Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | May 26, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | WYTEC INTERNATIONAL INC | ||
Entity Central Index Key | 0001560143 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 6,684,547 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Small Business | true | ||
Entity Emerging Growth | true | ||
Emerging growth transition | false | ||
Entity Interactive data current | Yes | ||
Entity File Number | 333-215496 | ||
Entity Incorporation State Code | NV | ||
Entity shell company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 595,732 | $ 619,104 |
Accounts receivable | 42,311 | 93,800 |
Inventory | 2,371 | 0 |
Prepaid expense and other current assets | 1,581 | 13,286 |
Total current assets | 641,995 | 726,190 |
Property and equipment, net | 55,184 | 80,273 |
Operating lease, right-of-use assets | 117,169 | 386,742 |
Total Assets | 814,348 | 1,193,205 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 123,768 | 68,614 |
Accounts payable, related party | 107,084 | 76,280 |
Other payable | 895,000 | 895,000 |
Operating lease, right-of-use obligation, current portion | 71,256 | 150,909 |
Contract liability | 25,905 | 0 |
Short-term debt, net of unamortized discount | 586,952 | 0 |
Total current liabilities | 1,809,965 | 1,190,803 |
Long-term liabilities: | ||
Operating lease, right-of-use obligation, long term portion | 27,274 | 237,042 |
Total long-term liabilities | 27,274 | 237,042 |
Total Liabilities | 1,837,239 | 1,427,845 |
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value, 495,000,000 shares authorized, 30,224,653 shares and 29,564,014 shares issued, 6,090,205 and 5,429,566 shares outstanding | 30,225 | 29,564 |
Additional paid-in capital | 26,352,142 | 25,207,137 |
Accumulated deficit | (22,092,678) | (20,118,169) |
Repurchased shares | (80,000) | 0 |
Deposit for future common stock subscriptions | 121,055 | 0 |
Treasury Stock: | ||
Common and preferred stock | (5,100,218) | (5,100,218) |
Total stockholders' equity (deficit) | (1,022,891) | (234,640) |
Total liabilities and stockholders' equity (deficit) | 814,348 | 1,193,205 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value 20,000,000 shares authorized: | 2,420 | 2,560 |
Treasury Stock: | ||
Common and preferred stock | (179,368) | (179,368) |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value 20,000,000 shares authorized: | 3,412 | 3,735 |
Treasury Stock: | ||
Common and preferred stock | (79,882) | (79,882) |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value 20,000,000 shares authorized: | $ 1 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 495,000,000 | 495,000,000 |
Common stock, shares issued | 30,224,653 | 29,564,014 |
Common stock, shares outstanding | 6,090,205 | 5,429,566 |
Treasury stock | 24,134,448 | 24,134,448 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 4,100,000 | 4,100,000 |
Preferred stock, shares issued | 2,420,000 | 2,560,000 |
Preferred stock, shares outstanding | 2,320,000 | 2,460,000 |
Treasury stock | 100,000 | 100,000 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 6,650,000 | 6,650,000 |
Preferred stock, shares issued | 3,412,885 | 3,735,784 |
Preferred stock, shares outstanding | 3,368,350 | 3,691,249 |
Treasury stock | 44,535 | 44,535 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 1,077,030 | $ 405,468 |
Cost of sales | 791,854 | 219,092 |
Gross profit | 285,176 | 186,376 |
Expenses: | ||
Selling, general and administrative | 2,292,597 | 2,754,447 |
Research and development | 21,161 | 4,500 |
Depreciation and amortization | 38,128 | 136,182 |
Operating expenses, net | 2,351,886 | 2,895,129 |
Net operating loss | (2,066,710) | (2,708,753) |
Other income (expense): | ||
Interest income | 42 | 404 |
Interest expense | (85,999) | (38) |
Other income | 178,158 | |
Impairment of assets | 0 | (144,994) |
Total other expense | 92,201 | (144,628) |
Net loss | $ (1,974,509) | $ (2,853,381) |
Weighted average number of common shares outstanding - basic and fully diluted | 5,649,517 | 5,129,767 |
Net loss per share - basic and fully diluted | $ (0.35) | $ (0.56) |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity (Deficit) - USD ($) | Class A Preferred Stock | Class B Preferred Stock | Class C Preferred Stock | Common Stock [Member] | Treasury Stock | Class A Preferred Treasury Stock | Class B Preferred Treasury Stock | Additional Paid-In Capital | Repurchased Shares | Deposit for Future Stock Subscription | Accumulated (Deficit) | Total |
Beginning balance, shares at Dec. 31, 2018 | 2,560,000 | 3,735,784 | 1,000 | 29,106,868 | 24,134,448 | 100,000 | 44,535 | |||||
Beginning balance, value at Dec. 31, 2018 | $ 2,560 | $ 3,735 | $ 1 | $ 29,107 | $ (5,100,218) | $ (179,368) | $ (79,882) | $ 23,131,864 | $ (17,264,788) | $ 543,011 | ||
Issuance of common stock for cash, shares | 193,800 | |||||||||||
Issuance of common stock for cash, value | $ 194 | 968,806 | 969,000 | |||||||||
Stock based payments for services, shares | 28,526 | |||||||||||
Stock based payments for services, value | $ 29 | 142,601 | 142,630 | |||||||||
Issuance of common stock in exchange for deferred revenue obligation, shares | 120,000 | |||||||||||
Issuance of common stock in exchange for deferred revenue obligation, value | $ 120 | 389,880 | 390,000 | |||||||||
Conversion of warrants to common stock, shares | 114,820 | |||||||||||
Conversion of warrants to common stock, value | $ 114 | 573,986 | 574,100 | |||||||||
Net loss | (2,853,381) | (2,853,381) | ||||||||||
Ending balance, shares at Dec. 31, 2019 | 2,560,000 | 3,735,784 | 1,000 | 29,564,014 | 24,134,448 | 100,000 | 44,535 | |||||
Ending balance, value at Dec. 31, 2019 | $ 2,560 | $ 3,735 | $ 1 | $ 29,564 | $ (5,100,218) | $ (179,368) | $ (79,882) | 25,207,137 | (20,118,169) | (234,640) | ||
Issuance of common stock for services, shares | 27,324 | |||||||||||
Issuance of common stock for services, value | $ 27 | 136,593 | 136,620 | |||||||||
Issuance of common stock for cash, shares | 104,916 | |||||||||||
Issuance of common stock for cash, value | $ 105 | 511,770 | 511,875 | |||||||||
Conversion of series A preferred stock to common stock, shares | (140,000) | 140,000 | ||||||||||
Conversion of series A preferred stock to common stock, value | $ (140) | $ 140 | ||||||||||
Conversion of Series B preferred stock to common stock, shares | (322,889) | 322,899 | ||||||||||
Conversion of Series B preferred stock to common stock, value | $ (323) | $ 323 | ||||||||||
Repurchase agreement, shares | ||||||||||||
Repurchase agreement, value | $ (80,000) | (80,000) | ||||||||||
Issuance of warrants for services | 89,155 | 89,155 | ||||||||||
Issuance of detachable warrants with Debt | 80,053 | 80,053 | ||||||||||
Conversion of warrants to common stock, shares | 65,500 | |||||||||||
Conversion of warrants to common stock, value | $ 66 | 327,434 | 327,500 | |||||||||
Deposit received for future common stock subscriptions | 121,055 | 121,055 | ||||||||||
Net loss | (1,974,509) | (1,974,509) | ||||||||||
Ending balance, shares at Dec. 31, 2020 | 2,420,000 | 3,412,885 | 1,000 | 30,224,653 | 24,134,448 | 100,000 | 44,535 | |||||
Ending balance, value at Dec. 31, 2020 | $ 2,420 | $ 3,412 | $ 1 | $ 30,225 | $ (5,100,218) | $ (179,368) | $ (79,882) | $ 26,352,142 | $ (80,000) | $ 121,055 | $ (22,092,678) | $ (1,022,891) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (1,974,509) | $ (2,853,381) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 38,128 | 136,182 |
Amortization of debt discount | 42,005 | 0 |
Impairment of assets | 0 | 144,994 |
Stock based payments | 225,775 | 142,630 |
Non-cash lease expense | 123,111 | 142,256 |
Debt forgiveness | (178,158) | 0 |
Decrease (increase) in assets: | ||
Accounts receivable | 51,489 | (70,339) |
Inventory | (2,371) | 0 |
Prepaid expenses and other current assets | 338 | (2,861) |
Increase (decrease) in liabilities: | ||
Accounts payable and accrued expenses | 55,154 | (159,844) |
Accounts payable, related party | 30,804 | 76,280 |
Other payable | 0 | (35,000) |
Operating lease liability | (131,592) | (141,047) |
Contract liability | 25,905 | 0 |
Net cash used in operating activities | (1,693,921) | (2,620,130) |
Cash flows from investing activities | ||
Purchase of equipment | (13,039) | (25,001) |
Net cash used in investing activities | (13,039) | (25,001) |
Cash flows from financing activities | ||
Repurchase agreement | (80,000) | 0 |
Deposit received for future common stock subscriptions | 121,055 | 0 |
Proceeds from issuance of debt | 803,158 | 0 |
Proceeds from exercise of warrants | 327,500 | 574,100 |
Proceeds from issuance of common stock | 511,875 | 969,000 |
Net cash provided by financing activities | 1,683,588 | 1,543,100 |
Net decrease in cash | (23,372) | (1,102,031) |
Cash - beginning | 619,104 | 1,721,135 |
Cash - ending | 595,732 | 619,104 |
Supplemental Disclosures | ||
Interest paid | 29,411 | 38 |
Income taxes | $ 0 | $ 0 |
Non-Cash Financing Activities | ||
Conversion of Series A preferred stock to common stock | 140 | 0 |
Conversion of series B preferred stock to common stock | $ 323 | $ 0 |
Cancellation and renegotiation of leases | 157,829 | 0 |
Issuance of detachable warrants with Debt | 0 | 0 |
Issuance of common stock in exchange for deferred revenue obligations | 0 | 390,000 |
Recognition of right-of use asset and lease liability upon adoption of ASU 2016-02 | 0 | 510,675 |
Recognition of right-of use asset and lease liability during the period | $ 0 | $ 18,323 |
A. Significant Accounting Polic
A. Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE A – SIGNIFICANT ACCOUNTING POLICIES Description of Business and Principles of Consolidation: Wylink Inc., a Texas corporation and wholly owned subsidiary, was until January 2016 engaged in the sale of Federal Communications Commission (“FCC”) registered links participating in the 70 and 80 gigahertz licensed frequency program (the “Program”). The Program allows qualified individuals to own a segment of the “backhaul” infrastructure of Wytec’s city-wide business deployment. Wylink Inc. has assigned all of its link related contract to Wytec and Wytec plans to wind up and dissolve Wylink Inc. in the near future. Wylink, Inc. was wound up and dissolved on or about September 22, 2020 and its assets and liabilities were assumed by Wytec. Wytec, LLC, a Delaware limited liability company, formed September 7, 2012 and previously managed by General Patent Corporation (“GPC”), owns five expired patents focused on high-capacity millimeter wave technology. On September 20, 2016, General Patent Corporation, the then Managing Partner of Wytec, LLC, assigned its partial ownership in the patents to Wytec, thereby terminating its role as Managing Partner. Wytec, LLC was wound up and dissolved in April 2020 and its assets and liabilities were assumed by Wytec. Capaciti Networks, Inc. (“Capaciti”), a Texas corporation, was engaged in the sale of wired and wireless services, including products, wireless data cards, back-office platform, and rate plans to their commercial and enterprise clients. Capaciti is in the process of winding up and dissolving. Its assets and liabilities will be assumed by Wytec. Capaciti was wound up and dissolved on or about August 20, 2020 and its assets and liabilities were assumed by Wytec. Collectively, Wytec and its subsidiaries, are referred to as “we,” “our,” “us,” or the “Company.” Basis of Accounting: Revenue and Cost Recognition. The Company earns revenues from contracts with customers for (i) sales and installation of cellular enhancement equipment and (ii) support agreements. Revenue from the sale and installation of cellular enhancement equipment is recognized either when the installation is completed or as the company installs the cellular enhancement equipment, depending on the complexity of the system, such as the degree of customization of the equipment being installed, and the agreement with the customer. The less complex systems installed by the Company where management believes the installed equipment has an alternative use, due to the standard nature of the equipment sourced from our vendors that can be used in other projects, revenue from such contacts is recognized for completed installations upon customer acceptance. This assessment, at contract inception, is a management judgment based on the combination of equipment ordered, the services performed and whether or not material effort, within the context of the contract, would be required to rework the equipment for another project, and the term and terms of the contract with the customer. For example, such contracts are usually completed within 30-45 days. In larger more complex projects where the Company is creating an asset for the customer with no alternative use and has an enforceable right to payment for performance prior to contract completion, we recognize revenue utilizing the percentage of completion method. This method measures completion based on management’s estimate of total costs to complete each contract because management considers total costs to be the best available measure of progress on the contract. Support agreements entered into with customers are generally for a period of one year, during which the Company stands ready to provide service and support for installed systems at the customer site. Support agreement amounts are billed in advance to the customer, as agreed in the contract, and recorded as a contract liability. During the period, the Company provides unspecified firmware upgrades to installed client equipment as they are available. Management estimates that straight line recognition of revenue over the period of the support agreement contract is a faithful representation of the pattern of delivery on the Company’s obligation under these agreements. Sales tax is recorded on a net basis and excluded from revenue. Cash and Cash Equivalents: Allowance for Doubtful Accounts: Construction in Process: Property and Equipment: Operating Leases Right-of-use Assets and Operating Lease Obligations: We adopted obligations on these provisions on January 1, 2019 using the optional transition method that permits us to apply the new disclosure requirements in 2019 and continue to present comparative period information as required under FASB ASC Topic 840, "Leases." We did not have a cumulative-effect adjustment to the opening balance of accumulated deficit at the date of adoption. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to exclude leases with an initial term of 12 months or less from the right-of-use assets and obligations. Adoption of the standards had no impact on results of operations or liquidity. If we determine that an arrangement is or contains a lease, we recognize a right-of-use (ROU) asset and lease obligation at the commencement date of the lease. ROU assets represent our right to use an underlying asset for the lease term and lease obligations represent our lease payments arising from the lease. Operating lease ROU assets and obligations are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Impairment of Assets: During the course of a strategic review of its assets, the Company assessed the recoverability of the carrying value of certain fixed assets and construction in process, this resulted in impairment losses of $0 and $144,994 as of December 31, 2020 and 2019, respectively. These losses reflect the amounts by which the carrying values of these assets exceed their estimated fair values determined by their estimated future discounted cash flows. Deferred Revenue: Income Taxes: The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Fair Value of Financial Instruments: The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value Concentrations of Credit Risk: Government Regulations: Income (loss) per share Subsequent Events: Use of Estimates: Recent Accounting Pronouncements |
B. Going Concern
B. Going Concern | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE B – GOING CONCERN The consolidated financial statements are prepared using U.S. generally accepted accounting principles applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred continuous losses from operations, has an accumulated deficit of $22,092,678 at December 31, 2020, and reported cash used by operations of $1,568,921 for the year ended December 31, 2020, all of which raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company expects to have ongoing requirements for capital investment to implement its business plan. Finally, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which it operates. Since inception, operations have primarily been funded through private equity financing. Management expects to continue to seek additional funding through private or public equity sources and will seek debt financing. The Company’s ability to continue as a going concern is ultimately dependent on its ability to generate sufficient cash from operations to meet cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance that the Company will be successful in these efforts. These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern. |
C. Revenue and Accounts Receiva
C. Revenue and Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Accounts Receivable | NOTE C – REVENUE AND ACCOUNTS RECEIVABLE The Company recognizes revenue in accordance with its accounting policy. The Company invoices customers and recognizes accounts receivable in an amount equivalent to which it has an unconditional right and expects to receive aligned with the agreement with the customer. The Company has contracted payment terms with its customer of net 15 days. The Company recognized revenue from performance obligations satisfied as of a point in time and over time as disaggregated in the table below. Timing of Revenue Recognition For the Year Ended December 31, December 31, 2020 2019 Point in Time $ $ 1, 044,730 $ 405,468 Over Time 32,300 – $ 1,077,030 $ 405,468 The Company earns revenues from Cel-fi systems and network services. Revenues from the sale and installation of Cel-fi systems, including fixed wireless, SmartDAS, and 4G LTE, totaled $482,273 in 2020 and $358,149 in 2019. The contracts for the sale of Cel-Fi systems generally include three identified performance obligations: (i) sales of equipment, (ii) sales of installation services, and (iii) sales of testing, commissioning and integration services. The performance obligation for the sale of equipment is deemed to be satisfied on the date the customer takes physical possession of the equipment and has control of the equipment. For installation, testing, commissioning and integration services, the Company measures progress toward complete satisfaction of the performance obligations ratably as the services are performed. Revenues from network and other services totaled $594,756 in 2020 and $47,319 in 2019. Network service revenues are recognized each month as services are rendered. Due to the Company billing service agreements in advance and recognizing revenue for service agreements over time as more fully described in its accounting policy the Company carries a contract liability balance proportional to the time remaining on each customer agreement. The Company issues invoices to customers for completed work as performance obligations satisfied as of a point in time are fulfilled and does not carry a contract asset balance for these performance obligations. Contract Assets and Liabilities December 31, December 31, 2020 2019 Contract Liability $ (25,905 ) $ 0 $ (25,905 ) $ 0 The Company’s contracts for support services are typically for terms of one year or less. The aggregate amount of contract performance obligation as of December 31, 2020 and December 31, 2019 that the Company expects to recognize over the next year is $25,905 and $0, respectively. The Company is under no obligation and is not in the practice of providing customers with returns, rebates, discounts, or refunds and has not in an amount material to the financial statements. The Company, accordingly, does not recognize these obligations at the time of revenue recognition. The Company may receive consideration from customers who enter into support agreements in the future for incremental services provided to such customers. Those services are delivered as of a point in time when the customer requests the service. Future consideration as described is excluded from the transaction price calculated for support agreement performance obligations. The Company has applied the practical expedient that permits the Company to recognize revenue without regard to significant financing components based on the Company’s expectations about the transfer of services and the receipt of payment from customers. The effect of this practical expedient is not material to the Company’s financial statements. |
D. Property and Equipment
D. Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE D – PROPERTY AND EQUIPMENT Property and equipment consist of the following: December 31, December 31, 2020 2019 Telecommunication equipment and computers $ 1,105,939 $ 1,092,901 Less: accumulated depreciation (1,050,755 ) (1,012,628 ) $ 55,184 $ 80,273 Depreciation expense for the year ended December 31, 2020 and 2019 was $38,128 and $136,182, respectively. |
E. Debt
E. Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE E – DEBT In February 2020, we issued a note in the amount of $625,000 bearing simple interest at a rate of 7% per annum to one investor due August 2021. The note contains a feature that allows the Company to extend the maturity date up to six months, twice, in the Company’s sole discretion. This note was issued along with 62,500 common stock purchase warrants that were determined to have a fair market value of $80,053 on the issuance date, which was recorded as a debt discount and amortized over the term of the notes, with $42,005 amortized in the year ended December 31, 2020 and reported in the statement of operations as interest expense. In April 2020, we received a loan pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in the amount of $178,158. The loan bears interest at a fixed rate of 1% per annum after a six-month deferral period. The loan contains a feature pursuant to which the Small Business Administration (“SBA”) will forgive the balance of the loan under statutory authority and conditions set forth in the CARES Act. This loan was forgiven in its entirety on December 18, 2020 by the Small Business Administration which has been recorded as other income in the consolidated statement of operations. |
F. Repurchase Agreement
F. Repurchase Agreement | 12 Months Ended |
Dec. 31, 2020 | |
F. Repurchase Agreement | |
Repurchase Agreement | NOTE F – REPURCHASE AGREEMENT In April 2020, we entered into a Repurchase and General Release Agreement with one shareholder pursuant to which we promised to pay the amount of $200,000 due on December 31, 2020. The agreement stated that the Company was to make $10,000 monthly installments with the balance payable on the maturity date. The agreement contains a feature that allows the Company to extend the maturity date of the amount payable to March 31, 2021 in the Company’s sole discretion, and if the Company exercises this option, the $10,000 monthly installments will continue until the extended maturity date on which date the remaining balance will be due. During the quarter, the Company extended the maturity date under the terms of the agreement to March 2021. The Company made payments in the amount of $80,000 during the period, however, the shareholder has not returned the shares so they may be canceled. As the shares had not been returned, the Company is not obligated per the agreement to pay any monies and the $80,000 was paid in good faith that the shares would be returned. The Company is pursuing action against the shareholder to get the shares returned or get the monies paid returned. Until such time, the $80,000 payments have been recorded as a reduction of additional paid in capital. |
G. Leases
G. Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE G – LEASES The Company leases facilities and office equipment under various operating leases, which generally are expected to be renewed or replaced by other leases. For the year ended December 31, 2020 and 2019, operating lease expense totaled $85,025 and $191,472, respectively. The weighted average remaining lease term is 1.66 years and weighted average discount rate is 5.5% as of December 31, 2020. Future minimum lease payments as of December 31, 2020 are as follows: 2021 $ 103,314 Total minimum lease payments 103,314 Less: imputed interest (4,784 ) Present value of minimum lease payments $ 98,530 Less: current portion of lease obligation 71,256 Long-term lease obligation $ 27,274 |
H. Warrants
H. Warrants | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | NOTE H – WARRANTS The Company has common stock purchase warrants outstanding at December 31, 2020 to purchase 2,388,675 shares of common stock exercisable until various dates through December 31, 2022. The warrants are exercisable at the following amounts and rates: 2,000,000 of which are exercisable at an exercise price of $1.00 per share and 155,000 of which are exercisable at an exercise price of $5.00 per share, and 233,675 of which are exercisable at an exercise price of the greater of $5.00 per share or (ii) 85% of the average closing price of our 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 prior to the date of exercise. To calculate the fair value of stock warrants at the date of grant, we use the Black-Scholes option pricing model. The volatility used is based on historical volatilities of selected peer group companies. Management estimates the average volatility considering current and future expected market conditions. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Each issuance is individually valued according to this procedure as of the date of issue with maturity dates between December 31, 2021 and December 31, 2022, volatility estimates between 35% to 44% and risk-free rates 0.38% to 1.44% in the period. On February 25, 2020, we issued a note in the amount of $625,000 bearing simple interest at a rate of 7% per annum to one shareholder. This note was issued along with 62,500 common stock purchase warrants that were determined to have a fair market value of $80,053 on the issuance date, which was recorded as a debt discount and amortized over the term of the notes, with $13,217 amortized in the current quarter ended December 31, 2020, and $42,005 in the year ended December 31, 2020. On March 3, 2020, we issued 92,500 warrants for services rendered with a fair market value on the issuance date of $89,155 recorded as an expense in the period. During the first quarter, we issued a total of 20,000 common stock purchase warrants to two investors as part of our offering of units, each unit consisting of one share of our common stock and one common stock purchase warrant. Fair market value based on the Black-Scholes Model on the date of issuance was $21,098 and was recorded in additional-paid-in-capital along with the common stock issued. During the first quarter, we issued a total of 10,000 common stock purchase warrants to one investor who purchased units at the end of 2019, but did not receive the common stock purchase warrants until February 2020. Fair market value based on the Black-Scholes Model on the date of issuance was $10,116 and was recorded in additional-paid-in-capital along with the common stock issued. There were no warrants issued in the second quarter of 2020. During the third quarter, we issued a total of 41,375 common stock purchase warrants to six investors as part of our offering of units, each unit consisting of one share of our common stock and one common stock purchase warrant. Fair market value based on the Black-Scholes Model $38,630 on the date of issuance and was recorded in additional-paid-in-capital along with the common stock issued. A total of 500 of these common stock purchase warrants were exercised during the third quarter. During the fourth quarter, we issued a total of 47,000 common stock purchase warrants to seven investors as part of our offering of units, each unit consisting of one share of our common stock and one common stock purchase warrant. Fair market value based on the Black-Scholes Model on the date of issuance was $39,055 and was recorded in additional-paid-in-capital along with the common stock issued. During 2019, 193,800 warrants were issued in connection with the issuance of common stock for cash with an exercise price of $5 and expiration date of December 31, 2020 and 140,000 warrants were issued in connection with link exchanges, with an exercise price of $5, 40,000 of which expired on June 30, 2019 and the remaining 100,000 warrants expired on December 31, 2019. During 2019, 114,820 warrants were exercised for cash proceeds of $574,100. The following is a summary of activity and outstanding common stock warrants: # of Warrants Balance, December 31, 2018 5,219,103 Warrants granted 333,800 Warrants exercised (114,820 ) Warrants expired (3,054,827 ) Balance, December 31, 2019 2,383,256 Warrants granted 273,375 Warrants exercised (65,500 ) Warrants expired (202,456 ) Balance, December 31, 2020 2,388,675 Exercisable, December 31, 2020 2,388,675 |
I. Stockholders' Equity
I. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE I – 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. In January 2020, the Company issued 554 shares of common stock to one vendor for services rendered at fair value of $2,770. In March 2020, the Company issued a total of 20,000 shares of common stock to two investors for cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In February 2020, the Company issued 10,000 shares of common stock at fair value of $50,000 to one employee pursuant to a severance agreement. In April 2020, the Company entered into a Repurchase and General Release Agreement with one investor to repurchase 40,000 shares of common stock and 40,000 shares of series B preferred stock at $2.50 per share in exchange for a note payable in the amount of $200,000 bearing no interest and due on March 31, 2021 as extended under the terms of the note. No portion of the agreement with the investor was treated as an expense. This agreement has been cancelled. See “NOTE M – SUBSEQUENT EVENTS.” In May 2020, the Company issued 40,000 shares of common stock in consideration for the conversion of 40,000 shares of Series A Preferred Stock by one shareholder. In July 2020, the Company issued a total of 12,000 shares of common stock to two investors for cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In August 2020, the Company issued a total of 25,000 shares of common stock to four investors for cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In September 2020, the Company issued 4,375 shares of common stock to one investor in lieu of making an accrued interest payment in cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In September 2020, one investor exercised 500 common stock purchase warrants for which the Company issued 500 shares of common stock for cash at $5.00 per share. In September 2020, the Company issued 83,333 shares of common stock in consideration for the conversion of 83,333 shares of Series B Preferred shares by one shareholder. In October 2020, the Company issued 20,000 shares of common stock in consideration for the conversion of 20,000 shares of Series A Preferred shares by one shareholder. In October 2020, the Company issued 172,964 shares of common stock in consideration for the conversion of 172,964 shares of Series B Preferred shares by three shareholders. In October 2020, the Company issued a total of 21,000 shares of common stock to three investors for cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In October 2020, one investor exercised 5,000 common stock purchase warrants for which the Company issued 5,000 shares of common stock for cash at $5.00 per share. In November 2020, the Company issued a total of 60,000 shares of common stock in consideration for the conversion of 60,000 shares of Series A Preferred Stock by two shareholders. In November 2020, the Company issued a total of 55,000 shares of common stock in consideration for the conversion of 55,000 shares of Series B Preferred Stock by six shareholders. In November 2020, one investor exercised 20,000 common stock purchase warrants for which the Company issued 20,000 shares of common stock for cash at $5.00 per share. In December 2020, the Company issued a total of 20,000 shares of common stock to two investors for cash at $5.00 per share as part of the Company’s offering of units, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant. In December 2020, the Company issued a total of 20,000 shares of common stock in consideration for the conversion of 20,000 shares of Series A Preferred Stock by one shareholder. In December 2020, the Company issued a total of 11,602 shares of common stock in consideration for the conversion of 11,602 shares of Series B Preferred Stock by two shareholders. In December 2020, three investors exercised a total of 40,000 common stock purchase warrants for which the Company issued 40,000 shares of common stock for cash at $5.00 per share. During the year, the Company issued 14,474 shares of common stock to nine employees as compensation. During the year, the Company issued 2,296 shares of common stock to one vendor for services rendered at fair value of $11,484. During the year ended December 31, 2019, there were 193,800 shares of common stock issued for cash proceeds of $969,000 at the price of $5.00 per share; 120,000 shares of common stock issued in exchange for deferred revenue of $390,000; 114,820 shares of common stock issued from exercise of warrants; and 28,526 shares of common stock issued for stock based compensation of $142,630. |
J. IncomeTaxes
J. IncomeTaxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | NOTE J – INCOME TAXES Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at: December 31, December 31, 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 4,305,806 $ 3,835,214 Less: Valuation allowance (4,305,806 ) (3,835,214 ) Net deferred tax assets $ – $ – The Company has net operating loss carryforwards for tax purposes of approximately $20.5 million for the year 2020 that begin to expire in the year 2032. Management has reviewed its net deferred asset position, and due to the history of operating losses has determined that the application of a full valuation allowance against its net deferred tax asset at December 31, 2020 and December 31, 2019 is warranted. As of December 31, 2020, the Company had not accrued any interest or penalties related to uncertain tax positions. Tax returns filed for the years 2017 through 2020 are open for examination by taxing authorities. The Company does not have a liability for state taxes at either December 31, 2020 or December 31, 2019. The federal income tax benefit expected by the application of the corporate income tax rates to pre-tax net loss differs from the actual benefit recognized due to the valuation allowance recorded for 2020 and 2019. The U.S. Statutory Tax Rate is 21%. See below table for the effective tax rate reconciliation: December 31, December 31, 2020 2019 Pre-tax GAAP loss at U.S. statutory rate $ (414,647 ) $ (496,900 ) Change in valuation allowance 414,647 496,900 Income tax expense $ – $ – |
K. Related Party Transactions
K. Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE K – RELATED PARTY TRANSACTIONS The Company has an accounts payable balance owed to Richardson & Associates in the amount of $107,084 as of December 31, 2020, and $76,280 as of December 31, 2019. The Company incurred expense of $128,340 and $86,033 with Richardson & Associates as of the year ended December 31, 2020 and 2019, respectively. Mark Richardson is the owner of Richardson & Associates and he was appointed as a director of Wytec International, Inc. in September 2019. |
L. Concentrations
L. Concentrations | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE L – CONCENTRATIONS The Company derived $995,894, 92%, and $0, 0%, of revenue in the years ended December 31, 2020 and 2019, respectively, from two customers. The Company derived $0, 0%, and $358,997, 89%, for the year ended December 31, 2020 and 2019, respectively, from four additional customers. We continue to endeavor to diversify our customer base and make efforts to mitigate the risk associated with excess concentration of sales from a limited number of customers. |
M. Subsequent Events
M. Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE M – SUBSEQUENT EVENTS During the first quarter of 2021, Wytec issued a total of 33,586 shares of common stock and a total of 33,586 common stock purchase warrants to four investors pursuant to Wytec’s offering of units under Rule 506(c) of Regulation D of the Securities Act, each unit consisting of one share of common stock and one common stock purchase warrant at a purchase price of $5.00 per unit, 4,375 units of which were issued in lieu of making an accrued interest payment in cash at $5.00 per share. These warrants are exercisable for cash until December 31, 2021 at an exercise price equal to the greater of (i) $5.00 or (ii) 85% of the average closing price of our 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 prior to the date of exercise. During the first quarter of 2021, Wytec issued a total of 56,592 common stock purchase warrants to three consultants. The warrants are exercisable on a cash or cashless basis at an exercise price of $5.00 per share until December 31, 2021. During the first quarter of 2021, the Company issued a total of 461,270 shares of common stock in consideration for the conversion of 461,270 shares of Series B Preferred Stock by eight shareholders. In February 2021, a total of 15,000 common stock purchase warrants were exercised for a total of 15,000 shares of Wytec’s common stock at an exercise price of $5.00 per share or a total of $75,000. In February 2021, the Company filed a Regulation A Offering Statement on Form 1-A under the Securities Act of 1933, as amended, pursuant to which the Company plans to offer 4,000,000 shares of its common stock at a purchase price of $5.00 per share. The Regulation A Registration Statement on Form 1-A is not yet effective. On March 18, 2021, Wytec received its second PPP loan in the amount of $160,073 Wytec fully expects to have the loan forgiven and no due date or payment schedule has been set by the financial institution providing the loan until forgiveness is determined. If the loan is not forgiven, the loan will carry interest at 1% per annum. In March 2021, a total of 200 common stock purchase warrants were exercised for a total of 200 shares of Wytec’s common stock at an exercise price of $5.00 per share or a total of $1,000. In April 2021, a total of 9,006 common stock purchase warrants were exercised for a total of 9,006 shares of Wytec’s common stock at an exercise price of $5.00 per shares or a total of $45,030. In April 2021, the Company issued a total of 25,280 shares of common stock in consideration for the conversion of 25,280 shares of Series B Preferred Stock by two shareholders. On May 5, 2021, Ms. Donna Ward submitted her written resignation as a director of Wytec and verbally resigned as the chief financial officer, secretary, and employee of Wytec. In April 2021, the Company terminated a Repurchase and General Release Agreement with one investor to repurchase 40,000 shares of common stock and 40,000 shares of series B preferred stock at $2.50 per share in exchange for a note payable in the amount of $200,000 bearing no interest and due on March 31, 2021 as extended under the terms of the note. The Company paid $80,000 toward the repurchase, but did not receive shares from the investor. In May 2021, a total of 20,000 common stock purchase warrants were exercised for a total of 20,000 shares of Wytec’s common stock at an exercise price of $5.00 per share or a total of $100,000. In May 2021, the Company issued a total of 30,000 shares of common stock in consideration for the conversion of 30,000 shares of Series B Preferred Stock by two shareholders. On June 14, 2021, the Company cancelled 24,134,448 shares of the Company’s common stock which were held in treasury. In June 2021, the Company issued a total of 40,000 shares of common stock in consideration for the conversion of 40,000 shares of Series A Preferred Stock by one shareholder. |
A. Significant Accounting Pol_2
A. Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Principles of Consolidation | Description of Business and Principles of Consolidation: Wylink Inc., a Texas corporation and wholly owned subsidiary, was until January 2016 engaged in the sale of Federal Communications Commission (“FCC”) registered links participating in the 70 and 80 gigahertz licensed frequency program (the “Program”). The Program allows qualified individuals to own a segment of the “backhaul” infrastructure of Wytec’s city-wide business deployment. Wylink Inc. has assigned all of its link related contract to Wytec and Wytec plans to wind up and dissolve Wylink Inc. in the near future. Wylink, Inc. was wound up and dissolved on or about September 22, 2020 and its assets and liabilities were assumed by Wytec. Wytec, LLC, a Delaware limited liability company, formed September 7, 2012 and previously managed by General Patent Corporation (“GPC”), owns five expired patents focused on high-capacity millimeter wave technology. On September 20, 2016, General Patent Corporation, the then Managing Partner of Wytec, LLC, assigned its partial ownership in the patents to Wytec, thereby terminating its role as Managing Partner. Wytec, LLC was wound up and dissolved in April 2020 and its assets and liabilities were assumed by Wytec. Capaciti Networks, Inc. (“Capaciti”), a Texas corporation, was engaged in the sale of wired and wireless services, including products, wireless data cards, back-office platform and rate plans to their commercial and enterprise clients. Capaciti is in the process of winding up and dissolving. Its assets and liabilities will be assumed by Wytec. Capaciti was wound up and dissolved on or about August 20, 2020 and its assets and liabilities were assumed by Wytec. Collectively, Wytec and its subsidiaries, are referred to as “we,” “our,” “us,” or the “Company.” |
Basis of Accounting | Basis of Accounting: |
Revenue and Cost Recognition | Revenue and Cost Recognition. The Company earns revenues from contracts with customers for (i) sales and installation of cellular enhancement equipment and (ii) support agreements. Revenue from the sale and installation of cellular enhancement equipment is recognized either when the installation is completed or as the company installs the cellular enhancement equipment, depending on the complexity of the system, such as the degree of customization of the equipment being installed, and the agreement with the customer. The less complex systems installed by the Company where management believes the installed equipment has an alternative use, due to the standard nature of the equipment sourced from our vendors that can be used in other projects, revenue from such contacts is recognized for completed installations upon customer acceptance. This assessment, at contract inception, is a management judgment based on the combination of equipment ordered, the services performed and whether or not material effort, within the context of the contract, would be required to rework the equipment for another project, and the term and terms of the contract with the customer. For example, such contracts are usually completed within 30-45 days. In larger more complex projects where the Company is creating an asset for the customer with no alternative use and has an enforceable right to payment for performance prior to contract completion, we recognize revenue utilizing the percentage of completion method. This method measures completion based on management’s estimate of total costs to complete each contract because management considers total costs to be the best available measure of progress on the contract. Support agreements entered into with customers are generally for a period of one year, during which the Company stands ready to provide service and support for installed systems at the customer site. Support agreement amounts are billed in advance to the customer, as agreed in the contract, and recorded as a contract liability. During the period, the Company provides unspecified firmware upgrades to installed client equipment as they are available. Management estimates that straight line recognition of revenue over the period of the support agreement contract is a faithful representation of the pattern of delivery on the Company’s obligation under these agreements. Sales tax is recorded on a net basis and excluded from revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Allowance for Doubtful Accounts: |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts: |
Construction in Process | Construction in Process: |
Property and Equipment | Property and equipment consist of the following: December 31, December 31, 2020 2019 Telecommunication equipment and computers $ 1,105,939 $ 1,092,901 Less: accumulated depreciation (1,050,755 ) (1,012,628 ) $ 55,184 $ 80,273 |
Impairment of Assets | Impairment of Assets: During the course of a strategic review of its assets, the Company assessed the recoverability of the carrying value of certain fixed assets and construction in process, this resulted in impairment losses of $0 and $144,994 as of December 31, 2020 and 2019, respectively. These losses reflect the amounts by which the carrying values of these assets exceed their estimated fair values determined by their estimated future discounted cash flows. |
Deferred Revenue | Deferred Revenue: |
Income Taxes | Income Taxes: The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value |
Concentrations of Credit Risk | Concentrations of Credit Risk: |
Government Regulations | Government Regulations: |
Income (loss) per share | Income (loss) per share |
Subsequent Events | Subsequent Events: |
Use of Estimates | Use of Estimates: |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
C. Revenue Recognition (Tables)
C. Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | For the Year Ended December 31, December 31, 2020 2019 Point in Time $ $ 1, 044,730 $ 405,468 Over Time 32,300 – $ 1,077,030 $ 405,468 |
Contract Assets and Liabilities | December 31, December 31, 2020 2019 Contract Liability $ (25,905 ) $ 0 $ (25,905 ) $ 0 |
D. Property and Equipment (Tabl
D. Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: December 31, December 31, 2020 2019 Telecommunication equipment and computers $ 1,105,939 $ 1,092,901 Less: accumulated depreciation (1,050,755 ) (1,012,628 ) $ 55,184 $ 80,273 |
G. Leases (Tables)
G. Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Minimum Lease Payments | Future minimum lease payments as of December 31, 2020 are as follows: 2021 $ 103,314 Total minimum lease payments 103,314 Less: imputed interest (4,784 ) Present value of minimum lease payments $ 98,530 Less: current portion of lease obligation 71,256 Long-term lease obligation $ 27,274 |
H. Warrants (Tables)
H. Warrants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrant activity | # of Warrants Balance, December 31, 2018 5,219,103 Warrants granted 333,800 Warrants exercised (114,820 ) Warrants expired (3,054,827 ) Balance, December 31, 2019 2,383,256 Warrants granted 273,375 Warrants exercised (65,500 ) Warrants expired (202,456 ) Balance, December 31, 2020 2,388,675 Exercisable, December 31, 2020 2,388,675 |
J. Income Taxes (Tables)
J. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred income taxes | December 31, December 31, 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 4,305,806 $ 3,835,214 Less: Valuation allowance (4,305,806 ) (3,835,214 ) Net deferred tax assets $ – $ – |
Reconciliation of income tax expense | December 31, December 31, 2020 2019 Pre-tax GAAP loss at U.S. statutory rate $ (414,647 ) $ (496,900 ) Change in valuation allowance 414,647 496,900 Income tax expense $ – $ – |
A. Significant Accounting Pol_3
A. Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | $ 0 | $ 0 | |
Asset impairment | $ 0 | 144,994 | |
Deferred revenue exchanged for stock, amount relieved | $ 390,000 | $ 400,000 | |
Deferred revenue refunded | $ 35,000 | ||
Minimum [Member] | |||
Property and Equipment, estimated useful lives | 5 years | ||
Maximum [Member] | |||
Property and Equipment, estimated useful lives | 10 years |
B. Going Concern (Details Narra
B. Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (22,092,678) | $ (20,118,169) |
Cash used in operations | $ (1,693,921) | $ (2,620,130) |
C. Revenue Recognition (Details
C. Revenue Recognition (Details - Disaggregation of Revenue) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 1,077,030 | $ 405,468 |
Transferred at Point in Time [Member] | ||
Revenue | 1,044,730 | 405,468 |
Transferred over Time [Member] | ||
Revenue | $ 32,300 | $ 0 |
C. Revenue Recognition (Detai_2
C. Revenue Recognition (Details - Contract Assets and Liabilities) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract Liability | $ (25,905) | $ 0 |
C. Revenue Recognition (Detai_3
C. Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 1,077,030 | $ 405,468 |
Cel-fi systems and network services [Member] | ||
Revenues | 482,273 | 358,149 |
Network and other services [Member] | ||
Revenues | $ 594,756 | $ 47,319 |
D. Property and Equipment (Deta
D. Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Tele communication equipment and computers | $ 1,105,939 | $ 1,092,901 |
Less: accumulated depreciation | (1,050,755) | (1,012,628) |
Property and equipment, net | $ 55,184 | $ 80,273 |
D. Property and Equipment (De_2
D. Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 38,128 | $ 136,182 |
E. Debt (Details Narrative)
E. Debt (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||
Feb. 25, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 30, 2020 | Feb. 29, 2020 | |
Amortization of warrant discount | $ 42,005 | $ 0 | ||||
Repayment of note payable | 80,000 | $ 0 | ||||
Feb 2020 Note [Member] | ||||||
Debt face amount | $ 625,000 | $ 625,000 | ||||
Debt stated interest rate | 7.00% | 7.00% | ||||
Debt maturity date | Aug. 31, 2021 | |||||
Warrants issued with debt, shares | 62,500 | |||||
Warrants issued with debt, value | $ 80,053 | |||||
Amortization of warrant discount | $ 42,005 | $ 13,217 | ||||
PPP Loan [Member] | ||||||
Debt face amount | $ 178,158 | |||||
Debt stated interest rate | 1.00% | |||||
Debt outstanding | 0 | 0 | ||||
Repurchase Note [Member] | ||||||
Debt outstanding | $ 120,000 | $ 120,000 |
F. Repurchase Agreement (Detail
F. Repurchase Agreement (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
F. Repurchase Agreement | |
Reduction in paid-in-capital for repurchase | $ (80,000) |
G. Leases (Details)
G. Leases (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Operating lease future minimum due | ||
2021 | $ 103,314 | |
Total minimum lease payments | 103,314 | |
Less imputed interest | (4,784) | |
Present value of minimum lease payments | 98,530 | |
Less: current portion of lease obligation | 71,256 | $ 150,909 |
Long-term lease obligation | $ 27,274 | $ 237,042 |
G. Leases (Details Narrative)
G. Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 85,025 | $ 191,472 |
Operating lease weighted average remaining lease term | 1 year 7 months 28 days | |
Weighted average discount rate | 5.50% |
H. Warrants (Details)
H. Warrants (Details) - Warrants [Member] | 12 Months Ended | |
Dec. 31, 2020shares | Dec. 31, 2019shares | |
Number of warrants outstanding, beginning balance | 2,383,256 | 5,219,103 |
Number of warrants granted | 273,375 | 333,800 |
Number of warrants exercised | (65,500) | (114,820) |
Number of warrants expired | (202,456) | (3,054,827) |
Number of warrants outstanding, ending balance | 2,388,675 | 2,383,256 |
Number of warrants exercisable | 2,388,675 |
H. Warrants (Details Narrative)
H. Warrants (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 03, 2020 | Feb. 25, 2020 | Dec. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 29, 2020 | Dec. 31, 2018 | |
Amortization of warrant discount | $ 42,005 | $ 0 | |||||||
Proceeds from warrants exercised | $ 327,500 | $ 574,100 | |||||||
Warrants Issued for Services [Member] | |||||||||
Number of warrants granted | 92,500 | ||||||||
Fair value of warrants granted | $ 89,155 | ||||||||
Issued with Common Stock [Member] | |||||||||
Number of warrants granted | 193,800 | ||||||||
Link Exchanges [Member] | |||||||||
Number of warrants granted | 140,000 | ||||||||
Warrants expired | 140,000 | ||||||||
Feb 2020 Note [Member] | |||||||||
Note payable issued | $ 625,000 | $ 625,000 | |||||||
Debt stated interest rate | 7.00% | 7.00% | |||||||
Unamortized debt discount | $ 80,053 | ||||||||
Number of warrants granted | 62,500 | ||||||||
Fair value of warrants granted | $ 80,053 | ||||||||
Amortization of warrant discount | $ 42,005 | $ 13,217 | |||||||
Warrants [Member] | |||||||||
Warrants outstanding | 2,388,675 | 2,388,675 | 2,383,256 | 5,219,103 | |||||
Warrants exercisable | 2,280,175 | 2,280,175 | |||||||
Warrant expiration date | Dec. 31, 2022 | Dec. 31, 2022 | |||||||
Number of warrants granted | 273,375 | 333,800 | |||||||
Warrants expired | 202,456 | 3,054,827 | |||||||
Warrants exercised | 114,820 | ||||||||
Proceeds from warrants exercised | $ 574,100 | ||||||||
Warrants [Member] | $1.00 Price [Member] | |||||||||
Warrants exercisable | 2,000,000 | 2,000,000 | |||||||
Warrant Exercise price | $ 1 | $ 1 | |||||||
Warrants [Member] | $5.00 Price [Member] | |||||||||
Warrants exercisable | 155,000 | 155,000 | |||||||
Warrant Exercise price | $ 5 | $ 5 | |||||||
Warrants [Member] | Greater than $5.00 or other [Member] | |||||||||
Warrants exercisable | 233,675 | 233,675 | |||||||
Warrant Exercise price | $ 5 | $ 5 | |||||||
Common Stock Purchase Warrants [Member] | Two Investors [Member] | |||||||||
Number of warrants granted | 20,000 | ||||||||
Fair value of warrants granted | $ 21,098 | ||||||||
Common Stock Purchase Warrants [Member] | One Investor [Member] | |||||||||
Number of warrants granted | 10,000 | ||||||||
Fair value of warrants granted | $ 10,116 | ||||||||
Common Stock Purchase Warrants [Member] | Six Investors [Member] | |||||||||
Number of warrants granted | 41,375 | ||||||||
Fair value of warrants granted | $ 38,630 | ||||||||
Common Stock Purchase Warrants [Member] | Seven Investors [Member] | |||||||||
Number of warrants granted | 47,000 | ||||||||
Fair value of warrants granted | $ 39,055 |
I. Stockholders' Equity (Detail
I. Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 7 Months Ended | 8 Months Ended | 9 Months Ended | 10 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Feb. 28, 2020 | Mar. 31, 2020 | Apr. 30, 2020 | Jul. 31, 2020 | Aug. 31, 2020 | Sep. 30, 2020 | Oct. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock issued for services, value | $ 136,620 | ||||||||||
Proceeds from issuance of stock | $ 511,875 | $ 969,000 | |||||||||
Three Investors [Member] | |||||||||||
Stock issued for cash, shares | 21,000 | ||||||||||
Common Stock [Member] | Two Investors [Member] | |||||||||||
Stock issued for cash, shares | 20,000 | ||||||||||
Common Stock [Member] | Nine Employees [Member] | |||||||||||
Stock issued for compensation, shares | 14,474 | ||||||||||
Warrant Exercise | Common Stock [Member] | One Investor [Member] | |||||||||||
Stock converted, shares issued | 5,000 | ||||||||||
Warrant Exercise | Common Stock Purchase Warrants [Member] | One Investor [Member] | |||||||||||
Stock converted, shares converted | 5,000 | ||||||||||
Conversion of Stock [Member] | Common Stock [Member] | |||||||||||
Stock converted, shares issued | 83,333 | 20,000 | 60,000 | 20,000 | |||||||
Conversion of Stock [Member] | Common Stock [Member] | Three Shareholders [Member] | |||||||||||
Stock converted, shares issued | 172,964 | ||||||||||
Conversion of Stock [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||
Stock converted, shares converted | 83,333 | ||||||||||
Conversion of Stock [Member] | Series B Convertible Preferred Stock [Member] | Three Shareholders [Member] | |||||||||||
Stock converted, shares converted | 172,964 | ||||||||||
Conversion of Stock [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||
Stock converted, shares converted | 20,000 | 60,000 | 20,000 | ||||||||
Conversion of Stock [Member] | Common Stock [Member] | |||||||||||
Stock converted, shares issued | 55,000 | 11,602 | |||||||||
Conversion of Stock [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||
Stock converted, shares converted | 55,000 | 11,602 | |||||||||
Warrant Exercises [Member] | Common Stock [Member] | |||||||||||
Stock converted, shares issued | 20,000 | ||||||||||
Warrant Exercises [Member] | Common Stock [Member] | Three Investors [Member] | |||||||||||
Stock converted, shares issued | 40,000 | ||||||||||
Warrant Exercises [Member] | Common Stock Purchase Warrants [Member] | |||||||||||
Stock converted, shares converted | 20,000 | ||||||||||
Warrant Exercises [Member] | Common Stock Purchase Warrants [Member] | Three Investors [Member] | |||||||||||
Stock converted, shares converted | 40,000 | ||||||||||
One Vendor [Member] | |||||||||||
Stock issued for services, shares | 554 | 2,296 | |||||||||
Stock issued for services, value | $ 2,770 | $ 11,484 | |||||||||
Two Investors [Member] | |||||||||||
Stock issued for cash, shares | 20,000 | 12,000 | |||||||||
Severance Agreement [Member] | |||||||||||
Stock issued for compensation, shares | 10,000 | ||||||||||
Stock issued for compensation, value | $ 50,000 | ||||||||||
Repurchase and General Release Agr [Member] | |||||||||||
Note payable issued | $ 200,000 | ||||||||||
Repurchase and General Release Agr [Member] | Common Stock [Member] | |||||||||||
Stock repurchased | 40,000 | ||||||||||
Repurchase and General Release Agr [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||
Stock repurchased | 40,000 | ||||||||||
Four Investors [Member] | |||||||||||
Stock issued for cash, shares | 25,000 | ||||||||||
One Investor [Member] | |||||||||||
Stock issued in lieu of accrued interest | 4,375 |
J. IncomeTaxes (Details - Defer
J. IncomeTaxes (Details - Deferred taxes) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 4,305,806 | $ 3,835,214 |
Less: Valuation allowance | (4,305,806) | (3,835,214) |
Net deferred tax assets | $ 0 | $ 0 |
J. Income Taxes (Details - Reco
J. Income Taxes (Details - Reconcilation of taxes) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Pre-tax GAAP loss at U.S. Statutory rate | $ (414,647) | $ (496,900) |
Change in valuation allowance | 414,647 | 496,900 |
Income tax expense | $ 0 | $ 0 |
J. IncomeTaxes (Details Narrati
J. IncomeTaxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 20,500,000 |
Loss carryforward beginning expiration date | Dec. 31, 2032 |
Uncertain tax positions | $ 0 |
State tax Liability | $ 0 |
K. Related Party Transactions (
K. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts payable - related parties | $ 107,084 | $ 76,280 |
Richardson and Associates [Member] | ||
Accounts payable - related parties | 107,084 | 76,280 |
Related party expenses | $ 128,340 | $ 86,033 |
L. Concentrations (Details Narr
L. Concentrations (Details Narrative) - Sales Revenue Net [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Two Customers [Member] | ||
Concentration risk percentage | 92.00% | 0.00% |
Revenues | $ 995,894 | $ 0 |
Four Another Customer [Member] | ||
Concentration risk percentage | 0.00% | 89.00% |
Revenues | $ 0 | $ 358,997 |