Notes to Consolidated
Financial Statements
Note 1 – Nature of Business and Significant Accounting
Policies
Description of Business
Competitive Companies, Inc. (the “Company”
or “CCI”) was incorporated in the state of Nevada in October 2001 and acts as a holding company for its operating subsidiaries.
The Company's headquarters are located in San Antonio, Texas. The Company is involved in providing next generation fixed and mobile
wireless broadband Internet services nationally and internationally to wholesale, retail and enterprise customers with a special
focus on the small medium business market.
The accompanying consolidated financial statements
include the accounts of the following entities. All significant inter-company transactions have been eliminated in the preparation
of these financial statements.
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State of
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Relationship
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Relationship
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Name of Entity (1)
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Form of Entity
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Incorporation
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December 31, 2016
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December 31, 2015
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Competitive Companies, Inc.
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Corporation
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Nevada
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Parent
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Parent
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Wireless Wisconsin LLC
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Limited Liability Company
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Wisconsin
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Subsidiary (2)
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Subsidiary (2)
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Innovation Capital Management, Inc.
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Corporation
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Delaware
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Subsidiary (2)
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Subsidiary (2)
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Innovation Capital Management, LLC
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Limited Liability Company
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Texas
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Subsidiary (2)
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Subsidiary (2)
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Wytec International, Inc.
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Corporation
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Nevada
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Subsidiary (3)
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Subsidiary (3)
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Wylink, Inc.
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Corporation
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Texas
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Subsidiary (4)
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Subsidiary (4)
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Capaciti Networks, Inc.
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Corporation
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Texas
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Subsidiary (5)
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Subsidiary (5)
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(1)
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Certain non-operational holding companies have been excluded.
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(2)
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Wholly-owned subsidiary of Competitive Companies, Inc.
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(3)
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As of December 31, 2015, CCI owned an 86% interest in Wytec and consolidated under
the voting interest model. As of December 31, 2016, CCI owned an 11% interest in Wytec and consolidated under the variable interest
entity model.
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(4)
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Wholly-owned subsidiary of Wytec International, Inc.
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(5)
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As of December 31, 2015, CCI wholly owned Capaciti. During 2016, Capaciti was sold,
in full, to Wytec.
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The operations of each subsidiary is further
detailed below:
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·
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Wireless Wisconsin LLC (“Wireless WI”) – Internet access services in rural markets
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·
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Innovation Capital Management, Inc. (“ICM”) – Managing capital raising
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·
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Innovation Capital Management LLC (“ICMLLC”) – Strategic marketing relationships
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·
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Wytec International, Inc. (“Wytec”) – Building wireless internet access serviced
infrastructures, and providing internet access services primarily to the SMB market
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·
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Wylink, Inc. (“Wylink”) - Applying for and registering links.
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·
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Capaciti Networks, Inc. (“Capaciti”) – Using Wyquote system to market internet
access services
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Use of Estimates
The preparation of consolidated financial statements
in accordance with generally accepted accounting principles in the United States of America requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of contingent asset and liabilities at the date of the
consolidated financial statements. The reported amounts of revenue and expenses during the reporting period may be affected by
the estimates and assumptions we are required to make. Actual results could differ significantly from our estimates.
Principles of Consolidation and Variable
Interest Entities
The accompanying Consolidated Financial Statements
include the accounts of the Company and its subsidiaries, after elimination of all material intercompany accounts, transactions,
and profits.
The Company accounts for the investments it
makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance
its activities without additional subordinated financial support, or (2) as a group, the holders of the equity investment at risk
do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly
impact the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the
right to receive expected residual returns of the legal entity. These certain legal entities are referred to as “variable
interest entities” or “VIEs.”
The Company consolidates the results of any
such entity in which it determined that it had a controlling financial interest. The Company is deemed to have a “controlling
financial interest” in such an entity if the Company has both the power to direct the activities that most significantly
affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the
VIE that could be potentially significant to the VIE. On a quarterly basis, the Company reassesses whether it has a controlling
financial interest in any investments it has in these certain legal entities.
Revenue Recognition
Revenue through the Company’s subsidiary,
Capaciti, is from the sale of both wired and wireless services, including products, wireless data cards, back office platform and
rate plans to their commercial and enterprise clients. Capaciti recognizes revenues from wired and wireless internet services in
the month in which services are provided. Services provided but not billed by the end of the year are reflected as unbilled receivables
in the accompanying consolidated balance sheets; likewise, services billed in advance for future months are reflected in deferred
revenues in the accompanying consolidated balance sheets.
Revenue from the Company’s subsidiary,
Wireless WI is recognized when persuasive evidence of an arrangement exists; delivery of services has occurred; the price to the
customer is fixed or determinable; and collectability of the sales price is reasonably assured. Wireless WI recognizes revenues
from dial-up and broadband internet services in the month in which services are provided. Services provided but not billed by the
end of the year are reflected as unbilled receivables in the accompanying consolidated balance sheets; likewise, services billed
in advance for future months are reflected in deferred revenues in the accompanying consolidated balance sheets.
Wylink’s revenue on sales of FCC register
links is recognized once the link has been registered on behalf of the customer and the necessary equipment has been installed
and is ready for use. Revenue is not recognized on the link sales until the link construction is completed and the link has been
placed in service. Amounts collected prior to completion of all obligations to the customer are recorded as deferred revenue. Commission
expense is a period cost and is recorded in the period in which the commission from the sale has been earned and paid, even though
the revenue from the sale may not be recognized until a future period. Commissions are payable at collection of funds from link
sale and are not dependent upon successful installation and operation of the link.
Allowance for Doubtful Accounts
The allowance for doubtful accounts is evaluated
on a regular basis through periodic reviews of the collectability of the receivables in light of historical experience, adverse
situations that may affect our customers' ability to repay, and prevailing economic conditions. This evaluation is inherently subjective
as it requires estimates that are susceptible to significant revision as more information becomes available. Accounts receivable
are determined to be past due based on how recently payments have been received and those considered uncollectible are charged
against the allowance account in the period they are deemed uncollectible. The allowance was $6,273 and $6,380 at December 31,
2016 and 2015.
Construction in Process
Construction in process consists of equipment
and materials to be used to construct network, plant property and equipment.
Property and Equipment
Property and equipment are stated at the lower of cost or estimated
net recoverable amount. The cost of property and equipment is depreciated using the straight-line method based on the lesser of
the estimated useful lives of the assets or the lease term based on the following life expectancy:
Furniture and fixtures
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5 years
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Telecommunication equipment and computers
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5 – 10 years
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Repairs and maintenance expenditures are charged
to operations as incurred. Major improvements and replacements, which have extended the useful life of an asset, are capitalized
and depreciated over the remaining estimated useful life of the asset. When assets are retired, or sold, the cost and related accumulated
depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.
Deferred Revenue
Deferred revenue consists of amounts billed
and collected before services have been completed.
Basic and Diluted Loss per Share
The basic net loss per common share is computed
by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed
by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding
plus potential dilutive securities. For 2016 and 2015, potential dilutive securities had an anti-dilutive effect and were not included
in the calculation of diluted net loss per common share.
Stock-Based Compensation
All share-based payments to service providers
or employees, including grants of employee stock options, are recognized in the income statement based upon their fair values determined
using the grant date Black-Scholes method. Stock and stock options were issued for services and compensation was $41,045 and $42,750
for the years ended December 31, 2016 and 2015, respectively.
Advertising
Advertising costs are expensed as incurred. These expenses approximated
$615 and $13,640 for the years ended December 31, 2016 and 2015, respectively.
Income Taxes
The Company files an income tax return in the
U.S. federal jurisdiction, as well as in the states of Texas, Florida, Wisconsin, and Ohio.
CCI recognizes deferred tax assets and liabilities
based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws
that are expected to be in effect when the differences are expected to be recovered. CCI provides a valuation allowance for deferred
tax assets for which it does not consider realization of such assets to be more likely than not.
Uncertain Tax Positions
In accordance with ASC 740, “Income Taxes”
(“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the
position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition,
classification, interest and penalties, accounting in interim periods, disclosure, and transition.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards
Board issued Accounting Standards Update No. 2014-09 entitled Revenue from Contracts with Customers (Topic 606). The core principle
of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in
an amount that reflects consideration to which the entity expects to be entitled in exchange for those goods or services. We are
subject to this guidance effective with financial statements we issue for the year ending December 31, 2018, and the quarterly
periods during that year. The effect of the new standard is not expected to materially influence the company’s financial
statement.
In February 2016, FASB issued ASU No. 2016-02,
Leases, requiring entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations
created by those leases. For leases which meet the criteria of short-term, lessees may elect an accounting policy to not
recognize lease assets and liabilities and expense lease payments on a straight-line basis. A short-term lease is one in which
the lease term is 12 months or less and there is not an option to purchase the underlying asset that the lessee is reasonably certain
to exercise. Under current GAAP, lessees apply a classification test to determine the accounting for the lease arrangements
as either capital leases, whereby the lease assets and liabilities would be recognized on the balance sheet, or operating leases,
whereby the lessees would not recognize lease assets and liabilities. This ASU will be effective for the Company for its
fiscal year beginning after December 15, 2018, and for interim periods therein. The Company is currently evaluating the effects
the adoption of this guidance will have on its consolidated financial statements.
Note 2 – Going Concern
The consolidated 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. The Company has incurred continuous
losses from operations, have an accumulated deficit of $18,522,585 at December 31, 2016, and has reported negative cash flows from
operations for six of the previous seven years. In addition, the Company expects to have ongoing requirements for capital investment
to implement our business plan. Finally, its ability to continue as a going concern must be considered in light of the problems,
expenses and complications frequently encountered by entrance into established markets and the competitive environment in which
we operate.
Since inception, operations have primarily
been funded through private equity financing, and the Company expects to continue to seek additional funding through private or
public equity and debt financing.
The Company’s ability to continue as
a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise
funds to finance ongoing operations and repay debt. However, there can be no assurance that the Company will be successful in its
efforts to raise additional debt or equity capital and/or that our cash generated by the Company’s operations will be adequate
to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable
period of time.
The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification
of liabilities that might be necessary should it be unable to continue as a going concern.
Note 3 – Property and Equipment
Property and equipment consist of the following:
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December 31,
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2016
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|
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2015
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Telecommunication equipment and computers
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$
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1,070,838
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$
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1,052,792
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Furniture and fixtures
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61,702
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44,746
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1,132,540
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1,097,538
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Less accumulated depreciation
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(529,143
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)
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(315,344
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)
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$
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603,397
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$
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782,194
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Note 4 – Convertible Notes
The Company issued unsecured convertible promissory
notes at various times from 2008 through 2015 with interest rates from 8.0% to 12.5% per annum. The notes mature at various times
through June 2017. During the year ended December 31, 2015, the Company converted $50,000 of CCI’s convertible promissory
notes plus $26,550 of accrued interest to 1,546,458 shares of CCI common stock and, the Company converted $45,000 of CCI’s
convertible promissory notes plus $23,824 of accrued interest to 22,941 shares of Wytec series B preferred stock. Also during the
year ended December 31, 2015, the Company converted $467,334 of Wytec’s convertible promissory notes plus $34,298 of accrued
interest to 167,210 shares of Wytec Series B Preferred Stock. At December 31, 2016, all convertible notes were repaid.
Note 5 – Warrants
During the year ended December 31, 2016 CCI
paid $138,000 to redeem the outstanding 87,571,429 common stock purchase warrants held by the Company’s chief executive officer.
The warrants allowed for the purchase of 87,571,429 shares of the Company’s common stock until April 17, 2024, at an exercise
price of $0.025 per share if the Company achieved certain milestones.
Wytec currently has a total of 7,109,280 common
stock purchase warrants outstanding to purchase a total of 7,109,280 shares of Wytec common stock exercisable through various dates
ranging to December 31, 2017. 1,731,104 of which are exercisable at an exercise price of $5.00 per share; 4,146,676 are exercisable
at an exercise price of $1.50 per share; 75,000 are exercisable at an exercise price of $1.45 per share 406,500 are exercisable
at an exercise price of $1.25 per share; and 750,000 are exercisable at an exercise price of $1.00 per share.
During the year ended December 31, 2015, Wytec
issued 294,567 common stock purchase warrants for the settlement of convertible debentures. Also, during the year ended December
31, 2015, Wytec issued 760,725 common stock purchase warrants in conjunction with its sale of Wytec Series B Preferred Stock.
The following is a summary of activity of CCI and Wytec outstanding
common stock warrants:
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Number of
CCI
Warrants
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|
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Number of
Wytec
Warrants
|
|
|
|
|
|
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Balance, December 31, 2014
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102,000,000
|
|
|
|
3,261,525
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|
Warrants granted
|
|
|
–
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|
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|
1,055,292
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Warrants exercised
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|
|
–
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|
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5,000
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Warrants repurchased
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|
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2,428,571
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|
|
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–
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Warrants expired
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|
|
12,000,000
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|
|
|
1,506,145
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|
Balance, December 31, 2015
|
|
|
87,571,429
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|
|
|
2,805,672
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|
|
|
|
|
|
|
|
|
|
Warrants granted
|
|
|
–
|
|
|
|
4,680,608
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|
Warrants exercised
|
|
|
–
|
|
|
|
207,000
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|
Warrants repurchased
|
|
|
87,571,429
|
|
|
|
–
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|
Warrants expired
|
|
|
–
|
|
|
|
170,000
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016
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|
|
–
|
|
|
|
7,109,280
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|
|
|
|
|
|
|
|
|
|
Exercisable, December 31, 2016
|
|
|
–
|
|
|
|
7,109,280
|
|
Note 6 – Nonconvertible
Debenture
During 2015, the Company refinanced convertible
promissory notes totaling $262,161 and bearing interest at 12.5% per annum into non-convertible notes, maturing at various times
through December 15, 2015. Also during 2015, the Company exchanged $230,380 of the non-convertible promissory notes plus $34,299
of accrued interest for 76,793 shares of Wytec Series B Preferred Stock.
Note 7 – Stockholders’ Equity (Deficit)
The Company is authorized to issue 500,000,000
shares of common stock, par value $0.001 per share. The Company is also authorized to issue 100,000,000 shares of preferred stock,
par value $0.001 per share, 100,000 of which have been designated as Class D Preferred Stock, 100,000 of which are issued and outstanding
as of December 31, 2016. Each share of Class D Preferred Stock has a par value of $0.001 and the equivalent of 2,500 votes. The
Class D Preferred Stock is not convertible into the Company’s common stock and has no rights to dividends and virtually no
rights to liquidation preference. The liquidation preference of each share of the Class D Preferred Stock is its par value.
The Company is currently researching the validity
of the authorization and issuance of Class A, Class B and Class C Preferred Stock. The Company has found no evidence of a Certificate
of Designation or any other document on file with the Nevada Secretary of State for these classes of Preferred Stock. The
Company will attempt to contact the owners of these shares in order to reach a conclusion as to their validity.
During 2016, the Company determined a reclassification
was required between non-controlling interest and additional paid in capital. This resulted in a reclassification to the December
31, 2015 balance sheet and statement of changes in shareholders’ equity of $7,238,928 between non-controlling interest and
additional paid in capital. The reclassification did not impact the consolidated net income or income from non-controlling interest
for the year ended December 31, 2015.
Note 8 – Common Stock Options
The Company had in place its 2005 Stock Option
Plan (the “2005 Plan”) which authorized the issuance of stock options and other awards to acquire up to five million
shares of the Company’s common stock (less the number of shares issuable upon exercise of options granted by the Company
under all other stock incentive plans on the date of any grant under the 2005 Plan). The 2005 Plan provided for the grant of incentive
stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended), options that are not incentive
stock options, stock appreciation rights and various other stock-based grants. The 2005 Plan terminated in 2015 and there are no
remaining outstanding stock options or other awards under the 2005 Plan.
The Company also has its 2012 Stock Incentive
Plan (the “Plan”) which authorizes the issuance of stock options to acquire up to 25 million shares of the Company’s
common stock.
In May 2015, the Company granted 750,000 options
to one employee to purchase 750,000 shares of common stock, exercisable at $0.02 per share with a three-year vesting schedule and
an expiration date of May 14, 2019. For the year ended December 31, 2016 and 2015, the stock-based compensation related to this
option grant was $4,000 and $3,000, respectively.
The following is a summary of activity of outstanding stock options
under the 2012 Stock Option Plan:
|
|
Number of
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
|
14,500,000
|
|
|
$
|
0.02
|
|
Options expired
|
|
|
–
|
|
|
|
–
|
|
Options cancelled
|
|
|
1,750,000
|
|
|
|
–
|
|
Options granted
|
|
|
750,000
|
|
|
$
|
0.02
|
|
Options exercised
|
|
|
–
|
|
|
|
–
|
|
Balance, December 31, 2015
|
|
|
13,500,000
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Options expired
|
|
|
2,000,000
|
|
|
|
–
|
|
Options cancelled
|
|
|
–
|
|
|
|
–
|
|
Options granted
|
|
|
–
|
|
|
|
–
|
|
Options exercised
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016
|
|
|
11,500,000
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Exercisable, December 31, 2016
|
|
|
1,500,000
|
|
|
$
|
0.02
|
|
The weighted average remaining contractual
term of options outstanding at December 31, 2016 is 2.20 years.
Note 9 – Treasury Stock
During 2016, the Company purchased 1,658,760
outstanding shares of its common stock at an aggregate cost of $39,456.
Note 10 – Spin-Off
In October 2016, the
Company’s board of directors and majority shareholders authorized a planned spin-off of Wytec (“Spin-Off”). Management
believes the spin-off may be approved by the summer of 2017, but no assurance is provided as to when, or if this may be finalized.
As of December 31, 2016, CCI owns 865,552 shares of the outstanding common stock of Wytec, and 1,731,104 Wytec common stock purchase
warrants, which, if the spin-off is completed, will be distributed among CCI shareholders on a pro rata basis.
On December 9, 2016,
CCI filed an Information Statement on Schedule 14C and on January 10, 2017, Wytec filed a Registration Statement on Form S-1 with
the Securities and Exchange Commission (the “SEC”). These filings describe in detail the terms and conditions of the
Spin-Off. Upon the S-1 Registration Statement being declared effective by the SEC, Wytec will no longer be owned by the Company,
as the Company is distributing 100 % of its owned Wytec common stock and warrants to its shareholders. Wireless WI, ICM, and ICM
LLC, will continue to be wholly owned subsidiaries of the Company.
Note 11 – Income Taxes
For the years ended December 31, 2016 and 2015,
the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. In addition,
no benefit for net deferred tax assets has been recorded due to the uncertainty of their realization. At December 31, 2016, the
Company had approximately $20,000,000 of federal and state net operating loss carryforwards which will begin to expire in 2026.
The components of the Company’s deferred tax asset are as
follows:
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
6,736,907
|
|
|
$
|
6,435,701
|
|
Total deferred tax assets
|
|
$
|
6,736,907
|
|
|
$
|
6,435,701
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets before valuation allowance
|
|
$
|
6,736,907
|
|
|
$
|
6,435,701
|
|
Less: Valuation allowance
|
|
|
(6,736,907
|
)
|
|
|
(6,435,701
|
)
|
Net deferred tax assets
|
|
$
|
–
|
|
|
$
|
–
|
|
The federal income tax benefit expected by
the application of a 34% corporate income tax rate to pre-tax net loss differs from the actual benefit recorded due to the valuation
allowance recorded for 2016 and 2015. Based on the available objective evidence, including the Company’s history of losses,
management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the
Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016 and 2015.
Note 12 – Commitments and Contingencies
The Company leases its office space in San
Antonio, Texas and Eau Claire, Wisconsin. The Company renewed its current lease agreement for its office space in San Antonio,
Texas on November 1, 2015 for a two-year term with lease payments starting at $5,412 per month and increasing on November 1, 2016
to $5,520 per month. The monthly lease payment will increase to $5,630 on November 1, 2017 until the lease expires on October 31,
2018. The Company pays approximately $815 per month on a month-to-month basis for its office space in Eau Claire, Wisconsin. Wytec
has entered into multiple rooftop lease agreements for the placement of equipment used in the buildout of the Company’s Millimeter
Wave Network. The monthly lease payments range from $100 to $575 per month and the leases expire from 2018 to 2024.
Total rent expense for office space and rooftop
equipment placement was $153,478 and $150,964 for the years ended December 31, 2016 and 2015, respectively.
As of December 31, 2016, the future minimum
lease payments are as follows:
Year Ended December 31,
|
|
|
|
2017
|
|
$
|
134,913
|
|
2018
|
|
|
113,656
|
|
2019
|
|
|
44,661
|
|
2020
|
|
|
43,836
|
|
2021
|
|
|
43,836
|
|
Thereafter
|
|
|
83,424
|
|
|
|
$
|
464,326
|
|
Note 13 –
Change in Ownership of Subsidiaries
Effective November
17, 2016, Wytec acquired Capaciti from CCI in exchange for 609,603 shares of Wytec common stock.
In October 2016, CCI
sold 73% of its interest in Wytec by exchanging Wytec common shares previously owned by CCI for the forgiveness of inter-company
liabilities due to Wytec. This sale of CCI’s interest in Wytec resulted in CCI losing a majority interest in Wytec. The financial
statements of Wytec and its wholly-owned subsidiaries continue to be consolidated into CCI’s financial statements as Wytec
was determined to be a variable interest entity.
As
of December 31, 2016, the Company’s consolidated financial statements include the assets, liabilities and results of operations
of Wytec International Inc. and subsidiaries, as the Company is the primary beneficiary. The other equity holders’ interests
are reflected in ‘‘Net loss attributable to noncontrolling interests’’ in the consolidated statements of
operations and ‘‘Noncontrolling Interest’’ in the consolidated balance sheets. The following table summarizes
the carrying amounts of Wytec and its subsidiaries’ assets and liabilities included in the Company’s consolidated balance
sheet at December 31, 2016 and 2015:
|
|
December 31,
2016
|
|
|
December 31,
2015 (a)
|
|
Cash and cash equivalents
|
|
$
|
2,766,775
|
|
|
$
|
1,013,033
|
|
Other current assets
|
|
|
15,752
|
|
|
|
1,100
|
|
Property and equipment (net of depreciation)
|
|
|
943,567
|
|
|
|
1,108,203
|
|
Due from CCI
|
|
|
–
|
|
|
|
4,972,146
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,726,094
|
|
|
$
|
7,094,482
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
146,497
|
|
|
$
|
158,715
|
|
Deferred revenue
|
|
|
1,930,000
|
|
|
|
6,242,500
|
|
Other current liabilities
|
|
|
26,061
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
2,102,558
|
|
|
$
|
6,401,215
|
|
|
(a)
|
As of December 31, 2015, Wytec was consolidated based on the voting interest model as CCI held a controlling interest in Wytec.
|
Note 14 – Subsequent Events
In January 2017, Wytec issued 95,334 shares of Wytec Series B Preferred
Stock and 95,334 Wytec common stock purchase warrants to investors pursuant to Wytec’s private placement made pursuant to
Rule 506(c) of Regulation D of the Securities Act of 1933, as amended.
In or about December 2004, the President of Competitive Companies,
Inc., a Nevada corporation (the "Company"), personally guaranteed a Small Business Administration ("SBA") loan
for the benefit of Discovernet, Inc., a prior subsidiary of the Company, in the original principal amount of $150,000 (the "Loan").
Discovernet, Inc. never repaid the Loan and has dissolved. The Loan was thereafter transferred to the United States Department
of Treasury ("USDT") for collection. On January 5, 2017, the board of directors determined to assist the President of
the Company with repayment of the Loan. Accordingly, on that date the Company repaid the outstanding balance of the Loan in the
amount of $177,689.75 including outstanding principal, interest and penalties. Subsequently, the Company deemed the repayment of
the Loan to be compensation to Mr. Gray. On March 3, 2017, the Company recorded the Loan repayment as a bonus to Mr. Gray and grossed
up the amount to cover the taxes. The total amount of the bonus was $252,992.50.
In January 2017, Wytec issued 10,000 shares of Wytec Series B Preferred
Stock and 10,000 common stock purchase warrants in exchange for 1 registered link that was included in deferred revenue.
In February 2017, Wytec issued 61,000 shares of Wytec International,
Inc. (“Wytec”) common stock to eight investors pursuant to a warrant exercise.
In February 2017, Wytec issued 80,000 shares of Wytec International,
Inc. (“Wytec”) common stock to one investor by converting his Wytec Series B Preferred Stock to common stock.
In March 2017, Wytec issued 231,834 shares of Wytec International,
Inc. (“Wytec”) common stock to eight investors pursuant to a warrant exercise.
In March 2017, the Company terminated the office lease in Eau Claire,
WI, thereby terminating the monthly payment of $815, and terminated agreements to continue providing certain services. The Company
will continue operations in the market with a focus on core services that provide the greatest return.