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, 2012. You should
carefully review the risks described in our Annual Report and in other documents
we file from time to time with the Securities and Exchange Commission. You are
cautioned not to place undue reliance on the forward-looking statements, which
speak only as of the date of this report. We undertake no obligation to publicly
release any revisions to the forward-looking statements or reflect events or
circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, there are a number of risks and
uncertainties that could cause actual results to differ materially from such
All references in this Form 10-Q to the "Company," "Cytta," "we," "us," or "our"
are to Cytta Corp.
Results of Operations
We have generated no new revenues from our business operations in the three
months since September 30, 2012 and generated $43,943 in revenues from our
business operations during the fiscal year ended September 30, 2012 and incurred
$ 325,137 in total operating expenses this quarter.
The following table provides selected financial data about our Company as of
December 31, 2012 and September 30th, 2012, respectively.
Balance Sheet Data December 31, 2012 September 30, 2012
Cash and cash equivalents $46,357 $36,080
Total Assets $105,457 $ 96,295
Total Liabilities $785,032 $680,031
Shareholder Equity (Deficit) $(680,073)$(583,736)
Net cash from operating activities during the quarter was $(195,323).
Plan of Operation
Cytta's technology called Cytta ConnectTM is the world's first open source
Special Purpose Medical Network. 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
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 provisioned with the Cytta platform. The Cytta Connect system works
seamlessly everywhere there is cellular service. Cytta Connect is currently
implementing systems to monitor, COPD, Asthma, Diabetes, Hypertension and
Obesity as well as several major causes of hospital readmission
On June 18th, 2009, the Company entered into a Licensing Agreement with
Lifespan, Inc. a Nevada Corporation. Through a series of transactions and
business developments commencing in 2002 Lifespan had acquired the expertise and
licenses to manufacture, distribute and market various technology based internet
and telephony based access and computing products and services, consisting of
internet access devices, related software and hardware and a series of medical
peripherals designed and adapted to provide remote patient monitoring (RPM) of
home based and remote patients.
On November 10th, 2010, the Company entered into an MVNO Mobile Virtual Network
Operator Agreement (herein "MVNO Agreement") with Vonify Inc. of Toronto, Canada
and Georgetown, Grand Cayman Island, BWI (herein "Vonify") and MVNO Mobile
Virtual Network Operator Corp (herein "MVNO") of New Westminster, Canada ("MVNO
Corp.") a company owned and controlled by Mr. Gary Campbell an Officer and
Director and controlling shareholder of Cytta for a license to provide all the
"Services" of the Vonify Network to third parties, in the medical marketplace in
the USA as a Special Purpose Medical Network. Cytta may only resell Services to
third parties who are also End Users and such third parties may not further
resell the Services. Cytta is expressly permitted to use and develop their own
applications and programing for the phones and may develop and utilize
applications which require modification of the "native" or "core" programing of
the Smartphones provided it does not have a deleterious effect upon the Network.
The Vonify Network includes those integrated mobile switching facilities,
servers, cell sites, telecom and internet connections, billing systems,
validation systems, gateways, landline switches and other related facilities
used to provide the Services. Vonify operates the network utilizing the C & F
Block Spectrum Licenses and associated roaming agreements and all the land,
towers and antennas along with the associated network agreements.
Pursuant to Cytta's MVNO agreement with Vonify, the Services to be marketed by
Cytta are defined as wireless telecommunications services for the Global System
for Mobile (GSM) communications. The Company is fully utilizing the Vonify
network in the US and utilizing Vonify SIM cards installed on numerous brands of
android smartphones and tablets deployed in various parts of the US. The Vonify
network is fully functional and compliant in regards to voice, data and SMS
connectivity. The network is suitable in all aspects for utilization by Cytta
for the movement of medical, health and wellness information gathered from
Bluetooth enabled remote medical monitoring devices. The Cytta ConnectTM
Medical smartphones and tablets are also fully functional voice, data and SMS
On January 25th, 2012, the Company's Board ratified an executed Wireless Data
Machine to Machine (M2M) Communications Agreement with ATT Mobility II, LLC on
behalf of its affiliates AT&T or AT&T Mobility (herein AT&T) pursuant to the
terms of which Cytta agrees to purchase from AT&T and AT&T agrees to sell to
Cytta wireless service for use in machine to machine communications on AT&T's
Wireless Data Network. Through AT&T, Cytta can offer a nationwide Data GSM/GPRS
footprint across 100 percent of the AT&T service area. GSM also provides global
compatibility resulting in more international roaming potential. Cytta has
currently activated its first AT&T SIMs through its VPN and has distributed the
first SIMs to evaluate their market potential. Additional setup, activation and
details are currently being explored between the parties. This transaction is
more fully described in our Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 31st, 2012.
Since the acquisition of the Lifespan technology, and the rights to utilize the
Vonify Wireless Network through the Vonify MVNO Agreement, and the AT&T Data
MVNO agreement, and the Agreements with the medical device manufacturers, the
Company has now completed the development of a remote medical monitoring model
or remote patient monitoring (RPM) system designed to deliver seamless, near
real-time, medical data transmission from home to Insurer/Provider. The
Company's system seamlessly collects the data generated by the portable or home
based medical monitoring devices (such as blood pressure, scale, blood glucose,
pulse oxygen etc.), utilizing Bluetooth connectivity. This medical data is sent
via Bluetooth from the medical device to the Company's Medical Smartphone, which
is also located in the home and/or held by the patient.
The Company's Medical Smartphone, contains proprietary device resident or
"native" programming, consisting of a "Firmware Client" or "Super App" developed
by Connected Health Pte. Ltd. in conjunction with the Cytta Special Purpose
Network and which is licensed to Cytta pursuant to the July 14th, 2011 License
Agreement. 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.
Connected Health is a wireless health innovator committed to developing health
monitoring connectivity solutions which when installed on the Cytta Medical
Smartphone, 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 has now completed the integration of the proprietary Firmware Client
with other elements of the system and have installed the technology on several
Nexus One, HTC My Touch, HTC Wildfire, HTC Sense, Sony Xperia android
smartphones as well as with the Samsung and HTC tablets. The testing and
integration of the combination Smartphone/tablets and Firmware Client, which has
collectively been described as the Cytta Medical Smartphone or the Cytta Medical
Tablet, with the double FDA blood pressure, weight scale, pulse/oximetry and
blood glucose devices, has been completed and are all functioning seamlessly.
The Company has completed the development of the relational data base and the
GUI developed therefrom consisting of 'Online Data Presentation Screens"
Dashboard or 'Instant EMRTM' to represent the data captured by the system for
The Company began 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 and product evaluation
with a major medical Insurance Co/Payor. The Company also delivered its second
round of orders to its first two medical group clients and has received notice
of upcoming further installations.
Upon successful conclusion of the Insurance co/Payor Pilot Program evaluation,
the Company planned to begin full deployment of its systems and commence
operations as a Medical Health Service Provider (MHSP). In November 2012 the
Company received the 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
"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.
Adherence to evidence based guidelines is increasingly important as CMS 5 STAR
ratings garner importance
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. A quite handsome return on investment is present if the
care coordination system is priced at less than $2,000 per year.
Summary of Trial results
Pre-trial Post-trial Last 90 days Change Cost Savings
Admits 28 17 3 9 $198,000
Readmits 12 5 0 7 $140,000
Bed Days 90 143 80 (53)
ER Visits 44 26 4 18 $21,600
UC Visits 12 4 1 8 $720
Specialists 102 92 36 10 $1,250
PCP 92 78 18 14 Capitated
Total Cost Savings $221,570
Cost Savings per Member over 6 $11,078
Cost savings per Member per $1,846
This trial also demonstrated that home biometric monitoring using the CYTTA
Connect Ecosystem can be easily introduced, dispensed and utilized in the home
setting. Care team training was easily completed. CYTTA Connect was easy for
patients and care coordinators to learn and effectively use. Technical
troubleshooting was prompt and effective.
Improved patient engagement and ability to self-manage care will become
increasingly important and require new resource allocation because CMS will soon
require Stage II Readiness participation. Through repeated collection and
review of biometric data patients learn how to titrate medications and adjust
behaviors to achieve target goals which is a cornerstone of CMS 5 STAR
performance and CMS Stage II Readiness. Patients and the care coordination team
are prompted by alerts to evaluate and to intervene in real time. This produces
a patient who is more engaged and prospectively aware of how they must modify
behaviors and medications to meet target metrics through self-management.
Additionally, improved achievement of target metrics produces significant
provider and care team satisfaction. Efforts of both become both more effective
and more efficient.
Effective use of the CYTTA Connect Ecosystem requires the managing physicians to
develop and communicate care plans and standing orders to adjust medications to
achieve target goal. Too often the goals of care and associated care plans
including medication administration are poorly communicated or not present.
Patients travel through various sites of service and levels of care without a
clear understanding of the expected behaviors and medication usage to be
executed in the home setting. CYTTA Connect in conjunction with care
coordination resolves this deficit and allows for care plan and medication
revision as the patient disease processes change in the home environment.
Through repeated measurement and with focused care coordination the patient
learns how to better manage their health care needs. This produces a patient
who is more engaged and prospectively aware of how they must modify behaviors
and medications to meet target metrics. This also produces a more satisfied
patient, physician, and care coordination team.
This trial discovered patients view CYTTA Connect and remote telemonitoring as a
special benefit to patients who are encouraged to retain their relationship with
Heritage to continue to access and build their personal health database.
Patients develop a special relationship with their care coordination team. The
patients viewed CYTTA Connect and care coordination activities as a value rather
than an intrusion because information and advice generated by the trial were
specific to the patient and time sensitive.
This trial enabled physicians and care coordinators to more effectively manage a
larger number of patients. Current care coordination ratios can be expanded by
20% using biometric remote telemonitoring through reduced telephone tag and
elimination of unfocused, subjective, generic discussions with patients.
Instead specific biometric data, medication usage, review of the active care
plan, and comparison to target metrics produces a focused discussion. Patients
and care coordinators are taught through rapid cycle improvement to Plan, Do,
Study, and ACT. Barriers to successful self-management are identified and
addressed. Patients now learn how to revise and update their care management in
the home setting rather than a physician office, emergency or hospital room
followed by an attempt to translate and implement the care plan in their home
setting upon discharge. Patient contacts have become value oriented with
immediate return on investment to the care coordinators and patient."
As can be seen from the above conclusion, the Company's integrated and
completely autonomous system provides numerous advantages over current
monitoring systems, as well as a pricing structure designed to generate a
positive return on investment (ROI) for the Medical Groups utilizing the system.
To this end the Company is currently demonstrating and actively marketing the
Cytta ConnectTM system to numerous Medical Group clients wishing to utilize and
or participate in the Company's "medical monitoring ecosystem".
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 first sales of our systems and the
installation thereof. 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 the health care arena.
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 year while the technology and system was being developed. The Company's
business may cause us to engage in further research and development in the
We have no present plans to purchase or sell any plant or significant equipment
although we will have to acquire some equipment related to the marketing
Agreements. We also have immediate plans to add employees and we will continue
to do so in the future as a result of the operations related to the marketing of
Liquidity and Capital Resources
Our cash and cash equivalents balance as of December 31, 2012 was $46,357.
We currently have limited marketing operations directly, but we are negotiating
marketing agreements with licensing partners.
We have sufficient funds on hand to pursue our business objectives for the near
future; however we cannot commence full scale operations without seeking
additional funding. 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 of the company to pay general
operating costs. As of December 31, 2012, we had $785,530 in loans outstanding.
We have limited operating costs and expenses at the present time due to the
early stage of our business activities. Currently our operating activities in
the healthcare arena are conducted by our senior Officers, engaged consultants
and licensing partners. We will, however, be required to raise additional
capital over the next twelve months to meet our current administrative expenses
and to develop our operations. This financing may take the form of additional
sales of our equity or debt securities to, or loans from, stockholders, or from
our officers and directors or other individuals. There is no assurance that
additional financing will be available from these or other sources, or, if
available, that it will be on terms favorable to us.
Our auditors have included an explanatory paragraph in their report on our
financial statements relating to the uncertainty of our business as a going
concern, due to our limited operating history, our lack of historical
profitability, and our limited funds. We believe that we will be able to raise
the required funds for operations and to achieve our business plan.
Off-Balance Sheet Arrangements
We have never entered into any off-balance sheet financing arrangements and have
not formed any special purpose entities with the exception of the Cytta Connect
LLC joint venture which is not currently active. We have not guaranteed any debt
or commitments of other entities or entered into any options on non-financial