ITEM 1. DESCRIPTION OF BUSINESS.
Data Call Technologies, Inc. was incorporated under the laws of the State of Nevada as Data Call Wireless, Inc. on April 4, 2002, and is sometimes referred to herein as "we", "us", "our", "Data Call" or the "Company." On March 1, 2006, we changed our name to Data Call Technologies, Inc. Since our inception, we have been engaged in the business of offering real-time information/content via digital signage and kiosk networks to our clients, who we consider to be our partners rather than simply as customers.
Our mission is to integrate cutting-edge information/content delivery solutions currently deployed by the media and make this content rapidly available to and within the control of our retail and commercial clients/customers. The Company's services put its clients in control of real-time news and other dynamic content, displayed within one or more locations, as well as to thousands of local, regional and national clients, through Digital Signage and Kiosk networks.
Our business plan is to focus on growing our client base by continually offering real-time information/content via Digital Signage and Kiosk networks, seeking to improve the delivery, security and variety of information/content services to the Digital Signage and Kiosk community.
Overview - What Is Digital Signage?
LED and LCD displays are continually replacing printed marketing materials such as signs and placards, as well as the old-fashioned whiteboard, for product and corporate branding, marketing and assisted selling. The appeal of instantly updating product videos and promotional messages on one or a thousand remotely located displays is driving the adoption of this exciting marketing tool. Digital Signage presentations are typically comprised of repeating loops of information used to brand, market or sell the owner's products and services. 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 "comes of age," the dynamic characteristics of the digital signage presentations has taken center-stage requiring fresh, relevant and updated dynamic content.
Digital Signage Comes of Age
We believe that the Digital Signage industry is "coming of age" and that Data Call through multiple industry relationships has been engaged in the business for more than a decade. Our company has virtually been there from the start and is in in a prime position to enjoy and benefit from our industry's growth. A few short years ago, a business wanting to derive commercial benefit from use of digital signage was often confronted with a myriad of hardware and software companies, all offering their own version of what digital signage should be. Typical customers for digital signage were most-often offered the hardware for digital signage but without the full package of content with which to build and tailor their systems for their target customer base.
Those early digital signage customers often had to deal with the fact that their digital signage hardware vendors lacked the know-how to provide them with the "do's and don'ts" of content development. However, from our inception, Data Call recognized that our competitors and their typical customers lacked a key component which includes the offering of a comprehensive content package.
Recently, as the cost of platforms supporting infrastructure and digital displays have fallen significantly, digital signage has become more accessible to a wider range of potential users while the growing Kiosk market has cross-pollinated with Digital Signage. Companies in our industry have come to understand, as we have understood almost since our inception in 2002, that the initial, one-time, up-front cost of Data Call's integrated, content-flexible, hardware and software package is far more customer friendly and, as a result, far surpasses outweighs the up-front savings by not doing so. The benefit that Data Call provides to our customers, in the form of ongoing content development, is expected to continue to provide our customers with desirable user friendly services.
As the cost of deployment has decreased, Data Call has continued to focus, as well as other providers have only begun focusing, on offering "attention-grabbing content" as a means of drawing target customers' attention to the core message of clients, thereby keeping their target customers engaged throughout Digital Signage and Kiosk presentations.
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 in order to attract and retain target customers to the product and service offered by 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 throughout the day. Those seeking to add active and dynamic content to their digital signage presentations are advised to employ Data Call's integrated content rather than attempting to "cut and paste" broadcast content of others into their digital signage presentation.
Our clients, by integrating Data Call's active content as a meaningful component of their digital signage presentations, can provide the entertainment and information content necessary to enhance the target customer's information retention without disrupting the core message of the presentation. Information categories provided by Data Call include news, weather, sports, financial data and the latest traffic alerts, among others. With such a broad range of offerings, our clients have access to the 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 virtually 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, product sales and specials, etc., our research has validated our long-held assumption that dynamic content draws and retains our clients' target viewers to their digital signage and keeps them engaged throughout the presentation.
Since our inception, management has developed strong relationships working with the leaders in digital signage. Collaborative efforts successfully created the data formats and means of communication to facilitate the delivery of our dynamic content more easily and efficiently by our clients for integration into their hardware and software products, setting industry standards.
Partners, Not Customers
Data Call's 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 do this because we understand that each client has its own content requirement. 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 have elected to enter into 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) pulling RSS feeds (which may come and go at the provider's whim). 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, we have determined that we could not simply use unfiltered Internet content for delivery to our clients. To achieve ease of implementation, our licensing of data facilitates the ease of delivery to and implementation and use by our client/partners. Data Call has understood that it's Digital Signage and Kiosk clients needed more complete service than to endeavor the sourcing of active content from multiple vendors. As a result, our flexible content packages permit our clients to do "one stop shopping" for all of their dynamic content requirements by a single sublicense from us. Ease of implementation also would require that the multiple formats of all Data Call's data providers be distilled into a single, usable format.
We enable our clients to receive customized dynamic content which may be displayed in a multitude of ways (banners, tickers, scrolls or artistically integrated with the overall presentations). We have created and produced multiple sets of common data layouts in the industry-standard XML (extensible markup language) format inclusive of MRSS. With the advent of HTML5, even more delivery methods have been made available to our clients, many of whom have found these new formats to be easily integrated into their products. Nevertheless, we have also produced customized data formats to the exact and specific requirements of our clients/partners, which, we believe ensures a higher level of reliability and ease of integration.
Market demand, opportunity and technology converge at a single point in time, and Data Call is there. Our integrity continues to build our business. Digital signage platforms are evolving 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 August of 2013, we announced the release of our Direct Lynk Media (DLMedia) product. The DLMedia product encapsulates the Direct Lynk Messenger product with major enhancements and options that allow the client to select and include in their feed images relative to the news feeds. Also in the release, both Weather and Traffic image products have been enhanced considerably. Other additions included within the release bring more value to the company's clients and create more interest from new and existing clients.
The current types of data and information, for which a client is able to subscribe to through the Direct Lynk System 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;
 Quirky News Bits latest off-beat news headlines;
 Sports Headlines top sports headlines;
 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;
 Major league soccer;
 Traffic Mapping;
 Animated Doppler Radar and Forest Maps;
 Listings of the day's horoscopes;
 Listings of the birthdays of famous persons born on each day;
 Trivia;
 Listings of historical events which occurred on each day in history; and
 Localized Traffic and Weather Forecasts.
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.
The Digital Signage and Kiosk industry is still a relatively new and since our inception in 2002 we have come to understand that it provides an exciting method for advertisers, including our clients, to promote, inform, educate, and entertain their customers regarding their business products and services. Through Digital Signage, businesses can use a single display or a complex, networked series of flat screen LED, LCD and even combined as video walls as display devices to market their products and services directly at their facilities and elsewhere to their customers and patrons in real time. Additionally, because Digital Signage advertising takes place in real time, businesses can change their marketing 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 companies to tailor their products, services and advertising 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 allowing clients to create their own Digital Signage dynamic 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 and/or Kiosk equipment solution, or similar device, which receives the data from our servers online; and (ii) an Internet connection. Our Direct Lynk 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 Direct Lynk Systems allow customers to select from the pre-determined data and information subscriptions of those described above. 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.
During the first quarter of fiscal 2014, we released our "Playlist-Ready" content products, enhancing our ability to further accommodate our current clients and appease new prospects. One product within the "Above the Fold" line has received a high level of acceptance at the industry trade shows, most recently at the Digital Signage Expo held in Las Vegas in March 2015.
In the end of 2015, we made available to our clients an online video creation tool. This tool is simple to use no matter what the level of computer skills a user may have. This online product requires no special artistic training. It is also ideal for re-purposing content originally created by a creative agency: customizing such content for local marketing, franchisee or dealer ID, web, digital signage, or agile marketing. It can create thousands of customized versions of a master piece of creative automatically. It has full brand compliance features built-in and satisfies professional artist specs. The system provides the client with the tools needed to create HD videos and video advertising in minutes. There are two available online options "Do It Myself" for extreme flexibility and control as the client creates HD videos and advertising from online templates, or a "Do It For Me" automated solution that lets the system do the work for the client. The client just needs to provide their business name and zip code. All of our products and services can be viewed on our website: datacalltech.com.
Dependence On A Few Major Customers
At December 31, 2016, we had over 1,000 customer/subscribers for our Direct Lynk System, which customers are relatively small, paying cumulatively an average monthly fee to Data Call of $10,000. We also have several larger new potential partner/clients that are testing our Digital Link Media products, and we expect that some or all of them may be expected to become significant clients in the near future. During the year ended December 31, 2016, we were dependent upon two major customers, who accounted for approximately 77% of our revenues. During the year ended December 31, 2015, we were dependent upon two major customers, who accounted for approximately 79% of our revenues.
Notwithstanding the forgoing, based upon recent communications with several potential clients who are volume users and/or wholesale distributors of digital signage content and content management systems, we believe that during 2017, several new clients will contribute significant revenue which should materially reduce our reliance on our three major customers to less than 50%. As a result, we believe that that we should become far less reliant on a few business clients for our source of revenue. However, there can be no assurance that our belief will prove to be justified or, if justified, that such trend will continue for any future period, if at all.
Employees
At December 31, 2016, we had 4 full-time employees, including our two executive officers. Depending upon our level of our growth, if any, we expect that we may or will be required to hire additional personnel in the areas of sales and marketing, software design, research and development and otherwise, during 2016 and continuing into 2017. However, we will be dependent upon revenue growth and profitability, of which there can be no assurance, to fund any increase in staff. None of our employees are covered by a selective bargaining agreement
Estimate Of The Amount Spent On Research And Development Activities
Since our inception in April 2002, the majority of our expenditures have been on research and development to create our Direct Lynk Messenger Systems, including software and hardware development and testing costs. The amount spent on this research and development from inception through December 31, 2016 is approximately $2,000,000.
ITEM 1A.
ITEM 1A. RISK FACTORS.
Investing in our common stock, while providing investors with an equity ownership interest, involves a high degree of risk, including the potential loss of all or a significant portion of their investment. Shareholders will be subject to risks inherent in our business relative to, among other things, general economic and industry conditions, market conditions and competition. The value of the investment may increase or decrease and could result in a loss, the size and extent of which cannot be predicted. An investor should carefully consider the following factors as well as other information contained in this annual report on Form 10-K for our year-ended December 31, 2016.
This annual report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including the risk factors described below and the other factors described elsewhere in this Form 10-K.
Since our inception, we have had a history of generating operating losses. However, in the past two calendar years, we have reversed that trend and have been able to generate positive cash flow from operations. As a result, our auditors have removed the going concern from their opinion. We anticipate being profitable in the near future. We currently expect to significantly increase our revenues by increasing our client base and/or generating additional revenue streams by offering new and enhanced products and services. However, there can be no assurance that our plan will be successful, either in whole or in part. If we fail to grow our revenues, our ability to achieve and fulfill our business plan may be delayed, which could adversely impact our results of operations.
Unforeseen events.
There can be no assurance that unforeseen events, such as: (i) the length of time necessary to generate increasing market acceptance of our Direct Lynk Systems; (ii) any unexpected material increased development costs; (iii), the general economy in the markets where we offer our Direct Lynk Systems.
We have competition.
There are many different sectors in the Digital Signage industry, including but not limited to (i) content Management providers, (ii) content Creation services, (III) hardware manufacturers, (iv) network management providers and (v) installation service providers. These sectors are extremely vas and well capitalized. We are in the content sector within a more specific niche of providing subscriptions of dynamic content. We provide subscription service of a wide variety of dynamic infotainment to the industry. As the leader in our subsector of the industry, other companies have attempted to duplicate us and we expect competition to increase in the future. To be competitive, we must continue to invest significant resources in research and development, sales and marketing and customer support. Few have sufficient resources to make these investments or are unable to make the technological advances necessary to continue to remain the leader, our competitive position may suffer. Increased competition could result in price reductions, fewer customer orders, reduced margins and loss of market share. Our failure to compete successfully against current or future competitors could adversely affect our fussiness and financial condition.
We rely on key management personnel.
We are highly dependent upon the services and efforts of key persons, as follows: Tim Vance, our founder and full-time CEO and Chief Operating Officer. Our ability to operate and implement our business plan is heavily dependent upon the continued services of Mr. Vance to grow as anticipated, our ability to attract, retain and motivate qualified, newly-hired, full and part-time personnel. The loss of Mr. Vance, in particular, and our inability, in the future to hire and retain qualified sales and marketing, software engineers and additional management personnel, as needed, could have a material adverse effect on our business and operations. We do not have "key man" life insurance on Mr. Vance.
We are highly dependent upon our ability to successfully market Direct Lynk System to subscribers.
We are dependent on the abilities of our sales and marketing activities to generate new clients for subscriptions to our Direct Lynk Systems and to broaden our customer base. While the number of paying subscribers for our Direct Lynk System increased during December 31, 2016 compared to December 31, 2015, there can be no assurance that our sales and marketing efforts will be able to market acceptance for our Direct Lynk System and increase our customer base to a level that will permit continued profitable operations. If our sales and marketing cannot continue to achieve market acceptance for our Direct Lynk Systems, and increase our customer base to a level that will permit profitable operations. If our sales and marketing efforts are unable to continue to generate new customers, we may not be able to generate sufficient revenues to continue with planned research and development on new products and improve our current products.
Difficult and volatile conditions in the capital, credit and commodities markets and general economic uncertainty have prompted companies to cut capital spending worldwide and could continue to materially adversely affect our business.
Disruptions in the economy and constraints in the capital markets have caused companies to reduce or delay capital investment. Some of our prospective customers may cancel or delay spending on the development or roll-out of technology projects with us due to continuing economic uncertainty. Our financial position, results of operations and cash flow could continue to be materially adversely affected by continuing difficult economic conditions and significant volatility in the capital. The continuing impact that these factors might have on us and our business is uncertain and cannot be predicted at this time. Such economic conditions have accentuated each of the risks we face and magnified their potential effect on us and our business. The difficult conditions in these markets and the overall economy affect our business in a number of ways. For example:
 Market volatility has exerted downward pressure on our stock price, which may make it more difficult for us to raise additional capital in the future. Economic conditions could continue to result in our customers experiencing financial difficulties or electing to limit spending because of the declining economy, which may result in decreased revenue for us.
 Difficult economic conditions have adversely affected certain industries in particular, including the automotive and restaurant industries, in which we have major customers. We could also experience lower than anticipated order levels from current customers, cancellations of existing but unfulfilled orders, and extended payment terms. Economic conditions could materially impact us through insolvency of our suppliers or current customers.
 Economic conditions combined with the weakness in the credit markets could continue to lead to increased price competition for our products, and higher overhead costs as a percentage of revenue.
If the markets in which we participate experience further economic downturns or slow recovery, this could continue to negatively impact our revenue generation, margins and operating expenses, and consequently have a material adverse effect on our business, financial condition and results of operations. If customer demand were to decline further, we might be unable to adjust expense levels rapidly enough in response to falling demand or without changing the way in which we operate. If revenue were to decrease further and we were unable to adequately reduce expense levels, we might incur significant losses that could adversely affect our overall financial performance and the market price of our common stock.
Potential future government regulation of the Internet may adversely affect our business.
We are dependent upon the Internet in connection with our business operations and the delivery of content for our Direct Lynk Systems. The United States Federal Communications Commission (the "FCC") does not currently regulate companies that provide services over the Internet, as it does common carriers or tele-communications service providers. Notwithstanding the current state of the FCC's rules and regulations, the potential jurisdiction of the FCC over the Internet is broad and if the FCC should determine in the future to regulate the Internet, our operations, as well as those of other Internet service providers, could be adversely. Compliance with future government regulation of the Internet could result in increased costs and because of our limited resources; it would have a material adverse effect on our business operations and operating results and financial condition.
We are dependent on the security of the Internet to serve our customers; any security breaches or other Internet difficulties could adversely affect our business.
We offer the majority of our services through, the secure transmission of confidential information over public networks are a critical element of our operations. A party who is able to circumvent security measures (hacker) could misappropriate proprietary information or cause interruptions in our operations. If we are unable to prevent unauthorized access to our users' information and transactions, our customer relationships could be irreparably harmed. Although we currently have in place security measures that we feel are adequate to protect our business and those of our customers, these measures may not prevent future security breaches. Nature's events placed on our systems could cause our systems to fail or cause our systems to operate at speeds unacceptable to our users, in which event we could lose customers and experience a material impact on our financial condition.
We must rely on other companies to maintain the Internet infrastructure if we hope to be successful.
Our future success depends, in large part, on other companies maintaining the Internet system infrastructure, including maintaining a reliable network backbone that provides adequate speed, data capacity and security. If the Internet continues to experience anticipated significant growth in the number of users, frequency of use and amount of data transmitted, as well as the number of malicious viruses and worms introduced onto the Internet by hackers and others, the infrastructure of the Internet may be unable to support the demands placed on it at any particular time or from time-to-time. Because we rely heavily on the Internet and our limited capital, any disruption of the Internet could adversely affect us to a greater degree than our competitors and other users of the Internet.
Our website and systems are hosted by a third party and we are vulnerable to disruptions or other events that are beyond our control.
Our website and systems are hosted by a third party. We are dependent on our systems' ability to distribute information over the Internet to customers. If our systems fail, it would harm our reputation, resulting in a loss of current and potential future customers and could cause us to breach existing agreements. Our success depends, in part, on the performance, reliability and availability of our services, which in turn are dependent on our third-party provider. Our systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, break-in, earthquake and similar events. We would face significant damage as a result of these events. As a result, we may be unable to develop or successfully manage the infrastructure necessary to meet current or future demands for reliability and scalability of our systems, which would have a negative impact on our business and financial conditions.
Our Direct Lynk Systems use sophisticated software which could be found to contain bugs or could be compromised by viruses. While we have not experienced any material bugs and viruses to date, if such event could occur, it could be costly for us to identify and repair, and until such bugs or viruses, if any, are fixed, they could cause interruptions in our service, which could cause our reputation to decline and/or cause us to lose clients.
Risk Factors Related to Our Common Stock
We are subject to financial reporting and other requirements for which our accounting, other management systems and resources may not be adequately prepared.
As a public company, we incur significant legal, accounting and other expenses, including costs associated with reporting requirements and corporate governance requirements, including requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Sarbanes-Oxley Act of 2002, and rules implemented by the SEC.
If we identify significant deficiencies or material weaknesses in our internal control over financial reporting that we cannot remediate in a timely manner, investors and others may lose confidence in the reliability of our financial statements, and the trading price of our common stock and ability to obtain any necessary equity or debt financing could suffer. In addition, if our independent registered public accounting firm is unable to rely on our internal control over financial reporting in connection with its audit of our financial statements, and if it is unable to devise alternative procedures in order to satisfy itself as to the material accuracy of our financial statements and related disclosures, it is possible that we would be unable to file our annual report with the SEC, which could also adversely affect the trading price of our common stock and our ability to secure any necessary additional financing.
In addition, the foregoing regulatory requirements could make it difficult or costly for us to obtain certain types of insurance, including directors' and officers' liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on board committees or as executive officers.
Market prices of our equity securities can fluctuate significantly.
The market prices of our common stock may change significantly in response to various factors and events beyond our control, including the following:
 the other risk factors described in this Form 10-K;
 changing demand for our products and services and ability to develop and generate sufficient revenues;
 any delay in our ability to generate operating revenue or net income;
 general conditions in markets we operate in;
 issuance of a significant number of shares, whether for compensation under employee stock options, conversion of debt, potential acquisitions, additional financing or otherwise.
There is only a limited trading market for our common stock.
Our Common Stock is subject to quotation on the OTC market. There has only been limited trading activity in our common stock. There can be no assurance that a more active trading market will commence in our securities as a result of the increasing operations of Data Call. Further, in the event that an active trading market commences, there can be no assurance as to the level of any market price of our shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.
State blue sky registration; potential limitations on resale of our securities.
Our common stock, the class of the Company's securities that is registered under the Exchange Act, has not been registered for resale under the Securities Act of 1933 or the "blue sky" laws of any state. The holders of such shares and persons, who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to resell our securities. Accordingly, investors should consider the secondary market for the Company's securities to be a limited one.
It is the intention of the management to seek coverage and publication of information regarding the Company in an accepted publication which permits a manual exemption. This manual exemption permits a security to be distributed in a particular state without being registered if the Company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. Furthermore, the manual exemption is a nonissuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they "recognize securities manuals" but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.
Dividends unlikely on our common stock.
We do not expect to pay dividends for the foreseeable future. The payment of dividends, if any, will be contingent upon our future revenues and earnings, capital requirements and general financial condition. The payment of any dividends will be within the discretion of our board of directors. It is our intention to retain all earnings for use in our business operations and accordingly, we do not anticipate that the Company will declare any dividends in the foreseeable future.
Compliance with Penny Stock Rules.
Our securities will initially be considered a "penny stock" as defined in the Exchange Act and the rules there under, since the price of our shares of common stock is less than $5. Unless our common stock is otherwise excluded from the definition of "penny stock," the penny stock rules apply with respect to that particular security. The penny stock rules require a broker-dealer prior to a transaction in penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. So long as the common stock is subject to the penny stock rules, it may become more difficult to sell such securities. Such requirements, if applicable, could additionally limit the level of trading activity for our common stock and could make it more difficult for investors to sell our common stock.
Shares eligible for future sale.
As of December 31, 2016, the Registrant had 4,832,547, shares of common stock issued and outstanding of which 1,082,048 shares are "restricted" as that term is defined under the Securities Act, and in the future may be sold in compliance with Rule 144 under the Securities Act. Rule 144 generally provides that a person holding restricted securities for a period of six months may sell every three months in brokerage transactions and/or market-maker transactions an amount equal to the greater of one (1%) percent of (a) the Company's issued and outstanding common stock or (b) the average weekly trading volume of the common stock during the four calendar weeks prior to such sale. Rule 144 also permits, under certain circumstances, the sale of shares without any quantity limitation by a person who has not been an affiliate of the Company during the three months preceding the sale and who has satisfied a six month holding period. However, all of the current shareholders of the Company owning 5% or more of the issued and outstanding common stock are subject to Rule 144 limitations on selling.
The Nevada Revised Statutes and our articles of incorporation authorize to issue additional shares of common stock and shares of preferred stock, which preferred stock having such rights, preferences and privileges as our board of directors shall determine.
Pursuant to our Articles of Incorporation, as amended and restated, we have authorized capital stock of 200,000,000 shares of common stock and 10,000,000 shares of preferred stock. As of the December 31, 2016, we have 4,832,547 shares of common stock issued and outstanding and 800,000 shares of preferred A stock issued and outstanding and 10,000 shares of preferred B stock issued and outstanding. Our Board of Directors has the ability, without shareholder approval; to issue a significant number of additional shares of common stock without shareholder approval, which if issued would cause substantial dilution to our then common shareholders. Additionally, shares of preferred stock may be issued by our Board of Directors at their sole discretion and without shareholder approval, in such classes and series, having such rights, including voting rights and super-majority voting rights, and such preferences and relative, participating, optional or other special rights, powers and privileges as determined by our Board of Directors from time-to-time. If shares of preferred stock are issued by our Board of Directors having super-majority voting rights, or having conversion rights to convert their preferred stock into a number of shares of common stock at a ratio of greater that one-for-one, holders of our common stock would be subject to dilution that may be significant.
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, par value $0.001 (the "Series B Stock"), 10,000 shares of which were issued to our CEO, Tim Vance. The Series B Stock, which may be issued in one or more series by the terms of which may be and may include preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions, has the right to vote, in the aggregate, on all shareholder matters, equal to 51% of the total shareholder vote on any and all shareholder matters. The Series B Stock is entitled to this super-majority, 51% voting right no matter how many shares of common stock or other voting stock of Data Call stock is issued and outstanding in the future. The voting rights of the Series B Stock make a change in control without the approval of Timothy Vance, our CEO, impossible.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY.
On January 9, 2013, the Company entered into a one-year lease agreement with Bridwell Property Group Inc., our landlord, for office space of 700 square feet located at 700 S Friendswood Drive, Suite E., Friendswood, TX 77546. The property changed ownership on February 1, 2014 and the Company and the new owner, Berkenmeier Properties, LLC mutually agreed to extend the lease for additional years at the same monthly rent of $900. We believe that these facilities are sufficient for our present level of operations including the growth we anticipate during the next twelve months. In the event that we need additional space, we believe that it will be available in the same property at comparable rates.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURE.
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
Our common stock is currently quoted on the OTCQB under the symbol DCLT. Quotation of the Company's securities on the OTCQB limits the liquidity and price of the Company's common stock more than if the Company's shares of common stock were listed on The Nasdaq Stock Market or a national exchange. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The below prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.
As of December 31, 2016, our shares of common stock were held by approximately 281 stockholders of record.
Dividends
The holders of our Preferred Stock, Series A, are entitled to a dividend of 	12 percent annually, subject to conversion into common stock. The undeclared 	dividends of this stock are calculated, but have not been recorded.
Holders of common stock are entitled to dividends when, as, and if declared 	by the Board of Directors, out of funds legally available therefore. We have 	never declared cash dividends on its common stock and our Board of Directors 	does not anticipate paying cash dividends in the foreseeable future as it 	intends to retain future earnings to finance the growth of our businesses. 	There are no restrictions in our articles of incorporation or bylaws that 	restrict us from declaring dividends.
Securities Authorized for Issuance Under Equity Compensation Plans
On December 26, 2014, the board of directors approved the Company's 2015 Employee Incentive Plan (the "Plan") pursuant to which the Company's board of director or a committee is authorized to issue 25,000,000 shares.
The board of director or 	committee shall determine at any time and from time to time after the 	effective date of this Plan:
(i) the Eligible Participants;
(ii) the 	number of shares of Common Stock issuable directly or to be granted pursuant 	to an Option;
(iii) the price per share at which each Option may be 	exercised or the value per share if a direct issue of stock pursuant to a 	Stock Award; and
(iv) the terms on which each Option may be granted.
Such determination, as may from 	time to time be amended or altered at the sole discretion of the board of 	director or committee.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
N.A.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION.
Results of Operations during the year ended December 31, 2016 as compared to the year ended December 31, 2015
We had $640,613 of sales revenue for the year ended December 31, 2016, compared to sales revenue of $605,105 for the year ended December 31, 2015, a increase in sales revenue of $35,508 or approximately a 5.9% increase from the prior year. We generate revenues through subscription fees received in connection with our Direct Lynk System.
We had total costs of sales for the year ended December 31, 2016 of 	$153,772 compared to total costs of sales of $151,000 for the year ended 	December 31, 2015, which resulted in a gross margin of $486,841 for the year 	ended December 31, 2016, compared to a gross margin of $454,105 for the year 	ended December 31, 2015, a increase in gross margin of $32,736 from the 	prior year, our increase in gross margin was due to our increase in 	revenues.
Cost of sales as a percentage of sales was 24.0 % for the year ended 	December 31, 2016, compared to 25.0% for the year ended December 31, 2015. 	As we gain more customers and enter into more service agreements, we 	anticipate our cost of sales will decrease as we expect to take advantage of 	applicable economies of scale. Our operating expenses increased to $683,603 	for the year ended December 31, 2016, compared to total expenses of $680,331 	for the year ended December 31, 2015, an increase in expenses of $3,272 from 	the prior period. The increase in expenses for the year of 2016 was due to 	the company's ongoing efforts to expand its business opportunities. The 	company had non-cash expense of $193,448, which was for common stock for its 	officers and, options expense of $1,072. We had a net loss of $200,938 for 	the year ended December 31, 2016, compared to a net loss of $231,681 for the 	year ended December 31, 2015. While there can be no assurance regarding our 	operating results in 2017, we believe that we will experience a significant 	reduction in non-cash expense as well as increased operating revenues which 	should result in profitable operations.
Liquidity and Capital Resources
We had current assets of $139,860 as of December 31, 2016, which 	consisted of, $53,499 in cash, accounts receivable of $69,361 and $17,000 in 	prepaid expense.
We had total assets of $141,591 as of December 31, 2016, compared to 	$157,035 as of December 31, 2015 or a decrease of $15,444, which consisted 	of current assets of $139,860, total property and equipment (net of 	accumulated depreciation) of $931, which included high end flat screen 	televisions, computers and software equipment responsible for running our 	Direct Lynk System which is stored in our Friendswood office; and other 	assets of $800, which included our deposit on our Friendswood office space.
We had total liabilities of $82,329 as of December 31, 2016, compared to 	$91,355 as of December 31, 2015, a decrease of $9,026, primarily consisting 	of accounts payable of $23,725 accrued expenses of $22,576, and short-term 	notes of $36,028. We had positive working capital of $57,531 and an 	accumulated deficit of $9,758,133 as of December 31, 2016.
Operating activities used $25,275 of cash for the year ended December 31, 	2016, which was mainly due to a net loss of $200,938, common stock and 	options expense of $194,520, increase in accounts receivables of $12,515, 	increase in prepaid expenses of $5,630, increase in accounts payable of 	$1,274, increase in accrued expenses of $793, and change in deferred revenue 	of $4,057.
We had financing activities of $7,036 primarily for the pay down of 	borrowings from related party during 2016 as compared to 2015 we had 	financing activity of $7,036 for the pay down of borrowings from related 	party.
We had no investing activities for the years ended December 31, 2016 and 	2015, respectively.
Off-Balance Sheet Arrangements
As of December 31, 2016 and 2015, we did not have any off-balance sheet 	arrangements as defined in Item 303(a) (4) (ii) of Regulation S-K 	promulgated under the Securities Act of 1934.
Contractual Obligations and Commitments
As of December 31, 2016 and 2015, we did not have any contractual 	obligations.
Critical Accounting Policies
Our significant accounting policies are described in the notes to our 	financial statements for the years ended December 31, 2016 and 2015, and are 	included elsewhere in this annual report.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
We have not entered into, and do not expect to enter into, financial instruments for trading or hedging purposes.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
	 	Report of Independent Registered Public Accounting Firm
Balance Sheets - December 31, 2016 and 2015
	Statements of Operations -Years ended December 31, 2016 and 2015
Statement of Stockholders’ Equity 	- Years ended December 31, 2016 and 2015
Statements of Cash Flows - Years ended December 31, 2016 and 2015
Notes to Financial Statements
Report of Independent Registered Public Accounting Firm
To the Board of Directors & Stockholders of
Data Call Technologies, Inc.
Friendswood, Texas
We have audited the accompanying balance sheets of Data Call Technologies, Inc. as of December 31, 2016 and 2015 and the related statements of operations, stockholders' equity (deficit) and cash flows for each of the two years in the two-year period ended December 31, 2016. Data Call's management is responsible for the financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public 	Company Accounting Oversight Board (United States). Those standards require 	that we plan and perform the audits to obtain reasonable assurance about 	whether the financial statements are free of material misstatement. The 	Company is not required to have, nor were we engaged to perform, an audit of 	its internal control over financial reporting. Our audits included 	consideration of internal control over financial reporting as a basis for 	designing audit procedures that are appropriate in the circumstances, but 	not for the purpose of expressing an opinion on the effectiveness of the 	Company's internal control over financial reporting. Accordingly, we express 	no such opinion. An audit includes examining, on a test basis, evidence 	supporting the amounts and disclosures in the financial statements, 	assessing the accounting principals used and significant estimates made by 	management, as well as evaluating the overall financial statement 	presentation. We believe that our audits provide a reasonable 	basis for our opinion.
In our opinion, the financial statements referred to above present 	fairly, in all material respects, the financial position of Data Call 	Technologies, Inc. as of December 31, 2016 and 2015 and the results of its 	operations and its cash flows
	for each of the two years in the two-year period ended December 31, 2016, in conformity with 	accounting principles generally accepted in the United States of America.
/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
April 10, 2017
Data Call Technologies, Inc.
Notes to Financial Statements
December 31, 2016
Note 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, within one building or 10,000, local or thousands of miles away.
The Company's financial statements are presented in accordance with 	accounting principles generally accepted (GAAP) in the United States. In the 	opinion of management, all adjustments, consisting of normal recurring 	adjustments, necessary for a fair presentation of financial position and 	result of operations for the periods presented have been reflected herein.
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 December 31, 2016 or 2015.
Revenue Recognition
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. The Company recognizes revenue in accordance with ASC 605 (1) when 	the price is fixed and determinable, (2) persuasive evidence of an 	arrangement exists, (3) the service has been provided, and (4) 	collectability is assured.
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 December 31, 2016 and 2015 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.
Beneficial Conversion Feature
Convertible debt includes conversion terms that are considered in the 	money compared to the market price of the stock on the date of the related 	agreement. The Company calculates the beneficial conversion feature and 	records a debt discount with the amount being amortized to interest expense 	over the term of the note.
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.
Earnings (Loss) Per Share
The basic net income per common share is computed by dividing the net 	loss by the weighted average number of shares outstanding during a period. 	Diluted net loss per common share is computed by dividing the net loss, 	adjusted on an as if converted basis, by the weighted average number of 	common shares outstanding plus potential dilutive securities using the 	treasury stock method. For the years ended December 31, 2016 and 2015, 	potential dilutive securities that had an anti-dilutive effect were not 	included in the calculation of diluted net loss per common share. These 	securities include options and warrants to purchase shares of common stock. 	Under the treasury stock method, an increase in the fair market value of the 	Company's common stock results in a greater dilutive effect from outstanding 	options, restricted stock awards and common stock warrants. In years with a 	net loss, potentially dilutive securities are not included because their 	effect is anti-dilutive.
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.
Common Stock Split
On September 13, 2016 we declared a reverse split of our common stock. 	The formula provided that every thirty (30) issued and outstanding shares of 	common stock of the Corporation be automatically split into one (1) share of 	common stock. Except as otherwise noted, all share, option and warrant 	numbers have been restated to give retroactive effect to this split. All per 	share disclosures retroactively reflect post-split shares.
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 December 31, 2016 and 2015:
(Level 1)
(Level 1)
(Level 3)
$
$
$
$
$
$
Recent Accounting Pronouncements
In August, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows 	(Topic 230): Classification of Certain Cash Receipts and Cash Payments(a 	consensus of the Emerging Issues Task Force). Effective for public business 	entities for fiscal years beginning after December 15, 2017, and interim 	periods within those fiscal years. For all other entities, the amendments 	are effective for fiscal years beginning after December 15, 2018, and 	interim periods within fiscal years beginning after December 15, 2019. Early 	adoption is permitted, including adoption in an interim period. If an entity 	early adopts the amendments in an interim period, any adjustments should be 	reflected as of the beginning of the fiscal year that includes that interim 	period. An entity that elects early adoption must adopt all of the 	amendments in the same period.
In May, 2016, the FASB issued ASU 	No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope 	Improvements and Practical Expedients. The amendments in this Update affect 	the guidance in Accounting Standards Update 2014-09, Revenue from Contracts 	with Customers (Topic 606), which is not yet effective. The effective date 	and transition requirements for the amendments in this Update are the same 	as the effective date and transition requirements for Topic 606 (and any 	other Topic amended by Update 2014-09). Accounting Standards Update 	2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of the 	Effective Date, defers the effective date of Update 2014-09 by one year.
In April, 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts 	with Customers (Topic 606): Identifying Performance Obligations and 	Licensing. The amendments in this Update affect the guidance in Accounting 	Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), 	which is not yet effective. The effective date and transition requirements 	for the amendments in this Update are the same as the effective date and 	transition requirements in Topic 606 (and any other Topic amended by Update 	2014-09). Accounting Standards Update 2015-14,Revenue from Contracts with 	Customers (Topic 606): Deferral of the Effective Date, defers the effective 	date of Update 2014-09 by one year.
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.
Note 2. Related Party Transactions.
During the third quarter of 2013, the Company issued unregistered shares 	as follows: (i) 33,334 restricted shares to Jim Tevis, the Company's CTO, in 	connection with the execution of a new 2 year consulting agreement. The 	restricted shares were valued at $0.555 per share using the closing price of 	the stock on the date of grant. Total expense associated with the issuances 	is calculated at $18,500 to be recognized over the 2 year term of the 	agreement. The expense recognized in 2016 was $Nil. The expense recognized 	in 2015 was $4,967.
During the first quarter of 2013, the Company issued unregistered shares 	as follows: (i) 250,000 restricted shares to Tim Vance, the Company's CEO, 	in connection with the execution of a new 5 year employment agreement; and 	250,000 restricted shares to Gary Woerz, the Company's newly designated CFO, 	in connection with the execution of a new 5 year employment agreement. The 	restricted shares were valued at $1.80 per share using the closing price of 	the stock on the date of grant. Total expense associated with the issuances 	is calculated at $900,000 to be recognized over the 5 year term of the 	agreements. The expense recognized in 2016 was $178,247 and the expense in 	2015 was $177,760. The January 2013 employment agreements calls for a 5 year 	term ending January 30, 2018, annual compensation of $85,000 per year for 	services as CEO, annual compensation of $52,000 per year for services as 	CFO, 500,000 options to the CEO and 400,000 options to the CFO in addition 	to the 250,000 restricted shares to each the CEO and CFO.
During the first quarter of 2014, the Company granted a total of 900,000 	options for the purchase of up to 900,000 shares of common stock to Tim 	Vance, the Company's CEO, in connection with the execution of a new 5 year 	employment agreement and to Gary Woerz, the Company's newly designated CFO, 	in connection with the execution of a new 5 year employment agreement. The 	Company uses the Black-Scholes option valuation model to value stock options 	granted. The Black- Scholes model was developed for use in estimating the 	fair value of traded options that have no vesting restrictions and are fully 	transferable. The model requires management to make estimates, which are 	subjective and may not be representative of actual results. The Company 	recorded $Nil (2015: $524) in stock option compensation expense, in relation 	to these options. The Black-Scholes model calculations included stock price 	on date of measurement of $0.30, exercise price of $0.001, a term of 1.5 	years, computed volatility of 348% and a discount rate of 0.27%. The January 	2014 employment agreements calls for a 5 year term ending January 30, 2018, 	annual compensation of $85,000 per year for services as CEO, annual 	compensation of $52,000 per year for services as CFO, 500,000 options to the 	CEO and 400,000 options to the CFO in addition to the 250,000 restricted 	shares to each the CEO and CFO.
During the first quarter of 2015, the Company granted a total of 900,000 	options for the purchase of up to 900,000 shares of common stock to Tim 	Vance, the Company's CEO, in connection with the execution of a new 5 year 	employment agreement and to Gary Woerz, the Company's newly designated CFO, 	in connection with the execution of a new 5 year employment agreement. The 	Company uses the Black-Scholes option valuation model to value stock options 	granted. The Black- Scholes model was developed for use in estimating the 	fair value of traded options that have no vesting restrictions and are fully 	transferable. The model requires management to make estimates, which are 	subjective and may not be representative of actual results. The Company 	recorded $266 (2015: $2,773) in stock option compensation expense, in 	relation to these options. The Black-Scholes model calculations included 	stock price on date of measurement of $0.0036, exercise price of $0.001, a 	term of 1.5 years, computed volatility of 251% and a discount rate of 0.33%. 	The January 2014 employment agreements calls for a 5 year term ending 	January 30, 2018, annual compensation of $85,000 per year for services as 	CEO, annual compensation of $52,000 per year for services as CFO, 500,000 	options to the CEO and 400,000 options to the CFO in addition to the 250,000 	restricted shares to each the CEO and CFO.
During the first quarter of 2016, the Company granted a total of 900,000 	options for the purchase of up to 900,000 shares of common stock to Tim 	Vance, the Company's CEO, in connection with the execution of a new 5 year 	employment agreement and to Gary Woerz, the Company's newly designated CFO, 	in connection with the execution of a new 5 year employment agreement. The 	Company uses the Black-Scholes option valuation model to value stock options 	granted. The Black- Scholes model was developed for use in estimating the 	fair value of traded options that have no vesting restrictions and are fully 	transferable. The model requires management to make estimates, which are 	subjective and may not be representative of actual results. The Company 	recorded $1,072 (2015: $Nil) in stock option compensation expense, in 	relation to these options for the year ended December 31, 2016. The 	Black-Scholes model calculations included stock price on date of measurement 	of $0.0014, exercise price of $0.001, a term of 3 years, computed volatility 	of 105% and a discount rate of 1.01%. The January 2016 employment agreements 	calls for a 5 year term ending January 30, 2018, annual compensation of 	$85,000 per year for services as CEO, annual compensation of $52,000 per 	year for services as CFO, 500,000 options to the CEO and 400,000 options to 	the CFO in addition to the 250,000 restricted shares to each the CEO and 	CFO.
The Company issued a total of four hundred thousand (400,000 	restricted shares) of the Company's common stock as follows: 200,000 	restricted shares in the name of Timothy E. Vance and 200,000 restricted 	shares in the name of Gary D. Woerz valued at $0.114 based upon services 	provided by the Executive officers in improving the Company's financial 	condition and operations and the shares will be subject to a holding period 	of eighteen months prior to their availability for resale pursuant to the 	provisions of Rule 144, and the Company determined that the Employment 	Agreements between the Company and its Executive Officers be amended to 	adjust the exercise price form the lower of $0.03 to $0.0015 and that the 	expiration date of the options to be extended from January 31, 2018 to 	December 31, 2019. The company expensed $15,200 for the year ended December 	31, 2016 and $30,400 for the year ended December 31, 2015. The total value 	of the 400,000 shares granted is $45,600.
During 2009, the Company received cash in the sum of $50,000 from a 	shareholder for a Convertible Note Payable at a 10% interest rate. On July 	30, 2015, the Company entered into an amendment agreement for the previously 	convertible note. The amendment removed the prior conversion feature of the 	note and amended the due date to December 31, 2016. The remaining balance of 	the note as of December, 31, 2016 and December 31, 2015 was $26,028 and 	$33,064, respectively. The interest for the note payable has been calculated 	annually and has been paid for the years ended December 31, 2016 and 	December 31, 2015.
During the years ended December 31, 2016 and December 31, 2015, the 	company repaid a total of $12,000 and $12,000, respectively, to related 	parties on various note payables and related interest.
As of December 31, 2016, and December 31, 2015 the total due to 	management for past accrued salaries is $460 and $42, respectively.
As of December 31, 2016, and December 31, 2015 the total due to 	management included in accounts payable is $3,389 and $3,767, respectively.
Note 3. Prepaid Expenses.
As of December 31, 2016, the Company had prepaid expenses of $17,000 for 	2017 trade show expenses paid in 2016. As of December 31, 2015, the Company 	had $11,370 in prepaid expenses for a 2016 trade show.
Note 4. Property and Equipment.
Major classes of property and equipment together with their estimated 	useful lives, consisted of the following:
Note 5. Income Taxes.
The Company has current net operating loss carryforwards in excess of $3,075,104 as of December 31, 2016, to offset future taxable income, which expire beginning 2029.
Deferred taxes are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities as measured by the enacted tax rates, which will be in effect when these differences reverse. The components of deferred income tax assets are as follows:
At December 31, 2016, the Company provided a 100% valuation allowance for the deferred tax asset because it could not be determined whether it was more likely than not that the deferred tax asset/(liability) would be realized.
Note 6. Capital Stock, Options and Warrants.
The Company is authorized to issue up to 10,000,000 shares of Series A 	Preferred Stock, $0.001 par value per share, of which 800,000 are 	outstanding as of December 31, 2016 and 2015. 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.
On September 13, 2016 we declared a reverse split of our common stock. The 	formula provided that every thirty (30) issued and outstanding shares of 	common stock of the Corporation be automatically split into one (1) share of 	common stock. Except as otherwise noted, all share, option and warrant 	numbers have been restated to give retroactive effect to this split. All per 	share disclosures retroactively reflect post-split shares.
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 as of December 31, 2016 or 2015. 	Unaccrued and undeclared dividends were $4,800 as of December 31, 2016 and 	2015, 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 in one or more 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 first quarter of 2015 The Company issued a total of 	four hundred thousand (400,000 restricted shares) of the Company's common 	stock as follows: 200,000 restricted shares in the name of Timothy E. Vance 	and 200,000 restricted shares in the name of Gary D. Woerz valued at $0.114 	based upon the closing price of the stock on the date of grant for services 	provided by the Executive officers in improving the Company's financial 	condition and operations. The shares will be subject to a holding period of 	eighteen months prior to their availability for resale pursuant to the 	provisions of Rule 144, and the Company determined that the Employment 	Agreements between the Company and its Executive Officers be amended to 	adjust the exercise price form the lower of $0.03 to $0.0015 and that the 	expiration date of the options to be extended from January 31, 2018 to 	December 31, 2019. The company expensed $15,200 for the year ending December 	31, 2016 (2015: $30,400). The total value of the 400,000 shares granted is 	$45,600.
During the first quarter of 2013 the Company issued unregistered 	shares as follows: (i) 250,000 restricted shares to Tim Vance, the Company's 	CEO, in connection with the execution of a new 5 year employment agreement; 	and 250,000 restricted shares to Gary Woerz, the Company's newly designated 	CFO, in connection with the execution of a new 5 year employment agreement. 	The restricted shares were valued at $1.80 per share using the closing price 	of the stock on the date of grant. Total expense associated with the 	issuances is calculated at $900,000 to be recognized over the 5 year term of 	the agreements. The expense recognized in 2016 was $178,247 and in 2015 the 	recognized expense was $177,760.
During the first quarter of 2013, the 	Company granted a total of 900,000 options for the purchase of up to 900,000 	shares of common stock to Tim Vance, the Company's CEO, in connection with 	the execution of a new 5 year employment agreement and to Gary Woerz, the 	Company's newly designated CFO, in connection with the execution of a new 5 	year employment agreement. The Company uses the Black-Scholes option 	valuation model to value stock options granted. During the period ended 	March 31, 2015 the Company determined that the Employment Agreements between 	the Company and its Executive Officers be amended to adjust the exercise 	price from $0.03 to $0.0015 and that the expiration date of the options to 	be extended from January 31, 2018 to December 31, 2019. The change in value 	from the lower exercise price and extended expiration date was considered 	immaterial. The Black- Scholes model was developed for use in estimating the 	fair value of traded options that have no vesting restrictions and are fully 	transferable. The model requires management to make estimates, which are 	subjective and may not be representative of actual results. The 	Black-Scholes model calculations included stock price on date of measurement 	of $0.30, exercise price of $0.001, a term of 1.5 years, computed volatility 	of 348% and a discount rate of 0.27%. Assumptions used to determine the fair 	value of the stock based compensation is as follows:
Exercise price
Total Options Outstanding
Weighted Average Remaining Life (Years)
Total Weighted Average Exercise Price
Options Exercisable
$0.001
900,000
0.65
$0.001
900,000
The Company recorded $Nil ($Nil in 2015) in stock option compensation 	expense, in relation to these options, during the year ended December 31, 	2016. Total stock option compensation expense is calculated at $26,872, to 	be recognized over the vesting period of one year.
During the first 	quarter of 2014, the Company granted a total of 900,000 options for the 	purchase of up to 900,000 shares of common stock to Tim Vance, the Company's 	CEO, in connection with the execution of a the 5 year employment agreement 	and to Gary Woerz, the Company's newly designated CFO, in connection with 	the execution of a new 5 year employment agreement. The Company uses the 	Black-Scholes option valuation model to value stock options granted. During 	the period ended March 31, 2015 the Company determined that the Employment 	Agreements between the Company and its Executive Officers be amended to 	adjust the exercise price from $0.03 to $0.0015 and that the expiration date 	of the options to be extended from January 31, 2018 to December 31, 2019. 	The change in value from the lower exercise price and extended expiration 	date was considered immaterial. The Black- Scholes model was developed for 	use in estimating the fair value of traded options that have no vesting 	restrictions and are fully transferable. The model requires management to 	make estimates, which are subjective and may not be representative of actual 	results. The Black-Scholes model calculations included stock price on date 	of measurement of $0.003, exercise price of $0.001, a term of 1.5 years, 	computed volatility of 256% and a discount rate of 0.34%. Assumptions used 	to determine the fair value of the stock based compensation is as follows:
Exercise price
Total Options Outstanding
Weighted Average Remaining Life (Years)
Total Weighted Average Exercise Price
Options Exercisable
$0.001
900,000
0.76
$0.001
900,000
The Company recorded $Nil (2015: $524) in stock option 	compensation expense, in relation to these options, during the year ended 	December 31, 2016. Total stock option compensation expense is calculated at 	$2,877, to be recognized over the vesting period of one year.
During the 	first quarter of 2015, the Company granted a total of 900,000 options for 	the purchase of up to 900,000 shares of common stock to Tim Vance, the 	Company's CEO, in connection with the execution of a the 5 year employment 	agreement and to Gary Woerz, the Company's newly designated CFO, in 	connection with the execution of a new 5 year employment agreement. The 	Company uses the Black-Scholes option valuation model to value stock options 	granted. During the period ended March 31, 2015 the Company determined that 	the Employment Agreements between the Company and its Executive Officers be 	amended to adjust the exercise price from $0.03 to $0.0015 and that the 	expiration date of the options to be extended from January 31, 2018 to 	December 31, 2019. The change in value from the lower exercise price and 	extended expiration date was considered immaterial. The Black- Scholes model 	was developed for use in estimating the fair value of traded options that 	have no vesting restrictions and are fully transferable. The model requires 	management to make estimates, which are subjective and may not be 	representative of actual results. The Black-Scholes model calculations 	included stock price on date of measurement of $0.0036, exercise price of 	$0.001, a term of 1.5 years, computed volatility of 251% and a discount rate 	of 0.33%. Assumptions used to determine the fair value of the stock based 	compensation is as follows:
Exercise price
Total Options Outstanding
Weighted Average Remaining Life (Years)
Total Weighted Average Exercise Price
Options Exercisable
$0.001
900,000
0.92
$0.001
900,000
The Company recorded $266 (2015: $2,773) in stock option compensation 	expense, in relation to these options, during the year ended December 31, 	2016. Total stock option compensation expense is calculated at $3,039, to be 	recognized over the vesting period of one year.
During the first quarter of 2016, the Company granted a total of 900,000 	options for the purchase of up to 900,000 shares of common stock to Tim 	Vance, the Company's CEO, in connection with the execution of a the 5 year 	employment agreement and to Gary Woerz, the Company's newly designated CFO, 	in connection with the execution of a new 5 year employment agreement. The 	Company uses the Black-Scholes option valuation model to value stock options 	granted. During the period ended March 31, 2015 the Company determined that 	the Employment Agreements between the Company and its Executive Officers be 	amended to adjust the exercise price from $0.03 to $0.0015 and that the 	expiration date of the options to be extended from January 31, 2018 to 	December 31, 2019. The change in value from the lower exercise price and 	extended expiration date was considered immaterial. The Black- Scholes model 	was developed for use in estimating the fair value of traded options that 	have no vesting restrictions and are fully transferable. The model requires 	management to make estimates, which are subjective and may not be 	representative of actual results. The Black-Scholes model calculations 	included stock price on date of measurement of $0.0014, exercise price of 	$0.001, a term of 3 years, computed volatility of 105% and a discount rate 	of 1.01%. Assumptions used to determine the fair value of the stock based 	compensation is as follows:
Exercise price
Total Options Outstanding
Weighted Average Remaining Life (Years)
Total Weighted Average Exercise Price
Options Exercisable
$0.001
900,000
2.30
$0.001
900,000
The Company recorded $806 (2015: $Nil) in stock option compensation 	expense, in relation to these options, during the year ended December 31, 	2016. Total stock option compensation expense is calculated at $884, to be 	recognized over the vesting period of one year.
During 2013, the Company issued unregistered shares as follows: (i) 	33,334 restricted shares to Jim Tevis, the Company's CTO, in connection with 	the execution of a new 2 year consulting agreement. The restricted shares 	were valued at $0.555 per share using the closing price of the stock on the 	date of grant. Total expense associated with the issuances is calculated at 	$18,500 to be recognized over the 2 year term of the agreement. The expense 	recognized in 2016 was $Nil. The expense recognized in 2015 was $4,967.
The Company is authorized to issue up to 200,000,000 shares of Common 	Stock, of which 4,832,547 shares were issued and outstanding as of December 	31, 2016 (2015: 4,832,547).
Note 7. 	Commitments and Contingencies.
The Company conducted its operations from a facility located in 	Friendswood Texas during FY 2016 and 2015. During January 2013 the Company 	moved facilities to Friendswood Texas under a 12 month operating lease 	expiring on January 30, 2015. The Friendswood lease was extended in February 	2015 for a term of 24 months expiring on February 1, 2016. The lease is 	currently month to month.
The following is a schedule of future minimum rental payments required 	under the above operating lease as of December 31, 2015:
Year
Amount
$ -
$ -
$ -
$ -
$ -
Rent expense in 2016 and 2015 under the terms of the Houston Texas lease 	was $10,800 and $10,800, respectively.
Note 8. Concentrations.
Concentration of Major Customers
As of December 31, 2016, the Company's 	trade accounts receivables from two customers represented approximately 94% 	of its accounts receivable. As of December 31, 2015 the Company's trade 	accounts receivables from two customers represented approximately 97% of its 	accounts receivable.
For the year ended December 31, 2016 the Company 	received approximately 77% of its revenue from two customers. The specific 	concentrations were Customer A, 50%, and Customer B, 27%. For the year ended 	December 31, 2015 the Company received approximately 79% of its revenue from 	two customers.
Concentration of Supplier Risk
The Company had 4 	vendors that accounted for approximately 66% of purchases during the year 	ended December 31, 2016 related to operations. Specific concentrations were 	Vendor A 19%, Vendor B 19%, Vendor C 15%, and Vendor D 12%. For the year 	ended December 31, 2015 the Company had 6 vendors that accounted for 	approximately 82% of purchases.
Note 9. Convertible Shareholder Notes Payable.
During 2009, the Company received cash in the sum of $50,000 from a 	shareholder for a note payable at a 10% interest rate. The interest for the 	note payable has been calculated annually and has been paid for 2016 and 	2015. During 2013, the note payable agreement was amended to include a 	conversion feature to the Company's common stock at $0.0001 per share. Under 	ASC 470-50, the amendment adds a substantive conversion option which causes 	the amended note to be evaluated as a new debt issuance. As the conversion 	term is considered in the money a beneficial conversion feature was present 	with a debt discount calculated at $50,000. The debt discount was amortized 	to interest expense during 2013 due to the note being due at the time of the 	amendment. During 2013, the creditor sold a portion of his note for $8,900. 	At the request of the new creditors the Company issued 2,966,667 shares of 	common stock at $0.0001 in terms with the amended agreement. No gain or loss 	was recorded on the conversion of debt to equity during the period ending 	December 31, 2013 as it was converted within the terms of the agreement. On 	July 30, 2015, the Company entered into an amendment agreement for the 	previously convertible note. The amendment removed the prior conversion 	feature of the note and amended the due date to June 30, 2016. The remaining 	balance due under this note was $26,028 as of December 31, 2016 and $33,064 	as of December 31, 2015. This note is currently in default.
During the quarter ended September 30, 2011, the Company issued a 	short-term convertible note to a shareholder in the amount of $10,000. The 	convertible note is due in one year and bears interest of 12%. The interest 	for the convertible note has been calculated annually and has been accrued 	for 2016 and 2015. As of December 31, 2016, the convertible note contains a 	conversion feature at a 50% discount of the 10 day average closing price 	prior to notice. The note holder agreed that the conversion would not force 	the Company to issue more shares than allowed under the current 	capitalization which eliminates the existence of a derivative. The 	beneficial conversion feature included in the discounted share price of the 	conversion was found to be immaterial for the years ended December 31, 2016 	and 2015. As the note is past its due date of June 2, 2012, the note is 	considered in default.
Note 10. Subsequent Events.
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.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
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 December 	31, 2016 (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 December 31, 2016, 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.
Management's Annual Report on Internal 	Control Over Financial Reporting
Management is responsible for establishing and 	maintaining adequate internal control over financial reporting, as defined 	in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over 	financial reporting is a process designed to provide reasonable assurance 	regarding the reliability of financial reporting and the preparation of 	financial statements in accordance with GAAP. Because of its inherent 	limitations, internal control over financial reporting may not prevent or 	detect misstatements. Projections of any evaluation of effectiveness to 	future periods are subject to the risk that controls may become inadequate 	because of changes in conditions, or that the degree of compliance with the 	policies or procedures may deteriorate.
Management has conducted, with the participation 	of our Principal Executive Officer and our Principal Accounting Officer, an 	assessment, including testing of the effectiveness, of our internal control 	over financial reporting as of Evaluation Date. Management's assessment of 	internal control over financial reporting was conducted using the criteria 	set forth by the Committee of Sponsoring Organizations of the Treadway 	Commission (COSO) in Internal Control - Integrated Framework (2013 	Framework).
A material weakness is a deficiency, or a 	combination of deficiencies, in internal control over financial reporting, 	such that there is a reasonable possibility that a material misstatement of 	our annual or interim financial statements will not be prevented or detected 	on a timely basis. In connection with our management's assessment of our 	internal control over financial reporting as required under Section 404 of 	the Sarbanes-Oxley Act of 2002, we have concluded that our internal control 	over financial reporting had material weaknesses including lack of 	sufficient internal accounting personnel in order to ensure complete 	documentation of complex transactions and adequate financial reporting 	during the year ended December 31, 2016. Management has identified 	corrective actions for the weakness and has begun implementation during the 	first quarter of 2017.
This annual report does not include an 	attestation report of our registered public accounting firm regarding 	internal control over financial reporting. Management's report was not 	subject to attestation by our registered public accounting firm pursuant to 	an exemption for smaller reporting companies under Section 989G of the 	Dodd-Frank Wall Street Reform and Consumer Protection Act.
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 period of our evaluation that have significantly affected, or are 	reasonably likely to significantly affect, our internal control over 	financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE.
The following table sets forth the name, age and position of each of our Directors and executive officers. Our officers and Directors are as follows:
Name Age Position
Timothy Vance
Chief Executive Officer, Chief Operating Officer and Director
Gary D. Woerz
Chief Financial Officer and Director
John Schafer
Director
Timothy Vance - Chief Executive Officer, Chief Operating Officer and Director
Timothy Vance, a founder and an intricate element in the fabric of the 	Company, has served as one of our Directors since June 2003, as our Chief 	Operating Officer since January 2007 and as our Chief Executive Officer 	since July 2008. Mr. Vance has been part of the Data Call management team 	since the company's inception. Prior to founding Data Call, Mr. Vance was 	employed at QVS Wireless Corporation. Prior to QVS Wireless, Mr. Vance was 	employed for 17 years by World Ship Supply, a global maritime supply 	company. He was the General Manager of the Houston branch for several years 	before following his entrepreneurial vision.
Gary D. Woerz - Chief Financial Officer and Director
From March 2009 to January 2012, Gary Woerz provided financial consulting 	services to private and public companies. From September 2007 to January 	2008, Mr. Woerz was CFO and COO of Larrea Biosciences, a public company. 	From July 2006 to July 2007, Mr. Woerz was the CFO of Virexx Medical Corp., 	a public company organized under the laws of the Province of Alberta, 	Canada. From April 2004 to May 2007, Mr. Woerz served as CFO of American 	International Industries, Inc., a public reporting company.
John Schafer - Director
Mr. Schafer has been a member of Data Call's Board of Directors since his 	appointment in May 2013. From March 2005 through the present, Mr. Schafer 	has served as Vice President of Operations of Waterfront Ventures LLC, a 	private company engaged in real estate development and operations, 	specializing in the hospitality and public service industry. Mr. Schafer's 	duties at Waterfront Ventures include strategic and financial planning and 	chief of operations. In addition, from 2004 through the present, Mr. Schafer 	has been President and principal of JLS Holdings LLC, a private company 	engaged in the business of marketing, business development, financial 	planning and promotion, primarily for the real estate and hospitality 	industry, among others.
Employment Agreements
Effective January 30, 2013, the Company entered into a five-year 	employment agreement with Tim Vance, to as Chief Executive Officer and Chief 	Operating Officer at a base compensation of $85,000 per year. The agreement 	also provided for the issuance of 250,000 restricted shares of the 	Company's common stock which vest at the rate of 50,000 shares per year 	and the grant of options to purchase 16,667 shares per annum at a price of 	$0.045, commencing on February 1, 2013. On January 8, 2015, Board of 	Directors amended the employment agreement with Mr. Vance to provide for the 	issuance of an additional 200,000 restricted shares which vest at the rate 	of 66,667 shares per year. During the period ended March 31, 2015 the 	Company determined that the Employment Agreements between the Company and 	its Executive Officers be amended to adjust the exercise price of the 	options from $0.03 to $0.0015 and that the expiration date of the options to 	be extended from January 31, 2018 to December 31, 2019.
Also effective on January 30, 2013, the Company entered into a five-year 	employment agreement with Gary D. Woerz to serve as Chief Financial Officer 	at a base compensation of $52,000 per year. The agreement also provided for 	the issuance of 250,000 restricted shares of the Company's common stock 	which vest at the rate of 50,000 shares per year, and the grant of 	warrants to purchase 13,333 shares per annum at a price of $0.045, 	commencing on February 1, 2013. On January 8, 2015, Board of Directors 	amended the employment agreement with Mr. Woerz to provide for the issuance 	of an additional 200,000 restricted shares which vest at the rate of 	66,667 shares per year. During the period ended March 31, 2015, the Company 	determined that the Employment Agreements between the Company and its 	Executive Officers be amended to adjust the exercise price of the options 	from $0.90 to $0.045 and that the expiration date of the options to 	be extended from January 31, 2018 to December 31, 2019.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information concerning the total compensation during the fiscal years ending December 31, 2016, 2015 and 2014.
(1) In June 2008, Timothy E. Vance was 	appointed CEO of the Registrant.
(2) In January 2013, Gary D. Woerz was 	appointed CFO of the Registrant.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2016. The information in this table provides the ownership information for: each person known by us to be the beneficial owner of more than 5% of our common stock; each of our directors; each of our executive officers; and our executive officers and directors as a group. Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.
Name of Beneficial Owner
Common Stock Beneficially Owned
Percentage of Common Stock Owned (1)
Timothy E. Vance, CEO, COO and Director
				472,547
9.77%
700 South Friendswood Drive, Suite E
Friendswood, TX 77546
Gary D. Woerz, CFO and Director
				456,667
9.45%
700 South Friendswood Drive, Suite E
Friendswood, TX 77546
John Schafer, Director
				33,333
0.69%
700 South Friendswood Drive, Suite E
Friendswood, TX 77546
Director and Officer (3 people)
				962,333
				19.91%
(1) Applicable percentage ownership is based on 4,832,547 shares of common stock outstanding as of December 31, 2016. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of December 31, 2016 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
None.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Independent Public Accountants
Our auditor, M&K CPAS, PLLC. has served as the Company's independent registered public accountants for the fiscal years 2016 and 2015.
Principal Accounting Fees
The following table presents the fees for professional audit services rendered by M&K CPAS, PLLC for the audits of the Registrant's annual financial statements for the years ended December 31, 2016 and 2015, and fees billed for other services rendered by M&K CPAS, PLLC during those periods.
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The exhibits listed below are filed as part of this annual report.
3.1
Articles of Incorporation, attached to the Company's Form S-1 as filed with the SEC 					on February 21, 2006.
3.2
Certificate of Amendment to Articles of Incorporation, 						attached to the Company's Form S-1 as filed with the SEC on 					February 21, 2006.
					3.3.1
					Amended and Restated Articles of Incorporation,
					attached to the Company's Form S-1/A as filed with the SEC 					on June 29, 2006.
										3.4
					Amended Bylaws,
					attached to the Company's Form S-1 as filed with the SEC on 					February 21, 2006.
					4.1
					Certificate of Designation of Series B Preferred Stock dated 					August 30, 2013, filed herewith.
					10.16
					Employment Agreement between the Company and Timothy E. 					Vance, as amended, filed herewith.
					10.17
					Employment Agreement between the Company and Gary Woerz, as 					amended, filed herewith.
					31.1
					Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith
					31.2
					Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith
									32.1
					Certificate of the Chief Executive Officer to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
									32.2
					Certificate of the Chief Financial Officer to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
									
					
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: April 12, 2017
By: /s/ Gary D. Woerz
	Gary D. Woerz
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Date: April 12, 2017
Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/
	 Timothy E. Vance
Timothy E. Vance
		Chairman
Date: April 12, 2017
By: /s/ Gary D. Woerz
	Gary D. Woerz
		Director
Date: April 12, 2017