U.S. SECURITIES ANDEXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-QSB

 

Quarterly Report underSection 13 or 15 (d) of

Securities ExchangeAct of 1934

 

For the Period endedJune 30, 2007

Commission File Number333-139699

 

CYTTA CORP.

(Name of smallbusiness issuer in its charter)

 

Nevada                                    98-0505761
                                                                                                 (State of incorporation)                     (IRS Employer

                                                                                                         ID Number)

 

710 West 16thAvenue

Vancouver, BritishColumbia, Canada, V5Z 1S7 

604-760-4440

(Address and telephonenumber of principal executive offices)

 

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

                       Yes X                        No _____ 
 

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

                       Yes X                      No ______
There were 3,000,000 shares of Common Stock outstanding as of June 30, 2007.

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

 
**ITEM 1. FINANCIAL STATEMENTS**
The un-audited quarterly financial statements for the periodended June 30, 2007, prepared by the company, immediately follow.
**Cytta Corp.

(A Development StageCompany)

Interim Balance Sheet**
- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Cytta Corp.

(A Development StageCompany)

Interim Statements ofOperations

Unaudited**
 

- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Cytta Corp.

(ADevelopment Stage Company)

InterimStatement of Stockholders' Equity**

- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Cytta Corp.

(ADevelopment Stage Company)

InterimStatements of Cash Flows

Unaudited**
 

- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -

 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007

 
**NOTE 1. GENERAL ORGANIZATION AND BUSINESS**
Cytta Corp., (A Development Stage Company) was      incorporated on May 30, 2006 under the laws of the State of Nevada. It is      located in Vancouver, British Columbia, Canada. 

The Company is a development stage company that intends      to develop and operate a website where trades/contractors can offer their      services. To date, the Company's activities have been limited to its      formation and the raising of equity capital. The Company's SB-2      registration was declared effective on January 10, 2007.
**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES****a. **Basis of Presentation**
The accounting and reporting policies of the Company      conform to U.S. generally accepted accounting principles applicable to      development stage enterprises. 
**b. Fiscal Periods**
The Company's fiscal year end is September 30. 
**c. Use of Estimates

The preparation of financial statements in conformity      with U.S. generally accepted accounting principles requires management to      make estimates and assumptions that affect the reported amounts of assets      and liabilities and disclosure of contingent assets and liabilities at the      date of the financial statements and the reported amount of revenues and      expenses during the reporting period. Actual results could differ from      those estimates.
**d. Cash and Cash Equivalents**
Cash and cash equivalents include cash in banks, money      market funds, and certificates of term deposits with maturities of less      than three months from inception, which are readily convertible to known      amounts of cash and which, in the opinion of management, are subject to an      insignificant risk of loss in value.
**e. Fair Value of Financial Instruments and Derivative      Financial Instruments**
The Company has adopted Statement of Financial      Accounting Standards ("SFAS") Number 119, "Disclosure About Derivative      Financial Instruments and Fair Value of Financial Instruments." The      carrying amount of accrued liabilities approximates its fair value because      of the short maturity of this item. Certain fair value estimates may be      subject to and involve, uncertainties and matters of significant judgement,      and, therefore, cannot be determined with precision. Changes in      assumptions could significantly affect these estimates. The Company does      not hold or issue financial instruments for trading purposes, nor does it      utilize derivative instruments in the management of its foreign exchange,      commodity price or interest rate market risks.
** 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)

f. Fair Value of Financial Instruments and Derivative      Financial Instruments

The Company has adopted Statement of Financial      Accounting Standards ("SFAS") Number 119, "Disclosure About Derivative      Financial Instruments and Fair Value of Financial Instruments." The      carrying amount of accrued liabilities approximates its fair value because      of the short maturity of this item. Certain fair value estimates may be      subject to and involve, uncertainties and matters of significant judgement,      and, therefore, cannot be determined with precision. Changes in      assumptions could significantly affect these estimates. The Company does      not hold or issue financial instruments for trading purposes, nor does it      utilize derivative instruments in the management of its foreign exchange,      commodity price or interest rate market risks.
**g. Segmented Reporting**
SFAS Number 131, "Disclosure About Segments of an      Enterprise and Related Information", changed the way public companies      report information about segments of their business in their quarterly      reports issued to shareholders. It also requires entity-wide disclosures      about the products and services an entity provides, the material countries      in which it holds assets and reports revenues and its major customers. The      company presently operates only in Canada.
**h. Federal Income Taxes**
Deferred income taxes are reported for timing      differences between items of income or expense reported in the financial      statements and those reported for income tax purposes in accordance with      SFAS Number 109, "Accounting for Income Taxes", which requires the use of      the asset/liability method of accounting for income taxes. Deferred income      taxes and tax benefits are recognized for the future tax consequences      attributable to differences between the financial statement carrying      amounts of existing assets and liabilities and their respective tax bases,      and for tax loss and credit carryforwards. 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 Company provides for deferred      taxes for the estimated future tax effects attributable to temporary      differences and carryforwards when realization is more likely than not.
**i. Earnings (Loss) per Share**
The Company has adopted Financial Accounting Standards      Board ("FASB") Statement Number 128, "Earnings per Share," ("EPS") which      requires presentation of basic and diluted EPS on the face of the income      statement for all entities with complex capital structures and requires a      reconciliation of the numerator and denominator of the basic EPS      computation to the numerator and denominator of the diluted EPS      computation. In the accompanying financial statements, basic earnings      (loss) per share is computed by dividing net income/loss by the weighted      average number of shares of common stock outstanding during the period.      

 

 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007

 
** 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)****j. Foreign Currency Transactions

The Company's functional currency is the Canadian      Dollar. The Company's reporting currency is the U.S. Dollar. All      transactions initiated in Canadian Dollars are translated to U.S. Dollars      in accordance with SFAS No. 52 as follows:

(i) Monetary assets and liabilities at the rate            of exchange in effect at the balance sheet date;

(ii) Equity at historical rates; and

(iii) Revenue and expense items at the average            rate of exchange prevailing during the period.

Exchange gains and losses arising from such      translations are deferred until realization and are included as a separate      component of shareholders' equity as a component of comprehensive income      or loss. Upon realization, the amount deferred is recognized in income in      the period when it is realized.

No significant realized exchange gains or losses were      recorded from inception (May 30, 2006) to June 30, 2007.
**k. Derivative Financial Instruments**
The Company was not a party to any derivative financial      instruments during the reported fiscal period.
**l. Stock-Based Compensation**
The Company adopted the provisions of Statement of      Financial Accounting Standards ("SFAS") No. 123(R), *"Share-Based      Payment"*, which establishes accounting for equity instruments      exchanged for employee services. Under the provisions of SFAS 123(R),      stock-based compensation cost is measured at the grant date, based on the      calculated fair value of the award, and is recognized as an expense over      the employees' requisite service period (generally the vesting period of      the equity grant). The Company accounts for share-based payments to      non-employees, in accordance with SFAS 123 (as originally issued) and      Emerging Issues Task force Issue No 96-18, "*Accounting for Equity      Instruments That Are Issued to Other Than Employees for Acquiring, or in      Conjunction with Selling, Goods or Services*"
**m. Comprehensive Income (Loss)**
SFAS No. 130, "Reporting Comprehensive Income",      establishes standards for reporting and display of comprehensive income      and its components in a full set of general-purpose financial statements.      From inception (May 30, 2006) to June 30, 2007, the Company had no items      of other comprehensive income. Therefore, net loss equals comprehensive      loss from inception (May 30, 2006) to June 30, 2007.

 

 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007

 
**NOTE 2 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)****n. Revenue Recognition

The Company recognizes revenue from the sale of      products and services in accordance with the Securities and Exchange      Commission Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue      Recognition in Financial Statements." Revenue will consist of plant sales      income and will be recognized only when all of the following criteria have      been met:

(i) Persuasive evidence for an agreement exists;

(ii) Delivery has occurred;

(iii) The fee is fixed or determinable; and 

(iv) Revenue is reasonably assured.
**NOTE 3. INCOME TAXES 

The Company has incurred operating losses of $11,353, which if      utilized, will begin to expire in 2026. Future tax benefits, which may      arise as a result of these loses, have not been recognized in these      financial statements, and have been off set by a valuation allowance. 

Details of future income tax assets are as follows:
June 30, 2007Cumulative Net    Operating Loss (from inception to June 30, 2007)$11,353Statutory Tax Rate - (combined    federal and state tax rate) 34%Deferred Tax Asset 3,860Valuation Allowance (3,860)Net Deferred Tax Asset$-
The potential future tax benefits of these losses have not been      recognized in these financial statements due to uncertainty of their      realization. When the future utilization of some portion of the carry      forwards is determined not to be "more likely than not," a valuation      allowance is provided to reduce the recorded tax benefits from such      assets.
**NOTE 4. CAPITAL STOCK

a) Authorized Stock:

The Company has authorized 100,000,000 common shares      with a par value of $0.001 per share. Each common share entitles the      holder to one vote, in person or proxy, on any matter on which action of      the stockholder of the corporation is sought.

The Company has also authorized 100,000,000 preferred      shares with a par value of $0.001 per share. 
** 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007

 

NOTE 4. CAPITAL STOCK (continued)****b)**Share Issuance:**
Since the inception of the Company (May 30, 2006) to      September 30, 2006, the Company issued 1,000,000 common shares at $0.005      per share and 2,000,000 common shares at $0.01 per share for total      proceeds of $25,000 being $3,000 for par value shares and $22,000 for      additional paid in capital. These shares were issued to directors and      officers of the Company. 

Prior to June 30, 2007, the Company was in the process      of selling shares under a SB-2 Registration Statement. In this regard, the      Company has received subscriptions for 2,575,000 shares from independent      investors for total amounts of $51,500 being $2,575 for par value shares      and $48,925 for additional paid in capital. Since these funds are to be      returned to the subscribers if the minimum of 3,000,000 shares are not      sold (for proceeds of $60,000), the $51,500 is therefore classified as a      liability (share subscriptions received in advance) in the Company's      records. 

There are no preferred shares outstanding. The Company      has issued no authorized preferred shares.

The Company has no stock option plan, warrants or other      dilutive securities.
**NOTE 5. RELATED PARTY TRANSACTIONS**
As of June 30, 2007, the Company was obligated to a      director, who is also an officer and a shareholder, for a non-interest      bearing demand loan with a balance of $2,275. The Company plans to pay the      loan back as cash flows become available. 
**NOTE 6. GOING CONCERN

The accompanying financial statements have been      prepared assuming that the Company will continue as a going concern, which      contemplates the realization of assets and the liquidation of liabilities      in the normal course of business. As at June 30, 2007, the Company has a      loss from operations of $8,321, an accumulated deficit of $11,353 and      working capital of $13,647 and has earned no revenues since inception. The      Company intends to fund operations through equity financing arrangements,      which may be insufficient to fund its capital expenditures, working      capital and other cash requirements for the year ending September 30,      2007.

The ability of the Company to emerge from the      development stage is dependent upon, among other things, obtaining      additional financing to continue operations, and development of its      business plan.

 
** 

 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007****NOTE 6. GOING CONCERN (continued)**
In response to these problems, management has planned      the following actions:

The Company's SB-2 Registration Statement filed with      the United States Securities Exchange Commission to offer up to 6,000,000      common shares at $0.02 per share for gross proceeds of up to $120,000 was      declared effective on January 10, 2007. 

These factors, among others, raise substantial doubt      about the Company's ability to continue as a going concern. The      accompanying financial statements do not include any adjustments that      might result from the outcome of this uncertainty.
**NOTE 7. NEW ACCOUNTING PRONOUNCEMENTS**
Recent accounting pronouncements that are listed below did and/or are      not currently expected to have a material effect on the Company's      financial statements.
**FASB Statements:

In December 2004, the FASB issued Financial Accounting      Standards No 123 (revised 2004) (SFAS 123R), *"Share-Based Payment."*      SFAS 123R replaces SFAS No. 123*, "Accounting for Stock-Based      Compensation,"*and supersedes APB Opinion No. 25, *"Accounting for      Stock Issued to Employees*." SFAS 123R requires compensation expense,      measured as the fair value at the grant date, related to share-based      payment transactions to be recognized in the financial statements over the      period that an 

employee provides service in exchange for the award.      SFAS 123R is effective in fiscal periods that begin after December 15,      2005. 

In December 2004, FASB issued Financial Accounting      Standards No. 153, *"Exchanges of Non-monetary Assets, an amendment of      APB Opinion No. 29, Accounting for Non-Monetary Transactions (SFAS 153)."*      This statement amends APB Opinion 29 to eliminate the exception for      non-monetary exchanges of similar productive assets and replaces it with a      general exception for exchanges of non-monetary assets that do not have      commercial substance. Under SFAS 153, if a non-monetary exchange of      similar productive assets meets a commercial-substance criterion and fair      value is determinable, the transaction must be accounted for at fair value      resulting in recognition of any gain or loss. SFAS 153 is effective in      fiscal periods that begin after June 15, 2005. 

In May 2005, the FASB issued SFAS No. 154, *"Accounting Changes and Error Corrections, a replacement of APB Opinion      No. 20 and FASB Statement No. 3."* This statement changes the      requirements for the accounting for and reporting of a change in      accounting principle. Previously, Opinion 20 required that most voluntary      changes in accounting principle be recognized by including in net income      of the period of change the cumulative effect of changing to a new      principle. This statement requires retrospective application to prior      periods' financial statements of changes in accounting principle, when      practicable. 
** 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007**** 

NOTE 7. NEW ACCOUNTING PRONOUNCEMENTS (Continued)**
In February 2006, FASB issued Financial Accounting      Standards No. 155, "Accounting for Certain Hybrid Financial Instruments -      an amendment of FASB Statements No. 133 and 140. This Statement amends      FASB Statements No. 133, *Accounting for Derivative Instruments and      Hedging Activities,* and No. 140, *Accounting for Transfers and      Servicing of Financial Assets and Extinguishments of Liabilities.* This      Statement resolves issues addressed in Statement 133 Implementation Issue      No. D1, *"Application of Statement 133 to Beneficial Interests in      Securitized Financial Assets."* SFAS 155 is effective for all financial      instruments acquired or issued after the beginning of an entity's first      fiscal year that begins after September 15, 2006.

In March 2006, FASB issued Financial Accounting      Standards No. 156, "Accounting for Servicing of Financial Assets - an      amendment of FASB Statement No. 140." This Statement amends FASB Statement      No. 140, Accounting for Transfers and Servicing of Financial Assets and      Extinguishments of Liabilities, with respect to the accounting for      separately recognized servicing assets and servicing liabilities. SFAS 156      is effective in the first fiscal year that begins after September 15,      2006.

In September 2006, FASB issued Financial Accounting      Standards No. 157, "Fair Value Measurements." This Statement defines fair      value, establishes a framework for measuring fair value in generally      accepted accounting principles (GAAP), and expands disclosures about fair      value measurements. This Statement applies under other accounting      pronouncements that require or permit fair value measurements, the Board      having previously concluded in those accounting pronouncements that fair      value is the relevant measurement attribute. Accordingly, this Statement      does not require any new fair value measurements. However, for some      entities, the application of this Statement will change current practice.      SFAS 157 is effective in the first fiscal year that begins after November      15, 2007.

In September 2006, FASB issued Financial Accounting      Standards No. 158*, "Employers' Accounting for Defined Benefit Pension      and Other Postretirement Plans - an amendment of FASB Statements No. 87,      88, 106, and 132(R)."* This Statement improves financial reporting by      requiring an employer to recognize the overfunded or underfunded status of      a defined benefit postretirement plan (other than a multiemployer plan) as      an asset or liability in its statement of financial position and to      recognize changes in that funded status in the year in which the changes      occur through comprehensive income of a business entity or changes in      unrestricted net assets of a not-for-profit organization. This Statement      also improves financial reporting by requiring an employer to measure the      funded status of a plan as of the date of its year-end statement of      financial position, with limited exceptions. SFAS 158 is effective. An      employer with publicly traded equity securities is required to initially      recognize the funded status of a defined benefit postretirement plan and      to provide the required disclosures as of the end of the first fiscal year      ending after December 15, 2006. 

 

 

CYTTA CORP.

(ADevelopment Stage Company)

Notes to Interim Financial Statements

June 30, 2007
** 

NOTE 7. NEW ACCOUNTING PRONOUNCEMENTS (Continued)**
In February 2007, FASB issued Financial Accounting      Standards No. 159, "*The Fair Value Option for Financial Assets and      Financial Liabilities--Including an amendment of FASB Statement No. 115."*This Statement permits entities to choose to measure many financial      instruments and certain other items at fair value. The objective is to      improve financial reporting by providing entities with the opportunity to      mitigate volatility in reported earnings caused by measuring related      assets and liabilities differently without having to apply complex hedge      accounting provisions. This Statement is expected to expand the use of      fair value measurement, which is consistent with the Board's long-term      measurement objectives for accounting for financial instruments. SFAS 159      is effective as of the beginning of an entity's first fiscal year that      begins after November 15, 2007.
**NOTE 8. SUBSEQUENT EVENT

Subsequent to June 30 2007, the Company received      $9,500.00 for 475,000 shares in connection to its current public offering.      The Company closed its offering on July 6, 2007 and will not sell any      additional shares. The Company sold 3,050,000 shares under the Prospectus,      raising a total of $61,000.00

 

 

 

 
**ITEM 2.**MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OFOPERATION**
Results of Operations

We are still in our development stage and have generated no revenues to date.

We incurred operating expenses of $2,467 for the three months and $8,321 forthe nine months ended June 30, 2007. These expenses consisted of generaloperating expenses and professional fees incurred in connection with the day today operation of our business and the preparation and filing of our SB-2Registration Statement and required periodic reports. 

Our net loss from inception through June 30, 2007 was $11,353. 

Cash provided by financing activities for the period frominception (May 30, 2006) through June 30, 2007, was $25,000, these activitiesconsisted of:
-  On June 30, 2006, 1,000,000 shares of common stock sold    to Chad Rutherford, an officer and director of the company, in exchange for    $5,000, or $0.005 per share. On September 29, 2006 an additional 1,000,000 shares were    issued to him for $10,000, or $0.01 per share. On September 30, 2006, 1,000,000 shares of common stock    were issued to Brad Prystupa, an officer and director of the company in    exchange for $10,000, or $.01 per share. 
The company received $45,000 for share subscriptions in advance pursuant toour public offering during the quarter ended June 30, 2007.

Liquidity and Capital Resources

Our current cash balance is $67,888, of which 51,500 is being held in aseparate bank account pending the closure of the Company's stock offering. Inorder to achieve our business plan goals, we needed the funding from theoffering of registered shares pursuant to our SB-2 Registration Statement filedwith the SEC under file number 333-139699 which became effective on January 10,2007. 

To June 30, 2007, we had received share subscriptionstotaling 2,575,000 shares, or $51,500 pursuant to the public offering.Subsequent to June 30 2007, the Company received $9,500 for 475,000 shares. TheCompany closed its offering on July 6, 2007, and will not sell any additionalshares. The Company sold 3,050,000 shares under the Prospectus, raising a totalof $61,000.

We are a development stage company and have generated no revenue to date. 

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.

Plan of Operation

Our plan is to develop a web-based advertising service to provide contractorswith opportunity to grow their businesses and get a premium price for providingoutstanding service and quality of craftsmanship. In addition, consumers willhave the ability to hire or choose a contractor with the aid of reviewinginformation available from other customers that have used a contractor'sservices. 

We will start operations by developing the website, using independent serviceproviders. We consider the $61,000 raised in our offering sufficient to hire adeveloper and begin development of the website.

We have provided the chart below that demonstrates how we intend to use theproceeds from our offering. 

We estimate the amount raised in our offering will provide enough capital topurchase one computerserver andmarketing services to begin searching for contractors to advertise on the site.

Here's how we intend to allocate the capital raised from the offering: 

 
*** 
Expenditure ItemComputer Servers5,000Web Development15,000Advertising and Promotion20,000Professional Fees15,000Office and Miscellaneous Expenses5,000**Total****$60,000**
 

 

During the first full year of operation, we will concentrate on finding therequired investment capital, apply to get our common stock listed for trading,develop the websites (www.cytta.com and www.greattradespeople.com), locateadvertisers, and market the services offered by our customers.

It has taken the first six months of 2007 to complete our offering, and wenow plan to begin development of the website and advertise for and sourcecustomers to purchase advertising. We anticipate that development of the websitewill take approximately three months, and sourcing customers will begin uponcompletion of the website. As such, we anticipate being able to generaterevenues from advertising in the last two months of 2007. 

Once we have completed development of the website, we will begin to sourcecontractors. We will advertise for them through trade magazines and source otherindustry related websites and approach them to engage in co-marketingagreements. Once we achieve a minimum of 10 contractors in a local market, wewill release the website as a live interactive platform. We will work on twogeographical markets at one time.

In the event that the $61,000that we raisedfrom the offering is insufficient to fund our plan of operation, we will attemptto proceed by self-financing through loans from the officers and directors.While the officers and directors have generally indicated a willingness toprovide services and financial contributions if necessary, there are presentlyno agreements, arrangements, commitments, or specific understandings, eitherverbally or in writing, between the officers and directors and Cytta Corp.

During the first year of operations, our officers and directors are providingtheir labor at no charge. We do not anticipate hiring any staff during the first12 months of operation. The difference between having the ability to sustain ourcash flow requirements over the next twelve months and the need for additionaloutside funding will depend on how fast we can generate sales revenue. 
**Critical Accounting Policies**
The un-audited financial statements as of June 30, 2007 included herein havebeen prepared without audit pursuant to the rules and regulations of the U.S.Securities and Exchange Commission. Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with generalaccepted accounting procedures have been condensed or omitted pursuant to suchrules and regulations. In the opinion of management, all adjustments (consistingof normal recurring accruals) considered necessary for a fair presentation havebeen included. It is suggested that these financial statements be read inconjunction with our September 30, 2006 audited financial statements and notesthereto, which can be found in our Form SB-2 Registration Statement on the SECwebsite at www.sec.gov under our SEC File Number 333-139699.
**a. **Basis of Presentation**
The accounting and reporting policies of the Company      conform to U.S. generally accepted accounting principles applicable to      development stage enterprises. 
**b. Fiscal Periods

The Company's fiscal year end is September 30. 
**c. Use of Estimates

The preparation of financial statements in conformity      with U.S. generally accepted accounting principles requires management to      make estimates and assumptions that affect the reported amounts of assets      and liabilities and disclosure of contingent assets and liabilities at the      date of the financial statements and the reported amount of revenues and      expenses during the reporting period. Actual results could differ from      those estimates.
**d. Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money      market funds, and certificates of term deposits with maturities of less      than three months from inception, which are readily convertible to known      amounts of cash and which, in the opinion of management, are subject to an      insignificant risk of loss in value.
**e. Fair Value of Financial Instruments and      Derivative Financial Instruments

The Company has adopted Statement of Financial      Accounting Standards ("SFAS") Number 119, "Disclosure About Derivative      Financial Instruments and Fair Value of Financial Instruments." The      carrying amount of accrued liabilities approximates its fair value because      of the short maturity of this item. Certain fair value estimates may be      subject to and involve, uncertainties and matters of significant judgment,      and, therefore, cannot be determined with precision. Changes in      assumptions could significantly affect these estimates. The Company does      not hold or issue financial instruments for trading purposes, nor does it      utilize derivative instruments in the management of its foreign exchange,      commodity price or interest rate market risks.
**f. Segmented Reporting

SFAS Number 131, "Disclosure About Segments of an      Enterprise and Related Information", changed the way public companies      report information about segments of their business in their quarterly      reports issued to shareholders. It also requires entity-wide disclosures      about the products and services an entity provides, the material countries      in which it holds assets and reports revenues and its major customers. The      company presently operates only in Canada.
**g. Federal Income Taxes

Deferred income taxes are reported for timing      differences between items of income or expense reported in the financial      statements and those reported for income tax purposes in accordance with      SFAS Number 109, "Accounting for Income Taxes", which requires the use of      the asset/liability method of accounting for income taxes. Deferred income      taxes and tax benefits are recognized for the future tax consequences      attributable to differences between the financial statement carrying      amounts of existing assets and liabilities and their respective tax bases,      and for tax loss and credit carryforwards. 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 Company provides for deferred      taxes for the estimated future tax effects attributable to temporary      differences and carryforwards when realization is more likely than not.
**h. Earnings (Loss) per Share

The Company has adopted Financial Accounting Standards      Board ("FASB") Statement Number 128, "Earnings per Share," ("EPS") which      requires presentation of basic and diluted EPS on the face of the income      statement for all entities with complex capital structures and requires a      reconciliation of the numerator and denominator of the basic EPS      computation to the numerator and denominator of the diluted EPS      computation. In the accompanying financial statements, basic earnings      (loss) per share is computed by dividing net income/loss by the weighted      average number of shares of common stock outstanding during the period.      
**i. Foreign Currency Transactions

The Company's functional currency is the Canadian      Dollar. The Company's reporting currency is the U.S. Dollar. All      transactions initiated in Canadian Dollars are translated to U.S. Dollars      in accordance with SFAS No. 52 as follows:

(iv) Monetary assets and liabilities at the rate            of exchange in effect at the balance sheet date;

(v) Equity at historical rates; and

(vi) Revenue and expense items at the average            rate of exchange prevailing during the period.

Exchange gains and losses arising from such      translations are deferred until realization and are included as a separate      component of shareholders' equity as a component of comprehensive income      or loss. Upon realization, the amount deferred is recognized in income in      the period when it is realized.

No significant realized exchange gains or losses were      recorded from inception (May 30, 2006) to June 30, 2007.
**j. Derivative Financial Instruments

The Company was not a party to any derivative financial      instruments during the reported fiscal period.
**k. Stock-Based Compensation

The Company adopted the provisions of Statement of      Financial Accounting Standards ("SFAS") No. 123(R), *"Share-Based      Payment"*, which establishes accounting for equity instruments      exchanged for employee services. Under the provisions of SFAS 123(R),      stock-based compensation cost is measured at the grant date, based on the      calculated fair value of the award, and is recognized as an expense over      the employees' requisite service period (generally the vesting period of      the equity grant). The Company accounts for share-based payments to      non-employees, in accordance with SFAS 123 (as originally issued) and      Emerging Issues Task force Issue No 96-18, "*Accounting for Equity      Instruments That Are Issued to Other Than Employees for Acquiring, or in      Conjunction with Selling, Goods or Services*"
**l. Comprehensive Income (Loss)

SFAS No. 130, "Reporting Comprehensive Income",      establishes standards for reporting and display of comprehensive income      and its components in a full set of general-purpose financial statements.      From inception (May 30, 2006) to June 30, 2007, the Company had no items      of other comprehensive income. Therefore, net loss equals comprehensive      loss from inception (May 30, 2006) to June 30, 2007.
**m. Revenue Recognition

The Company recognizes revenue from the sale of      products and services in accordance with the Securities and Exchange      Commission Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue      Recognition in Financial Statements." Revenue will consist of plant sales      income and will be recognized only when all of the following criteria have      been met:

(v)Persuasive evidence for an agreement exists;

(vi)Delivery has occurred;

(vii)The fee is fixed or determinable; and 

(viii)Revenue is reasonably assured.
**Forward Looking Statements**
Some of the statements contained in this Form 10-QSB that are not historicalfacts are "forward-looking statements" which can be identified by the use ofterminology such as "estimates," "projects," "plans," "believes," "expects,""anticipates," "intends," or the negative or other variations, or by discussionsof strategy that involve risks and uncertainties. We urge you to be cautious ofthe forward-looking statements, that such statements, which are contained inthis Form 10-QSB, reflect our current beliefs with respect to future events andinvolve known and unknown risks, uncertainties and other factors affecting ouroperations, market growth, services, products and licenses. No assurances can begiven regarding the achievement of future results, as actual results may differmaterially as a result of the risks we face, and actual events may differ fromthe assumptions underlying the statements that have been made regardinganticipated events. 

All written forward-looking statements made in connection with this Form10-QSB that are attributable to us, or persons acting on our behalf, areexpressly qualified in their entirety by these cautionary statements. Given theuncertainties that surround such statements, you are cautioned not to placeundue reliance on such forward-looking statements. 

The safe harbors of forward-looking statements provided bythe Securities Litigation Reform Act of *1995*are unavailable to issuersnot subject to the reporting requirements set forth under Section 13(a) or *15(d)*of the Securities Exchange Act of 1934, as amended. As we have notregistered our securities pursuant to Section 12 of the Exchange Act, such safeharbors set forth under the Reform Act are unavailable to us.
** 

ITEM 3. CONTROLS AND PROCEDURES**
Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, includingour principal executive officer and the principal financial officer, we haveconducted an evaluation of the effectiveness of the design and operation of ourdisclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)under the Securities and Exchange Act of 1934, as of the end of the periodcovered by this report. Based on this evaluation, our principal executiveofficer and principal financial officer concluded as of the evaluation date thatour disclosure controls and procedures were effective such that the materialinformation required to be included in our Securities and Exchange Commissionreports is recorded, processed, summarized and reported within the time periodsspecified in SEC rules and forms relating to our company, particularly duringthe period when this report was being prepared.

Additionally, there were no significant changes in our internal controls orin other factors that could significantly affect these controls subsequent tothe evaluation date. We have no identified any significant deficiencies ormaterial weaknesses in our internal controls, and therefore there were nocorrective actions taken.
**PART II - OTHER INFORMATION

ITEM 6. EXHIBITS**
The following exhibits are included with this quarterly filing. Those markedwith an asterisk and required to be filed hereunder, are incorporated byreference and can be found in their entirety in our original Form SB-2Registration Statement, filed under SEC File Number 333-139699, at the SECwebsite at www.sec.gov:

 

Exhibit No.Description
3.1 Articles of Incorporation*

3.2 Bylaws*

31.1 Sec. 302 Certification of Principal Executive Officer and Chief    Financial Officer

32.1 Sec. 906 Certification of Principal Executive Officer and Chief    Financial Officer
** 

 

SIGNATURES**
Pursuant to the requirements of Section 13(a) or 15(d) of the SecuritiesExchange Act of 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized.

 

August 17, 2007                                                                                                  Cytta Corp.

/s/Chad Rutherford

__________________________

By:Chad Rutherford

President and Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

 

August 17, 2007                                                                                                  Cytta Corp.

 

/s/Chad Rutherford

__________________________

By:Chad Rutherford

President, ChiefExecutive Officer, Treasurer, Chief Financial Officer, and Principal AccountingOfficer

 

August 17, 2007                                                                                                   /s/ Brad Prystupa

__________________________

By:Brad Prystupa

Secretary &Director
*********************************************************