| Stockholders' Equity | NOTE E – STOCKHOLDERS’ EQUITY Holders of common stock are entitled to one vote per share.
The common stock does not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of
the outstanding shares of common stock entitled to vote in any election of directors may elect all of the directors standing for
election. Subject to preferential rights with respect to any series of preferred stock that may be issued, holders of the common
stock are entitled to receive ratably such dividends as may be declared by the board of directors on the common stock out of funds
legally available therefore and, in the event of liquidation, dissolution or winding-up of affairs, are entitled to share equally
and ratably in all the remaining assets and funds. Series A preferred stock is nonvoting capital stock, but may
be converted into voting common stock. Each share of series A preferred stock is convertible at the option of the holder at any
time after the issuance into one share of common stock, subject to adjustment from time to time in the event (i) the Company subdivides
or combines its outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends;
or (ii) of a reorganization or reclassification of common stock, the consolidation or merger with or into another company, the
sale, conveyance or other transfer of substantially all of the Company assets to another corporation or other similar event, whereby
securities or other assets are issuable or distributable to the holders of the outstanding common stock upon the occurrence of
any such event; or (iii) of the issuance to the holders of Company common stock of securities convertible into, or exchangeable
for, such shares of common stock. Each outstanding share of series A preferred stock will automatically
convert into one share of common stock (a) if the common stock commences public trading on the NASDAQ capital market or better,
(b) if the series A preferred stockholder receives distributions from the net profits pool equal to the original purchase price
paid for their registered links, or (c) five years after the date of issuance of the series A preferred stock. The Company does
not have any other right to require a conversion of the series A preferred stock into common stock. The Company does not have the
option to redeem outstanding shares of series A preferred stock. A holder of the series A preferred stock has no preemptive rights
to subscribe for any additional shares of any class of stock or for any issue of bonds, notes or other securities convertible into
any class of stock. In the event of a liquidation, dissolution or winding-up whether voluntary or otherwise, after payment of debts
and other liabilities, the holders of the series A preferred stock will be entitled to receive from the remaining net assets, before
any distribution to the holders of the common stock, the amount of $1.50 per share. After payment of the liquidation preference
to the holders of series A preferred stock and payment of any other distributions that may be required with respect to any other
series of preferred stock, the remaining assets, if any, will be distributed ratably to the holders of the common stock and the
holders of the series A preferred stock on an as-if converted basis. The series B preferred stock is voting capital stock. The holders
of the series B preferred stock will vote on an as-converted basis with the common stock on all matters submitted to a vote of
the shareholders. The holders of the series B preferred stock are not entitled to any dividends unless and until the series B preferred
stock is converted into common stock. Each share of series B preferred stock is convertible at the option of the holder at any
time after issuance into one share of common stock, subject to adjustment from time to time in the event (i) the Company subdivides
or combines into outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends;
or (ii) of a reorganization or reclassification of common stock, the consolidation or merger with or into another company, the
sale, conveyance or other transfer of substantially all of the Company assets to another corporation or other similar event, whereby
securities or other assets are issuable or distributable to the holders of the outstanding common stock upon the occurrence of
any such event; or (iii) of the issuance by us to the holders of common stock of securities convertible into, or exchangeable for,
such shares of common stock. Each outstanding share of series B preferred stock will automatically
convert into one share of common stock at a conversion rate equal to the lesser of $3.00 per share or 75% of the average closing
price of the Company’s common stock as quoted on the public securities trading market on which our common stock is then traded
with the highest volume, for ten (10) consecutive trading days immediately after the first day of public trading of common stock
if common stock commences public trading on the NASDAQ capital market or better, but in any event no less than $2.50 per share
or at $3.00 per share five years after the date of issuance of the series B preferred stock. In the event of a liquidation, dissolution
or winding-up whether voluntary or otherwise, after payment of debts and other liabilities, the holders of the series B preferred
stock will be entitled to receive from the remaining net assets, before any distribution to the holders of the common stock, and
pari pasu with the payment of a liquidation preference of $1.50 per share to the holders of the series A preferred stock, the amount
of $3.00 per share. After payment of the liquidation preference to the holders of the series A preferred stock and the series B
preferred stock, and payment of any other distribution that may be required with respect to any other series of preferred stock,
the remaining assets, if any, will be distributed ratably to the holders of the common stock, the holders of the series A preferred
stock, and the holders of the series B preferred stock on an as-if converted basis. The series C preferred stock is voting capital stock. For so
long as any shares of the series C preferred stock remain issued and outstanding, the holders thereof, voting separately as a class,
shall have the right, on or after July 20, 2016, to vote in an amount equal to 51% of the total vote (representing a super majority
voting power) with respect to all matters submitted to a vote of the shareholders of Wytec. Such vote shall be determined by the
holder(s) of a majority of the then issued and outstanding shares of series C preferred stock. For example, if there are 10,000
shares of our common stock issued and outstanding at the time of such shareholder vote, the holders of the series C preferred stock,
voting separately as a class, will have the right to vote an aggregate of 10,408 shares, out of a total number of 20,408 shares
voting. Additionally, the Company is prohibited from adopting any amendments
to the Company’s bylaws or articles of incorporation, as amended, making any changes to the certificate of designation establishing
the series C preferred stock, or effecting any reclassification of the series C preferred stock, without the affirmative vote of
at least 66-2/3% of the outstanding shares of series C preferred stock. The Company may, however, by any means authorized by law
and without any vote of the holders of shares of series C preferred stock, make technical, corrective, administrative or similar
changes to such certificate of designation that do not, individually or in the aggregate, adversely affect the rights or preferences
of the holders of shares of series C preferred stock. The holders of the series C preferred stock are not entitled
to any dividends. Holders of the series C preferred stock have no conversion rights. The shares of the series C preferred stock
shall be automatically redeemed by us at their par value on the first to occur of the following: (i) on the date that Mr. Gray
ceases, for any reason, to serve as officer, director or consultant of Wytec, or (ii) on the date that our shares of common stock
first trade on any national securities exchange provided that the listing rules of any such exchange prohibit preferential voting
rights of a class of securities of Wytec, or listing on any such national securities exchange is conditioned upon the elimination
of the preferential voting rights of the series C preferred stock set forth in the certificate of designation. A holder of the
series C preferred stock has no preemptive rights to subscribe for any additional shares of any class of stock of Wytec or for
any issue of bonds, notes or other securities convertible into any class of stock of Wytec. The holders of the Series C Preferred
Stock are not entitled to any liquidation preference. During 2014 through December 31, 2017, Wytec issued shares of
its Series A Preferred Stock and Series B Preferred Stock, along with warrants to purchase Wytec common stock, to outside investors
in consideration for the repurchase of registered links from third party owners who had previously purchased them from a subsidiary
of Wytec. During year 2014, Wytec issued a total of 3,360,000 shares of its Series A Preferred Stock in exchange for a total of
168 registered links held by third party owners. Twenty-thousand (20,000) shares were issued for each of the 168 registered links
exchanged, resulting in an effective value per share of approximately $1.41 since the registered links were originally sold for
an average price of approximately $28,150 per link. Setting the exchange price at 20,000 shares was a discretionary decision which
established the initial basis for capitalization. During 2016, Wytec issued 1,215,000 shares of its Series B Preferred Stock and
1,215,000 warrants to purchase Wytec common stock in exchange for a total of 121.5 registered links held by third party owners.
During 2017, Wytec issued 50,000 shares of its Series B Preferred Stock and 50,000 warrants to purchase Wytec common stock in exchange
for a total of 5 registered links held by third party owners. Ten-thousand (10,000) shares were issued for each of the 126.5 registered
links exchanged. In each of these exchanges the Company issued preferred stock,
and in some cases Wytec warrants, to the registered link holders in consideration for which the Company either acquired an installed
and operational register link or satisfied a deferred revenue obligation associated with the registered Link. |
