WYTC 10-K & 10-Q changes, risk factors and insider trading

Our revenues are concentrated in a small number of customers and they may decrease significantly if we were to lose one of these customers. Laredo ISD generated approximately 88%77% of our revenue during the year ended December 31, 20232024 and 76%88% of revenue during the year ended December 31, 2022.2023. Although we have preferred vendor status with the CTPA of which Laredo is a member, along with approximatelyover 150200 other school districts in Texas, the high concentration of revenue from a limited number of customers creates a risk that our revenue may decrease substantially if we were to lose any significant customer. We cannot assure that our current main customers will continue to purchase our products and services in the future.

Our ability to protect our intellectual property is uncertain. We assigned our five patents to our former subsidiary, Wytec, LLC, which was then managed and 50% owned by General Patent Corporation. General Patent Corporation (“GPC”), the oldest patent enforcement firm in the United States, represents clients on patent enforcement rights and licensing transactions on a contingency basis. GPC was the manager of Wytec, LLC until 2017, when it assigned all of its rights in Wytec, LLC back to us. After extensive research and analysis, GPC elected not to assert infringement claims for the patents on behalf of us and itself through Wytec, LLC. All five previous patents prior to 2017 have expired. In 2017, we re-acquired the 50% of Wytec, LLC that we did not already own, and became the manager of it. In 2014, we filed a new provisional patent application for our proprietary LPN-16 data transmission technology. On October 31, 2017, we received our first patent on the LPN-16 (patent number 9,807,032). In December of 2020, Wytec was granted a second patent (patent number 10868775 B2), for our additional claims to our original 2017 patent. In October of 2023, Wytecwe filed for two additionala provisional patentspatent to be integrated with itsour two previous patents while including both artificialAI, intelligence (“AI”), machine learning (“ML”),ML, and blockchain encryption technologies. In October 2024, we split the provisional patent into four separate patent applications, one of which we filed with the USPTO and all four of which we filed with the PCT. Although we have applied for additional patents and may continue to do so in the future, we cannot assure that these patents or any other patents that may be granted to us, if any, in the future will be enforceable. We will have limited resources to fight any infringements on our proprietary rights and 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. The current manufacturer of our LPN-16 owns the intellectual property rights to certain software used in the device which has now expired and is no longer usable. Wytec plans to replace the software components with its own twoproprietary provisionalsoftware, patents,for which we filed patent applications in October 2023,2024, designed with AI, ML, and blockchainencryption technologies.

We cannot assureprovide assurance that we will achieve profitability. We cannot assureprovide assurance that we will be able to operate profitably in the future. Profitability, if any, will depend in part upon our ability to successfully develop and market our proprietary telecommunications technology, and other products products and services. We may not be able to successfully transition from our current stage of business to a stabilized operation having sufficient sufficient revenues to cover expenses. While attempting to make this transition, we will be subject to all the risks inherent in a small business, business, including the need to adequately service and expand our customer base and to maintain and enhance our current services.

We aremay be exposed to various various possible claims relating to our business and we may not have sufficient insurance to fully protect us. We cannot assure that we will not incur uninsured liabilities and losses because of the conduct of our business, even though we currently maintain insurance policies policies for liability and property insurance coverage, along with workmen’s compensation and related insurance. Should uninsured losses losses occur, our investors could lose their invested capital.

We may incur additional indebtedness. We cannot assure that we will not incur additional debt in the future, that we will have sufficient funds to repay our indebtedness, or that we will not default on our debt, jeopardizing our business viability. Furthermore, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct our business. We currently have debt as of December 31, 20232024 of $710,000$730,000 of promissory notes due and payable on various dates through December 2024,2025 $364,515and $615,000 of convertible promissory notes due and payable through December 2024 and $21,609 of notes payable for equipment financing due and payable on various dates through December 2024.2025.

NoShares of our common stock are thinly traded, the price may not reflect our value, there is no assurance that there will be an active market for our shares of common stock currentlyeither exists,now or in the future, and an active trading market may not develop or be sustained. Ourour stock price may fluctuate significantly. There isShares currently no public market for our common stock. We intend to apply to haveof our common stock quotedare and thinly traded on the OTC-QXOTCQB Market orMarket, and the NASDAQprice, Capitalif Market.traded, Wemay cannotnot assure thatreflect our application for listing our common stock for trading on the NASDAQ Capital Market will be accepted. In order to have our common stock quoted for public trading on the OTC-QX Market, which is an over-the-counter market, not an exchange, we must have a market maker registered with FINRA to sponsor our application for a trading symbol for that over-the-counter market. We cannot assure that we will find a market maker to sponsor our common stock for public trading.value. An active trading market for our common stock may not develop or may not be sustained in the future. The lack of an active market may make it more difficult for stockholders to sell our shares and could lead to our share price and trading volume being depressed or volatile. We cannot predict the prices at which our common stock may trade. The market price of the common stock may fluctuate widely and decline, depending on many factors, some of which may be beyond our control.

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

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

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

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

Revenues for the year ended December 31, 20232024 were $255,634$131,077 compared to revenues of $413,858$255,634 for the year ended December 31, 2022,2023, which resulted in a decrease of $158,224,$124,557, or 38%.49%. Our revenues decreased in 20232024 compared to 20222023 due to a decrease in revenue from our Cel-Fi services. Revenues from the sale and installation of Cel-Fi systems, including fixed wireless, SmartDAS, and 4G LTE, totaled $105,110 in 2024 and $225,388 in 2023 and $386,325 in 2022,2023, which resulted in a decrease of $160,937.$120,278. Our revenues increaseddecreased from network and other services including fixed wireless services, which totaled $25,967 in 2024 and $30,246 in 2023 and $27,533 in 2022,2023, representing ana increasedecrease of $2,713.$4,279. The revenue increasedecrease in network services wasis predominately due to ana increasedecrease in monitoring and maintenance services provided.

Cost of sales for the year ended December 31, 20232024 was $170,904,$55,571, a decrease of $168,892$115,333 or 50%,67%, from $339,796$170,904 for the year ended December 31, 2022.2023. Our cost of sales decreased primarily due to decreased costs related predominately to the decrease in revenues related to our contract with the Laredo and Wytec had increased inventory in 2022 due to long lead times from China for project installations set for the first six (6) months of 2023.ISD.

Selling and general and administrative expenses were $2,755,418 for the year ended December 31, 2024 compared to $2,999,384 for the year ended December 31, 2023 compared to $1,932,595 for the year ended December 31, 2022,2023, which resulted in ana increasedecrease of $1,066,789$241,127 or 55%.8%. The increasedecrease in our selling and general and administrative expenses wasis largely due to thea issuance of common stock for board member compensationdecrease in 2023stock compensation of $159,952, a decrease in professional fees of $86,120, and a decrease in payroll related expenses of $39,333 which didwere offset notby occuran increase in 2022.marketing and advertising of $43,883. Salaries and wages expenses were $772,295$732,962 for the year ended December 31, 2023 2024 compared to $863,051$772,295 for the year ended December 31, 2022,2023, which resulted in a decrease of $90,756$39,333 or 11%.5%. The decrease in salaries and wages is due to fewer employees employed by the Company during 2023.2024.

Research and development costs were $131,759$379,940 for the year ended December 31, 20232024 compared to $-0-$131,759 of research and development costs for the year ended December 31, 31, 2022,2023, which resulted in an increase of $131,759.$248,181. The increase in research and development costs is due to an increase in expenses incurred incurred in the development of our LPN-16.

While we have raised capital to meet our working capital and financing needs in the past, additional financing will be required in order to meet our current and projected cash requirements for operations. As of December 31, 2023,2024, we had a working capital deficit of $1,502,330.$2,358,251. AsThe of$335,000 other payable account balance at December 31, 2024 and 2023, $335,000 ofrepresents our current liabilities is defined as other payable due to linkLink sales that have been funded by the customers, for which obligations to the customers have not yet been completely performed, or the link has not yet been repurchased by the Company. During 2019 deferred revenue was reclassified to other payable due to the Company exitingno longer expects to fulfill the business of installing registered links and related equipment andobligations servicesto (“Links”).justify presenting as deferred revenue. The Company intends to relieve the liability through a combination of exchanges for common stock and cash.

We estimate that we could need approximately $3,500,000$4,200,000 of capital or financing over the next twelve months to fund our planned operations, including the commercialization of our LPN-16 for supporting our private LTE services and paying down $1,114,515$1,345,000 of existing note payables that is expected to come due in the next twelve months as well as to pay out the $335,000 included in other payables for monies due to Link holders.payables. Until the $335,000 is converted to common stock, the amounts are due on demand and, therefore, while unlikely to be demanded, the monies are included as an outflow over the next twelve months. Additionally, Wytec will look to extend or convert into common stock the debt of $1,074,515$1,345,000 that comes due in 2024,2025, however, until negotiated, it is included as a cash need for the next twelve months. Approximately $2,048,183$2,577,000 of the cash needs relates to operational needs, including paying down current accounts payable of approximately $515,000, current portions of notes taken on equipment of $21,609,$617,000, accrued interest of $129,574,$183,715, and $1,382,000$1,776,000 of operations, including research and development expenses, that cannot be extended.

OurIn 2024, the Company invested $1,899 in computer equipment. In contrast, our 2023 investing activities consist principallyconsisted of thea $600,000 investment in Insurance Resources LLC.

Cash flows provided from financing financing activities during the year ended December 31, 20232024 were $2,929,334$1,252,323 compared to $1,162,467$2,929,334 during the year ended December 31, 2022. 2023. During the year ended December 31, 2024, we received $668,932 from the exercise of common stock purchase warrants, and during the year ended December 31, 2023, we received $605,865 from the exercise of common stock purchase warrants. During the year ended December 31, 2024, we also obtained debt financing of $605,000 while during the year ended December 31, 2023, we issued $605,866 in common stock from the exercise of warrants and during the year ended December 31, 2022, we issued $25,000 in common stock. During the year ended December 31, 2023, we also obtained financing forof $2,376,515 while during the year ended December 31, 2022, we obtained financing for $1,030,000 and received $140,970 for common stock issued in 2021.$2,376,515.

We have reviewed the standards issued by the Financial Accounting Standards Board (“FASB”) through December 31, 20232024 and which are not yet effective. The following is a list of pronouncements that the Company has or will adopt:

During the quarter ended JuneSeptember 30, 2025, there have been no material changes from the risk factors previously in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024.

Wytec is a designerdeveloper andof developerwide area ofnetworks (“WANs”) utilizing small cell technology and wide area networks designed to support 5Gthe networkrapidly deploymentsgrowing Internet of Things (“IOT”) solutions across the United States.world. Currently wethe offer Company offers in-building cellular (known as a distributed antenna system, “DAS”) and private Long-term Evolution “private LTE” solutions utilizing private distributor agreements along with multiple vendors and a channel agreement with Synnex Corporation, a leading distributor and solutions aggregator hosting more than 22,000 technology vendors across the world. Concurrently, Wytec is the owner of patented technologies, including small cell technology, known as the “LPN-16,” designed to support a dense neutral host citywide 5G network coverage.supporting multiple solutions such as driverless cars, 5G cellular support, gunshot detection, and drug (Vape/THC/Fentanyl) detection technology utilizing utility pole management services. Small cell technology is purported by PricewaterhouseCoopers Internationalto Limited to be the key component to 5G deployment.

In August 2023, we entered into an agreement with Trabus Technologies (“Trabus”) to utilize Trabus’ algorithms for artificial intelligence (“AI”), and machine learning (“ML”) to facilitate the development of our gunshot detection and other smart sensors. Our agreement with Trabus also addresses the prototype we are currently developing for use in a pilot program (“Pilot Program”) to be offered to TXShare cooperative purchasing program members in the third or fourth quarter of 2025,2026, which is expected to include our gunshot detection technology.

We expect 5G to have a transformative impact on the economy and we believe that 5G citywideand deploymentsthe next generation “6G” will rely substantially on citywide deployments utilizing small cell technology to facilitate this impact. We believe our enhanced LPN-16 technology with our recent addition of AI and ML can solve many of the long-term challenges faced by operators needing access to implement their 5G initiatives. It can also assist cities challenged with on-going technology upgrades, network growth demands, political hurdles, and new business models needed to realize the benefits of a 5G network. In addition to aligning with technical and governmental issues, the LPN-16 is designed to meet the standards for 5G deployment and, for operator needs, adheres to the FCC policy initiatives addressing public safety and First Responder initiatives. Specifically, the FCC’s Report and Order 14-153, Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies, adopts rules to help spur wireless broadband deployment by facilitating the sharing of wireless transmission equipment using “neutral host” functionality to simultaneously support multiple providers.cellular carriers. The LPN-16 was specifically designed to support neutral host features and performance. The FCC’s goal of “shared use” and “neutral host” seeks to expand coverage and capacity more quickly, reduce costs, and promote access to infrastructure which reduces barriers to deployment and incentivize the sharing of resources, rather than relying on new builds for every stakeholder, thereby safeguarding environmental, aesthetic, historic and local land-use values.

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

Critical Accounting Policies and Estimates

The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. At JuneSeptember 30, 2025, the Company has estimated estimated no product warranty accrual given the Company’s de minimis historical financial warranty experience.

Results of Operations for the Three and SixNine Months Months Ended JuneSeptember 30, 2025 and 2024

Revenue for the three months ended ended JuneSeptember 30, 2025 and 2024 was $19,183$2,359 and $25,514,$88,034, respectively. The decrease in revenue of $6,331$85,675 or 25%97% was primarily due to decrease in revenue from our in-building cellular systems. Revenue for the sixnine months ended JuneSeptember 30, 2025 and 2024 was $21,790$24,149 and $40,112,$128,146, respectively. respectively. The decrease in revenue of $18,322$103,997 or 46%81% was primarily due to decrease in revenue from our in-building cellular systems.

Cost of sales for the three months months ended JuneSeptember 30, 2025 and 2024 was $9,818$-0- and $24,690,$30,617, respectively. This decrease of $14,872,$30,617, or 60%,100%, was primarily due to decrease in costs incurred related to the sales of our in-building cellular systems. Cost of revenues for the sixnine months ended JuneSeptember 30, 2025 and and 2024 was $9,818 and $24,953,$55,570, respectively. This decrease of $15,135,$45,752, or 61%,82%, was primarily due to decrease in costs incurred related to to the sales of our in-building cellular systems.

Cash flows used in operating activities during the sixnine months ended JuneSeptember 30, 2025 were $784,699$1,150,568 as compared to $997,814$1,386,569 during the sixnine months ended June September 30, 2024. The $213,115$236,001 decrease in cash used in operating activities was primarily due to an increase of accounts payable and accrued expenses and receipt of the employee retention credit receivable during the sixnine months ended JuneSeptember 30, 2025 as compared to the same period in 2024.

Cash flows used by investing activities activities during the sixnine months ended JuneSeptember 30, 2025 were $1,388 as compared to the cash flows used by investing activities of $1,899 during during the sixnine months ended JuneSeptember 30, 2024. Capital expenditures totaled $1,388 and $1,899 during the sixnine months ended JuneSeptember 30, 2025 and and 2024, respectively.

Cash flows provided by financing activities during the sixnine months ended JuneSeptember 30, 2025 were $772,650$1,170,194 as compared to $642,358$925,160 during the sixnine months ended June September 30, 2024. These receipts represent proceeds from the sale of sharesexercise of the Company’s common stock purchase warrants and common stock purchase warrants, and the issuance of debt.

As of JuneSeptember 30, 2025, our cash cash balance was $97,262.$128,937. Our plan for satisfying our cash requirements for the next twelve months is through a combination of sales-generated income, including revenue from our installation contracts with the Texas school districts, private placements of our capital stock, exercise of warrants, third party financing, and/or traditional bank financing. There is no assurance that we will be able to meet our working capital requirements through the private placement of equity or debt or from any other source.

The $335,000 other payable account account balance at JuneSeptember 30, 2025 and December 31, 2024, represents sales of registered links and related equipment and services (“Links”) that have been funded by customers, for which the Company no longer expects to fulfill the related obligations to justify presenting as deferred revenue. The Company intends to relieve the remaining amount of this liability through a combination of exchanges for common stock and cash.

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate 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 $36,044,556$36,540,293 at JuneSeptember 30, 2025, and have reported negative cash flows from operations. In addition, we do not currently have the cash resources to meet our operating and approximately $2,400,000 of financing commitments for the next twelve months from the date of this report. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.