20231215Application.pdf

Lance J.M. Steinhart, P.C.
Attorneys At Law 1725 Windward Concourse Suite 150 Alpharetta, Georgia 30005

Also Admitted in New York Telephone: [phone]
Email: [e-mail] Facsimile: [phone] December 15, 2023
VIA EMAIL DELIVERY TO [e-mail]
Jan Noriyuki Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Building 8, Suite 201-A Boise, ID 83714 [phone]
Re: IM Telecom, LLC d/b/a Infiniti Mobile
Application for Designation as an Eligible Telecommunications Carrier for the Limited Purpose of Offering Lifeline Service to Qualified Households Dear Ms. Noriyuki:
Please find for filing IM Telecom, LLC d/b/a Infiniti Mobile’s Application for Designation as an Eligible Telecommunications Carrier for the Limited Purpose of Offering Lifeline Service to Qualified Households in the State of Idaho.
If you have any questions, or if I may provide you with additional information, please do not hesitate to contact me at [e-mail] or by phone at 770-232-9200.
Respectfully submitted,
Lance J.M. Steinhart, Esq. Managing Attorney Lance J.M. Steinhart, P.C. Attorneys for IM Telecom, LLC d/b/a Infiniti Mobile

Attachments
RECEIVED
2023 DECEMBER 15, 2023 11:55AM
IDAHO PUBLIC
UTILITIES COMMISSION
CASE NO. GNR-T-23-06
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IM Telecom, LLC d/b/a Infiniti Mobile
Application for Designation as an Eligible Telecommunications Carrier for the Limited Purpose of Offering Lifeline Service to Qualified Households ____________________________________
) ))))))
Case No. ____
APPLICATION
Lance J.M. Steinhart, Esq. Managing Attorney
Lance J.M. Steinhart, P.C. 1725 Windward Concourse, Suite 150 Alpharetta, Georgia 30005 [phone] (Phone) [phone] (Fax)
E-Mail: [e-mail] Attorneys for IM Telecom, LLC d/b/a Infiniti Mobile

December 15, 2023
TABLE OF CONTENTS I. INTRODUCTION ...............................................................................................................1
II. COMPANY OVERVIEW ...................................................................................................3
III. THE COMMISSION HAS JURISDICTION OVER DESIGNATION OF WIRELESS ETCS ...............................................................................................................4
IV. INFINITI SATISFIES THE REQUIREMENTS FOR DESIGNATION AS AN ETC UNDER 47 C.F.R. § 54.201 .................................................................................5
V. INFINITI SATISFIES THE ADDITIONAL REQUIREMENTS FOR ETC
DESIGNATION UNDER 47 C.F.R. § 54.202(a) ..............................................................11
VI. DESIGNATION OF INFINITI AS AN ETC WOULD PROMOTE THE PUBLIC INTEREST .........................................................................................................17
VII. CONCLUSION ..................................................................................................................21

TABLE OF EXHIBITS
Exhibit
Certification ...............................................................................................................1 FCC-Approved Revised Compliance Plan .................................................................2

Coverage Areas ..........................................................................................................3 Sample Advertisement ...............................................................................................4
Financial Statements ..................................................................................................5
Key Management Bios ...............................................................................................6 Proposed Lifeline Offering ........................................................................................7

Certificate of Service .................................................................................................8

1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IM Telecom, LLC d/b/a Infiniti Mobile
Application for Designation as an Eligible Telecommunications Carrier for the Limited Purpose of Offering Lifeline Service to Qualified Households ____________________________________
) ))))))
Case No. ____
APPLICATION

I. INTRODUCTION
IM Telecom, LLC d/b/a Infiniti Mobile (“INFINITI” or the “Company”), by its
undersigned counsel, and pursuant to Section 214(e)(2) of the Communications Act of 1934, as
amended (the “Act”),1 Sections 54.101 through 54.207 of the Rules of the Federal
Communications Commission (“FCC”),2 and the rules and regulations of the Idaho Public Utilities
Commission (the “Commission”), including the Idaho Telecommunications Act of 1988, hereby
submits this Application for Designation as an Eligible Telecommunications Carrier (“ETC”) in
the State of Idaho (this “Application”).
INFINITI seeks ETC designation solely to provide Lifeline service to qualifying Idaho
consumers; it will not (and is not eligible to) seek access to funds from the federal Universal
Service Fund (“USF”) for the purpose of participating in the Link-Up program or high cost

1 47 U.S.C. § 214(e)(2)
2 47 C.F.R. §§ 54.101-54.207.
2
program.3 INFINITI requests that its designation as an ETC include the authority to participate in
and receive reimbursement from the Idaho Telephone Service Assistance Program (ITSAP).
As demonstrated herein, and as certified in Exhibit 1 attached hereto, INFINITI meets all
the statutory and regulatory requirements for designation as an ETC in the State of Idaho, including
the requirements outlined in the FCC’s Lifeline and Link Up Reform Order,4 Lifeline
Modernization Order,5 and Fifth Report and Order.6 Furthermore, INFINITI is positioned to
reach unserved and underserved Lifeline-eligible consumers. Rapid grant of INFINITI’s request,
therefore, would advance the public interest because it would enable the Company to commence
much needed Lifeline services to a wide array of low-income Idaho residents as soon as possible.
Accordingly, the Company respectfully requests that the Commission expeditiously approve this
Application.

3 Given that the Company only seeks Lifeline support from the low-income program and does not seek any high-cost support, ETC certification requirements for the high-cost program are not applicable to the Company.
4 In the Matter of Lifeline and Link Up Reform and Modernization, Lifeline and Link Up, Federal-State Joint Board
on Universal Service, Advancing Broadband Availability Through Digital Literacy Training, WC Docket No. 11-42, WC Docket No. 03-109, CC Docket No. 96-45, WC Docket No. 12-23, Report and Order and Further Notice of
Proposed Rulemaking, FCC 12-11 (rel. Feb. 6, 2012) (“Lifeline and Link Up Reform Order”).
5 In the Matter of Lifeline and Link Up Reform and Modernization, Telecommunications Carriers Eligible for
Universal Service Support, Connect America Fund, WC Docket No. 11-42, WC Docket No. 09-197, WC Docket No. 10-90, Third Report and Order, Further Report and Order, and Order on Reconsideration, FCC 16-38 (rel. Apr. 27,
2016) (hereinafter, “Third Report and Order” or “Lifeline Modernization Order”).
6 In the Matter of Bridging the Digital Divide for Low-Income Consumers, Lifeline and Link Up Reform and
Modernization, Telecommunications Carriers Eligible for Universal Service Support, WC Docket No. 17-287, WC Docket No. 11-42, WC Docket No. 09-197, Fifth Report and Order, Memorandum Opinion and Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 19-111 (rel. Nov. 14, 2019) (hereinafter, “Fifth Report and Order”).
3
All correspondence, communications, pleadings, notices, orders and decisions relating to
this Application should be addressed to:
Lance J.M. Steinhart, Esq. Managing Attorney Lance J.M. Steinhart, P.C.
Attorneys for IM Telecom, LLC d/b/a Infiniti Mobile
1725 Windward Concourse, Suite 150 Alpharetta, Georgia 30005 [phone] (Phone) [phone] (Fax)
E-Mail: [e-mail]
II. COMPANY OVERVIEW
INFINITI is an Oklahoma Limited Liability Company.7 Its principal office is located at
500 N. Central Expressway, Suite 202, Plano, Texas 75074. INFINITI is a wholly owned
subsidiary of KonaTel, Inc., a Delaware corporation (“KonaTel”) which acquired INFINITI on
January 31, 2019, and received all required approvals from the FCC and state commissions.
INFINITI is a provider of commercial mobile radio service (“CMRS”) and provides prepaid
wireless telecommunications services to consumers by using the underlying wireless networks of
AT&T Mobility (“AT&T”), Verizon Wireless (“Verizon”) and T-Mobile USA, Inc. (“T-Mobile”)
(collectively “Underlying Carriers”) on a wholesale basis. INFINITI has been designated as a
Lifeline-only wireless ETC in California, Georgia, Kentucky, Maryland, Nevada, New York,
Oklahoma, Pennsylvania, South Carolina, Vermont and Wisconsin. INFINITI is also authorized by
the FCC and USAC to participate in the Affordable Connectivity Program (the “ACP”) throughout
the United States, including Idaho.

7 Infiniti was organized in the State of Oklahoma on February 9, 2012.
4
INFINITI will provide affordable prepaid mobile phone service, including calling, text
messaging, and broadband access, along with user-friendly handsets, tablet or hotspot devices.
The Company will not require service contracts from its customers and it will always ensure
competitively low pricing for its services and products. INFINITI will manage all aspects of the
customer experience, including setting service pricing, handset selection, marketing materials, and
customer service. The Company’s prepaid, budget-friendly pricing will give many low-income
consumers the option of having mobile phone service and broadband access without the burden of
hidden costs, varying monthly charges, or contractual commitments. Customers will be able to
customize their INFINITI service to suit their needs with INFINITI’s available bundles of minutes,
broadband data, and text packages to supplement their monthly plan.
INFINITI’s Lifeline customers will depend on, and benefit greatly from, INFINITI’s
inexpensive and flexible pricing plans. INFINITI will not impose credit checks nor will it require
any deposits or contractual commitments. Many Lifeline customers turn to carriers like INFINITI
because they cannot afford the postpaid services provided by traditional wireless carriers.
INFINITI will affirmatively reach out to the low-income sector of the consumer base to offer
attractive and affordable communications options. As such, INFINITI will contribute to the
expansion of mobile wireless and broadband services for low-income consumers in Idaho.
III. THE COMMISSION HAS JURISDICTION OVER DESIGNATION OF WIRELESS ETCS
Section 214(e)(2) of the Act provides state public utility commissions with the “primary
responsibility” for the designation of ETCs.8 Although Section 332(c)(3)(A) of the Act prohibits
states from regulating the entry of or the rates charged by any provider of commercial mobile

8 47 U.S.C. § 214(e)(2).
5
service or any private mobile service, this prohibition does not allow states to deny wireless carriers
ETC status.9 Under the Act, a state public utility commission with jurisdictional authority over
ETC designations must designate a common carrier as an ETC if the carrier satisfies the
requirements of Section 214(e)(1).
INFINITI recognizes that Section 214(e)(1)(A) of the Act states that ETCs shall offer
services, at least in part, over their own facilities and that Section 54.201(i) of the FCC’s Rules (47
C.F.R. § 54.201(i)) prohibits state commissions from designating as an ETC a telecommunications
carrier that offers services exclusively through the resale of another carrier’s services. However,
the FCC has granted forbearance from enforcement of this facilities requirement to carriers seeking
Lifeline-only ETC designation.10 Section 10(e) of the Act (47 U.S.C. § 160(e)) provides: “[a]
State commission may not continue to apply or enforce any provision of this chapter that the
[Federal Communications] Commission has determined to forbear from applying under subsection
(a) of this section.” As such, the Commission is required by Section 10(e) to act in accordance
with the FCC’s grant of forbearance, and therefore, may not apply the facilities-based requirement
to INFINITI. Therefore, the Commission has the authority under Section 214(e)(2) of the Act to
grant INFINITI’s request for designation as an ETC throughout the State of Idaho.
IV. INFINITI SATISFIES THE REQUIREMENTS FOR DESIGNATION AS AN ETC UNDER 47 C.F.R. § 54.201
Section 254(e) of the Act provides that, “only an eligible telecommunications carrier
designated under section 214(e) shall be eligible to receive specific federal universal service
support.” Section 214(e)(2) of the Act authorizes state commissions, such as the Commission, to
designate ETC status for federal universal service purposes and authorizes the Commission to

9 USF Order, at 8858–59, ¶ 145.
10 See Lifeline and Link Up Reform Order at ¶ 368.
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designate wireless ETCs.11 Section 214(e)(1) of the Act and Section 54.201(d) of the FCC’s rules
provide that applicants for ETC designation must be common carriers that shall, throughout the
designated service area, offer all of the services supported by universal service, either using their
own facilities or a combination of their own facilities and the resale of another carrier’s services,
except where the FCC has forborne from the “own facilities” requirement. Applicants also must
commit to advertise the availability and rates of such services.12 As detailed below, INFINITI
satisfies each of the above-listed requirements.
A. INFINITI Will Provide Service Consistent with the FCC’s Grant of Forbearance from Section 214’s Facilities Requirements
Although Section 214 requires ETCs to provide services using their facilities, at least in
part, the FCC has forborne from that requirement with respect to carriers such as INFINITI. In the
Lifeline and Link Up Reform Order, the FCC granted forbearance from the “own-facilities”
requirement contained in Section 214(e)(1)(A) for carriers that are, or seek to become, Lifeline-only
ETCs, subject to the following conditions:13

(1) the carrier must comply with certain 911 requirements [(a) providing its Lifeline
subscribers with 911 and E911 access, regardless of activation status and availability of minutes; (b) providing its Lifeline subscribers with E911-compliant handsets and replacing, at no additional charge to the subscriber, noncompliant handsets of Lifeline-eligible subscribers who obtain Lifeline-supported services; and (c) complying with conditions (a) and
(b) starting on the effective date of this Order]; and
(2) the carrier must file, and the Bureau must approve, a compliance plan providing specific information regarding the carrier’s service offerings and outlining the measures the carrier will take to implement the obligations contained in this Order as well as further safeguards
against waste, fraud and abuse the Bureau may deem necessary.

11 See Federal-State Joint Board on Universal Service, First Report and Order, 12 FCC Rcd 8776, 8858-59, ¶ 145 (1997) (“USF Order”).
12 See 47 U.S.C. § 214(e)(1) and 47 C.F.R. § 54.201(d)(2).
13 See Lifeline and Link Up Reform Order at ¶¶ 368, 373, and 379.
7
In accordance with the Lifeline and Link Up Reform Order, INFINITI filed its Compliance
Plan with the FCC, which the FCC approved on August 8, 2012.14 The Company’s Revised
Compliance Plan, which updated terms and conditions and reflected the acquisition by KonaTel,
was approved by the FCC on October 23, 2018 and is attached hereto as Exhibit 2.15 INFINITI
commits to providing Lifeline service in Idaho in accordance with its approved Compliance Plan,
as revised, and in compliance with applicable state and federal regulations, to the extent
amendments thereto may supersede commitments made in the Compliance Plan.
B. INFINITI Is a Common Carrier
CMRS providers like INFINITI are treated as common carriers.16
C. INFINITI Will Provide All Supported Services
Through its Underlying Carriers, INFINITI is able to provide all of the supported services
required by Section 54.101(a) of the FCC’s Rules (47 C.F.R. § 54.101(a)) as follows:
1. Voice Telephony Service
As set forth in 47 C.F.R. § 54.101(a)(1), eligible Voice Telephony Services must provide
the following:
Voice Grade Access to the Public Switched Telephone Network. INFINITI provides
voice grade access to the public switched telephone network (“PSTN”) through the purchase of

14 See FCC Public Notice DA 12-1286, https://www.fcc.gov/document/wcb-approves-compliance-plans-birch-communications.
15 See FCC Public Notice DA 18-1081, https://www.fcc.gov/document/wcb-approves-wireless-compliance-plan-im-telecom.
16 Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, GN Docket No. 93-252, Second Report and Order, 9 FCC Rcd 1411, 1425 ¶ 37, 1454-55 ¶ 102 (1994) (wireless resellers
are included in the statutory “mobile services” category, and providers of cellular service are common carriers and CMRS providers); 47 U.S.C. § 332(c)(1)(A) (“mobile services” providers are common carriers); see also PCIA
Petition for Forbearance for Broadband PCS, WT Docket No. 98-100, (Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 16857, 16911 ¶ 111 (1998) ("We concluded [in the Second Report and Order] that CMRS also includes the following common carrier services: cellular service, … all mobile telephone services and resellers of such services.") (emphasis added).
8
wholesale CMRS services from its facilities-based underlying carriers.
Local Usage At No Additional Charge. INFINITI offers rate plans that provide its
customers with minutes of use for local service at no additional charge.
Access to Emergency Services. INFINITI provides 911 and E911 access for all of its
customers to the extent the local government in its service area has implemented 911 or E911
systems. As noted, calls to 911 emergency services will always be free and will be available
regardless of service activation status or availability of minutes. INFINITI also complies with the
FCC’s regulations governing the deployment and availability of E911 compatible handsets.
Toll Limitation. In its Lifeline and Link Up Reform Order, the FCC provided that toll
limitation would no longer be deemed a supported service.17 “ETCs are not required to offer toll
limitation service to low-income consumers if the Lifeline offering provides a set amount of
minutes that do not distinguish between toll and non-toll calls.”18 Nonetheless, INFINITI’s
offerings inherently allow Lifeline subscribers to control their usage, as its wireless service is
offered on a prepaid, or pay-as-you-go, basis. INFINITI’s service, moreover, is not offered on a
distance-sensitive basis and local and domestic long distance minutes are treated the same.
2. Broadband Internet Access Services
INFINITI provides Broadband Internet access service (“BIAS”) in accordance with the
FCC’s minimum service standards to ensure Lifeline customers receive full Lifeline support. The
FCC has stated that BIAS consists of the ability for a user to receive “the capability to transmit
data to and receive data from all or substantially all Internet endpoints, including any capabilities
that are incidental to and enable the operation of the communications service, but excluding dial-

17 See Lifeline and Link Up Reform Order at ¶ 367.
18 See id. at ¶ 49.
9
up Internet access service.”19 INFINITI provides BIAS to low-income consumers via resale of
Underlying Carriers’ services.
D. INFINITI Requests Designation Throughout Its Service Area
INFINITI is not a rural telephone company as defined in Section 153(37) of the Act (47
U.S.C. § 153(37)). Accordingly, INFINITI is required to describe the geographic area(s) within
which it requests designation as an ETC. INFINITI requests ETC designation that is statewide in
scope to allow the Company to provide Lifeline service wherever its underlying, facilities-based
provider(s) have wireless coverage, including federally-recognized tribal lands, including as it may
change going forward. 20 Current coverage maps are attached hereto as Exhibit 3. INFINITI
understands that its service area overlaps with rural carriers in Idaho, but maintains that the public
interest factors described below justify its designation in these carriers’ service areas, especially
because it seeks ETC designation solely to utilize USF funding to provide Lifeline service to
qualified low-income consumers. INFINITI is not eligible for and does not seek Link-Up or high-
cost support.
Therefore, designation of INFINITI as an ETC will cause no growth in the high-cost
portions of the USF and will not erode high-cost support from any rural telephone company. In
fact, the FCC has determined that “[d]esignation of competitive ETCs promotes competition and
benefits consumers in rural and high-cost areas by increasing customer choice, innovative services,
and new technologies.”21 While federal rules (47 U.S.C. §§ 160, 214(e)(5) and 47 C.F.R. §

19 See 47 C.F.R. § 8.2(a).
20 In accordance with Commission requirements, a copy of this Application is being sent concurrent with this filing to
the tribes identified on the attached Certificate of Service. The Company requests that the Commission expressly indicate in the ETC designation order that such designation includes federally recognized tribal lands.
21 See Western Wireless Corporation Petition for Designation as an Eligible Telecommunications Carrier in the State of Wyoming, Memorandum Opinion and Order, 16 FCC Rcd 48, 55 (2000).
10
54.207(b)) require that the service area of an ETC conform to the service area of any rural
telephone company serving the same area (the “service area conformance” requirement), the
FCC’s Lifeline and Link Up Reform Memorandum Opinion and Order (FCC 13-44 released April
15, 2013) authorized forbearance from the service area conformance requirements with respect to
carriers seeking to provide Lifeline-only service.22 In light of this forbearance, the Commission
has the authority to designate ETCs such as INFINITI in rural areas without concern for the service
area conformance requirement.23
E. INFINITI Will Advertise the Availability of Supported Services
INFINITI will advertise the availability and rates for the services described above using
media of general distribution as required by 47 C.F.R. § 54.201(d)(2). INFINITI will comply with
the FCC’s rules regarding information to be included in marketing materials, including FCC rule
section 54.405(c). Specifically, INFINITI’s marketing materials will state, in easily understood
language, that: (i) the service is a Lifeline service; (ii) Lifeline is a government assistance program;
(iii) the service may not be transferred to someone else; (iv) consumers must meet certain
eligibility requirements before enrolling in the Lifeline program; (v) the Lifeline program permits
only one Lifeline discount per household; (vi) documentation is necessary for enrollment; and (vii)
INFINITI is the provider of the services. Moreover, the Lifeline application/certification form will
state that Lifeline is a federal benefit and that consumers who willfully make a false statement in
order to obtain the Lifeline benefit can be punished by fine or imprisonment or can be barred from
the program.

22 See In the Matter of Telecommunications Carriers Eligible for Support, Lifeline and Link Up Reform, WC Docket No. 09-197, WC Docket No. 11-42, Memorandum Opinion and Order, FCC 13-44 (rel. April 15, 2013).
23 See 47 C.F.R. § 54.207(c).
11
The Company will advertise its services in a manner reasonably designed to reach those
likely to qualify for Lifeline service, using mediums for outreach such as internet, radio, television,
print advertising, and direct mailing.24 Moreover, INFINITI will expand its advertising efforts as
necessary to ensure that Lifeline-eligible customers are aware of the Company’s service offerings.
V. INFINITI SATISFIES THE ADDITIONAL REQUIREMENTS FOR ETC DESIGNATION UNDER 47 C.F.R. § 54.202(a)
INFINITI hereby provides the additional information and certifications required for carriers
seeking ETC designation as set forth in 47 C.F.R. § 54.202(a).
A. Service Commitment Throughout the Proposed Designated Service Area
INFINITI will provide service in Idaho by reselling service which it obtains from its
Underlying Carriers whose networks are operational and largely built out. Thus, INFINITI will be
able to commence offering its Lifeline service to all locations served by its Underlying Carriers
very soon after receiving approval from the Commission.
In accordance with 47 C.F.R. § 54.202(a)(1)(i), and by the certification attached in Exhibit 1,
INFINITI commits to comply with the service requirements applicable to the low-income support
that it receives. Pursuant to 47 C.F.R. § 54.202(a)(1)(ii), a common carrier seeking designation as
a Lifeline-only ETC is not required to submit a five-year network improvement plan as part of its
application for designation as an ETC.
B. Ability to Remain Functional in Emergency Situations
In accordance with 47 C.F.R. § 54.202(a)(2), INFINITI has the ability to remain functional
in emergency situations. As discussed, INFINITI will utilize the extensive and well-established
network and facilities of Tier 1 carriers to provide its Lifeline services. The Company understands
24 See attached Exhibit 4 for a sample advertisement. The advertisement will be updated if necessary to comply with
any state specific requirements.
12
that its Underlying Carriers’ networks have access to a reasonable amount of back-up power to
ensure functionality without an external power source, are able to reroute traffic around damaged
facilities, and are capable of managing traffic spikes resulting from emergency situations.
Through access to the Underlying Carriers’ networks, INFINITI and its customers benefit from
this same functionality.
C. Commitment to Consumer Protection and Service Quality
In accordance with 47 C.F.R. § 54.202(a)(3), an ETC applicant must demonstrate that it
will satisfy applicable consumer protection and service quality standards, and wireless applicants
may satisfy this requirement with a commitment to comply with the Cellular Telecommunications
and Internet Association’s (“CTIA”) Consumer Code for Wireless Service. INFINITI hereby
commits to comply with the CTIA Consumer Code for Wireless Service.
D. INFINITI is Financially and Technically Capable
In accordance with 47 C.F.R. § 54.202(a)(4), INFINITI is financially and technically capable
of providing Lifeline-supported services. INFINITI currently provides service to both Lifeline and
non-Lifeline customers. INFINITI has not been subject to enforcement action, and has not been
subject to ETC revocation proceedings in any state except for Wisconsin which was reinstated.25

25 The Public Service Commission of Wisconsin (WI PSC) granted Infiniti designation as an ETC by Order effective May 25, 2016 in Docket No. 9694-TI-100. The WI PSC rescinded Infiniti’s ETC designation in Docket No. 5-TI-2723 effective July 30, 2020 because the Company had not yet offered Lifeline service in Wisconsin and did not
respond to certain data requests issued by Staff. Infiniti filed to reinstate its ETC designation, sincerely apologizing for the circumstances surrounding its ETC revocation proceeding, identifying the reasons for its failures, and
explaining the steps it had taken to remedy these problems: “In order to prevent any compliance deficiencies in the future, Infiniti has put measures in place to ensure consistent, timely compliance going forward by contracting with independent third-party compliance vendors: FAS Tek Compliance Solutions, Inc. for ongoing regulatory compliance and reporting ongoing sales and use tax and E-911 compliance; Expert Telecom Compliance, Inc. for ETC-specific
compliance; and Lance J.M. Steinhart, P.C. for legal and regulatory services, including maintaining current contact information with regulatory entities, as well as legal advice regarding operations, marketing and compliance, rate
changes and service area expansions, advice regarding state and federal ETC Lifeline rulemakings and rule changes, and general monitoring of Lifeline notices and proceedings that could potentially affect Infiniti. These third-party
vendors will provide industry expertise and add a layer of accountability and protection regardless of unforeseen internal personnel changes, although in addition, the Company has dedicated staff to work with these aforementioned
13
INFINITI is financially able to provide Lifeline-supported services; the Company does not, and
does not intend to, offer exclusively Lifeline-supported services—and the Company is therefore
not exclusively dependent on USAC for its revenue. INFINITI also has access to managerial,
technical and financial resources from its parent company, KonaTel.26 INFINITI is fully capable
of honoring all of its service obligations to customers and regulatory obligations to state and federal
regulators. Furthermore, the senior management of INFINITI has great depth in the
telecommunications industry and offers extensive telecommunications business technical and
managerial expertise to the Company.27 INFINITI will be providing resold wireless service, and
therefore INFINITI will also rely upon the managerial and technical expertise of its Underlying
Carriers.
E. Terms and Conditions of Proposed Lifeline Offering
INFINITI has the ability to provide all services supported by the universal service program,
as detailed in 47 C.F.R. § 54.101(a), throughout Idaho. INFINITI intends to be a leader in the
prepaid marketplace by offering consumers exceptional value and competitive amounts of voice
and broadband usage. INFINITI commits that its Lifeline-supported voice services will meet or
exceed the minimum service standards set forth in 47 C.F.R. § 54.408, including as such standards
are updated going forward. INFINITI’S Lifeline-supported broadband services will also meet the
minimum service standards set forth in 47 C.F.R. § 54.408 for mobile broadband internet access
services, including for service speed and data usage allowance, as such standards are updated going
forward. To the extent INFINITI provides devices for use with Lifeline-supported broadband

compliance providers.” The WI PSC found that re-designation was in the public interest by Order effective July 20, 2022.
26 See Exhibit 5 for financial statements.
27 See Exhibit 6 for key management bios.
14
service, such devices will meet the equipment requirements set forth in 47 C.F.R. § 54.408(f), and
INFINITI will not impose an additional or separate tethering charge for mobile data usage below
the minimum standard.
Attached hereto as Exhibit 7 is a summary table of the Company’s proposed Lifeline service
offerings. Customers will be able to purchase additional minutes or data as needed. In addition to
wholly-supported or discounted wireless services, prepaid Lifeline customers will receive access
to voicemail, caller ID and call waiting features at no additional charge. All plans will include
nationwide domestic long-distance at no extra per-minute charge, and INFINITI will not assess
any usage for access to its free customer services (611). Emergency (911) calls will be free,
regardless of service activation or availability of minutes, and will not count against the customer’s
airtime. The Company’s Lifeline offering will provide feature-rich mobile connectivity for
qualifying subscribers without the burden of credit checks or service contracts. INFINITI’s
prepaid offering will be an attractive alternative for consumers who need the mobility, security,
and convenience of a wireless phone, but who are concerned about usage charges or long-term
contracts.
F. INFINITI Will Comply with the Lifeline Certification and Verification Requirements
Customers interested in obtaining information on the Lifeline program will be directed to
a toll-free telephone number and to the Company’s website, which will contain information
regarding the Company’s Lifeline service plans, including a description of the Lifeline program
and eligibility criteria. Customers must then apply through the National Lifeline Eligibility
Verifier (“National Verifier”), which they may do online or by submitting all required
documentation to the National Verifier by mail. Customers may download a copy of the
application form from the Internet (from the National Verifier’s website) or request that a copy be
15
mailed to them. INFINITI utilizes the standard Lifeline application forms as required by FCC
rules, and thus complies with the disclosure and information collection requirements in 47 C.F.R.
§ 54.410(d).28 INFINITI will certify and verify initial and continued consumer eligibility in
accordance with 47 C.F.R. § 54.410, and will notify the applicant that the prepaid service must be
personally activated by the subscriber and the subscriber must use their service every thirty (30)
days. INFINITI further confirms that it will not provide a consumer with an activated device and
will not activate a Lifeline service unless or until it has confirmed that the consumer is a qualifying
low-income household pursuant to 47 C.F.R. § 54.409, and completed the required eligibility
determination and certification requirements of 47 C.F.R. §§ 54.410, 54.404-54.405. Processing of
consumers’ applications and determination of eligibility will be performed by the National Verifier.
G. Prevention of Waste, Fraud and Abuse
The FCC has taken steps to further curb abuse in the Lifeline program by establishing the
National Verifier, which transfers the responsibility of eligibility determination away from Lifeline
providers. INFINITI will rely on the National Verifier to determine initial and ongoing eligibility
of Idaho Lifeline subscribers. The National Verifier queries the National Lifeline Accountability
Database (“NLAD”) for every enrollment to determine whether a prospective subscriber is
currently receiving a Lifeline service from INFINITI or any other ETC, and whether anyone else
living at the prospective subscriber’s residential address is currently receiving Lifeline service.
INFINITI thus complies with the requirements of section 54.404 of the FCC’s rules. In addition,
Company personnel emphasize the “one Lifeline service per household” restriction in their direct

28 FCC Wireline Competition Bureau Provides Guidance on Universal Forms for the Lifeline Program, WC Docket No. 11-42, Public Notice, “Wireline Competition Bureau Provides Guidance on Universal Forms for the Lifeline Program,” DA 18-161 (rel. Feb. 20, 2018). The standard application/certification forms are available on USAC’s website (See USAC, Lifeline Forms, http://www.usac.org/li/tools/forms/default.aspx).
16
sales contacts with potential customers.
Consistent with federal regulations, the Company will not seek USF reimbursement for
new subscribers until they have personally activated the service, either by initiation and/or actual
use of the service, and will de-enroll any subscriber that has not used the Company’s Lifeline
service as set forth in 47 C.F.R. § 54.407(c)(2). An account will be considered active if the
authorized subscriber establishes usage, as “usage” is defined by 47 C.F.R. § 54.407(c)(2), during
the specified timeframe, currently a period of thirty (30) days, or during the notice period set forth
in 47 C.F.R. § 54.405(e)(3), currently a period of fifteen (15) days. In accordance with 47 C.F.R.
§ 54.405(e)(3), INFINITI will provide the subscriber advanced notice, using clear, easily
understood language, that the subscriber’s failure to use the Lifeline service within the notice
period will result in service termination for non-usage. Customers that have been deactivated may
participate in the Company’s Lifeline service in the future by reapplying and re-establishing
eligibility.
H. INFINITI Will Comply With Reporting Requirements
INFINITI will provide the Commission a copy of its annual certifications and Lifeline
recertification results pursuant to 47 C.F.R. § 54.416 (i.e., FCC Form 555), as well as a copy of its
annual report filed pursuant to 47 C.F.R. § 54.422 (i.e., FCC Form 481), and will comply with
applicable Commission reporting requirements for Lifeline ETCs.
I. INFINITI Will Comply With Regulations Imposed By The Commission
By this Application, INFINITI hereby asserts its willingness and ability to comply with all
the rules and regulations that the Commission may lawfully impose upon the Company’s provision
of service contemplated by this Application. INFINITI commits to comply with applicable ITSAP
regulations, including but not limited to required monthly reporting, as well as execution of a
17
Memorandum of Understanding with the Department of Health and Welfare. INFINITI further
commits to remit required ITSAP funds to the ITSAP Administrator. Upon Commission request,
INFINITI is prepared to answer questions or present additional testimony or other evidence about
its services within the state.
As the Company is not seeking high-cost support for its wireless service, it hereby requests
a waiver of the Commission Rules, Commission Order No. 29841 Section B.1 (two-year network
improvement and maintenance plan based on high-cost support). Because the Company is not
seeking high-cost support, this rule is not applicable and therefore should be waived.
INFINITI commits that 100% of federal universal service funds will flow through directly
to Lifeline customers.
VI. DESIGNATION OF INFINITI AS AN ETC WOULD PROMOTE THE PUBLIC INTEREST
One of the principal goals of the Act, as amended by the Telecommunications Act of 1996,
is “to secure lower prices and higher quality services for American telecommunications consumers
and encourage the rapid deployment of new telecommunications technologies” to all citizens,
regardless of geographic location or income.29 Designation of INFINITI as an ETC in Idaho will
further that public interest. Whether because of financial constraints, poor credit history, or
intermittent employment, many low-income consumers often lack the countless choices available
to most consumers and thus have yet to reap the full benefits of the intensely competitive wireless
market.
The instant request for ETC designation must be examined in light of the Act’s goal of
providing low-income consumers with access to telecommunications services. The primary

29 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56.
18
purpose of universal service is to ensure that consumers—particularly low-income consumers—
receive affordable and comparable telecommunications services. The FCC has in recent years
expanded the Lifeline program to cover broadband services, noting that “Only half of all
households in the lowest income tier subscribe to a broadband service and 43 percent say the
biggest reason for not subscribing is the cost of the service,” and “Of the low income consumers
who have subscribed to mobile broadband, over 40 percent have to cancel or suspend their service
due to financial constraints.”30 Given this context, designating INFINITI as an ETC would
significantly benefit low-income consumers eligible for Lifeline services in Idaho—the intended
beneficiaries of universal service.
A. Advantages of INFINITI’s Service Offering
INFINITI offers an easy to use, competitive, and highly affordable wireless
telecommunications service, which benefits qualified consumers who either have no other service
alternatives or who choose a wireless prepaid solution in lieu of more traditional service. The
public interest benefits of INFINITI’s wireless service include larger calling areas (as compared
to traditional wireline carriers), the convenience and security afforded by mobile service, and a
generous amount of voice and broadband access included at limited or no cost (after application
of the Lifeline and ITSAP support), as well as free access to caller ID, call waiting, and Voicemail
features, and access to 911 services regardless of the number of voice minutes remaining on the
Lifeline consumer’s plan. These low or no cost to consumer services are an invaluable resource
for cash-strapped consumers, and the prepaid nature of the service also provides an alternative for
“unbanked” consumers. INFINITI’s prepaid wireless service is likely to be an especially attractive

30 See Lifeline Modernization Order ¶ 2.
19
option for low-income consumers because it alleviates customer concerns regarding hidden costs,
varying monthly charges and long-term contract issues.
In today’s market, consumers, including qualified Lifeline customers, view the portability
and convenience of wireless service not as a luxury, but as a necessity. Mobile service allows
children to reach their parents wherever they may be, allows a person seeking employment greater
ability to be contacted by potential employers, and provides end users with the ability to contact
emergency service providers regardless of location. Mobile service often also serves as a key
bridge in closing the homework gap for students who live in rural areas with limited access to
broadband.
With the comprehensive strength and experience of INFINITI’s management team, and its
solid history as a Lifeline provider, INFINITI is positioned to meet the needs of Lifeline customers
and remains committed to careful stewardship of the Lifeline program. Without question, prepaid
wireless services have become essential for low-income customers, providing them with value for
their money, access to emergency services on wireless devices, and a reliable means of contact for
prospective employers, social service agencies or dependents. Providing INFINITI with the
authority necessary to offer discounted Lifeline service to those without wireless service—or most
in danger of losing service altogether—undoubtedly promotes the public interest.
B. The Benefits of Competitive Choice
The FCC has acknowledged the benefits to consumers of being able to choose from among
a variety of telecommunications service providers for more than three decades.31 Increasing
customer choice promotes promote competition and innovation, thus spurring other carriers to
target low-income consumers with service offerings tailored to their needs, ultimately resulting in

31 See, e.g., Specialized Common Carrier Services, 29 FCC Rcd 870 (1971).
20
improved services to consumers. Designation of INFINITI as an ETC will help ensure that quality
services are available at “just, reasonable, and affordable rates” as envisioned in the Act.32
Introducing INFINITI into the market as an additional wireless ETC provider will afford low-
income Idaho residents a wider choice of providers and available services while creating a
competitive marketplace as ETCs compete for a finite number of Lifeline-eligible customers.
Increasing the competitive marketplace of providers has the potential to effectively increase the
penetration rate and reduce the number of individuals not connected to the PSTN.
C. Impact on the Universal Service Fund
With Lifeline, ETCs only receive support for customers they obtain. The amount of
support available to an eligible subscriber is exactly the same whether the support is given through
a company such as INFINITI or the Incumbent LEC operating in the same service area. The
number of persons eligible for Lifeline support is the same regardless of the number of ETCs; thus,
INFINITI will only increase the amount of USF Lifeline funding in situations where it obtains
Lifeline customers not already enrolled in another ETC’s Lifeline program. By implementing the
safeguards set forth in the Lifeline and Link Up Reform Order and utilizing the NLAD and National
Verifier, the likelihood that INFINITI’s customers are not eligible or are receiving duplicative
support either individually or within their household is greatly minimized. INFINITI’s ability to
increase the Lifeline participation rate of qualified low-income individuals will further the goal of
Congress to provide all individuals with affordable access to telecommunications service, and thus
any incremental increases in Lifeline expenditures are far outweighed by the significant public
interest benefits of expanding the availability of affordable wireless services to low-income
consumers.

32 See 47 U.S.C. § 254(b)(1).
21
VII. CONCLUSION
Based on the foregoing, designation of INFINITI as an ETC in the State of Idaho accords
with the requirements of Section 214(e)(2) of the Act and is in the public interest.
WHEREFORE, INFINITI respectfully requests that the Commission promptly designate
INFINITI as an ETC in the State of Idaho for the purpose of participating in the Lifeline and ITSAP
programs.
Respectfully submitted,
/s/ Lance J.M. Steinhart ______________________________
Lance J.M. Steinhart, Esq.
Managing Attorney Lance J.M. Steinhart, P.C. 1725 Windward Concourse, Suite 150 Alpharetta, Georgia 30005
[phone] (Phone)
E-Mail: [e-mail] Attorneys for IM Telecom, LLC d/b/a Infiniti Mobile

December 15, 2023

EXHIBIT 2
FCC-Approved Revised Compliance Plan
F A C S I M I L E
( 2 0 2 ) 3 4 2 - 8 4 5 1
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KELLEY DRYE & WARREN LLP
A LIMITED LIABILIT Y PARTNERSHIP
WASHINGTON HARBOUR, SUITE 400
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WASHINGTON, D.C. 20007-5108
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A U S T I N , T X
C H I C A G O , I L
H O U S T O N , T X
L O S A N G E L E S , C A
N E W Y O R K , N Y
P A R S I P P A N Y , N J
S T A M F O R D , C T
B R U S S E L S , B E L G I U M
A F F I L I A T E O F F I C E
M U M B A I , I N D I A
J O H N J . H E IT MA N N
D IR E C T L INE : (2 0 2 ) 3 4 2 -8 5 4 4
E MA IL : jh e it ma n n @ k e lle y d ry e . c o m
March 8, 2018
VIA ECFS
Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, S.W.
Washington, DC 20554
Re: IM Telecom, LLC Revised Compliance Plan – Acquisition by KonaTel, Inc.;
WC Docket Nos. 09-197, 11-42
Dear Ms. Dortch:
On July 5, 2012, IM Telecom, LLC d/b/a Infiniti Mobile (IM Telecom or the Company)
submitted its proposed Compliance Plan for wireless Lifeline services, outlining the measures it
would take to comply with the Federal Communications Commission’s (Commission’s) Lifeline
rules.1 The Wireline Competition Bureau (Bureau) approved the Company’s Compliance Plan
on August 8, 2012.2
Enclosed, on behalf of IM Telecom, is the Company’s Amended Compliance Plan. IM
Telecom is revising its approved Compliance Plan in order to (i) reflect a transaction, described
in more detail in the Amended Compliance Plan, whereby KonaTel, Inc.3 will acquire 100
1 See IM Telecom, LLC d/b/a Infiniti Mobile Compliance Plan, WC Docket Nos. 09-197, 11-42
(filed July 5, 2012).
2 See Wireline Competition Bureau Approves the Compliance Plans of Birch Communications,
Boomerang Wireless, IM Telecom, Q Link Wireless and TAG Mobile, WC Docket Nos. 09-197,
11-42, Public Notice, DA 12-1286 (rel. Aug. 8, 2012).
3 KonaTel, Inc. (KonaTel Parent) is a Delaware corporation with a Nevada-formed subsidiary,
also named KonaTel, Inc. (KonaTel). For the purposes of this filing, they will be referred to,
collectively, as the KonaTel Companies.
Marlene H. Dortch, Secretary
March 8, 2018
Page Two
KELLEY DRYE & WARREN LLP
percent ownership and control of IM Telecom; and (ii) update the entirety of the Company’s
Compliance Plan due to the passage of time to reflect current Lifeline rules and requirements.
Current IM Telecom Operations
As discussed in the Amended Compliance Plan, IM Telecom operates, or is authorized to
operate (insofar as required), as a Mobile Virtual Network Operator in 24 states, providing
prepaid commercial mobile radio services to consumers utilizing the wireless networks of its
underlying facilities-based providers. The Company is designated as an eligible
telecommunications carrier (ETC) to provide Lifeline services to low-income consumers on a
wireless basis in seven states, and has ETC applications pending in 17 states.
KonaTel Transaction
IM Telecom is currently 100 percent owned by Mr. Trevan V. Morrow. Pursuant to an
Agreement for the Purchase and Sale of Membership Interest (the Agreement), executed between
IM Telecom and KonaTel Parent effective as of February 5, 2018, the Parties have agreed that
Mr. Morrow will transfer all of his interests in IM Telecom to KonaTel Parent. The Transaction
will be closed as soon as required regulatory approvals are obtained and other pre-closing
conditions satisfied or waived. Following the consummation of the Transaction, IM Telecom
will be a direct wholly-owned subsidiary of KonaTel Parent.
KonaTel Parent is a public Delaware corporation with principal offices located at 13601
Preston Rd., Suite 816E, Dallas, TX 75240.4 KonaTel Parent’s operating subsidiary, KonaTel,
operates as a full service cellular provider, delivering local and long distance wireless voice
services and broadband services to individual and business customers in various retail and
wholesale markets. Through its sales network, it provides its services nationwide.
KonaTel’s cellular industry segment operations primarily consist of the following
services:
•“Wholesale Mobile Voice,” which includes wholesale priced minutes, text and data to
mobile resellers;
•“B2B Mobile Voice,” which includes traditional post-paid cellular services, primarily
acquired from Verizon, sold to small and medium sized businesses and marketed
through independent commissioned sales agents;
4 KonaTel Parent currently trades on the OTC Markets Group under the trading symbol
“DALP.”
Marlene H. Dortch, Secretary
March 8, 2018
Page Three
KELLEY DRYE & WARREN LLP
•“B2B & B2C Retail,” which comprises one retail location in upstate New York that
functions as a Sprint Corporation reseller of cellular services and products, primarily
selling B2C Retail Service, and which also sells Verizon service from that location,
mostly consisting of B2B Mobile Service; and
•“Internet of Things” or wireless data (IoT). KonaTel plans to devote additional
resources to IoT and has direct wholesale mobile data agreements with Verizon and
AT&T, Inc. to provide it with wireless data services.
The KonaTel Companies have facilities in Johnstown, New York and Johnstown,
Pennsylvania as well as in Dallas, Texas, where the KonaTel Companies maintain their principal
executive offices. Further information regarding KonaTel and its products and services is
available at www.konatel.com.
The acquisition of IM Telecom by KonaTel Parent, as contemplated by the Agreement,
will benefit consumers throughout IM Telecom’s current and future operating territories. The
KonaTel Companies are financially strong and are directly managed by a hands-on team which
brings over thirty years of experience in telecommunications as well as decades of expertise in
operations management and marketing and, collectively, 24 years of experience in operations for
Lifeline service providers. Further enhancing the caliber of its senior management, KonaTel
Parent recently added three new members to the Board of Directors, each with over twenty
years’ experience in the telecommunications industry. All of these strategic resources will be
available to IM Telecom as it continues to grow and develop its business. This will facilitate
improvements to IM Telecom’s operating efficiency, financial management, and strategic
decision-making. As a result, IM Telecom will be able to compete more effectively in the
wireless and broadband market sectors. At the same time, the Transaction holds no adverse
effects for consumers as it will not lead to any loss of or reduction in services to IM Telecom’s
customers, nor will it result in any change to the rates, terms and conditions associated with those
services.5
Moreover, the Bureau previously found that KonaTel, based on its experience and
expertise, satisfied the requirements to provide Lifeline service when it granted KonaTel’s
request for designation as a Lifeline Broadband Provider (LBP) on December 1, 2016.6 In the
5 Future changes to IM Telecom’s service offerings and/or the rates, terms and conditions
applicable to those offerings will be implemented consistent with applicable regulatory
requirements.
6 See Telecommunications Carriers Eligible for Universal Service Support, Petitions for
Designation as a Lifeline Broadband Provider, WC Docket Nos. 09-197, 11-42, Order, DA 16-
1325 (WCB rel. Dec. 1, 2016) (LBP Approval Order).
Marlene H. Dortch, Secretary
March 8, 2018
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KELLEY DRYE & WARREN LLP
LBP Approval Order, the Bureau concluded that the service offerings of KonaTel were “likely to
provide a variety of benefits to Lifeline-eligible consumers, including increased consumer
choice, affordable access to the Internet, qualifying BIAS plans, mobility, and strong protections
against waste, fraud, and abuse.”7 The Bureau later set aside all LBP designations on procedural
grounds, but has never specifically reversed its substantive finding that KonaTel is qualified to
provide Lifeline service.8
Compliance Plan Updates Due to the Passage of Time
The proposed Amended Compliance Plan has been revised to update the details of IM
Telecom’s wireless Lifeline operations (see pp. 5-10) and financial and technical capability (see
pp. 23-26). It also incorporates revisions to Company procedures and commitments throughout
to reflect recent changes to Lifeline program rules. For example, IM Telecom provides updates
regarding its enrollment process to reflect enrollments using the National Verifier where
available (see pp. 5, 7, 8, 14), explains its rolling recertification process (see pp. 14-15) and
updates the discussion about the Company’s non-usage policy (see pp. 15-16). In addition, the
Amended Compliance Plan provides the Company’s current wireless Lifeline service plan
options (see pp. 22-23). Current exhibit materials for the Company’s wireless Lifeline
operations (marketing materials, sample enrollment form, income eligibility worksheet) are also
included.
Summary
IM Telecom hereby submits its proposed Amended Compliance Plan with the above-
described revisions. The Company respectfully requests expeditious approval of its Amended
Compliance Plan in order to ensure continued provision of wireless Lifeline services as
discussed herein.
7 Id. ¶ 21.
8 See Telecommunications Carriers Eligible for Universal Service Support, Petitions for
Designation as a Lifeline Broadband Provider, WC Docket Nos. 09-197, 11-42, Order on
Reconsideration, DA 17-128 (WCB rel. Feb. 3, 2017). See also Bridging the Digital Divide for
Low-Income Consumers Lifeline and Link Up Reform and Modernization Telecommunications
Carriers Eligible for Universal Service Support, WC Docket Nos. 17-287, 11-42, 09-197, Fourth
Report and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of
Proposed Rulemaking, and Notice of Inquiry, FCC 17-155, ¶¶ 55-58 (2017) (proposing to
eliminate the standalone LBP status altogether due to concerns about improperly preempting
state authority over ETC designations).
Marlene H. Dortch, Secretary
March 8, 2018
Page Five
KELLEY DRYE & WARREN LLP
This letter and revised Amended Compliance Plan are being filed electronically for
inclusion in the public record of the above-referenced proceedings. Please feel free to contact
the undersigned with any questions.
Respectfully submitted,
/s/ Trevan V. Morrow
Trevan V. Morrow, Esq.
Owner
IM Telecom, LLC
1705 South Baltimore Ave.
Tulsa, OK 74119
John J. Heitmann
Joshua T. Guyan
Kelley Drye & Warren, LLP
3050 K Street, N.W. Suite 400
Washington, D.C. 20007
Tel: [phone]
Fax: [phone]
[e-mail]
[e-mail]
Counsel to KonaTel, Inc.
cc: Ryan Palmer
Jodie Griffin
1
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of IM Telecom, LLC d/b/a Infiniti Mobile
Telecommunications Carriers Eligible to
Receive Universal Service Support
Lifeline and Link Up Reform and Modernization
WC Docket No. 09-197
WC Docket No. 11-42
IM TELECOM, LLC d/b/a INFINITI MOBILE
AMENDED COMPLIANCE PLAN
IM Telecom, LLC d/b/a Infiniti Mobile (IM Telecom or the Company),1 through its
undersigned counsel, hereby respectfully submits and requests expeditious treatment of its
revised Compliance Plan outlining the measures it will take to implement the conditions imposed
by the Commission in its Lifeline program rules and implementing orders and guidance and
reflecting a material change in ownership of IM Telecom.2
1 The Company hereby also reports its corporate and trade names, identifiers, and its
holding company, operating companies and affiliates as: Infiniti Mobile (dba). After the
transaction described herein, IM Telecom will be 100% owned by KonaTel, Inc.
(KonaTel Parent), which is a public Delaware corporation owned by Sean McEwen, M2
Equity Partners LLC and others holding less than 10%. IM Telecom will be affiliated
with KonaTel, Inc. the operating subsidiary of KonaTel Parent. KonaTel, Inc. the
operating subsidiary operates as a full service cellular provider, delivering local and long
distance wireless voice and broadband services to individual and enterprise customers.
Pre- and post-close corporate structure diagrams are included as Exhibit A.
2 See Lifeline and Link Up Reform and Modernization, Lifeline and Link Up, Federal-State
Joint Board on Universal Service, Advancing Broadband Availability Through Digital
Literacy Training, WC Docket No. 11-42, WC Docket No. 03-109, CC Docket No. 96-
45, WC Docket No. 12-23, Report And Order and Further Notice Of Proposed
Rulemaking, FCC 12-11 (Feb. 6, 2012) (2012 Lifeline Reform Order). The Company
2
IM Telecom commends the Commission’s commitment to a nationwide communications
system that promotes the safety and welfare of all Americans, including Lifeline customers. The
Company complies with 911 requirements as described below and it is submitting this
Compliance Plan in order to continue to qualify for blanket forbearance from the facilities
requirement of section 214(e)(1)(A) of the Communications Act and participate as an eligible
telecommunications carrier (ETC) in the Lifeline program.3
IM Telecom complies fully with all conditions set forth in the 2012 Lifeline Reform
Order, as well as with the Commission’s Lifeline rules and policies more generally. This
Compliance Plan describes the specific measures that the Company has implemented to achieve
these objectives. Specifically, this Compliance Plan: (1) describes the specific measures that the
herein submits the information required by the Compliance Plan Public Notice. See
Wireline Competition Bureau Provides Guidance for the Submission of Compliance
Plans Pursuant to the 2012 Lifeline Reform Order, WC Docket Nos. 09-197, 11-42,
Public Notice, DA 12-314 (rel. Feb. 29, 2012); Lifeline and Link Up Reform and
Modernization et al., WC Docket No. 11-42, et al., Second Further Notice of Proposed
Rulemaking, Order on Reconsideration, Second Report and Order, and Memorandum
Opinion and Order, FCC 15-71 (2015) (2015 Lifeline Order); Lifeline and Link Up
Reform and Modernization, et al., WC Docket No. 11-42, et al., Third Report and Order,
Further Report and Order, and Order on Reconsideration, FCC 16-38 (2016) (2016
Lifeline Modernization Order); Bridging the Digital Divide for Low-Income Consumers
Lifeline and Link Up Reform and Modernization Telecommunications Carriers Eligible
for Universal Service Support, WC Docket Nos. 17-287, 11-42, 09-197, Fourth Report
and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of
Proposed Rulemaking, and Notice of Inquiry, FCC 17-155 (2017) (2017 Lifeline Digital
Divide Order).
3 See 2012 Lifeline Reform Order, ¶ 368. Although the Company qualifies for and seeks to
avail itself of the Commission’s grant of forbearance from the facilities requirement of
section 214(e)(1)(A) for purposes of the federal Lifeline program, the Company reserves
the right to demonstrate to a state public utilities commission that it provides service
using its own facilities in a state for purposes of state universal service funding under
state program rules and requirements. IM Telecom will follow the requirements of the
Commission’s Lifeline rules and this Compliance Plan in all states in which it provides
Lifeline service and receives reimbursements from the federal Low-Income fund,
including in any state where the public utilities commission determines that IM Telecom
provides service using its own facilities for purposes of a state universal service program.
3
Company takes to implement the obligations contained in the Lifeline program rules and orders,
including the procedures the Company follows in enrolling a subscriber in Lifeline and
submitting for reimbursement for that subscriber from the Low-Income Fund, materials related
to initial and ongoing certifications and sample marketing materials; and (2) provides a detailed
description of how the Company offers Lifeline services, the geographic areas in which it offers
services, and a detailed description of the Company’s Lifeline service plan offerings.
ACCESS TO 911 AND E911 SERVICES4
Pursuant to the 2012 Lifeline Reform Order, forbearance is conditioned upon the
Company: (1) providing its Lifeline voice subscribers with 911 and E911 access, regardless of
activation status and availability of minutes; and (2) providing its Lifeline voice subscribers with
E911-compliant handsets and replacing, at no additional charge to the subscriber, noncompliant
handsets of Lifeline-eligible subscribers who obtain Lifeline-supported voice services.5 The
Company will comply with all current and future 911 and E911 requirements when providing
voice service.
IM Telecom provides its Lifeline voice customers with access to 911 and E911 services
immediately upon activation of service. The Commission and consumers are hereby assured that
all Company voice customers have available access to emergency calling services at the time that
Lifeline service is initiated, and that such 911 and E911 access is available from Company
handsets, even if the account associated with the handset has no minutes remaining.
4 See Compliance Plan Public Notice at 3.
5 See 2012 Lifeline Reform Order, ¶ 373.
4
IM Telecom provides access to 911 and E911 services for all voice customers. The
Company uses Verizon Wireless and T-Mobile as its underlying network providers/carriers.6
Verizon Wireless and T-Mobile route 911 calls from the Company’s customers in the same
manner as 911 calls from Verizon Wireless’s and T-Mobile’s own retail customers. To the
extent that Verizon Wireless and T-Mobile are certified in a given PSAP territory, this 911
capability will function the same for the Company. IM Telecom also enables 911 emergency
calling services for all properly activated handsets regardless of whether the account associated
with the handset is active or suspended. Finally, the Company transmits all 911 calls initiated
from any of its handsets even if the account associated with the handset has no remaining
minutes.
E911-Compliant Handsets. IM Telecom ensures that all handsets used in connection
with the Lifeline service offering are E911-compliant. The Company uses phones that meet all
FCC requirements and ensures that the handset models used meet all 911 and E911
requirements. As a result, any customer that qualifies for and elects Lifeline service will already
have a 911/E911-compliant handset, which will be confirmed at the time of enrollment in the
Lifeline program. Any new customer that qualifies for and enrolls in the Lifeline program will
have the option of a 911/E911-compliant handset.
6 IM Telecom will receive minutes from an intermediary, which purchases minutes from
Verizon Wireless and T-Mobile.
5
COMPLIANCE PLAN
I. PROCEDURES TO ENROLL A SUBSCRIBER IN LIFELINE7
A. Policy
IM Telecom complies with the Commission’s Lifeline rules and orders, including the
uniform eligibility criteria established in section 54.409 of the Commission’s rules, as well as
any additional certification and verification requirements for Lifeline eligibility in states where
the Company is designated as an ETC.
Therefore, all subscribers are required to demonstrate eligibility based at least on: (1)
household income at or below 135% of the Federal Poverty Guidelines for a household of that
size; or (2) the household’s participation in one of the federal assistance programs listed in
sections 54.409(a)(2) or 54.409(b) of the Commission’s rules. In addition, through the
certification requirements described below, the Company confirms that the subscriber is not
already receiving a Lifeline service and no one else in the subscriber’s household is subscribed to
a Lifeline service.
B. Eligibility Determination
IM Telecom uses multiple outreach methods including but not limited to phone, web-
based, and in person enrollments through Lifeline events, street teams, and permanent store
locations. The Company utilizes IM Telecom trained employees or representatives (Company
personnel) through the various channels to ensure that only qualified, non-duplicate, Lifeline
eligible subscribers are enrolled in the program and rely on the National Verifier or state
eligibility administrators where applicable. All Company personnel must pass a Compliance
7 See Compliance Plan Public Notice at 3.
6
Lifeline training including information about the federal Lifeline program and any state specific
requirements that are unique to the state in which the representative is operating, such as a state
eligibility database.
IM Telecom currently uses the CGM, LLC Lifeline enrollment application – which is
used by dozens of ETCs – for its in-person and online wireless Lifeline customer enrollments.
The CGM Lifeline enrollment application works on a tablet or computer and provides the
required disclosures, and collects applicant information, identity documentation (where
requested by the ETC or necessary for National Lifeline Accountability Database (NLAD) third-
party identity verification (TPIV) dispute resolutions), and proof of eligibility. It also requires
applicants to make the required certifications for Lifeline service. The application will then
check any available state or federal eligibility databases, IM Telecom’s designated service
territory in the state, underlying carrier coverage area and conduct the NLAD duplicate check.
IM Telecom Company personnel must log in to the CGM software so that the customer
enrollment information is safeguarded against potential identity fraud behind a password
protected portal and the Company personnel enrollments can be tracked. The Company
personnel must sign his or her agreement to follow all rules and requirements with respect to
assisting an applicant with the Lifeline enrollment. The order process then advances through the
electronic windows with the prospective customer to provide disclosures, collect information and
elicit certifications as detailed below. The CGM enrollment process asks if the potential Lifeline
customer or anyone in the customer’s household is currently receiving a Lifeline benefit from
any other Lifeline service provider. The enrollment process then gathers customer specific
information required to verify identity such as date of birth, full name, and all or part of the
social security number (based on federal and state specific requirements). The enrollment
7
process then requires the potential customer to make certifications and confirm that all
information provided on the application form is true and correct under penalty of perjury. To
complete the electronic enrollment, the customer signs the electronic application and the
information collected is sent for several database checks, including an address verification, a
geographic footprint match to the ETC’s authorization to provide Lifeline service in the area, an
internal duplicate check, a state database eligibility check (if available), the NLAD check. In any
state where the National Verifier has been implemented, the Company will modify its enrollment
process to first confirm that the applicant has been deemed eligible by the National Verifier, or
assist the applicant to use the National Verifier portal to obtain that approval before initiating or
completing the Company’s enrollment process for Lifeline.8
Company personnel may collect applications and assist applicants with providing the
necessary information, including proof of eligibility, however all application information is
entered into the CGM enrollment application and sent to the Company’s corporate offices for
review by a Company employee that is not paid on a commission basis. The employee reviews
the application and all scanned documentation before making the decision to allow the applicant
to be enrolled. All transfers of information and scans collected electronically are transmitted in
encrypted form. When the checks described herein are completed, approved customers are
enrolled and receive a handset to be activated as discussed below.
As discussed in further detail in Section I.F. below, all Company personnel that are
involved in the enrollment process are trained regarding the eligibility and certification
requirements in the Lifeline rules and this Compliance Plan, including the one-per-household
requirement. New Company personnel undergo an initial mandatory training session where they
8 See USAC, “Lifeline National Verifier Plan” (July 2017).
8
are given training materials, including a compliance manual, as well as shown visual examples of
documents acceptable to demonstrate eligibility for the Lifeline program.
If IM Telecom cannot determine a prospective subscriber’s eligibility for Lifeline by
accessing income or program eligibility databases, Company personnel, who are non-
commission-based employees, review documentation establishing eligibility pursuant to the
Lifeline rules.9 All personnel who interact with current or prospective customers are trained to
assist Lifeline applicants in determining whether they are eligible to participate based on the
income-based and/or program-based criteria. These personnel are trained to answer questions
about Lifeline eligibility, and review required documentation to determine whether it satisfies all
current federal eligibility requirements.
Proof of Eligibility. The electronic enrollment process includes the ability to scan
customers’ government-issued identification, proof of residence (if necessary because the
address cannot be verified) and proof of eligibility. The proof will be retained as required by
section 54.410 of the Commission’s Lifeline program rules. Company personnel are trained on
acceptable documentation required to establish income-based and program-based eligibility. In
the absence of the National Verifier or a state eligibility database, acceptable documentation of
program eligibility as defined by the Lifeline rules is reviewed by a non-commission-based IM
Telecom employee during the electronic order process.10 Acceptable documentation of program
eligibility includes: (1) the current or prior year’s statement of benefits from a qualifying
assistance program; (2) a notice letter of participation in a qualifying assistance program; (3)
program participation documents (e.g., the consumer’s Supplemental Nutrition Assistance
9 See 2012 Lifeline Reform Order, ¶ 100; section 54.410(b)(1)(i)(B), 54.410(c)(1)(i)(B).
10 See 2012 Lifeline Reform Order, ¶ 101. See also USAC Guidance available at
http://www.usac.org/li/telecom-carriers/step06/default.aspx.
9
Program (SNAP) electronic benefit transfer card or Medicaid participation card (or copy
thereof)); or (4) another official document evidencing the consumer’s participation in a
qualifying assistance program.11
Acceptable documentation of income eligibility includes the prior year’s state, federal, or
Tribal tax return; current income statement from an employer or paycheck stub; a Social Security
statement of benefits; a Veterans Administration statement of benefits; a retirement/pension
statement of benefits; an Unemployment/Workmen's Compensation statement of benefits;
federal or Tribal notice letter of participation in General Assistance; or a divorce decree, child
support award, or other official document containing income information. If the prospective
subscriber presents documentation of income that does not cover a full year, such as current pay
stubs, the prospective subscriber must present the same type of documentation covering three
consecutive months within the previous twelve months.12
Company personnel examine this documentation for each Lifeline applicant and record
the type of documentation used to satisfy the income- or program-based criteria.13 Where the
employee concludes that proffered documentation is insufficient to establish such eligibility, the
Company denies the associated application and informs the applicant of the reason for such
rejection. In the event that a non-commission-based employee cannot ascertain whether
documentation of a specific type is sufficient to establish an applicant’s eligibility, the matter is
escalated to supervisory personnel. A non-commission-based IM Telecom employee is
responsible for overseeing and finalizing every Lifeline enrollment prior to including that
customer on a request for reimbursement.
11 Id. and section 54.410(c)(1)(i)(B).
12 See 2012 Lifeline Reform Order, ¶101; section 54.410.(b)(1)(i)(B).
13 See 2012 Lifeline Reform Order, ¶101; sections 54.410(b)(1)(iii), 54.410(c)(1)(iii).
10
In addition, IM Telecom does not enroll customers at retail locations where IM Telecom
does not have an agency agreement with the retailer. Further, IM Telecom requires an agent
retailer to have any employees involved in the enrollment process go through the standard IM
Telecom field representative training, same as it would for any other agent. By establishing
agency relationships with all of its field representatives, including future retail outlets, IM
Telecom meets the “deal directly” requirement adopted in the TracFone Forbearance Order.14
The Commission determined in the 2012 Lifeline Reform Order that ETCs may permit
agents or representatives to review documentation of consumer program eligibility for Lifeline
because “the Commission has consistently found that ‘[l]icensees and other Commission
regulatees are responsible for the acts and omissions of their employees and independent
contractors.’”15 Because IM Telecom is responsible for the actions of all of its employees and
agents, including those enrolling customers in any IM Telecom owned or affiliated retail
locations, and a IM Telecom employee is responsible for overseeing and finalizing every Lifeline
enrollment prior to including that customer on a request for reimbursement, the Company always
“deals directly” with its customers to certify and verify the customer’s Lifeline eligibility.
De-Enrollment for Ineligibility. If IM Telecom has a reasonable basis to believe that one
of its Lifeline subscribers no longer meets the eligibility criteria, the Company will notify the
subscriber of impending termination in writing and in compliance with any state dispute
resolution procedures applicable to Lifeline termination, and give the subscriber 30 days to
demonstrate continued eligibility.16 A demonstration of eligibility must comply with the annual
14 See Petition of TracFone Wireless, Inc. for Forbearance from 47 U.S.C. § 214(e)(1)(A)
and 47 C.F.R. § 54.201(i), CC Docket no. 96-45, Order, FCC 05-165, ¶19 (2005).
15 2012 Lifeline Reform Order, ¶ 110.
16 See 2012 Lifeline Reform Order, ¶ 143; section 54.405(e)(1).
11
verification procedures below and found in section 54.410(f), including the submission of a
certification form.
C. Subscriber Certifications for Enrollment
The Company has implemented certification policies and procedures that enable
consumers to demonstrate their eligibility for Lifeline assistance to IM Telecom employees as
defined by the Lifeline rules, together with any additional state certification requirements.17 The
Company shares the Commission’s concern about abuse of the Lifeline program and is thus
committed to the safeguards stated herein, with the belief that these procedures will prevent the
Company’s customers from engaging in such abuse of the program, inadvertently or
intentionally. Every applicant is required to complete an application/certification form
containing disclosures, and collecting certain information and certifications as discussed below.18
Applicants that seek to enroll based on income eligibility are referred to the Federal Poverty
Guidelines by household size.19 Any evidentiary documentation submitted with the
application/certification is used strictly to verify a consumer’s eligibility to participate in the
Lifeline program. Upon approval of the customer’s application, a copy of such proof of
eligibility is retained by IM Telecom, as previously stated in Section I.B. above.
17 2012 Lifeline Reform Order, ¶ 61; section 54.410(a).
18 See Compliance Plan Public Notice at 3. A sample Application/Certification Form is
included as Exhibit B. The certification on the sample form pertaining to a port freeze
exemption will be deleted after the port freeze is eliminated on March 19, 2018. IM
Telecom understands and will comply with the requirement to utilize the USAC standard
application/certification form by July 1, 2018. See Wireline Competition Bureau
Provides Guidance on Universal Forms for the Lifeline Program, WC Docket No. 11-42,
Public Notice, DA 18-161 (rel. Feb. 20, 2018) (Lifeline Form Public Notice).
19 See Income Eligibility Worksheet, included as Exhibit C. (IM Telecom understands and
will comply with the requirement to utilize the USAC standard application/certification
form, which includes income eligibility information, by July 1, 2018. See Lifeline Form
Public Notice.)
12
Disclosures. The Company’s application and certification forms include the following
disclosures: (1) Lifeline is a federal benefit and willfully making false statements to obtain the
benefit can result in fines, imprisonment, de-enrollment or being barred from the program; (2)
only one Lifeline service is available per household; (3) a household is defined, for purposes of
the Lifeline program, as any individual or group of individuals who live together at the same
address and share income and expenses; (4) a household is not permitted to receive Lifeline
benefits from multiple providers; (5) violation of the one-per-household limitation constitutes a
violation of the Commission’s rules and will result in the applicant’s de-enrollment from the
program; and (6) Lifeline is a non-transferable benefit and the applicant may not transfer his or
her benefit to any other person.20
Applications and certification forms also state that: (1) the service is a Lifeline service,
(2) Lifeline is a government assistance program, and (3) only eligible consumers may enroll in
the program.21
In addition, the Company notifies the applicant that the Lifeline service must be
personally activated and verified by the subscriber and the service will be deactivated and the
subscriber de-enrolled if the subscriber does not use the service for 30 days.22
Information Collection. IM Telecom also collects the following information from the
applicant in the application/certification form: (1) the applicant’s full name; (2) the applicant’s
full residential address (P.O. Box is not sufficient23); (3) whether the applicant’s residential
address is permanent or temporary; (4) the applicant’s billing address, if different from the
20 See 2012 Lifeline Reform Order, ¶ 121; section 54.410(d)(1).
21 See section 54.405(c).
22 See 2012 Lifeline Reform Order, ¶ 257.
23 See 2012 Lifeline Reform Order, ¶ 87.
13
applicant’s residential address; (5) the applicant’s date of birth; (6) the full or last four digits of
the applicant’s Social Security number as determined by the federal or state specific
requirements (or the applicant’s Tribal identification number, if the subscriber is a member of a
Tribal nation and does not have a Social Security number); (7) if the applicant is seeking to
qualify for Lifeline under the program-based criteria, the name of the qualifying assistance
program from which the applicant, his or her dependents, or his or her household receives
benefits; and (8) if the applicant is seeking to qualify for Lifeline under the income-based
criterion, the number of individuals in his or her household.24
Applicant Certification. Consistent with section 54.410(d)(3), the Company requires the
applicant to certify, under penalty of perjury, in writing or by electronic signature or interactive
voice response recording,25 the following: (1) the applicant meets the income-based or program-
based eligibility criteria for receiving Lifeline; (2) the applicant will notify the Company within
30 days if for any reason he or she no longer satisfies the criteria for receiving Lifeline including,
as relevant, if the applicant no longer meets the income-based or program-based criteria for
receiving Lifeline support, the applicant is receiving more than one Lifeline benefit, or another
member of the applicant’s household is receiving a Lifeline benefit; (3) if the applicant is
seeking to qualify for Lifeline as an eligible resident of Tribal lands, he or she lives on Tribal
lands; (4) if the applicant moves to a new address, he or she will provide that new address to the
Company within 30 days; (5) the applicant’s household will receive only one Lifeline service
and, to the best of the applicant’s knowledge, the applicant’s household is not already receiving a
Lifeline service; (6) the information contained in the applicant’s certification form is true and
correct to the best of the applicant’s knowledge; (7) the applicant acknowledges that providing
24 See section 54.410(d)(2).
25 See 2012 Lifeline Reform Order. ¶¶ 168-69; section 54.419.
14
false or fraudulent information to receive Lifeline benefits is punishable by law; and (8) the
applicant acknowledges that the applicant may be required to re-certify his or her continued
eligibility for Lifeline at any time, and the applicant’s failure to re-certify as to the applicant’ s
continued eligibility will result in de-enrollment and the termination of the applicant’s Lifeline
benefits pursuant to the de-enrollment policy included below and in the Commission’s rules.
In addition, the applicant is required to authorize IM Telecom to access any records
required to verify the applicant’s statements on the application/certification form and to confirm
the applicant’s eligibility for the Company Lifeline credit. The applicant must also authorize the
Company to release any records required for the administration of the Company Lifeline credit
program, including to USAC to be used in a Lifeline program database.26
D. Annual Verification Procedures
IM Telecom re-certifies all subscribers within 12 months after the subscriber's service
initiation date and within every 12 months thereafter, except for subscribers in states where the
National Verifier, state Lifeline administrator, or other state agency is responsible for the annual
re-certification of subscribers' Lifeline eligibility in accordance with section 54.410(f). If the
subscriber’s program-based or income-based eligibility for Lifeline cannot be determined by
accessing one or more state databases containing information regarding enrollment in qualifying
assistance programs, then the Company obtains a signed certification from the subscriber on a
form that meets the certification requirements in section 54.410(d) of the Commission’s rules.
26 See Section 54.404(b)(9). The application/certification form will also describe the
information that will be transmitted, that the information is being transmitted to USAC to
ensure the proper administration of the Lifeline program and that failure to provide
consent will result in the applicant being denied the Lifeline service. See id.
15
By July 1, 2018, IM Telecom will use the standard federal form to re-certify a qualifying low-
income consumer.27
Verification De-Enrollment. As required by section 54.405(e)(4), IM Telecom de-enrolls
Lifeline subscribers who does not respond to the Company’s attempts to obtain recertification of
the subscriber’s continued eligibility or who fails to provide the annual one-per-household
recertifications. Prior to de-enrolling a subscriber, the Company will notify the subscriber in
writing, using clear, easily understood language, that failure to respond to the recertification
request will trigger de-enrollment. The subscriber will be given 60 days to respond to
recertification efforts. If the subscriber does not respond to the Company’s notice of impending
de-enrollment, the Company will de-enroll the subscriber from Lifeline within five business days
after the expiration of the subscriber’s time to respond to the recertification efforts.
E. Activation and Non-Usage
IM Telecom does not consider a prepaid subscriber activated and does not seek
reimbursement for Lifeline for that subscriber, until the subscriber activates the Company’s
Lifeline service.28 A customer that activates the Company’s Lifeline service must affirmatively
acknowledge that they are the applicant and that they have applied for, and wish to receive,
Lifeline service from IM Telecom. Customers that apply for Lifeline service and receive phones
in person must activate the phone and place a test call with the Company representative.
Customers that receive a handset through the mail must contact IM Telecom’s Welcome
Activation Customer Service Center to activate service upon receipt of the handset. New
activations are routed to a dedicated activation hotline where the information contained in the
27 See Lifeline Form Public Notice.
28 See 2012 Lifeline Reform Order, ¶ 257; section 54.407(c)(1).
16
customer’s application is validated, receives affirmative acknowledgment that the individual
activating the handset is the applicant and that they have applied for and wish to receive Lifeline
service from IM Telecom. The Lifeline service is then activated.
As defined in section 54.405(e)(3), if a Lifeline subscriber fails to use, as “usage” is
defined in section 54.407(c)(2),29 for 30 consecutive days a Lifeline service that does not require
the Company to assess and collect a monthly fee from its subscribers, the Company provides the
subscriber 15 days’ notice, using clear, easily understood language, that the subscriber’s failure
to use the Lifeline service within the 15-day notice period will result in service termination for
non-usage. The Company reports to the Commission annually the number of subscribers de-
enrolled for non-usage. This de-enrollment information is reported by month and submitted to
the Commission at the time the Company submits its annual certification report pursuant to
section 54.416.
F. Additional Measures to Prevent Waste, Fraud and Abuse
To supplement its verification and certification procedures, and to better ensure that
customers understand the Lifeline service restrictions with respect to duplicates, the Company
has implemented measures and procedures to prevent duplicate Lifeline benefits being awarded
to the same household. These measures entail additional emphasis in written disclosures as well
as live due diligence.
In addition to checking the NLAD, Company personnel emphasize the “one Lifeline
phone per household” restriction in their contacts with potential customers. Training materials
29 Subscribers can “use” the service by: (i) completing an outbound call or using data; (ii)
purchasing minutes or data from IM Telecom to add to the subscriber's service plan; (iii)
answering an incoming call from a party other than IM Telecom or the IM Telecom’s
agent or representative; (iv) responding to direct contact from IM Telecom and
confirming that he or she wants to continue receiving Lifeline service; or (v) sending a
text message.
17
include a discussion of the limitation to one Lifeline phone per household, and the need to ensure
that the customer is informed of this restriction. All Company personnel interacting with
existing and potential Lifeline customers undergo training regarding the eligibility and
certification requirements of the Lifeline program and this Compliance Plan. All Company
personnel receive such training upon being hired. This includes reviewing and signing the
Company’s training manual and a training session. IM Telecom regularly provides refresher
training and seek feedback from employees regarding enrollment. In addition, if Company
personnel have any questions or concerns regarding eligibility and enrollment, the IM Telecom
“open door” policy encourages them to bring such questions and concerns to a member of
leadership to be researched and resolved ensuring the Company remains in compliance with all
requirements and regulations.
Further, all Company personnel must log in to an enrollment software tool to enroll
customers and therefore can be tracked. The Company regularly monitors accounts for
irregularities, such as excessive activity and conducts random audits of activations to verify
enrollment accuracy.
National Lifeline Accountability Database (NLAD). IM Telecom complies with the
requirements of section 54.404 and checks the NLAD for all enrollments other than in NLAD
opt-out states. The Company queries the NLAD to determine whether a prospective subscriber
is currently receiving a Lifeline service from another ETC and whether anyone else living at the
prospective subscriber’s residential address is currently receiving Lifeline service.30
30 See 2012 Lifeline Reform Order, ¶ 203. The Company will also transmit to the National
Database the information required for each new and existing Lifeline subscriber. See
2012 Lifeline Reform Order, ¶¶ 189-195; section 54.404(b)(6). Further, the Company
will update each subscriber’s information in the National Database within ten business
18
One-Per-Household. IM Telecom ensures that it provides only one Lifeline benefit per
household31 through the use of its application and certification forms discussed above, its
marketing materials, the NLAD and the use of a one-per-household form.32 Upon receiving an
application for IM Telecom’s Lifeline service, the Company searches its own internal records to
ensure that it does not already provide Lifeline-supported service to someone at the same
residential address and checks the NLAD to determine if a Lifeline subscriber of another ETC
resides at that address.33 If so, and the applicant lives at an address with multiple households, the
Company requires the applicant to complete and submit an independent economic household
form, consistent with section 54.410(g) of the rules, containing the following: (1) an explanation
of the Commission’s one-per-household rule; (2) a check box that an applicant can mark to
indicate that he or she lives at an address occupied by multiple households; (3) a space for the
applicant to certify that he or she shares an address with other adults who do not contribute
income to the applicant’s household and share in the household’s expenses or benefit from the
days of any change, except for de-enrollment, which will be transmitted within one
business day. See section 54.404(b)(8),(10).
31 A “household” is any individual or group of individuals who are living together at the
same address as one economic unit. A household may include related and unrelated
persons. An “economic unit” consists of all adult individuals contributing to and sharing
in the income and expenses of a household. An adult is any person eighteen years or
older. If an adult has no or minimal income, and lives with someone who provides
financial support to him/her, both people shall be considered part of the same household.
Children under the age of eighteen living with their parents or guardians are considered to
be part of the same household as their parents or guardians. See 2012 Lifeline Reform
Order, ¶ 74; section 54.400(h).
32 IM Telecom understands and will comply with the requirement to utilize the USAC
standard one-per-household worksheet by July 1, 2018. See Lifeline Form Public Notice.
33 See 2012 Lifeline Reform Order, ¶ 78.
19
applicant’s income, pursuant to the Commission’s definition; and (4) the penalty for a
consumer’s failure to make the required one-per-household certification (i.e., de-enrollment).34
In addition, IM Telecom Company personnel inform each Lifeline applicant that he or
she may be receiving Lifeline support under another name, and facilitate the applicant’s
understanding of what constitutes “Lifeline-supported services.” Employees will be instructed
ask potential customers whether the customer or any other member of the customer’s household
is currently receiving a Lifeline-supported service.
Marketing Materials. IM Telecom includes the following information regarding its
Lifeline service on all marketing materials describing the service: (1) it is a Lifeline service, (2)
Lifeline is a government assistance program, (3) the service is non-transferable, (4) only eligible
consumers may enroll in the program, (5) the program is limited to one discount per household;
(6) that documentation is necessary for enrollment; and (7) IM Telecom, LLC d/b/a Infiniti
Mobile’s name (the ETC).35 These statements will be included in all print, audio video and web
materials (including social networking media) used to describe or enroll customers in the
Company’s Lifeline service offering, as well as the Company’s application forms and
certification forms.36 This specifically includes the Company’s website
(www.infinitimobile.com) and outdoor signage.37 A sample of the Company’s marketing
materials is included as Exhibit D. In addition, the Company’s application/certification form
will state that consumers who willfully make a false statement to obtain the Lifeline benefit can
be punished by fine or imprisonment or can be barred from the program.
34 Id.
35 See 2012 Lifeline Reform Order, ¶ 275; section 54.405(c).
36 Id.
37 Id.
20
G. Company Reimbursements From the Fund
To ensure that the Company does not seek reimbursement from the Fund without a
subscriber’s consent, IM Telecom certifies, as part of each reimbursement request, that it follows
all of the Commission’s Lifeline rules and, to the extent required, has obtained valid certification
and verification forms from each of the subscribers for whom it is seeking reimbursement.38 The
Company submits all required information and follows all current processes as defined by the
Commission and USAC in a timely manner in order to be reimbursed through USAC’s Lifeline
Claims System (“LCS”). In addition, the Company keeps accurate records as directed by
USAC39 and as required by section 54.417 of the Commission’s rules.
H. Annual Company Certifications
IM Telecom will continue to submit an annual certification to USAC, signed by a
Company officer under penalty of perjury, that the Company: (1) has policies and procedures in
place to ensure that its Lifeline subscribers are eligible to receive Lifeline services;40 (2) is in
compliance with all federal Lifeline certification procedures;41 and (3) is in compliance with the
minimum service levels set forth in section 54.408.42
In addition, the Company will continue to provide the results of its annual
recertifications/verifications on an annual basis to the Commission, USAC, the applicable state
commission and the relevant Tribal governments (for subscribers residing on Tribal lands).43
38 See 2012 Lifeline Reform Order, ¶ 128; section 54.407(d).
39 See section 54.407(e).
40 See 2012 Lifeline Reform Order, ¶ 126; section 54.416(a)(1).
41 See 2012 Lifeline Reform Order, ¶ 127; section 54.416(a)(2).
42 See section 54.416(a)(3).
43 See 2012 Lifeline Reform Order, ¶¶ 132, 148; section 54.416(b).
21
Further, as discussed above, the Company will continue to report annually to the Commission the
number of subscribers de-enrolled for non-usage by month.44
The Company also annually reports to the Commission, USAC, and relevant state
commissions and the relevant authority in a U.S. territory or Tribal government as appropriate,45
the company name, names of the company’s holding company, operating companies and
affiliates, and any branding (such as a “dba” or brand designation) as well as relevant universal
service identifiers for each entity by Study Area Code.46 The Company reports annually
information regarding the terms and conditions of its Lifeline plans for voice telephony service
offered specifically for low-income consumers during the previous year, including the number of
minutes provided and whether there are additional charges to the consumer for service, including
minutes of use and/or toll calls.47 Finally, if the Company is designated as an ETC pursuant to
section 214(e)(6) of the Act by the Commission, it will annually provide detailed information
regarding service outages in the previous year, the number of complaints received and
certification of compliance with applicable minimum service standards, as set forth in section
54.408, service quality standards and consumer protection rules, as well as a certification that the
Company is able to function in emergency situations.48
I. Cooperation with State and Federal Regulators
IM Telecom will cooperate with federal and state regulators to prevent waste, fraud and
abuse. More specifically, the Company will:
44 See 2012 Lifeline Reform Order, ¶ 257; section 54.405(e)(3).
45 See section 54.422(c).
46 See 2012 Lifeline Reform Order, ¶¶ 296, 390; section 54.422(a).
47 See 2012 Lifeline Reform Order, ¶ 390; section 54.422(a)(2).
48 See 2012 Lifeline Reform Order, ¶ 389; section 54.422(b)(1)-(4).
22
•Assist the Commission, USAC, state commissions, and other ETCs in resolving
instances of duplicative enrollment by Lifeline subscribers, including by
providing to USAC and/or any state commission, upon request, the necessary
information to detect and resolve duplicative Lifeline claims;
•Promptly investigate any notification that it receives from the Commission,
USAC, or a state commission to the effect that one of its customers already
receives Lifeline services from another carrier; and
•Immediately de-enroll any subscriber whom the Company has a reasonable basis
to believe49 is receiving Lifeline-supported service from another ETC or is no
longer eligible.
II. Description of Lifeline Service Offerings50
IM Telecom will offer its Lifeline service in the states where it is designated as an ETC51
and throughout the coverage area of its underlying providers Verizon Wireless and T-Mobile.52
Subject to the annual increase in minimum service standard requirements, IM Telecom will offer
the following service plan options:
Product Plans Plan 1 (Non-
Tribal)
Plan 2 (Non-Tribal) Plan 3 (Non-Tribal) Plan 4 (Tribal)
Data None 500 MB at 4G or 3G
speeds
2 GB at 4G or 3G
speeds
2 GB at 4G or 3G
speeds
Voice Minutes 750 1,000 1,000 1,000
Texts Unlimited Unlimited Unlimited Unlimited
Price to Lifeline
Subscribers
$0.00 $15.00/month $25.00/month $1.00/month
Voice and broadband “top ups” will also be available at the following rates:
49 See section 54.405(e)(1).
50 See Compliance Plan Public Notice at 3.
51 The Company currently holds ETC designations in Oklahoma, Georgia, South Carolina,
Vermont, Wisconsin, Nevada and Maryland, and has requests for ETC designation
pending in Pennsylvania, Michigan, Arizona, Kentucky, Washington and the 12 federal
jurisdiction states (Alabama, Connecticut, Delaware, the District of Columbia, Florida,
Maine, New Hampshire, New York, North Carolina, Texas, Tennessee, and Virginia).
52 IM Telecom receives minutes from an intermediary, which purchases minutes from
Verizon Wireless and T-Mobile.
23
Top Ups Price to Lifeline Subscribers
100 Voice Minutes $4.00
500 Voice Minutes $12.00
1000 Voice Minutes $20.00
100 MB at 4G or 3G speeds $4.00
500 MB at 4G or 3G speeds $15.00
1 GB at 4G or 3G speeds $20.00
Additional information regarding the Company’s plans, rates and services can be found on its
website www.infinitimobile.com.
In addition to free voice services, the Company’s Lifeline plan may include a free handset
and includes custom calling features at no charge, including Caller ID, Call Waiting, Call
Forwarding, 3-Way Calling, and Voicemail. All plans include domestic long-distance at no extra
per minute charge. Calls to 911 emergency services are always free, regardless of service
activation or availability of minutes.
III. Demonstration of Financial and Technical Capabilities and Certifications Required
for ETC Designation53
Financial and Technical Capabilities. Section 54.202(a)(4) requires carriers petitioning
for ETC designation to demonstrate financial and technical capability to comply with the
Commission’s Lifeline service requirements.54 The Compliance Plan Public Notice requires that
carriers’ compliance plan include this demonstration. Among the factors the Commission will
consider are: a carrier’s prior offering of service to non-Lifeline subscribers, the length of time
the carrier has been in business, whether the carrier relies exclusively on Lifeline reimbursement
to operate, whether the carrier receives revenues from other sources and whether the carrier has
been the subject of an enforcement action or ETC revocation proceeding in any state.
53 See Compliance Plan Public Notice at 3.
54 See 2012 Lifeline Reform Order, ¶¶ 387-388 (revising Commission rule 54.202(a)(4)).
24
IM Telecom has successfully operated as a provider of wireless Lifeline service since
2012. Financial support for IM Telecom’s continued operations will be enhanced pursuant to an
Agreement for the Purchase and Sale of Membership Interest dated as of February 5, 2018,
subject to regulatory approval, KonaTel Parent will acquire 100% of the membership interest in
IM Telecom. IM Telecom customers will continue to receive their existing services at the same
rates, terms and conditions currently in effect. In addition, as explained below, the transfer of
ownership to KonaTel will ensure that IM Telecom will not rely exclusively on Lifeline
reimbursement for the Company’s operating revenues.
KonaTel, Inc. is an established provider of wireless telecommunications services.
KonaTel has provided local and long distance voice services and broadband services, without
interruption, for more than three years. KonaTel offers its wireless services throughout the
coverage area of its underlying carriers, from which it purchases wireless network services on a
wholesale basis and resells the services to its subscribers. With a subscriber base of more than
30,000 non-Lifeline subscribers, KonaTel produces substantial non-Lifeline net income. The
Commission previously found that KonaTel’s proven business model satisfies the requirements
to participate in the Lifeline program when it granted KonaTel’s request for designation as a
Lifeline Broadband Provider on December 1, 2016.55 Many members of KonaTel’s leadership
team have more than a decade of experience in the telecommunications and broadband
industries. Information about KonaTel’s management team and board members is attached as
Exhibit E.
55 See Telecommunications Carriers Eligible for Universal Service Support, Petitions for
Designation as a Lifeline Broadband Provider, WC Docket Nos. 09-197, 11-42, Order, DA 16-
1325 (WCB rel. Dec. 1, 2016). The Bureau later reversed this order for all designated LBPs on
procedural grounds. See Telecommunications Carriers Eligible for Universal Service Support,
Petitions for Designation as a Lifeline Broadband Provider, WC Docket Nos. 09-197, 11-42,
Order on Reconsideration, DA 17-128 (WCB rel. Feb. 3, 2017).
25
With respect to technical expertise, IM Telecom has demonstrated its capabilities over
more than five years of operations, now providing service pursuant to wireless ETC designations
in seven states. The Company has considerable experience complying with the requirements of
the federal Lifeline program. Upon approval of the change in ownership, KonaTel’s
management team will be responsible for day-to-day oversight of the operations. Their
collective expertise in the telecommunications compliance field and specific in-depth knowledge
of the Lifeline program will guide the Company’s decisions going forward and its adherence to
this revised Compliance Plan. As a result, the transaction will bring together the full strength of
IM Telecom’s and KonaTel’s proven telecommunications capabilities and business expertise.
The resulting synergy will enable IM Telecom to achieve measurable growth at the same time as
it develops improved operating efficiencies, both necessary components for the Company to
thrive.
Finally, the Company has not been subject to enforcement sanctions related to the Low
Income Fund or ETC revocation proceedings in any state.
Service Requirements Applicable to Company’s Support. The Compliance Plan Public
Notice requires carriers to include “certifications required under newly amended section 54.202
of the Commission’s rules.”56 The Company certifies that it will comply with the service
requirements applicable to the support the Company receives.57 The Company provides all of
the services supported by the Lifeline program and makes the services available to all qualified
consumers throughout the states in which it is designated as an ETC. The Company’s services
include voice telephony services that provide voice grade access to the public switched network
or its functional equivalent and broadband Internet access service that is a mass-market retail
56 Compliance Plan Public Notice at 3.
57 47 C.F.R. § 54.202(a)(1).
26
service by wire or radio that provides the capability to transmit data to and receive data from all
or substantially all Internet endpoints, including any capabilities that are incidental to and enable
the operation of the communications service, but excluding dial-up service. Further, the
Company’s voice service offerings provide its customers with a set number of minutes of use for
local service at no charge to the customer. The Company’s Lifeline offerings include packages
in Section II supra.
The Company also provides access to emergency services provided by local government
or public safety officials, including 911 and E911 where available and complies with any
Commission requirements regarding E911-compatible handsets. As discussed above, the
Company complies with the Commission’s forbearance grant conditions relating to the provision
of 911 and E911 services and handsets.
Finally, the Company does not provide toll limitation service (“TLS”). The Company,
like most wireless carriers, does not differentiate domestic long distance toll usage from local
usage and all usage is paid for in advance. Pursuant to the 2012 Lifeline Reform Order,
subscribers to such services are not considered to have voluntarily elected to receive TLS.58
58 See 2012 Lifeline Reform Order, ¶ 230.
27
IV. Conclusion
The Company submits that its revised Compliance Plan fully satisfies the conditions set
forth in the Commission’s 2012 Lifeline Reform Order, the Compliance Plan Public Notice and
the Lifeline rules. Accordingly, the Company respectfully requests that the Commission
expeditiously approve its revised Compliance Plan.
March 8, 2018
EXHIBIT A
IM Telecom, LLC d/b/a Infiniti Mobile
Trevan V. Morrow
100%
0%
Pre-Close Corporate Structure of IM Telecom, LLC d/b/a Infiniti Mobile

KonaTel, Inc.
(a Nevada corporation)
(a wholly owned subsidiary)
KonaTel, Inc.
(a publicly traded Delaware corporation)
100%
0%
M2 Equity Partners LLC D. Sean McEwen
31.2% 34%
Pre-Close Corporate Structure of the KonaTel Companies
Other parties
each holding
<10 % interest
34.8%1
1 Pursuant to a Shareholder Voting Agreement, Mr. McEwen holds an irrevocable proxy to vote the
shares of M2 Equity Partners LLC for a period of two years, vesting him with a controlling 66% of the
voting shares of KonaTel, Inc. during that time

IM Telecom, LLC
d/b/a Infiniti Mobile
(an Oklahoma limited liability company)
(a wholly owned subsidiary)
Post-Close Corporate Structure of
IM Telecom, LLC d/b/a Infiniti Mobile and the KonaTel Companies
KonaTel, Inc.
(a Nevada corporation)
(a wholly owned subsidiary)
KonaTel, Inc.
(a publicly traded Delaware corporation)
100%
0%
M2 Equity Partners LLC D. Sean McEwen
34.8%1 31.2%
Other parties
each holding
<10 % interest
100%
0%
34%
1 Pursuant to a Shareholder Voting Agreement, Mr. McEwen holds an irrevocable proxy to vote the
shares of M2 Equity Partners LLC for a period of two years, vesting him with a controlling 66% of the
voting shares of KonaTel, Inc. during that time

EXHIBIT B
Lifeline Enrollment Application
A complete and signed Lifeline Service Application and Certification (“Certification”) is required to enroll you in IM Telecom
dba Infiniti Mobile’s (“Company”) Lifeline service program in your state. This Certification is only for the purpose of verifying
your eligibility for Lifeline service and will not be used for any other purpose. Service requests will not be processed until this
Form has been received and verified by Company.
One Lifeline service per household disclosures: Lifeline is a government assistance program and willfully making false
statements to obtain a Lifeline benefit can result in fines, imprisonment, de-enrollment or being barred from the program. Lifeline
benefits are limited to a single line of service per household. A household is defined, for the purposes of the Lifeline program, as
any individual or group of individuals who live together at the same address and share income and expenses. A household may
not receive multiple Lifeline discounts. You may apply your Lifeline discount to either one landline or one wireless number, but
you cannot have the discount on both and you cannot receive Lifeline benefits from multiple providers. Note that not all Lifeline
services are currently marketed under the name Lifeline. Lifeline is non-transferable benefit and you may not transfer your
benefit to any other person, including another eligible low-income consumer. Violation of the one-per-household limitation
constitutes a violation of the Federal Communications Commission's rules and will result in your de-enrollment from the
program, and potentially prosecution by the United States Government.
I hereby certify, under penalty of perjury, that I have read and understood the disclosures listed above and
that, to the best of my knowledge, my household is not already receiving a Lifeline service benefit.
Customer eligibility certification:
I hereby certify that I participate in the following program (check one):
Supplemental Nutrition Assistance Program (SNAP)
Federal Public Housing Assistance (FPHA)
Medicaid
Supplemental Security Income (SSI)
Veterans and Survivors Pension Benefit
Income at or below 135% of Federal Poverty Guidelines
Household Member Information:
First Name: _______________________ Middle Name: _______________________ Last Name: ___________________________
DOB: Month: _______ Day: ______ Year: _____ Last Four SSN (or Tribal ID #): ______________
Relationship to Applicant: _____________________
Personal Information:
First Name:_______________________ Middle Name: _______________________ Last Name: ___________________________
DOB: Month: _______ Day: ______ Year: _____ Last Four SSN (or Tribal ID #): ______________
If Qualifying for Lifeline by Income, number of Individuals in Household: ______
Residential Address (May not be a PO Box) Contact Number (if available): ____________________________
Street address: _________________________________________ Apt: ______
City: ________________________ State: ______ Zip Code: _____________
This address is (choose one): □ Permanent □ Temporary
Billing Address (if different from Above) (P.O. Box is permitted)
Street address: _________________________________________ Apt: ______
City: ________________________ State: ______ Zip Code: _____________
Initial
Multiple households sharing an address:
I hereby certify that I reside at an address occupied by multiple households, including adults who do not contribute
income to my household and/or share in my household’s expenses, and I will complete a separate additional form.
Activation and usage requirement disclosures: This service is a prepaid service and you must personally activate it by dialing
611 from your handset. To keep your account active, you must use your Lifeline service at least once during any 30-day period by
completing an outbound call, sending a text message, using your mobile broadband connection, purchasing additional minutes or
data from Company, answering an in-bound call from someone other than the Company, or by responding to a direct contact from
the Company confirming that you want to continue receiving Lifeline service from Company. If your service goes unused for 30
days, you will no longer be eligible for Lifeline benefits and your service will be suspended (allowing only 911 calls and calls to the
Company’s customer care center) subject to a 15-day cure period during which you may use the service (as described above) or contact
the Company to confirm that you want to continue receiving Lifeline service from Company.
I hereby certify, under penalty of perjury, that I have read and understood the disclosures listed above regarding
activation and usage requirements.
Authorizations:
I hereby authorize the Company to access any records required to verify my statements on this form and to confirm my eligibility
for the Lifeline program. I also authorize the Company to release any records required for the administration of the Lifeline
program (name, telephone number, address, date of birth, last 4 digits of SSN or Tribal ID Number, amount of support being
sought, means of qualification for support, and dates of service initiation and termination), including to the Universal Service
Administrative Company, to be used in a Lifeline database and to ensure the proper administration of the Lifeline Program.
Failure to consent will result in denial of service.
I understand I have the right to enroll in the Lifeline service using non-electronic methods. I further understand that I have the
right to withdraw this consent at any time prior to activation of my service. The Company has advised me that I may request a
paper copy of my contract and associated fees by calling 611 from my wireless handset.
I hereby authorize the Company to send text messages to my Company provided wireless number about my Lifeline benefit. Text
messages sent by the Company will not decrement my available wireless minutes or texts. Standard voice, data and text rates will
apply to all messages to and from anyone other than the Company.
I acknowledge that I am providing the information I have included in this application to CGM, LLC and further authorize CGM,
LLC to receive and use my information for enrollment verification and waste, fraud and abuse mitigation purposes. Additionally,
I authorize CGM to receive and use my historic Lifeline enrollment information for enrollment verification and waste, fraud and
abuse mitigation purposes.
Additional certifications: I hereby certify, under penalty of perjury, that (initial for each statement to which you certify):
I meet the income-based or program-based eligibility criteria for receiving Lifeline service and have provided documentation of
eligibility if required.
I hereby certify that I participate in the following program [Lifeline program name ex: SoonerCare (Medicaid)].
I will notify the Company within 30 days if for any reason I no longer satisfy the criteria for receiving Lifeline including, as
relevant, if I no longer meet the income-based or program-based eligibility criteria, I begin receiving more than one Lifeline
benefit, or another member of my household is receiving a Lifeline benefit. I understand that I may be subject to penalties if I fail
to follow this requirement.
I am not listed as a dependent on another person's tax return (unless over the age of 60).
The Residential Address listed above is my primary residence, not a second home or business.
If I move to a new address, I will provide that new address to the Company within 30 days.
I acknowledge that providing false or fraudulent information to receive Lifeline benefits is punishable by law.
I acknowledge that I may be required to re-certify my continued eligibility for Lifeline at any time, and my failure to re-certify as
to my continued eligibility will result in de-enrollment and the termination of my Lifeline benefits.
The information contained in this certification form is true and correct to the best of my knowledge.
I reside on Federally-recognized Tribal lands or Hawaiian Home Lands (only applicable to enrollments in Hawaii).
I certify that the individual named on the documentation used to demonstrate program participation or income eligibility is part of
my household.
Initial
Initial
Initial
Initial
Initial
Initial
I certify that the individual named on the documentation used to demonstrate program participation or income eligibility is not
already receiving a Lifeline subsidy.
I certify that my household will receive only one Lifeline service and, to the best of my knowledge, no one in my household,
including myself, is receiving a Lifeline-supported service from any other landline or wireless service provider.
If Infiniti Mobile finds that I am already receiving a Lifeline discount benefit from another provider, I agree that I want to transfer
my Lifeline discount benefit from that Lifeline provider to Infiniti Mobile. I understand that once the transfer is complete, I will
lose my Lifeline Program benefit with any other Lifeline provider from which I am currently receiving a Lifeline discount. Infiniti
Mobile has explained to me and I understand that I may not have multiple Lifeline Program benefits with the same or different
providers.
If I am subject to a benefit port freeze with another Lifeline provider and I am transferring my benefit to Infiniti Mobile pursuant
to an exception to the benefit port freeze, I understand that I am not required to provide proof of eligibility for Lifeline until the
end of my port freeze, but I consent to providing such proof of eligibility to Infiniti Mobile at this time.
By my signature immediately below, I hereby certify, under penalty of perjury, that the information included in this
certification form is true and correct to the best of my knowledge.
Applicant’s Signature: _______________________________________________________ Date: ___________________
For Agent Use Only (check only 1 eligibility category and only 1 box under that category):
Documents Acceptable Proof for Eligibility:
The prior year’s state, federal, or Tribal tax return,
Current income statement from an employer or paycheck stub,
A Social Security statement of benefits,
A Veterans Administration statement of benefits,
A retirement/pension statement of benefits,
An Unemployment/Workmen's Compensation statement of benefits,
Federal or Tribal notice letter of participation in General Assistance, or
A divorce decree, child support award, or other official document containing income
information.
If the documentation of income does not cover a full year, the applicant must present the
same type of documentation covering 3 consecutive months within the previous 12
months.
List A - Choose 1
Supplemental Nutrition Assistance Program (SNAP)
Medicaid
Section 8 Federal Public Housing Assistance (FPHA)
Supplemental Security Income (SSI)
Veterans and Survivors Pension Benefit
Documents Acceptable Proof for Program-Eligibility: List A Cont.
List B - Choose 1
Program Participation card / document
Prior year’s statement of benefits
Notice letter of participation
Other official qualifying document: ____________________________
Representative Name Representative Signature
EXHIBIT C
Lifeline Service Application Income Eligibility Worksheet
Individuals in all states are able to enroll in the Lifeline program by demonstrating that their
household’s annual income is at or below 135% of the Federal Poverty Guidelines. This table
should be used to determine whether a Lifeline applicant is eligible for Lifeline service based on
the number of individuals in the applicant’s household and the applicant’s household annual
income:
HOUSEHOLD SIZE INCOME LEVEL
1 $16,389
2 $22,221
3 $28,053
4 $33,885
5 $39,717
6 $45,549
7 $51,381
8 $57,213
For each additional
person
Add $5,832
Applicants must list the number of individuals in the applicant’s household on the Lifeline
application form. Applicants seeking to qualify for Lifeline service based on their household
income must present one of the following documents in order to prove eligibility:
•the prior year’s state, federal, or Tribal tax return
•current income statement from an employer or paycheck stub
•a Social Security statement of benefits
•a Veterans Administration statement of benefits
•a retirement/pension statement of benefits
•an Unemployment/Workmen's Compensation statement of benefits
•Federal or Tribal notice letter of participation in General Assistance
•a divorce decree, child support award, or other official document containing income
information for at least three months time
This is a Lifeline service provided by IM Telecom, LLC dba Infiniti Mobile. Lifeline is a
government assistance program. Only one Lifeline service is available per household. Households
are not permitted to receive multiple Lifeline benefits whether they are from one or multiple
companies, wireless or wireline. Proof of eligibility is required for enrollment and only eligible
customers may enroll in Lifeline service. Consumers who willingly make false statements to obtain
the benefit can be punished by fine or imprisonment or can be barred from the program. Lifeline is
a non-transferable benefit. Lifeline customers may not transfer their benefits to any other person.
EXHIBIT D
* Included Plan Features
Nationwide Calling  750 Minutes 1000 Minutes 1000 Minutes 1000 Minutes
Voice Mail Yes Yes Yes Yes
Free 911 Yes Yes Yes Yes
Nationwide Texting Unlimited Unlimited Unlimited Unlimited
Picture Messaging Unlimited Unlimited Unlimited Unlimited
Nationwide Roaming Yes Yes Yes Yes
High Speed Data X No 500 MB 2 GB 2 GB
Smartphone Included X No Yes Yes Yes
* Plans subject to change as mandated by the FCC.
** Tribal Plan requires additional eligibility. See website for details.
Infiniti Mobile is a Lifeline supported service. Lifeline is a government assistance program, and only
eligible subscribers may enroll. Customers who willfully make false statements to obtain the benefit can
be punished by fine or imprisonment or can be barred from the program. Lifeline is available for only one line
per household. A household is defined as any individual or group of individuals who live together at the same
address and share income and expenses. A household is not permitted to receive Lifeline benefits from multiple
providers. Violation of the one-per-household rule constitutes a violation of FCC rules, and will result in the Customer’s de-
enrollment from Lifeline. Lifeline is a non-transferable benefit, and a Customer may not transfer his or her benefit to another
person. IM Telecom d/b/a Infiniti Mobile as the eligible telecommunications carrier is not available in all
states/areas. For full details, go to www.infinitimobile.com.
LifeLink is a federal Lifeline Assistance program supported by the federal Universal Service Fund.
Who Is Eligible? Enrollment is available to individuals who are not already enrolled in Lifeline or wish to transfer service and
meet the federal or state-specific eligibility requirements. You may qualify if you are on certain federal assistance programs,
like Medicaid or SNAP (Supplemental Nutrition Assistance Program), or based on income.
How to Apply? You can start the LifeLink enrollment process by calling 918.960.0023, visiting our website at
www.infinitimobile.com, or by visiting one of our many outreach locations. Proof of participation in a qualifying program or
income and a valid photo ID will be needed to start the process. NO CREDIT CHECK will be performed.
SIGN UP TODAY!
LifeLink
EXHIBIT E
KonaTel, Inc. Management and Board Member Biographies
Chuck Schneider, CEO for KonaTel, has over 30 years of telecommunication experience at a
Fortune 500 company, small/startup companies and other telecom companies in between. His
experience includes executive management, finance, sales, network operations, engineering, and
regulatory affairs. Mr. Schneider was the President & CEO for TAG Mobile, a mid-sized MVNO
and wireless Lifeline carrier in over 20 states. Prior to TAG Mobile, he was the President & CEO
for dPi Teleconnect a nationwide Competitive Local Exchange Carrier (CLEC) and wireline
lifeline carrier operating in over 30 states.
Mr. Schneider served as Vice President, Business Operations at CMC Telecom, a regional CLEC.
His responsibilities at CMC Telecom included overseeing the following back office functions:
network operations, engineering, regulatory affairs, billing, IT, provisioning, customer care, and
finance. His major accomplishment at CMC was taking the Company in a new direction by
transforming the telecom provider from being a reseller to a facility-based carrier by installing a
state-of-the-art Alcatel-Lucent and BroadSoft VoIP soft switch platform included lighting up 10
colocation facilities. Prior to joining CMC Telecom, Mr. Schneider was the Director, Business
Development at BullsEye Telecom, a nationwide CLEC where he orchestrated the launch of
voice services in 42 states. His duties at BullsEye included regulatory affairs, carrier access
billing, financial assurance, network vendor invoice auditing, network cost & optimization,
vendor relations, and program management.
Mr. Schneider began his career at Allnet/Frontier Communications, a nationwide long distance
phone company, where he held positions in customer service, network provisioning, network
planning and carrier relations.
Mr. Schneider holds a Bachelor of Business Administration degree from The University of
Michigan.
Nicholas Metherd, Director of Operations for KonaTel, has over 15 years of operational
management experience at a Fortune 100 telecom company, a publicly traded software company
and other smaller telecom companies along the way. His experience includes PMO leadership,
customer service management, information technology, business optimization, data analysis, and
leadership development. He is responsible for executing the operational and support initiatives
for the various product offerings of KonaTel. Mr. Metherd is currently working on a Bachelor of
Computer Science degree from the University of Texas.
Dale Bennett, Director of Sales for KonaTel, has been achieving sales and profitability goals for
Fortune 500 Companies, and smaller companies alike for nearly two decades. Starting his career
as a Retail Master Agent for T-Mobile, Verizon and AT&T in the post-paid space, he quickly
developed executive level relationships with sales partners that were profitable, and long-lasting.
Dale has skillfully cultivated and leveraged his business relationships through a genuine desire to
mentor and coach people from all walks of life. Prior to joining KonaTel in December 2016, Dale
built a SafeLink master agent from 500 activations a month to over 15,000 activations a month
within 12 months. Prior to that, Dale worked as a Sales Director for TAG Mobile. Building
those sales from 1,000 a month to over 40,000 activations per month. Dale has a Bachelor of
Arts degree in Management, Music Theory and Percussion from Musicians Institute.
D. Sean McEwen, Chairman of the KonaTel Board. Mr. McEwen founded KonaTel in 2014
when the company acquired the assets of Coast to Coast Cellular. Mr. McEwen began his career
in 1983, when he co-founded TriTech Software Systems and served as its first chief executive for
17 years (1983 to 2000). TriTech is a mission critical software developer that pioneered modern-
day 9-1-1 emergency dispatching systems used throughout the world. In 1998, while serving as
TriTech’s CEO, TriTech was named to the Inc. 500 as the 344th fastest growing private company
in the U.S. Today, TriTech is the largest public safety software company in the world currently
owned by Insight Venture Partners.
Terry Addington, KonaTel Board Member. Mr. Addington is 65 years of age and was the
Chairman and CEO of SI Wireless, SI Spectrum and Twigby from late 2009 until his recent
retirement on January 1, 2018. Mr. Addington has had a distinguished 30 year career in the
Wireless Industry, having entered the industry in 1984. In 1990, Mr. Addington was involved in
the founding of the entity that would become First Cellular of Southern Illinois. While at First
Cellular, Mr. Addington succeeded in making the company a leader not only in the rural carrier
community, but in the broader wireless industry as well. He was a 12-year Director of both the
Cellular Telecommunications and Internet Association (CTIA) and the Rural Cellular Association
(“RCA,” now “CCA”). In 2004 – 2005, he served as Chairman of the Board of CTIA, and in
2001 – 2002, he served as Chairman of the Board of RCA.
Mr. Addington is the recipient of numerous honors and distinctions for his work in federal and
state legislative, regulatory and policy matters, including the prestigious Wireless Industry
Presidents Award, presented by CTIA in 1995, as well as the GTE Mobilnet President’s Award.
He has served on several early stage company boards of directors and was a past Consultant to
Vantage Marketplace, LLC, a subsidiary of Goldman Sachs. His civic involvement activities
include several years on the Board of Directors of the Illinois Telecommunications Association
(ITA) and the Rend Lake College foundation and six (6) years as a Commissioner of the Mount
Vernon, Illinois Economic Development Commission.
Mr. Addington was born and raised in Seattle, Washington, and earned a degree in Economics
from Central Washington State University, Ellensburg, Washington.
Robert Beaty, KonaTel Board Member. Mr. Beaty is 49 years of age and is currently the
President of AGS Construction Inc., a premier reconstruction company in the Denver
Metropolitan area. Previously, he was the Founder and CEO of Impact Telecom, a leader in the
telecommunications market, which focused on delivering flexible and effective solutions to
carriers, businesses and homes. Impact Telecom is comprised of a family of brands all dedicated
to innovation, affordability and execution.
Mr. Beaty brings to KonaTel 23 years of experience in telecommunications and managing
wholesale and commercial customer bases. Prior to starting Impact Telecom in 2005, he served as
the Senior Vice President of Sales for ICG Communications. He helped guide ICG through
bankruptcy, and was a valued member of the senior executive team tasked with growing and
managing the customer base.
He earned a B.A. in Psychology from the University of Kansas and his M.B.A. in Business
Administration from Webster University.
Dennis E. Miller, KonaTel Board Member. Mr. Miller is 58 years of age and is currently serving
on the Board of Directors of New Ulm Telecom, Inc., a diversified communication company
headquartered in New Ulm, Minnesota (“New Ulm Telecom”). New Ulm Telecom is a publicly-
held reporting company under the Exchange Act whose shares are traded on the OTC Markets
Group OTCQB under the trading symbol “NULM.” Mr. Miller has been an Independent Director
of New Ulm Technology since 2009. From 1995 to 2007, he has also served as the President and
CEO of Midwest Wireless Holdings in Mankato, Minnesota, where he was responsible for
strategic development, including consolidating partnerships; identifying, financing, acquiring and
integrating new markets; integrating multiple network technologies; and innovating product
development and deployment. Mr. Miller led Midwest Wireless from a start-up company,
culminating in successfully completing its sale to Alltel Wireless for $1.075 billion. Mr. Miller
also served as Vice President - Minnesota Operations, for Pacific Telecom Cellular, Appleton,
Wisconsin, from 1990 to 1995, where he was responsible for all operational aspects of five (5)
Rural Service Area partnerships that combined to form Minnesota Wireless. He also has prior
business experience in sales, including leading sales teams and developing sales and distribution
programs and processes.
Mr. Miller brings to the Board his experience on numerous other boards and his wireless
telecommunications experience, along with his experience in regulatory and legislative affairs, at
both the state and federal level, and his participation on business and industry boards.

EXHIBIT 3
Coverage Areas
T-Mobile Coverage

AT&T Coverage

Verizon Coverage

EXHIBIT 4
Sample Advertisement
CALL TODAY!
888-801-0012
www.Infinitimobile.com
Lifeline Mobile Phone Service in Wisconsin
FREE Smartphone
•3000 Talk Minutes
•Unlimited Text
•4.5G of Data
ALL FOR AS LOW AS $20 PER MONTH!
Infiniti Mobile is an approved Lifeline Mobile Phone Service Provider
The Lifeline Plan is a benefit provided by the US Government that offers discounted wireless phone service. This benefit is available
to eligible households that participate in select government programs. Requirements and service offers vary by state so get started
now to see if you qualify for FREE Cellphone and Discounted Monthly Services!
Each Lifeline benefit is limited to 1 per household and is nontransferable. You can take your benefit to any provider at any time.
IF YOU RECIEVE ONE OF THE FOLLOWING
BENEFITS, YOU MAY QUALIFY FOR LIFELINE
SERVICES
•Supplemental Nutrition Assistance Program (SNAP)
•Section 8 Federal Public Housing Assistance
(FPHA)
•Medicaid
•Veterans or Survivors Pension
AND/OR Income at or below 135% of Federal Poverty
Guidelines

EXHIBIT 5
Financial Statements

UNITED STATES
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from
Commission File No. 001-10171
KonaTel, Inc.
(Name of Small Business Issuer in its Charter)
Delaware 80-0973608
(State or other Jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.)
500 N. Central Expressway, Ste. 202
Plano, Texas 75074
(Address of Principal Executive Offices)
214-323-8410
(Registrant’s Telephone Number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, par value $0.001
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes 
No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes 
No
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the Registrant was required to submit such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer 
Non-accelerated filer (Do not check if a smaller reporting company)
Smaller reporting company Emerging Growth company 
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Our website is KonaTel.com.
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by
the registered public accounting firm that prepared or issued its audit report. 
If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial statements
of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
On June 30, 2022, the last business day of the Registrant’s most recently completed second quarter, the aggregate market value of
the Registrant’s common stock held by non-affiliates of the Registrant was $29,362,185 based upon 20,390,406 shares of the
Registrant’s common stock being currently owned by such persons, and based upon the closing price of the common stock of the
Registrant on the OTC Markets Group, LLC (the “OTC Markets”) “OTC Pink Tier” (“KTEL”) of $1.44 per share on June 30,
2022.
As of December 31, 2022, the Registrant had 42,240,406 shares of its common stock, $0.001 par value, issued and outstanding.
REFERENCES
In this Annual Report, references to “KonaTel, Inc.,” “KonaTel,” the “Company,” “we,” “our,” “us” and words of similar import,
refer to KonaTel, Inc., a Delaware corporation, formerly named Dala Petroleum Corp., which is the Registrant, and our wholly
owned subsidiaries, KonaTel, Inc., a Nevada corporation (“KonaTel Nevada”), Apeiron Systems, Inc., a Nevada corporation
(“Apeiron Systems” or “Apeiron”), IM Telecom, LLC, an Oklahoma limited liability company doing business as “Infiniti Mobile”
(sometimes called “IM Telecom” or “Infiniti Mobile”).
FORWARD LOOKING STATEMENTS
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In
some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the
negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.
Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of
the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information
available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause
our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by
the forward-looking statements in this Annual Report. We cannot assure you that the forward-looking statements in this Annual
Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-
looking statements. You should carefully read this Annual Report completely, and it should be read and considered with all other
reports filed by us with the United States Securities and Exchange Commission (the “SEC”). Other than as required by law, we
undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
CAUTIONARY STATEMENT
Summaries of all agreements or other documents referenced herein and attached hereto by Hyperlink in Part IV, Item 15, or
otherwise, do not purport to be all inclusive of the terms, conditions and other provisions of such agreements or documents, and
accordingly, all such summaries are modified in their entirety to the referenced and Hyperlinked respective agreement or document
in Part IV, Item 15 hereof.
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TABLE OF CONTENTS
PART I.
Item 1. Business 4
Item 1.A. Risk Factors 10
Item 1.B. Unresolved Staff Comments 21
Item 2. Properties 21
Item 3. Legal Proceedings 21
Item 4. Mine Safety Disclosures 21
PART II.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities 21
Item 6. [Reserved]23
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 27
Item 8. Financial Statements and Supplementary Data 28
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 29
Item 9A. Controls and Procedures 29
Item 9B. Other Information 30
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspection 30
PART III.
Item 10. Directors, Executive Officers and Corporate Governance 31
Item 11. Executive Compensation 36
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 41
Item 13. Certain Relationships and Related Transactions, and Director Independence 42
Item 14. Principal Accounting Fees and Services 43
PART IV.
Item 15. Exhibit and Financial Statement Schedules 44
Item 16. Form 10-K Summary 45
Signatures 46
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PART I
ITEM 1. BUSINESS
Corporate History and Business Development
We were incorporated as “Light Tech, Inc.” under the laws of the State of Nevada on May 24, 1984. A subsidiary in the name
“Westcott Products Corporation” was organized by us under the laws of the State of Delaware on June 24, 1986, for the purpose of
changing our name and domicile to the State of Delaware. On June 27, 1986, we merged with the Delaware subsidiary, with the
survivor being Westcott Products Corporation, a Delaware corporation. At that time, all of our prior operations were conducted
through Lee Building Products and T. A. Kilgore & Company, which owned and operated a home center in League City, Texas,
about 30 miles southeast of downtown Houston, Texas. During 1990, we ceased these operations, and the secured lenders took
possession of our assets.
We changed our name to “Dala Petroleum Corp.” on August 29, 2014; and then to “KonaTel, Inc.” on February 5, 2018, following
the closing of two respective mergers that are discussed below.
On March 11, 2000, our Board of Directors began the process of re-entering the development stage, and on June 2, 2014, we
completed a merger with Dala Petroleum Corp., a Nevada corporation (respectively, “Dala Nevada” and the “Dala Merger”). Dala
Nevada was wholly owned by Chisholm Partners II, LLC, a Louisiana limited liability company (“Chisholm II”). We operated as
an early-stage oil exploration company focused on our leased acreage acquired by Dala Nevada until 2016, when Chisholm II
returned a total of 8,567,800 shares of the 10,000,000 shares of our common stock exchanged under the Dala Merger to us for
cancellation in exchange for our assignment of approximately 55,000 acres, more or less, of our leased acreage or approximately
68.75% of our total holdings, to Chisholm II. All of our remaining oil and gas leasehold interests, comprising leases covering
approximately 7,489 and 403 acres, more or less, expired in 2017 and 2018, respectively.
On July 20, 2017, pursuant to a Common Stock Purchase Agreement dated July 19, 2017, M2 Equity Partners, LLC, a privately
held Minnesota limited liability company (“M2”), acquired 12,100,000 shares of our common stock in consideration of the sum of
$367,500, which resulted in a change in control of our Company.
On November 13, 2017, we filed an Amended and Restated Certificate of Incorporation with the State of Delaware, which removed
all of the designations of our preferred stock from our Certificate of Incorporation, while reserving our 50,000,000 authorized and
unissued one cent ($0.01) par value shares of preferred stock for future issuance as the Board of Directors may designate and
approve. See Part IV, Item 15, Exhibit 3(i).
Effective December 18, 2017, we completed an Agreement and Plan of Merger (the “KonaTel Merger Agreement”) with KonaTel
Nevada, under which KonaTel Nevada became our wholly owned subsidiary on the closing of the merger (the “KonaTel Nevada
Merger”), and we succeeded to the business operations of KonaTel Nevada.
Effective February 7, 2018 (dated as of February 5, 2018), we entered into an Agreement for the Purchase and Sale of Membership
Interest (the “PSMI”), with the transaction documents being deposited in escrow on February 7, 2018, respecting the acquisition of
100% of the membership interest in IM Telecom, doing business as “Infiniti Mobile,” from its sole owner, Trevan Morrow (“Mr.
Morrow”). The principal asset of IM Telecom, at that time, was a “Lifeline Program” license of the Federal Communications
Commission (“FCC”) (an FCC approved wireless Compliance Plan).
On August 9, 2018, we entered into an Asset Purchase Agreement (the “Telecon Wireless Agreement”) with Telecon Wireless
Resources, Inc., a New York corporation (the “Telecon Wireless”), whereby we sold various assets, including furniture, fixtures,
equipment, account receivable and a customer list, among other assets and liabilities.
Effective December 31, 2018, we completed an Agreement and Plan of Merger with Apeiron Systems (the “Apeiron Systems
Merger Agreement”), under which Apeiron Systems became our wholly owned subsidiary on the closing of the merger (the
“Apeiron Systems Merger”). We issued 7,000,000 shares of our common stock in exchange for all of the outstanding shares of
common stock of Apeiron Systems, its two (2) shareholders, Joshua Ploude (6,300,000 shares) and Vyacheslav Yanson (700,000
shares), pro rata, in accordance with their respective equity interests in Apeiron Systems. Closing conditions to the Apeiron
Systems Merger Agreement included, among other conditions, that the Apeiron Systems shareholders would have a $1.00 per share
“Guaranteed Value” on the KonaTel shares they received under the Apeiron Systems Merger, if the KonaTel shares exchanged did
not trade at or above $1.00 for ten (10) consecutive days during the period commencing on
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December 31, 2020, and ending December 31, 2021, on the applicable trading market for our common stock during that period, and
subject to such shares being continuously owned of record by the Apeiron Systems shareholders, all as outlined in Section 5.10 of
the Apeiron Systems Merger Agreement. This condition was fully satisfied effective June 16, 2021.
On April 14, 2020, our operating subsidiaries made loan applications to participate in the Small Business Administration’s (the
“SBA”) Paycheck Protection Program (the “PPP”) created under the “Cares Act” as a result of the COVID-19 pandemic. On April
15, 2020, the loan applications of Apeiron Systems, IM Telecom and KonaTel Nevada were approved and loan proceeds in the
amounts of $101,800, $20,900 and $186,300, respectively, were received. We followed all prescribed loan forgiveness guidelines
provided by our local bank and the SBA by using these loan proceeds to fund employee payroll through the 60-day period ending
on June 15, 2020. All PPP loans were forgiven by the SBA in 2021.
On December 14, 2020, the shares of our common stock were approved for up listing to the OTC Markets OTCQB® Venture
Market (“OTCQB Tier”). OTCQB is a venture market operated by the OTC Markets. To be eligible for quotation on the OTCQB,
companies must be current in their reporting obligations under Section 13 or 15(d) of the Exchange Act and undergo an annual
verification and management certification process. Companies must also meet a minimum bid price test and other financial
conditions. The OTC Markets is recognized by the SEC as a “Qualified Interdealer Quotation System” (“IDQS”) under SEC Rule
15c2-11(e)(6); and the OTCQB is an established public market that provides current public information to investors that need to
analyze, value and trade securities.
On August 25, 2021, the Company filed a registration statement with the SEC on Form S-8 to register 5,901,884 shares of its
common stock reserved for grant underlying the Company’s 2018 Incentive Stock Option Plan (year designation reflects a change
to a calendar year end in 2017).
On June 14, 2022, we and our wholly owned subsidiaries, Apeiron Systems and IM Telecom, entered into a Note Purchase
Agreement (the “NPA”) with CCUR Holdings, Inc., a Delaware corporation (“CCUR”), as “Collateral Agent”; and CCUR andSymbolic Logic, Inc., a Delaware corporation (“Symbolic”), as “Purchasers,” along with a related Guarantee and Security
Agreement (the “GSA”), whereby the Company and its subsidiary companies pledged their assets (including the Company’s equity
ownership of its subsidiaries) to secure $3,150,000 (the “Principal Amount”) in debt financing payable in one (1) year (cannot berepaid prior to nine (9) months), together with interest at the rate of 15% per annum (the “Interest Rate”), with two (2) successive
six (6) month optional extensions (the “Loan”). For additional information on the NPA and related transactions, see our 8-K
Current Report dated June 14, 2022, and filed with the SEC on June 21, 2022, which is available by Hyperlink in Part IV, Item 15
hereof.
On July 7, 2022, the Company filed a registration statement with the SEC on Form S-8 to register an additional 2,000,000 shares of
its common stock reserved for grant underlying the Company’s 2018 Incentive Stock Option Plan.
On August 22, 2022, the Company filed a registration statement with the SEC on Form S-8 to decrease its shares registered on
Form S-8 by 1,500,000 shares; and on March 20, 2023, filed a similar amendment on Form S-8 to decrease the shares registered by
253,764 shares, leaving 6,148,120 remaining registered shares with 1,648,120 shares having been issued and 4,500,000 reserved
shares for future issuance under granted or to be granted incentive stock options.
BUSINESS
KonaTel Nevada was organized under the laws of the State of Nevada on October 14, 2014, by its founder and then sole
shareholder, D. Sean McEwen, our current Chairman and CEO, to conduct the business of a full-service cellular provider that
delivered cellular products and services to individual and business customers in various retail and wholesale markets. Through its
sales network, it provided these services nationwide. In furtherance of its proposed business, on November 1, 2014, it acquired
most of the assets of Coast to Coast Cellular, Inc. (“Coast to Coast”), including inventories, property, plant and equipment and its
customer list, all valued at approximately $950,000 net of liabilities in the approximate amount of $415,000; and on November 1,
2016, it acquired the assets of CS Agency LLC (“CS Agency”), consisting of contract rights related to the cellular industry, in
consideration of assuming liabilities of CS Agency in the approximate amount of $300,000. With the completion of the KonaTel
Nevada Merger, we succeeded to the current and intended business operations of KonaTel Nevada.
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On December 31, 2018, we acquired Apeiron Systems (www.apeiron.io). Apeiron was organized in 2013 and is an international
hosted services Communications Platform as a Service (“CPaaS”) provider that designed, built, owns and operates its national
private core network, supporting a suite of business communications services, all accessible via proprietary Applications
Programming Interfaces (“APIs”). As an FCC licensed Internet Telephony Service Provider (“ITSP”), Apeiron also holds an FCC
numbering authority license. Some of Apeiron’s hosted services include Voice over IP (“VoIP”), cellular and Over-The-Top
(“OTT”) telephony, SMS/MMS messaging and broadcast services, numbering features, including Cloud IVRs, Voicemail, Fax, Call
Recording and other services through local, toll-free and international phone numbers. Supported by its national redundant
network, Apeiron also provides public and private IP network services, including Multiprotocol Label Switching (“MPLS”),
Dedicated Internet and LTE Wireless WAN solutions. Apeiron’s cloud services include Information Data Dips, Software-Defined
Wide Area Networking (“SD-WAN”) and Internet of Things (“IoT”) data and device management. Apeiron primarily distributes its
services nationally through its website, its sales staff, independent sales agents and Independent Sales Organizations (“ISOs”).
Apeiron Systems is headquartered in Johnstown, Pennsylvania, where it has customer service and software engineering resources
staffed. Additional development resources are staffed out of Los Angeles, CA, as well as in Europe and Asia.
On February 5, 2018, we entered into a purchase agreement to acquire IM Telecom (www.infinitimobile.com). On October 23,
2018, the FCC approved our acquisition of IM Telecom, and on January 31, 2019, we completed the purchase of IM Telecom. IM
Telecom operates as a wholly owned subsidiary of KonaTel. It is an FCC licensed Eligible Telecommunications Carrier (“ETC”)
and is one of twenty-two (22) original FCC licensed wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan
since 2012, of which approximately twelve (12) license holders remain active today. The FCC has not approved (granted) a new
wireless reseller Lifeline Compliance Plan since 2012. As a licensed ETC, IM Telecom is currently authorized to distribute Lifeline
subsidized mobile voice/data service in ten (10) states, which are Vermont, South Carolina, Georgia, Maryland, Kentucky,
Wisconsin, Oklahoma, California, New York and Nevada. In addition to Lifeline, IM Telecom is also an FCC licensed Affordable
Connectivity Program (“ACP”) provider, authorized to distribute ACP subsidized high-speed mobile data service in the fifty (50)
states plus Washington D.C. and Puerto Rico. Lifeline is an FCC program that provides subsidized, fixed or mobile
telecommunications services to low-income Americans. ACP is an FCC program that provides subsidized high-speed wireless data
services to low-income Americans. IM Telecom distributes Lifeline and ACP services under its Infiniti Mobile brand name through
its website, sales staff, retail locations and ISOs. IM Telecom also offers non-Lifeline and non-ACP services throughout the United
States.IM Telecom has a US-based customer support center located in Atmore, Alabama.
IM Telecom is headquartered in Plano, Texas, and has a warehouse operation in Tulsa, Oklahoma, and a customer service center in
Atmore, Alabama.
We are headquartered in Plano, Texas. Apeiron Systems has eight (8) full-time employees; IM Telecom has (23) full-time
employees and two (2) part-time employees; and we have four (4) full-time employees.
Principal Products or Services and their Markets
Our principal products and services, across our two wholly owned subsidiaries, Apeiron Systems and IM Telecom, include our
CPaaS suite of services (SIP/VoIP, SMS/MMS), wholesale and retail mobile voice and mobile data IoT services, wholesale voice
termination services, and our ETC and ACP subsidized services for low-income Americans. Except for our ETC Lifeline services
distributed in up to ten (10) states and our ACP services distributed in the fifty (50) states, as well as Washington D.C. and Puerto
Rico, our Apeiron Systems’ products and services are available worldwide and subject to U.S., international and local/national
regulations.
We generate revenue from two (2) primary sources, Hosted Services and Mobile Services:
Our Hosted Services include a suite of hosted CPaaS services within Apeiron Systems’ cloud platform, including Cloud
IVRs, Voicemail, Fax, Call Recording and other services provided with local, toll-free and international phone numbers.
Apeiron also delivers public and private IP network services from its national redundant network backbone, including
MPLS, Dedicated Internet and LTE Wireless WAN solutions. Additionally, Apeiron’s Cloud Services include Information
Data Dips, SD-WAN and IoT data and device management, of which IoT provides device connectivity via wireless
4G/5G. These Hosted Services are marketed nationally and internationally through the Apeiron website, its sales staff,
independent sales agents and ISOs.
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Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through
our subsidiaries Apeiron Systems and IM Telecom. Mobile voice/text/data and IoT mobile data services are supported by a
blend of reseller agreements with select national wireless carriers and national wireless wholesalers. A wireless
communications service reseller typically does not own the wireless network infrastructure over which services are
provided to its customers. Mobile voice/text/data and mobile data solutions are generally sold as traditional post-paid
service plans that may include voice/text/data or wireless data only plans. Sometimes equipment is provided, which can
include, but is not limited to, phones, tablets, modems, routers and accessories. Also included in our Mobile Services
segment is the distribution of government subsidized mobile voice service and mobile data service by IM Telecom under
its Infiniti Mobile brand and FCC license to low-income American households that qualify for the FCC’s Lifeline mobile
voice service program and/or the FCC’s ACP mobile data program. Even though government programs like Lifeline have
existed since 1985, these programs, along with newer programs like the ACP program, are subject to change and may have
a material impact on our Mobile Services business if changed, reduced or eliminated.
Distribution Methods of the Products or Services
We primarily distribute our Hosted Services through our website, sales staff, master distribution agreements and ISOs (independent
sales agents). We primarily distribute our Mobile Services through our website, sales staff, retail locations and ISOs. Since 2021,
we have continued to increase our Mobile Service online marketing efforts to supplement alternative distribution channel growth.
Sources and Availability of Raw Materials and the Names of Principal Suppliers
Wholesale wireless services are sourced either directly from the wireless carrier or from wholesalers that sit between us (Apeiron
Systems and IM Telecom) and the wireless carrier. Carriers can include Verizon, T-Mobile and AT&T. Wholesalers can include
Prepaid Wireless Group (“PWG”) and Telispire.
Wireless resellers, like us, traditionally do not own the wireless infrastructure over which services are provided. We purchase
services from the following sources:
Verizon: Verizon voice, text and data services are provided through master distribution partners of Verizon. The contract
we hold with distribution partners has set per unit pricing for voice, text and data wireless services. Pricing per unit is in
the form of a monthly recurring charge (“MRC”) that may or may not include minutes of use, text units or data units.
Additional data units are available for purchase;
AT&T: AT&T voice, text or data service and AT&T IoT service under a contract with us, has set “unit based” pricing for
voice, text, and data and IoT wireless services. Pricing per unit is in the form of an MRC that may or may not include
minutes of use, text units or data units. Additional data units are available for purchase;
Verizon Wireless VPP, a Verizon IoT product: Verizon VPP, also through a contract with us, has set per unit pricing for
IoT wireless services. Pricing per unit is in the form of an MRC that includes data units with defined over plan use pricing;
and
T-Mobile voice, text or data Lifeline services are provided through master distribution partners of T-Mobile. The contract
we hold has set pricing for bundled voice, text and data wireless services. Pricing bundles are in the form of an MRC that
include minutes of use, text units or data units. Larger data plans are available for purchase for consumer requiring larger
voice and data packages.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts
Our wholly owned subsidiary, IM Telecom, is an FCC licensed ETC and is one of the original twenty-two (22) FCC licensed
wireless cellular resellers to hold an FCC approved wireless Lifeline Compliance Plan in the United States (as of 2012), of which
approximately twelve (12) license holders remain active today. As a licensed ETC, IM Telecom is currently authorized to distribute
Lifeline subsidized mobile voice/data service in ten (10) states. IM Telecom is also an FCC licensed ACP carrier, authorized to
distribute ACP subsidized mobile data services in the fifty (50) states as well as Washington D.C. and Puerto Rico. Infiniti Mobile
also offers non-Lifeline and non-ACP services.
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We hold a United States Patent and Trademark Office registered trademark “Lifeline+®” and use this Trademark in our marketing
materials.
Competition
The telecommunications industry is highly competitive. Our primary cellular competitors include other resellers and national
carriers, such as AT&T, Verizon and T-Mobile. These national cellular carriers are facility-based, are significantly larger than us
and enjoy trade name and trademark public recognition, as well as greater resources, scale and competitive advantages, among
other substantial factors, as compared to us. In addition, our cellular competitors also include numerous smaller regional carriers,
existing MVNOs and ETCs, such as Metro PCS, Cricket Wireless, TracFone Wireless, QLink Wireless, TruConnect and Assurance
Wireless, many of which offer or may offer cellular, mobile data, Lifeline and ACP services, along with no-contract postpaid and
prepaid service plans. Our CPaaS competitors include, but are not limited to, Twilio, Plivo, Bandwidth, Thinq, VoIP Innovations,
Telnyx, Coredial, Vonage/Nexmo, CLX Comm, Genband Kandy, Tropo, Telestax, 2600Hz and Signal Wire. Competitive factors
within the telecommunications industry include pricing, market saturation, service and product offerings, customer experience,
network investment and quality, development and deployment of technologies and regulatory changes. Some competitors have
shown a willingness to use aggressive pricing as a source of differentiation. Other competitors have sought to add ancillary
services, like mobile video, to enhance their offerings. Taken together, the competitive factors we face continue to put pressure on
margins as companies compete to retain their current customer base and continue to add new developments, many proprietary or
patented, and customers.
Need for any Governmental Approval of Principal Products or Services
On October 23, 2018, the FCC approved our acquisition of IM Telecom, an FCC licensed wireless Lifeline carrier. In 1985, during
the Reagan administration, the FCC established the Lifeline Assistance program through generic powers afforded the FCC under
the Communications Act of 1934. Cellular service was added to the Lifeline program in 2009. Approximately nineteen (19) of the
original twenty-two (22) ETCs still hold an FCC approved wireless reseller Lifeline Compliance Plan, but only about twelve (12)
are active today. The FCC has not approved any new wireless reseller Lifeline Compliance Plans since 2012. We expect our future
gross revenues to mainly come from government subsidized mobile voice and mobile data services.
Existing and Probable Government Regulation to Our Current and Intended Business
The FCC has several complex requirements and proceedings that affect our operations and that could increase our costs or diminish
our revenues. For example, the FCC has rules regarding provision of 911 and E-911 services, porting telephone numbers, roaming,
disabilities access, privacy and cybersecurity, consumer protection, and the universal service and Lifeline programs, including
eligibility, reimbursement and program requirements. Many of these and other issues are being considered in ongoing proceedings,
and we cannot predict whether or how such actions will affect our business, financial condition or results of operations. Our ability
to provide services and generate revenues could be harmed by adverse regulatory action or changes to existing laws and
regulations. In addition, regulation of companies that offer competing services can impact our business indirectly.
Smaller Reporting Company
We are subject to the reporting requirements of Section 13 of the Exchange Act, and we are subject to the disclosure requirements
of Regulation S-K of the SEC, as a “smaller reporting company.” That designation relieves us of some of the informational
requirements of Regulation S-K and Article 8 of Regulation S-X of the SEC.
Emerging Growth Company
In 2020, our “emerging growth company” designation as defined in the “Jumpstart Our Business Startups Act of 2012,” or the
“JOBS Act,” expired as of the fifth anniversary of our initial registered public offering. During our emerging growth company
designation, we did not utilize any financial statement waivers available to us as a result of that designation.
8
Sarbanes/Oxley Act
We are also subject to the Sarbanes-Oxley Act of 2002. The Sarbanes/Oxley Act created a strong and independent accounting
oversight board to oversee the conduct of auditors of public companies and strengthens auditor independence. It also requires steps
to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial
disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of
interest affecting securities analysts; creates guidelines for audit committee members’ appointments, compensation and oversight of
the work of public companies’ auditors; management assessment of our internal controls; auditor attestation to management’s
conclusions about internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies and
auditors to evaluate internal controls and procedures; and establishes a federal crime of securities fraud, among other provisions.
Compliance with the requirements of the Sarbanes/Oxley Act could substantially increase our legal and accounting costs.
Exchange Act Reporting Requirements
Section 14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act
to comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted
to our shareholders at a special or annual meeting thereof or pursuant to a written consent will require us to provide our
shareholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must
be submitted to the SEC at least ten (10) days prior to the date that definitive copies of this information are forwarded to our
shareholders.
We are required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis, and are
required to timely disclose certain material events (e.g., entry into a definitive material agreement, changes in corporate control,
acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business, bankruptcy and
receivership filings and the sale of in excess of five percent (5%) of our outstanding securities, among various other material
matters) in a Current Report on Form 8-K. See SEC Form 8-K for a more complete description of the type of material events
required to be disclosed.
Number of Total Employees and Number of Full-Time Employees
Across our companies, we have a total of thirty-seven (37) employees; thirty-five (35) full-time employees and two (2) part-time
employees.
Subsidiaries
We have three (3) wholly owned subsidiaries: KonaTel Nevada; IM Telecom; and Apeiron Systems. Our subsidiary KonaTel
Nevada, has remained inactive since early 2021.
Additional Information
You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may also find all the reports or registration statements that we have previously filed electronically
with the SEC at its Internet site at www.sec.gov in the Edgar Archives of the SEC or in our website at konatel.com.
9
ITEM 1A. RISK FACTORS
RISK FACTORS
As we are a smaller reporting company as defined by Section 12b-2 of the Exchange Act, we are not required to provide the
information under this Item or in our annual or quarterly reports filed with the SEC; however, we believe this information may be
of value to our shareholders or potential investors in our Company. These risk factors should be considered in light of the caption
“Forward-Looking Statements” at the forepart of this Annual Report. We reserve the right not to provide risk factors in our future
filings. Our primary risk factors and other considerations include:
Risks Related to the Company
We have a limited operating history and cannot ensure the long-term successful operation of our business or the execution
of our business plan.
We have a limited operating history, having commenced our current business operations in November of 2014, and our wireless
marketing technology and solutions are an evolving business offering. As a result, investors have a limited track record by which to
evaluate our future performance. Our prospects must be considered in light of the risks, expenses and difficulties frequently
encountered by growing companies in new and rapidly evolving markets. We may be unable to successfully accomplish and fund
our current endeavors, which would materially impact our ability to implement our business plan, including:
establishing and maintaining broad market acceptance of our technology, solutions, services and platforms, and converting
that acceptance into direct and indirect sources of revenue;
establishing and maintaining adoption of our technology, solutions, services and platforms in and on a variety of
environments, experiences and types of devices;
timely and successfully developing new technologies, solutions, services and platform features, and increasing the
functionality and features of our existing technologies, solutions, services and platform offerings;
developing technologies, solutions, services and platforms that result in a high degree of customer satisfaction and a high
level of end-customer usage;
successfully responding to competition, including competition from emerging technologies and solutions;
developing and maintaining strategic relationships to enhance the distribution, features, content and utility of our
technologies, solutions, services and platforms;
identifying, attracting and retaining talented engineering, network operations, program management, technical services,
creative services and other personnel at reasonable market compensation rates in the markets in which we employ such
personnel; and
integration of potential evolving offerings of products and acquisitions.
Our business strategy may be unsuccessful, and we may be unable to address the risks we face in a cost-effective manner, if at all.
If we are unable to successfully accomplish these tasks, our business will be harmed, and we may fail.
For the year end December 31, 2022, we reported gross revenues of $20,023,340, cost of revenues of $15,033,733, operating
expenses of $7,544,292, other income and expenses of ($397,675) and a net loss of ($2,952,360). We anticipate additional revenue
and net income growth in 2023, further reducing our accumulated deficit balance.
For the prior year ended December 31, 2021, we reported gross revenues of $12,834,844, cost of revenues of $7,105,464, operating
expenses of $5,091,033, other income and expenses of ($15,361) and net income of $622,986.
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For the year ended December 31, 2022, we had $12,352, in non-cash depreciation expense. As of December 31, 2022, our
accumulated deficit was $8,297,864.
The United States Government’s dissolution or reduction of the Lifeline Program or the elimination of “resellers” of these
services would have a substantial adverse effect on our current and planned business operations.
Considering there are approximately 7,300,000 current Lifeline users and approximately 38,000,000 eligible Lifeline
customers (according to USAC), this would be a draconian move; however, it is a possibility. Federal or state
governmental agencies could also significantly reduce or delay Lifeline reimbursement payments to Lifeline carriers,
forcing Lifeline carriers to continue to provide minimum Lifeline services and at a reduced reimbursement rate.
Depending on any reimbursement reduction, a reduction would diminish earnings and could make Lifeline unprofitable.
The FCC established the Lifeline program in 1985 to ensure that qualifying low-income consumers could afford phone
service and the opportunities and security it provides. Congress supported and strengthened Lifeline in the
Telecommunications Act of 1996, requiring that affordable service and advanced communications be available to low-
income consumers across the country.
Lifeline and ACP require several factors to be successful. The impact of negative governmental changes and negative
national carrier pricing have been outlined above. In addition to those two risks, an interruption to the supply of low-cost
phones and/or a reduction of Lifeline and ACP agents (no access to or not enough access to agents) would have a negative
impact on Lifeline and/or ACP.
Adequate equipment financing and available cash resources to pay up-front compensation payments (sometimes required)
is critical to facilitate Lifeline, ACP, B2B and retail sales, and the lack of these resources would have a negative impact on
our business.
The increase in the number of resellers of services and products that we provide by any national carrier could saturate the
markets and market segments of our targeted customers, which could affect our business adversely.
Market saturation could occur when a national carrier allows too many resellers into the market and margins drop so low where the
reseller business model is no longer profitable, and our business may suffer and fail.
A decrease in the amount of wholesale voice and mobile data available to purchase from wholesale aggregators could cause
a substantial reduction in our business and customers.
We purchase a portion of our mobile data service (“IOT”) directly from national carriers and purchase the remainder of our
wholesale voice and mobile data from wholesale aggregators or MVNEs like PWG and Telispire. If one of these aggregators
vacated the market, such action could strand many resellers of these services, like us, and could substantially reduce our current and
anticipated revenues from our IoT or cellular service.
A wireless reseller could gain a significant price advantage over other wireless resellers by entering into a special national
carrier pricing agreement not available to other resellers.
Any special national carrier pricing agreement that was not available to us would allow that particular reseller to “undercut” all
other resellers. This scenario could also apply to a national wireless carrier acquiring a reseller then allowing that reseller to
operate with special wholesale pricing not available to other resellers. This scenario has happened in the past with Cricket
Communications, Inc. and Ultra Mobile, resellers that were acquired by a national carrier. Any such event could have a substantial
adverse impact on our business and revenues.
Adequate funds for our current and intended operations may not be available, requiring us to raise additional financing or
curtail our current and planned operations significantly.
We might be required to raise additional funding through public or private debt or equity financings. Any additional equity
financings may be dilutive to our current shareholders and may be completed at a discount to the then-current market price of our
common stock. Debt financing, if available, would likely involve restrictive covenants on our operations or pertaining to future
debt or equity financing arrangements. Nevertheless, we may not successfully complete any future equity or debt financing.
Adequate funds for our operations,
11
whether from financial markets, collaborative or other arrangements, may not be available when needed or on terms attractive to us.
If adequate funds are not available, our plans to operate our business maybe adversely affected, and we could be required to curtail
our activities significantly and/or cease operations.
We will be unable to implement our business plan if we cannot raise sufficient capital and may be required to pay higher prices for
capital based on the current illiquid market for our common stock, among other factors.
We may need to raise additional capital to implement our business plan and meet financial obligations as they come due. If
we do need to raise additional capital, and cannot attract sufficient capital from customary sources, we may be required to
pay a higher price for capital.
Factors affecting the availability and price of capital may include the following:
the availability and cost of capital generally;
our financial results;
the experience and reputation of our management team;
market interest, or lack of interest, in our industry, industry segments and our business plan;
the trading volume of, and volatility in, the market for our common stock, assuming there is a reasonable trading market
for our common stock;
our ongoing success, or failure, in executing our business plan;
the amount of our capital needs; and
the amount of debt, options, warrants and convertible securities that may be outstanding in our Company at any time.
A national carrier (Verizon, AT&T, T-Mobile) could dissolve, reduce or restrict any wholesale program, agent program or
reseller program. This includes both voice and data IoT, which would adversely affect our business.
We, like all voice and data resellers, are dependent on the FCC licensed national carriers to provide services that can be resold for a
profit. The wireless carriers own/control their respective network (towers) and provide the wireless service. Resellers do not own
their own network and are dependent on the national carriers to provide a reseller program. These carriers could eliminate a
reseller program or implement new policies that could reduce profit margins making any applicable program unprofitable. They
could also implement market restorations reducing markets we could sell into, which would have a direct adverse effect on our
current and future prospects.
Similarly, one of these national carriers could reduce their own retail pricing, with no corresponding reduction in their wholesale
pricing, which could create a situation where a reseller is unable to make enough profit to sustain operations. This has happened in
the past with Verizon until Verizon’s wholesale (reseller) division finally reduced wholesale prices.
We may be unable to meet our current or future obligations or to adequately exploit existing or future opportunities if we cannot
raise sufficient capital. If we are unable to obtain any required capital for an extended period of time, we may be forced to
discontinue or curtail our business operations and we may fail.
We expect that there will be significant consolidation in our industry. Our failure or inability to lead that consolidation
would have a severe adverse impact on our access to financing, customers, technologies and human resources.
Our industry is currently composed of a small number of substantial entities, and a relatively large number of small businesses, no
single one of which is dominant, or which provides integrated solutions and product offerings incorporating much of the available
technology. Accordingly, we believe that substantial consolidation of the smaller companies may occur in our industry in the near
future as has occurred with many larger participants. If we do not play a positive role in that consolidation, either as a leader or as a
participant whose capabilities and offerings are merged into a larger entity, we may be left out of this process, with product and
service offerings of limited value compared with those of our competitors. Moreover, even if we lead the consolidation process, the
market may not validate the decisions we make in that process and our business will suffer and may fail.
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Our success depends on our product and service technologies achieving and maintaining widespread acceptance in our
targeted markets.
Our success will depend to a large extent on broad market acceptance of our telecommunications solutions among our current and
prospective customers. Our prospective customers may be unwilling to use our solutions for a number of other reasons, including
preference for static advertising, lack of familiarity with our technologies, preference for competing technologies or perceived lack
of reliability. We believe that the acceptance of our technologies by prospective customers will depend primarily on the following
factors:
our ability to demonstrate the economic and other benefits attendant to our products and services;
our customers becoming comfortable with using our telecommunications technologies; and
the reliability of these services and technologies.
Because we do not have long-term purchase commitments from our customers, the failure to obtain anticipated orders or
the deferral or cancellation of commitments could have an adverse effect on our business and future prospects.
Our business is characterized by short-term purchase orders and contracts that do not require that purchases be made. This makes
forecasting our sales difficult. The failure to obtain anticipated orders and deferrals or cancellations of purchase commitments
because of changes in customer requirements, or otherwise, could have a material adverse effect on our business, financial
condition and results of operations. We have experienced such challenges in the past and may experience such challenges in the
future.
Most of our contracts are terminable by our customers with limited notice and without penalty payments, and early
terminations could have a material adverse effect on our business, operating results and financial condition.
Most of our contracts are terminable by our customers following limited notice and without early termination payments or
liquidated damages due from them. In addition, each stage of a project often represents a separate contractual commitment, at the
end of which the customer may elect to delay or not to proceed to the next stage of the project. We cannot assure you that one or
more of our customers will not terminate a material contract or materially reduce the scope of any large project. The delay,
cancellation or significant reduction in the scope of a large project or a number of projects could have a material adverse effect on
our business, operating results, and financial condition.
Our industry is characterized by frequent technological change. If we are unable to adapt our products and services and
develop new products and services to keep up with these rapid changes, we will not be able to obtain or maintain market
share and our business may fail.
We must respond to changing technology and industry standards in a timely and cost-effective manner. We may not be successful in
using new technologies, developing new products and services or enhancing existing products and services in a timely and cost-
effective manner.
Furthermore, even if we successfully adapt our products and services, these new technologies or enhancements may not achieve
market acceptance. The market for our products and services is characterized by rapidly changing technology, evolving industry
standards, changes in customer needs, heavy competition and frequent new product and service introductions. If we fail to develop
new products and services or modify or improve our existing products and services in response to these changes in technology,
customer demands or industry standards, our products and services could become less competitive or obsolete.
A portion of our business involves the use of software technologies that we have developed or licensed. Industries involving
the ownership and licensing of software-based intellectual property are characterized by frequent intellectual property
litigation, and we could face claims of infringement by others in the industry. Such claims are costly and add uncertainty to
our operational results.
A portion of our business involves our ownership and/or licensing of software. This market space is characterized by frequent
intellectual property claims and litigation. We could be subject to claims of infringement of third-party intellectual property rights
resulting in significant expense and the potential loss of our own intellectual property rights. From time to time, third parties may
assert copyright, trademark, patent or other intellectual property rights to technologies that are important to our business.
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Any litigation to determine the validity of these claims, including claims arising through our contractual indemnification of our
business partners, regardless of their merit or resolution, would likely be costly and time consuming and divert the efforts and
attention of our management and technical personnel. If any such litigation resulted in an adverse ruling, we could be required to:
pay substantial damages;
cease the development, use, licensing or sale of infringing products;
discontinue the use of certain technologies; or
obtain a license under the intellectual property rights of the third-party claiming infringement, which license may not be
available on reasonable terms or at all.
Our business may be adversely affected by malicious applications that interfere with, or exploit security flaws in, our
products and services.
Our business may be adversely affected by malicious applications that make changes to our customers’ computer systems and
interfere with the operation and use of our products or products that impact our business. These applications may attempt to
interfere with our ability to communicate with our customers’ devices. The interference may occur without disclosure to or consent
from our customers, resulting in a negative experience that our customers may associate with our products and services. These
applications may be difficult or impossible to uninstall or disable, may reinstall themselves and may circumvent other applications’
efforts to block or remove them. The ability to provide customers with a superior interactive marketing technology experience is
critical to our success. If our efforts to combat these malicious applications fail, or if our products and services have actual or
perceived vulnerabilities, there may be claims based on such failures and our reputation may be harmed, which would damage our
business and financial condition and our ability to continue our business.
We face risks relating to Cyberattack.
Our business operations are dependent upon secure information technology systems and telecommunications networks. Breaches
of these systems and networks through cyberattack or other unauthorized access may have numerous negative effects on our
business, including lost sales and damage to customer relationships; disruptions on our operations; reputational harm and negative
publicity; lost trust from our customers, partners and employees; lawsuits resulting from the compromise of sensitive customer or
employee information; costs of mitigation; and remediation and security enhancement expenses.
We compete with other companies that have substantially greater resources, and we are at a distinct competitive
disadvantage in our chosen industry.
The market for our products and service solution technologies is generally highly competitive, and we expect competition to
increase in the future. Some of our competitors or potential competitors have significantly greater financial, technical and
marketing resources than we have. These competitors may be able to respond more rapidly than we can to new or emerging
technologies or changes in customer requirements. They may also devote greater resources to the development, promotion and sale
of their products than we do.
We expect competitors to continue to improve the performance of their current products and to introduce new products, services
and technologies. Successful new product and service introductions or enhancements by our competitors could reduce sales and the
market acceptance of our products and services, cause intense price competition or make our products and services obsolete. To be
competitive, we must continue to invest significant resources in research and development, sales and marketing and customer
support. If we do not have sufficient resources to make these investments or are unable to make the technological advances
necessary to be competitive, our competitive position will suffer, and we may fail. 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 also adversely affect our business and financial condition.
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Our future success depends on key personnel and our ability to attract and retain additional personnel.
Our success is dependent upon attracting and maintaining key personnel, including our founder, Chairman and CEO, D. Sean
McEwen, and various key executive employees, including Joshua Ploude from whom we acquired Apeiron Systems and who
serves as CEO of Apeiron Systems, and Charles D. Griffin, our President and COO, among others, who are listed in Part III, Item
10 of this Annual Report.
Further, if we fail to retain our key personnel or to attract, retain, and motivate other qualified employees, our ability to maintain
and develop our business may be adversely affected. Our future success depends significantly on the continued service of our key
technical, sales, and senior management personnel and their ability to execute our growth strategy. The loss of the services of our
key employees could harm our business. We may be unable to retain our employees or to attract, assimilate and retain other highly
qualified employees who could migrate to other employers who offer competitive or superior compensation packages.
Unpredictability in financing markets could impair our ability to grow our business through acquisitions.
We anticipate that opportunities to acquire similar businesses will materially depend on the availability of financing alternatives
with acceptable terms. As a result, poor credit and other market conditions or uncertainty in financial markets could materially limit
our ability to grow through acquisitions since such conditions and uncertainty make obtaining financing more difficult.
Our reliance on information management and transaction systems to operate our business exposes us to cyber incidents and
hacking of our sensitive information if our outsourced service provider experiences a security breach.
Effective information security internal controls are necessary for us to protect our sensitive information from illegal activities and
unauthorized disclosure, in addition to preventing service attacks and corruption of our data. Further, we rely on the information
security internal controls maintained by our outsourced service provider. Breaches of our information management system could
also adversely affect our business reputation. Finally, significant information system disruptions could adversely affect our ability
to effectively manage operations or reliably report results.
Because our technology, products, platforms and services are complex and are deployed in and across complex
environments, they may have errors or defects that could seriously harm our business.
Our technology, proprietary platforms, products and services are highly complex and are designed to operate in and across data
centers, large and complex networks and other elements of the digital media workflow that we do not own or control. On an
ongoing basis, we need to perform proactive maintenance services on our platform and related software services to correct errors
and defects. In the future, there may be additional errors and defects in our software that may adversely affect our services. We may
not have in place adequate reporting, tracking, monitoring and quality assurance procedures to ensure that we can detect errors in
our software in a timely manner. If we are unable to efficiently and cost-effectively correct errors or other problems that may be
identified, or if there are unidentified errors that allow persons to improperly access our services, we could experience loss of
revenues and market share, damage to our reputation, increased expenses and legal actions by our customers and our business may
fail.
We may have insufficient network or server capacity for our current and planned business, which could result in
interruptions in our services and the loss of revenues resulting in a negative impact on our business.
Our operations are dependent, in part, upon network capacity provided by our telecommunications network and third-party
telecommunications networks; data center services provider owned and leased infrastructure and capacity; server capacity located
at the data center services provider partner or partners; and our own infrastructure and equipment. Collectively, this infrastructure,
equipment and capacity must be sufficiently robust to handle all of our customers’ wireless requirements, particularly in the event
of unexpected surges in high-definition video traffic and network services incidents. We may not be adequately prepared for
unexpected increases in bandwidth and related infrastructure demands from our customers. In addition, the bandwidth we have
contracted to purchase may become unavailable for a variety of reasons, including payment disputes, outages or such service
providers going out of business. Any failure of these service providers or our own infrastructure to provide the capacity we require
due to financial or other reasons may result in a reduction in or the interruption of service to our customers, leading to an immediate
decline in revenue and possible additional decline in revenue, as a result of subsequent customer losses, which could result in the
cessation of all or part of our business operations.
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We do not have sufficient capital to engage in substantial research and development, which may harm our long-term
growth.
In light of our limited resources in general, we have made no substantial investments in research and development. This conserves
capital in the short term. In the long term, as a result of our limited investment in research and development, our technologies and
product offerings may not keep pace with the market, and we may lose any existing competitive advantage. Over the long term, this
may harm our revenue growth and our ability to be profitable.
Our business operations are susceptible to interruptions caused by events beyond our control.
Our business operations are susceptible to interruptions caused by events beyond our control. We are vulnerable to the following
potential problems, among others:
our platform, technologies, products, services and underlying infrastructure, or that of our key suppliers, may be damaged
or destroyed by events beyond our control, such as fires, earthquakes, pandemics, war, floods, power outages or
telecommunications failures;
we and our customers and/or partners may experience interruptions in service as a result of the accidental or malicious
actions of Internet users, hackers, hostile nation states or current /former employees;
we may face liability for transmitting viruses to third parties that damage or impair their access to computer networks,
programs, data or information. Eliminating computer viruses and alleviating other security problems may require
interruptions, delays or cessation of service to our customers; and
the failure of our systems or those of our suppliers may disrupt service to our customers (and from our customers to their
customers), which could materially impact our operations (and the operations of our customers), adversely affecting our
relationships with our customers and lead to lawsuits and contingent liabilities.
The occurrence of any of the foregoing could result in claims for consequential and other damages, significant repair and recovery
expenses and extensive customer losses and otherwise have a material adverse effect on our business, financial condition and
results of operations.
Our business operations could be impacted by the current world health crisis.
On January 30, 2020, the World Health Organization declared the coronavirus (the “Covid-19”) outbreak a “Public Health
Emergency of International Concern,” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help
mitigate the spread of the coronavirus included restrictions on travel and quarantines in certain areas, and forced closures for certain
types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to
have an adverse impact on the economies and financial markets of many countries, including the geographical areas in which we
operate. While it is unknown how long these conditions will last and what the complete financial affect will be on us, to date, and
as a result of actions taken by management to mitigate a material impact to our financial statements or our operational results, we
are not currently experiencing a material impact to our financial statements or our results of operations; however, a pandemic
typically results in social distancing, travel bans and quarantines, which may result in limited access to our facilities, customers,
management, support staff and professional advisors. These, in turn, may not only impact our operations, financial condition and
demand for our services, but our overall ability to react timely to mitigate the impact of this event. Given our small staff, if a key
member of our team were disabled by COVID-19, it could have a material negative impact on our business. Also, it may
substantially hamper our efforts to provide our investors with timely information and to comply with our filing obligations under
the Exchange Act with the SEC. If this pandemic were to last a prolonged period of time, we could see a decline in revenue due to
the closure of customer businesses, which could then impact our ability to pay our short-term debts. Our concentration of revenue
from a small group of Apeiron Systems’ customers makes it reasonably possible that we are vulnerable to the risk of a long-term
severe impact. Our dependence on certain suppliers to provide equipment to be distributed or sold to our customers could also be
impacted if inventory shortages occur due to import or export restrictions resulting from the pandemic.
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General global market and economic conditions may have an adverse impact on our operating performance and results of
operations.
Our business has been and could continue to be affected by general economic and market conditions. Weakness in the United States
and worldwide economy could have a negative effect on our operating results. Additionally, in a down-cycle economic
environment, we may experience the negative effects of increased competitive pricing pressure, customer loss, slowdown in
commerce over the Internet and corresponding decrease in traffic delivered over our network and failures by our customers to pay
amounts owed to us on a timely basis or at all. Suppliers on which we rely for equipment, field services, servers, bandwidth, co-
location and other services could also be negatively impacted by economic conditions that, in turn, could have a negative impact on
our business operations or revenues. Flat or worsening economic conditions may harm our operating results and financial
condition.
The Russian invasion of Ukraine may disrupt global telecommunications networks.
While we do not have any direct exposure to Russia, Belarus or Ukraine through our operations, employee base, investments or
sourcing of goods and services, third party companies with whom we do business may use Ukraine-based software developers.
These relationships may be affected by the global geopolitical disruptions caused by the Russian invasion of Ukraine in February
2022. We also face the risk that the invasion and ongoing war may result in disruptions to national and international
telecommunications networks, either through cyberattacks by state actors or others, physical damage to the networks themselves or
due to interruptions in the supply chain for the materials and services necessary to maintain them. The likelihood and the potential
size and scope of any such damage or disruptions is difficult to predict. However, they may have significant negative effects on the
Company’s future business and results of operations.
Rising inflation may negatively affect our operating results.
During 2021 and 2022, global economic conditions have deteriorated, with significantly increased inflation and the risks of further
inflation and recession in 2023 and beyond. These unfavorable economic conditions may lead to decreased demand for our
products or services in the future, especially by our lower-income customers, which would have a negative effect on our business
and results of operations. In particular, inflation could affect the price of equipment for the services provided in our Lifeline
Program. The ongoing Russian invasion of Ukraine and related sanctions on Russia may also lead to higher prices for commodities
used in the production of telephones and other technologies used in the global telecommunications industry, which may result in
decreased demand for our products and services. To the extent that we are unable to increase the prices of our goods and services
in response to increased costs, our operating margins will be compressed.
Supply chain disruptions could adversely affect our business.
Supply chain dislocations resulting from global geopolitical and public health issues such as the Russian invasion of Ukraine, the
COVID-19 pandemic and other causes may have a material adverse impact on our business and results of operations. Such
disruptions may increase our costs of doing business, including through significant increases in the price of our products and their
components and materials and the related costs of shipment, including equipment used in the Lifeline Program. Supply chain
disruptions may also adversely affect our access to suppliers, manufacturers, customers and vendors and may impair our ability to
perform contracted services. Delays in our ability to meet our obligations as a result of supply chain issues may negatively affect
our reputation, our relationships with customers and our ability to deliver products and services.
The markets in which we operate are rapidly emerging, and we may be unable to compete successfully against existing or
future competitors to our business.
The markets in which we operate are becoming increasingly competitive. Our current competitors generally include those that offer
similar products and services. These competitors, including future new competitors who may emerge, may be able to develop
comparable or superior solution capabilities, platforms, services, products and/or a series of services that provide a similar or more
robust set of features and functionality than the technologies, products and services we offer. If this occurs, we may be unable to
grow as necessary to make our business profitable.
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Regardless of whether we have superior products, many of these current and potential future competitors have a longer operating
history in their current respective business areas and greater market presence, brand recognition, engineering and marketing
capabilities, and financial, technological and personnel resources than we do. Existing and potential competitors with an extended
operating history, even if not directly related to our business, have an inherent marketing advantage because of the reluctance of
many potential customers to entrust key operations to a company that may be perceived as unproven or in the early stage of its
development. In addition, our existing and potential future competitors may be able to use their extensive resources:
to develop and deploy new products and services more quickly and effectively than we can;
to develop, improve and expand their platforms and related infrastructures more quickly than we can;
to reduce costs, particularly hardware costs, because of discounts associated with large volume purchases and longer-term
relationships and commitments;
to offer less expensive products, technologies, platforms and services as a result of a lower cost structure, greater capital
reserves or otherwise;
to adapt more swiftly and completely to new or emerging technologies and changes in customer requirements;
to take advantage of acquisition and other opportunities more readily; and
to devote greater resources to the marketing and sales of their products, technology, platform, and services.
If we are unable to compete effectively in our various markets, or if competitive pressures place downward pressure on the prices at
which we offer our products and services, our business, financial condition and results of operations may suffer, and our business
may fail.
Compliance with the reporting requirements of federal securities laws can be expensive.
We are a public “reporting company” in the United States, and accordingly, subject to the information and reporting requirements
of the Exchange Act and other federal securities laws, rules and regulations, including compliance obligations under the Sarbanes-
Oxley Act of 2002. The costs of preparing and filing annual and quarterly reports and other information with the SEC and
furnishing audited and reviewed financial statements in reports filed with the SEC, along with required communications with our
shareholders, are substantial. We have incurred and expect to continue to incur costs associated with becoming and continuing as a
public company, including, but not limited to, legal, accounting, filing and other related costs and expenses. Failure to comply with
the applicable securities laws could result in private or governmental legal action against us or our officers and directors, which
could have a detrimental impact on our business and financial condition, the value of our common stock and the ability of our
shareholders to resell their common stock.
We do not intend to pay dividends on our common stock for the foreseeable future.
All future revenues are anticipated to be utilized for research, development and the furtherance of our business plan and our
technologies, products, services and platform, and accordingly, it is highly unlikely that you will receive any dividends from us in
the near future, if ever.
We do not intend to provide guidance about future events in the foreseeable future.
Our Board of Directors anticipates adopting a policy that will preclude us from providing guidance about matters that may happen
in the foreseeable future, though any such policy will not prohibit our responsibilities to provide forward-looking information to
our shareholders and to the public in our Exchange Act filings with the SEC, including our “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” required in a number of SEC reports and registration statements.
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Risks Related to Our Common Stock
There is a limited active trading market for our shares of common stock.
In general, there has been a limited trading volume in our common stock. The small trading volume will likely make it difficult for
shareholders to sell their shares as and when they choose. Furthermore, small trading volumes are generally understood to depress
market prices. As a result, you may not always be able to resell shares of our common stock publicly at the time and prices that you
feel are fair or appropriate.
Additionally, if we do not timely file our reports required to be filed with the SEC under the Exchange Act, broker-dealers may not
be able or willing to trade our common stock, and the OTC Markets will post adverse warnings on its website about such failures,
which, unless such failures are corrected by us, could have an additional adverse impact on the viability of any market that may
develop for our common stock. Other adverse warnings of the OTC Markets under their current and future policies could similarly
have an adverse effect on any market for our common stock, and there is no assurance that we will be able to satisfy comments or
concerns of the OTC Markets, if any are expressed.
If an active market for our common stock develops, there is a significant risk that the Company’s common stock price may
fluctuate dramatically in the future in response to any of the following factors, some of which are beyond our control,
including, but not limited to:
variations in our quarterly operating results;
announcements that our revenue or income are below analysts’ expectations;
general economic slowdowns;
sales of large blocks of our common stock by insiders and others; and
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or
capital raises.
Our common stock is subject to the “penny stock” rules of the SEC, which may make it more difficult for shareholders to
sell our common stock.
The SEC has adopted Rule 15g-9, which established the definition of a “penny stock,” for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the
broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny
stock to be purchased.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and
investment experience objectives of the person and make a reasonable determination that the transactions in penny stocks are
suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating
the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC
relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability
determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it
more difficult for investors to dispose of the Company’s common stock if and when such shares are eligible for sale and may cause
a decline in the market value of its stock.
19
Because of increased regulatory efforts of governmental and quasi-governmental agencies regarding the trading of
securities that are deemed to be penny stocks, the cost and expense of depositing and inducing a broker-dealer to effect sales
of these shares is very costly, which can be in excess of value of the shares sought to be sold, and often includes requirements
of legal opinions of both the selling shareholder’s counsel and the broker-dealer’s counsel, both at the expense of the selling
shareholder.
Currently, broker-dealers require legal opinions of shareholders of almost all over-the-counter stocks to deposit and sell these
shares, and all of these legal opinions are required to be paid for by the shareholder; and often, two (2) legal opinions are required,
one (1) from the shareholder’s legal counsel and one (1) from the broker-dealer’s legal counsel. This policy has been required of
mostly all low-priced over-the-counter traded securities, regardless of whether the shares have been registered with the SEC, or
whether there is no “restrictive” legend on the stock certificate representing the shares and always if the shares are designated as
“restricted securities.” Larger, national broker-dealers will generally not even trade these securities. The high cost of these types of
legal opinions is often more than the value of the shares sought to be sold, and the process can take two (2) to three (3) weeks or
more. Accordingly, shareholders with limited shares of low-priced stocks will be unable to economically sell their shares,
regardless of whether an “established trading market” for the shares exists, and if they could sell their shares, the required selling
process may inhibit their ability to sell the shares when they desire to sell their shares.
Because we became public by means of a reverse acquisition, we may not be able to attract the attention of brokerage firms.
Because we became public through a “reverse acquisition,” securities analysts of brokerage firms may not provide coverage of us
since there is little incentive to brokerage firms to recommend the purchase of our common stock. Moreover, no assurance can be
given that brokerage firms will want to conduct capital raises on our behalf, presently or in the future.
Our investors’ ownership in the Company may be diluted in the future.
In the future, we may issue additional authorized but previously unissued equity securities, resulting in the dilution of ownership
interests of our present shareholders. We expect to need to issue a substantial number of shares of our common stock or other
securities convertible into or exercisable for our common stock in connection with hiring or retaining employees, future
acquisitions, raising additional capital in the future to fund our operations and other business purposes. We currently offer incentive
stock options for our officers, directors and certain significant employees and may extend this policy to others. Additional shares of
common stock issued by us in the future will dilute an investor’s investment in the Company.
Directors, executive officers, principal shareholders and affiliated entities own a significant percentage of our capital stock,
and they may make decisions that our shareholders do not consider to be in their best interests.
As of the date of this Annual Report, D. Sean McEwen, our Chairman and Chief Executive Officer, beneficially owns
approximately 37% of our issued and outstanding shares of common voting stock by reason of his personal holdings. This
percentage does not include certain vested non-compensatory stock options which he owns and that can be exercised within sixty
(60) days of the date of this Annual Report, all of which options are described under the caption “Security Ownership of Certain
Beneficial Owners and Management” in Part III, Item 12 hereof. As a result, Mr. McEwen may have the ability to substantially
control the election of our board of directors, the outcome of issues requiring approval by our shareholders and other corporate
actions. This concentration of ownership may also have the effect of delaying or preventing a change in control of our Company
that may be favored by other shareholders; and could prevent transactions in which shareholders might otherwise recover a
premium for their shares over current market prices. This concentration of ownership and influence in management and board
decision making could also harm the price of our capital stock by, among other things, discouraging a potential acquirer from
seeking to acquire shares of our capital stock, whether by making a tender offer or attempting to obtain control of our Company.
Also see the caption “Executive Compensation” of Part III, Item 11 hereof.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results
in a timely manner or detect fraud. Consequently, investors could lose confidence in our financial reporting, and this may
adversely affect any trading price for our common stock that may then exist.
We must maintain effective internal controls to provide reliable financial reports and to detect and prevent fraud. If we cannot
provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as would be possible
with an effective control system in place. We have not performed an in-depth analysis to determine if historical undiscovered
failures of internal controls exist and may in the future discover areas of our internal controls that need improvement.
20
We are continually in the process of evaluating our internal controls for effectiveness as well as evaluating the need for additional
internal controls. Failure to implement changes to our internal controls that we may deem to be ineffective or any others that we
may identify as necessary to maintain an effective system of internal controls could harm our operating results and cause investors
to lose confidence in our reported financial information. Any such loss of confidence could have a substantial negative affect on the
trading price of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2: PROPERTIES
We do not own any property.
We have leases on the following properties:
On December 18, 2020, we entered into a lease of an office suite in Plano, TX, which commenced on January 25, 2021. Lease
payments were deferred until May 1, 2021. Beginning on May 1, 2021, lease payments are $3,650 per month for the twelve (12)
month period ended April 30, 2022, and $3,735 per month for the twelve (12) month period ended April 30, 2023. The lease term is
for five (5) years.
Through our wholly owned subsidiary, IM Telecom, we have leases on the following properties:
Our Tulsa, Oklahoma distribution center, consisting of approximately 2,466 square feet, is under a three (3) year lease that
commenced on August 1, 2022. Monthly lease payments for this property are $2,356 per month for the twelve (12) month period
ended July 31, 2023.
Our customer service center is in Atmore, Alabama, and consists of approximately 1,766 square feet. This lease commenced on
June 1, 2022, and terminates on June 1, 2025. Monthly lease payments for this property are $2,121 per month.
Through our wholly owned subsidiary, Apeiron Systems, we have a lease at the following property:
Our Johnstown, Pennsylvania office, consisting of approximately 6,900 square feet, is under a lease that commenced on September
1, 2022, and expires on September 30, 2030. Monthly lease payments for this property are $4,500 per month.
ITEM 3: LEGAL PROCEEDINGS
We are not party to any material legal proceedings.
ITEM 4: MINE SAFETY DISCLOSURES
None; not applicable.
PART II
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Until December 14, 2020, our common stock was quoted on the “OTC Pink Tier” of the OTC Markets under the symbol “KTEL.”
On December 14, 2020, our common was approved for up-listing on the OTC Markets’ OTCQB® Venture Market or the OTCQB
Tier. No assurance can be given that any established trading market for our common stock will develop or be maintained.
For any market that develops for our common stock, the sale of shares of our common stock comprised of restricted securities
pursuant to Rule 144 of the SEC, any other available exemption from registration under the Securities Act or by registration under
the Securities Act by members of management or others, including any person to whom any such securities may be issued in the
future, may have a substantial adverse impact on any such public market. For information regarding the requirements of resales
under Rule 144, see the heading “Rule 144” of this Item below.
21
The common stock that can be acquired under vested and exercised incentive stock options that we have granted may also have an
impact on any public trading market in our common stock. The shares underlying our 2018 Incentive Stock Option Plan have been
registered with the SEC on Form S-8. See the heading “Outstanding Equity Awards” of the caption “Executive Compensation” in
Part III, Item 11 hereof, for a description of all of our outstanding incentive stock options.
Also, see the heading “Risks Related to Our Common Stock” of the caption “Risk Factors” in Part I, Item 1A hereof.
The following table sets forth, for the periods indicated over the last two (2) years, the high and low closing bid quotations, as
reported by the OTC Markets and OTCQB Markets, and represents prices between dealers, does not include retail markups,
markdowns, or commissions and may not represent actual transactions:
For the Years Ended December 31,
2022 2021
High Low High Low
First Quarter $ 1.75 $ 0.75 $ 0.78 $ 0.20
Second Quarter $ 1.50 $ 0.77 $ 1.10 $ 0.30
Third Quarter $ 1.75 $ 1.10 $ 0.92 $ 0.60
Fourth Quarter $ 1.31 $ 1.03 $ 1.97 $ 0.82
These prices were obtained from OTC Markets and do not necessarily reflect actual transactions, retail markups, mark downs or
commissions.
Rule 144
The following is a summary of the current requirements of Rule 144, including issues related to companies that are or have ever
been a “shell company”:
Securities Affiliate or Person Selling on Behalf of an Affiliate Non-Affiliate (and has not been an
Affiliate During the Prior Three Months)
Restricted
Securities of
Reporting
Issuers
During six-month holding period – no resales under Rule 144
Permitted.
After six-month holding period – may resell in accordance
with all Rule 144 requirements including:
*Current public information,
Volume limitations,
Manner of sale requirements for equity securities, and
Filing of Form 144.
*Current public information is continually required for resales
under Rule 144 because the Company was a former shell
company.
During six-month holding period – no
resales under Rule 144 permitted.
After six-month holding period but
before one year – unlimited public
resales under Rule 144 except that the
current public information requirement
still applies.
After one-year holding period –
unlimited public resales under Rule
144; need not comply with any other
Rule 144 requirements.
Restricted
Securities of
Non-
Reporting
Issuers
During one-year holding period – no resales under Rule 144
permitted.
After one-year holding period – may resell in accordance with
all Rule 144 requirements including:
Current public information,
Volume limitations,
Manner of sale requirements for equity securities, and
Filing of Form 144.
During one-year holding period – no
resales under Rule 144 permitted.
After one-year holding period –
unlimited public resales under Rule
144; need not comply with any other
Rule 144 requirements.
22
Holders
We currently have 556 shareholders of record as of March 20, 2023, not including an indeterminate number of shareholders who
may hold their shares in “street name.”
Dividends
We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the
foreseeable future. All future earnings are anticipated to be utilized for research, development and the furtherance of our business
plan and our technologies, products, services, and platform, and accordingly, it is highly unlikely that you will receive any
dividends from us in the near future, if ever.
There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our securities.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
There have been no sales by us of any unregistered securities during the past two (2) years ended December 31, 2022, and 2021.
Use of Proceeds of Registered Securities
None; not applicable.
Purchases of Equity Securities by Us and Affiliated Purchasers
None; not applicable.
ITEM 6: [RESERVED]
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
When used in this Annual Report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and
similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act and
Section 21e of the Exchange Act regarding events, conditions and financial trends that may affect our future plans of operations,
business strategy, operating results and financial position. Persons reviewing this Annual Report are cautioned that any forward-
looking statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ
materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed at
the forepart of this Annual Report on page 2 hereof, and further, below, under “Trends and Uncertainties.”
Overview of Current and Planned Business Operations
We continue to pursue market opportunities for the distribution of our current products and services described in our “Principal
Products or Services and their Markets” summary on page 6 of this Annual Report. In addition, we continue to pursue expanded
market distribution opportunities, development of new products and services, the addition of new lines of business and accretive
acquisition opportunities that may enhance or expand our current product and service offerings.
Comparison of the Year Ended December 31, 2022, to the Year ended December 31, 2021
Results of Operations
In comparing our Statements of Operations between the years ended December 31, 2022, and 2021, we grew revenue, realized
increased costs of revenue and operating expenses, and decreased net income.
23
For the year ended December 31, 2022, we had $20,023,340 in revenues from operations compared to $12,834,844 in the prior year
ended December 31, 2021, for a total revenue increase of $7,188,496, in 2022. The increase in 2022 revenue was due to our
planned expansion within the Mobile Services segment, which allowed us to distribute high-speed mobile data service to low-
income consumers.
For the year ended December 31, 2022, our cost of revenue was $15,033,733 compared to $7,105,464 in the prior year ended
December 31, 2021, for a cost of revenue increase of $7,928,269, in 2022. Our cost of revenue increase was the result of delivering
more devices to subscribers, as well as providing for sales compensation and network costs related to the higher growth occurring
within the Mobile Services segment.
For the year ended December 31, 2022, we had gross profit of $4,989,607 compared to $5,729,380 in the prior year ended
December 31, 2021, for a gross profit decrease of ($739,773) in 2022. This decline is directly related to up-front costs incurred by
accelerating growth to acquire new customers within our Mobile Services segment.
For the year ended December 31, 2022, total operating expenses were $7,544,292 compared to $5,091,033 in the prior year ended
December 31, 2021, for an increase of $2,453,259 in 2022. This increase was due primarily from additions in payroll and related
expenses resulting from the hiring of our executive staff, as well as senior operations and customer support staff within our IM
Telecom subsidiary. Additionally, increases in professional service fees for legal and billing, as related to the expansion of ACP and
Lifeline in our Mobile Services segment.
For the year ended December 31, 2022, other income (expense) was ($397,675) compared to ($15,361) in the prior year ended
December 31, 2021. This increase is due primarily to interest expense related to our CCUR loan.
For the year ended December 31, 2022, we had a net loss of ($2,952,360) compared to net income of $622,986 in the prior year
ended December 31, 2021.
Liquidity and Capital Resources
As of December 31, 2022, we had $2,055,634 in cash and cash equivalents on hand.
Our ability to continue as a business is dependent upon our generating profitable operations in the future and/or obtaining the
necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.
Management intends to finance operating costs over the next twelve (12) months with revenues from our operations and use of
financing received during the year.
In comparing liquidity between the years ending December 31, 2022, and 2021, cash increased by 120%. The increase was the
result of the CCUR $3,150,000 loan received to finance sales growth in our mobile services sector. Total liabilities increased by
294% in 2022when compared to 2021, as a result of the CCUR loan taken out in 2022. Going forward, growth from new service
offerings is expected to provide additional liquidity for our business. Working capital decreased by $2,257,587 for the year ended
December 31, 2022, primarily resulting from the addition of loans payable.
Our current ratio (current assets divided by current liabilities) was .92 as of December 31, 2022, and 2.91as of December 31, 2021.
Cash Flow from Operations
During the year ended December 31, 2022, and the year ended December 31, 2021, cash flow provided by operating activities was
$(1,821,870) and $211,930, respectively. Decreased cash flows provided by operating activities were primarily attributable to a
material increase in purchased inventory to support distribution and growth within the Mobile Services, as well as related sales
compensation expenses.
Cash Flows from Investing Activities
During the year ended December 31, 2022, and the year ended December 31, 2021, cash flow provided by(used in) investing
activities was $10,000 and ($10,000), respectively. The cash provided by investing activities during 2022 was the result of the sale
of assets.
24
Cash Flows from Financing Activities
During the year ended December 31, 2022, and the year ended December 31, 2021, cash flow provided by financing activities was
$2,934,718 and $15,661, respectively. In 2022, cash flow generated from financing activities consisted of $3,150,000 cash received
from short-term notes payable; ($173,532) cash used for payment of loan origination costs; ($150,000) cash used for repayment of
notes payable; and $108,250 cash received from the exercise of incentive stock options. During the year ended December 31, 2021,
cash flow used in financing activities was comprised of($94,339) for repayments of notes payable and $110,000 in cash received
from the exercise of incentive stock options.
Going Concern
The Company generated a net loss of ($2,952,360) during the year ended December 31, 2022. We had net income of $622,986 in
2021. The Company experienced positive cash flow of $1,112,849 and $217,591 in 2022, and 2021, respectively. The accumulated
deficit as of December 31, 2021, was $8,297,864.
The business received $3,150,000 in capital financing during the year ended December 31, 2022, to help grow the mobile services
base in IM Telecom. The business gained additional distribution channels as a result, and at its peak more than tripled its subscriber
base. High growth phases require immediate expense recognition, and as a result, management expected net operating losses during
this high growth phase. Following this initial high-growth phase, management slowed the acceleration, and the business had an
immediate (and expected) return to positive cash flow and recorded net operating profit of $301,135 in Q4 2022. In Q4 2022,
management shifted its distribution channels towards its highest profit areas, and has seen Average Revenue Per User (“ARPU”)
increase as a result. Management also gained additional equipment suppliers, and has been able to leverage terms on device
purchases, moving from prepayments up to thirty (30) days. We expect terms to become more favorable and offer greater use of our
cash in 2023.
We are one of only a few businesses to hold a national ETC license, which provides us with additive reimbursement rates within
the states we operate. We will continue to target and expand into new ETC licensed areas, and expect increasing returns as a result.
Management believes as we expand state licensing under our ETC designation, this activity will only continue to increase the value
of our ETC license within the marketplace and afford us additional financing capabilities for growth.
Critical Accounting Policies and Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America 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 differ from those estimates. Significant estimates in the accompanying
financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets,
depreciable lives of the website and property and equipment, valuation of warrant and beneficial conversion feature debt discounts,
valuation of share-based payments and the valuation allowance on deferred tax assets.
Impairment of Long-Lived Assets
We account for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10,
“Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
25
Fair Value of Financial Instruments and Fair Value Measurements
We measure their financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our
financial instruments, including cash, accounts payable, accrued expenses escrow liability and short-term loans the carrying
amounts approximate fair value due to their short maturities.
We have adopted accounting guidance for financial and non-financial assets and liabilities. The adoption did not have a material
impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring
fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all
other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements
related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market
prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service
capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices which are observable, either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions
developed by us, which reflect those that a market participant would use.
Leases
In February 2016, the FASB updated the accounting guidance related to leases. The most significant change in the updated
accounting guidance requires lessees to recognize lease assets and liabilities on the balance sheet for all operating leases with the
exception of short-term leases. The standard also expands the disclosures regarding the amount, timing, and uncertainty of cash
flows arising from leases. For a lessee, the recognition, measurement, and presentation of expenses and cash flows arising from a
lease did not significantly change from previous guidance. We adopted the updated guidance on January 1, 2019, on a prospective
basis and as a result, prior period amounts were not adjusted to reflect the impacts of the updated guidance. In addition, as
permitted under the transition guidance within the new standard, prior scoping and classification conclusions were carried forward
for leases existing as of the adoption date.
Revenue Recognition
We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services. We
account for these revenues under Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers.” This
standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a
common revenue standard U.S. GAAP. The standard update also amends current guidance for the recognition of costs to obtain and
fulfill contracts with customers such that incremental costs of obtaining and direct costs of fulfilling contracts with customers will
be deferred and amortized consistent with the transfer of the related good or service. Revenue from these services is generally
recognized monthly as the services are provided. Such revenue is recognized based on usage, which can vary from month to month
or at a contractually committed amount, net of credits or other billing adjustments. Advance billings for future service in the form
of monthly recurring charges are not recognized as revenue until the service is provided.
Stock-Based Compensation
We record stock-based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize
expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a
fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting
period of the award.
We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance
with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The
value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance
commitment or completion of performance by the provider of goods or services.
26
Income Taxes
We account for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts
of existing assets and liabilities and loss carryforwards and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in
which those temporary differences are expected to be recovered or settled.
The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A
valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.
Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a
position taken on an income tax return. We had no liability for uncertain tax positions as of December 31, 2022, and 2021. Interest
and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. We do not have any accrued
interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the years
ended December 31, 2022, and 2021.
Earnings Per Share
We follow ASC Topic 260 to account for the earnings per share. Basic earnings per common share calculations are determined by
dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding
during the period. Diluted earnings per common share calculations are determined by dividing net income available to common
stockholders by the weighted average number of common shares and dilutive common share equivalents outstanding. During
periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 305 of SEC Regulation S-K provides that certain registrants are required to categorize market risk sensitive instruments into
instruments entered into for trading purposes and instruments entered into for purposes other than trading purposes. Within both the
trading and other than trading portfolios, separate quantitative information shall be presented, to the extent material, for each
market risk exposure category (i.e., interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant
market risks, such as equity price risk). These requirements are not applicable to smaller reporting companies under subsection
thereof.
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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
KONATEL, INC.
FINANCIAL STATEMENTS
December 31, 2022, and 2021
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm F-1
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Stockholders’ Equity (Deficit)F-5
Consolidated Statements of Cash Flow F-6
Notes to Consolidated Financial Statements F-7
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of KonaTel, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of KonaTel, Inc. (the Company) as of December 31, 2022, and
2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-
year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the
consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of
December 31, 2022, and 2021, and the results of its consolidated operations and its cash flows for each of the years in the two-year
period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-1
Valuation of Stock Based Compensation
Description of the Matter:
As discussed in Note 9 to the consolidated financial statements, the Company offers stock option awards that involve
complex accounting estimates. Management evaluates the stock option awards in accordance with ASC Topic 718,
“Compensation-Stock Compensation” and uses the Black Scholes Model to value the stock option awards. This model
requires management to make assumptions, use judgment, and can be complex.
How We Addressed the Matter in Our Audit
We gained an understanding of the management’s processes and methodology to develop the estimates. We reviewed the
underlying option agreements. We evaluated management’s selection of a valuation method, tested the inputs used in the
valuation method (Black-Scholes) calculation by agreeing terms of the underlying agreements and market information to
third-party sites, and recalculated the value of the options. We also evaluated the adequacy of the disclosures related to
these fair value measurements.
/s/ Haynie & Company
Haynie & Company
Salt Lake City, Utah
April 17, 2023
PCAOB #457
We have served as the Company’s auditor since 2019.
F-2
KONATEL, INC.
CONSOLIDATED BALANCE SHEETS
Years Ended December 31,
2022 2021
Assets
Current Assets
Cash and Cash Equivalents $ 2,055,634 $ 932,785
Accounts Receivable, net 1,510,118 1,274,687
Inventory, Net 526,337 566,839
Prepaid Expenses 61,241 79,467
Other Current Asset 164 164
Total Current Assets 4,153,494 2,853,942
Property and Equipment, Net 36,536 48,887
Other Assets
Intangible Assets, Net 1,187,937 807,775
Other Assets 73,883 154,297
Investments — 10,000
Total Other Assets 1,261,820 972,072
Total Assets $ 5,451,850 $ 3,874,901
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable and Accrued Expenses $ 1,348,931 $ 930,449
Loans Payable, net of loan fees 3,070,947 —
Right of Use Operating Lease Obligation - current 118,382 50,672
Total Current Liabilities 4,538,260 981,121
Long Term Liabilities
Right of Use Operating Lease Obligation - long term 458,227 136,445
Note Payable - long term — 150,000
Total Long Term Liabilities 458,227 286,445
Total Liabilities 4,996,487 1,267,566
Commitments and contingencies
Stockholders’ Equity
Common stock, $0.001 par value, 50,000,000 shares authorized, 42,240,406 outstanding and
issued at December 31, 2022 and 41,615,406 outstanding and issued at December 31, 2021 42,240 41,615
Additional Paid In Capital 8,710,987 7,911,224
Accumulated Deficit (8,297,864)(5,345,504)
Total Stockholders’ Equity 455,363 2,607,335
Total Liabilities and Stockholders’ Equity $ 5,451,850 $ 3,874,901
The accompanying notes are an integral part of these consolidated financial statements.
F-3
KONATEL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
2022 2021
Revenue $ 20,023,340 $ 12,834,844
Cost of Revenue 15,033,733 7,105,464
Gross Profit 4,989,607 5,729,380
Operating Expenses
Payroll and Related Expenses 4,974,989 2,702,495
Operating and Maintenance 8,129 1,887
Bad Debt 29,133 31,318
Professional and Other Expenses 1,509,269 697,594
Utilities and Facilities 206,380 146,254
Depreciation and Amortization 12,352 833,016
General and Administrative 300,042 156,386
Marketing and Advertising 106,402 90,635
Application Development Costs 146,400 266,191
Taxes and Insurance 251,196 165,257
Total Operating Expenses 7,544,292 5,091,033
Operating Income/(Loss)(2,554,685) 638,347
Other Income and Expense
Interest Expense (399,031) (15,361)
Other Income/(Expense), net 1,356 —
Total Other Income and Expenses (397,675) (15,361)
Net Income (Loss)$ (2,952,360)$ 622,986
Earnings (Loss) per Share
Basic $ (0.07) $ 0.02
Diluted $ (0.07) $ 0.01
Weighted Average Outstanding Shares
Basic 41,863,283 40,909,085
Diluted 41,863,283 42,891,011
The accompanying notes are an integral part of these consolidated financial statements.
F-4
KONATEL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
Common Shares Additional Accumulated
Shares Amount Paid-in Capital Deficit Total
Balances as of January 1, 2021 40,692,286 $ 40,692 $ 7,460,632 $ (5,968,490) $ 1,532,834
Exercised Stock Options 923,120 923 109,077 — 110,000
Stock Based Compensation — — 341,515 — 341,515
Net Income — — — 622,986 622,986
Balances as of December 31, 2021 41,615,406 $ 41,615 $ 7,911,224 $ (5,345,504) $ 2,607,335
Exercised Stock Options 625,000 625 107,625 —108,250
Stock Based Compensation — — 692,138 — 692,138
Net Loss — — — (2,952,360) (2,952,360)
Balances as of December 31, 2022 42,240,406 $ 42,240 $ 8,710,987 $ (8,297,864)$ 455,363
The accompanying notes are an integral part of these consolidated financial statements.
F-5
KONATEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Years Ended December 31,
2022 2021
Cash Flows from Operating Activities:
Net Income (Loss)$ (2,952,360) $ 622,986
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and Amortization 12,352 833,016
Loan Origination Cost Amortization 94,478 —
Bad Debt 29,133 31,318
Stock-based Compensation 692,138 341,515
Change in Right of Use Asset (83,612) (92,947)
Change in Lease Liability 92,941 105,395
Changes in Operating Assets and Liabilities:
Accounts Receivable (264,564) (871,204)
Inventory 40,502 (549,053)
Prepaid Expenses 98,640 (77,102)
Accounts Payable and Accrued Expenses 418,483 (112,117)
Deferred Revenue — (37,677)
Other Assets — 17,800
Net cash provided by (used in) operating activities (1,821,869) 211,930
Cash Flows from Investing Activities
Purchase of Assets — (10,000)
Sale of Assets 10,000 —
Net cash provided by (used in) investing activities 10,000 (10,000)
Cash Flows from Financing Activities
Proceeds from short-term note payable 3,150,000 —
Loan origination cost (173,532) —
Repayments of amounts of Notes Payable (150,000) (94,339)
Cash received from Stock Options Exercised 108,250 110,000
Net cash provided by (used in) financing activities 2,934,718 15,661
Net Change in Cash 1,122,849 217,591
Cash - Beginning of Year 932,785 715,194
Cash - End of Period $ 2,055,634 $ 932,785
Supplemental Disclosure of Cash Flow Information
Cash paid for interest $ 3,099 $ 6,796
Cash paid for taxes $ — $ —
Non-cash investing and financing activities:
Right of use assets obtained in exchange for new operating lease liabilities $ 472,974 $ 199,245
The accompanying notes are an integral part of these consolidated financial statements.
F-6
KONATEL, INC.
Notes to Consolidated Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview of Company
KonaTel Nevada (as defined below) was organized under the laws of the State of Nevada on October 14, 2014, by its founder and
then sole shareholder, D. Sean McEwen, to conduct the business of a full-service MVNO (“Mobile Virtual Network Operator”)
provider that delivered cellular products and services to individual and business customers in various retail and wholesale markets.
KonaTel Inc., formerly known as Dala Petroleum Corp. (“KonaTel,” the “Company,” “we,” “our,” or “us”), also formerly known as
“Westcott Products Corporation,” was incorporated as “Light Tech, Inc.” under the laws of the State of Nevada on May 24, 1984. A
subsidiary in the name “Westcott Products Corporation” was organized by us under the laws of the State of Delaware on June 24,
1986, for the purpose of changing our name and domicile to the State of Delaware. On June 27, 1986, we merged with the
Delaware subsidiary, with the survivor being Westcott Products Corporation, a Delaware corporation (“Westcott”). On December
18, 2017, we acquired KonaTel, Inc, a Nevada sub S-Corporation (“KonaTel Nevada”), in a merger with our acquisition subsidiary
under which KonaTel Nevada became our wholly owned subsidiary.
On December 31, 2018, we acquired Apeiron Systems, Inc., a Nevada corporation d/b/a “Apeiron” (“Apeiron Systems”), which is
also our wholly owned subsidiary. Apeiron Systems was organized in 2013 and is an international hosted services CPaaS
(“Communications Platform as a Service”) provider that designed, built, owns and operates its private core network, supporting a
suite of real-time business communications services and Applications Programming Interfaces (“APIs”). As an Internet Telephony
Service Provider (“ITSP”), Apeiron Systems holds a Federal Communications Commission (“FCC”) numbering authority license.
Some of Apeiron Systems’ hosted services include SIP/VoIP services, SMS/MMS processing, BOT integration, NLP (“Natural
Language Processing”), ML (“Machine Learning”) and number services, including mobile, toll free and DID landline numbers,
SMS to Email services, Database Dip services, SD-WAN, voice termination, and numerous API driven services including voice,
messaging and network management.
On January 31, 2019, we acquired IM Telecom, an Oklahoma limited liability company, d/b/a Infiniti Mobile, (“IM Telecom” or
“Infiniti Mobile”), which became our wholly owned subsidiary. Infiniti Mobile is an FCC licensed ETC (“Eligible
Telecommunications Carrier”) and is one of nineteen (19) FCC licensed carriers to hold an FCC approved Lifeline Compliance
Plan in the United States. Under the Lifeline program, Infiniti Mobile is currently authorized to provide government subsidized
mobile telecommunications services to eligible low-income Americans currently in ten (10) states.
Basis of Presentation
The accompanying financial statements have been prepared using the accrual basis of accounting.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America 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. Significant estimates in these financial statements include the allowance for doubtful
receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and intangible assets.
Actual results could differ from those estimates. Certain reclassifications have been made to prior year amounts to conform with the
current year presentation.
Basis of Consolidation
The consolidated financial statements for the year ended December 31, 2022, include the Company and its three (3) wholly owned
corporate subsidiaries, KonaTel Nevada, Apeiron Systems, and Infiniti Mobile (January through December). The consolidated
financial statements for the year ended December 31, 2021, include the Company and its three (3) wholly owned corporate
subsidiaries, KonaTel Nevada, Apeiron Systems, and Infiniti Mobile (January through December). All significant intercompany
transactions are eliminated.
Cash and Cash Equivalents
Cash and Cash Equivalents include cash on hand and all short-term investments with maturities of three months or less.
F-7
Trade Accounts Receivable
The Company accounts for trade receivables based on amounts billed to customers. Past due receivables are determined based on
contractual terms. The Company does not accrue interest and does not require collateral on any of its trade receivables.
Allowance for Doubtful Receivables
The allowance for doubtful receivables is determined by management based on customer credit history, specific customer
circumstances and general economic conditions. Periodically, management reviews our accounts receivable and adjusts the
allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to
collect the receivable have failed. As of December 31, 2022, and 2021, management has determined that no allowance for doubtful
receivables is necessary.
Inventory
Inventory consists primarily of the cost of cellular phones and cellular accessories. Inventory is reported at the lower of cost or net
realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. As of December 31, 2022, total inventory owned by
the company was $526,337.
Due to rapidly changing technology within the industry, inventory is evaluated on a regular basis to determine if any obsolescence
exists. As of December 31, 2022, and 2021, the allowance for inventory obsolescence was $0.
Property and Equipment
Property and equipment are recorded at cost and are depreciated on the straight-line method over their estimated useful lives.
Leasehold improvements are amortized over the lesser of the lease term or estimated useful life, furniture and fixtures, equipment,
and vehicles are depreciated over periods ranging from five to seven (5-7) years, and billing software is depreciated over three (3)
years which represents the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred while
major replacements and improvements are capitalized. When property and equipment are retired or sold, the cost and applicable
accumulated depreciation are removed from the respective accounts and the related gain or loss is recognized.
The Company recognizes impairment losses for long-lived assets whenever changes in circumstances result in the carrying amount
of the assets exceeding the sum of the expected future cash flows associated with such assets. Management has concluded that no
impairment reserves are required as of December 31, 2022, and 2021.
Intangible Assets
The Company accounts for intangible assets in accordance with the provisions of Statement of Financial Accounting Standards
ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets
and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs
to sell. As of December 31, 2022, intangible assets include our ETC License and Right of Use Assets.
Other Assets
Other Assets represent items classified as long-term assets in accordance with the Statement of Financial Accounting Standards
ASC 210-10-45. Other Assets include security deposits held with vendors.
Customer Deposits
Before entering into a contract with a sub-reseller customer, the Company requires the customer to either secure a formal letter of
credit with a bank or require a certain level of cash collateral deposits from the customer. These collateral requirements are
determined by management and may be adjusted upward or downward depending on the volume of business with the sub-reseller
customer, or if management’s assessment of credit risk for a sub-reseller customer would change.
F-8
The Company held $0 in collateral deposits from various sub-reseller customers at December 31, 2022, and 2021, respectively.
Such amounts represent collateral received from the sub-resellers in order to contract with the Company. The related contracts have
an option to terminate within a period of less than one (1) year, and accordingly, these collateral deposits are classified as current
liabilities in the accompanying balance sheet.
Fair Market Value of Assets
The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain
of our financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for receivables
and short-term loans the carrying amounts approximate fair value due to their short maturities. Long-term assets purchased through
acquisitions are valued at the Fair Market Value of the asset at the time of acquisition. The Fair Market Value is based on
observable inputs of assets in active market- places for fixed assets, and estimations and assumptions developed by us for Other
Intangibles.
The Company follows accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value,
provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value
measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This
guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as
the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost
approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description
of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices, which are observable, either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions
developed by us, which reflect those that a market participant would use.
Leases
In February 2016, the FASB updated the accounting guidance related to leases. The most significant change in the updated
accounting guidance requires lessees to recognize lease assets and liabilities on the balance sheet for all operating leases with the
exception of short-term leases. The standard also expands the disclosures regarding the amount, timing and uncertainty of cash
flows arising from leases. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a
lease did not significantly change from previous guidance. See NOTE 4.
Upon adoption, we recorded $151,471 for operating lease assets and liabilities, which includes the impact of fair value adjustments,
prepaid and deferred rent. As of December 31, 2022, and December 31, 2021, our operating lease assets and liabilities were
$576,609 and $187,117, respectively.
Revenue Recognition
Services revenues are generated from cellular and telecommunication services. The revenue is derived from wholesale and retail
services. Telecommunications and mobile telecommunication services include network platforms, voice, data, and text services.
The Company recognizes revenue as telecommunications and mobile services are provided in service revenue.
Telecommunications and mobile services are billed and paid on a monthly basis. Services are billed and paid on a monthly basis.
These bills include an amount for the monthly recurring charge and a usage charge.
We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services. We
account for these revenues under Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers.” This
standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a
common revenue standard under U.S. GAAP. The standard update also amends current guidance for the recognition of costs to
obtain and fulfill contracts with customers such that incremental costs of obtaining and direct costs of fulfilling contracts with
customers will be deferred and
F-9
amortized consistent with the transfer of the related good or service. The adoption of this guidance did not have a material impact
on the consolidated financial statements.
Deferred Revenue
Services for cellular and telecommunication services have a monthly recurring charge that is billed in advance. This charge covers
a thirty (30) or thirty-one (31)-day period. This charge is deferred for the period in which it was received and recorded as revenue at
the conclusion of this period. Costs, mainly from outside providers, associated with the deferred revenue are recognized in the same
period as revenue is recognized.
Cost of Revenue
Cost of Revenue includes the cost of communication services, equipment and accessories, shipping costs, and agent compensation.
Advertising/Marketing
Costs for advertising/marketing of products and services, as well as other promotional and sponsorship costs, are charged to selling,
general and administrative expense in the periods in which they are incurred. Advertising/marketing expense was $106,402 and
$90,635 for 2022 and 2021, respectively. The increase in advertising/marketing costs was a result of the expansion of the marketing
of Infiniti Mobile via independent agents.
Professional and Other Expenses
Previously for 2021, the Company presented certain professional fees and other expenses under the category of “Professional and
Other Expenses.” These expenses are now being presented under the categories of “Operating and Maintenance,” “Professional
Services,” and “Application Development Costs” as this change better represents the types of expenses that were incurred during
2022 and 2021, respectively.
Stock-based Compensation
The Company records stock-based compensation in accordance with the guidance in ASC 718 which requires the Company to
recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted
for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the
vesting period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from nonemployees in
accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably
measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a
performance commitment or completion of performance by the provider of goods or services.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary
differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities
and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial
statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected
to be realized or settled. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.
The benefits of uncertain tax positions are recorded in the Company’s Consolidated Financial Statements only after determining a
more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. The
Company records interest and penalties related to unrecognized tax benefits in interest expense in the Company’s Consolidated
Statements of Operations.
F-10
Net Income (Loss) Per Share
Basic income (loss) per share of common stock attributable to common stockholders is calculated by dividing net income (loss)
attributable to common stockholders by the weighted-average shares of common stock outstanding for the period. Potentially
dilutive shares, which are based on the weighted-average shares of common stock underlying outstanding stock-based awards using
the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income (loss) per
share of common stock attributable to common stockholders when their effect is dilutive. The dilutive common shares for year
ended December 31, 2022, are not included in the computation of diluted earnings per share because to do so would be anti-
dilutive. As of December 31, 2021, there were 1,981,926 dilutive shares.
The following table reconciles the shares outstanding and net income used in the computations of both basic and diluted earnings
per share of common stockholders:
Years Ended December 31,
2022 2021
Numerator
Net Income (Loss)$ (2,952,360) $ 622,986
Denominator
Weighted-average common shares outstanding 41,863,283 40,909,085
Dilutive impact of stock options 1,981,926
Weighted-average common shares outstanding, diluted 41,863,283 42,891,011
Net income per common share
Basic $ (0.07) $ 0.02
Diluted $ (0.07) $ 0.01
Concentrations of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of receivables, cash,
and cash equivalents.
All cash and cash equivalents and restricted cash and cash equivalents are held at high credit financial institutions. These deposits
are generally insured under the FDIC’s deposit insurance coverage; however, from time to time, the deposit levels may exceed
FDIC coverage levels.
The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of December
31, 2022, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater
than 10% of total receivables) due from two (2) customers in the amounts of $859,334 or 57.0% and $255,136 or 16.9%. As of
December 31, 2021, the Company had a significant concentration of receivables from two (2) customers in the amounts of
$783,431, or 63.9%, and $194,647, or 15.9%.
Concentration of Major Customer
A significant amount of the revenue is derived from contracts with major customers. For the year ended December 31, 2022, the
Company had two (2) customers that accounted for $12,852,384 or 64.2% of revenue and $3,431,875 or 17.1%, of the revenue. For
the year ended December 31, 2021, the Company had two (2) customers that accounted for $5,494,625 or 42.8% and $3,617,833 or
28.2% of revenue. The loss of a major customer would have a negative impact on the Company, and would subsequently require
the Company to make significant changes to reduce expenses. It should be noted that our largest customer is the FCC, as part of our
participation in the federal Lifeline and ACP programs.
Effect of Recent Accounting Pronouncements
The Company has evaluated all other recent accounting pronouncements and believes that none will have a significant effect on the
Company’s financial statement.
F-11
NOTE 2 – SIGNIFICANT TRANSACTIONS
CCUR Loan
On June 14, 2022, the Company and its wholly owned subsidiary companies entered into a Note Purchase Agreement and related
Guarantee and Security Agreement with CCUR Holdings, Inc. (as collateral agent), and Symbolic Logic, Inc., whereby the
Company pledged its assets to secure $3,150,000 in debt financing. The term is for a period of twelve (12) months, at an interest
rate of 15%, with two successive six-month optional extensions. As a condition of securing the loan, the Company paid a 3%
origination fee, and other legal and closing expenses to the lender, in the amount of $153,284, resulting in a net loan balance of
$2,984,181. The loan costs of $153,284 and the net loan balance of $2,984,181 are to be amortized over a 12-month period. The
Company incurred an additional $20,248 in legal expense related to the closing, which amount will be amortized over a 12-month
period. Proceeds of the loan were used to retire the $150,000 SBA “EIDL” Loan and will be used in an ongoing capacity to support
the acceleration of our mobile services growth strategy.
EIDL Loan
In 2020, the Company was granted a $150,000 Economic Injury Disaster Loan (“EIDL”) from the SBA. The term of the loan is
thirty (30) years, at an interest rate of 3.75% on advanced funds. Installment payments were to begin twelve (12) months following
the loan date but were deferred through September of 2022. As of June 30, 2022, the outstanding balance was paid in full and there
are no further obligations due the SBA.
Euler Hermes/Sky Phone Settlement
Between March and July of 2019, IM Telecom purchased wireless handsets from Sky Phone, LLC in the amount of $192,293.
Subsequently, a dispute arose between the parties regarding the amount of the debt, a lack of sufficient transaction documentation
and problems with some of the handsets. On or about December 2019, the debt was transferred to Euler Hermes North America
Insurance Company. On April 22, 2020, the parties entered into an agreement to settle the matter whereby IM Telecom agreed to
pay $80,000 in monthly payments of $4,000 over twenty (20) months. The first payment was made on May 20, 2020. As of August
2021, the settlement had been paid in full.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following major classifications as of December 31, 2022, and 2021:
December 31, 2022 December 31, 2021
Lease Improvements $ 46,950 $ 46,950
Furniture and Fixtures 102,946 102,946
Billing Software 217,163 217,163
Office Equipment 94,552 94,552
461,611 461,611
Less: Accumulated Depreciation (425,075)(412,724)
Property and equipment, net $ 36,536 $ 48,887
Depreciation expense amounted to $12,352 and $30,683 for the years ended December 31, 2022, and 2021, respectively.
Depreciation expense is included as a component of operating expenses in the accompanying statements of operations.
NOTE 4 – RIGHT-OF-USE ASSETS
Right-of-Use Assets consist of assets accounted for under ASC 842. The assets are recorded at present value using implied interest
rates between 4.75% and 7.50%. The Right-of-Use Assets were $553,686 and $173,524 in 2022 and 2021, respectively.
F-12
The Company has right-of-use assets through leases of properties under non-cancelable leases. As of December 31, 2022, the
Company had four (4) properties with lease terms in excess of one (1) year. Of these four (4) leases, two (2) leases expire in 2025,
one (1) lease expires in 2026, and one (1) lease expires in 2030. Lease payables as of December 31, 2022, are $576,609.
Future lease liability payments under the terms of these leases are as follows:
2023 $ 153,593
2024 $ 155,325
2025 $ 129,543
2026 $ 65,968
2027 $ 54,000
Thereafter $ 144,000
Total $ 702,429
Less Interest $ 125,820
Present value of minimum lease payments $ 576,609
Less Current Maturities $ 118,382
Long Term Maturities $ 458,227
The weighted average term of the right-to-use leases is 68.5 months recorded with a weighted average discount of 6.76%. For the
year ended December 31, 2022, total lease expense was $152,639.
NOTE 5 – INTANGIBLE ASSETS
Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions:
December 31,
2022 2021
Customer List $ 1,135,962 $ 1,135,962
Software 2,407,001 2,407,001
ETC License 634,251 634,251
Less: Amortization (3,542,963)(3,542,963)
Net Amortizable Intangibles 634,251 634,251
Right of Use Assets - net 553,686 173,524
Intangible Assets net $ 1,187,937 $ 807,775
Amortization expense amounted to $0 and $802,334 for the years ended December 31, 2022, and 2021, respectively. Amortization
expense is included as a component of operating expenses in the accompanying statements of operations. With the exception of the
license granted by the FCC, all intangible assets are fully amortized as of December 31, 2022.
Intangible Assets with indefinite useful life consist of the Lifeline license granted by the FCC. The license, because of the nature of
the asset and the limitation on the number of granted Lifeline licenses by the FCC, will not be amortized. The license was acquired
through an acquisition. The fair market value of the license as of December 31, 2022, and December 31, 2021, was $634,251.
NOTE 6 – LINES OF CREDIT
The Company has no lines of credit as of December 31, 2022.
NOTE 7 – CONTINGENCIES AND COMMITMENTS
Litigation
From time to time, the Company may be subject to legal proceedings and claims that arise in the ordinary course of business. As of
December 31, 2022, there are no such legal proceedings.
F-13
Contract Contingencies
The Company has the normal obligation for the completion of its cellular provider contracts in accordance with the appropriate
standards of the industry and that may be provided in the contractual agreements.
Regulatory Determination
On May 17, 2019, IM Telecom was notified by USAC of an over-payment of Universal Service Fund reimbursements in the
amount of $168,277. On July 25, 2019, the Company entered into a Letter of Acknowledgement with the FCC and requested a
twenty-four (24)-month payment plan regarding the repayment of the over-payment amounts. While awaiting approval of this
repayment plan, the Company continued to make monthly payments against the outstanding balance. On October 15, 2020, the
Company received approval of the payment plan and signed a promissory note with USAC to repay the remainder of the unpaid
balance in the amount of $67,105. The loan had a commencement date of November 13, 2020, a term of twelve (12) months, with
an annual interest rate of 12.75%. The Company agreed to pay USAC $5,986 per month for twelve (12) months, and a $1,000
Administrative Fee due on October 15, 2020. The promissory note was paid in full in August of 2021.
Tax Audits
In June of 2021, the Company received an audit determination and assessment from the State of Pennsylvania related to sales and
use tax for the audit period of January 1, 2016, through September 30, 2019. The assessment is in the amount of $115,000,
including interest and penalties calculated on sales made inside and outside Pennsylvania. The Company has recorded the full
amount of this assessment. The Company appealed the assessment in August 2021, and at the request of the state, provided
additional information to support its appeal. The Company’s position is that Pennsylvania has no sales tax authority to levy and
collect sales tax on sales made outside of Pennsylvania. The Company initially recorded an expected liability of $7,000, based on
known sales inside Pennsylvania. The State of Pennsylvania rejected an appeal by the Company. The Company remains in
discussions with the State of Pennsylvania and is working towards a plan to pay the full amount of the liability, under the
possibility of an extended payout period. The Company believes this is the best course of action, as following the final payoff of the
liability, the Company can re-open an appeal with the state for a refund of the liability.
Letters of Credit
The Company had no outstanding letters of credit as December 31, 2022.
NOTE 8 – SEGMENT REPORTING
The Company operates within two (2) reportable segments. The Company’s management evaluates performance and allocates
resources based on the profit or loss from operations. Because the Company is a recurring revenue service business with very few
physical assets, management does not use total assets by segment to make decisions regarding operations, and therefore, the total
assets disclosure by segment has not been included.
The reportable segments consist of Hosted Services and Mobile Services. Mobile Services reporting will now consist of our post-
paid and pre-paid cellular business.
Hosted Services – Our Hosted Services include a suite of hosted CPaaS services within the Apeiron Systems’ cloud platform,
including Cloud IVRs, Voicemail, Fax, Call Recording and other services provided with local, toll-free and international phone
numbers. Apeiron also delivers public and private IP network services from its national redundant network backbone, including
MPLS, Dedicated Internet and LTE Wireless WAN solutions. Additionally, Apeiron’s Cloud Services include Information Data
Dips, SD-WAN and IoT data and device management. These Hosted Services are marketed nationally and internationally through
the Apeiron website, its sales staff, independent sales agents and ISOs.
Mobile Services – Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services
through our subsidiaries Apeiron Systems and IM Telecom. Mobile voice/text/data and IoT mobile data services are supported by a
blend of reseller agreements with select national wireless carriers and national wireless wholesalers. A wireless communications
service reseller typically does not own the wireless network infrastructure over which services are provided to its customers.
Mobile voice/text/data and mobile data solutions are generally sold as traditional post-paid service plans that may include
voice/text/data or wireless data only plans. Sometimes equipment is provided, which can include, but is not limited to, phones,
tablets, modems, routers
F-14
and accessories. Also included in our Mobile Services segment is the distribution of government subsidized mobile voice service
and mobile data service by IM Telecom under its Infiniti Mobile brand and FCC license to low-income American households that
qualify for the FCC’s Lifeline mobile voice service program and/or the FCC’s ACP mobile data program. Even though government
programs like Lifeline have existed since 1985, these programs, along with newer programs like the ACP program, are subject to
change and may have a material impact on our Mobile Services business if changed, reduced or eliminated.
The following table reflects the result of operations of the Company’s reportable segments:
Hosted Services Mobile Services Total
For the year ended December 31, 2022
Revenue $5,567,308 $ 14,456,032 $ 20,023,340
Gross Profit $ 1,808,393 $ 3,181,214 $ 4,989,607
Depreciation and amortization $ 11,944 $ 408 $ 12,352
Additions to property and equipment $ - $ - $ -
For the year ended December 31, 2021
Revenue $ 5,740,728 $ 7,094,116 $ 12,834,844
Gross Profit $ 2,013,459 $ 3,715,921 $ 5,729,380
Depreciation and amortization $ 805,469 $ 27,547 $ 833,016
Additions to property and equipment $ - $ - $ -
NOTE 9 – STOCKHOLDERS’ EQUITY
Non-Compensatory Stock Options
Effective December 18, 2017, the Company completed an Agreement and Plan of Merger whereby a newly formed wholly owned
subsidiary merged with and into KonaTel Nevada, and under which KonaTel Nevada was the surviving corporation and became a
wholly owned subsidiary of the Company. Mr. McEwen was the sole shareholder of KonaTel Nevada and received merger
consideration of 13,500,000 shares of the Company’s common stock and 1,500,000 non-compensatory options to acquire shares of
the Company’s Common Stock under the merger, at an exercise price of $0.22 per share, vesting quarterly, from March 18, 2018, to
December 18, 2019. See NOTE 11 below.
Stock Compensation
The Company offers incentive stock option equity awards to directors and key employees. Options vest in tranches and typically
expire in five (5) years. During the year ended December 31, 2022, and 2021, the Company recorded options expense of $692,138
and $341,515, respectively. The option expense not taken as of December 31, 2022, is $1,557,516, with a weighted average term of
3.22 years.
In 2022, 900,000 share incentive stock options were granted to two (2) independent members of the Board of Directors and two (2)
key employees. Each independent Board member was granted 25,000 shares per quarter of service in 2022, for a total of 100,000
shares each. The key employees were granted 700,000 share options as part of their employment agreements. During the year
ended December 31, 2022, 625,000 shares were exercised by three (3) former employees of the Company, who received these
options as part of their employment agreements. During the year, 130,000 share options were forfeited, of which 50,000 options
were forfeited by an independent consultant, and 80,000 options were forfeited by two (2) former employees of the Company. The
Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $1.10 on December 31, 2022.
The estimated grant date fair value of stock option grants was calculated using the Black-Scholes-Merton option-pricing model
using the following assumptions:
2022 2021
Weighted average volatility 192.71% 231.6%
Weighted average expected term (years)5.00 2.25
Risk free interest rate 1.90% 0.78%
Expected dividend yield — —
F-15
The following table represents incentive stock option activity as of and for the year ended December 31, 2022:
Number of Weighted Average Weighted Average Aggregate
Shares Exercise Price Remaining Life Intrinsic Value
Options Outstanding – December 31, 2021 4,260,000 $ .37 2.25 $ 5,862,938
Granted 900,000 1.16
Exercised (625,000) .17 920,750
Forfeited (130,000)—
Options Outstanding – December 31, 2022 4,405,000 $ .59 3.22 $ 2,260,138
Exercisable and Vested, December 31, 2022 1,722,041 $ .36 1.80 $ 1,271,653
The following table represents stock option activity as of and for the year ended December 31, 2021:
Number of
Shares
Weighted Average
Exercise Price
Weighted Average
Remaining Life
Aggregate
Intrinsic Value
Options Outstanding: December 31, 2020 3,800,000 $ .21 3.60 $ 812,350
Granted 1,635,000 $ .75
Exercised (923,120) .14 847,406
Forfeited (251,880)
Options Outstanding: December 31, 2021 4,260,000 $ .37 2.25 $ 5,862,938
Exercisable and Vested: December 31, 2021 1,981,926 $ .25 1.65 $ 2,970,907
In 2021, 1,635,000 share options were granted to two (2) independent members of the Board of Directors, and six (6) key
employees of the Company. Each independent director was granted 25,000 shares per quarter of service for a total of 100,000
shares each, and in aggregate, key employees were granted 1,435,000 shares as part of their employment agreements. During the
year ended December 31, 2021, 923,120 share options were exercised. Exercised shares included 250,000 options exercised by one
(1) former Board member who received his options at the time of the KonaTel Nevada merger in 2017 and who was not an
independent director, and 250,000 of these options were exercised by an officer who also received his options at the time of the
KonaTel Nevada merger. The remaining 423,120 options were exercised by a former key employee. During 2021, 175,000 share
options were forfeited by a former independent director; and 76,880 options were utilized in a cashless exercise by a former key
employee under a Severance Agreement and Release. The “Aggregate Intrinsic Value” is based on the market value of the
Company’s common stock of $1.75 on December 31, 2021.
NOTE 10 – INCOME TAX
The Company provides for income taxes using an asset and liability-based approach. Deferred income tax assets and liabilities are
recorded to reflect the future tax consequences of temporary differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. The Tax Cuts and Jobs Act was enacted on December 22, 2017, which
reduced the U.S. corporate statutory tax rate from 35% to 21%. The Company changed its effective federal rate to 21% as the
expected rate for our deferred tax items.
The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2022, and 2021:
December 31,
2022 2021
Net operating losses $ 850,050 $ 361,947
Depreciation and amortization 3,716 24,290
Stock option expense 324,528 172,062
Valuation allowance (1,178,294)(558,299)
Net Deferred Tax Asset $ — $ —
F-16
As of December 31, 2022, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective
income tax rate over the next twelve (12) months. A reconciliation of the expected income tax benefit at the U.S. Federal income
tax rate to the income tax benefit actually recognized for the years ended December 31, 2022, and 2021 is set forth below:
For the Year Ended
December 31,
2022 2021
Tax at statutory federal rate $ (619,996) $ 130,827
Non-deductible expenses and other — (31,991)
Change in valuation allowance 619,996 (98,836)
Benefit from income taxes $ — $ —
As of December 31, 2022, the Company has a net operating loss carry-forward for U.S. federal income tax purposes of
approximately $4,047,861. This carry-forward is available to offset future taxable income, if any, and will expire, if not used, from
2037 through 2042. The utilization of the net operating loss carry-forward is dependent upon the tax laws in effect at the time the
net operating loss carry-forward can be utilized and may be limited by changes in ownership control of the Company. The
Company’s U.S. federal tax return, constituting the return of the major taxing jurisdictions, are subject to examination by the taxing
authorities for all open years as prescribed by applicable statute. No income tax waivers have been executed that would extend the
period subject to examination beyond the period prescribed by statute. The Company is no longer subject to U.S. federal tax
examinations for tax years before and including December 31, 2019. During the years ended December 31, 2022, and 2021, the
Company did not incur interest and penalties.
Expiration NOL Amount
2037 $ 759,300
2038 $ 463,895
2039 $ 484,496
2040 $ 87,181
2042 $ 2,252,989
$ 4,047,861
NOTE 11 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date of this filing, and except for the following, no material subsequent
events have occurred:
Agreement to Acquire Wireless Carrier
On January 24, 2023, the Company entered into a non-material purchase agreement to acquire 100% of the membership interest of
Tempo Telecom, LLC, a Georgia limited liability company and Eligible Telecommunications Carrier (“ETC”), pending FCC
approval, which the Company estimates could take several months. Additionally, the Company has assigned its rights under the
purchase agreement to Insight Mobile, Inc., a Delaware corporation, subject to various conditions of closing. If all conditions are
timely satisfied, including the required FCC approval, this transaction will be materially beneficial to the Company and will not
involve any dilution to the Company’s shareholders. Additional information about this assignment of the Company’s rights to the
referenced purchase agreement is contained in the 8-K Current Report of the Company dated April 6, 2023, and filed with the SEC
on April 17, 2023.
Employee Stock Option Grants
Jeffrey Pearl, an independent Board member, was granted 25,000 quarterly incentive stock options on January 30, 2023, at an
exercise price of $0.880, fully vested, which was 110% of the fair market value of our common stock on the date of grant.
F-17
On February 9, 2023, Robert Beaty conveyed to the Company 44,686 shares of the Company’s common stock, originally acquired
through an unrelated private transaction in 2020, at a price of $0.7385, in an exempt transaction pursuant to Section 16b-3(e), in
full payment of the exercise of 100,000 incentive stock options granted in 2018, at a price of $.033 per share, which was 110% of
the fair market value of our common stock on the date of grant.
Robert Beaty, an independent Board member, was granted 25,000 quarterly incentive stock options on February 13, 2023, at an
exercise price of $0.814, fully vested, which was 110% of the fair market value of our common stock on the date of grant.
Non-Compensatory Stock Option Grant
On March 16, 2023, Mr. McEwen exercised his first tranche of 187,500 stock options for 187,500 shares of common stock at a
price of $0.22 per share, which shares were issued on March 20, 2023.
F-18
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE
During our two (2) most recent fiscal years, no independent accountant who was previously engaged as the principal accountant to
audit our financial statements, or an independent accountant who was previously engaged to audit a significant subsidiary and on
whom the principal accountant expressed reliance in its report, has resigned (or indicated it has declined to stand for re-election
after the completion of the current audit) or was dismissed.
ITEM 9A: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are
designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to
other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure
that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are 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 an issuer in the
reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our
principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely
decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness, as of December 31, 2022, of our disclosure controls and procedures. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective as of December 31, 2022.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in
Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision
of our Chief Executive Officer and our Chief Financial Officer, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. Internal controls over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records, which in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts and expenditures are being made in accordance
with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
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.
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 the Company’s annual or interim financial statements will not be prevented or
detected on a timely basis.
In evaluating the effectiveness of our internal control over financial reporting as of December 31, 2022, management used the
criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission (“COSO”). Based on the criteria established by COSO, management (with the participation of the CEO
and the CFO) determined that the internal controls over financial reporting are effective as of December 31, 2022, and that there are
no material weaknesses in the Company’s internal controls over financial reporting as of such date.
29
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Management’s report is not subject to attestation by our registered public accounting firm pursuant to rules of
the SEC that permit us to satisfy these requirements by providing the management’s report only.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting during the last fiscal quarter of our fiscal year ended
December 31, 2022.
Limitations on the Effectiveness of Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will
prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that
there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts
of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls
is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to
future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in
the degree of compliance with policies or procedures.
ITEM 9B: OTHER INFORMATION
None.
ITEM 9C: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None, not applicable.
(This space intentionally left blank)
30
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Identification of Directors and Executive Officers
Our executive officers and directors and their respective ages, positions and biographical information are set forth below.
Name Age Positions Held Since
D. Sean McEwen 61 Chairman and CEO Dec.-17
Charles D. Griffin 58 President and COO Jan.-22
Brian R. Riffle 63 Chief Financial Officer Dec.-17
B. Todd Murcer 53 EVP, Finance and Secretary Jan.-22
D. Sean McEwen 61 Director Dec.-17
Robert Beaty 53 Director Feb.-18
Jeffrey Pearl 59 Director Oct.-18
Joshua Ploude 46 CEO of Apeiron Systems Dec.-18
Jason N. Welch 52 President of IM Telecom Feb.-22
Background and Business Experience
D. Sean McEwen
Mr. McEwen is 61 years of age and founded KonaTel Nevada in 2014, a wireless data and voice service reseller, and currently
focuses his efforts exclusively on our current and planned business operations. From 2011 to 2013, Mr. McEwen consulted with
multiple international Mobile virtual network operators (“MVNOs”) in the U.S., Peru, Croatia and China. From 2010 to 2011, he
served as a founding board member of One Fund, a NYSE listed (NYSE: ONEF) exchange traded fund. One Fund pioneered the
“ETF of ETFs” concept, and in 2011, came to the attention of Russell Investments, known for their stock indices (i.e., the Russell
2000). Russell Investments purchased One Fund in 2011. In 2008, Mr. McEwen became a member of the venture/angel investment
group, Sierra Angels (www.sierraangels.com) serving on several high-tech due diligence committees and participating in early-
stage funding transactions. In early 1983, he co-founded Online Data Corp. Through a series of acquisitions/mergers, this company
was eventually renamed “TriTech Software Systems” (www.tritech.com) “TriTech”. From 1983 to 1990, it developed custom
strategic software applications for numerous businesses, including E. F. Hutton Life Insurance, Travel Lodge Hotels, Foodmaker
(Jack in the Box restaurants), AT&T, UCSD’s Scripps Institute of Oceanography and Visa’s Plus Systems national ATM network.
In 1991, TriTech transformed from a custom software development firm to an enterprise software development and systems
integration company specializing in mission critical public safety (e.g., police, fire, and EMS) software solutions. TriTech’s
flagship product, VisiCAD, was the world’s first 9-1-1 emergency dispatching system based on Microsoft technology with
integrated GPS based tracking and predictive routing technology. In 1995, TriTech won the Microsoft Most Innovative Windows
Application award competing against all Windows applications worldwide. In 1998, while Mr. McEwen was CEO, TriTech was
named to the Inc. 500 as the 344th fastest growing privately held company in the United States. The following year, Bill Gates cited
TriTech and VisiCAD in his book Business at the Speed of Thought as an example of a mission critical Windows based telecom
system utilizing GPS.
Mr. McEwen served as Vice President of TriTech from 1983 to 1988, President from 1988 to 1996, Chairman/CEO from 1996 to
2000, and finally as a member of the Board of Directors, until controlling interest was sold to Westview Capital Partners in 2006.
Charles D. Griffin
Mr. Griffin is 58 years of age. Prior to joining us, Mr. Griffin served as Chairman and Chief Executive Officer of Lingo
Communications, a provider of IP-based Cloud voice and data solutions, following its merger with Impact Telecom, Inc. (“Impact
Telecom”) in 2018. In this role, he led the successful integration of Impact Telecom into Lingo Communications (“Lingo”) under a
private equity purchase and facilitated the financing of the transaction in collaboration with a private equity investor.
31
Impact Telecom and Lingo continue to operate as global providers of voice and data communications services spanning
Residential, SMB, Enterprise and Wholesale markets. Prior to the merger of Lingo and Impact Telecom, Mr. Griffin served as
Chief Executive Officer of Impact Telecom, where he completed eleven (11) accretive M&A transactions and led the successful
restructuring of multiple technology portfolio companies, including PacWest, TNCI and Unipoint Holdings, which resulted in
record high net income. As one of the original founders of Impact Telecom, Mr. Griffin led it from a start-up to a company with
annual revenues of over $290 million and more than 300 employees servicing 250,000 customers worldwide.
Mr. Griffin ultimately guided the Impact Telecom to a successful exit in 2020. Previously, Mr. Griffin served as Chief Executive
Officer of Ipath Communications, where he was responsible for building a Class V Broadsoft VoIP network for SMB direct sales
distribution with over 5,000 subscribers nationwide. In this role, he also led the successful merger with Impact Telecom. Prior to his
time with Ipath, Mr. Griffin served in a number of business development, operations and sales roles where he was involved in
product development, sales strategy and distribution and installations, all within the telecommunications industry.
Mr. Griffin graduated Summa Cum Laude in business communications from Metropolitan State University of Colorado.
Brian R. Riffle
Mr. Riffle is 63 years of age and the founder of CFO Strategies LLC of Johnstown, Pennsylvania (“CFO Strategies”), an
accounting firm and consulting firm, which he founded in May 2008. CFO Strategies has thirteen (13) employees; approximately
180 small business clients and approximately 650 tax clients. It provides consulting, CFO, accounting, bookkeeping, payroll and
tax services, including: CFO for businesses; entire accounting department for businesses; temporary staffing for businesses;
complete payroll processing; CFO consulting and small business start-up services; and prepares taxes for corporations, small
businesses, non-profits and individuals. Mr. Riffle is the Managing Partner and has extensive experience in various industries,
including: Chief Financial Officer, healthcare industry; telecommunications, security, manufacturing and non-profit industries
experience; Chief Executive Officer in the financial services industry and healthcare; Assistant Controller in the retail industry;
Consultant in non-profit, healthcare and event management arenas; governmental treasurer and board member for over thirty (30)
years; and as a masters level college instructor at Mount Aloysius College since 1994. He is also a Certified Public Accountant
(May 1987).
B. Todd Murcer
Mr. Murcer is 53 years of age. Prior to joining us, Mr. Murcer served as Executive Vice President, FP&A and Treasury of Lingo
Communications, a provider of IP-based Cloud voice and data solutions, following its merger with Impact Telecom, Inc. (“Impact”)
in 2018. In this key leadership position, he directed procedures and policies for the financial operations of the business and had
responsibility for planning and implementing financial projections and reporting activities for the U.S. and its Canadian subsidiary,
Vancouver Telephone Company, Limited. As owner of treasury operations, Mr. Murcer managed the use and sourcing of the
company’s cash and banking activities with additional oversight to credit and collections risk management. Mr. Murcer has been
in the telecommunication industry for more than 20 years, and got his start with Matrix Telecom, Inc. (“Matrix”), a Platinum Equity
portfolio company that ultimately divested to Impact. At Matrix, he helped the company grow annual revenues from $10 million to
$400 million, serving in a number of business development and financial roles and leading teams through numerous M&A
transactions. Mr. Murcer holds a B.S. in Economics from the University of Oklahoma and an M.S.M. from Boston University’s
Brussels Graduate Center.
Robert Beaty
Mr. Beaty is 53 years of age and currently the President of AGS Construction Inc., a premier reconstruction company in the Denver
metropolitan area. Previously, he was the founder and CEO of Impact Telecom, a leader in the telecommunications market, which
focused on delivering flexible and effective solutions to carriers, businesses and homes. Impact Telecom is comprised of a family of
brands all dedicated to innovation, affordability and execution.
Mr. Beaty brings twenty-five (25) years of experience in telecommunications and managing wholesale and commercial customer
bases. Prior to starting Impact Telecom in 2005, he served as the Senior Vice President of Sales for ICG Communications. He
helped guide ICG through bankruptcy and was a valued member of the senior executive team tasked with growing and managing
the customer base.
He earned a B.A. in Psychology from the University of Kansas and his M.B.A. in Business Administration from Webster
University.
32
Jeffrey Pearl
Mr. Pearl is 59 years of age and brings more than thirty-two (32) years of Telecommunications/Cloud Service Provider experience
to our Board of Directors. Jeffrey has experience in both the startup environment as well as working inside of some of the larger
incumbent players, both privately held as well as publicly traded companies. This experience will assist us in building out our go to
market strategy, focusing both on direct sales as well as the alternative channels of distribution. His extensive sales and marketing
experience, knowledge of the marketplace and personal connections in the industry are valuable to us at this stage and throughout
our evolution.
Mr. Pearl currently is involved in running three companies:
Mr. Pearl is currently CEO and Co-founder of OTG Consulting, which was founded in May 2016. OTG Consulting is a sales
agency formed by a group of industry leaders in order to fill a gap in the marketplace. The group assists executives of SMB and
Enterprise businesses as they make the move to cloud-based services. OTG Consulting works with most carriers and service
providers delivering solutions for voice and data communications, internet, hosting, managed services and other cloud offerings
Mr. Pearl also consults under PearlCom, a consulting practice focusing on telecom companies and service providers which was
founded in January 2016. PearlCom offers strategic advice, providing direction on sales management, technology implementation,
product pricing and positioning, bringing his thirty (30) plus years of experience to the table, accelerating timelines and creating
efficiencies.
Mr. Pearl also co-founded Secure View, where he is Chief Revenue Officer and Partner, which was founded in December 2016.
Secure View is focused on delivering “best in class” unified IP-based security solutions. Its systems are designed to be more
accessible and simpler to use allowing customers to feel that their security needs are 100% covered providing peace of mind
allowing them to focus elsewhere on their business. Secure View offers the experience, knowledge and technical understanding
coupled with relationships with the players/partners needed to move security systems to the cloud.
Prior to starting and running these three (3) companies, Jeffrey worked at Broadsoft (recently acquired by Cisco) July 2013 to May
2016, where he successfully ran North America Carrier Sales. In this role he cultivated strong relationships with C-Level
executives within the major telcos and service providers utilizing BroadSoft in the US. Under his guidance, his organization also
pursued new relationships with startups and providers not utilizing BroadSoft. After successfully fulfilling those duties, Jeffrey was
next tasked with starting an entirely new division: Channel Acceleration, focusing on some of the largest customers in and outside
the US. In this role, Jeffrey and his teams engaged with executives and sales organizations to productively assist in accelerating
their efforts around “Go to Market” strategies, sales training and sales assistance in the area of Hosted VoIP and SIP Trunking
services. Prior to Broadsoft Jeffrey successfully started, operated and sold two VoIP companies.
Joshua Ploude
Mr. Ploude is 46 years old. He is the President and CEO and Co-Founder of Apeiron Systems, and since 2013, he has been
responsible for defining the product vision and operational strategy for Apeiron Systems. He has worked directly with software,
hardware and carrier network vendors to oversee the development of Apeiron Systems’ product set; and has also had the
responsibility to work with internal software development teams to ensure Apeiron Systems’ software provides the requisite
function to support product and operational initiatives.
He has also been responsible for planning and building Competitive Local Exchange Carrier (“CLEC”) and Internet Service
Provider (“ISP”) facilities-based networks since 2001 and has managed 5+ “Greenfield network” (the installation of a network
where there was not previously one in use) builds across all types of wireline and wireless network infrastructures.
Mr. Ploude holds a Bachelor of Science in Political Science from UCLA and a Master of Science in Telecommunications
Management from Golden Gate University. He has had the following business experience since 1999: 1999-2005 - CTO of
PCS1/Datavo - A facilities-based CLEC serving a California-wide footprint; 2006-2010 - President/CEO of Ethos Communications
- A consultancy helping CLECs and ISPs with operational and technology development; 2010-2013 - CTO of TNCI - A facilities-
based CLEC & ISP, serving a forty-eight (48)-state footprint; and 2013-Present - Co-Founder, CEO and President of Apeiron
Systems.
33
Jason N. Welch
Mr. Welch is 52 years of age, President of IM Telecom. Prior to joining us, Mr. Welch served as Chief Operations Officer of 46
Labs LLC, a provider of SaaS, voice and data solutions servicing large enterprise and communications providers internationally. In
this key leadership position, he directed procedures and policies for the operations of the business and had responsibility for service
delivery, customer care and vendor management. Prior to joining 46 Labs, Mr. Welch served as Executive Vice President of Impact
Telecom, a Lingo Company. In this function, he provided oversight to carrier wholesale sales acquisition, product strategy, account
management, agent channel management, vendor management, pricing, routing and business analytics. He successfully managed
the growth of the carrier wholesale business unit to $40m+ in annual revenues, processing 18b+ voice minutes annually through
hundreds of domestic and international carrier partnerships. Mr. Welch has been in the telecommunication industry for more than
25 years and has successfully served in management roles across companies such as Frontier Communications, Global Crossing,
Telco Group Inc., KDDI Global, XO Communication and Impact Telecom.
Family Relationships
There are no family relationships between any of our officers and directors.
Involvement in Other Public Companies
Except as may be indicated above, none of our officers or directors is an “affiliate” of any other publicly held companies.
Involvement in Certain Legal Proceedings
During the past ten (10) years, none of our directors, executive officers or persons nominated to become directors or executive
officers (or those in similar positions with us) has been the subject of any of the following:
(1) A petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general
partner at or within two (2) years before the time of such filing, or any corporation or business association of which he was an
executive officer at or within two (2) years before the time of such filing
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures
Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter,
broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank,
savings and loan association or insurance company, or engaging in or continuing any conduct or practice in
connection with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection
with any violation of Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal
or State authority barring, suspending or otherwise limiting for more than sixty (60) days the right of such person to engage in any
activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
34
(5) Such person was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state
securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or
vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission
to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding,
not subsequently reversed, suspended or vacated, relating to an alleged violation of:
(i) Any federal or state securities or commodities law or regulation; or
(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a
temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent
cease-and-desist order, or removal or prohibition order; or
(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(a) of the Exchange Act
The common stock of the Company is registered under the Exchange Act, and therefore, the officers, directors and holders of more
than 10% of our outstanding shares are subject to the provisions of Section 16(a) which requires them to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and
greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely upon review of the copies of such forms furnished to us during the fiscal year ended December 31, 2022, and based
upon a review of the filings contained in the Edgar Archives, all such required reports were believed to be timely filed.
Code of Ethics
We have adopted a Code of Ethics for our principal executive and financial officers. See Exhibit 14 in Part IV, Item 15. We
anticipate that our Code of Ethics will be updated by our Board of Directors as the Board deems necessary.
Corporate Governance
Nominating Committee
We have not established a Nominating Committee because until our closing of the KonaTel Nevada Merger, we had only two (2)
directors and two (2) executive officers, and we believed that we were able to effectively manage the issues normally considered by
a Nominating Committee and currently believe we can do without a Nominating Committee.
If we do establish a Nominating Committee, we will disclose our procedures in recommending nominees by our Board of
Directors.
Audit Committee
We have not established an Audit Committee for the same reasons why we have not established a Nominating Committee, and a
further review of this issue will no doubt be necessitated and undertaken by our management in the future.
35
Insider Trading Policy
During the year ended December 31, 2021, our Board of Directors adopted an Insider Trading Policy, which is Exhibit 99.1 hereto.
See Item IV, Part 15.
The Insider Trading Policy was adopted by the Company to satisfy its obligations to prevent insider trading and to help its
personnel avoid the consequences associated with violations of applicable federal and state securities laws, rules and regulations
regarding insider trading of our securities when they have material non-public information related to the Company. It is also
intended to prevent even the appearance of improper conduct on the part of anyone employed by or associated with us, not just so-
called “insiders.” It contains four (4) “Black-Out Periods”, which are as follows: twenty (20) days prior to the release of financial
results for the periods ending March 31, June 30, September 30 and December 31 of each year and end after three (3) full trading
days of our securities on the OTCQB (or any other recognized nation medium on which our securities publicly trade [“Other
Medium”]) after financial results are announced for the preceding fiscal period. If the last day of the month falls on a weekend, the
Black-Out Period will start at the close of business on the last trading day prior to the weekend. Additional Black-Out Periods may
occur when other material events occur, such as a press release sent out to the public, wherein only a select few persons have
knowledge of the event. The Black-Out Periods do not apply to the exercise of outstanding and vested ISOs issued by the
Company or other stock issuances approved by the Board of Directors; however, they do apply to all of our securities that are the
subject of a registration statement filed with the SEC. This summary is modified in its entirely by reference to Exhibit 99.1.
ITEM 11: EXECUTIVE COMPENSATION
All Compensation
The following Employment Agreements of our officers and directors are discussed below under the caption “Executive
Compensation” in Part III, Item 11 hereof, and can be accessed by Hyperlink in Part IV, Item 15 hereof:
D. Sean McEwen-Chairman and CEO-8-K Current Report dated January 1, 2022, filed with the SEC January 14, 2022, along with
the third amendment to Mr. McEwen’s Employment Agreement that is Exhibit 10.1 filed herewith.
Charles D. Griffin, President-8-K Current Report dated January 1, 2022, filed with the SEC January 14, 2022.
B. Todd Murcer, 8-K Current Report dated February 4, 2022, filed with the SEC on February 11, 2022.
Joshua Ploude, President of Apeiron Systems-8-K Current Report dated December 31, 2018, filed with the SEC on December 31,
2018.
Jason N. Welch, President of IM Telecom-8-KA-1 Current Report dated February 4, 2022, filed with the SEC on April 8, 2022.
36
Summary Compensation Table
Name and Compen- Stock Warrant Compen-
Principal Position Salary sation Bonus Awards Awards* sation Total
D Sean McEwen, 2022 $ 316,450 $ — $ — $ — $ — $ — $ 316,450
Chairman and CEO 2021 $ 67,976 $ — $ — $ — $ — $ — $ 67,976
Robert Beaty, Director 2022 $ 36,000 $ — $ — $ — $ 122,375 $ — $ 158,375
2021 $ 28,000 $ — $ — $ — $ 89,404 $ — $ 117,404
Jeffrey Pearl, Director 2022 $ 36,000 $ — $ — $ — $ 126,500 $ — $ 162,500
2021 $ 28,000 $ — $ — $ — $ 78,916 $ — $ 106,916
Brian R. Riffle, 2022 $ — $ — $ — $ — $ — $ 16,544 $ 16,544
Chief Financial Officer 2021 $ — $ — $ — $ — $ — $ 37,160 $ 37,160
Charles D. Griffin, 2022 $ 250,000 $ — $ — $ — $ — $ — $ 250,000
President and COO 2021 $ — $ — $ — $ — $ — $ — $ —
B. Todd Murcer, Secretary 2022 $ 216,250 $ — $ — $ — $ — $ — $ 216,250
and EVP of Finance 2021 $ — $ — $ — $ — $ — $ — $ —
Joshua Ploude, President, 2022 $ 250,000 $ — $ — $ — $ — $ — $ 250,000
Apeiron Systems 2021 $ 219,679 $ — $ — $ — $ — $ — $ 219,679
Jason Welch, President, 2022 $ 225,139 $ — $ — $ — $ — $ — $ 225,139
IM Telecom 2021 $ — $ — $ — $ — $ — $ — $ —
*See the heading “Outstanding Equity Awards” below.
Employment Agreement of D. Sean McEwen
At the Effective Time of the KonaTel Merger, we entered into an Employment Agreement with Mr. McEwen for a term of two (2)
years, under which he served as the Chairman, President and CEO of our Company, with customary duties applicable to these
positions. After the initial term, the McEwen Employment Agreement provided that it would continue on a year-to-year basis.
During the initial term (2018-2019), Mr. McEwen received the following compensation under his Employment Agreement: $1,000
per month base salary; and inclusion in our healthcare plan for employees, including medical, dental and vision, which coverage
also includes his spouse. Effective January 1, 2020, McEwen’s Employment Agreement was amended to adjust his monthly base
salary to $16,667, including a monthly bonus program tied to a percentage of EBITDA. Effective January 1, 2022, McEwen’s
Employment Agreement was amended a second time to adjust his monthly base salary to $22,916.66, including a twenty-four (24)
month severance compensation package equal to his then current base salary, together with any accrued and untaken vacation, in
the event any employment departure is not “for cause” as defined in the McEwen Employment Agreement. Additionally, at the
time of the second amendment to his Employment Agreement, Mr. McEwen resigned as President of the Company to allow for
Charles D. Griffin to assume the role of President and COO of the Company. Mr. McEwen remains as Chairman of the Board and
CEO of the Company. Mr. McEwen has never claimed the “percentage of EBITDA” bonus program provision of his Employment
Agreement; accordingly, effective April 12, 2022, Mr. McEwen suggested, and the Board of Directors agreed, to a third amendment
of his Employment Agreement thereby eliminating the percentage of EBITDA bonus provision. Mr. McEwen volunteered this third
amendment to his Employment Agreement without receipt of any current or future consideration, and all other terms and conditions
of the McEwen Employment Agreement along with its three amendments remain the same. The third amendment to Mr. McEwen’s
Employment Agreement is filed herewith as Exhibit 10.1, in Part IV, Item 15 hereof.
Charles D. Griffin Employment Agreement
The Griffin Employment Agreement covers customary duties performed by persons serving in the capacities of President and COO,
and Mr. Griffin, with the guidance of Mr. McEwen, our Chairman and CEO, will assist in the management and leadership of the
Company and is accountable to our CEO; he will also act as a liaison between the Company, our subsidiaries and our CEO. A
complete description of his duties is contained in Exhibit A of the Griffin Employment Agreement, which provides, among other
customary terms and provisions: (i) a monthly base salary of $20,833.33, along with inclusion in our healthcare plan for employees
and spouse, including medical, dental and vision coverage, effective January 1, 2022, and termination can occur on thirty (30) days’
notice by either party; (ii) customary trade secret, non-competition and dispute resolution provisions, among other provisions; and
(iii) he shall be paid a twelve (12) months’ severance compensation package equal to his then current base salary, together with any
accrued and untaken vacation, in the event any employment departure is not “for cause” as defined in the Griffin Employment
Agreement.
37
The Employment Agreement has customary termination, trade secret and dispute resolution clauses, among others.
B. Todd Murcer Employment Agreement
On January 24, 2022, we entered into an Employment Agreement with Mr. Murcer (the “Murcer Employment Agreement”), under
which Mr. Murcer will serve as our Executive Vice President of Finance and Secretary of the Company, with customary duties
applicable to these positions, and which are described in Exhibit A thereof. Under the Murcer Employment Agreement, Mr. Murcer
will receive the following compensation: $18,750 per month base salary; and inclusion in our healthcare plan for employees,
including medical, dental and vision, which coverage also includes his immediate family. The monthly base salary may be
increased or decreased from time to time in the sole discretion of the Company, but in no event shall the monthly base salary be less
than the amount stated in this section. Mr. Murcer is entitled to paid vacation during each year of his employment in accordance
with the Company’s vacation accrual policy as defined by our Company handbook; and he may also receive an annual bonus under
the Company’s bonus program established by us and as approved by our Board of Directors each calendar year.
The Murcer Employment Agreement also contained customary termination, trade secret and dispute resolution clauses, among
others.
Joshua Ploude Employment Agreement
Effective December 31, 2018, Apeiron and Mr. Ploude executed and delivered a 36-month Employment Agreement under which
Mr. Ploude will be the Chief Executive Officer of Apeiron, with the attendant duties and responsibilities outlined in his
Employment Agreement, at a monthly salary of $16,667 (the “Ploude Employment Agreement”). On September 1, 2021, Mr.
Ploude’s monthly salary was increased to $20,883.33. The Ploude Employment Agreement has customary provisions regarding
trade secrets; a one (1) year covenant not to compete; confidentiality; Apeiron’s continued ownership of intellectual property; a
duty to cooperate; free, fully-paid licensing to Apeiron of inventions created by Mr. Ploude that he provides or incorporates into
any Employer product or system during his employment with Apeiron; and an assignment of Mr. Ploude’s interest in all relevant
intellectual property utilized by Apeiron, among other terms and conditions.
Jason N. Welch Employment Agreement
On February 2, 2022 (effective February 14, 2022), we entered into an Employment Agreement with Mr. Welch (the “Welch
Employment Agreement”), under which Mr. Welch will serve as the President of IM Telecom, with customary duties applicable to
this position, and which are described in Exhibit A thereof. Under the Welch Employment Agreement, Mr. Welch will receive the
following compensation: $20,833.33 per month base salary; and inclusion in our healthcare plan for employees, including medical,
dental and vision, which coverage also includes his immediate family. The monthly base salary may be increased or decreased from
time to time in the sole discretion of the Company, but in no event shall the monthly base salary be less than the amount stated in
this section. Mr. Welch is entitled to paid vacation during each year of his employment in accordance with the Company’s vacation
accrual policy as defined by our Company handbook; and he may also receive an annual bonus under the Company’s bonus
program established by us and as approved by our Board of Directors each calendar year.
The Welch Employment Agreement also contained customary termination, trade secret and dispute resolution clauses, among
others.
(This space intentionally left blank)
38
Securities Authorized for Issuance under Equity Compensation Plans
Outstanding Equity Awards
The following table represents 2,855,000 options granted, with 1,725,000 exercised, and 1,645,000 options still available to be
granted under the 6,225,000 shares reserved for issuance under the Company’s 2018 Incentive Stock Option Plan.
Name Option Awards Stock Awards
Number of Number of Equity Option Option Number of Market Equity Equitysecurities securities incentive plan exercise expiration shares or value of incentive incentive
underlying underlying awards; price ($) date units of shares or plan plan
unexercised unexercised number of stock that units of awards; awards;options (#) options (#) securities have not stock that number of market or
exercisable not underlying vested (#) have not unearned payout
exercisable unexercised vested (#) shares, value ofunearned units or unearned
options (#) other shares,
rights united orthat have other
not rights
vested (3) that havenot
vested
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Robert Beaty 100,000 0 $0.33 (1) 0 0
Robert Beaty 25,000 0 $0.18 (1) 0 0
Robert Beaty 50,000 0 $0.17 (1) 0 0
Robert Beaty 25,000 0 $0.17 (1) 0 0
Robert Beaty 25,000 0 $0.26 (1) 0 0
Robert Beaty 25,000 0 $0.13 (1) 0 0
Robert Beaty 25,000 0 $0.06 (1) 0 0
Robert Beaty 25,000 0 $0.44 (1) 0 0
Robert Beaty 25,000 0 $0.66 (1) 0 0
Robert Beaty 25,000 0 $0.94 (1) 0 0
Robert Beaty 25,000 0 $1.93 (1) 0 0
Robert Beaty 25,000 0 $1.14 (1) 0 0
Robert Beaty 25,000 0 $1.01 (1) 0 0
Robert Beaty 25,000 0 $1.91 (1) 0 0
Robert Beaty 25,000 0 $1.32 (1) 0 0
Robert Beaty 25,000 0 $0.81 (1) 0 0
Jeffrey Pearl 100,000 0 $0.50 (2) 0 0
Jeffrey Pearl 25,000 0 $0.17 (2) 0 0
Jeffrey Pearl 25,000 0 $0.12 (2) 0 0
Jeffrey Pearl 25,000 0 $0.17 (2) 0 0
Jeffrey Pearl 25,000 0 $0.10 (2) 0 0
Jeffrey Pearl 25,000 0 $0.49 (2) 0 0
Jeffrey Pearl 25,000 0 $0.60 (2) 0 0
Jeffrey Pearl 25,000 0 $0.81 (2) 0 0
Jeffrey Pearl 25,000 0 $1.60 (2) 0 0
Jeffrey Pearl 25,000 0 $1.34 (2) 0 0
Jeffrey Pearl 25,000 0 $1.10 (2) 0 0
Jeffrey Pearl 25,000 0 $1.74 (2) 0 0
Jeffrey Pearl 25,000 0 $1.39 (2) 0 0
Jeffrey Pearl 25,000 0 $0.88 (2) 0 0
Jonathan So 50,000 100,000 $0.32 (3) 0 0
Edward Archuleta 10,000 20,000 $0.73 (4) 0 0
Charles D. Griffin 0 1,100,000 $0.78 (5) 0 0
Amy Pearson 16,667 33,333 $0.75 (6) 0 0
B. Todd Murcer 87,500 262,500 $1.17 (7) 0 0
Jason N. Welch 87,500 262,500 $1.04 (8) 0 0
39
(1) As part of his designation as director, Mr. Beaty was granted quarterly stock option grants to purchase 25,000 shares of our
common stock commencing February 12, 2018, with the shares being valued at 110% of the fair market value or the closing
price of our common stock on the date of the grant for the first year, and thereafter at 110% of the fair market value or the
closing price of our common stock on the quarterly date of vesting for any other remaining quarters of service as a director.
The first quarterly grants of 25,000 (100,000 total) were all granted at the same exercise price of $0.33 and all would have
expired February 11, 2023. The remaining options expire at the earlier of five (5) years from the date of quarterly grant or
one (1) year from termination or resignation as a director. On February 9, 2023, Mr. Beaty exercised his first option grants
of 100,000 options by conveying to the Company 44,686 unencumbered shares of the Company’s common stock that he had
acquired in an unrelated private transaction in 2020, which was subsequent to the date of this Annual Report.
(2) As part of his designation as director, Mr. Pearl was granted quarterly stock option grants to purchase 25,000 shares of our
common stock commencing October 28, 2018, with the shares being valued at 110% of the fair market value or the closing
price of our common stock on the date of the grant for the first year, and thereafter at 110% of the fair market value or the
closing price of our common stock on the quarterly date of vesting for the remaining quarters of service as a director. The
first quarterly grants of 25,000 (100,000 total) were all granted at the same exercise price of $0.495 and all expire October
28, 2023. The remaining options expire at the earlier of five (5) years from the date of quarterly grant or one (1) year from
termination or resignation as a director.
(3) These options were granted on April 1, 2021, and vest 50,000 shares on April 1, 2022; 50,000 shares on April 1, 2023; and
50,000 shares on April 1, 2024; and they expire on April 1, 2026, or ninety (90) days from resignation or termination of
employment.
(4) These options were granted on May 17, 2021, and vest 10,000 shares on May 17, 2022; 10,000 shares on May 17, 2023; and
10,000 shares on May 17, 2024; and they expire on May 17, 2026, or ninety (90) days from resignation or termination of
employment.
(5) These options were granted on July 6, 2021, and vest 275,000 shares on January 7, 2023; 275,000 shares on January 7,
2024; 275,000 shares on January 7, 2025; and 275,000 shares on January 7, 2026; and they expire on January 7, 2027, or
ninety (90) days from resignation or termination of employment.
(6) These options were granted on September 27, 2021, and vest 16,667 shares on September 27, 2022; 16,667 shares on
September 27, 2023, and 16,666 shares on September 27, 2024; and they expire on September 26, 2026, or ninety (90) days
from resignation or termination of employment.
(7) These options were granted on January 24, 2022, and vest 87,500 shares on January 24, 2023, 87,500 shares on January 24,
2024, 87,500 shares on January 24, 2025 and 87,500 shares January 24, 2026; and they expire on January 24, 2027, or
ninety (90) days from resignation or termination of employment.
(8) These options were granted on February 14, 2022, and vest 87,500 shares February 14, 2023, 87,500 shares on February 14,
2024, 87,500 shares on February 14, 2025 and 87,500 shares on February 14, 2026; and they expire on February 14, 2027,
or ninety (90) days from resignation or termination of employment.
Compensation of Directors
Mr. McEwen receives no compensation to serve as a Director and Chairman of the Board. Currently, and except for compensation
of Mr. McEwen under his Third Amended Employment Agreement (see Exhibit 10.1, in Part IV, Item 15), and the $3,000 monthly
compensation set out above for certain directors, our directors do not receive any other compensation other than the incentive stock
options outlined above in this Item under the heading “Outstanding Equity Awards.”
Transactions with Related Persons
For information regarding transactions with related persons, see the heading “Transactions with Related Persons,” in Part III, Item
13 below.
40
Promoters and Certain Control Persons
See the heading “Transactions with Related Persons,” under Item 13 below.
Parents of the Smaller Reporting Company
We have no parents.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners
The following table sets forth the ownership by any person known to us to be the beneficial owner of more than five percent (5%)
of any of our outstanding voting securities as of the filing of this Annual Report with the SEC. Beneficial ownership is determined
in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Other than as
indicated below in footnotes to this table, the persons named in the table below have sole voting power and investment power with
respect to all shares of common stock shown as beneficially owned by them.
Security Ownership of Beneficial Owners
Name and Address* Title of Amount and Nature of Percent of
of Beneficial Owner Class Beneficial Ownership (1), (2), (3) & (4)Class (1), (2), (3) & (4)
D. Sean McEwen Common 17,000,000 37.67%
Joshua Ploude Common 6,300,000 13.96%
James Michael Grisham Common 3,250,000 7.2%
Security Ownership of Officers and Directors
Name and Address* Title of Amount and Nature of Percent of
of Officer or Director Class Beneficial Ownership (1), (2), (3) & (4)Class (1), (2), (3) & (4)
D. Sean McEwen Common 17,000,000 37.67%
Charles D. Griffin Common 275,000 0.61%
Brian R. Riffle Common 0 0.00%
B. Todd Murcer Common 87,500 0.19%
Robert Beaty Common 530,314 1.18%
Jeffrey Pearl Common 450,000 1.00%
Joshua Ploude Common 6,300,000 13.96%
Jason N. Welch Common 87,500 0.19%
All Officers and Directors as a Group Common 24,730,314 54.81%
*The Company’s principal executive office address on the cover page.
(1) James Michael Grisham is presently the sole Trustee of “The James T. Coyle Trust” formed by Mr. Coyle on June 19, 2012 (the
“Coyle Trust”), and is one of four (4) equal beneficiaries, per stirpes, of the Coyle Trust. He is also the CEO of Shawnee
Communications, Inc. (“Shawnee”) The Coyle Trust and Shawnee purchased, respectively, from the Company, 750,000 shares
($150,000) and 2,500,000 shares ($500,000) of the Company’s common stock on or about March 6, 2018, and collectively own
3,250,000 shares or 7.2% of the outstanding securities of the Company. Neither Mr. Grisham, the Coyle Trust or Shawnee is or has
ever been an “affiliate” of the Company.
(2) The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as
to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right
to acquire within sixty (60) days through the exercise of any stock option or other right. The persons named in the table have sole
voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to
community property laws where applicable and the information contained in the footnotes to this table.
41
(3) Based on 42,483,220 currently issued and outstanding shares of common stock, together with 1,312,500 non-compensatory
stock options of Mr. McEwen; 1,325,000 vested incentive stock options, comprised of, 425,000 for Robert Beaty, 450,000 Jeffrey
Pearl, Charles D. Griffin for 275,000, Todd Murcer for 87,500, and Jason Welch for 87,500, for a total of 45,120,720 issued (or
issuable with respect to such options within sixty [60] days) and outstanding shares of common stock, as of the filing of this Annual
Report. SEC Rule 13d-3 generally provides that management’s beneficial ownership of securities includes any such security that
can be acquired within sixty (60) days. Accordingly, any securities not outstanding, which are subject to such options, warrants or
conversion privileges and exercisable within sixty (60) days, are treated as outstanding for the purpose of computing the percentage
of outstanding securities owned by that person, and are not treated as outstanding for the purpose of computing the percentage of
the class owned by any such person.
(4) The beneficial ownership of Mr. McEwen in the “Beneficial Owners” table includes 15,687,500 shares directly owned; and
1,312,500 shares underlying personally owned vested options, all of which vested non-compensatory options can be exercised
within sixty (60) days of the filing of this Annual Report.
Changes in Control
There are no additional present arrangements or pledges of our securities which may result in a change in control of the Company.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
Transactions with Shareholders
None.
Transactions with CFO Strategies LLC
Brian R. Riffle, the CFO of the Company, is the Managing Partner of CFO Strategies, LLC. Payments of $16,544 were made to
CFO Strategies LLC as compensation for the CFO services of Mr. Riffle.
Promoters and Certain Control Persons
See the heading “Transactions with Related Persons” of this Item above, and Part III, Item 12 hereof for identification of control
persons.
Director Independence
For purposes of determining director independence, we have applied the definitions set out in NASDAQ Marketplace Rule
4200(a)(15), which states that “Independent director” means “a person other than an executive officer or employee of the company
or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director.” None of the following named directors come
within any of the exceptions to this definition regarding: being or having been an executive officer; having an employee-employer
relationship with us; having received compensation from us in an amount in excess of $100,000; and having certain relationships
with us, in the case of membership of a director on an audit committee, including applicable family relationships. Accordingly,
Messrs. Robert Beaty and Jeffrey Pearl, two (2) of our current directors, are independent directors.
42
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
We have not adopted an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, we do require
approval in advance of the performance of professional services to be provided to us by our principal accountant. Additionally, all
services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal
accountant.
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
The following is a summary of the fees billed to us by our principal accountants, Haynie & Company, CPAs, during the years ended
December 31, 2022, and 2021, respectively:
Fee Category 2022 2021
Audit Fees $ 100,500 $ 89,156
Audit-related Fees — —
Tax Fees — —
All Other Fees — —
Total Fees $ 100,500 $ 89,156
Audit Fees - Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial
statements for our 10-K Annual Reports and review of the financial statements included in our 10-Q Quarterly Reports or services
that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.
Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to
the performance of the audit or review of our financial statements and are not reported under “Audit fees.”
Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax
planning.
All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported
under “Audit Fees,” “Audit-related Fees,” and “Tax Fees” above.
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43
PART IV
ITEM 15: EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a)(1)(2)
Financial Statements. See the audited financial statements of the Company contained in Part II, Item 8 above, of this Annual
Report, which are incorporated herein by this reference.
(a)(3)
Exhibits. The following exhibits are filed as part of this Annual Report:
(a) Exhibits.
Exhibit Description of Exhibit Filing
Number
3(i)Amended and Restated Certificate of Incorporation Filed with the Form 8-K/A filed on
December 20, 2017 and incorporated
herein by reference.
3(ii)Amended and Restated Bylaws Filed with the Form 8-K/A filed on
December 20, 2017 and incorporated
herein by reference.
4 Description of the Company’s Securities Filed herewith.
10.1 Third Amended Employment Agreement with D. Sean McEwen Filed with the Form 8-K dated January
1, 2022, and filed with the SEC on
January 14, 2022.
10.2 Charles D. Griffin Employment Agreement Filed with the Form 8-K dated January
1, 2022, and filed with the SEC on
January 14, 2022.
10.3 B. Todd Murcer Employment Agreement Filed with the Form 8-K dated February
4, 2022, and filed with the SEC on
February 11, 2022.
10.4 Joshua Ploude Employment Agreement Filed with the Form 8-K dated
December 31, 2018, and filed with the
SEC on December 31, 2018.
10.5 Jason N. Welch Employment Agreement Filed with the Form 8-K/A-1 dated
February 4, 2022, and filed with the
SEC on April 8, 2022.
14 Code of Ethics Filed with the Form 8-K/A filed on
December 20, 2017 and incorporated
herein by reference.
31.1 Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
Filed herewith.
31.2 Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Filed herewith
32 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith.
99.1 Insider Trading Policy Filed herewith.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase
44
Exhibits incorporated by reference:
8-K Current Report dated June 14, 2022 (“CCUR”), and filed with the SEC on June 21, 2022
10-Q Quarterly Report for the quarter ended June 30, 2022, and filed with the SEC on August 15, 2022.
ITEM 16. FORM 10-K SUMMARY
None.
(This space intentionally left blank)
45
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, thereunto duly authorized.
KonaTel, Inc.
Date: April 17, 2023 By: /s/ D. Sean McEwen
D. Sean McEwen
Chairman, CEO and Director
Date: April 17, 2023 By:/s/ Brian R. Riffle
Brian R. Riffle
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Date: April 17, 2023 By:/s/ D. Sean McEwen
D. Sean McEwen
Chairman, CEO and a Director
Date: April 17, 2023 By:/s/ Brian R. Riffle
Brian R. Riffle
Chief Financial Officer
Date: April 17, 2023 By:/s/ Robert Beaty
Robert Beaty
Director
Date: April 17, 2023 By:/s/ Jeffrey Pearl
Jeffrey Pearl
Director
46

EXHIBIT 6
Key Management Bios
OFFICER AND KEY MANGEMENT BIOS
D. Sean McEwen (Chairman/CEO - KonaTel)
Mr. McEwen founded KonaTel in 2014 as a Mobile Virtual Network Operator (MVNO) providing wireless voice and data services. Prior to creating KonaTel, from 2010 to 2013, he served as an executive management consultant to international MVNOs in the U.S., Peru, Croatia, Serbia and China, providing expertise in the areas of telecommunications technology
procurement & deployment. From 2010 to 2011, Mr. McEwen also served as a founding board member of the exchange traded fund One Fund (NYSE: ONEF). In early 1983, Mr. McEwen co-founded Online Data Corp, and through a series of acquisitions/mergers, the company eventually became TriTech Software Systems. From 1983 to
1990, TriTech developed enterprise software applications for numerous companies, including E. F. Hutton Life Insurance, Travel Lodge Hotels, Foodmaker (Jack in the Box restaurants), AT&T, and Visa’s Plus Systems national ATM network. In 1990, TriTech evolved into an enterprise application and systems integration company specializing in telecommunications-oriented mission critical software solutions for public safety (Police, Fire, EMS). TriTech’s flagship
product, VisiCAD, was the world’s first 9-1-1 emergency dispatching system based solely on Microsoft technology with integrated GPS based tracking and predictive routing technology. In 1995, TriTech won Microsoft’s Most Innovative Windows Application award, and in 1998, TriTech was named to the Inc. 500 as the 344th fastest growing privately-held company in
the United States. Mr. McEwen served as Vice President of TriTech from 1983 to 1988, President from 1988 to 1996, Chairman/CEO from 1996 to 2000 and finally served as a member of the Board of Directors until successfully exiting the company when controlling interest was sold to Westview Capital Partners in 2006. Chuck Griffin (President/COO KonaTel) Mr. Griffin brings more than 20 years of executive communications experience to the job and currently serves as President and Chief Operations Officer of KonaTel. Prior to joining
KonaTel, he served as Chairman of the Board and Chief Executive Officer of Lingo
Communications. Lingo successfully operates as a global provider of voice and data communications spanning residential, SMB, enterprise, and wholesale markets and servicing more than 250,000 customers worldwide.
Prior to Lingo communications, Mr. Griffin served as CEO for Impact Telecom. As
CEO, he was instrumental in building Impact from a start-up company in four states to an international telecommunications facilities-based TDM and VoIP company with more than 25 billion voice minutes traversing its network worldwide. Using private equity investment, Impact grew to more than 400 employees and $250M in revenue acquiring brands such as Excel, Matrix,
AmericaTel, Startec, Vancouver Telecom, Touch 1, TNCI, PacWest, Unipoint and PacWest
Telecom before successfully transacting for the sale of Impact with Lingo Communications in 2019.
2

Prior to Impact, Mr. Griffin held multiple executive leadership positions including CEO, Chief Operating Officer, VP of Business Development, VP of Sales in the telecom and data
communications fields for companies such as ICG Communications, Idigi Wireless, @Link
Networks, and iPath Communications. These opportunities spanned technologies such as ATM, MPLS, Ethernet over Copper (EoC), Point to Multi-Point fixed base wireless, Dedicated Internet Access (DIA), Class IV and Class V Voice over IP, and native SIP. A business development expert, Mr. Griffin has led organizations in many phases of growth including start-up, stacked
acquisition, as well as restructuring and synergy efforts.
Mr. Griffin graduated Summa Cum Laude in business communications from Metropolitan State University of Colorado. A lover of the outdoors, Mr. Griffin is a commercial pilot, alpinist, and lives in Colorado with his wife of over 32 years.
Brian Riffle (CFO)
Mr. Riffle is a Certified Public Accountant with over 35 years of experience in various industries. He is the Managing Partner of a Certified Public Accounting firm and his industry experience has included retail, healthcare, financial services, cloud computing and
telecommunications. He has also served as a master’s level college accounting instructor since
1994. Mr. Riffle holds certifications in several popular accounting system packages and cloud-based software applications, and he has implemented accounting systems and industry-specific
operational software solutions for over 200 companies. He has served as KonaTel’s corporate
accountant since 2014 and CFO since becoming a publicly traded company in December 2017. Mr. Riffle earned a B.A. in Accounting from the University of Pittsburgh and became a Certified Public Accountant in 1987.
Jason N. Welch (President, IM Telecom d/b/a Infiniti Mobile)
Mr. Welch serves as President of Infiniti Mobile, a wholly owned subsidiary of KonaTel and wireless service provider specializing in discounted phone and broadband service through government support programs. He oversees all company strategy, sales, distribution, and
operations.
Immediately prior to joining Infiniti Mobile, Mr. Welch served as Chief Operating Officer of 46 Labs. In his 25+ years of telecommunications industry experience, he has held various VP/SVP/EVP carrier management, sales and operational roles within the wireless and
wireline space spanning domestic and international communications service offerings. Mr.
Welch successfully served in management roles across companies such as Frontier Communications, Global Crossing, Telco Group Inc., KDDI Global, XO Communication and Impact Telecom.

3

Todd Murcer (EVP Finance – KonaTel)
Mr. Murcer serves as the Executive Vice President of Finance and the corporate
Secretary for KonaTel. Mr. Murcer previously served as Executive Vice President, FP&A and Treasury of Lingo Communications, a provider of IP-based Cloud voice and data solutions following its merger
with Impact Telecom. At Lingo, Mr. Murcer had oversight of financial operations, planning, and
implementing financial projections & reporting, as well as managing all banking activities/relationships for the U.S. and Canada. Mr. Murcer has worked in the telecommunication industry for more than 20 years. He got
his start with Matrix Telecom, Inc., a Platinum Equity portfolio company that ultimately divested
to Impact. At Matrix, Mr. Murcer helped the company grow annual revenues from $10 million to over $400 million while serving in a variety of business development and financial roles as well as leading teams through multiple M&A transactions.
Mr. Murcer holds a Master of Science Management in Business Administration and
Management from Boston University (Brussels, Belgium) and a Bachelor of Science in Economics from the University of Oklahoma.

EXHIBIT 7
Proposed Lifeline Offering WIRELESS LIFELINE OFFERING

Data 1 GB 4.5 GB 6 GB
Voice Minutes 1,000 3,000 3,000
Text 1,000 Unlimited Unlimited
Price to Lifeline
Subscribers
$14.00/month $20.00/month $0.00/month

All Plans include the following:
• Free phone or SIM card
• Calls to 911 emergency services
• Calls to Customer Service
• Access to Voicemail, Caller-ID, Call-Waiting, Call-Forwarding, and 3-Way Calling features
• Domestic, Long-Distance Calls Top Ups:
• $10.00 for 1,000 minutes and 1,000 texts
• $10.00 for 1GB Refill
• $20.00 for 2GB Refill
• $30.00 for 4GB Refill Complete program terms of use located at http://infinitimobile.com/terms/

EXHIBIT 8
CERTIFICATE OF SERVICE I HEREBY CERTIFY that I caused a true and correct copy of IM Telecom, LLC d/b/a
Infiniti Mobile’s Application for Designation as an Eligible Telecommunications Carrier for the
Limited Purpose of Offering Lifeline Service to Qualified Households to be mailed, by USPS
Tracking, to the Tribes listed below:

Coeur d’ Alene Tribe 850 A Street Plummer, ID 83851 Kootenai Tribe of Idaho
142 County Road 38A, Bonners Ferry, ID 83805 Nez Perce Tribe of Idaho 120 Bever Grade Rd,
Lapwai, ID 83540 Shoshone-Bannock Tribe of Idaho Mission Rd, Fort Hall, ID 83203

DATED THIS 15th day of December 2023.
____________________________
Lance J.M. Steinhart, Esq. Lance J.M. Steinhart, P.C. Attorneys at Law
1725 Windward Concourse, Ste. 150
Alpharetta, GA 30005 [phone] (Phone) [phone] (Facsimile) [e-mail] (Email)

Attorneys for IM Telecom, LLC d/b/a
Infiniti Mobile