10-Q 1 form10q.htm
false Q3 --12-31 0001321828 246 0001321828 2023-01-01 2023-09-30 0001321828 2023-11-14 0001321828 2023-09-30 0001321828 2022-12-31 0001321828 us-gaap:RelatedPartyMember 2023-09-30 0001321828 us-gaap:RelatedPartyMember 2022-12-31 0001321828 DCLT:SeriesAConvertiblePreferredStockMember 2023-09-30 0001321828 DCLT:SeriesAConvertiblePreferredStockMember 2022-12-31 0001321828 DCLT:SeriesBConvertiblePreferredStockMember 2023-09-30 0001321828 DCLT:SeriesBConvertiblePreferredStockMember 2022-12-31 0001321828 2023-07-01 2023-09-30 0001321828 2022-07-01 2022-09-30 0001321828 2022-01-01 2022-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2021-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2021-12-31 0001321828 us-gaap:CommonStockMember 2021-12-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001321828 us-gaap:RetainedEarningsMember 2021-12-31 0001321828 2021-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-03-31 0001321828 us-gaap:CommonStockMember 2022-03-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001321828 us-gaap:RetainedEarningsMember 2022-03-31 0001321828 2022-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-06-30 0001321828 us-gaap:CommonStockMember 2022-06-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001321828 us-gaap:RetainedEarningsMember 2022-06-30 0001321828 2022-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-09-30 0001321828 us-gaap:CommonStockMember 2022-09-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001321828 us-gaap:RetainedEarningsMember 2022-09-30 0001321828 2022-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-12-31 0001321828 us-gaap:CommonStockMember 2022-12-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001321828 us-gaap:RetainedEarningsMember 2022-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-03-31 0001321828 us-gaap:CommonStockMember 2023-03-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001321828 us-gaap:RetainedEarningsMember 2023-03-31 0001321828 2023-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-06-30 0001321828 us-gaap:CommonStockMember 2023-06-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001321828 us-gaap:RetainedEarningsMember 2023-06-30 0001321828 2023-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-01-01 2022-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-01-01 2022-03-31 0001321828 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001321828 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001321828 2022-01-01 2022-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-04-01 2022-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-04-01 2022-06-30 0001321828 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001321828 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001321828 2022-04-01 2022-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-07-01 2022-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-07-01 2022-09-30 0001321828 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001321828 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2022-10-01 2022-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2022-10-01 2022-12-31 0001321828 us-gaap:CommonStockMember 2022-10-01 2022-12-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2022-10-01 2022-12-31 0001321828 us-gaap:RetainedEarningsMember 2022-10-01 2022-12-31 0001321828 2022-10-01 2022-12-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-01-01 2023-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-01-01 2023-03-31 0001321828 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001321828 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001321828 2023-01-01 2023-03-31 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-04-01 2023-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-04-01 2023-06-30 0001321828 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001321828 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001321828 2023-04-01 2023-06-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-07-01 2023-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-07-01 2023-09-30 0001321828 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0001321828 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesAPreferredStockMember 2023-09-30 0001321828 us-gaap:PreferredStockMember us-gaap:SeriesBPreferredStockMember 2023-09-30 0001321828 us-gaap:CommonStockMember 2023-09-30 0001321828 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001321828 us-gaap:RetainedEarningsMember 2023-09-30 0001321828 srt:MinimumMember 2023-09-30 0001321828 srt:MaximumMember 2023-09-30 0001321828 us-gaap:FairValueInputsLevel1Member 2023-09-30 0001321828 us-gaap:FairValueInputsLevel2Member 2023-09-30 0001321828 us-gaap:FairValueInputsLevel3Member 2023-09-30 0001321828 us-gaap:FairValueInputsLevel1Member 2022-12-31 0001321828 us-gaap:FairValueInputsLevel2Member 2022-12-31 0001321828 us-gaap:FairValueInputsLevel3Member 2022-12-31 0001321828 DCLT:TimothyEVanceMember us-gaap:RestrictedStockMember DCLT:EmploymentAgreementMember 2018-04-01 2018-06-30 0001321828 DCLT:GaryDWoerzMember us-gaap:RestrictedStockMember DCLT:EmploymentAgreementMember 2018-04-01 2018-06-30 0001321828 us-gaap:RestrictedStockMember DCLT:EmploymentAgreementMember 2018-06-30 0001321828 DCLT:EmploymentAgreementMember 2018-04-01 2018-06-30 0001321828 DCLT:EmploymentAgreementMember 2023-07-01 2023-09-30 0001321828 DCLT:EmploymentAgreementMember 2023-01-01 2023-09-30 0001321828 DCLT:EmploymentAgreementMember 2022-07-01 2022-09-30 0001321828 DCLT:EmploymentAgreementMember 2022-01-01 2022-09-30 0001321828 DCLT:TimothyEVanceMember DCLT:EmploymentAgreementMember 2023-01-01 2023-09-30 0001321828 DCLT:GaryDWoerzMember DCLT:EmploymentAgreementMember 2023-01-01 2023-09-30 0001321828 DCLT:SeriesAConvertiblePreferredStockMember 2023-01-01 2023-09-30 0001321828 DCLT:SeriesAConvertiblePreferredStockMember 2022-09-30 0001321828 DCLT:SeriesBConvertiblePreferredStockMember 2014-09-30 0001321828 DCLT:SeriesBConvertiblePreferredStockMember 2014-07-01 2014-09-30 0001321828 DCLT:ContractorsMember 2022-01-01 2022-12-31 0001321828 us-gaap:EquipmentMember srt:MinimumMember 2023-09-30 0001321828 us-gaap:EquipmentMember srt:MaximumMember 2023-09-30 0001321828 us-gaap:EquipmentMember 2023-09-30 0001321828 us-gaap:EquipmentMember 2022-12-31 0001321828 us-gaap:FurnitureAndFixturesMember 2023-09-30 0001321828 us-gaap:FurnitureAndFixturesMember 2022-12-31 0001321828 us-gaap:LeaseholdImprovementsMember 2023-09-30 0001321828 us-gaap:LeaseholdImprovementsMember 2022-12-31 0001321828 2022-01-01 2022-12-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares DCLT:Day xbrli:pure

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2023

 

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

 

Commission file number 000-54696

 

DATA CALL TECHNOLOGIES, INC.

(Exact Name Of Registrant As Specified In Its Charter)

 

Nevada   30-0062823

(State of

Incorporation)

 

(I.R.S. Employer

Identification No.)

     
700 South Friendswood Drive, Suite E, Friendswood, TX   77546
(Address of Principal Executive Offices)   (ZIP Code)

 

Registrant’s Telephone Number, Including Area Code: (866) 219-2025

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None   None   None

 

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 ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

 

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

 

On November 14, 2023, the Registrant had 157,498,515 shares of common stock outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

Item   Description   Page
         
    PART I - FINANCIAL INFORMATION    
         
ITEM 1.   FINANCIAL STATEMENTS.   3
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION.   12
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   17
ITEM 4.   CONTROLS AND PROCEDURES.   17
         
    PART II - OTHER INFORMATION    
         
ITEM 1.   LEGAL PROCEEDINGS.   18
ITEM 1A.   RISK FACTORS.   18
ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.   18
ITEM 3.   DEFAULT UPON SENIOR SECURITIES.   18
ITEM 4.   MINE SAFETY DISCLOSURE.   18
ITEM 5.   OTHER INFORMATION.   18
ITEM 6.   EXHIBITS.   18

 

 2 

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents

 

Condensed Balance Sheets - September 30, 2023 (Unaudited) and December 31, 2022   4
Condensed Statements of Operations - Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)   5
Condensed Statement of Stockholders’ Equity Nine Months Ended September 30, 2023 (unaudited) and the Year Ended December 31, 2022   6
Condensed Statements of Cash Flows - Nine Months Ended September 30, 2023 and 2022 (Unaudited)   7
Notes to Condensed Financial Statements   8

 

 3 

 

 

Data Call Technologies, Inc.

Condensed Balance Sheets

September 30, 2023 (Unaudited) and December 31, 2022

Back to Table of Contents

 

         
   September 30, 2023   December 31, 2022 
   (Unaudited)   Balances 
Assets          
Current assets:          
Cash  $95,477   $20,727 
Accounts receivable   40,092    65,203 
Prepaid Rent   -    1,400 
Total current assets   135,569    87,330 
           
Property and equipment   151,723    151,723 
Less accumulated depreciation and amortization   148,469    147,733 
Net property and equipment   3,254    3,990 
           
Other assets   80,800    800 
Total assets  $219,623   $92,120 
           
Liabilities and Stockholders’ Equity          
           
Current liabilities:          
Accounts payable  $21,194   $16,710 
Advances from related party   4,838    1,774 
Accrued expenses-related party   808    361 
Deferred revenue   105,837    - 
Total current liabilities   132,677    18,845 
           
Total liabilities   132,677    18,845 
           
Stockholders’ equity:          
Preferred stock, $0.001 par value. Authorized 10,000,000 shares: Series A 12% Convertible - 800,000 shares issued and outstanding at September 30, 2023 and December 31, 2022   800    800 
Preferred stock, $0.001 par value. Authorized 1,000,000 shares: Series B - 10,000 shares issued and outstanding at September 30, 2023 and December 31, 2022   10    10 
Common stock, $0.001 par value. Authorized 490,000,000 shares: 157,498,515 shares issued and outstanding at September 30, 2023 and at December 31, 2022   157,498    157,498 
Additional paid-in capital   9,883,085    9,881,902 
Accumulated deficit   (9,954,447)   (9,966,935)
Total stockholders’ equity   86,946    73,275 
Total liabilities and stockholders’ equity  $219,623   $92,120 

 

The accompanying notes are an integral part of these financial statements.

 

 4 

 

 

DATA CALL TECHNOLOGIES, INC.

Condensed Statements of Operations

Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Back to Table of Contents

 

                 
   Three Months ended   Three Months ended   Nine Months ended   Nine Months ended 
   September 30, 2023   September 30, 2022   September 30, 2023   September 30, 2022 
                 
Revenues                    
Sales  $138,233   $132,144   $414,864   $424,405 
Cost of sales   58,469    46,997    137,321    148,973 
Gross margin   79,764    85,147    277,543    275,432 
                     
Selling, general and administrative expenses   62,785    84,759    264,427    274,692 
Depreciation and amortization expense   245    245    736    736 
Total operating expenses   63,030    85,004    265,163    275,428 
                     
Other (income) expense                    
Interest income   (33)   (1)   (108)   (1)
Interest expense   -    -    -    - 
Total expenses   62,997    85,003    265,055    275,427 
                     
Net income (loss) before income taxes   16,767    144    12,488    5 
                     
Provision for income taxes   -    -    -    - 
Net income (loss)  $16,767   $144   $12,488   $5 
                     
Net income per common share - basic and diluted  $0.00   $0.00   $0.00   $0.00 
                     
Weighted average common shares:                    
Basic   157,498,515    157,498,515    157,498,515    157,498,515 
Diluted   871,784,229    542,470,992    871,784,229    524,470,992 

 

The accompanying notes are an integral part of these financial statements.

 

 5 

 

 

Data Call Technologies, Inc.

Condensed Statement of Stockholders’ Equity

For The Nine Months Ended September 30, 2023 (unaudited) and the year ended December 31, 2022

Back to Table of Contents

 

                                     
   Preferred Stock A   Preferred Stock B   Common Stock   Additional paid-in   Accumulated   Stockholders’ 
   shares   amount   shares   amount   shares   amount   capital   deficit   equity 
Balance year ended December 31, 2021   800,000   $800    10,000   $10    157,498,515   $157,498   $9,873,906   $(9,971,717)  $60,497 
Shares issued for services   -    -    -    -    -    -    2,137    -    2,137 
Net Income (loss)   -    -    -    -    -    -    -    (12,776)   (12,776)
Balance period ended March 31, 2022   800,000   $800    10,000   $10    157,498,515   $157,498   $9,876,043   $(9,984,493)  $49,858 
Shares issued for services   -    -    -    -    -    -    2,137    -    2,137 
Net Income (loss)   -    -    -    -    -    -    -    (12,637)   (12,637)
Balance period ended June 30, 2022   800,000   $800    10,000   $10    157,498,515   $157,498   $9,878,180   $(9,971,856)  $64,632 
Shares issued for services   -    -    -    -    -    -    2,930    -    2,930 
Net Income (loss)   -    -    -    -    -    -    -    144    144 
Balance period ended September 30, 2022   800,000   $800    10,000   $10    157,498,515   $157,498   $9,881,110   $(9,971,712)  $67,206 
Net Income (loss)   -    -    -    -    -    -    -    4,782    4,782 
Balance year ended December 31, 2022   800,000   $800    10,000   $10    157,498,515   $157,498   $9,881,902   $(9,966,935)  $73,275 
                                              
Shares issued for services   -    -    -    -    -    -    887    -    887 
Net Income (loss)   -    -    -    -    -    -    -    (9,771)   (9,771)
Balance period ended March 31, 2023   800,000   $800    10,000   $10    157,498,515   $157,498   $9,882,789   $(9,976,706)  $64,391 
                                              
Shares issued for services   -    -    -    -    -    -    296    -    296 
Net Income (loss)   -    -    -    -    -    -    -    5,492   5,492
Balance period ended June 30, 2023   800,000   $800    10,000   $10    157,498,515   $157,498   $9,883,085   $(9,971,214)  $70,179 
Net Income (loss)   -    -    -    -    -    -    -    16,767    16,767 
Balance period ended September 30, 2023   800,000   $800    10,000   $10    157,498,515   $157,498   $9,883,085   $(9,954,447)  $86,946 

 

The accompanying notes are an integral part of these financial statements.

 

 6 

 

 

DATA CALL TECHNOLOGIES INC.

Condensed Statements of Cash Flows

Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Back to Table of Contents

 

         
   Nine Months Ended   Nine Months Ended 
   September 30, 2023   September 30, 2022 
Cash flows from operating activities:          
Net income (loss)  $12,488   $5 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation   736    736 
Stock-based compensation   1,183    7,204 
Changes in operating assets and liabilities:          
Accounts receivable   25,111    (5,070)
Prepaid Expenses   1,400    - 
Accounts payable   4,484    (8,842)
Accrued Expense- related party   447    12 
Deferred Revenue   105,837    - 
Net cash provided by (used in) operating activities   151,686    (5,955)
           
Cash flows from investing activities:          
Purchase of Software   (80,000)   - 
Net cash used in investing activities   (80,000)   -
           
Cash flows from financing activities:          
Advances from related party   3,064    382 
Net cash provided by (used in) financing activities   3,064    382 
           
Net increase (decrease) in cash   74,750    (5,573)
Cash at beginning of year   20,727    13,871 
Cash at end of period  $95,477   $8,244 
           
Supplemental Cash Flow Information:          
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 

 

The accompanying notes are an integral part of these financial statements.

 

 7 

 

 

DATA CALL TECHNOLOGIES, INC.

Notes to Condensed Financial Statements

September 30, 2023 (Unaudited)

Back to Table of Contents

 

(1) Summary of Significant Accounting Policies

 

Organization, Ownership and Business

 

Data Call Technologies, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 2002. The Company’s mission is to integrate cutting-edge information delivery solutions that are currently deployed by the media, and put them within the control of retail and commercial enterprises. The Company’s software and services put its clients in control of real-time advertising, news, and other content, including emergency alerts.

 

The accompanying unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine-month period ended September 30, 2023 are not indicative of the results that may be expected for the year ending December 31, 2023.

 

As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-X, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual financial statements and footnotes thereto. For further information, refer to the Company’s audited consolidated financial statements and related footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid investment instruments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents as of September 30, 2023 or December 31, 2022.

 

Revenue Recognition

 

On January 1 2018, we adopted Accounting Standards Update No. 2014-09, (Revenue from Contracts with Customers) (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC), Revenue Recognition. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.

 

Topic Under 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

identification of the contract, or contracts, with a customer;
identification of the performance obligations in the contract;
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenue when, or as, we satisfy a performance obligation.

 

 8 

 

 

Company recognizes revenues based on monthly fees for services provided to customers. Some customers prepay for annual services and the Company defers such amounts and amortizes them into revenues as the service is provided.

 

Accounts Receivable

 

Accounts receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $0 as of September 30, 2023 and December 31, 2022 as we believe all of our receivables are fully collectable.

 

Property, Equipment and Depreciation

 

Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (3-5 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.

 

Advertising Costs

 

The cost of advertising is expensed as incurred.

 

Research and Development

 

Research and development costs are expensed as incurred.

 

Product Development Costs

 

Product development costs consist of cost incurred to develop the Company’s website and software for internal and external use. All product development costs are expensed as incurred.

 

Income Taxes

 

The Company is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized.

 

Use of Estimates

 

The preparation of financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from those estimates.

 

 9 

 

 

Management’s Estimates and Assumptions

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

 

Stock-Based Compensation

 

We account for stock-based compensation in accordance with “FASB ASC 718-10.” Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of the Company’s common stock on the date of grant. Compensation expense for all share-based payment awards is recognized using the straight-line amortization method over the vesting period.

 

Fair Value of Financial Instruments

 

The Company estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company estimates of fair value are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by the Company on its notes payable approximate market rates. The Company believes that the fair value of its financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate their carrying amounts.

 

On January 1, 2009, the Company adopted an accounting standard for applying fair value measurements to certain assets, liabilities and transactions that are periodically measured at fair value. The adoption did not have a material effect on the Company’s financial position, results of operations or cash flows. In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are routinely recognized or disclosed at fair value. This standard clarifies how a company should measure the fair value of liabilities, and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard became effective for the Company on October 1, 2009. The adoption of this standard did not have a material impact on the Company’s financial statements. The fair value accounting standard creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.

 

Level 1: Quoted prices in active markets for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

 

Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

 

The following table presents the Company’s Assets and Liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2023 and December 31, 2022:

 

   (Level 1)   (Level 2)   (Level 3) 
September 30, 2023  $0   $0   $0 
December 31, 2022  $0   $0   $0 

 

Recent Accounting Pronouncements

 

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

 

(2) Related Party Transactions

 

During the second quarter of 2018, the Company issued unregistered shares as follows: (i) 3,500,000 restricted shares to Tim Vance, the Company’s CEO, in connection with the execution of a new 5 year employment agreement; and 2,000,000 restricted shares to Gary Woerz, the Company’s CFO, in connection with the execution of a new 5 year employment agreement. The restricted shares were valued at $0.0034 per share using the closing price of the stock on the date of grant. Total expense associated with the issuances is calculated at $18,700 to be recognized over the 5-year term of the agreements. During the three and Nine Months ended September 30, 2023, the Company recorded $0 and $1,183, respectively, in stock-based compensation expense. During the three and Nine Months ended September 30, 2022, the Company recorded $246, and $736, respectively, in stock-based compensation expense. The April 30, 2018 employment agreements calls for a 5-year term ending April 30, 2023, annual compensation of $98,000 per year for services as CEO, annual compensation of $57,200 per year for services as CFO.

 

As of September 30, 2023 and December 31, 2022, the total due to management for past accrued salaries is $808 and $361 respectively.

 

As of September 30, 2023, and December 31. 2022, the total due to management included in accounts payable and advances from related party is $4,838 and $1,774.

 

 10 

 

 

(3) Capital Stock, Warrants and Options

 

The Company is authorized to issue up to 10,000,000 shares of Preferred Stock, $0.001 par value per share, of which 800,000 shares of Series A convertible preferred stock are outstanding at September 30, 2023 and December 31, 2022. The Preferred Stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors, without further action by stockholders, and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions.

 

Each share of Series A Preferred Stock shall bear a preferential dividend of twelve percent (12%) per year and is convertible into a number shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) based upon Fifty (50%) percent of the average closing bid price of the Common Stock During the ten (10) day period prior to the conversion. The Company has not declared or accrued any dividends and as of September 30, 2023 or December 31, 2022. Unaccrued and undeclared dividends were $2,400 and $2,400 as of September 30, 2023 and September 30, 2022, respectively.

 

During the quarter ended September 30, 2014, the Company amended its Articles of Incorporation to authorize 1,000,000 shares of Series B Preferred Stock at a par value of $0.001 and issued 10,000 shares. The Series B shares were valued at $76,000 and were expensed during 2014. The Series B Preferred Stock may be issued to one or series by the terms of which may be and may include preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions. The Series B Preferred Shares have the right to vote in the aggregate, on all shareholder matters votes equal to 51% of the total shareholder vote on any and all shareholder matters. The Series B Preferred Stock will be entitled to this 51% voting right no matter how many shares of common stock or other voting stock of Data Call Technology stock is issued and outstanding in the future.

 

During the second quarter of 2018, the Company issued unregistered shares as follows: (i) 3,500,000 restricted shares to Tim Vance, the Company’s CEO, in connection with the execution of a new 5-year employment agreement; and 2,000,000 restricted shares to Gary Woerz, the Company’s CFO, in connection with the execution of a new 5 year employment agreement. The restricted shares were valued at $0.0034 per share using the closing price of the stock on the date of grant. Total expense associated with the issuances is calculated at $18,700 to be recognized over the 5-year term of the agreements. During the three and Nine Months ended September 30, 2023, the Company recorded $0 and $1,183, respectively, in stock-based compensation expense. During the three and Nine Months ended September 30, 2022, the Company recorded $246 and $736, respectively, in stock-based compensation expense. The April 30, 2018 employment agreements calls for a 5-year term ending April 30, 2023, annual compensation of $98,000 per year for services as CEO, annual compensation of $57,200 per year for services as CFO. During 2022 the company issued 500,000 shares to a contractor for services.

 

The Company is authorized to issue up to 490,000,000 shares of Common Stock, of which 157,498,515 shares were issued and outstanding as of September 30, 2023 and December 31, 2022.

 

(4) Property and Equipment

 

Major classes of property and equipment together with their estimated useful lives, consisted of the following:

 

   Years   September 30, 2023   December 31, 2022 
Equipment   3-5   $119,386   $119,386 
Office furniture   7    21,681    21,681 
Leasehold improvements   3    10,656    10,656 
Property and equipment, gross        151,723    151,723 
Less accumulated depreciation and amortization        (148,469)   (147,733)
Net property and equipment       $3,254   $3,990 

 

(5) Deferred Revenue

 

Prepaid subscriptions for services are deferred and are amortized as services are provided.

 

   September 30, 2023   December 31,2022 
Beginning Balance   0    - 
Prepayment Received  $254,010    0 
Less Recognized Revenue  $(148,173)       0 
Deferred Revenue  $105,837    0 

 

(6) Software Redesign

 

The Company has engaged a software company to implement a new system. The contract is for $100,000 of which the company is making payments ($80,000 paid through September 30, 2023) when the project is completed the company will capitalize the amount.

 

(7) Subsequent Events and Contingencies

 

The Company has evaluated subsequent events from the date on the balance sheet through the date these financial statements are being filed with the Securities and Exchange Commission. No additional material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements.

 

 11 

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION Back to Table of Contents

 

Some of the statements contained in this quarterly report of Data Call Technologies, Inc., Nevada corporation (hereinafter referred to as “we”, “us”, “our”, “Company” and the “Registrant”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

 

Data Call Technologies, Inc. (“Data Call,” or the “Company”) was incorporated under the laws of the State of Nevada as Data Call Wireless on April 4, 2002. On March 1, 2006, we changed our name to Data Call Technologies, Inc.

 

Our mission is to continue to exponentially grow our offering of our proprietary subscription services by integrating cutting-edge information/content delivery solutions to and within the control of retail and commercial resellers CMS manufacturers and end-users. Our Company’s services put its clients in control of real-time news, sports, weather and other dynamic content, displayed within one or multiple locations, spanning from local, regional to global end points, through Digital Signage and Kiosk networks.

 

Our business plan continues to focus on growing our client base by effectively offering this real-time and licensed information/content displayed through Digital Signage and Kiosk networks, seeking to improve the delivery, security, and variety of information/content services to the growing Digital Signage and Kiosk community.

 

Overview - What Is Digital Signage?

 

You’ve seen Digital Signage, it’s everywhere. Whether you’re shopping, trying to find your way through the airport, in a taxi, or even along the highway on your way home, it’s there. LED and LCD displays are continually replacing printed marketing materials such as signs and placards, as well as the old-school whiteboard, for product and corporate branding, marketing and assisted selling. The appeal of instantly updating product videos and promotional messages on one or thousands of remotely located displays is driving the adoption of this growing marketing platform. Digital Signage presentations are typically comprised of repeating loops (playlists) of information used to brand, market or sell the owner’s products and services or corporate messaging. But once viewed, this information becomes repetitive and the viewer tunes it out, resulting in low retention of the client’s message. As digital signage has matured, the characteristics of the digital signage presentations have taken center-stage requiring fresh, relevant and dynamic content mixed within the marketing messages. Dynamic Content is key.

 

 12 

 

 

Digital Signage Matures

 

We are experiencing the Digital Signage Industry (back then called connected signage) steadily maturing and Data Call, through its multiple industry specific relationships, continues its engagement and influence in the direction of the Digital Signage industry. Data Call has been performing in this space for well over a decade. Our company has staked claim in assisting the industry’s birth and maintains its prime position to enjoy and benefit from this industry’s growth.

 

Early on, a business desiring to achieve commercial benefits from the use of digital signage was often confronted by a plethora of hardware and software solutions, all offering their own “standard” of what digital signage should be. Typical customers for digital signage were most-often offered expensive hardware to present digital signage with a very minimalistic content management solution (CMS), lacking the full package of content with which to build and tailor their systems for their target customer base.

 

Those early adopters of digital signage often had to realize that their digital signage hardware vendors lacked the acumen to fully provide best practice of content strategy. The tools to manage content were provided, but not the content. From our inception, Data Call recognized that early signage providers and their typical customers lacked that key component - the offering of a comprehensive content package.

 

As the cost of platforms supporting infrastructure and digital displays has fallen significantly, digital signage has become more accessible to a wider range of potential users. Companies in our industry have come to understand, as we have preached since our inception, that the cost of Data Call’s integrated, content-flexible subscription service is extremely cost effective - and licensed for redistribution over their networks. The benefit that Data Call continues to provide our client base, in the form of ongoing content development, is expected to continue to provide our customers with desirable user-friendly content and content services.

 

The Need for Speed - Active Content

 

Active and dynamic content is the integral part of digital signage presentations that must be constantly updated with timely and relevant information to attract and retain target viewers to the products, services, or messaging offered by typical Digital Signage clients. For instance, a typical presentation may contain ten 15-second loops that provide the primary message of the presentation, but the active dynamic content, such as that provided by Data Call, is updated with new information constantly throughout the day. Those seeking to add active and dynamic content to their digital signage presentations are educated and advised to subscribe to Data Call’s dynamic content rather than attempting to illegally “cut and paste” or “scrape” broadcast content or RSS Feeds “not for commercial use” of others into their digital signage presentation.

 

By integrating Data Call’s content as a meaningful component of digital signage presentations, our clients can legally provide the entertainment and information content necessary to enhance the target customer’s information retention without disrupting the core message of the presentation. Some of the Infotainment categories provided by Data Call include news, sports, weather, financial data, the latest traffic alerts, among many others. With such a broad range of offerings, our clients have access to this active and dynamic content they need, regardless of the target customers and market they are addressing.

 

Our Business Opportunities

 

Our many opportunities for client development in the digital signage industry are growing exponentially. While many companies in our industry have traditionally outsourced all or part of their content creation, Data Call serves as a provider of dynamic active content to clients on a tailored basis. Whether a client desires general entertainment information for customers, such as news, sports, stock market quotes, etc. or location-specific content, such as local weather, traffic, etc., our research and experience has validated our long-held mantra that dynamic content draws and retains our clients’ target viewers to their digital signage and keeps viewers engaged throughout the client presentation.

 

Since our inception, management has developed and maintains strong relationships working with the leaders and associations of the digital signage industry. Collaborative efforts have successfully created, now industry standard, data formats and methods to facilitate the delivery of our dynamic content more easily and efficiently for integration into most hardware and software products.

 

 13 

 

 

Partners, Not Customers

 

Data Call’s enduring approach to our clients is to build long-lasting partnerships by creating client relationships that we believe are unique in the digital signage industry. We understand that each client has their own content requirements. In developing dynamic content for individual digital signage clients, we have identified three content-related factors: (i) reliability; (ii) objectivity; and (iii) ease of implementation. To address the reliability requirement, we are engaged in multiple license arrangements with the leading providers of news, weather, sports and financial information, among other client-desired content rather than either: (i) downloading and repackaging content sourced from the Internet (which may be illegal); or (ii) Scraping RSS feeds from news organizations (which may come and go at the provider’s whim - not to mention this practice is also illegal).

 

Licensing data from these premier providers has also served us by satisfying the second criteria, objectivity. Because it is commonly recognized that Internet content may often be unreliable, unverifiable and biased, early on, we determined that we could not simply use unfiltered Internet content for delivery to our clients. Our proper licensing of data facilitates the standard of delivery and implementation by our client/partners. Data Call does the heavy lifting by taking care of not just the licensing, but the proper formatting of that data for consumption by the industry utilizing our multiple formats offered. Data Call has understood that it’s Digital Signage and Kiosk clients needed a more complete service than to endeavor the sourcing of active content from multiple vendors. As a result, our flexible content plans permit our clients to do “one stop shopping” for all dynamic content requirements by licensing subscriptions through us.

 

We empower our clients to receive customized dynamic content subscriptions to be displayed in a multitude of ways (banners, tickers, scrolls or visualizations integrated with the overall presentations). We have created “Playlist Ready” offerings and produced and distribute multiple sets of common data layouts in the industry-standard formats such as XML (extensible markup language), JSON (JavaScript Object Notation), JPEG (Joint Photographic Experts Group), RSS (Rich Site Summary, often called Really Simple Syndication), MRSS (Media RSS) and MPEG (Moving Pictures Expert Group). With the advent of HTML5 (5th version of Hypertext Markup Language), even more delivery methods have been made available to our clients, many of whom have found any one or a combination of these formats to be easily integrated into their products. Nevertheless, we have also produced customized data formats and visualizations to the exact and specific requirements of our clients/partners, which, we believe ensures a higher level of reliability and ease of implementation.

 

Market demand, opportunity and technology converge at a single point in time, and Data Call continues hold its position. Our integrity persistently builds our business. Digital signage platforms steadily evolve to meet mass market requirements, costs for hardware and software are falling to the point of becoming commodities and the markets for digital signage are clarifying through historical trial and error.

 

Business Operations

 

In March of 2017, we released our Direct Lynk Manager (DLManager) customer portal at the Digital Signage Expo in Las Vegas. The DLManager incorporates the Direct Lynk Media platform with major enhancements and options that enable the client to self-serve in a webstore environment. This is a moderated space that allows proper “white glove” treatment by our staff that our clients have come to expect and appreciate. Once the client is comfortable with navigation of the portal, they may then set up multiple groups and displays within their account for testing results in a demo fashion free of charge. Upon completion of their content selections and distribution points, the client may purchase the proper number of licenses needed to support their sections through various plans offered within the portal.

 

Some of the current types of data and information, for which a client may subscribe to through the Direct Lynk System, in multiple formats include:

 

Headline News top world and national news headlines;
Business News top business headlines;
Financial Highlights world-based financial indicators ;
Entertainment News top entertainment headlines;
Health/Science News top science/health headlines;
Strange News - latest off-beat news headlines;
Sports Headlines top sports headlines
  - AP News Minute Video

 

 14 

 

 

  - AP This Day In History Videos
  - AP Entertainment Minute Videos
Latest Sports Lines - latest sports odds for NFL, NBA, NHL, NCAA Football and NCAA Basketball;
National Football League latest game schedule and in-game updates;
National Basketball Association - latest game schedule and in-game updates;
Major League Baseball - latest game schedule and in-game updates;
National Hockey League - latest game schedule and in-game updates;
NCAA Football - latest game schedule and in-game updates;
NCAA Men’s Basketball - latest game schedule and in-game updates;
Professional Golf Association top 10 leaders continuously updated throughout the four-day tournament;
NASCAR top 10 race positions updated every 20 laps throughout the race;
Traffic Mapping;
Animated Doppler Radar and Forecast Maps;
Listings of the day’s horoscopes;
Listings of the birthdays of famous persons born on each day;
Health and Wellness
Listings of historical events which occurred on each day in history; and
Localized Traffic and Weather Forecasts.

 

We continually add different types of content per client requests. We provide our DLM services to our clients and other potential customers through the Internet. All DLM Services are real-time information services providing a wide range of up-to-date information for display. These services are designed to work concurrently with customers’ existing digital signage systems. The Direct Lynk Messenger product is scheduled to be sunset within the next 12 months, as DLMedia gradually moves into a legacy status with the DLManager portal taking the forefront.

 

Since our inception in 2002, we have come to deeply understand that this industry provides an exciting platform for advertisers, including our clients, to promote, inform, educate, and entertain their customers and employees regarding their business products, services, and corporate communications. Through Digital Signage, and Digital Out of Home (DOOH) businesses can use a single display or a complex, networked series of displays and video walls to market their products and services directly at their facilities and elsewhere to their customers and employees in real time. Additionally, because the core of Digital Signage advertising takes place in real time, businesses can change their marketing and messaging efforts literally from moment to moment and over the course of a day or such other period as they may determine.

 

We believe that the ability of our clients to display in real-time, the information and content we deliver, better allows our clients to tailor their products, services, advertising and messaging to individual and target-group customers, thereby advertising and offering, for example, inventory and sales discounts that may be designed to appeal to those individual customers and target customer groups, increasing sales and revenues. We believe that the benefits of on-site, real-time Digital Signage displays compared to regular print or video advertising are substantial and include, among other advantages, being able to immediately change digitally-displayed images/advertisements depending on our client’s customers own situation, not simply being restricted by in-store print circulars produced days, weeks or even months in advance, which may become stale or obsolete prior to or shortly after publication and dissemination.

 

We specialize in enabling our clients to create their own Digital Signage content feeds which are delivered online directly to their chosen, electronic digital display devices at their various facilities. The only requirements our clients must have are: (i) a supported, third-party Digital Signage or Kiosk equipment solution - through a CMS or a standalone player, or similar device, which receives the data from our servers online; and (ii) an Internet connection. Our DLM System is supported by various, readily available third-party systems, varying in costs from inexpensive monthly cloud-based licenses to much more extensive and expensive content management/playback systems. Our Systems allow customers to select from their pre-determined data and information subscriptions offered. We enable our clients to also select location specific content they wish to receive based on how and where their Digital Signage network is configured.

 

 15 

 

 

In December of 2017 the company completed the arduous task of reconstructing our back-end systems architecture. This task was initialized to exploit the latest technology advances within our space, utilizing our data center efficiencies to further streamline our processes. One of the greater culminations of this effort yielded the Data Call API (Application Programming Interface) allowing our enterprise channel partners to embed our products within their offerings to further widen our reach.

 

Data Call continues to grow its client base through relationships that are gained through industry events such as seminars and trade shows. Our company has become a leader in syndicated content and custom content development for Digital Signage. Our licensed content is utilized on thousands of screens in hundreds of deployments. We are truly excited of our continued growth through our resellers, CMS manufacturers and end users.

 

Results of Operations

 

The following discussion should be read in conjunction with our financial statements.

 

During the last twelve months, the Company has implemented cost management measurements to review monthly expenditures. We will continue these efforts to streamline operations, as we focus on increasing sales and gross revenues over the next twelve months. We do not currently have any plans to increase our monthly expenditures or number of employees. We currently offer our Direct Lynk Messenger and DLMedia services to our clients and other potential customers through the Internet. Both DLM Services are Digital Signage products and real-time information services which provides a wide range of up-to-date information for display. Both DLM services are able to work concurrently with customers’ existing digital signage systems. The Direct Lynk Messenger product is slowly becoming a legacy product with the DLMedia product in the forefront.

 

We continually add subscribers for our technology throughout and intend to build and increase such subscribers moving forward.

 

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

 

Our revenues for the three months ended September 30, 2023 were $138,233, compared to $132,144 for the three-month period ended September 30, 2022, representing an increase of $6,089 or approximately 4.60%.

 

Costs of sales for the three months ended September 30, 2023 were $58,469 compared to $46,997 for the three-month period ended September 30, 2022, cost of sales for the quarter decreased $11,472. This was due to the Company’s ongoing efforts to reduce costs.

 

Gross margins for the three months ended September 30, 2023 was $79,764 compared to $85,147 as of September 30, 2022, or 57.7% for the three-month period ended September 30, 2023 as compared to 64.4% for the three-month period ending September 30, 2022.

 

Operating expenses for the three months ended September 30, 2023 were $63,030 compared to $85,004 for the three-month period ended September 30, 2022, representing a decrease of $21,974 from the same period in the prior year.

 

Net income for the three months ended September 30, 2023 was $16,767 compared to a net income of $144 for the three-month period ended September 30, 2022 or a net change of $16,623. The Company’s net income was due to our continuing efforts to react to the changing environment and trends.

 

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

 

Our revenues for the Nine Months ended September 30, 2023 were $414,864, compared to $424,405 for the nine-month period ended September 30, 2022, representing a decrease of $9,541 or approximately 2.20%. The decrease in revenues was mainly due to customers not renewing their subscriptions.

 

Costs of sales for the Nine Months ended September 30, 2023 were $137,321, compared to $148,973 for the same period of the prior year. The decrease was due the costs related to the licensing and royalty expense required to provide the subscription services.

 

Gross margins for the Nine Months ended September 30, 2023 were $277,543 compared to $275,432 as of September 30, 2022, or 66.9% for the nine-month period ended September 30, 2023 as compared to 64.9% for the nine-month period ending September 30, 2022.

 

 16 

 

 

Operating expenses for the Nine Months ended September 30, 2023 were $26265,163 compared to $275,428 for the nine-month period ended September 30, 2022, representing a decrease of $10,265 from the same period in the prior year.

 

Net income (loss) for the Nine Months ended September 30, 2023 was $12,488 compared to a net income of $5 for the nine-month period ended September 30, 2022. The Company’s net income was due to our continuing efforts to react to the changing environment and trends.

 

Liquidity and Capital Resources

 

As of September 30, 2023, we had total current assets of $135,569, consisting of $95,477 in cash and $40,092 in accounts receivable. had total current liabilities of $132,677 consisting of $21,194 in accounts payable, $4,838 in related party advances, and $808 in Accrued expenses, and had $105,837 in deferred revenue.

 

At September 30, 2023, we had a positive working capital of $2,892 and an accumulated deficit since inception of $9,954,447. The Company had net cash provided by (used in) operating activities of $151,686 during the nine-month period ended September 30, 2023, which was mainly due to a net income (loss) of $12,488 a decrease in accounts receivable of $25,111, an increase in stock compensation expense and options expense of $1,183, depreciation expense of $736, an in increase in accounts payable of $4,484, prepaid expense of $1,400 and deferred revenue of 105,837.

 

We had investing activities of $(80,000) during the nine-month period ended September 30, 2023 related to the purchase of software. We had $3,064 in our financing activities during the Nine Months ended September 30, 2023.

 

Due to our strong financial position we do not see a need to raise additional funds. We will continue to generate sufficient revenues and generate new revenues to support our operations.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

 

(a) Evaluation of Disclosure Controls and Procedures.

 

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023 (the “Evaluation Date”). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2023, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level as described in our Annual Report on Internal Control Over Financial Reporting filed in our Annual Report on Form 10-K.

 

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the 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. Because of 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, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

(b) Changes in Internal Control over Financial Reporting

 

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the three-month period ended September 30, 2023 that have significantly affected, or are reasonably likely to significantly affect, our internal control over financial reporting.

 

 17 

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

 

None.

 

ITEM 1A. RISK FACTORS Back to Table of Contents

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1. Description of Business, subheading Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K is not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURE Back to Table of Contents

 

None.

 

ITEM 5. OTHER INFORMATION Back to Table of Contents

 

None.

 

ITEM 6. EXHIBITS Back to Table of Contents

 

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

 

Exhibit No.   Description
31.1   Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2   Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 18 

 

 

SIGNATURES

 

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

 

DATA CALL TECHNOLOGIES INC.

 

By: /s/ Timothy E. Vance  
  Timothy E. Vance  
  Chief Executive Officer and Chairman  
  (Principal Executive Officer)  
  Date: November 14, 2023  
     
By: /s/ Gary Woerz  
  Gary Woerz  
  Chief Financial Officer  
  (Principal Financial and Principal Accounting Officer)  
  Date: November 14, 2023  

 

 19