have limited marketing operations however our business model is to license these activities to skilled partners in each vertical market.
We have limited funds on hand to pursue our business objectives for the near future however we cannot commence full scale operations without seeking additional funding and/or the appropriate business partners. We currently do not have a specific plan of how we will obtain such funding.
Loans to the Company We have been receiving loans from shareholders, management and other related and non-related parties to pay general operating costs. As of June 30, 2014, we had $ 438,100 in loans to these individuals outstanding.
We have minimal operating costs and expenses at the present time due to our frugal business model. Currently our operating activities (technical integration and partner development) in the healthcare and O&G arena are conducted by our senior Officers and engaged consultants who earn equity in the Company for their endeavors. We will, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses and to further develop our operations. This financing may take the form of additional sales of our equity or debt securities to, or loans from, stockholders, or from our officers and directors or other individuals. There is no assurance that additional financing will be available from these or other sources, or, if available, that it will be on terms favorable to us.
Going Concern Our auditors have included an explanatory paragraph in their report on our financial statements relating to the uncertainty of our business as a going concern, due to our limited operating history, our lack of historical profitability, and our limited funds. We believe that we will be able to raise the required funds for operations and to achieve our business plan.
14 Off-Balance Sheet Arrangements We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities with the exception of the Cytta Connect LLC joint venture which has no current operations. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
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