Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following is management's discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words "believes," "anticipates," "may," "will," "should," "expect," "intend," "estimate," "continue," and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward -looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q.

THE COMPANY

Cytta Corp., ("Cytta" or the "Company") was incorporated on May 30, 2006, under the laws of the State of Nevada. It is located in Las Vegas, Nevada. Cytta is in the business of imagineering, developing and securing disruptive technologies.

Results of Operations for the three and nine months ended June 30, 2025, and 2024:

Revenues for the three and nine months ended June 30, 2025, were $416 and $2,914, respectively, compared to $832 and $3,243, respectively, for the three and nine months ended June 30, 2024, and were from deferred revenue on subscription agreements being recognized.

Revenues consist of our proprietary software, integration consulting services, tech support and product maintenance billed to the customer.

Cost of sales for the three and nine months ended June 30, 2025, were $13,195 and $50,285, respectively, and consisted of hosting fees. There was no hosting fees for cost of sales for the three and nine months ended June 30, 2024.

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Operating expenses were $360,190 and $1,564,431 for the three and nine months ended June 30, 2025, compared to $1,295,747 and $3,191,909 for the three and nine months ended June 30, 2024. The decreases of $935,557 and $1,627,478 for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, are as shown in the table below:

		Three months ended June 30,								Nine months ended June 30,
Description		2025				2024				2025				2024
Related party expenses (excluding stock-based compensation)		$	98,703			$	97,725			$	294,613			$	277,725
Stock based compensation			4,750				575,127				233,606				1,317,127
Stock based compensation, officers			118,158				124,708				365,325				374,750
Professional fees			46,000				51,460				167,349				157,961
Consulting expenses (excluding stock-based compensation)			9,575				237,375				9,575				459,375
Depreciation expense			9,907				10,019				29,362				31,103
Software and demo expenses			835				743				18,529				188,203
General and Administrative, officers			10,525				3,798				18,215				9,603
Auto, travel and entertainment			9,987				13,855				28,747				35,744
Rent expense			11,250				6,748				33,873				19,930
Transfer agent and filing fees			7,909				11,255				22,369				27,865
Investor relations			2,247				147,520				250,914				237,001
Gain on debt extinguishment			-				(9,457	)			(864	)			(14,291	)
Other operating expenses			30,343				24,871				92,818				69,813
Total		$	360,190			$	1,295,747			$	1,564,431			$	3,191,909

Related party expenses (excluding stock expenses) increased for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, as follows:

		Three months ended June 30,								Nine months ended June 30,
Description		2025				2024				2025				2024
Management fees, Chief Executive Officer (CEO)		$	45,000			$	45,000			$	135,000			$	135,000
Management fees, Chief Operation Officer (COO)			45,000				45,000				135,000				135,000
Office rent and expenses			8,703				7,725				24,613				7,725
Total		$	98,703			$	97,725			$	294,613			$	277,725

Effective January 1, 2023, the monthly fee for the CEO was $15,000 and effective September 1, 2023, the monthly fee for the President and COO was $15,000. Beginning in April 2024, the Company agreed to rent office space for the COO at $2,575 per month plus incidental expenses, on a month to month basis, accordingly, $8,703 and $24,613 is included in related party expenses for the three and nine months ended June 30, 2025, respectively, and $7,725 is included in related party expenses for the three and nine months ended June 30, 2024.

Stock-based compensation expenses decreased in the current periods compared to the prior periods. For the three and nine months ended June 30, 2025, stock-based expenses include the compensation of $4,750 and $233,606 related to common stock all previously issued (amortization of prepaids) or to be issued (accrued), pursuant to the terms of each consultant's contracts. For the three and nine months ended June 30, 2024, stock-based expenses , were related to shares issued to consultants of $300,000 and $469,200, respectively and the amortization of common stock (pursuant to the terms of each consultant's contracts), options and warrants of $275,127 and $847,927 respectively.

Stock based compensation - officers was comprised pursuant to the agreement with the COO (SGG) to issue 250,000 common shares per month. For the three and nine months ended June 30, 2025, the Company recorded expenses of $12,825 and $49,325, respectively. For the three and nine months ended June 30, 2024, the Company recorded an expense of $19,375 and $58,750 related to the 250,000 shares per month. Additionally, the Company granted an option to SGG (a related party) to purchase 10,000,000 shares of the Company's common stock at $0.02 per share with an expiry date of July 1, 2025 (the "CYCA Option"). The CYCA option vests at the rate of 25% beginning on the first six-month anniversary of the agreement, as well as a warrant to purchase 250,000 shares of the Reticulate Micro common stock the Company owns (the "RM Warrant"). The RM Warrant has an exercise price of $1.00 per share and an expiry date of July 1, 2025. The Company valued the CYCA Option at $639,543 based on the Black-Scholes option pricing method and will be amortized through the term of the agreement, and accordingly, $53,295 and $159,885, is included in stock-based compensation expense-related party for the three and nine months ended June 30, 2025, and 2024, respectively. The Company valued the RM Warrant at $624,458 based on the Black-Scholes option pricing method and will be amortized through the term of the agreement, and accordingly, $52,038 and $156,114 is included in stock-based compensation expense-related party for the three and nine months ended June 30, 2025, and 2024, respectively.

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Professional fees remained fairly constant for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024.

Consulting expenses (excluding stock expenses) decreased during the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, as certain consultants engaged in the prior periods were not engaged in the current periods.

Investor relations fees decreased for the three and increased for the nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024. The current three month decrease was the termination with cause of the investor relation firm.

For the three months ended June 30, 2025, other expenses were $1,756,292, compared to $158,862 for the three months ended June 30, 2024. The increase was a result of the unrealized loss on the change in fair value of the RM common stock (marketable securities). For the nine months ended June 30, 2025, other income was $4,980,223 compared to other expense of $312,780 for the nine months ended June 30, 2024. For the nine months ended June 30, 2025, other income of $4,980,223, was the result of the $5,919,760 unrealized gain on the fair value change of the RM common stock, partially offset by the loss on settlement of debt.

Interest expense decreased for the three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024, due to settlements of notes payable.

		Three months ended June 30,								Nine months ended June 30,
Description		2025				2024				2025				2024
Interest expense		$	14,154			$	159,041			$	151,900			$	313,282
Loss on RM shares issued for debt conversions			-				-				787,637				-
Unrealized gain on fair value change of marketable securities			1,742,138				-				(5,919,760	)			-
Interest income			-				(179	)			-				(502	)
Total Other Expense (Income)		$	1,756,292			$	158,862			$	(4,980,223	)		$	312,780

The following tables set forth key components of our balance sheet as of June 30, 2025, and September 30, 2024.

		June 30, 2025				September 30, 2024
Current Assets		$	5,429,073			$	1,983,881
Long term assets		$	24,505			$	191,310
Total Assets		$	5,453,578			$	2,175,191
Current and Total Liabilities		$	1,408,886			$	2,412,635
Stockholders' Equity (Deficit)		$	4,044,692			$	(237,444	)
Total Liabilities and Stockholders' Equity (Deficit)		$	5,453,578			$	2,175,191

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Liquidity and Capital Resources

As of June 30, 2025, we had limited operating capital. Our current capital and our other existing resources will not be sufficient to provide the working capital needed for our current business. Additional capital will be required to meet our obligations, and to further expand our business. We may be unable to obtain the additional capital required. Our inability to generate capital or raise additional funds when required will have a negative impact on our business development and financial results. These conditions raise substantial doubt about our ability to continue as a going concern as well as our recurring losses from operations and the need to raise additional capital to fund operations. This "going concern" could impair our ability to finance our operations through the sale of debt or equity securities.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2025, the Company had an accumulated deficit of $33,499,472 and limited revenue. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. The Company intends to fund operations through equity and/or debt financing arrangements, which may not be sufficient to fund its capital expenditures, working capital and other cash requirements for the foreseeable future.

As of June 30, 2025, we had cash of $416,892 compared to $1,439,835 at September 30, 2024. As of June 30, 2025, we had current assets of $5,429,073 and current liabilities of $1,408,886, which resulted in working capital of $4,020,187. The current liabilities are comprised of accounts payable and accrued expenses, related party liabilities, dividend payable and convertible notes payable.

Operating Activities

For the nine months ended June 30, 2025, net cash used in operating activities was $1,019,943 compared to $1,411,364 for the nine months ended June 30, 2024. For the nine months ended June 30, 2025, our net cash used in operating activities was primarily attributable to net income of $3,368,421, adjusted by the unrealized gain on the fair value change of marketable securities of $5,919,760, the loss on issuance of RM stock in settlement of debt conversions of $787,637, stock-based compensation of $608,931, and depreciation of $29,362. Net changes of $106,330 in operating assets and liabilities decreased the cash used in operating activities.

For the nine months ended June 30, 2024, our net cash used in operating activities was primarily attributable to the net loss of $3,501,446 adjusted by stock-based compensation of $1,691,877, amortization of note discounts of $46,060, gain on debt extinguishment of $14,291 and amortization and depreciation of $31,103. Net changes of $335,333 in operating assets and liabilities decreased the cash used in operating activities.

Investing Activities

For the nine months ended June 30, 2025, the Company purchased $3,000 of property and equipment. For the nine months ended June 30, 2024, the Company spent $14,707 for the purchase of property and equipment.

Financing Activities

For the nine months ended June 30, 2025, there were no financing activities.

For the nine months ended June 30, 2024, the Company received $2,468,450 in exchange for the issuance of various convertible promissory notes.

Critical Accounting Policies

Our significant accounting policies are summarized in Note 3 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. The SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our management believes that given current facts and circumstances, there are no material estimates or assumptions with levels of subjectivity and judgement necessary to be considered critical accounting policies.

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Off Balance Sheet Arrangements

We have no off-balance sheet arrangements, including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.