SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended December 31, 2015

 

OR

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

	COMPETITIVE COMPANIES, INC.
	(Exact name of registrant as specified in its charter)

 

Nevada		333-76630		65-1146821
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

19206 Huebner Rd., Suite 202

San Antonio, Texas 78258

(Address of principal executive offices, including zip code)

 

(210) 233-8980

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

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

 

Common Stock, $0.001 par value

 

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

 

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 preceding 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 þ No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 þ No o

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes o No þ

 

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

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

 

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

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on June 30, 2015, based on a closing price of $0.03 was approximately $10,032,325 (computed by reference to the last sale price of a share of the registrant’s common stock on that date as reported by OTC-QB Market).

 

The number of shares of common stock, $0.001 par value, outstanding on March 30, 2016 was 334,224,469 shares.

 

 

COMPETITIVE COMPANIES, INC.

FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2015

 

Index to Report on Form 10-K

 

		Page
PART I
Item 1	Business	1
Item 1A	Risk Factors	7
Item 1B	Unresolved Staff Comments	10
Item 2	Properties	11
Item 3	Legal Proceedings	11
Item 4	Mine Safety Disclosures	11
PART II
Item 5	Market for Registrant’s Common Equity and Related Stockholder Matters, and Issuer Purchases of Equity Securities	12
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 8	Financial Statements and Supplementary Data	18
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	19
Item 9A	Control and Procedures	19
Item 9B	Other Information	20
PART III
Item 10	Directors, Executive Officers, and Corporate Governance	21
Item 11	Executive Compensation	24
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	28
Item 13	Certain Relationships and Related Transactions, and Director Independence	29
Item 14	Principal Accounting Fees and Services	30
PART IV
Item 15	Exhibits, Financial Statement Schedules	31
SIGNATURES		32

 

 

 

 

PART I

 

Item 1. Business.

 

The Company

 

Competitive Companies, Inc. (the “Company”) was originally incorporated in the state of Nevada in October 2001 and acts as a holding company for its operating subsidiaries, Wytec International, Inc. (“Wytec”), Wylink, Inc., Wireless Wisconsin LLC, Capaciti Networks, Inc., Innovation Capital Management, Inc., and Innovation Capital Management LLC (collectively, the “Subsidiaries”). The Company and its Subsidiaries (also collectively referred to as “CCI”) are involved in providing next generation fixed and mobile wireless broadband Internet services nationally and internationally to wholesale, retail and enterprise customers.

 

Due to developments in our intellectual property and the continued development of our municipal and governmental relationships along with the addition of key personnel and consultants, management intended to enter into 30 markets by year-end 2015. This strategy was redesigned to reduce market entry costs and enhance marketing capabilities along with the development of a commissioned based agent sales channel. Included in our market entry schedule are new products and services for small and medium businesses and our continued optimization strategies for assisting municipalities in leveraging current assets such as utility poles for maximum utilization related to the provisioning of telecommunications and machine to machine (“M2M”) services.

 

We plan to accomplish these objectives by applying the extended development of our current intellectual property consisting of our latest patent pending LPN-16 Small Cell technology along with our proprietary millimeter backhaul design to build our anticipated 5G platform network. We believe the benefit of a 5G network is its ability to support multiple mobile communications services, including but not limited to, public safety, first responder, machine to machine, and carrier offload services.

 

CCI is currently in high-level discussions with multiple municipal governments including Columbus, Ohio, San Antonio, Texas and Denver, Colorado where we have been developing a core millimeter wave network for 4G/5G Wi-Fi and related high sped broadband services throughout the central business district of these cities. Currently our network design is capable of delivering bandwidth services of up to 1.5 gigabits per second to a wide range of customers including small, midsize and large corporate operations located in Tier One, Tier Two, and Tier Three (the term “Tier” defines the population size of the link location) cities throughout the United States. Our millimeter wave technology serves as the backbone for our platform networks capable of supporting a host of high capacity data throughput objectives.

 

On December 18, 2015, Wytec performed an outside speed test on the first LPN-16 working prototype and produced record performance speeds in excess of 500 Mbps to a smart phone and 600 Mbps to a laptop computer. These and earlier speed test results enabled us, through Wytec, to consummate our first services agreement with the City of Columbus. Wytec has now substantially completed its footprint coverage of the Central Business District (“CBD”) of Columbus, Ohio with more than 100 high speed access points providing, among other services, direct connections to public safety devices, high capacity Wi-Fi access to commercial enterprises and the extension of the Company’s Small Cell deployment designed for carrier offload and other enterprise services.

 

Through our subsidiary, Wireless Wisconsin, LLC, we also provide high-speed wireless Internet connections to residents in rural communities, as well as webhosting, dial-up, and other commercial services throughout rural Wisconsin. We operate in both a regulated and nonregulated environment. Our current business plan includes the delivery of 4G mobile broadband services via Wi-Fi in urban, suburban, and rural markets throughout the United States.

 

Subsidiary Operations

 

Wytec International, Inc., a Nevada corporation, designs, manufactures, and installs “proprietary” carrier-class Wi-Fi solutions to local government, Mobile Service Operations (“MSOs”), National Telecommunications Operators (“NTOs”), and corporate enterprises. Wytec owns an interest in five patents focused on high capacity millimeter wave technology (the “Patents”), which Wytec holds in a partnership with General Patent Corporation (“GPC”). Wytec has developed and filed for patent protection with its sixth patent dealing in multi-channeling technology known as the LPN-16.

 

On September 7, 2012, Wytec entered into a definitive agreement with GPC to form Wytec LLC, a Delaware limited liability company, for the purpose of transferring ownership of our five patents originally owned by Wytec into Wytec LLC. GPC is the manager of Wytec, LLC and is expected to assist in the monetization of the five patents. Wytec’s current product development of the LPN-16 is designed to meet the stringent bandwidth needs of both government “first responder” services as well as “carrier offload” services. Management believes the LPN-16 transmitter is the first of its kind specifically developed to participate in the Small Cells as a Service (“SCaaS”) market which has been forecasted by SNS Research to reach $15 billion globally by 2020.

 

 

 

 

In addition to the SCaaS market, management believes the LPN-16 transmitter will support the needs of the massive growth of the M2M market forecasted by SNS Research to account for nearly $196 billion in global revenues by the end of 2020. Wytec’s LPN-16 transmitter is proprietary intellectual property of Wytec for which management has applied for U.S. patent protection rights in the second quarter of 2014 and is a significant part of Wytec’s intellectual property portfolio. CCI has most recently filed its Patent Cooperation Treaty (“PCP”) application for 148 foreign countries. Design and engineering of the LPN-16 was completed on December 22, 2014 and tested in San Antonio, Texas producing what management believes to be record breaking mobile broadband speeds.

 

Wylink Inc., a Texas corporation and wholly owned subsidiary of Wytec (“Wylink”), operates and manages a unique sales organization engaged in the sale of Federal Communications Commission (“FCC”) registered links participating in the 70 and 80 gigahertz licensed frequency program (the “Program”). The Program allows qualified individuals to own a segment of the “backhaul” infrastructure of Wytec’s city-wide business deployment. A total of eight cities were chosen for initial deployment of Wylink’s Registered Link Program. The first market, Columbus, Ohio sold out of its Registered Links representing 52 Links averaging $25,000 per Link totaling $1,300,000 in sales. As of March 30, 2016, Wylink has sold 367.5 Registered Links in 14 markets averaging $31,612 per Link totaling $11,617,500 in Registered Link sales.There is no assurance as to whether or not Wylink will sell more Registered Links or how many Registered Links Wylink will sell in 2016. Furthermore, with each Registered Link it sells, Wylink incurs liability to provide and install telecommunications equipment at its cost for the Link owner, and monthly lease payments for access to a portion of the Link’s capacity.

 

On January 27, 2014, Registered Link holders were offered the opportunity by Wytec to exchange each Registered Link in consideration for (1) a pro rata percentage interest in the net income of Wytec, calculated in accordance with generally accepted accounting principles (“GAAP”) and distributable on a quarterly basis until the earlier to occur of (a) the date on which Wytec becomes a fully reporting company with the Securities and Exchange Commission (“SEC”) and its common stock is traded on the NASDAQ Capital Market or higher, or (b) five (5) years from the date of the closing of the exchange offer, (2) 20,000 shares of Wytec’s Series A Convertible Preferred Stock, each share of which is convertible into one share of Wytec’s common stock at any time, and (3) a first priority perfected security interest in Wytec’s interest in the Patents. The Units will share in a total of 33.3% of Wytec’s net profits (the “Net Profits Pool”). The exchange offer ended in July, 2014 and 70 of our 97 Registered Link holders participated in the exchange offer resulting in a total exchange value of $4,730,000.

 

Capaciti Networks, Inc., a Texas corporation (“CNI”), is a wholly owned subsidiary of CCI, and was formed on August 12, 2013 to provide marketing services for our internet products and services to small and medium businesses, as well as commercial and enterprise clients. Capaciti has entered into an agreement with Wytec pursuant to which CNI will act as a master agent with respect to the use of Wytec’s “online quote system” called “WyQuote” which caters to direct agents who sell telecommunications products and services to small, medium and enterprise customers. Current online quote systems list both wired and wireless Internet service products. The Wytec quote system listsfixed and mobile wireless Internet services. The system also provides an information portal to educate users of the benefits of today’s advanced fixed wireless technology versus its wired counterpart. We believe that master agents, such as CNI, will now be able to empower their direct agents on the benefits and positive differences of fixed wireless. Our research has shown that there are more than 100,000 direct agents utilizing the services of master agents providing more than 60% of all telecommunication products and services sold in the United States.

 

On December 15, 2015, CNI entered into a Private Label Wireless Services Agreement pursuant to which CNI will be able to provide managed wireless services, including products, wireless data cards, back office platform and rate plans, to end users through multiple carriers. CNI expects to use the services to market and sell white-labeled services under the one or more brand(s) established by CNI to its end users.

 

Innovation Capital Management, Inc., (“ICM”) operates as the Company’s private equity placement division focused on raising capital and developing joint ventures and acquisitions while Innovation Capital Management, LLC (“ICMLLC”) focuses on structuring strategic marketing relationships for the Company’s products and services. ICM managed an exchange offer with several holders of the Company’s outstanding convertible notes. In the exchange offer, we offered up to 300,000 units, each unit consisting of one dollar principal amount of 12.5% convertible promissory note of Wytec (the “Exchange Offer Notes”) and one warrant to purchase one share of Wytec’s common stock (“Exchange Offer Warrants”), in exchange for up to $300,000 of outstanding principal amount and accrued but unpaid interest of the Company’s convertible notes, which would then be cancelled. The security interest on the Exchange Offer Notes is pari passu with the security interest securing Wytec’s other outstanding notes. The Exchange Offer Warrants are exercisable for a period of two years after the date of issuance at an exercise price of $3.00 per share. To date, Wytec has issued $111,149 of Exchange Offer Notes and 111,145 Exchange Offer Warrants exercisable until various dates ranging from June 30, 2015 to October 18, 2015. The Exchange Offer Warrants all expired as of December 31, 2015. ICM also managed our exchange offer with Registered Link holders, as discussed in the following paragraph. ICM does not receive any remuneration for its managerial services to the Company and its other Subsidiaries.

 

 

 

 

ICM also managed our $5,374,480 buyback unit offering for Wytec International, Inc. The offering consisted of 205 units consisting of 4,100,000 shares of Series A Convertible Preferred Stock and Participating Interest. The units were offered for exchange for up to 205 registered links owned by Wytec linkholders. Each unit consists of (1) a pro rata percentage interest in the net profits of the Company, calculated in accordance with generally accepted accounting principles ("GAAP") and distributable on a quarterly basis until the earlier to occur of (a) the date on which the Company becomes a fully reporting company with the Securities and Exchange Commission ("SEC") and its common stock is traded on the NASDAQ Capital Market or higher, or (b) five (5) years from the date of the closing of this offering, and (2) 20,000 shares of the Wytec's Series A Convertible Preferred Stock, each share of which is convertible into one share of the Wytec's common stock at any time. The Units will share in a total of 33.3% of the Company's net profits. As of March 30, 2016, Wytec had issued 168 units in the buyback unit offering.

 

Wireless Wisconsin, LLC, a Wisconsin limited liability company (“Wireless WI”), managed by Capaciti, provides high speed wireless Internet connections to residents in rural communities to include dial-up, DSL and wireless internet services to businesses and residents within various markets throughout rural Wisconsin. Wireless WI operates in both a regulated and non-regulated environment. The Company is planning to install its high capacity wireless technology and begin offering its high capacity broadband services by the end of 2016. Our current plan now includes the delivery of 4G mobile broadband services via WiFi in major and rural markets throughout the United States.

 

Product Revenues from Subsidiary Products and Services

 

Wytec International, Inc. Wytec International, Inc. is currently developing its next generation of point-to-point and point-to-multipoint millimeter equipment and technology in multiple licensed and “limited” licensed frequencies, including the 60, 71-76, 81-86, and 92-95 GHz bands. This technology has most recently come to the forefront as a significant piece in delivering 4G and emerging 5G telecommunications services because of its high capacity internet throughput features. These features enable a further high capacity delivery to a microcell or “small cell” network ultimately delivering 100+ Mbps bandwidth to 4G mobile devices such as smartphones, i-pads and laptops. Management believes that the Wytec network design is one of the few 4G/5G networks to comply with the International Mobile Telecommunications Advanced (“IMT-A”) standards of 4G technology in North America. Wytec has developed its proprietary millimeter wave platform network in the CBDs of Columbus, Ohio, San Antonio, Texas, and Denver, Colorado. Additional market developments will be determined by the Company’s enhanced marketing and sales program utilizing independent telecommunication sales agents located across the United States. Latest mobile broadband speed tests in San Antonio, Texas have produced “mobile” broadband speeds in excess of 600 Mbps for a laptop and over 500 Mbps for a smart phone.

 

Additionally, Wytec has generated interest in multiple relationships involving key back-end support such as Wytec’s contract with Level 3 Communications (“Level 3”). Level 3 operates a Tier 1 network providing core transport, IP, voice, video, and content delivery for most of the Internet carriers in North America, Latin America, Europe, and selected cities in Asia. Level 3 is also the largest competitive local exchange carrier (“CLEC”) in the United States. Wytec’s contractual relationship with Level 3 opens the door for Wytec to market its equipment and services to more than 500 U.S. locations including 55 foreign countries. Wytec’s master service agreement with Level 3 also provides rooftop access at no extra charge to every property owned by Level 3. We believe this negotiated agreement is the first of its kind for a wireless provider and gives the Company certain cost advantages in network deployments.

 

Wytec’s current product development involves the design of a “small cell” radio called the LPN-16 designed to meet the stringent bandwidth needs of both government “first responder” services as well as “carrier offload” services and expansion of services from Wytec’s millimeter wave core network for municipal Wi-Fi and small and medium businesses. Management believes the LPN-16 radio is the first of its kind specifically developed to participate in the Small Cells as a Service (“SCaaS”) market which management forecasts will exceed $6.5 billion by 2018. In addition to the SCaaS market, management believes the LPN-16 radio will support the needs of the massive growth of the Machine to Machine (“MtoM”) and “wearable technologies” market which management forecasts to exceed $2 trillion within the same time frame.

 

Wytec’s LPN-16 radio is proprietary intellectual property of Wytec for which management filed a provisional patent application on March 12, 2014 for U.S. and international patent protection rights and is a significant part of Wytec’s intelligent community Wi-Fi network. Much of the design and engineering of the LPN-16 radio has been completed and a functional unit is currently being tested in San Antonio, Texas with download speeds exceeding 500Mbps to a 4G LTE smartphone. Management had expected the LPN-16to be commercially ready during the third quarter of 2015, however due to developments in the market place and the opportunity to expand the LPN’s service capabilities, management altered the production schedule to better coincide with manufacturing costs and potential modifications to the LPN unit. With the success of the unit being tested in San Antonio, management is planning to conduct live field tests in several markets and expects participants for testing the radio to include government (federal, state and municipal), mobile service operators (carriers), and multiple application service providers.

 

 

 

 

WyQuote is a proprietary quoting and ordering system designed by Wytec. We believe that the WyQuote system is the nation’s first online-real-time ordering and quoting system designed solely for wireless services, both fixed and mobile wireless. The WyQuote system is similar in nature to systems used to order “wired” services such as cable and DSL. We believe WyQuote’s unique features address and overcome many of the ordering delays experienced by telecommunication agents selling other services and, for the first time in the industry, provides a real-time quoting option for competitive wireless solutions for commercial Internet services as compared to cable and DSL offerings. WyQuote is currently in live testing with customers and agents. A full commercial launch is scheduled for later in the first quarter of 2016.

 

Wylink, Inc. Wylink has supported initial Wytec equipment sales through the development of a unique marketing concept called the Registered Link Program. The Registered Link Program generated Wytec product sales through the promotion of a business opportunity afforded under the FCC 70-80 GHz frequency allocation program. Wylink promotes and sells the opportunity to a qualified applicant allowing the applicant to own and operate its own Registered Link established as a part of the Wytec backhaul network. Registered Link owners receive income from subscribers of the Link including Capaciti’s (CCI subsidiary) commitment to support its Wi-Fi network through commercial and enterprise Internet sales. As of March 30, 2016, Wylink has sold 367.5 Registered Links in 14 markets averaging $31,612 per Link totaling $11,617,500 in Registered Link sales.

 

Currently Wytec’s primary service product consists of Wylink’s FCC Registered Link application and registration service for the 70 and 80 Gigahertz FCC “protected frequency” supporting the backbone of Wytec’s Wi-Fi network. FCC Registered Links are capable of delivering at least one (1) gigabyte or more of data throughput to multiple points throughout the network. This enables each point within the network to deliver 100 Mbps or more to the end user including mobile and fixed wireless customers. Service products on the network include commercial and enterprise fixed wireless customers, mobile 4G Wi-Fi service to individuals, public safety (such as the camera network to the City of Columbus), MSOs, also known as “carriers,” hot spots, hot spot aggregators, hot zones such as special sports events and other large data capacity users. Much of the network capacity will be utilizing the Wytec LPN-16 small cell technology also known as Small Cells as a Service or “SCaaS”.

 

The total global market for equipment sales included in the Wytec portfolio of equipment offerings is estimated at over $5.7 billion by 2018 according to market research performed by Signals and Systems in their publication of the HetNet Bible dated May 10, 2013. CCI has estimated in a five-year forecast that Wytec should capture approximately $116,443,000 or 2% of this equipment sales market, although there is no assurance as to the amount of equipment sales that Wytec will make.

 

Services Revenue

 

Much of the service revenue for CCI is expected to be generated through the use of the Wytec network including fixed and mobile wireless services offered by CCI’s Subsidiaries according to the services delivered.

 

Wytec Service Offerings

 

Transport and Maintenance Services. Wytec, besides selling equipment including its LPN-16 technology and other proprietary equipment offered through special vendor relationships, will also sell unique services known as “transport” services in consideration for transportation fees, for the use of the small cell portion of its network. This is known as “SCaaS” or Small Cells as a Service and primarily involves the sale of transport to enterprise customers that do not need the use of CCI’s Internet feed such as municipal, state, and federal governments, mobile service operators (Carriers), utility operators and M2M customers.

 

The total global market for SCaaS transport sales is estimated at over $6.5 billion by 2018 according to market research performed by Signals and Systems in their publication of the HetNet Bible dated May 10, 2013. CCI has estimated in a five year forecast that Wytec should capture approximately $124,830,000 or 2% of the SCasS transport sales market, although there is no assurance regarding CCI’s future SCaaS service sales, if any. Wytec will also provide equipment maintenance contracts (from the sale of equipment) as a service and estimates the revenues from this service to total approximately $17,466,000 by 2018. Revenues for this service are calculated to be approximately 15% of total equipment sold. Management views this estimated percentage as an industry standard.

 

Capacity Service Offerings

 

Internet Services. Capaciti, Inc. was designed to market Internet services on behalf of the networks being designed and developed by Wytec. The offerings include but are not limited to fixed and mobile wireless service offerings to both residential and commercial Internet customers. In November 2013, Capaciti began selling mobile Wi-Fi through its contractual relationship with Pronto Networks allowing Wi-Fi services to be marketed in the CBD of Columbus, Ohio. To date, Capaciti has accepted over 240 mobile Wi-Fi connections and believes this service offering will grow with the advent of independent telecom sales agents in the geographical marketing area, local digital and print marketing efforts and as users discover the record breaking speed of the network, delivering more than 100 Mbps to a smart phone and more than 200 Mbps to a laptop.

 

 

 

 

Capaciti also offers Internet services through its operation in Eau Claire, Wisconsin called Wireless Wisconsin and currently generates sales of approximately $3,000 per month. Wireless Wisconsin also offers both DSL and dial-up internet via a wholesale relationship with Ikano Wholesale. This wholesale relationship provides multiple territory access to many markets throughout North America and allows the Company to expand its coverage nationwide.

 

Principal Suppliers

 

During the year ended December 31, 2015, CCI, through its Subsidiaries, had various suppliers for its dial-up and high-speed internet connections. In July 2013, CCI signed a contract with Level 3 Communications, Inc. to provide Tier 1 Internet access in more than 500 U.S. cities. To date, the Company has “turned up” cities with initial propagation and equipment installation in Columbus, Ohio, San Antonio, Texas, and Denver, Colorado. On October 15, 2013, CCI signed a contract with Pronto Networks for Wi-Fi authentication services enabling Wi-Fi access services to be provided via a mobile device such as smart phones, i-pads and laptops sold by the hour, day or week. The service includes integration services through Boingo and Ipass. Since inception, 240 subscribers have signed on to CCI’s network in Columbus, Ohio. Management believes that new and enhanced marketing efforts utilizing a telecom agent channel and related marketing campaigns will result in increased usage of all network elements. Additionally, CCI contracts with Ikano Wholesale DSL in supporting its U.S. residential DSL and dial-up services.

 

Customers

 

During the years ended December 31, 2015 and 2014, revenues derived from mobile wireless services provided by Capaciti in San Antonio, Texas totals $44,344 in 2015 and $25,787 in 2014, internet access services provided by Wireless Wisconsin in Eau Claire, Wisconsin totaled $36,461 in 2015 and $40,192 in 2014, and revenues derived from Registered Link sales provided by Wylink totaled $-0- in 2015 and $250,000 in 2014.

 

Competition and Market Overview

 

CCI is transitioning into providing information communications technology (“ICT”) as well as professional, technical, and management telecommunications support services to a wide range of market customers including municipalities, governments, education, large venues, transportation, and similar sectors desirous of or planning a “smart/intelligent” city infrastructure. The telecommunications industry is highly competitive, rapidly evolving, and subject to technology changes. Additionally, there are numerous telecommunications service companies that conduct extensive advertising campaigns to capture market share. CCI believes that the principal competitive factors affecting its business will be the continued advancement of private/public partnership development, competitive pricing levels, network performance, speed and data capacity efficiency, customer service, and the variety of data plans offered as well as improved marketing efforts through professional independent telecommunication agents. Our ability to compete effectively will depend upon our continued ability to maintain high-quality, market-driven services at prices generally equal to or below those charged by competitors. To maintain a competitive posture, CCI believes that it must be in a position to reduce its prices in order to meet reductions in rates, if any, by others. Any such reductions could reduce profitability and make it cost prohibitive to continue as a going concern. Many of CCI’s current and potential competitors have financial, personnel, and other resources, including brand name recognition, greater than ours, as well as other competitive advantages.

 

Within the telecommunications industry sector, CCI competes principally with traditional local phone companies serving an area, including but not limited to AT&T, BellSouth, and Verizon. While these providers have name recognition, we believe CCI utilizes next generation technology to offer competitive pricing in various products and services related to 4G and emerging 5G mobile broadband services. The Company is currently marketing its products through Wylink, but has not achieved and does not expect to achieve a significant market share for any of its resale transport services in the short run. Recent regulatory initiatives allow newer local phone companies to connect with traditional local phone company facilities. Although this provides increased business opportunities for CCI, such connection opportunities have been, and likely will continue to be, accompanied by increased pricing flexibility for and relaxation of regulatory oversight of the traditional local telephone companies.

 

Traditional local telephone companies have long-standing relationships with regulatory authorities at the federal and state levels. While recent FCC administrative decisions and initiatives provide for increased business opportunities to telecommunication providers such as CCI, they also provide the traditional local telephone companies with increased pricing flexibility for their private line, special access, and switched access services. Additionally, wireless Internet and VoIP services are currently non-regulated and cost much less than the standard hardwire services offered by the local phone companies.

 

 

 

 

Intellectual Property

 

The Company, through Wytec, is owner of an interest in five (5) United States Patents directly related to LMDS or millimeter technology. The Company is currently in the process of developing its next generation of the technology (the LPN-16) to include substantial improvements in software integration, multiple frequencies and attachment capabilities. To protect this newer advanced technology, Wytec filed a provisional patent application in 2014 with the United States Office of Patents and Trademarks, and international patent applications ultimately for several foreign countries for the same technology in 2015.

 

Employees

 

As of December 31, 2015, we and our Subsidiaries had ten (10) full-time employees, including two (2) executive officers. Currently, there are no organized labor agreements or union agreements between us and our employees.

 

Assuming we are able to earn additional revenue through organic growth, acquisitions and strategic alliances during 2015, we may need to hire additional employees. In the interim, we intend to use the services of independent consultants and contractors to perform various professional services when appropriate. We believe the use of third-party service providers may enhance our ability to control general and administrative expenses and operate efficiently.

 

Governmental Approval and Regulation

 

CCI generally is subject to all of the governmental regulations that regulate businesses generally such as compliance with regulatory requirements of federal, state, and local agencies and authorities, including regulations concerning workplace safety, labor relations, and disadvantaged businesses. In addition, CCI’s operations are affected by federal and state laws relating to marketing practices in the telecommunications industry.

 

Traditionally, telephone services have been subject to extensive state regulation, while internet services have been subject to much less regulation. VoIP has elements that resemble traditional telephone companies as well as those that resemble the internet. Therefore, VoIP did not fit into either existing framework of regulation and until recently operated in an environment that was largely free of regulation.

 

The FCC, United States Congress, and various state regulatory bodies have, however, begun to assert regulatory authority over VoIP providers and on a continuous basis are evaluating how VoIP will be regulated in the future. Some of the existing regulations for VoIP are applicable to the entire industry, while other rulings are limited to specific companies and/or categories of service. At this point in time, the application of rules to CCI and its competitors is speculative.

 

Federal Regulation

 

The FCC has authority to regulate and implement provisions of the Telecommunications Act of 1996. One of the provisions enacted by the FCC was the Universal Service Order, which requires telecommunications carriers providing interstate telecommunications services to periodically contribute to universal service support programs administered by the FCC. The periodic contribution requirements to the Universal Service Funds are currently assessed based on a percentage of each contributor’s interstate end user telecommunications revenues reported to the FCC. The contribution rate factors are determined quarterly and carriers are billed for their contribution requirements each month based on projected interstate and international end-user telecommunications revenues, subject to periodic reconciliation. Currently we are not charged and are not paying a Universal Services Funds fee to the FCC. In the future we may become subject to this charge and have to pay it, in which case we would pass these fees to our customers a part of our service charges.

 

The FCC is considering several proposals that would fundamentally alter the basis upon which the Universal Service Fund contributions are determined and the means by which contributions can be recovered from. As of the first quarter 2013, the Universal Service Funds fee equals 16.1% of a telecom company’s interstate end-user revenues. As of the second quarter of 2013, the Universal Service Funds fee is 15.5%. If in the future we are required to pay the Universal Service Funds fee, those charges may impact our service fees and the ability to recoup these contributions from our customers.

 

The FCC recently adopted a regulatory policy to promote “net neutrality” for internet access. This policy is expected to result in more regulatory oversight of the internet access service industry by the FCC to ensure fair and equal access to the internet for businesses of all sizes, including potential pricing regulations. The FCC is promulgating new regulations to implement its policy to promote “net neutrality”, the impact of which on the Company and its Subsidiaries is currently uncertain.

 

 

 

 

State Regulation

 

State regulatory agencies have jurisdiction when facilities and services are used to provide intrastate services. A portion of CCI’s current traffic may be classified as intrastate and therefore subject to state regulation. CCI expects to offer more intrastate services as its business and product lines expand and state regulations are modified to allow increased local services competition. For other than shared tenant services, in order to provide intrastate services, CCI generally must obtain a certificate of public convenience and necessity from the state regulatory agency and comply with state requirements for telecommunications utilities, including state rate requirements.

 

State agencies require that CCI file periodic reports, pay various fees and assessments, and comply with rules governing quality of service, consumer protection, and similar issues. Although the specific requirements vary from state to state, they tend to be more detailed than the FCC’s regulation because of the strong public interest in the quality of basic local exchange service. CCI will comply with all applicable state regulations, and as a general matter does not expect that these requirements of industry-wide applicability will harm the business. However, new regulatory burdens in a particular state may affect the profitability of services in that state.

 

Local Regulation

 

CCI’s networks are subject to numerous local regulations such as building codes and licensing. Such regulations vary on a city-by-city and county-by-county basis. If CCI decides in the future to install its own fiber optic transmission facilities, it will need to obtain rights-of-way to publicly owned land. Since CCI is an approved public utility, such rights-of-way may be available to the Company on economically reasonable or advantageous terms.

 

Item 1A. Risk Factors.

 

Risks Relating with Our Business and Marketplace

 

We have incurred losses since inception and expect to incur losses for the foreseeable future. In addition, our poor financial condition raises substantial doubt about our ability to continue as a going concern. Our net losses for the years ended December 31, 2015 and 2014 were $2,948,112 and $5,072,168, respectively. As of December 31, 2015, we had $1,085,113 in cash available to finance our operations and a working capital deficit of $5,483,266.  Capital requirements have been and will continue to be significant, and our cash requirements have exceeded cash flow from operations since inception. We are in need of additional capital to continue our operations and have been dependent on the proceeds of private placements of securities, issuances of convertible notes, and sales of Registered Links by Wylink to satisfy working capital requirements. We will continue to be dependent upon the proceeds of future private offerings of our securities to fund development of products, short-term working capital requirements, marketing activities and to continue implementing our current business strategy. We cannot assure that we will be able to raise the necessary capital to continue operations.

 

Our ability to continue as a going concern is dependent on our ability to raise funds to finance ongoing operations; however we may not be able to raise sufficient funds to do so. Our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months. Because of these factors, investors cannot determine if and when we will become profitable and therefore run the risk of losing their investment.

 

If we are unable to obtain additional funding, our business operations will be harmed and our existing stockholders may suffer substantial dilution. We may consider acquisitions of assets or other businesses. Any acquisition involves a number of risks that could fail to meet our expectations and adversely affect our profitability. For example:

 

·	The acquired assets or business may not achieve expected results;
·	We may incur substantial, unanticipated costs, delays or other operational or financial problems when integrating the acquired assets;
·	We may not be able to retain key personnel of an acquired business;
·	Our management’s attention may be diverted; or
·	Our management may not be able to manage the acquired assets or combined entity effectively or to make acquisitions and grow our business internally at the same time.

 

If these problems arise we may not realize the expected benefits of an acquisition.

 

 

 

 

Without realization of additional capital, it would be unlikely for us to continue as a going concern. As a result of our working capital deficit at December 31, 2015, and other factors, our auditors have included an explanatory paragraph in their audit report regarding substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments as a result of this uncertainty. The going concern qualification may adversely impact our ability to raise the capital necessary for the continuation of operations.

 

Our limited resources may prevent us from retaining key employees or inhibit our ability to hire and train a sufficient number of qualified management, professional, technical and regulatory personnel. Our success may also depend on our ability to attract and retain other qualified management and personnel familiar in telecommunications industry. Currently, we have a limited number of personnel that are required to perform various roles and duties as a result of our limited financial resources. We intend to use the services of independent consultants and contractors to perform various professional services, when appropriate to help conserve our capital. However, if and when we determine to acquire additional personnel, we will compete for such persons with other companies and other organizations, some of which have substantially greater capital resources than we do. We cannot assure that we will be successful in recruiting or retaining personnel of the requisite caliber or in adequate numbers to enable us to conduct our business.

 

We must adapt quickly to changes in technology. Telecommunications is a rapidly evolving technology. We must keep abreast of this technological evolution. To do so, we must continually improve the performance, features, and reliability of our equipment and related products. If we fail to maintain a competitive level of technological expertise, then we will not be able to compete successfully in our market.

 

Our inability to respond timely to technological advances could have an adverse effect on our business. We must be able to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. We cannot assure that we will be able to successfully use new technologies effectively or adapt our products in a timely manner to a competitive standard. If we are unable to adapt in a timely manner to changing technology, market conditions, or customer requirements, then we may not be able to compete successfully in our market.

 

We may not be able to repay our indebtedness. We have substantial indebtedness to related parties and to unaffiliated third parties, as disclosed in more detail in our reports, financial statements, and notes to financial statements filed with the SEC. We cannot assure that we will be able to repay all or any of our indebtedness, or that the indebtedness does not and will not continue to have a material adverse impact on our financial condition, operating results and business performance, including but not limited to our ability to continue as a going concern.

 

We cannot assure that we will achieve profitability. We cannot assure that we will be able operate profitability in the future. We may not be able to transition successfully from our current stage of business to a stabilized operation having sufficient revenues to cover expenses. While attempting to make this transition, we will be subject to all the risks inherent in a small business, including the needs to adequately service and expand our customer base and to maintain and enhance our current services. There is no assurance that our proprietary LPN-16 technology will be as effective as we anticipate, give us a competitive advantage, or result in substantial sales by the Company and its subsidiaries. Our future profitability will be affected by all the risk factors described herein.

 

We are exposed to various possible claims relating to our business and our insurance may not fully protect us. We cannot assure that we will not incur uninsured liabilities and losses as a result of the conduct of our business. We generally maintain theft and casualty insurance and have modest liability and property insurance coverage, along with workmen’s compensation and related insurance. However, should uninsured losses occur, our shareholders could lose their invested capital.

 

We may face litigation in the future. We may be involved in litigation in the future. The adverse resolution of such litigation to us could impair our ability to continue in business if judgment holders were to seek to liquidate our business through levy and execution. We may incur substantial legal fees and costs in connection with future litigation. If we fail in our defense to future pending actions, or become subject to a levy and execution on our assets and business, we could be forced to liquidate or to file for bankruptcy and be unable to continue in our business. Investors who purchase shares of our common stock will be subject to the risk of total loss if the risks described herein are realized, because there may be insufficient assets with which to pay our debts, which would leave shareholders with no recovery.

 

The loss of the services of any or our management or key executives could adversely affect our business. Our success is substantially dependent on the performance of our executive officers and key employees. The loss of an officer or director could have a material adverse impact on us. We are generally dependent upon our executive officer, William H. Gray, for the direction, management and daily supervision of our operations.

 

 

 

 

Our ability to protect our intellectual property is uncertain. We own an interest in patents, have filed a new patent application for our proprietary LPN-16 technology, and may apply for additional patents in the future. We cannot assure that these applications will be approved or that any other person will not challenge the patents or attempt to infringe upon our proprietary rights. If we are unable to protect our proprietary rights or if such rights infringe on the rights of others, our business would be materially adversely affected.

 

Competition from companies with already established marketing links and brand recognition to our potential customers may adversely affect our ability to introduce and market our products. The telecommunications industry is highly competitive. Many of our current and potential competitors have financial, personnel and other resources, including brand name recognition, substantially greater than ours, as well as other competitive advantages over us. Certain competitors may be able to secure product from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, and adopt more aggressive pricing than we will. There can be no assurance we will be able to compete successfully against these competitors, which ultimately may have a materially adverse effect on our business, results of operations, financial condition and potential products in the future.

 

We may not be able to provide our products and services if we do not connect or continue to connect with the traditional carriers, our primary competitors. As a competitive carrier, we must coordinate with traditional carriers so that we can provide local service to customers on a timely and competitive basis. The Telecommunications Act created incentives for regional Bell operating companies to cooperate with competitive carriers and permit access to their facilities by denying such companies the ability to provide in-region long distance services until they have satisfied statutory conditions designed to open their local markets to competition. The regional Bell operating companies in our markets are not yet permitted by the FCC to offer long distance services. These companies may not be accommodating once they are permitted to offer long distance service. Currently AT&T is permitted to offer both local and long distance service in some of our mutual service areas, but we have not yet noticed any impact on our markets. Many competitive carriers, including us, have experienced difficulties in working with traditional carriers with respect to initiating, connecting, and implementing the systems used by these competitive carriers to order and receive network elements and wholesale services and locating equipment in the offices of the traditional carriers. If we cannot obtain the cooperation of a regional Bell operating company in a region, whether or not we have been authorized to offer long distance service, our ability to offer local services in such region on a timely and cost-effective basis will be harmed.

 

Risks Relating To Our Common Stock

 

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. Companies trading on the OTC-QB Market, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC-QB Market. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC-QB Market by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC-QB Market for failure to timely file twice in a two-year period then we will be ineligible for quotation on the OTC-QB Market for one year. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

 

Our internal controls are inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of CCI; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of CCI are being made only in accordance with authorizations of management and directors of CCI, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of CCI’s assets that could have a material effect on the financial statements.

 

We have a limited number of personnel that are required to perform various roles and duties. Furthermore, we have one individual, our chief executive officer, who is responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls are inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

 

 

 

 

Because our common stock is deemed a low-priced “Penny” Stock, an investment in our common stock should be considered high risk and subject to marketability restrictions. Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment of our common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

 

·	Deliver to the customer, and obtain a written receipt for, a disclosure document;
·	Disclose certain price information about the stock;
·	Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
·	Send monthly statements to customers with market and price information about the penny stock; and
·	In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

 

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

 

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our stock. In addition to the “penny stock” rules described above, FINRA has adopted rules that require that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

 

Shareholders will experience dilution in their ownership of us. Our board of directors has the authority to cause the Company to issue additional securities and convertible securities at such prices and on such terms as it determines in its discretion without the consent of the stockholders, including without limitation common stock, preferred stock, warrants and convertible notes. The Company has issued securities to investors that have variable conversion prices, anti-dilution provisions and other adjustments for certain potentially dilutive transactions. These provisions may be triggered, causing adjustments resulting in lower conversion prices and more securities outstanding, thereby causing existing shareholders to experience more dilution than originally anticipated when those securities were first issued by the Company. Consequently, our shareholders are subject to the risk that their ownership in the Company will be substantially diluted in the future.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

 

 

 

 

Item 2. Properties.

 

Our corporate headquarters are located at 19206 Huebner Road, Suite 202, San Antonio, Texas, where we lease approximately 3,400 square feet of office space pursuant to a two year lease agreement which was renewed on November 1, 2015. Our monthly lease payment is currently $5,412. On November 1, 2016 it will increase to $5,520 per month and on November 1, 2017 it will increase to $5,630 per month until the lease expires on October 31, 2018. The Company has the ability to extend the lease on month to month basis at the end of the current lease term.

 

Wireless WI’s operations are located in Eau Claire, Wisconsin, where we lease approximately 860 square feet of office and warehouse space for approximately $815 per month. The lease expired on September 30, 2013 and we currently lease the space on a month to month basis.

 

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.

 

Item 3. Legal Proceedings.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

 

 

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

 

Market Information

 

Our common stock was approved for trading on FINRA’s Over-the-Counter Bulletin Board market (OTC:BB) under the symbol CCOP on March 8, 2006. Our common stock now trades relatively light volume on the OTC-QB Market, which limits our ability to locate accurate high and low bid prices for each quarter within the last two fiscal years. The range of high and low bid quotations for each fiscal quarter within the last two fiscal years was as follows:

 

				December 31, 2015								December 31, 2014
					High				Low				High				Low
	1st Quarter			$	0.020			$	0.010			$	0.055			$	0.012
	2nd Quarter			$	0.036			$	0.011			$	0.029			$	0.014
	3rd Quarter			$	0.030			$	0.011			$	0.024			$	0.016
	4th Quarter			$	0.030			$	0.011			$	0.032			$	0.015

 

The above quotations reflect inter-dealer prices, without retail markup, mark-down, or commission and may not necessarily represent actual transactions.

 

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, 2015. 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.

 

As of December 31, 2015, 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, and expects to reach a conclusion as to their validity in 2016.

 

As of March 30, 2016, there were 682 record holders of our common stock, not including shares held in “street name” in brokerage accounts which is unknown. As of March 30, 2016, there were 334,224,469 shares of common stock outstanding on record.

 

We have never declared or paid dividends on our Common Stock and have no plan to do so in the immediate future.

 

Wytec’s authorized capital stock consists of 495,000,000 shares of common stock, par value $0.001 per share, of which 25,005,000 shares are issued and outstanding as of December 31, 2015. Our authorized capital stock also includes 20,000,000 shares of Preferred Stock, par value $0.001, 4,100,000 of which have been designated as Series A Preferred Stock, 3,360,000 of which are issued and outstanding, and 6,650,000 of which have been designated as Series B Preferred Stock, 831,161 of which are issued and outstanding. Holders of common stock are entitled to one vote per share held of record on all matters submitted to a vote of stockholders. The holders of common stock do not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of the outstanding shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Subject to preferential rights with respect to any series of preferred stock that may be issued, holders of the common stock are entitled to receive ratably such dividends as may be declared by the board of directors on the common stock out of funds legally available therefore and, in the event of a liquidation, dissolution or winding-up of our affairs, are entitled to share equally and ratably in all of our remaining assets and funds.

 

 

 

 

Wytec’s Series A Preferred Stock is nonvoting capital stock but may be converted into voting common stock of Wytec. Each share of Series A Preferred Stock is convertible at the option of the holder at any time after issuance into one share of common stock, subject to adjustment from time to time in the event (i) Wytec subdivides or combines its outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends; or (ii) of a reorganization or reclassification of our common stock, the consolidation or merger of Wytec with or into another company, the sale, conveyance or other transfer of substantially all of our assets to another corporation or other similar event, whereby securities or other assets are issuable or distributable to the holders of our outstanding common stock upon the occurrence of any such event; or (iii) of the issuance by us to the holders of our common stock of securities convertible into, or exchangeable for, such shares of common stock. Each outstanding share of Series A Preferred Stock will automatically convert into one share of common stock (a) if Wytec common stock commences public trading on the NASDAQ Capital Market or better, (b) if the Series A Preferred Stockholder receives distributions from the Net Profits Pool equal to the original purchase price paid for their Registered Links, or (c) five years after the date of issuance of the Series A Preferred Stock. The Subsidiary does not have any other right to require a conversion of the Series A Preferred Stock into common stock. The Subsidiary does not have the option to redeem outstanding shares of Series A Preferred Stock. A holder of the Series A Preferred Stock has no preemptive rights to subscribe for any additional shares of any class of stock of Wytec or for any issue of bonds, notes or other securities convertible into any class of stock of Wytec. In the event of a liquidation, dissolution or winding-up of Wytec, whether voluntary or otherwise, after payment of our debts and other liabilities, the holders of the Series A Preferred Stock will be entitled to receive from our remaining net assets, before any distribution to the holders of the common stock, the amount of $1.50 per share. After payment of the liquidation preference to the holders of the Series A Preferred Stock and payment of any other distributions that may be required with respect to any other series of Preferred Stock, our remaining assets, if any, will be distributed ratably to the holders of the common stock and the holders of the Series A Preferred Stock on an as-if converted basis.

 

Wytec’s Series B Preferred Stock is voting capital stock. The holders of the Series B Preferred Stock will vote on an as-converted basis with the common stock on all matters submitted to a vote of the shareholders of Wytec. The holders of the Series B Preferred Stock are not entitled to any dividends unless and until the Series B Preferred Stock is converted into common stock. Each share of Series B Preferred Stock is convertible at the option of the holder at any time after issuance into one share of common stock, subject to adjustment from time to time in the event (i) Wytec subdivides or combines its outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends; or (ii) of a reorganization or reclassification of our common stock, the consolidation or merger of Wytec with or into another company, the sale, conveyance or other transfer of substantially all of our assets to another corporation or other similar event, whereby securities or other assets are issuable or distributable to the holders of our outstanding common stock upon the occurrence of any such event; or (iii) of the issuance by us to the holders of our common stock of securities convertible into, or exchangeable for, such shares of common stock. Each outstanding share of Series B Preferred Stock will automatically convert into one share of common stock at a conversion rate equal to the lesser of $3.00 per share or 75% of the average closing price of 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 after the first day of public trading of Wytec common stock if Wytec’s common stock commences public trading on the NASDAQ Capital Market or better, but in any event no less than $2.50 per share or at $3.00 per share five years after the date of issuance of the Series B Preferred Stock. We do not have any other right to require a conversion of the Series B Preferred Stock into common stock. We do not have the option to redeem outstanding shares of Series B Preferred Stock. In the event of a liquidation, dissolution or winding-up of Wytec, whether voluntary or otherwise, after payment of our debts and other liabilities, the holders of the Series B Preferred Stock will be entitled to receive from our remaining net assets, before any distribution to the holders of the common stock, and pari pasu with the payment of a liquidation preference of $1.50 per share to the holders of the Series A Preferred Stock, the amount of $3.00 per share. After payment of the liquidation preference to the holders of the Series A Preferred Stock and the Series B Preferred Stock, and payment of any other distributions that may be required with respect to any other series of Preferred Stock, our remaining assets, if any, will be distributed ratably to the holders of the common stock, the holders of the Series A Preferred Stock, and the holders of the Series B Preferred Stock on an as-if converted basis.

 

Equity Compensation Plan and Information

 

2012 Stock Incentive Plan

 

On October 10, 2012, in order to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial success, the Company, through its board of directors, adopted an equity incentive plan (the “Plan”), pursuant to which 25,000,000 shares of our common stock are reserved for issuance as awards to employees, directors, consultants and other service providers. Under the Plan, we are authorized to issue incentive stock options intended to qualify under Section 422 of the Code and non-qualified stock options. The incentive stock options may only be granted to employees. Nonstatutory stock options may be granted to employees, directors and consultants. The Plan is administered by our board of directors until such time as such authority has been delegated to a committee of the board of directors. The Plan was ratified by our shareholders in September 2013. As of the date of this report, 15,250,000 stock options have been granted and 13,500,000 remain outstanding under the Plan.

 

 

 

 

Plan and Non Plan Stock Option Grants

 

The following table sets forth information as of December 31, 2015, regarding outstanding options granted under the plan and options reserved for future grant under the plan.

 

Plan Category		Number of shares to be issued upon exercise of outstanding stock options				Weighted-average exercise price of outstanding stock options				Number of shares remaining available for future issuance under equity compensation plans
Equity compensation plans approved by stockholders			13,500,000			$	0.02				11,500,000
Non Plan Equity compensation			0			$	0				0
Total			13,500,000			$	0.02				11,500,000

 

Warrants

 

CCI currently has a total of 87,571,429 common stock purchase warrants outstanding to purchase a total of 87,571,429 shares of its common stock exercisable until April 17, 2024, and are exercisable at an exercise price of $0.025 per share only if the Company achieves certain milestones. As of December 31, 2015 these milestones have not been met.

 

During the year ended December 31, 2015, the Company paid $51,000 to repurchase 2,428,571 of the 90,000,000 unvested CCI common stock purchase warrants held by the Company’s chief executive officer.

 

Wytec currently has a total of 2,805,672 common stock purchase warrants outstanding to purchase a total of 2,805,672 shares of Wytec common stock exercisable until various dates through December 31, 2016, 170,000 of which are exercisable at an exercise price of $1.75 per share, 1,310,672 of which are exercisable at an exercise price of $1.50 per share, 75,000 of which are exercisable at an exercise price of $1.45 per share, 500,000 of which are exercisable at an exercise price of $1.25 per share, and 750,000 of which are exercisable at an exercise price of $1.00 per share.

 

Recent Sales of Unregistered Securities

 

The Company did not issue any securities during the fiscal year ending December 31,2015 in transactions exempt from registration that were not previously included in a Quarterly Report on Form 10-Q or in a Report on Form 8-K.

 

Issuer Purchases of Equity Securities

 

The Company repurchased a total of 394,292 shares of its outstanding common stock during the year ended December 31, 2015, from employees of the Company for $8,170.

 

During the year ended December 31, 2015, the Company repurchased 2,428,571 of the 90,000,000 CCI common stock purchase warrants issued to the Company’s chief executive officer for $51,000.

 

 

 

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Cautionary Statements

 

This Form 10-K contains financial projections and other “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others, statements concerning the potential for revenues and expenses and other matters that are not historical facts. These statements may be made expressly in this Form 10-K. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions used in this Form 10-K. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied by us in those statements. The most important facts that could prevent us from achieving our 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)

our failure to earn revenues or profits;

 

(e)

inadequate capital to continue 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 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-K. 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-K or to reflect the occurrence of unanticipated events.

 

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

 

 

 

Overview of Current Operations

 

For the years ended December 31, 2015 and 2014, we incurred net losses of $2,948,112 and $5,072,168 respectively.  Our accumulated deficit at the end of December 31, 2015 was $18,136,863.  We have a history of operating losses and expect to continue incurring losses for the foreseeable future. We cannot anticipate when, if ever, our operations will become profitable. We expect to incur significant net losses as we invest in our technology, expand our markets and pursue our business strategy. We intend to invest significantly in our business before we expect cash flow from operations to be adequate to cover our operating expenses. If we are unable to execute our business strategy and grow our business, either as a result of the risks identified in this annual report or for any other reason, our business, prospects, financial condition and results of operations will be adversely affected.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. 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 disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

 

Revenue Recognition

 

Our main source of revenue currently is through the Company’s subsidiary, Capaciti Networks, where the sales of both wired and wireless services, including products, wireless data cards, back office platform and rate plans to their commercial and enterprise clients. As such, we recognize revenues from our wired and wireless internet services in the month in which we provide services. 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.

 

A second source of revenue is through the Company’s subsidiary, WW. Our revenue is recognized when persuasive evidence of an arrangement exists; delivery of our services has occurred; our price to our customer is fixed or determinable; and collectability of the sales price is reasonably assured. As such, we recognize revenues from our dial-up and broadband internet services in the month in which we provide services. 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.

 

A third source of revenue is through the Company’s subsidiary, Wylink, where the sales of FCC Registered Links sales, as well as the necessary equipment and installation of the equipment, are sold to qualified individuals. Revenue 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. Amounts collected from the customer prior to completion of all obligations to the customer are recorded as deferred revenue. Commission expense 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.

 

Stock-Based Compensation

 

All share based-based payments to service providers or employees, including grants of employee stock options, are recognized in the income statement based upon their fair values. Stock issued for services, stock-based compensation and expenses related to stock option awards totaled $42,750 and $30,000 for the years ended December 31, 2015 and 2014, respectively.

 

 

 

 

Result of Operations for the Years Ended December 31, 2015 and 2014

 

Revenues for the year ended December 31, 2015 was $80,806 compared to revenues of $405,878 for the year ended December 31, 2014. This resulted in a decrease in revenues of $325,072, or 80%.  Our revenues decreased in 2015 compared to 2014 due to lower total amount of links recognized as revenue from the prior year.

 

Cost of sales for the year ended December 31, 2015 was $51,975, a decrease of $100,918, or 66%, from $152,893 for the year ended December 31, 2014.  Our cost of sales decreased primarily due reduction of costs incurred in the operation of our Registered Links Program from which we have recognized -$-0- in link revenue for the year ended December 31, 2015.

 

General and administrative expenses were $1,789,783 for the year ended December 31, 2015, as compared to $3,962,893 for the year ended December 31, 2014.  This resulted in a decrease of $2,173,110 or 55%.  The decrease in our general and administrative expenses was largely a result of a decrease in the commissions paid for link sales. Commission expense is recorded in the period in which the commission form the link sale has been earned and paid, even though the revenue from the sale may not be recognized until a future period.

 

Salary and wage expenses were $814,499 for the year ended December 31, 2015, versus $904,803 of salary and wage expenses for the year ended December 31, 2014, which resulted in an increase a decrease of $90,304, or 10%.  The decrease in salary and wages is due to the decrease in compensation paid during the year to the current employees as well as a reduction in overall staff. The number of employees has decreased from 11 full time employees in 2014 to 10 full time employees in 2015.

 

Research and development costs were $22,358 for the year ended December 31, 2015 versus $336,491 of research and development costs for the year ended December 31, 2014, which resulted in a decrease of $314,133, or 93%. The decrease in research and development is due to a reduction in expenses incurred in the development of Wytec’s LPN-16.

 

Depreciation expense was $212,002 for the year ended December 31, 2015, versus $103,661 for the year ended December 31, 2014, resulting in an increase of $108,341 or 105%.  The increases are principally due to the placement of additional property and equipment in service in the latter half of 2014. 

 

Interest expenses were $136,959 for the year ended December 31, 2015, versus $88,979 of interest expense for the year ended December 31, 2014, which resulted in an increase of $47,980, or 54%. The increase was primarily due to payoff convertible and non-convertible debentures and related accrued interest during 2015.

 

Other income is $-0- for the year ended December 31, 2015, versus $38,590 for the year ended December 31, 2014, resulting in aa decrease of $38,590 or 100%.  The decrease is principally due to no reimbursements from the State of Texas for workforce credits during the year.  

 

Liquidity and Capital Resources

 

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development of alternative revenue sources. As of December 31, 2015, we had a working capital deficit of $5,483,266. Our poor financial condition raises substantial doubt about our ability to continue as a going concern and we have incurred losses since inception and may incur future losses.

 

However, should we not be able to continue to secure additional financing when needed, we may be required to slow down or suspend our growth or reduce the scope of our current operations, any of which would have a material adverse effect on our business.

 

During the year ended December 31, 2015, the Company repurchased a total of 394,292 shares of common stock, at an aggregate cost of $8,170.

 

Our future capital requirements will depend on many factors, including the expansion of our wireless internet services in the CBDs and rural markets; VoIP services; additional marketing of the (800) services; the cost and availability of third-party financing for development; addition of new revenue sources; and administrative and legal expenses.

 

 

 

 

We anticipate that we will incur operating losses 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 development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of additional revenue sources; and the management of growth. To address these risks, we must, among other things, expand our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

 

Going Concern

 

Our 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. We have incurred continuous losses from operations, have an accumulated deficit of $18,136,863 and a working capital deficit of $5,483,266 at December 31, 2015, and have reported negative cash flows from operations over the last six years. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. 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 or operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 8. Financial Statements and Supplementary Data

 

 

 

 

COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

CONTENTS

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of December 31, 2015 and 2014	F-2
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014	F-3
Consolidated Statement of Stockholders’ (Deficit) for the years ended December 31, 2015 and 2014	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014	F-6
Notes to Consolidated Financial Statements	F-7

 

 

 

 

 

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders

Competitive Companies, Inc.

 

We have audited the accompanying consolidated balance sheets of Competitive Companies, Inc. and subsidiaries (collectively, the “Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, stockholders' (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Competitive Companies, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has insufficient working capital and a stockholders’ deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Padgett, Stratemann & Co., L.L.P.
San Antonio, Texas 

March 30, 2016

 

 

 

 

COMPETITIVE COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

 

		December 31,				December 31,
		2015				2014
Assets
Current assets:
Cash		$	1,085,113			$	318,397
Accounts receivable, net			4,328				7,162
Prepaid expenses			8,200				76,041
Total current assets			1,097,641				401,600
Property and equipment, net			782,194				990,464
Other assets:
Construction in process			359,900				476,099
Software, net			–				3,504
Deposits and other assets			43,610				43,183
			403,510				522,786
Total assets		$	2,283,345			$	1,914,850
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable		$	253,975			$	262,821
Accrued expenses			65,932				161,739
Deferred revenues, net of commissions			6,242,500				4,685,000
Notes payable			–				47,006
Convertible debentures			18,500				676,160
Nonconvertible debenture			–				109,210
Total current liabilities			6,580,907				5,941,936
Total liabilities			6,580,907				5,941,936
Stockholders' (deficit):
Controlling interest:
Preferred stock, $0.001 par value 100,000,000 shares authorized:
Class A, no shares issued and outstanding with no liquidation value			–				–
Class B, 1,495,436 shares issued and outstanding with no liquidation value			1,495				1,495
Class C, 1,000,000 shares issued and outstanding with no liquidation value			1,000				1,000
Class D, 100,000 shares issued and outstanding with no liquidation value			100				100
Common stock, $0.001 par value, 500,000,000 shares authorized, 337,167,991 shares and 335,621,533 shares issued, 334,410,828 and 333,258,662 shares outstanding at December 31, 2015 and  December 31, 2014, respectively			337,164				335,618
Additional paid-in capital			6,111,263				5,925,499
Accumulated (deficit)			(18,136,863	)			(15,391,154	)
Treasury stock, at cost, 2,757,163 and 2,362,871 shares at December 31, 2015 and December 31, 2014, respectively			(78,718	)			(70,548	)
Noncontrolling interest			7,466,997				5,170,904
Total stockholders' (deficit)			(4,297,562	)			(4,027,086	)
Total liabilities and stockholders' (deficit)		$	2,283,345			$	1,914,850

 

See accompanying notes to financial statements.

 

 

COMPETITIVE COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		For the Years
		Ended December 31,
		2015				2014
Revenue		$	80,806			$	405,878
Cost of sales			51,975				152,893
Gross profit			28,831				252,985
Expenses:
General and administrative			1,789,783				3,962,893
Salaries and wages			814,499				904,803
Research and development			22,358				366,491
Depreciation and amortization			212,002				103,661
Bad debts			1,235				–
Total operating expenses			2,839,877				5,337,848
Net operating loss			(2,811,046	)			(5,084,863	)
Other income (expense):
Interest income			43				224
Interest expense			(136,959	)			(88,979	)
Other income			–				38,950
Other expense			(150	)			–
Gain on sale of property and equipment			–				62,500
Total other income (expense)			(137,066	)			12,695
Net loss		$	(2,948,112	)		$	(5,072,168	)
Net loss attributable to the noncontrolling interest		$	(202,403	)		$	(300,803	)
Net loss attributable to Competitive Companies, Inc.		$	(2,745,709	)		$	(4,771,365	)
Weighted average number of common shares outstanding - basic and fully diluted			333,787,781				333,670,218
Net loss per share - basic and fully diluted		$	(0.01	)		$	(0.02	)

 

See accompanying notes to financial statements.

 

 

COMPETITIVE COMPANIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)

 

Class A

Class B

Class C

Class D

Preferred Stock

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Balance, December 31, 2013

–

$

–

1,495,436

$

1,495

1,000,000

$

1,000

100,000

$

100

335,621,533

$

335,618

Wytec warrants issued for extension of debts

–

–

–

–

–

–

–

–

CCI warrants issued for services

–

–

–

–

–

–

–

–

–

–

Wytec warrants issued for services

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. preferred stock to satisfy subscription payable

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. preferred stock in exchange for registered links and related equipment

–

–

–

–

–

–

–

–

–

–

Stock-based compensation expense

–

–

–

–

–

–

–

–

–

–

Purchase of treasury stock

–

–

–

–

–

–

–

–

–

–

Net loss for the year ended December 31, 2014

–

–

–

–

–

–

–

–

–

–

Balance, December 31, 2014

–

$

–

1,495,436

$

1,495

1,000,000

$

1,000

100,000

$

100

335,621,533

$

335,618

Stock-based compensation expense

–

–

–

–

–

–

–

–

–

–

CCI shares issued for conversion of debt

–

–

–

–

–

–

–

–

1,546,458

1,546

Adjustment for Warrants issued for extended notes payable

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. preferred stock to satisfy subscription payable

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. Series B preferred stock

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. Series B preferred stock for CCI Notes

–

–

–

–

–

–

–

–

–

–

Issuance of Wytec International, Inc. Series B preferred stock for Wytec Notes

–

–

–

–

–

–

–

–

–

–

Purchase of treasury stock

–

–

–

–

–

–

–

–

–

Net loss for the year ended December 31, 2015

–

–

–

–

–

–

–

–

–

–

Balance, December 31, 2014

–

$

–

1,495,436

$

1,495

1,000,000

$

1,000

100,000

$

100

337,167,991

$

337,164

 

 

See accompanying notes to financial statements.

 

 

COMPETITIVE COMPANIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT) (continued)

 

 

	Treasury Stock						Additional			Accumulated			Noncontrolling			Stockholders'
	Shares			Amount			Paid-in Capital			(Deficit)			Interest			(Deficit)
Balance, December 31, 2013		470,000		$	(20,653	)	$	5,443,499		$	(10,619,789	)	$	–		$	(4,858,730	)
Wytec warrants issued for extension of debts		–			–			–			–			125,557			125,557
CCI warrants issued for services		–			–			452,000			–			–			452,000
Wytec warrants issued for services		–			–			–			–			616,150			616,150
Issuance of Wytec International, Inc. preferred stock to satisfy subscription payable		–			–			–			–			4,280,000			4,280,000
Issuance of Wytec International, Inc. preferred stock in exchange for registered links and related equipment		–			–			–			–			450,000			450,000
Stock-based compensation expense		–			–			30,000			–			–			30,000
Purchase of treasury stock		1,892,871			(49,895	)		–			–			–			(49,895	)
Net loss for the year ended December 31, 2014		–			–			–			(4,771,365	)		(300,803	)		(5,072,168	)
Balance, December 31, 2014		2,362,871		$	(70,548	)	$	5,925,499		$	(15,391,154	)	$	5,170,904		$	(4,027,086	)
Stock-based compensation expense		–			–			42,750			–			–			42,750
CCI shares issued for conversion of debt		–			–			75,004			–			–			76,550
Adjustment for Warrants issued for extended notes payable		–			–			68,010			–			–			68,010
Issuance of Wytec International, Inc. preferred stock to satisfy subscription payable		–			–			–			–			65,000			65,000
Issuance of Wytec International, Inc. Series B preferred stock		–			–			–			–			1,863,040			1,863,040
Issuance of Wytec International, Inc. Series B preferred stock for CCI Notes		–			–			–			–			68,824			68,824
Issuance of Wytec International, Inc. Series B preferred stock for Wytec Notes		–			–			–			–			501,632			501,632
Purchase of treasury stock		394,292			(8,170	)		–			–			–			(8,170	)
Net loss for the year ended December 31, 2015		–			–			–			(2,745,709	)		(202,403	)		(2,948,112	)
Balance, December 31, 2014		2,757,163		$	(78,718	)	$	6,111,263		$	(18,136,863	)	$	7,466,997		$	(4,297,562	)

 

See accompanying notes to financial statements.

 

 

 

 

COMPETITIVE COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Year
		Ended December 31,
		2015				2014
Cash flows from operating activities
Net loss		$	(2,948,112	)		$	(5,072,168	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			42,750				30,000
Warrants issued for services			–				1,068,150
Writedown of construction in progress equipment			54,092				–
Depreciation			212,002				103,661
Gain on asset disposal			–				(62,500	)
Decrease (increase) in assets:
Accounts receivable			2,834				3,496
Prepaid expenses			71,346				(6,733	)
Deposits and other assets			(427	)			(33,075	)
Increase (decrease) in liabilities:
Accounts payable			(8,846	)			70,773
Accrued expenses			9,870				45,284
Deferred revenues			1,557,500				3,845,520
Net cash used in operating activities			(1,006,991	)			(7,592	)
Cash flows from investing activities
Purchases of property and equipment			(3,734	)			(505,901	)
Purchase of construction in progress equipment			(135	)			–
Return of construction in progress equipment			62,242				–
Net cash provided by (used in) investing activities			58,373				(505,901	)
Cash flows from financing activities
Principal payments on short term and convertible debts			(204,536	)			(20,000	)
Proceeds from issuance of Wytec common stock			5,000				–
Proceeds from issuance of Wytec Series B preferred stock			1,923,040				–
Purchase of treasury stock			(8,170	)			(49,895	)
Net cash provided by (used in) financing activities			1,715,334				(69,895	)
Net increase (decrease) in cash			766,716				(583,388	)
Cash - beginning			318,397				901,785
Cash - ending		$	1,085,113			$	318,397
Supplemental disclosures:
Interest paid		$	43,019			$	–
Income taxes paid		$	–			$	–
Non-cash investing and financing activities:
Issuance of Wytec International, Inc. preferred stock in exchange for deferred revenue obligations		$	–			$	4,280,000
Issuance of Wytec International, Inc. preferred stock in exchange for registered links and related equipment		$	–			$	450,000
Warrants issued for convertible debentures and accrued interest		$	–			$	125,557
Reclassification of equipment held for installation to property and equipment		$	–			$	714,804
Reclassification of property and equipment to construction in progress		$	–			$	476,099
Sale of property and equipment in exchange for deferred revenue obligations		$	–			$	220,000
Issuance of CCI common stock for conversion of CCI convertible debentures		$	76,550			$	–
Issuance of Wytec International, Inc. Preferred Stock Series B in exchange for CCI Notes		$	68,824			$	–
Issuance of Wytec Series B Preferred Stock for conversion of Wytec convertible debentures		$	271,252			$	–
Issuance of Wytec Series B Preferred Stock for conversion of Wytec non-convertible debentures		$	230,380			$	–
Notes payable converted to additional paid-in capital		$	68,010			$	–
Reclassification of software to prepaid expenses		$	3,505			$	–

 

See accompanying notes to financial statements.

 

 

Note 1 – Nature of Business and Significant Accounting Policies

 

Description of Business

Through the Company’s subsidiary, Wylink Inc., the Company operates and manages a unique sales organization engaged in the sale of Federal Communications Commission (“FCC”) registered links participating in the 70 and 80 gigahertz licensed frequency program (the “Program”). The Program allows qualified individuals to own a segment of the “backhaul” infrastructure of Wytec’s city-wide business deployment. A total of eight cities were chosen for initial deployment of Wylink’s Registered Link Program.

 

Through the Company’s subsidiary, Wisconsin Wireless, LLC, the Company’s primary operations consist of providing high speed wireless Internet connections to residents in rural communities, as well as some dial-up internet services to businesses and residents within various markets throughout rural Wisconsin. The Company operates in both a regulated and non-regulated environment.

 

On August 12, 2013 the Company formed a subsidiary, Capaciti Networks, Inc., to provide flexible and customizable wireless internet services for small-to-medium businesses, and commercial and enterprise clients called Bid for Better Broadband (B4BB). This service allows customers to use an online automated system for choosing their broadband plan and communicating with Capaciti sales team members.

 

The Company's headquarters are located in San Antonio, Texas.

 

Use of Estimates

The preparation of consolidated financial statements in accordance with generally accepted 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

The accompanying consolidated financial statements include the accounts of the following entities:

 

Name of Entity (1)

Form of Entity

State of Incorporation

Relationship

Abbreviated Reference

Competitive Companies, Inc.

Corporation

Nevada

Parent

CCI

Capaciti Networks, Inc.

Corporation

Texas

Subsidiary (2)

CNI

Competitive Communications, Inc.(3)

Corporation

California

Subsidiary (2)

COMM

CCI Residential, Inc.(3)

Corporation

California

Subsidiary (2)

CCIR

Innovation Capital Management, Inc.

Corporation

Delaware

Subsidiary (2)

ICMI

Innovation Capital Management, LLC

Limited Liability Corporation

Delaware

Subsidiary (2)

ICML

Wireless Wisconsin, LLC

Limited Liability Corporation

Wisconsin

Subsidiary (2)

WW

Wytec International, Inc.

Corporation

Nevada

Subsidiary (5)

WYTECI

Wylink, Inc.

Corporation

Texas

Subsidiary (4)

WYLINK

(1) Certain non-operational holding companies have been excluded.

(2) Wholly-owned subsidiary of Competitive Companies, Inc.

(3) Inactive since discontinuing its operations in California in 2009

(4) Wholly-owned subsidiary of Wytec International, Inc.

(5) Competitive Companies, Inc. owns 86% of the issued and outstanding stock of this subsidiary.

 

The consolidated financial statements herein contain the operations of the wholly owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company, CCI and subsidiaries will be collectively referred to herein as the “Company”, or “CCI”.

 

 

 

 

Revenue Recognition

Our main source of revenue currently is through the Company’s subsidiary, Capaciti Networks, where the sales of both wired and wireless services, including products, wireless data cards, back office platform and rate plans to their commercial and enterprise clients. As such, we recognize revenues from our wired and wireless internet services in the month in which we provide services. 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.

 

A second source of revenue is through the Company’s subsidiary, WW. Our revenue is recognized when persuasive evidence of an arrangement exists; delivery of our services has occurred; our price to our customer is fixed or determinable; and collectability of the sales price is reasonably assured. As such, we recognize revenues from our dial-up and broadband internet services in the month in which we provide services. 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.

 

A third source of revenue is through the Company’s subsidiary, Wylink, where the sales of FCC Registered Links sales, as well as the necessary equipment and installation of the equipment, are sold to qualified individuals. Revenue 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. Amounts collected from the customer prior to completion of all obligations to the customer are recorded as deferred revenue. Commission expense 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.

 

Allowance for Doubtful Accounts

We evaluate the allowance for doubtful accounts 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 for doubtful accounts was $6,380 and $5,145 at December 31, 2015 and 2014.

 

Equipment Held for Installation

Equipment held for installation is comprised of link equipment that the company has purchased to satisfy obligations under its link sales program. We transferred the funds from the Equipment Held for Installation to a new account titled Construction in Process to better reflect the current nature of those costs. Originally the account known as Equipment Held for Installation reflected the value of equipment and materials inventory related to links that had not gone live which, when applied, would have become cost of goods sold. The new account known as Construction in Process largely consists of equipment and materials that will be used to construct network, plant property and equipment. Equipment and materials related to links that have not gone live is a small portion of the value of this new account and when installed for that purpose will be treated as cost of goods sold. Largely the value of this equipment and materials will be capitalized when each construction project is completed. In the future, this account will also hold certain direct and indirect non-equipment costs until construction of a market has been completed and capitalized.

 

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			5 years
Telecommunication equipment and computers			5 – 10 years

 

Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend 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.

 

 

 

 

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 2015 and 2014, 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. Stock and stock options were issued for services and compensation was $42,750 and $30,000 for the years ended December 31, 2015 and 2014, respectively.

 

Advertising

We expense advertising costs as they are incurred. These expenses approximated $13,640 and $384,230 for the years ended December 31, 2015 and 2014, respectively.

 

Income Taxes

The Company files an income tax return in the U.S. federal jurisdiction, as well as in the states of Texas, 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.

 

Reclassifications

During 2015, the Company identified a math error in the 2014 Consolidated Statement of Operations, totaling $360.  The 2014 error has been corrected, and appropriate reclassifications to retained earnings and accounts payable have been made, in this year’s financial statements.

 

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 Company has not yet selected a transition method and is currently evaluating the effect the updated standard will have on the consolidated financial statements.

 

In February 2016, FASB issued ASU No. 2016-02, Leases, requiring entities that lease assets, referred to as “lessees”, 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 fiscal years 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

 

Our 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. We have incurred continuous losses from operations, have an accumulated deficit of $18,136,863 and a working capital deficit of $5,483,266 at December 31, 2015, and have reported negative cash flows from operations for six of the previous seven years. In addition, we expect to have ongoing requirements for capital investment to implement our business plan. Finally, our 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, our operations have primarily been funded through private equity financing, and we expect to continue to seek additional funding through private or public equity and debt financing.

 

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.

 

Our 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 we be unable to continue as a going concern.

 

Note 3 – Property and Equipment

 

Property and equipment consist of the following:

 

		December 31,
		2015				2014
Telecommunication equipment and computers		$	1,052,792			$	1,049,060
Furniture and fixtures			44,746				44,746
			1,097,538				1,093,806
Less accumulated depreciation			(315,344	)			(103,342	)
		$	782,194			$	990,464

 

Depreciation expense totaled $212,002 and $103,661 for the years ended December 31, 2015 and 2014, respectively.

 

Note 4 – Construction in Progress

 

Construction in Process consists of equipment and materials that will be used to construct network, plant property and equipment. Equipment and materials related to links that have not gone live is a small portion of the value of this new account and when installed for that purpose will be treated as cost of goods sold. Largely the value of this equipment and materials will be capitalized when each construction project is completed. In the future, this account will also hold certain direct and indirect non-equipment costs until construction of a market has been completed and capitalized.

 

Note 5– Notes Payable

 

The Company has unsecured notes payable to individuals, with original maturity dates ranging from June 5, 2009 to February 23, 2011, totaling $47,006 at December 31, 2014. The notes bear interest at 8%. As of December 31, 2015 all of these notes were converted to equity.

 

Interest continued to accrue on these notes as long as they remained outstanding. The Company recorded interest expense on notes payable in the amount of $1,880 and $3,761 for the years ended December 31, 2015 and 2014, respectively.

 

 

 

 

Note 6– Convertible Debentures

 

The Company has issued unsecured convertible promissory notes at various times from 2008 through 2015. The notes bear interest at rates at 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, 2015, convertible debentures totaling $18,500 were outstanding with $6,000 of these convertible notes in default.

 

The principal balance of each note is convertible into shares of the Company’s common stock. The conversion terms of each note varies, but in general, the notes are convertible at a rate equal to a specified percentage (most range from 80% to 90%) of the Company’s average common stock closing price for a short period of time prior to conversion.

 

Note 7 – Warrants

 

CCI currently has a total of 87,571,429 common stock purchase warrants outstanding to purchase a total of 87,571,429 shares of its common stock exercisable until April 17, 2024, all of which are exercisable at an exercise price of $0.025 per share only if the Company achieves certain milestones. As of December 31, 2015 these milestones have not been met.

 

During the year ended December 31, 2015, the Company paid $51,000 to repurchase 2,428,571 of the 90,000,000 unvested CCI common stock purchase warrants held by the Company’s chief executive officer.

 

Wytec currently has a total of 2,805,672 common stock purchase warrants outstanding to purchase a total of 2,805,672 shares of Wytec common stock exercisable until various dates ranging from October 18, 2015 to December 31, 2017, 170,000 of which are exercisable at an exercise price of $1.75 per share, 1,310,672 of which are exercisable at an exercise price of $1.50 per share, 75,000 of which are exercisable at an exercise price of $1.45 per share, 500,000 of which are exercisable at an exercise price of $1.25 per share, and 750,000 of which 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:

 

			Number of CCI Warrants				Number of Wytec Warrants
Balance, December 31, 2013			12,725,000				2,011,100
Warrants granted			90,000,000				2,250,380
Warrants exercised			–				–
Warrants expired			725,000				999,955
Balance, December 31, 2014			102,000,000				3,261,525
Warrants granted			–				1,055,292
Warrants exercised			–				5,000
Warrants repurchased			2,428,571				–
Warrants expired			12,000,000				1,506,145
Balance, December 31, 2015			87,571,429				2,805,672
Exercisable, December 31, 2015			87,571,429				2,805,672

 

 

 

 

 

Note 8– Nonconvertible Debenture

 

During the year ended December 31, 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 the year ended December 31, 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.

 

During the year ended December 31, 2014, the Company refinanced a convertible promissory note totaling $109,210 and bearing interest at 12.5% per annum into a non-convertible note.

 

Note 9–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, 2015. 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.

 

As of December 31, 2015, 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, and expects to reach a conclusion as to their validity in 2016.

 

Wytec’s authorized capital stock consists of 495,000,000 shares of common stock, par value $0.001 per share, of which approximately 25,005,000 shares are issued and outstanding as of December 31, 2015. Our authorized capital stock also includes 20,000,000 shares of Preferred Stock, par value $0.001, 4,100,000 of which have been designated as Series A Preferred Stock, 3,360,000 of which are issued and outstanding, and 6,650,000 of which have been designated as Series B Preferred Stock, 831,161 of which are issued and outstanding. Holders of common stock are entitled to one vote per share held of record on all matters submitted to a vote of stockholders.

 

The holders of common stock do not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of the outstanding shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Subject to preferential rights with respect to any series of preferred stock that may be issued, holders of the common stock are entitled to receive ratably such dividends as may be declared by the board of directors on the common stock out of funds legally available therefore and, in the event of a liquidation, dissolution or winding-up of our affairs, are entitled to share equally and ratably in all of our remaining assets and funds.

 

Wytec’s Series A Preferred Stock is nonvoting capital stock but may be converted into voting common stock of Wytec. Each share of Series A Preferred Stock is convertible at the option of the holder at any time after issuance into one share of common stock, subject to adjustment from time to time in the event (i) Wytec subdivides or combines its outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends; or (ii) of a reorganization or reclassification of our common stock, the consolidation or merger of Wytec with or into another company, the sale, conveyance or other transfer of substantially all of our assets to another corporation or other similar event, whereby securities or other assets are issuable or distributable to the holders of our outstanding common stock upon the occurrence of any such event; or (iii) of the issuance by us to the holders of our common stock of securities convertible into, or exchangeable for, such shares of common stock.

 

Each outstanding share of Series A Preferred Stock will automatically convert into one share of common stock (a) if Wytec common stock commences public trading on the NASDAQ Capital Market or better, (b) if the Series A Preferred Stockholder receives distributions from the Net Profits Pool equal to the original purchase price paid for their Registered Links, or (c) five years after the date of issuance of the Series A Preferred Stock. The Subsidiary does not have any other right to require a conversion of the Series A Preferred Stock into common stock. The Subsidiary does not have the option to redeem outstanding shares of Series A Preferred Stock. A holder of the Series A Preferred Stock has no preemptive rights to subscribe for any additional shares of any class of stock of Wytec or for any issue of bonds, notes or other securities convertible into any class of stock of Wytec. In the event of a liquidation, dissolution or winding-up of Wytec, whether voluntary or otherwise, after payment of our debts and other liabilities, the holders of the Series A Preferred Stock will be entitled to receive from our remaining net assets, before any distribution to the holders of the common stock, the amount of $1.50 per share. After payment of the liquidation preference to the holders of the Series A Preferred Stock and payment of any other distributions that may be required with respect to any other series of Preferred Stock, our remaining assets, if any, will be distributed ratably to the holders of the common stock and the holders of the Series A Preferred Stock on an as-if converted basis.

 

 

 

 

Wytec’s Series B Preferred Stock is voting capital stock. The holders of the Series B Preferred Stock will vote on an as-converted basis with the common stock on all matters submitted to a vote of the shareholders of Wytec. The holders of the Series B Preferred Stock are not entitled to any dividends unless and until the Series B Preferred Stock is converted into common stock. Each share of Series B Preferred Stock is convertible at the option of the holder at any time after issuance into one share of common stock, subject to adjustment from time to time in the event (i) Wytec subdivides or combines its outstanding common stock into a greater or smaller number of shares, including stock splits and stock dividends; or (ii) of a reorganization or reclassification of our common stock, the consolidation or merger of Wytec with or into another company, the sale, conveyance or other transfer of substantially all of our assets to another corporation or other similar event, whereby securities or other assets are issuable or distributable to the holders of our outstanding common stock upon the occurrence of any such event; or (iii) of the issuance by us to the holders of our common stock of securities convertible into, or exchangeable for, such shares of common stock. Each outstanding share of Series B Preferred Stock will automatically convert into one share of common stock at a conversion rate equal to the lesser of $3.00 per share or 75% of the average closing price of 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 after the first day of public trading of Wytec common stock if Wytec's common stock commences public trading on the NASDAQ Capital Market or better, but in any event no less than $2.50 per share or at $3.00 per share five years after the date of issuance of the Series B Preferred Stock. We do not have any other right to require a conversion of the Series B Preferred Stock into common stock. We do not have the option to redeem outstanding shares of Series B Preferred Stock. In the event of a liquidation, dissolution or winding-up of Wytec, whether voluntary or otherwise, after payment of our debts and other liabilities, the holders of the Series B Preferred Stock will be entitled to receive from our remaining net assets, before any distribution to the holders of the common stock, and pari pasu with the payment of a liquidation preference of $1.50 per share to the holders of the Series A Preferred Stock, the amount of $3.00 per share. After payment of the liquidation preference to the holders of the Series A Preferred Stock and the Series B Preferred Stock, and payment of any other distributions that may be required with respect to any other series of Preferred Stock, our remaining assets, if any, will be distributed ratably to the holders of the common stock, the holders of the Series A Preferred Stock, and the holders of the Series B Preferred Stock on an as-if converted basis.

 

During the year ended December 31, 2015, the Company issued 1,546,458 shares of CCI common stock for the conversion of $76,550 in convertible debentures and related accrued interest.

 

During the year ended December 31, 2015, the Company issued 5,000 shares of Wytec Common Stock for $5,000 in cash.

 

During the year ended December 31, 2015, the Company issued 641,010 shares of Wytec Series B Preferred stock for $1,923,040 in cash. During the year ended December 31, 2015, the Company issued 113,358 shares of Wytec Series B Preferred Stock for the conversion of $271,252 in convertible debentures and related accrued interest. Also during the year ended December 31, 2015, the Company issued 76,793 shares of Wytec Series B Preferred Stock in exchange for $230,380 of nonconvertible debentures.

 

Note 10– Common Stock Options

 

During the year ended December 31, 2005, the Company adopted 2005 Stock Option Plan (the “2005 Plan”). The 2005 Plan authorizes 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 provides 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 is scheduled to terminate in 2015 and there are no outstanding stock options or other awards under the 2005 Plan.

 

During the year ended December 31, 2012, the Company adopted 2012 Stock Incentive Plan (the “Plan”). The Plan authorizes the issuance of stock options to acquire up to 25 million shares of the Company’s common stock (less the number of shares issuable upon exercise of options granted by the Company under the Plan on the date of any grant under the Plan). The Plan provides 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. Shares reserved for awards under this plan total 25 million.

 

 

 

 

On October 10, 2012, the Company granted three employees options to purchase a total of 3,000,000 shares of common stock exercisable at $0.01 per share with a three year vesting schedule beginning March 19, 2013 and expiration dates between March 19, 2016 and August 21, 2016. In August 2015, one of the employees resigned from the Company and forfeited his 1,000,000 options. For the years ending December 31, 2015 and 2014, the stock-based compensation related to these options was $667 and $667, respectively. For the years ending December 31, 2015 and 2014, the stock-based compensation related to the remaining options was $1,333 and $1,333, respectively.

 

On April 17, 2014, the Company granted 10,000,000 stock options to purchase 10,000,000 shares of its common stock to the Company’s Chief Executive Officer, exercisable on a cash or cashless basis at $0.025 per share with a three year vesting schedule and an expiration date of April 17, 2019. The stock-based compensation expense for the year ended December 31, 2015 and 2014 was $34,000 and $25,500, respectively. The expense for the options is valued at zero due to certain Company benchmarks that are required before the options are exercisable. Management believes that these benchmarks are not likely to be met prior to the expiration of the options.

 

In September 2014, 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 September 1, 2018. The stock-based compensation expense for these options for the year ended December 31, 2015 and 2014 was $2,500 and $1,250, respectively.

 

In September 2014, the Company granted 750,000 options to one employee to purchase 750,000 shares of common, exercisable at $0.02 per share with a three year vesting schedule and an expiration date of September 1, 2018. In July 2015 the employee was terminated from the Company and forfeited the options prior to the first vesting milestone. The stock-based compensation expense for these options for the year ended December 31, 2015 and 2014 was $1,250 and $1,250, respectively.

 

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, 2015, the stock-based compensation related to this option grant was $3,000.

 

The following is a summary of activity of outstanding stock options under the 2005 and 2012 Stock Option Plans:

 

			Number of Shares				Weighted Average Exercise Price
Balance, December 31, 2013			3,000,000			$	0.01
Options expired			–				–
Options cancelled			–				–
Options granted			11,500,000			$	0.02
Options exercised			–				–
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
Exercisable, December 31, 2015			3,500,000			$	0.01

 

The weighted average remaining contractual term of options outstanding at December 31, 2015 is 3.30 years.

 

Note 11 – Treasury Stock

 

For the year ended December 31, 2015, the Company purchased 394,292 shares of its common stock at an aggregate cost of $8,170.

 

 

 

 

Note 12– Income Taxes

 

For the years ended December 31, 2015 and 2014, the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. In addition, no benefit for deferred income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2015, the Company had approximately $16,500,000 of federal and state net operating loss carryforwards. The net operating loss carry forwards, if not utilized, will begin to expire in 2026.

 

The components of the Company’s deferred tax asset are as follows:

 

		December 31, 2015				December 31, 2014
Deferred tax assets:
Net operating loss carry forwards		$	6,435,701			$	5,780,078
Total deferred tax assets		$	6,435,701			$	5,780,078
Net deferred tax assets before valuation allowance		$	6,435,701			$	5,780,078
Less: Valuation allowance			(6,435,701	)			(5,780,078	)
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 2015 and 2014. 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, 2015 and 2014.

 

Note 13 – 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 $150,964 and $148,307 for the years ended December 31, 2015 and 2014, respectively.

 

As of December 31, 2015, the future minimum lease payments are as follows:

 

Year Ended December 31,
2016			$	138,876
2017				134,913
2018				113,656
2019				44,661
2020				43,836
Thereafter				127,260
			$	603,202

 

 

 

 

 

 

Note 14 – Subsequent Events

 

On January 28, 2016, the Company paid off a convertible note in the amount of $6,000 plus accrued interest of $3,181 through January 28, 2016.

 

From January 1, 2016 to March 31, 2016, the Company redeemed 2,071,428 warrants from our chief executive officer for total cash payments of $43,500.

 

On January 22, 2016, the Company purchased 186,259 common stock shares from an employee for a cash payment of $5,000.

 

On January 28, 2016, the Company refunded $35,000 to a linkholder in consideration for the return of a Link purchase.

 

On February 10, 2016, the Company refunded $34,530 to a linkholder in consideration for the return of a Link purchase.

 

On March 15, 2016, the Company refunded $34,530 to a linkholder in consideration for the return of a Link purchase.

 

 

 

 

 

 

 

 

 

 

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our principal executive officer and principal financial officer during the year ended December 31, 2015, William Gray, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) 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 concluded that our disclosure controls and procedures are not effective, which are discussed below in more detail, in timely alerting him 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 as identified below under the heading “Management’s Report on 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 consolidated 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.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based upon this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2015 for the following reasons.

 

·	The Company does not have an independent board of directors or audit committee or adequate segregation of duties;
·	A significant portion of our financial reporting is prepared by our financial consultant;
·	We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company; and
·	Inadequate closing process to ensure all material misstatements are corrected in the financial statements.

 

We intend to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.

 

 

 

 

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting through the date of this report or during the quarter ended December 31, 2015, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

No Attestation Report by Independent Registered Accountant

 

The effectiveness of our internal control over financial reporting as of December 31, 2015 has not been audited by our independent registered public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.

 

Item 9B. Other Information.

 

None.

 

 

 

PART III

 

Item 10. Directors, Executive Officers, and Corporate Governance.

 

The members of the board of directors of the Company will serve until the next annual meeting of stockholders, or until their successors have been elected. The officers serve at the pleasure of the board of directors. Officers are elected by the board of directors and their terms of office are, except to the extent governed by employment contract, at the discretion of the board. Information as to the directors and executive officers of the Company and its wholly owned subsidiary Wytec is as follows:

 

NAME		AGE				POSITION
William H. Gray			64			Chief Executive Officer, President, Chief Financial Officer, and Chairman
Angus Davis			43			Chief Strategy Officer of Wytec, Director

 

Duties, Responsibilities, and Experience

 

William H. Gray has been a director of the Company since November 2008, the chief executive officer, president, and chief financial officer of the Company since February 10, 2009, and a director, chief executive officer, president, and chief financial officer of Wytec since November 2011. Mr. Gray was the secretary of CCI from February 10, 2009 to April 2014 and the secretary of Wytec from November 2011 to April 2014. Additionally, Mr. Gray is the founder of Innovation Capital Management, Inc. (“ICM”), a Nevada corporation formed in May 2008. ICM is involved in managing investment securities design and development. ICM is also the owner of ICM LLC and DiscoverNet, Inc. DiscoverNet, Inc. is a full service Internet Service Provider currently deploying wireless broadband Internet throughout western Wisconsin and was incorporated in July 1996. Mr. Gray has been the President and Chief Executive Officer of DiscoverNet since May of 1997 and has been chiefly responsible for the funding of DiscoverNet since inception. DiscoverNet was the developer of proprietary propagation software capable of designing wireless networks via the web. Its initial purpose was to offer the software to other Wireless Internet Service Providers as part of its planned investment and acquisition program. Mr. Gray is also the chairman, chief executive officer, chief financial officer and secretary of WyLink, Inc., a wholly owned subsidiary of Wytec formed in June 2012, and Capaciti Networks, Inc., a wholly owned subsidiary of CCI formed in June 2013. Mr. Gray is highly skilled and experienced in designing investment securities, developing financial forecasts, structuring mergers and acquisitions, writing business plans and drafting private placement memoranda. Mr. Gray has monitored investment securities portfolios exceeding $100 million.

 

Mr. Gray’s qualifications:

 

Leadership experience – Mr. Gray has been our chairman and chief executive officer of the Company since February 2009 and is the founder of Wytec International, Inc., WyLink, Inc., Innovation Capital Management, Inc., Innovation Capital Management LLC, Wireless Wisconsin, LLC and Capaciti Networks, Inc.

 

Finance experience – Mr. Gray has designed and developed multiple securities investment products and programs as well as complex financial projections and proforma models. He has extensive knowledge with billing and accounting systems such as QuickBooks and Platypus. Additionally, he has substantial experience with Industry billing systems and financial software integration. Mr. Gray has established the Company’s accounting, billing and merchant integration systems for the Company.

 

Industry experience – Mr. Gray has more than sixteen (16) years of experience and been intricately involved in the Internet Industry since inception starting in 1995.

 

Education experience - Mr. Gray attended Navarro Jr. College, Howard Payne University and Texas A&M University majoring in Psychology.

 

Angus Davis has been a key employee of the Company since July 2012 and a director of the Company since April 2014. Mr. Davis has also been a director of Wytec since April 2014, the chief strategy officer of Wytec since January 2014, and was a key employee of Wytec from July 2012 to January 2014. Mr. Davis has been a senior executive and advisor in strategic operational planning and process improvement for 15 years. Prior to joining CCI from July 2007 to July 2012, Mr. Davis worked for the Texas Division of Teen Challenge as vocational coordinator in charge of product development, manufacturing operations and personnel management. His area of expertise is in creating value, building high-performance teams, and leading sophisticated business transactions. Mr. Davis also worked as the senior principal strategist for Rainmaker Marketing Corporation, where he worked in the design and development of senior housing services and program management for private developers. Mr. Davis also led a project team of architects, attorneys, and specialized consultants in the first $200 million public bond float for a private developer in New Orleans after hurricane Katrina. He helped design and implement the Americans Rebuilding America program which provides a multi-million dollar A-rated bonding facility for service-disabled veteran contractors. Mr. Davis is an army veteran with seven years of service in the United States Army and Army Reserve. Mr. Davis oversees our intelligent community strategy and public private partnership alliances and has a degree in business management from American Intercontinental University, which he received in October 2004.

 

 

Election of Directors and Officers

 

Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.

 

Involvement in Certain Legal Proceedings

 

No executive officer or director of the Company has been the subject of any order, judgment, or decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.

 

No executive officer or director of the Company has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.

 

Neither the Company nor any of its current executive officers or directors of the Company are the subject of any pending legal proceedings.

 

Limitation of Liability and Indemnification of Officers and Directors

 

Under Nevada General Corporation Law and our articles of incorporation, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his “duty of care.” This provision does not apply to the directors’ (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director’s duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to the corporation or its shareholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation or its shareholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.

 

The effect of this provision in our articles of incorporation is to eliminate the rights of CCI and our stockholders (through stockholder’s derivative suits on behalf of CCI) to recover monetary damages against a director for breach of his fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (vi) above. This provision does not limit nor eliminate the rights of CCI or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director’s duty of care. In addition, our Articles of Incorporation provide that if Nevada law is amended to authorize the future elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the law, as amended. Nevada General Corporation Law grants corporations the right to indemnify their directors, officers, employees and agents in accordance with applicable law. Our bylaws provide for indemnification of such persons to the full extent allowable under applicable law. These provisions will not alter the liability of the directors under federal securities laws.

 

We intend to enter into agreements to indemnify our directors and officers, in addition to the indemnification provided for in our bylaws. These agreements, among other things, indemnify our directors and officers for certain expenses (including attorneys’ fees), judgments, fines, and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of CCI, arising out of such person’s services as a director or officer of CCI, any subsidiary of CCI or any other company or enterprise to which the person provides services at the request of CCI. We believe that these provisions and agreements are necessary to attract and retain qualified directors and officers.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling CCI pursuant to the foregoing provisions, CCI has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

 

 

 

Board Committees

 

Director Independence. The board of directors has analyzed the independence of each director and has concluded that currently no director is considered an independent director in accordance with the director independence standards of the Financial Industry Regulatory Authority (FINRA) the NYSE Amex Equities or the NASDAQ Capital Market.

 

Audit Committee. Currently, we do not have an audit committee. At this time, the board of directors will perform the necessary functions of an audit committee, such as: recommending an independent registered public accounting firm to audit the annual financial statements; reviewing the independence of the independent registered public accounting firm; review of the financial statements and other required regulatory financial reporting; and reviewing management’s policies and procedures in connection with its internal control over financial reporting.

 

Additionally, we do not have a financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. At such time the Company has the financial resources, a financial expert will be appointed.

 

Compensation Committee. We currently do not have a compensation committee of the board of directors. Until a formal committee is established our board of directors will review all forms of compensation provided to our executive officers, directors, consultants and employees, including stock compensation. The board makes all compensation decisions for the Executives and approves recommendation regarding equity awards to all elected officers of CCI. Decisions regarding the non-equity compensation of other executive officers are made by the board.

 

Nominating Committee. We do not have a nominating committee or nominating committee charter. Our board of directors performs some of the functions associated with a nominating committee. We elected not to have a nominating committee during the year ended December 31, 2015, in that we had limited operations and resources.

 

Director Nomination Procedures. Generally, nominees for Directors are identified and suggested by the members of the board or management using their business networks. The board has not retained any executive search firms or other third parties to identify or evaluate director candidates in the past and does not intend to in the near future. In selecting a nominee for director, the board or management considers the following criteria:

 

·	whether the nominee has the personal attributes for successful service on the board, such as demonstrated character and integrity; experience at a strategy/policy setting level; managerial experience dealing with complex problems; an ability to work effectively with others; and sufficient time to devote to the affairs of the Company;
·	whether the nominee has been the chief executive officer or senior executive of a public company or a leader of a similar organization, including industry groups, universities or governmental organizations;
·	whether the nominee, by virtue of particular experience, technical expertise or specialized skills or contacts relevant to the Company’s current or future business, will add specific value as a board member; and
·	whether there are any other factors related to the ability and willingness of a new nominee to serve, or an existing board member to continue his service.

 

The board or management has not established any specific minimum qualifications that a candidate for director must meet in order to be recommended for board membership. Rather, the board or management will evaluate the mix of skills and experience that the candidate offers, consider how a given candidate meets the board’s current expectations with respect to each such criterion and make a determination regarding whether a candidate should be recommended to the stockholders for election as a Director. During 2015, the Company received no recommendation for directors from its stockholders.

 

Report of the Audit Committee

 

Our board of directors has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 2015 with senior management. The board of directors has also discussed with Padgett, Stratemann & Co., LLP (“PS&Co.”), our independent auditors, the matters required to be discussed by the statement on Auditing Standards No. 61 (Communication with Audit Committees) and received the written disclosures and the letter from PS& Co. required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees). The board of directors has discussed with PS&Co. the independence of PS&Co. as our auditors.

 

 

 

 

BOARD OF DIRECTORS

William H. Gray

Angus Davis

 

Notwithstanding anything to the contrary set forth in any of our previous or future filings under the United States Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this report in future filings with the Securities and Exchange Commission, in whole or in part, the foregoing report shall not be deemed to be incorporated by reference into any such filing.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires executive officers and directors, and persons who beneficially own more than ten percent of an issuer’s common stock, which has been registered under Section 12 of the Exchange Act, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater-than-ten-percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based upon a review of the copies of such forms furnished to us and written representations from our executive officers and directors, we believe that as of December 31, 2015, they were current in their filings.

 

Code of Ethics

 

A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:

 

·	Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·	Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
·	Compliance with applicable governmental laws, rules and regulations;
·	The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
·	Accountability for adherence to the code.

 

On December 18, 2005 (as amended and restated on March 9, 2015), we adopted a written code of ethics that governs all of our officers, and more specifically our principal executive officer, principal financial officer and principal accounting officer, as well as directors, employees and contractors. The code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote the above mentioned objectives. Anyone can obtain a copy of the Code of Ethics by contacting the Company. The Company will post any amendments to the Code of Ethics, as well as any waivers that are required to be disclosed by the rules of either the Securities and Exchange Commission or FINRA.

 

Item 11. Executive Compensation.

 

Compensation Discussion and Analysis

 

The following Compensation Discussion and Analysis describes the material elements of compensation for our executive officer identified in the Summary Compensation Table (“Named Executive Officer”), and executive officers that we may hire in the future. As more fully described below, our board of directors makes all decisions for the total direct compensation of our executive officers, including the Named Executive Officer. We do not have a compensation committee, so all decisions with respect to management compensation are made by the whole board.

 

 

 

Compensation Program Objectives and Rewards

 

Our compensation philosophy is based on the premise of attracting, retaining, and motivating exceptional leaders, setting high goals, working toward the common objectives of meeting the expectations of customers and stockholders, and rewarding outstanding performance. Following this philosophy, in determining executive compensation, we consider all relevant factors, such as the competition for talent, our desire to link pay with performance in the future, the use of equity to align executive interests with those of our stockholders, individual contributions, teamwork and performance, and each executive’s total compensation package. We strive to accomplish these objectives by compensating all executives with total compensation packages consisting of a combination of competitive base salary and incentive compensation.

 

We expect to grow and hire additional executives in the future. Our Named Executive Officer has been with us since 2009 and his compensation has basically been static, based primarily on the level at which we can afford to retain him and his responsibilities and individual contributions. To date, we have not applied a formal compensation program to determine the compensation of the Named Executives Officer and executive officers that we may hire in the future. In the future, as we and our management team expand, our board of directors expects to add independent members, form a compensation committee comprised of independent directors, and apply the compensation philosophy and policies described in this section of the Form 10-K.

 

The primary purpose of the compensation and benefits described below is to attract, retain, and motivate highly talented individuals when we do hire, who will engage in the behaviors necessary to enable us to succeed in our mission while upholding our values in a highly competitive marketplace. Different elements are designed to engender different behaviors, and the actual incentive amounts which may be awarded to each Named Executive Officer are subject to the annual review of the board of directors. The following is a brief description of the key elements of our planned executive compensation structure.

 

·	Base salary and benefits are designed to attract and retain employees over time.
·	Incentive compensation awards are designed to focus employees on the business objectives for a particular year.
·	Equity incentive awards, such as stock options and non-vested stock, focus executives’ efforts on the behaviors within the recipients’ control that they believe are designed to ensure our long-term success as reflected in increases to our stock prices over a period of several years, growth in our profitability and other elements.
·	Severance and change in control plans are designed to facilitate a company’s ability to attract and retain executives as we compete for talented employees in a marketplace where such protections are commonly offered. We currently have not given separation benefits to our Name Executive Officer.

 

Benchmarking

 

We have not yet adopted benchmarking but may do so in the future. When making compensation decisions, our board of directors may compare each element of compensation paid to our Name Executive Officer against a report showing comparable compensation metrics from a group that includes both publicly-traded and privately-held companies. Our board believes that while such peer group benchmarks are a point of reference for measurement, they are not necessarily a determining factor in setting executive compensation as each executive officer’s compensation relative to the benchmark varies based on scope of responsibility and time in the position. We have not yet formally established our peer group for this purpose.

 

The Elements of Our Compensation Program

 

Base Salary. Executive officer base salaries are based on job responsibilities and individual contribution. The board reviews the base salaries of our executive officers, including our Named Executive Officer, considering factors such as corporate progress toward achieving objectives (without reference to any specific performance-related targets) and individual performance experience and expertise. As of December 31, 2015, our Named Executive Officer does not have an employment agreement with us, and remains employed without a formal agreement. The Company has “at will” employment agreement with Angus Davis. Additional factors reviewed by the board of directors in determining appropriate base salary levels and raises include subjective factors related to corporate and individual performance. For the year ended December 31, 2015, all executive officer base salary decisions were approved by the board of directors.

 

Our board of directors determines base salaries for our executive officers, including the Named Executive Officer, at the beginning of each fiscal year, and the board proposes new base salary amounts, if appropriate, based on its evaluation of individual performance and expected future contributions. We do not have a 401(k) Plan, but if we adopt one in the future, base salary would be the only element of compensation that would be used in determining the amount of contributions permitted under the 401(k) Plan.

 

Incentive Compensation Awards. The Named Executive Officer has not been paid bonuses and our board of directors has not yet established a formal compensation policy for the determination of bonuses. If our revenue grows and bonuses become affordable and justifiable, we expect to use the following parameters in justifying and quantifying bonuses for our Named Executive Officer and other officers of the Company: (1) the growth in our revenue, (2) the growth in our earnings before interest, taxes, depreciation and amortization, as adjusted (“EBITDA”), and (3) our stock price. The board has not adopted specific performance goals and target bonus amounts for any of our fiscal years, but may do so in the future.

 

 

Equity Incentive Awards. Our board has adopted an equity incentive plan. Stock options have been granted to our Named Executive Officer, and certain other employees. In the future we plan to grant stock options and make restricted stock awards to members of management, which would not be assignable during the executive’s life, except for certain gifts to family members or trusts that benefit family members. These equity incentive awards, we believe, would motivate our employees to work to improve our business and stock price performance, thereby further linking the interests of our senior management and our stockholders. The board will consider several factors in determining whether awards are granted to an executive officer, including those previously described, as well as the executive’s position, his or her performance and responsibilities, and the amount of options or other awards, if any, currently held by the officer and their vesting schedule. Our policy will prohibit backdating options or granting them retroactively.

 

Benefits and Prerequisites. At this stage of our business we have limited benefits and no prerequisites for our employees other than health insurance and vacation benefits that are generally comparable to those offered by other small private and public companies or as may be required by applicable state employment laws. We do not have a 401(k) Plan or any other retirement plan for our Named Executive Officer or for executive officers that we may hire in the future. We may adopt these plans and confer other fringe benefits for our executive officers in the future if our business grows sufficiently to enable us to afford them.

 

Separation and Change in Control Arrangements. We do not have any employment agreements with any executive officer or employee of the Company except for “at will” agreements with Robert Merola and Angus Davis. None of them are eligible for specific benefits or payments if their employment or engagement terminates in a separation or if there is a change of control.

 

Executive Officer Compensation

 

The following table sets forth the compensation of our executive officers for the years ended December 31, 2015 and 2014, respectively:

 

Summary Compensation Table

 

Name and Principal Position		Year				Salary				Bonus				Stock Awards ($)				Option Awards ($)		All Other Compensation				Total
William Gray, (1)			2015			$	90,309			$	-0-			$	-0-			[options and warrant]		$	85,000			$	175,309
Chief Executive Officer, President, Chief Financial Officer			2014			$	128,400			$	15,000			$	-0-					$	22,087			$	165,487
Tina Bagley, (2)			2015			$	93,997			$	-0-			$	-0-					$	1,724			$	95,721
Former Corporate Secretary			2014			$	85,867			$	-0-			$	-0-					$	1,797			$	87,664
Robert Merola, (3)			2015			$	96,207			$	-0-			$	-0-					$	6,742			$	102,949
Former Chief Technical Officer of Wytec			2014			$	125,190			$	15,000			$	-0-					$	2,308			$	42,498
Angus Davis, (4)			2015			$	88,002			$	-0-			$	-0-					$	1,707			$	89,709
Chief Strategy Officer of Wytec			2014			$	80,250			$	-0-			$	-0-					$	1,812			$	82,062

 

 

 

 

(1)	Mr. Gray was appointed as Chief Executive Officer on February 10, 2009. Commencing August 1, 2010, Mr. Gray began to receive annual compensation of $120,000 and an automobile allowance of $500 per month. Mr. Gray was entitled to be issued shares of our common stock pursuant to the acquisition by the Company from him of new businesses on April 2, 2009.  On February 11, 2010, 3,000,000 of those shares were issued, of which Mr. Gray subsequently exchanged 500,000 shares in a private transaction. The remaining 542,871 shares were issued on June 30, 2010.  The shares were not issued as compensation expense.  On or about August 15, 2013, Mr. Gray was issued 100,000 shares of the Company’s Series D Preferred Stock.  The shares were issued as $100 in compensation expense.  On April 17, 2014, Mr. Gray was granted 10,000,000 stock options to purchase 10,000,000 shares of the Company’s common stock, exercisable on a cash or cashless basis at $0.025 per share on a three year vesting schedule, expiring on April 17, 2019.  On April 17, 2014, Mr. Gray was also issued 90,000,000 warrants to purchase 90,000,000 shares of the Company’s common stock, exercisable on a cash or cashless basis at $0.025 per share, vesting only upon the achievement of certain milestones by the Company. During 2015, the Company repurchased 2,428,571 of the 90,000,000 unvested warrants in exchange for $51,000, and as of December 31, 2015, only 87,571,429 of the original unvested warrants remain.
(2)	On April 4, 2014, Ms. Tina Bagley was appointed as the corporate secretary of the Company and Wytec. Ms. Bagley receives an annual salary of $85,867, owns 4,500,000 shares of the Company’s common stock and was granted 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock on October 10, 2012. The stock options are exercisable at an exercise price of $0.01 per share until March 19, 2016 and vest according to the following schedule: 500,000 on March 19, 2013, 250,000 on March 19, 2014, and then 250,000 on March 19, 2015. Ms. Bagley resigned her positions as the corporate secretary and a director of the Company and Wytec, effective November 1, 2015. Since November 1, 2015, she has been the vice president of operations of the Company.
(3)	On January 28, 2014, Mr. Robert Merola was appointed as the chief technical officer of Wytec.  Mr. Merola received an annual salary of $125,190, owns 3,390,000 shares of the Company’s common stock, and was issued 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock on October 10, 2012.  Mr. Merola resigned his positions as the chief technical officer and a director of Wytec and as a director of the Company, effective August 25, 2015.  He is no longer employed with the Company and his stock options expired on November 25, 2015.
(4)	On January 28, 2014, Mr. Angus Davis was appointed as the chief strategy officer of Wytec.  Mr. Davis receives an annual salary of $80,250, owns 4,650,000 shares of the Company’s common stock, and was issued 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock on October 10, 2012.  The stock options are exercisable at an exercise price of $0.01 per share until July 20, 2016 and vest according to the following schedule: 500,000 on July 20, 2013, 250,000 on July 20, 2014, and then 250,000 on July 20, 2015.

 

Although discretionary bonuses have been granted as indicated on the table, our board of directors has not yet established a formal compensation policy for the determination of bonuses.

 

Employment Agreements

 

The Company does not currently have any employment agreements with its executive officers. The Company may enter into employment agreements with them in the future.

 

Outstanding Equity Awards at Fiscal Year-End

 

During the year ended December 31, 2015, we granted equity awards to our chief executive officer, as indicated on the following table. On August 20, 2013, we issued 100,000 shares of our Series D Preferred Stock to our chief executive officer. The shares were issued as $100 in compensation expense. Each share of Series D Preferred Stock has a par value of $0.001 and the equivalent of 2,500 votes. The Series 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 Series D Preferred Stock is its par value.

 

 

 

 

Outstanding Equity Awards at Fiscal Year-End

 

Option Awards
Name and Principal Position			Number of Securities Underlying Unexercised Options Exercisable				Number of Securities Underlying Unexercised Options Unexercisable				Option Exercise Price				Option Expiration Date
William Gray, Chief Executive Officer , President and Chief Financial Officer (1)			8,000,000				2,000,000			$	0.025				April 17, 2019
Robert Merola, Former Chief Technical Officer of Wytec (2)			-0-				-0-			$	0.01				(2)
Angus Davis, Chief Strategy Officer of Wytec			1,000,000				-0-			$	0.01				July 20, 2016
Tina Bagley, Former Corporate Secretary (3)			1,000,000				-0-			$	0.01				March 19, 2016

 

(1)

Does not include 87,571,429 unvested warrants to purchase 87,571,429 shares of the Company’s common stock outstanding as of December 31, 2015 that are exercisable at an exercise price of $0.025 per share upon the Company achieving certain milestones.

 

(2)

Mr. Merola resigned his positions as the chief technical officer and a director of Wytec and as a director of the Company, effective August 25, 2015. He is no longer employed with the Company and his stock options expired on November 25, 2015.

 

(3)

Ms. Bagley resigned her positions as the corporate secretary and a director of the Company and Wytec, effective November 1, 2015. Since November 1, 2015, she has been the vice president of operations of the Company.

 

Option Exercises and Stock Vested

 

None of our executive officers exercised any stock options or acquired stock through vesting of an equity award during the fiscal year ended December 31, 2015.

 

Director Compensation and Other Arrangements

 

As a result of having limited resources during most of 2014, we did not provide compensation to our board of directors.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table presents information, to the best of our knowledge, about the beneficial ownership of our common stock on March 30, 2016, held by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers. The percentage of beneficial ownership for the following table is based on 334,224,469 shares of common stock outstanding as of March 30, 2016.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes (unless footnoted) shares of common stock that the stockholder has a right to acquire within 60 days after March 30, 2016, through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of our common stock.

 

 

 

 

Name of Officer, Director or Shareholder (1)		Number of Common Shares				Percent Beneficially Owned (2)
William Gray, Chairman, Chief Executive Officer, President, and Chief Financial Officer (3)			9,740,000				2.9%
Tina Bagley, Former Corporate Secretary and Director (4)			5,258,641				1.6%
Robert Merola, Former Director (5)			3,880,000				1.1%
Angus Davis, Director (6)			5,360,708				1.6%
All Officers and Directors as a Group (4 persons)			24,239,349				7.3%

 

(1)

As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). The address of each person is in the care of the Company.

 

(2)

Figures are rounded to the nearest percent.

 

(3)

Includes 8,000,000 stock options to purchase 8,000,000 shares of the Company’s common stock which are exercisable at an exercise price of $0.025 per share within 60 days of February 20, 2015. Does not include 2,000,000 stock options to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.025 that are not exercisable within 60 days of March 30, 2016. Does not include 87,571,429 unvested warrants to purchase 87,571,429 shares of the Company’s common stock at an exercise price of $0.025 per share that are not exercisable within 60 days of March 30, 2016. Does not include 100,000 shares of our Series D Preferred Stock issued to Mr. Gray on August 15, 2013. The shares were issued as $100 in compensation expense. Each share of Series D Preferred Stock has a par value of $0.001 and the equivalent of 2,500 votes. The Series 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 Series D Preferred Stock is its par value.

 

(4)

Includes 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock which are exercisable at an exercise price of $0.01 per share within 60 days of March 30, 2016. Ms. Bagley resigned her positions as the corporate secretary and a director of the Company and Wytec, effective November 1, 2015. Since November 1, 2015, she has been the vice president of operations of the Company.

 

(5)

Does not include 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock which expired on November 25, 2015 due to Mr. Merola’s resignation as an officer and director of the Company and Wytec, effective August 25, 2015.

 

(6)

Includes 1,000,000 stock options to purchase 1,000,000 shares of the Company’s common stock which are exercisable at an exercise price of $0.01 per share within 60 days of March 30, 2016.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

As of March 30, 2016, the Company had not yet formed an audit committee. The Company plans to form an audit committee once it adds a director to its Board of Directors who may be considered to be independent as defined in Rule 4200 of the Financial Industry Regulatory Authority’s listing standards, and qualified with sufficient financial acumen to meet the standards for an audit committee member.

 

 

 

 

Item 14. Principal Accounting Fees and Services.

 

Audit Fees

 

The aggregate fees billed for professional services rendered by Padgett, Stratemann & Co, L.L.P. for the audit of our annual financial statements and review of the financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for 2015 was $58,000.

 

The aggregate fees billed for professional services rendered by Padgett, Stratemann & Co, L.L.P. for the audit of our annual financial statements and review of the financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for 2014 was $50,000.

 

Audit-Related Fees

 

The aggregate fees billed for non-audit-related services rendered by Padgett, Stratemann & Co., L.L.P. for the compilation of the financial statements of Wytec International, Inc. for 2015 was $-0-.

 

The aggregate fees billed for non-audit-related services rendered by Padgett, Stratemann & Co., L.L.P. for the compilation of the financial statements of Wytec International, Inc. for 2014 was $3,000.

 

Tax Fees

 

No tax fees were paid to Padgett, Stratemann & Co., L.L.P. during 2015 or 2014.

 

All Other Fees

 

$1,065 and $8,078 of other fees were paid to Padgett, Stratemann & Co., L.L.P. during 2015 and 2014, respectively.

 

Pre-Approval Policies and Procedures of Audit and Non-Audit Services of Independent Registered Public Accounting Firm

 

Until we appoint an audit committee, our board of directors’ policy in the future is to pre-approve, typically at the beginning of our fiscal year, all audit and non-audit services, other than de minimis non-audit services, to be provided by an independent registered public accounting firm. These services may include, among others, audit services, audit-related services, tax services and other services and such services are generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the full board of directors regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. As part of the board’s review, the board will evaluate other known potential engagements of the independent auditor, including the scope of work proposed to be performed and the proposed fees, and approve or reject each service, taking into account whether the services are permissible under applicable law and the possible impact of each non-audit service on the independent auditor’s independence from management. At board meetings throughout the year, the auditor and management may present subsequent services for approval. Typically, these would be services such as due diligence for an acquisition, that would not have been known at the beginning of the year.

 

Our board of directors has considered the provision of non-audit services provided by our independent registered public accounting firm to be compatible with maintaining their independence. Until we appoint an audit committee, our board of directors will continue to approve all audit and permissible non-audit services provided by our independent registered public accounting firm.

 

 

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

(a)

The following documents are filed as a part of this report on Form 10-K:

 

1.

The financial statements listed in the “Index to Financial Statements” at page F-1 are filed as part of this report.

 

2.

Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

 

3.

Exhibits included or incorporated herein: See index to Exhibits.

 

(b)

Exhibits

 

				Incorporated by reference
Exhibit		Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
2.1		Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2		2	01/11/02
2.2		Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2/A		2.2	08/02/02
2.3		Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2/A		2.2	04/24/03
2.4		Plan and agreement of reorganization between Competitive Companies, Inc. and CCI Acquisition Corp		8-K		10.1	05/09/05
3(i)		Articles of Competitive Companies, as amended		SB-2		3(I)	01/11/02
3(ii)		Bylaws of Competitive Companies		SB-2		3(II)	01/11/02
4		Rights and Preferences of Preferred Stock		SB-2		4	01/11/02
10.1		Amendment to Employment Agreement		8K		4	07/28/14
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act	X
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X
101.INS		XBRL Instance Document	X
101.SCH		XBRL Schema Document	X
101.CAL		XBRL Calculation Linkbase Document	X
101.DEF		XBRL Definition Linkbase Document	X
101.LAB		XBRL Label Linkbase Document	X
101.PRE		XBRL Presentation Linkbase Document	X

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	COMPETITIVE COMPANIES, INC.
Date: March 30, 2016	By:	/s/ William Gray
		William Gray, Chief Executive Officer

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

Signature		Title		Date
/s/ William Gray		Chief Executive Officer, Principal Accounting		March 30, 2016
William Gray		Officer, and Director
/s/ Angus Davis		Director		March 30, 2016
Angus Davis