Wytec International 10Q 2024 Q2 Quarterly report

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to____________

Commission File Number: 333-215496

Wytec International, Inc.

(Exact Name of registrant as specified in its charter)

Nevada	46-0720717
(State or other jurisdiction of	(IRS Employer I.D. No.)
incorporation)

19206 Huebner Rd., Suite 202

San Antonio, TX 78258

(Address of principal executive offices and Zip Code)

(210) 233-8980

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	WYTC	OTCQB

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 14, 2024, there were 16,727,025 shares outstanding of the registrant’s common stock.

WYTEC INTERNATIONAL, INC.

FORM 10-Q

June 30, 2024

Table of Contents

		Page
PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3

	Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3

	Statements of Operations for the Three and Six Months ended June 30, 2024 and June 30, 2023 (unaudited)	4

	Statements of Stockholders’ Deficit for the Three and Six Months ended June 30, 2024 and June 30, 2023 (unaudited)	5

	Statements of Cash Flows for the Six Months ended June 30, 2024 and June 30, 2023 (unaudited)	7

	Notes to Financial Statements (unaudited)	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	28

ITEM 4.	CONTROLS AND PROCEDURES	28

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	29

ITEM 1A.	RISK FACTORS	29

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	29

ITEM 4.	MINE SAFETY DISCLOSURES	29

ITEM 5.	OTHER INFORMATION	29

ITEM 6.	EXHIBITS	30

	SIGNATURES	31

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

WYTEC INTERNATIONAL, INC.

BALANCE SHEETS

(Unaudited)


	June 30,			December 31,
	2024			2023
Assets

Current assets:
Cash	$	207,405		$	564,760
Inventory		30,041			30,303
Total current assets		237,446			595,063

Property and equipment, net		11,388			26,205
Investment in limited liability company		600,000			600,000
Operating lease, right-of-use asset		117,843			–

Total assets	$	966,677		$	1,221,268

Liabilities and Stockholders' Deficit

Current liabilities:
Accounts payable and accrued expenses	$	334,651		$	391,104
Accounts payable, related party		260,871			253,771
Other payable		335,000			335,000
Operating lease, right-of-use obligation, current portion		68,054			–
Contract liability		4,118			21,394
Notes payable, current portion		7,834			21,609
Convertible promissory notes		55,000			364,515
Promissory notes, shareholders		710,000			710,000
Total current liabilities		1,775,528			2,097,393

Long-term liabilities:
Operating lease, right-of-use obligation, long term portion		50,189			–
Total long-term liabilities		50,189			–

Total liabilities		1,825,717			2,097,393

Commitments and contingencies (See Note M)		–			–

Stockholders' deficit:
Preferred stock, par value $0.001 per share, 20,000,000 shares authorized:
Series A convertible preferred stock, par value $0.001 per share, 4,100,000 shares designated, 100,000 shares issued and 0 shares outstanding at June 30, 2024 and December 31, 2023		100			100
Series B convertible preferred stock, par value $0.001 per share, 6,650,000 shares designated, 44,535 shares issued and 0 shares outstanding at June 30, 2024 and December 31, 2023		45			45
Series C convertible preferred stock, par value $0.001 per share, 1,000 shares designated, 1,000 issued and 1,000 outstanding at June 30, 2024 and December 31, 2023		1			1
Common stock, par value $0.001 per share, 495,000,000 shares authorized, 13,686,965 shares and 13,288,692 shares issued and outstanding at June 30, 2024 and December 31, 2023		13,684			13,287
Additional paid-in capital		32,339,906			30,558,906
Accumulated deficit		(33,061,026	)		(31,109,214	)
Repurchased shares		(80,000	)		(80,000	)
Subscriptions payable		187,500			–
Treasury stock:
Series A convertible preferred stock, at cost, 100,000 shares		(179,368	)		(179,368	)
Series B convertible preferred stock, at cost, 44,535 shares		(79,882	)		(79,882	)
Total stockholders' deficit		(859,040	)		(876,125	)

Total liabilities and stockholders' deficit	$	966,677		$	1,221,268

See accompanying notes to unaudited financial statements

WYTEC INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenues	$	25,514		$	22,811		$	40,112		$	43,220
Cost of revenues		24,690			28,431			24,953			35,946

Gross profit (loss)		824			(5,620	)		15,159			7,274

Expenses:
Selling, general, and administrative		427,364			322,168			1,754,580			638,984
Research and development		129,742			–			158,111			–
Depreciation		8,321			10,687			16,717			21,689
Operating expenses, net		565,427			332,855			1,929,408			660,673

Net operating loss		(564,603	)		(338,475	)		(1,914,249	)		(653,399	)

Other expense:
Interest expense		16,852			58,479			37,563			105,084
Total other expense		16,852			58,479			37,563			105,084

Net loss	$	(581,455	)	$	(396,954	)	$	(1,951,812	)	$	(758,483	)

Weighted average number of common shares outstanding - basic and fully diluted		13,645,067			12,198,378			13,599,210			12,196,781

Net loss per share - basic and fully diluted	$	(0.04	)	$	(0.03	)	$	(0.14	)	$	(0.06	)

See accompanying notes to unaudited financial statements

WYTEC INTERNATIONAL, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT

For the six months ended June 30, 2024 and 2023

(Unaudited)

Class A

Class B

Class C

Class A Preferred

Preferred Stock

Common Stock

Treasury Stock

Amount

Balance, January 1, 2024

100,000

100

44,535

1,000

13,288,692

13,287

100,000

(179,368

)

Conversion of note payable into common stock

–

65,956

–

Warrants exercised for cash

–

59,504

–

Cashless warrant exercised

–

46,250

–

Stock issued to existing holders

–

154,840

155

–

Extension of warrants

–

Stock issued for board member compensation

–

Net loss for the three months ended March 31, 2024

–

Balance, March 31, 2024

100,000

100

44,535

1,000

13,615,242

13,615

100,000

(179,368

)

Warrants exercised for cash

–

71,723

–

Stock issued for board member compensation

–

Net loss for the three months ended June 30, 2024

–

Balance, June 30, 2024

100,000

100

44,535

1,000

13,686,965

13,684

100,000

(179,368

)

Balance, January 1, 2023

100,000

100

44,535

1,000

12,195,166

12,194

100,000

(179,368

)

Net loss for the three months ended March 31, 2023

–

Balance, March 31, 2023

2,380,000

2,380

2,856,335

2,856

1,000

12,195,166

12,194

100,000

(179,368

)

Conversion of note payables into common stock

–

20,879

–

Cancellation of subscription payable

–

Net loss for the three months ended June 30, 2023

–

Balance, June 30, 2023

2,380,000

2,380

3,735,784

3,735

1,000

12,216,045

12,215

100,000

(179,368

)

See accompanying notes to unaudited financial statements

WYTEC INTERNATIONAL, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT

For the six months ended June 30, 2024 and 2023

(Unaudited)

(Continued)


																	Total
	Class B Preferred Treasury Stock				Additional Paid-in			Repurchased			Subscriptions			Accumulated			Stockholders' Equity
	Shares	Amount			Capital			Shares			Payable			Deficit			(Deficit)
Balance, January 1, 2024	44,535	$	(79,882	)	$	30,558,906		$	(80,000	)	$	–		$	(31,109,214	)	$	(876,125	)

Conversion of note payable into common stock	–		–			329,713			–			–			–			329,779

Warrants exercised for cash	–		–			297,460			–			–			–			297,520

Cashless warrant exercised	–		–			(47	)		–			–			–			–

Stock issued to existing holders	–		–			774,045			–			–			–			774,200

Extension of warrants	–		–			21,285			–			–			–			21,285

Stock issued for board member compensation	–		–			–			–			93,750			–			93,750

Net loss for the three months ended March 31, 2024	–		–			–			–			–			(1,370,357	)		(1,370,357	)

Balance, March 31, 2024	44,535	$	(79,882	)	$	31,981,362		$	(80,000	)	$	93,750		$	(32,479,571	)	$	(729,948	)

Warrants exercised for cash	–		–			358,544			–			–			–			358,613

Stock issued for board member compensation	–		–			–			–			93,750			–			93,750

Net loss for the three months ended June 30, 2024	–		–			–			–			–			(581,455	)		(581,455	)

Balance, June 30, 2024	44,535	$	(79,882	)	$	32,339,906		$	(80,000	)	$	187,500		$	(33,061,026	)	$	(859,040	)



Balance, January 1, 2023	44,535	$	(79,882	)	$	25,118,101		$	(80,000	)	$	25,400		$	(27,798,203	)	$	(2,981,612	)

Net loss for the three months ended March 31, 2023	–		–			–			–			–			(361,529	)		(361,529	)

Balance, March 31, 2023	44,535	$	(79,882	)	$	25,118,101		$	(80,000	)	$	25,400		$	(28,159,732	)	$	(3,343,141	)

Conversion of note payables into common stock	–		–			104,378			–			–						104,399

Cancellation of subscription payable	–		–			–			–			(25,400	)		–			(25,400	)

Net loss for the three months ended June 30, 2023	–		–			–			–			–			(396,954	)		(396,954	)

Balance, June 30, 2023	44,535	$	(79,882	)	$	25,222,479		$	(80,000	)	$	–		$	(28,556,686	)	$	(3,661,096	)

See accompanying notes to unaudited financial statements

WYTEC INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months
	Ended June 30,
	2024			2023
Cash flows from operating activities
Net loss	$	(1,951,812	)	$	(758,483	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		16,717			21,689
Stock based compensation		982,985			–
Non-cash lease expense		22,518			12,280
Reversal of stock based compensation		–			(25,400	)
Decrease (increase) in operating assets
Accounts receivable		–			(15,000	)
Inventory		262			(3,607	)
Increase (decrease) in operating liabilities
Accounts payable and accrued expenses		(36,190	)		102,901
Accounts payable, related party		7,100			(25,837	)
Contract liability		(17,276	)		(2,211	)
Operating lease liability		(22,118	)		(12,376	)
Net cash used in operating activities		(997,814	)		(706,044	)

Cash flows from investing activities
Purchase of equipment		(1,899	)		–
Net cash used in investing activities		(1,899	)		–

Cash flows from financing activities
Proceeds from promissory notes, shareholders		–			75,000
Proceeds from issuance of convertible promissory notes		–			665,000
Payments on notes payable		(13,775	)		(14,271	)
Proceeds from exercise of warrants		656,133			–
Net cash provided by financing activities		642,358			725,729

Net increase (decrease) in cash		(357,355	)		19,685
Cash - beginning of period		564,760			93,748
Cash - end of period	$	207,405		$	113,433

Supplemental disclosures:
Interest paid	$	3,626		$	3,720

Non-cash investing and financing activities:
Conversion of accrued interest and note payable into common stock	$	329,779		$	104,399
ROU assets and operating lease obligations recognized	$	140,361		$	–

See accompanying notes to unaudited financial statements

WYTEC INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE A – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”), have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company's Annual Report on Form 10-K filed with the SEC on March 29, 2024. The results for the six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the year ended December 31, 2024. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.

Description of Business: Wytec International, Inc. (“Wytec,” “we,” “our,” “us,” or the “Company”), a Nevada corporation, is a designer and developer of patented small cell technology, which we call the “LPN-16,” and wide area networks designed to support 5G network deployments across the United States. Wytec offers in-building cellular (known as a distributed antenna system, “DAS”) and private Long-term Evolution (“private LTE”) solutions utilizing multiple vendors through Synnex Corporation, a leading distributor and solutions aggregator hosting more than 22,000 technology vendors. Concurrently, Wytec plans to commercialize a multichannel transmission product that integrates in-building cellular, private LTE, and gunshot detection services with its LPN-16 in the third quarter of 2024. Wytec was previously involved in the sale of wired and wireless services, including products, wireless data cards, back-office platform and rate plans to commercial and enterprise clients and was also 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 allowed qualified individuals to own a segment of the “backhaul” infrastructure of Wytec’s city-wide business deployment.

Basis of Accounting: The accompanying financial statements have been prepared by the Company’s management in accordance with U.S. GAAP and applied on a consistent basis.

Revenue Recognition. Revenue is recognized by applying the following five steps: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation.

The Company earns revenues from contracts with customers for sales and installation of cellular enhancement equipment and 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. Revenue from the installation of systems, which management believes have an alternative use, is recognized upon customer acceptance. This assessment, at contract inception, is 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. 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. During the six months ended June 30, 2024 and 2023, all sales and installation revenue was recognized when the installation was completed, per Company policy.

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 representative of the pattern of delivery on the Company’s obligation under these agreements.

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.

Sales tax is recorded on a net basis and excluded from revenue.

Inventory: Inventory is stated at the lower of cost or selling price less costs to complete and sell. Specific identification is used to track inventory and record cost of goods sold when the inventory is sold.

Operating Leases Right-of-use Assets and Operating Lease Obligations: 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.

Stock Based Compensation: The Company measures stock-based compensation expense for stock awards at the grant date, based on the fair value-based measurement of the award, and the expense is recorded over the related service period, generally the vesting period, net of estimated forfeitures. The Company calculates the fair value-based measurement of warrants using the Black-Scholes valuation model and the simplified method and recognizes expense using the straight-line attribution approach.

Estimating the fair value of share-based awards requires the input of subjective assumptions, including the estimated fair value of the Company’s common stock, the expected life of the warrants and stock price volatility. The fair value of the Company’s common stock is determined by the Board reasonably and in good faith with an independent valuation review, which requires judgmental inputs and assumptions such as cash flow projections, peer company comparisons, market data, growth rates and discount rate.

The expected term of the warrant is estimated using the contractual life as the Company has no historical information from which to develop reasonable expectations about future exercise patterns. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of warrants. The risk-free rate is based on the U.S. Treasury yield curve commensurate with the expected term of the option. The expected dividend yield is 0% because the Company has not historically paid, and does not expect, for the foreseeable future, to pay a dividend on its common stock.

Cost Method Investment: Investments made by the Company are currently classified as cost method investment, or investments that do not hold any significant influence or control and do not have a readily-determinable fair value. As the investment does not have a readily-determinable fair value and as the investment is not into an investment fund, the measurement alternate approach, in accordance with ASC 321, is used to measure the fair value of the investment. The measurement alternate approach is defined as cost, less impairment, adjusted (increased or decreased) for information about fair value of the investment from observable price changes, whenever those occur.

NOTE B – GOING CONCERN

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $33,061,026 at June 30, 2024, and have reported negative cash flows from operations. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months from the date of this report. These conditions 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 placements of equity and convertible debt. Management expects to continue to seek additional funding through private or public sources. 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 substantial doubt that the Company will be able to continue as a going concern for a period of one year from the filing of these financial statements. Managements’ plan is to raise additional funding through a capital raise associated with a public offering and/or additional private capital raises.

The 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.

As of June 30, 2024, our cash balance was $207,405. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, including revenue from our installation contracts with the Texas school districts, private placements of our capital stock, exercise of warrants, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that same period, but do not anticipate generating sufficient revenues to meet our working capital requirements. Consequently, we intend to attempt to find sources of additional capital in the future to fund our growth and expansion through additional equity or debt financing or credit facilities. There is no assurance that we will be able to meet our working capital requirements through the private placement of equity or debt or from any other source. We estimate that we will need approximately $3,100,000 of capital or financing over the next twelve months to fund our planned operations.

NOTE C – REVENUE AND ACCOUNTS RECEIVABLE

The Company invoices customers and recognizes accounts receivable in an amount it expects to receive from the customer. The Company has contracted payment terms with its customer of net 30 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

Schedule of timing of revenue recognition
	For the Three Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2024		2023		2024		2023
Point in Time	$	15,950	$	16,500	$	20,900	$	30,500
Over Time		9,564		6,311		19,212		12,720
	$	25,514	$	22,811	$	40,112	$	43,220

The Company earns revenues from in-building cellular systems and network services. Revenues from the sale and installation of in-building cellular systems, including fixed wireless, SmartDAS, and 4G LTE, totaled $15,950 and $16,500 during the three months ended June 30, 2024 and 2023, respectively, and $20,900 and $30,500 during the six months ended June 30, 2024 and 2023, respectively. The contracts for the sale of in-building cellular systems generally include the performance obligation to sell and install (including testing, commissioning and integration services) equipment. The amount of revenue earned related to the sales of equipment was $8,950 and $7,000 during the three months ended June 30, 2024 and 2023, respectively, and $11,200 and $12,500 during the six months ended June 30, 2024 and 2023, respectively. The amount of revenue earned related to installation and other services was $7,000 and $9,500 during the three months ended June 30, 2024 and 2023, respectively, and $9,700 and $18,000 during the six months ended June 30, 2024 and 2023, respectively. 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 $9,564 and $6,311 during the three months ended June 30, 2024 and 2023, respectively, and $19,212 and $12,720 during the six months ended June 30, 2024 and 2023 respectively. Network service revenues are recognized each month as services are rendered.

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 June 30, 2024 that the Company expects to recognize over the next year is $4,118.

The Company is under no obligation and is not in the practice of providing customers with returns, rebates, discounts, or refunds. The Company, accordingly, does not recognize these obligations at the time of revenue recognition. The Company may receive future consideration from customers who enter into support agreements. 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.

NOTE D – INVESTMENT IN LIMITED LIABILITY COMPANY

The Company made an investment into another company in the amount of $600,000 during the year ended December 31, 2023. The investment is classified as a cost method investment as the fair value of the investment is not readily determinable. The investment is valued as cost, less impairment, adjusted for any observable price changes. For the six months ended June 30, 2024, there were no distributions received and the Company determined that no impairment existed at June 30, 2024.

NOTE E – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Schedule of property and equipment
	June 30,			December 31,
	2024			2023
Telecommunication equipment and computers	$	299,885		$	299,943
Vehicle		23,805			23,805
Office furniture and fixtures		9,029			9,325
Less: Accumulated depreciation		(321,331	)		(306,868	)
	$	11,388		$	26,205

Depreciation expense for the three months ended June 30, 2024 and 2023 was $8,321 and $10,687, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023 was $16,717 and $21,689, respectively.

NOTE F – DEBT

The Company’s debt consists of the following:

Schedule of debt
	June 30,		December 31,
	2024		2023
Notes payable to a financial institution, at 8.75% per annum, with the equipment purchased pledged as collateral and varying due dates through November 2024	$	7,834	$	21,609

Unsecured promissory note payable to a director, of the Company, at 7% per annum, due in February 2025		625,000		625,000

Unsecured promissory note payable to president, at 5% per annum, due in October 2024		10,000		10,000

Secured convertible promissory notes payable to various investors, at 9.5% per annum, due on December 31, 2024		55,000		364,515

Unsecured promissory note payable to a shareholder, at 9.5% per annum, due on December 31, 2024		50,000		50,000

Unsecured promissory note payable to the president of the Company, at 7% per annum, due on September 30, 2024		25,000		25,000

Total	$	772,834	$	1,096,124

In February 2020, we issued a note in the amount of $625,000 bearing simple interest at a rate of 7% per annum to Mr. Christopher Stuart, a director of the Company, initially due in August 2021. The note, as amended, contains a feature that allows the Company to extend the maturity date up to six months, seven times, 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, being fully amortized by year end December 31, 2021. The Company has exercised all seven extensions extending the maturity date of the note to February 13, 2025.

In October 2021, the president of the Company loaned the Company $10,000 pursuant to an unsecured promissory note initially due on October 21, 2022. The note was amended in October 2022 to extend the maturity date to October 21, 2023 and in November 2023 to extend the maturity date to October 21, 2024. The maturity date of the note, as amended, may be extended by an additional six months in the sole discretion of the Company up to two times. The note bears simple interest at a rate of 5% per annum.

In January 2023, the president of the Company loaned the Company $25,000 pursuant to an unsecured promissory note due on March 31, 2024. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to two times. The Company has exercised one extension extending the maturity date of the note to September 30, 2024.

In February 2023, we commenced an offering of up to $25,000,000 of 9.5% secured convertible promissory notes (“2023 Notes”) pursuant to a private placement in accordance with Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “2023 Offering”). The 2023 Notes together with all accrued and unpaid interest will be payable on or before December 31, 2024 and will be secured by a perfected recorded first priority security interest in the Company’s LP-16 patent. If the Company’s common stock is listed on the NASDAQ Capital Markets on or before the maturity date, the outstanding Notes will automatically be converted into shares of the Company’s common stock at a rate equal to the price per share in the public offering. If the Notes have not otherwise been automatically converted into shares of the Company’s common stock, the noteholders (“2023 Noteholders”) will have the option, on or before the maturity date, to convert all or a portion of their outstanding 2023 Notes into shares of the Company’s common stock at a rate equal to $5.00 per share and, immediately upon the conversion, the converting Noteholders will be issued a number of new warrants from the Company equal to the dollar amount of the conversion divided by $5.00 (the “2023 Warrants”). The 2023 Warrants will be exercisable until December 31, 2024 at an exercise price equal to the greater of (i) five dollars ($5.00) or (ii) eighty-five percent (85%) of the 10-day moving average of the Company’s public trading price if the Company’s securities are trading on a public securities trading market. The Company issued a total of $2,289,515 of 2023 Notes pursuant to this offering, which ended in December 2023, including $1,925,000 of which was converted into common stock and 2023 Warrants during the year ended December 31, 2023 and $309,515 of which was converted into common stock and 2023 Warrants during the six months ended June 30, 2024.

NOTE G – 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 in exchange for 40,000 shares of common stock and 40,000 shares of Series B Preferred Stock (which shares automatically converted into 40,000 shares of common stock in April 2022). 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 ended December 31, 2020, 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 properly returned the shares so they may be canceled. As the shares had not been properly 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.

NOTE H – LEASES

Short Term Leases

The Company leased its office space on a month-to-month basis until February 29, 2024. Total lease expense related to this short-term lease was $-0- and $18,300 for the three months ended June 30, 2024 and June 30, 2023, respectively, and $12,200 and $36,600 for the six months ended June 30, 2024 and 2023.

Operating Leases

The Company leases its office space and leased data centers under operating leases. The leases for the Data Centers were cancelled as of June 20, 2023. For the three month period ended June 30, 2024 and 2023, operating lease expense under these lease totaled $19,200 and $2,725 respectively, and for the six months ended June 30, 2024 and 2023, operating lease expense totaled $25,600 and $5,355, respectively.

The remaining weighted average lease term is 1.67 years and the weighted average discount rate is 9.5% as of June 30, 2024.

Future minimum lease payments as of June 30, 2024 are as follows:

Schedule of future minimum lease payments
2025	$	76,400
2026		52,000
Total minimum lease payments		128,400
Less: imputed interest		(10,157	)
Present value of minimum lease payments	$	118,243
Less: current portion of lease obligation		68,054
Long-term lease obligation	$	50,189

NOTE I – WARRANTS

The Company has common stock purchase warrants outstanding at June 30, 2024 to purchase 2,447,022 shares of common stock, all of which are exercisable until various dates through October 11, 2026. The warrants are exercisable at the following amounts and rates: 2,000,000 are exercisable on a cash or cashless basis at an exercise price of $1.00 per share, 42,500 are exercisable on a cash or cashless basis at an exercise price of $5.00 per share, 67,166 are exercisable for cash at an exercise price of $5.00 per share and 337,356 are exercisable for cash at an exercise price of the greater of (i) $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 estimated the fair value of the underlying common stock by utilizing the discounted cash flow method and the prior transaction method approaches and determined a fair value of $5.00. 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 through October 11, 2026, volatility estimates between 28.30% to 29.69% and risk-free rates 4.70% to 5.00% in the period.

During June 2023, the Company issued 10,879 common stock purchase warrants (“Warrants”) pursuant to its offering of up to up to $25,000,000 of 9.5% secured convertible promissory notes (“Notes”) pursuant to a private placement in accordance with Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “2022 Offering”), and 10,000 2023 Warrants along with 20,879 shares of common stock upon the conversion of a total of $104,386 of Notes, 2023 Notes, and accrued interest. The total value of the Warrants and 2023 Warrants, which $14,667 and was recorded in additional paid in capital.

During the third quarter of 2023, the Company issued 32,873 Warrants along with 32,873 shares of common stock upon the conversion of $164,394 of Notes and accrued interest. The total value of the Warrants was $13,597 and was recorded in additional paid in capital.

During October 2023, the Company issued 25,000 common stock purchase warrants as compensation to the director of operations of the Company. The total cost of the warrants was $38,611, which was recorded in additional paid in capital and which was reduced by $1,487 during the quarter ended March 31, 2024 because the warrants were amended and restated in February 2024 to correct the expiration date to October 11, 2026.

During the fourth quarter of 2023, the Company issued 38,716 common stock purchase warrants, 47,765 Warrants, and 385,336 2023 Warrants along with 472,375 shares of common stock upon the conversion of a total of $2,342,621 of promissory notes, Notes, 2023 Notes, and accrued interest. The total value of the common stock purchase warrants, Warrants, and 2023 Warrants was $37,520, which was recorded in additional paid in capital.

During December 2023, the Company issued 71,233 common stock purchase warrants along with 71,233 shares of common stock upon the conversion of a convertible promissory note in the principal amount of $320,242 (the “New ERI Note”) bearing interest at a rate of 9.5% per annum, due and payable on or before December 31, 2023, owned by Eagle Rock Investments, L.L.C., a limited liability company of which a majority of the outstanding equity is owned by Christopher Stuart, a director of the Company (“ERI”), or a total of $356,167 of principal and accrued interest. The total value of the common stock purchase warrants was $12,265, which was recorded as additional paid in capital.

During December 2023, the Company issued 85,784 common stock purchase warrants along with 85,784 shares of common stock upon the conversion of a convertible promissory note in the principal amount of $385,658 (the “New Stuart Note”) bearing interest at a rate of 9.5% per annum, due and payable on or before December 31, 2023, owned by Mr. Christopher Stuart, a director of the Company, or a total of $428,921 of principal and accrued interest. The total value of the common stock purchase warrants was $14,770, which was recorded as additional paid in capital.

In December 2023, the Company extended the expiration date of all warrants expiring on December 31, 2023 to January 31, 2024. Due to the modification of the warrants, the difference between the fair value of the modified warrants and the fair value of the warrants immediately before modification was recorded as a warrant expense, which was only applicable to service warrants. Total incremental increase in the warrants was $3,471, which was recorded as stock compensation expense and is included in the general and administrative expenses in the accompanying statement of operations for the year ended December 31, 2023.

During December 2023, the Company issued a total of 121,173 shares of the Company’s common stock upon the exercise of 8,092 Warrants, 100,864 2023 Warrants, and 12,217 other common stock purchase warrants by several investors at an exercise price of $5.00 per share or a total of $605,866 in proceeds.

During December 2023, the Company issued a total of 20,893 shares of the Company’s common stock upon the cashless exercise of a total of 37,700 common stock purchase warrants by several investors.

In January 2024, the Company extended the expiration date of 2,000,000 common stock purchase warrants owned by the president of the Company, to December 31, 2025. Due to the modification of the warrants, the difference between the fair value of the modified warrants and the fair value of the warrants immediately before the modification was recorded as a warrant expense, which was only applicable to service warrants. The total incremental increase in the warrants was $22,772.

During the first quarter of 2024, the Company issued 65,956 2023 Warrants along with 65,956 shares of common stock upon the conversion of $309,515 of 2023 Notes and $20,264 of accrued interest. The total value of the 2023 Warrants was $69,818 and was recorded in additional paid in capital.

In January 2024, the Company issued a total of 52,409 shares of the Company’s common stock upon the cashless exercise of 94,607 common stock purchase warrants by Mr. Christopher Stuart, a director of the Company. Subsequently, the Company determined the fair value utilized to determine the number of shares issued was not indicative of recent common stock transactions. Accordingly, the Company recorded additional compensation expense of $262,045.

In January 2024, the Company issued a total of 28,738 shares of the Company’s common stock upon the cashless exercise of 51,875 common stock purchase warrants by ERI. Subsequently, the Company determined the fair value utilized to determine the number of shares issued was not indicative of recent common stock transactions. Accordingly, the Company recorded additional compensation expense of $143,690.

In January 2024, the Company issued a total of 119,943 shares of the Company’s common stock upon the cashless exercise of 179,272 common stock purchase warrants by thirteen investors. Subsequently, the Company determined the fair value utilized to determine the number of shares issued was not indicative of recent common stock transactions. Accordingly, the Company recorded additional compensation expense of $368,465.

In January 2024, the Company issued a total of 59,504 shares of the Company’s common stock upon the exercise of 5,731 Warrants, 41,200 2023 Warrants and, 12,573 other common stock purchase warrants by a total of six investors at an exercise price of $5.00 per share for total proceeds of $297,520.

In January 2024, the Company extended the expiration date of 85,784 common stock purchase warrants owned by Mr. Christopher Stuart and 71,233 common stock purchase warrants owned by ERI from January 31, 2024 to December 31, 2024.

In May 2024, the Company issued 800 shares of the Company’s common stock upon the exercise of 800 2023 Warrants by one investor at an exercise price of $5.00 per share for total proceeds of $4,000.

In May 2024, the Company made an offer to existing warrant holders who obtained their warrants upon the conversion of their 9.5% convertible promissory notes pursuant to which such warrant holders who agreed, on or before May 31, 2024, to exercise at least 50% of their warrants on or before June 30, 2024 would receive (i) an extension of the expiration date of the balance of such warrants to December 31, 2025 (ii) removal of the following language related to the exercise price of the warrants “provided, that ten (10) days after the common stock of the Company commences trading on the NASDAQ Capital Market or equivalent or higher public securities trading market (the “Measurement Date”), the amount per Share payable to exercise this Warrant shall thereafter be the greater of (i) $5.00 or (ii) 85% of the average closing price that is quoted on said trading market (if more than one, the one with the then highest trading volume), during the ten (10) consecutive trading days immediately prior to the Measurement Date” `and (iii) payment of the legal expense to remove the 144 legend, after the applicable holding period, for both the shares issuable upon the exercise of such warrants and the shares issued upon the conversion of their 9.5% convertible promissory notes. Pursuant to this offer, in May 2024, the Company issued a total of 71,723 shares of the Company’s common stock upon the exercise of 35,306 2023 Warrants and 35,617 other common stock purchase warrants by a total of eight investors, including ERI, at an exercise price of $5.00 per share for total proceeds of $354,615 and extended the expiration date to December 31, 2025 and adjusted the exercise price to $5.00 per share of 35,306 2023 Warrants and 35,616 other common stock purchase warrants. The fair value of the modifications to the warrants was $50,553 and has been recorded as additional paid-in-capital, net of equity issuance costs of the same amount which resulted in a net effect of zero.

The following is a summary of activity and outstanding common stock warrants:

Schedule of warrant activity
	# of Warrants
Balance, December 31, 2023		2,925,596

Warrants granted		65,956
Warrants exercised		(456,981	)
Warrants expired/cancelled		(87,549	)

Balance, June 30, 2024		2,447,022

Exercisable, June 30, 2024		2,447,022

As of June 30, 2024, the outstanding and exercisable warrants have a weighted average remaining term of 0.51 years and have an estimated $8,000,000 aggregate intrinsic value. The intrinsic value is calculated by taking the difference between the exercise price and the estimated fair market value of the stock at June 30, 2024 multiplied by the number of warrants.

NOTE J – STOCKHOLDERS’ EQUITY

During the second quarter of 2023, the Company issued a total of 20,879 shares of the Company’s common stock along with 20,879 common stock purchase warrants upon the conversion of $50,000 of Notes, $50,000 of 2023 Notes, and $4,399 of accrued interest. The total value of the common stock purchase warrants was $17,792, which was recorded as additional paid in capital.

During the second quarter of 2023, the Company cancelled the 5,000 subscription payable shares owed pursuant to the Consulting Agreement. The subscription payable shares were originally recorded upon the signing of that certain consulting agreement by and between the Company and a consultant, dated October 1, 2021 (the “Consulting Agreement”), but were never issued. Subsequently, the Company entered into the recession agreement with the consultant (the “Recession Agreement”) which rescinded and terminated the Consulting Agreement. Accordingly, the subscription payable shares have been removed.

During the third quarter of 2023, the Company issued a total of 32,423 shares of common stock and 32,423 Warrants upon the conversion of $150,000 of Notes and $14,367 of accrued interest. The total value of the Warrants was $13,597, which was recorded as additional paid in capital.

During the fourth quarter of 2023, the Company issued a total of 629,392 shares of common stock, 48,323 Warrants, 385,336 2023 Warrants, and 195,733 other common stock purchase warrants upon the conversion of $212,000 of Notes, $1,875,000 of 2023 Notes, the $320,242 New ERI Note, the $385,658 New Stuart Note, $180,000 of other notes, and $168,391 of accrued interest. The total value of the Warrants, 2023 Warrants, and other common stock purchase warrants was $356,872, which was recorded as additional paid in capital.

During the fourth quarter of 2023, the Company issued a total of 121,173 shares of common stock upon the exercise of 8,092 Warrants, 100,864 2023 Warrants, and 12,217 other common stock purchase warrants at an exercise price of $5.00 per share for total proceeds of $605,866.

During December 2023, the Company issued a total of 20,893 shares of the Company’s common stock upon the cashless exercise of 37,700 common stock purchase warrants by several investors.

During December 2023, the Company issued a total of 268,295 shares to the Company’s directors as compensation valued at $1,383,493 for current and past services performed.

In May 2024, the Company issued 800 shares of the Company’s common stock upon the exercise of 800 2023 Warrants by one investor at an exercise price of $5.00 per share for total proceeds of $4,000.

In May 2024, in conjunction with the Company’s offer to existing warrant holders described in Note I, the Company issued a total of 70,923 shares of the Company’s common stock upon the exercise of 35,306 2023 Warrants and 35,617 other common stock purchase warrants by a total of eight investors, including ERI, at an exercise price of $5.00 per share for total proceeds of $354,615.

NOTE K – RELATED PARTY TRANSACTIONS

The Company has an accounts payable balance owed to Richardson & Associates in the amount of $253,772 as of June 30, 2024, and $253,772 as of December 31, 2023. The Company incurred expense of $0 and $7,188 with Richardson & Associates during the six months ended June 30, 2024 and 2023, respectively. Mark Richardson is the owner of Richardson & Associates and he was a director of Wytec International, Inc. from September 2019 until November 2023.

In 2021, ERI loaned the Company a total of $250,000 and made a line of credit in the amount of $250,000 available to the Company until December 31, 2022. In June 2022, ERI loaned the Company an additional $50,000 pursuant an unsecured promissory note. In October 2022, we entered into the ERI Agreement with ERI, pursuant to which ERI exchanged the two above referenced promissory notes ($300,000 principal and $20,242 accrued but unpaid interest) for a convertible promissory note in the principal amount of $320,242. The line of credit also expired with no amounts drawn upon it. The New ERI Note, along with associated accrued interest, was converted into shares of common stock and common stock purchase warrants during the year ended December 31, 2023 for a total of 71,233 shares and 71,233 warrants. In May 2024, ERI exercised 35,617 warrants in accordance with the Company’s offer to existing warrant holders described in Note I for a total of 35,617 shares and the expiration date and exercise price of the remaining 35,616 warrants were adjusted to December 31, 2025 and $5.00 per share, respectively.

In August 2023, ERI purchased $100,000 of 2023 Notes. This 2023 Note, along with associated accrued interest, was converted into shares of common stock and common stock purchase warrants during the year ended December 31, 2023 for a total of 20,640 shares and 20,640 2023 Warrants. In May 2024, ERI exercised 10,320 2023 Warrants in accordance with the Company’s offer to existing warrant holders described in Note I for a total of 10,320 shares and the expiration date and exercise price of the remaining 10,320 2023 Warrants were adjusted to December 31, 2025 and $5.00 per share, respectively.

In January 2022, the Company issued 40,000 warrants to purchase up to 40,000 shares of Wytec’s common stock on a cash or cashless basis to ERI in consideration for making the $250,000 line of credit available to Wytec. In January 2024, these warrants were exercised on a cashless basis for a total of 22,159 shares.

In February 2020, Mr. Christopher Stuart, a director of the Company, purchased 12.5 units, each unit consisting of $50,000 7% promissory notes and five thousand common stock purchase warrants pursuant to a prior private placement made by the Company. The accrued interest on the 7% promissory note was credited to ERI and converted into units every six months at the conversion rate of $5.00 per unit, each unit consisting of one share of common stock and one common stock purchase warrant, pursuant to the Company’s prior private placement of units or a total of 13,125 units through August 31, 2021. In December 2021, ERI exercised 8,750 of these common stock purchase warrants at an exercise price of $5.00 per share or a total $43,750 for 8,750 shares of the Company’s common stock. The note, as amended, contains a feature that allows the Company to extend the maturity date up to six months up to seven times, in the Company’s sole discretion. The Company has exercised all seven extensions extending the maturity date of the note to February 13, 2025.

In February 2022, Mr. Stuart purchased for $175,000 a unit, consisting of (i) a $175,000 7% promissory note with a maturity date of August 31, 2023 and (ii) 17,500 common stock purchase warrants exercisable on a cash or cashless basis until December 31, 2024 at an exercise price of $5.00 per share, offered by the Company in its private placement pursuant to Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended, commenced by the Company in February 2022. In April 2022, Mr. Stuart loaned the Company $100,000 pursuant to an unsecured promissory note and, in September 2022, Mr. Stuart loaned the Company an additional $100,000 pursuant to an unsecured promissory note. In October 2022, we entered into the Stuart Agreement with Mr. Stuart pursuant to which Mr. Stuart exchanged the three above referenced promissory notes ($375,000 principal and $10,658 accrued but unpaid interest) for a convertible promissory note in the principal amount of $385,658. See NOTE E – DEBT for a description of the Stuart Agreement. This New Stuart Note, along with associated accrued interest, was converted into shares of common stock and common stock purchase warrants during the year ended December 31, 2023 for a total of 85,784 shares and 85,784 warrants.

In November and December 2022, we borrowed a total of $150,000 from Mr. Stuart pursuant to unsecured convertible promissory notes, as amended in December 2023, to allow us to extend the maturity date of the notes by up to three additional six month periods instead of two additional six month periods as set forth in the original notes in consideration for permitting the optional conversion of the notes and possible issuance of warrants as below described. The notes bear simple interest at a rate of 7% per annum and initially matured on June 30, 2023. The Company exercised one extension for each note extending the maturity date of the notes to December 31, 2023. In accordance with the December 2023 amendments, Mr. Stuart has the option to elect at any time until the maturity date to convert all or any portion of the outstanding principal and accrued interest on these promissory notes into shares of our common stock at a rate equal to $5.00 per share and immediately upon the conversion, Mr. Stuart will be issued a number of new warrants from Wytec equal to the dollar amount of the conversion divided by $5.00. The warrants will be exercisable on a cash or cashless until December 31, 2023 at an exercise price equal to the greater of (i) five dollars ($5.00) or (ii) eighty-five percent (85%) of the 10-day moving average of Wytec’s public trading price if Wytec’s securities are trading on a public securities trading market. These notes, along with associated accrued interest, were converted into shares of common stock and common stock purchase warrants during the year ended December 31, 2023 for a total of 32,107 shares and 32,107 warrants. In January 2024, these warrants were exercised on a cashless basis for a total of 17,786 shares.

In August 2023, Mr. Stuart purchased $100,000 of 2023 Notes. This 2023 Note, along with associated accrued interest, was converted into shares of common stock and common stock purchase warrant during the year ended December 31, 2023 for a total of 20,640 shares and 20,640 warrants.

In January 2024, a total of 74,375 warrants were exercised on a cashless basis by Mr. Stuart and ERI for a total of 41,202 shares.

In September 2022, the president of the Company loaned the Company $25,000 pursuant to an unsecured promissory note initially due on March 30, 2023. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to two times. The Company has exercised both extensions extending the maturity date of the note to March 30, 2024. This note, along with associated accrued interest, was paid back during the year ended December 31, 2023.

In January 2024, the Company extended the expiration date of 2,000,000 common stock purchase warrants owned by the president of the Company to December 31, 2025.

In October 2022, the president of the Company entered into an agreement with the Company, as amended in November 2022, and as amended as described in Note N, to exchange 1,000 shares of the Company’s Series C Preferred Stock owned by him for 3,000,000 shares of the Company’s common stock. The exchange will close on the earlier of the effective date of the initial public offering of the Company’s common stock on a public trading market or October 6, 2025.

In January 2023, the president of the Company loaned $25,000 to the Company pursuant to an unsecured promissory note initially due on March 31, 2024. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months September 30, 2024.

The Company has an accounts payable balance owed to Mr. Robert Cook in the amount of $7,100 as of June 30, 2024 for prior consulting services.

NOTE L – CUSTOMER CONCENTRATIONS

The Company derived $35,746, 89% and $41,967, 97%, of revenue from three customers in the six months ended June 30, 2024 and June 30, 2023, respectively. 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.

NOTE M – COMMITMENTS AND CONTINGENCIES

We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceedings that management believes could have a material adverse effect on our financial statements.

At June 30, 2024 and December 31, 2023 our other payable balance of $335,000 consists of amounts billed and collected before services related to Links previously sold by the Company had been completed and was reclassified from deferred revenue to other payable due to the Company’s exiting the business of installing Links. The Company intends to relieve the remaining amount of this liability through a combination of exchanges for common stock and cash.

In October 2022, the president of the Company entered into an agreement with the Company, as amended in November 2022 and as amended as described in Note N, to exchange 1,000 shares of the Company’s Series C Preferred Stock owned by him for 3,000,000 shares of the Company’s common stock. The exchange will close on the earlier of the effective date of the initial public offering of the Company’s common stock on a public trading market or October 6, 2025.

See Note C in regards to commitments related to contracts with customers. See Note H in regards to commitments related to leases.

NOTE N – SUBSEQUENT EVENTS

In July 2024, the Company issued a total of 18,750 shares of the Company’s common stock to the Company’s five directors as compensation for services provided to the Company during the second quarter of 2024, valued at a total of $93,750.

In July 2024, the Company issued 25,000 common stock purchase warrants as compensation to the director of operations and corporate secretary of the Company. The total cost of the warrants was $20,944, which was recorded in additional paid in capital.

In July 2024, the Company issued 25,000 common stock purchase warrants as compensation to a consultant of the Company. The total cost of the warrants was $20,944, which was recorded in additional paid in capital.

In July 2024, we commenced an offering of up to $10,000,000 of 9.5% secured convertible promissory notes (“2024 Notes”) pursuant to a private placement in accordance with Rule 506(c) of Regulation D of the Securities Act of 1933, as amended. The 2024 Notes together with all accrued and unpaid interest will be payable on or before December 31, 2025 and will be secured by a perfected recorded subordinate security interest in the Company’s LP-16 patent. If the Company’s common stock is listed on the NASDAQ Capital Markets on or before the maturity date, the outstanding 2024 Notes will automatically be converted into shares of the Company’s common stock at a rate equal to the price per share in a public offering or, in the event of a direct listing of the Company’s common stock, the reference price on the closing date of the listing. If the 2024 Notes have not otherwise been automatically converted into shares of the Company’s common stock, the noteholders will have the option, on or before the maturity date, to convert all or a portion of their outstanding 2024 Notes into shares of the Company’s common stock at a rate equal to $5.00 per share and, immediately upon the conversion, the converting noteholders will be issued a number of new warrants from the Company equal to the dollar amount of the conversion divided by $5.00. These warrants will be exercisable until December 31, 2025 at an exercise price equal to the greater of (i) five dollars ($5.00) or (ii) eighty-five percent (85%) of the 10-day moving average of the Company’s public trading price if the Company’s securities are trading on the NASDAQ Capital Markets. As of the date of this report, the Company has issued a total of $50,000 of 2024 Notes pursuant to this offering.

In July 2024, the Company amended that certain exchange agreement with the president of the Company, dated October 6, 2022, as amended in November 2022, in order to adjust the closing date set forth in Section 1(i) of the exchange agreement from the effective date of the initial public offering of the Company’s common stock on the NASDAQ Capital Markets to the effective date of the initial public offering of the Company’s common stock on a public trading market.

Effective July 30, 2024, the Company’s common stock was accepted for trading on the OTCQB.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about Wytec International, Inc. (“Wytec,” “Company,” “us,” “we” or “our”), the industry in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts. These statements include, in particular, statements about our plans, strategies and prospects. For example, when we use words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” and variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause the Company’s actual results to be materially different from any future results expressed or implied by the Company in those statements. The most important factors that could prevent the Company from achieving its stated goals include, but are not limited to, the following:

	(a)	volatility or decline of our stock price;

	(b)	potential fluctuation in quarterly results;

	(c)	failure to earn revenues or profits;

	(d)	inadequate capital to continue our business;

	(e)	insufficient revenues to cover operating costs;

	(f)	barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;

	(g)	dilution experienced by our shareholders in their ownership of the Company because of the issuance of additional securities by us, or the exercise of warrants or conversion of outstanding convertible securities;

	(h)	inability to complete research and development of our technology with little or no current revenue;

	(i)	lack of demand for our products and services;

	(j)	loss of customers;

	(k)	rapid and significant changes in markets;

	(l)	technological innovations causing our technology to become obsolete;

	(m)	increased competition from existing competitors and new entrants in the market;

	(n)	litigation with or legal claims and allegations by outside parties;

	(o)	inability to start or acquire new businesses, or lack of success of new businesses started or acquired by us, if any;

	(p)	inability to effectively develop or commercialize our technology; and

	(q)	inability to obtain patent or other protection for our proprietary intellectual property.

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

The following discussion should be read in conjunction with our unaudited financial statements and notes to those statements. In addition to historical information, the following discussion and other parts of this annual report contain forward-looking statements and information that involves risks and uncertainties.

Overview of Current Operations

Wytec International, Inc., a Nevada corporation (“Wytec,” the “Company,” “we,” “us,” or “our”), is a designer and developer of small cell technology and wide area networks designed to support 5G network deployments across the United States. Currently, we offer in-building cellular (known as a distributed antenna system, “DAS”) and private Long-term Evolution “private LTE” solutions utilizing multiple vendors through a channel agreement with Synnex Corporation, a leading distributor and solutions aggregator hosting more than 22,000 technology vendors across the world. Concurrently, Wytec is the owner of patented small cell technology, which we call the “LPN-16,” designed to support dense citywide 5G network coverage. Small cell technology is purported by PricewaterhouseCoopers International Limited to be the key component to 5G deployment.

In September 2023, we engaged Trabus Technologies to begin Wytec’s artificial intelligence (“AI”), machine learning (“ML”), and blockchain software development in preparation for a series of state and federal pilot projects to be conducted across the United States which are expected to commence in the third quarter of 2024. In October 2023, Wytec filed two provisional patent applications with the United States Patent and Trademark Office (“USPTO”) to enhance its LPN-16 small cell to include AI, ML, and blockchain technologies capable of supporting advanced multi-sensor technology.

In October 2023, Wytec signed a development agreement with Lemko Corporation to manufacture the updated version of our LPN-16 with AI, ML, and blockchain technologies. This agreement was signed in conjunction with our development of an integrated solution with the Nextivity Corporation (“Nextivity”) to enhance the in-building solution, utilizing Nextivity’s Cel-Fi, we currently offer to the over 190 Independent School District (“ISD”) members of the Central Texas Purchasing Alliance (“CTPA”). Wytec plans to include gunshot and drug detection solutions in conjunction with its in-building cellular services as a part of a pilot project offered to over 40 of the CTPA members requesting to be included in the pilot program.

We expect 5G to have a transformative impact on the economy and we believe that 5G citywide deployments will rely substantially on small cell technology to facilitate this impact. We believe our LPN-16 small cell can solve many of the long-term challenges faced by operators needing access to implement their 5G initiatives. It can also assist cities challenged with on-going technology upgrades, network growth demands, political hurdles, and new business models needed to realize the benefits of a 5G network. In addition to aligning with technical and governmental issues, the LPN-16 is designed to meet the standards for 5G deployment and, for operator needs, adheres to the Federal Communications Commission (“FCC”) policy initiatives addressing public safety and First Responder initiatives. Specifically, the FCC’s Report and Order 14-153, Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies, adopts rules to help spur wireless broadband deployment by facilitating the sharing of wireless transmission equipment using “neutral host” functionality to simultaneously support multiple providers. The LPN-16 was specifically designed to support neutral host features and performance. The FCC’s goal of “shared used” and “neutral host” seeks to expand coverage and capacity more quickly, reduce costs, and promote access to infrastructure which reduces barriers to deployment and incentivize the sharing of resources, rather than relying on new builds for every stakeholder, thereby safeguarding environmental, aesthetic, historic and local land-use values.

We have implemented an aggressive intellectual property strategy and continue to pursue patent protection for new innovations. In addition to the LPN-16 covered by our current patent, we have identified additional upgrades and additions to the LPN-16 which further tie it to the goals and timelines of Wytec’s 5G development business model, FCC policy initiatives, and customer business usage which we believe could lead to additional patentable property. We intend to file for patent protection on these developments. Our strategy is to continually monitor the costs and benefits of our patent applications and pursue those that will best protect our business and expand the core value of the Company.

We have recruited and hired a seasoned management team with both private and public company experience and relevant technical and industry experience to develop and execute our operating plan. In addition, we have identified key engineering resources for intellectual property development, antenna development, and hardware, software, and firmware engineering, as well as integration and testing that we believe will allow us to continue to expand our technology and intellectual property.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments, particularly those related to the determination of the estimated recoverable amounts of trade accounts receivable, impairment of long-lived assets, revenue recognition and deferred tax assets. We believe the following critical accounting policies require more significant judgment and estimates used in the preparation of the financial statements.

Revenue Recognition. Wytec International, Inc. follows the revenue standards of Financial Accounting Standards Board Update No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation.

Our contracts for the sale of Cel-Fi systems generally include the performance obligation to sell and install (including testing, commissioning and integration services) equipment. The performance obligation is deemed satisfied once the equipment has been installed, placed in service and customer signs off on their acceptance, at a point in time.

Network service revenues are recognized each month as services are rendered.

The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. At June 30, 2024, the Company has estimated no product warranty accrual given the Company’s de minimis historical financial warranty experience.

Revenue is recorded and recognized when installation is complete. Maintenance and monitoring rates are pre-set based upon the building’s square footage. Cost of sales includes all equipment and labor that is connected to a project and all other costs are general and administrative. Laredo Independent School District projects are subject to contracted rates.

Warrants: The Company estimates and applies its judgement when determining the inputs to the Black Scholes calculation that is used to calculate the expense for the warrants issued. The volatility used is based on historical volatilities of selected peer group companies. Management estimated the fair value of the underlying common stock by utilizing the discounted cash flow method and prior transaction method approaches. 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 issuance.

Results of Operations for the Three and Six months Ended June 30, 2024 and 2023

Revenue for the three months ended June 30, 2024 and 2023 was $25,514 and $22,811, respectively. The increase in revenues of $2,703 or 12% was primarily due to increase in revenue from our Cel-Fi systems. Revenues for the six months ended June 30, 2024 and 2023 was $40,112 and $43,220, respectively. The decrease in revenues of $3,108 or 7% was primarily due to decrease in revenues from our in-building cellular systems.

Cost of revenues for the three months ended June 30, 2024 and 2023 was $24,690 and $28,431, respectively. This decrease of $3,741, or 13%, was primarily due to decrease in costs incurred related to the sales of our in-building cellular systems. Cost of revenues for the six months ended June 30, 2024 and 2023 was $24,953 and $35,946, respectively. This decrease of $10,933, or 31%, was primarily due to decrease in costs incurred related to the sales of our in-building cellular systems.

General and administrative expenses were $427,364 for the three months ended June 30, 2024 compared to $322,168 for the three months ended June 30, 2023, resulting in an increase of $105,196 or 33%. Contributing factors to the increase include an increase in subscription fees of $28,754 and an increase in stock compensation of $119,150 which was offset by a decrease in payroll by $7,079 and a decrease in professional and consulting fees by $34,425 for the three months ended June 30, 2024. General and administrative expenses were $1,754,580 for the six months ended June 30, 2024 compared to $638,984 for the six months ended June 30, 2023, resulting in an increase of $1,115,596 or 176%. Contributing factors to the increase include an increase in professional and consulting fees of $142,481 and an increase in stock compensation of $1,008,385 which was offset by a decrease in payroll by $29,948 and decrease in marketing and advertising by $21,043 for the six months ended June 30, 2024.

We estimate that we will need approximately $3,100,000 of capital or financing over the next twelve months to fund our planned operations, which we plan to satisfy as described below under “Satisfaction of our Cash Needs for the Next 12 Months.”

We anticipate that we will incur operating losses in the next twelve months. Our revenue is not expected to exceed our investment and operating costs in the next twelve months. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment and acquisitions, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.

Cash Flow from Operating Activities

Cash flows used in operating activities during the six months ended June 30, 2024 were $997,814 compared to $706,044 during the six months ended June 30, 2023. This increase of $291,770 was primarily due to increased research and development expenditures during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Cash Flow from Investing Activities

Cash flows used by investing activities during the six months ended June 30, 2024 were $1,899 compared to the cash flows used by investing activities of $-0- during the six months ended June 30, 2023. Capital expenditures totaled $1,899 and $-0- during the six months ended June 30, 2024 and June 30, 2023, respectively.

Cash Flow from Financing Activities

Cash flows provided by financing activities during the six months ended June 30, 2024 were $642,358 compared to $725,729 during the six months ended June 30, 2023. These receipts represent proceeds from the sale of shares of the Company’s common stock and common stock purchase warrants, and the issuance of debt.

Satisfaction of Our Cash Obligations for the Next 12 Months

As of June 30, 2024, our cash balance was $207,405. Our plan for satisfying our cash requirements for the next twelve months is through a combination of sales-generated income, including revenue from our installation contracts with the Texas school districts, private placements of our capital stock, exercise of warrants, third party financing, and/or traditional bank financing. There is no assurance that we will be able to meet our working capital requirements through the private placement of equity or debt or from any other source.

Other Funding Arrangements

On September 28, 2023, (the “Effective Date”), we entered into a Share Purchase Agreement (the “SPA”) with Gem Global Yield LLC SCS (“GEM” or the “Purchaser”) and Gem Yield Bahamas Limited (“GYBL”). Pursuant to the SPA, we may sell to the Purchaser from time to time up to $100,000,000 (the “Aggregate Limit”) in shares of our common stock during the 36 month period after the first day on which the Company’s common stock trades on a nationally recognized United States stock exchange or any other exchange platform in the world (the “Public Listing Date”). Pursuant to the SPA, after the Public Listing Date, the Company may issue a draw down notice pursuant to which the Company may sell the Purchaser an amount of shares that shall not exceed 400% of the average daily trading volume for the 30 days immediately preceding the date on which the Company delivers the draw down notice. The per share price shall equal 90% of the average applicable Daily Closing Price (as defined in the SPA) of the Company’s common stock during the applicable Draw Down Pricing Period (as defined in the SPA). Notwithstanding the foregoing, within five trading days after the Public Listing Date, the Company may issue a draw down notice for an amount up to $10,000,000 of the Aggregate Limit. Unless earlier terminated as provided in the SPA, the SPA terminates automatically on the earliest of (i) thirty-six (36) consecutive months after the Public Listing Date; (ii) thirty-six (36) months from the Effective Date (as may be extended as provided in the SPA), and (iii) the date the Purchaser shall have purchased the Aggregate Limit.

Pursuant to the SPA, in consideration for these services, we agreed to pay GYBL the following consideration: (i) a commitment fee equal to two (2) percent of the Aggregate Limit (the “Commitment Fee”) payable in cash from the proceeds of the Draw Downs (as defined in the SPA) or in freely tradeable shares of common stock of the Company valued at the Daily Closing Price (as defined in the SPA) at the time of each Draw Down (as defined in the SPA), at the option of Wytec, deliverable as described in the SPA so long as the entire Commitment Fee is paid on or before the first anniversary of the Public Listing Date and (ii) a warrant granting GYBL the right to purchase shares of our common stock having an expiration date that is the third anniversary of the Public Listing Date at the exercise price and upon the terms set forth more fully in the SPA, up to the number of shares of common stock that is equal to 3.7% of the total number of shares of common stock outstanding calculated on a fully diluted basis as of the Public Listing Date (the “Warrant”). The Commitment Fee will not be payable and the Warrant will not be issuable if the Company’s common stock does not become publicly listed.

Pursuant to a Registration Rights Agreement, dated September 28, 2023, between us and the Purchaser and GYBL (the “Registration Rights Agreement”), no later than thirty (30) calendar days after the Public Listing Date, we are obligated to file a registration statement with the Securities and Exchange Commission (“SEC”) to register the shares of common stock issuable pursuant to the SPA. Pursuant to the Registration Rights Agreement, we are obligated to have the registration statement declared effective by the SEC on the earlier of (A) the 45^th calendar day after the date on which the registration statement is filed with the SEC and (B) the fifth business day after the date the Company is notified by the SEC that the registration statement will not be reviewed.

Other Payable

During 2019, $895,000 of deferred revenue, related to amounts billed and collected before services related to registered links and related equipment and services (“Links”) previously sold by the Company had been completed, was reclassified to other payable due to the Company exiting the business of installing Links. Since that time, a total of $560,000 of the amount was exchanged for a total of 119,000 shares of the Company’s common stock, leaving a balance of $335,000 at June 30, 2024. The Company intends to relieve the remaining liability through a combination of exchanges for common stock and cash.

Going Concern

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $33,061,026 at June 30, 2024, and have reported negative cash flows from operations. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months from the date of this report. These factors raise substantial doubt about the Company’s ability to continue as a going concern. 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 nature in which we operate.

Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. However, there can be no assurance that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

Off-Balance Sheet Arrangements

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

Recently Issued Accounting Standards

We have reviewed the standards issued by the Financial Accounting Standards Board (“FASB”) through June 30, 2024 and which are not yet effective. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncement will have a material impact on its financial statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our principal executive officer, William Gray, and our principal financial officer, Karen Stegall, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15I under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on that evaluation, Mr. Gray and Ms. Stegall have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may be involved in legal actions and claims arising in the ordinary course of business from time to time. As of the date of the report, there are no legal matters of which management is aware.

Item 1A. Risk Factors.

During the quarter ended June 30, 2024, there have been no material changes from the risk factors previously in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities.

During the second quarter 2024, the Company issued a total of 36,106 shares of the Company’s common stock upon the exercise of a total of 36,106 common stock purchase warrants by a total of nine investors, including an affiliate of a director of the Company, at an exercise price of $5.00 per share or a total of $180,530 in accordance with Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

During the second quarter 2024, the Company issued a total of 35,617 shares of the Company’s common stock upon the exercise of a total of 35,617 common stock purchase warrants by an affiliate of a director of the Company at an exercise price of $5.00 per share or a total of $178,085 in accordance with Rule 506(b) of Regulation D of the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

During the quarter ended June 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

Exhibit		Description
3.1		Articles of Incorporation, dated November 7, 2011 (1)
3.2		Amendment to Articles of Incorporation, dated January 14, 2014(1)
3.3		Amendment to Articles of Incorporation, dated June 13, 2014 (1)
3.4		Bylaws (1)
4.1		Certificate of Designation for Series A Preferred Stock, dated February 14, 2014 (1)
4.2		Certificate of Designation for Series B Preferred Stock, dated June 13, 2014 (1)
4.3		Amendment to Certificate of Designation for Series B Preferred Stock, dated October 22, 2014 (1)
4.4		Amendment to Certificate of Designation for Series B Preferred Stock, dated March 4, 2015 (1)
4.5		Certificate of Designation for Series C Preferred Stock, dated July 26, 2016 (1)
4.6		Warrant issued by Wytec International, Inc. to William H. Gray (2)
4.7		Amendment to William H. Gray Warrants, dated December 30, 2020 (3)
4.8		Amendment to Certificate of Designation for Series C Preferred Stock, dated December 29, 2023 (4)
4.9		Amendment to William H. Gray Warrants, dated November 22, 2023 (7)
4.10		Amendment to Warrant No. 524, dated January 31, 2024 (9)
4.11		Amendment to Warrant No. 527, dated January 31, 2024 (9)
4.12		Amended and Restated Erica Perez Warrant, dated February 5, 2024 (9)
4.13		Erica Perez Warrant, dated July 2, 2024 (10)
10.1		Separation and Distribution Agreement by and between Wytec International, Inc. and Competitive Companies, Inc. (1)
10.2		License Agreement by and between Wytec International, Inc. and Competitive Companies, Inc. (1)
10.3		Agreement with the Laredo School District (5)
10.4		Exchange Agreement, dated October 6, 2022, by and between Wytec International, Inc. and William H Gray (6)
10.5		Exchange Agreement, dated October 6, 2022, by and between Wytec International, Inc. and Christopher Stuart (6)
10.6		Exchange Agreement, dated October 6, 2022, by and between Wytec International, Inc. and Eagle Rock Investments L.L.C. (6)
10.7		Amendment to Exchange Agreement, dated November 15, 2022, by and between Wytec International, Inc. and William H. Gray (11)
10.8		Amendment to Promissory Note, dated December 5, 2023 (8)
10.9		Amendment to Promissory Note, dated December 5, 2023 (8)
10.10		Amendment to Christopher Stuart Promissory Note, dated February 5, 2024 (9)
10.11		Amendment to Exchange Agreement, dated July 30, 2024, by and between Wytec International, Inc. and William H. Gray (12)
14.1		Code of Conduct (1)
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act *
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act *
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act *
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act *
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)*
101.SCH		Inline XBRL Taxonomy Extension Schema Document*
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)*

(1)	Incorporated by reference from the original filing of the Registration Statement on January 10, 2017.
(2)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, dated September 21, 2018.
(3)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, dated January 4, 2021.
(4)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, dated January 3, 2024.
(5)	Incorporated by reference to the Form 10-K filed with the Securities and Exchange Commission on June 25, 2021.
(6)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on October 13, 2022.
(7)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on November 28, 2023.
(8)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on December 6, 2023.
(9)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on February 5, 2024.
(10)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on July 9, 2024.
(11)	Incorporated by reference to the Form 10-Q filed with the Securities and Exchange Commission, filed on November 18, 2022.
(12)	Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission, filed on August 1, 2024.

Filed herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WYTEC INTERNATIONAL, INC.

By:  /s/ William H. Gray                      

William H. Gray, Chief Executive Officer and

President (Principal Executive Officer)

By:  /s/ Karen Stegall                         

Karen Stegall, interim Chief Financial Officer

(Principal Accounting Officer)

Date: August 14, 2024

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Wytec International (WYTC) 10-Q2024 Q2 Quarterly report

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