KTEL KonaTel Inc (QB)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

________________

 

FORM 10-Q

 

 

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

 

For the quarterly period ended June 30, 2024

 

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

 

For the transition period from ____________to____________

 

Commission File No. 001-10171

 

KonaTel, Inc.

(Exact name of the issuer as specified in its charter)

 

Delaware		80-0973608
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer I.D. No.)

 

500 N. Central Expressway, Ste. 202

Plano, Texas 75074

(Address of Principal Executive Offices)

 

214-323-8410

(Registrant’s Telephone Number)

 

The Registrant does not have any securities registered pursuant to Section 12(b) of the Exchange Act.

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

 

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 x No o

 

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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company x
	Emerging Growth company ☐

 

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. o

 

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

 

Our website is www.konatel.com.

 

Our common stock is quoted on the OTC Markets Group, LLC (the “OTC Markets”) in its “OTCQB Tier” under the symbol “KTEL.”

 

 

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.

 

The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:

 

Common Capital Voting Stock, $0.001 par value per share		43,489,245 shares
Class		Outstanding as of August 14, 2024

 

References

 

In this Quarterly 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 doing business as “Apeiron” (“Apeiron Systems”); and IM Telecom, LLC, an Oklahoma limited liability company doing business as “Infiniti Mobile” (“IM Telecom” or “Infiniti Mobile”), of which we own 51%, which interest is subject to conveyance, if approved by the Federal Communications Commission (the “FCC”), to Excess Telecom, Inc., a Nevada corporation (“Excess Telecom”), under a Membership Interest Purchase Agreement effective at January 22, 2024 (the “Excess Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”). For additional information on the conditions of this conveyance and related agreements, see our 8-K Current Report dated January 22, 2024 (Excess Telecom Membership Purchase Agreement and related Agreements), filed with the SEC on January 30, 2024, which is Hyperlinked in Part II, Other Information, Item 6, Exhibits, hereof, and is incorporated herein by reference.

Forward-Looking Statements

 

This Quarterly 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 Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly 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 Quarterly 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”) that are contained in the SEC Edgar Archives, including the “Risk Factors” enumerated in “Part I, Item IA. Risk Factors” of our 10-K Annual Report for the year ended December 31, 2023, which commence on page ten (10) thereof; and issues related to “Cybersecurity” enumerated in “Part I, Item 1C. Cybersecurity,” which commence on page twenty (20) thereof. A copy of the Annual Report is attached hereto by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof, and is incorporated herein by reference. 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.

 

Documents Incorporated by Reference

 

See Part II-Other Information, in Item 6, Exhibits, hereof.

 

 

 

 

KONATEL, INC.

FORM 10-Q

June 30, 2024

INDEX

 

	Page No.
PART I – FINANCIAL INFORMATION
Item 1.     Financial Statements & Footnotes	4
Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.     Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.     Controls and Procedures	20
PART II – OTHER INFORMATION
Item 1.     Legal Proceedings	21
Item 1A.  Risk Factors	21
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.     Defaults Upon Senior Securities	21
Item 4.     Mine Safety Disclosures	21
Item 5.     Other Information	21
Item 6.     Exhibits	22
SIGNATURES	22

 

PART I - FINANCIAL STATEMENTS

 

June 30, 2024

Table of Contents

 

Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited), and December 31, 2023	4
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024, and 2023 (unaudited)	5
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2024, and 2023 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024, and 2023 (unaudited)	7
Notes to Condensed Consolidated Financial Statements (unaudited)	8

 

 

 

KonaTel, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

  

		June 30, 2024				December 31, 2023
Assets
Current Assets
Cash and Cash Equivalents		$	3,681,162			$	777,103
Accounts Receivable, Net			1,840,237				1,496,799
Inventory, Net			554,859				1,229,770
Prepaid Expenses			106,688				129,706
Other Current Assets			1,010,797				—
Total Current Assets			7,193,743				3,633,378
Property and Equipment, Net			19,285				24,184
Other Assets
Intangible Assets, Net			323,468				634,251
Right of Use Assets			382,426				443,328
Other Assets			74,543				74,543
Total Other Assets			780,437				1,152,122
Total Assets		$	7,993,465			$	4,809,684
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts Payable and Accrued Expenses		$	3,139,243			$	3,709,691
Loans Payable, Net of Loan Fees			—				3,655,171
Right of Use Operating Lease Obligation - Current			131,787				127,716
Total Current Liabilities			3,271,030				7,492,578
Long Term Liabilities
Right of Use Operating Lease Obligation - Long Term			274,457				330,511
Total Long Term Liabilities			274,457				330,511
Total Liabilities			3,545,487				7,823,089
Commitments and Contingencies
Stockholders’ Equity (Deficit)
Common stock, $0.001 par value, 50,000,000 shares authorized, 43,472,954 outstanding and issued at June 30, 2024 and 43,145,720 outstanding and issued at December 31, 2023			43,473				43,146
Additional Paid In Capital			9,669,809				9,182,140
Accumulated Deficit			(5,265,304	)			(12,238,691	)
Total Stockholders’ Equity (Deficit)			4,447,978				(3,013,405	)
Total Liabilities and Stockholders’ Equity (Deficit)		$	7,993,465			$	4,809,684

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

KonaTel, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

   

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue		$	4,343,179			$	4,601,426			$	9,979,016			$	8,633,145
Cost of Revenue			3,443,472				3,827,374				7,951,804				6,857,214
Gross Profit			899,707				774,052				2,027,212				1,775,931
Operating Expenses
Payroll and Related Expenses			1,341,046				1,107,303				2,793,146				2,246,849
Operating and Maintenance			1,421				1,621				2,965				3,321
Bad Debt			—				—				1,448				14
Professional and Other Expenses			231,302				204,023				341,525				463,418
Utilities and Facilities			59,332				52,030				110,118				109,075
Depreciation and Amortization			2,449				3,088				4,899				6,176
General and Administrative			44,573				43,259				105,968				83,492
Marketing and Advertising			27,031				46,490				61,027				84,008
Application Development Costs			387,800				299,629				593,883				443,158
Taxes and Insurance			59,115				16,907				113,550				33,163
Total Operating Expenses			2,154,069				1,774,350				4,128,529				3,472,674
Operating Loss			(1,254,362	)			(1,000,298	)			(2,101,317	)			(1,696,743	)
Other Income and Expense
Gain on Sale			—				—				9,247,726
Interest Expense			—				(179,630	)			(104,329	)			(341,132	)
Other Income/(Expense), net			(4,763	)			(42,792	)			(68,693	)			(99,542	)
Total Other Income and Expenses			(4,763	)			(222,422	)			9,074,704				(440,674	)
Income Before Income Taxes			(1,259,125	)			(1,222,720	)			6,973,387				(2,137,417	)
Income Tax Expense (Benefit)			(149,428	)			—				—				—
Net Income (Loss)		$	(1,109,697	)		$	(1,222,720	)		$	6,973,387			$	(2,137,417	)
Earnings (Loss) per Share
Basic		$	(0.03	)		$	(0.03	)		$	0.16			$	(0.05	)
Diluted		$	(0.03	)		$	(0.03	)		$	0.16			$	(0.05	)
Weighted Average Outstanding Shares
Basic			43,412,602				42,520,720				43,301,670				42,539,672
Diluted			43,412,602				42,520,720				43,301,670				42,539,672

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

KonaTel, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

 

		Common Shares								Additional				Accumulated
		Shares				Amount				Paid-in Capital				Deficit				Total
Balances as of January 1, 2024			43,145,720			$	43,146			$	9,182,140			$	(12,238,691	)		$	(3,013,405	)
Stock Based Compensation			—				—				446,746				—				446,746
Stock Options Exercised			327,234				327				40,923				—				41,250
Net Income			—				—				—				6,973,387				6,973,387
Balances as of June 30, 2024			43,472,954			$	43,473			$	9,669,809			$	(5,265,304	)		$	4,447,978

 

  

		Common Shares								Additional				Accumulated
		Shares				Amount				Paid-in Capital				Deficit				Total
Balances as of April 1, 2024			43,333,220			$	43,333			$	9,447,272			$	(4,155,607	)		$	5,334,998
Stock Based Compensation			—				—				222,677				—				222,677
Stock Options Exercised			139,734				140				(140	)			—				—
Net Loss			—				—				—				(1,109,697	)			(1,109,697	)
Balances as of June 30, 2024			43,472,954			$	43,473			$	9,669,809			$	(5,265,304	)		$	4,447,978

 

 

		Common Shares								Additional				Accumulated
		Shares				Amount				Paid-in Capital				Deficit				Total
Balances as of January 1, 2023			42,240,406			$	42,240			$	8,710,987			$	(8,297,864	)		$	455,363
Stock Based Compensation			—				—				282,569				—				282,569
Stock Options Exercised			430,314				430				82,070				—				82,500
Net Loss			—				—				—				(2,137,417	)			(2,137,417	)
Balances as of June 30, 2023			42,670,720			$	42,670			$	9,075,626			$	(10,435,281	)		$	(1,316,985	)

 

 

		Common Shares								Additional				Accumulated
		Shares				Amount				Paid-in Capital				Deficit				Total
Balances as of April 1, 2023			42,483,220			$	42,483			$	8,894,593			$	(9,212,561	)		$	(275,485	)
Stock Based Compensation			—				—				139,970				—				139,970
Stock Options Exercised			187,500				187				41,063				—				41,250
Net Loss			—				—				—				(1,222,720	)			(1,222,720	)
Balances as of June 30, 2023			42,670,720			$	42,670			$	9,075,626			$	(10,435,281	)		$	(1,316,985	)

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

Common Shares

Additional Paid-in Capital

Accumulated Deficit

 

 

 

KonaTel, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  

 

		Six Months Ended June 30,
		2024				2023
Cash Flows from Operating Activities:
Net Income (Loss)		$	6,973,387			$	(2,137,417	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and Amortization			4,899				6,176
Gain on Sale of IM Telecom (49%)			(9,247,726	)			—
Loan Origination Cost Amortization			49,579				89,516
Bad Debt			1,448				14
Stock-based Compensation			446,747				282,569
Non-Compensatory Stock Options Exercised			—				41,250
Change in Right of Use Asset			60,901				67,644
Change in Lease Liability			(51,983	)			(58,003	)
Changes in Operating Assets and Liabilities:
Accounts Receivable			(344,885	)			71,762
Inventory			674,911				(266,648	)
Prepaid Expenses			23,018				51,647
Other Assets			(10,797	)			—
Notes Receivable			(1,000,000	)			—
Accounts Payable and Accrued Expenses			(570,449	)			466,629
Net cash used in operating activities			(2,990,950	)			(1,384,861	)
Cash Flows from Investing Activities
Sale of IM Telecom (49%)			9,558,509				—
Net cash provided by investing activities			9,558,509				—
Cash Flows from Financing Activities
Proceeds from Note Payable			—				500,000
Repayments of Note Payable			(3,704,750	)			—
Loan Origination Costs			—				(77,250	)
Cash received from Stock Options Exercised			41,250				41,250
Net cash provided by (used in) financing activities			(3,663,500	)			464,000
Net Change in Cash			2,904,059				(920,861	)
Cash - Beginning of Year			777,103				2,055,634
Cash - End of Period		$	3,681,162			$	1,134,773
Supplemental Disclosure of Cash Flow Information
Cash paid for interest		$	54,750			$	133,500
Cash paid for taxes		$	—			$	—

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

KonaTel, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Overview of Company

 

KonaTel Inc., a Delaware corporation, formerly known as Dala Petroleum Corp. (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”). During 1990, we ceased our then current operations. 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”). We operated as an early-stage oil exploration company focused on our leased acreage acquired by Dala Nevada until 2016, at which time we assigned substantially all of our leased acreage to the former owner of Dala Nevada, and 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 December 18, 2017, we acquired KonaTel, Inc, a Nevada subchapter S-Corporation (“KonaTel Nevada”), in a merger with our acquisition subsidiary under which KonaTel Nevada became our wholly owned subsidiary, and we succeeded to its operations; and we changed our name to “KonaTel, Inc.” on February 5, 2018.

 

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.

 

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 a Federal Communication Commission (“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, California, as well as in Europe and Asia.

 

On February 5, 2018, we entered into a purchase agreement to acquire 100% of the membership interest in 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 operated as a wholly owned subsidiary of KonaTel until the sale of 51% of its membership interest to “Excess Telecom” on January 22, 2024, which is discussed below. 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. In addition to being an FCC

 

8

 

licensed ETC in thirty-six (36) states/territories, which are Vermont, South Carolina, Georgia, Maryland, Kentucky, Wisconsin, Oklahoma, California, New York, Pennsylvania, Nevada, Alaska, Arkansas, Florida, Louisiana, North Dakota, Nebraska, Ohio, Alabama, Colorado, Hawaii, Iowa, Idaho, Michigan, Minnesota, Missouri, New Jersey, Puerto Rico, Rhode Island, Tennessee, Utah, US Virgin Islands, Virginia, Washington, West Virginia, and Wyoming, IM Telecom has been an FCC licensed Affordable Connectivity Program (“ACP” and the “ACP Program”) provider, authorized to distribute ACP subsidized high-speed mobile voice/data service in the fifty (50) states, Washington D.C. and Puerto Rico. As of June 1, 2024, the ACP Program ended in its current form. The “ACP Extension Act,” among other legislative initiatives, is being considered by Congress for purposes of extending the ACP Program. Stand-alone ACP customers have been given the opportunity to enroll in the Lifeline program, in lieu of ACP benefits. Customers already enrolled in Lifeline, in combination with ACP benefits, continue with Lifeline services. Lifeline is an FCC program that provides subsidized, fixed or mobile telecommunications services to low-income Americans. The ACP Program was an FCC program that provided subsidized high-speed wireless data services to low-income Americans. IM Telecom distributes Lifeline, and prior to June 1, 2024, had distributed 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.

 

On January 22, 2024 (the “Effective Date”), KonaTel and IM Telecom entered into a Membership Interest Purchase Agreement (the “Excess Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”) with Excess Telecom, Inc., a Nevada corporation (“Excess Telecom”), pursuant to which KonaTel conveyed 49% of its membership interest in IM Telecom to Excess Telecom on the “Initial Closing Date” in consideration of the sum of $10,000,000, and if approved by the FCC, will convey the remaining 51% of the membership interest in IM Telecom to Excess Telecom for the sum of $100 on the “Final Closing.” If not approved by the FCC, KonaTel shall retain 51% of IM Telecom and Excess Telecom shall retain 49% of IM Telecom; and KonaTel shall have no obligation to refund any portion of the funds paid by Excess Telecom to KonaTel.

 

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 twelve (12) full-time employees. The current employees of IM Telecom, twenty-two (22) full-time and one (1) part-time, novated to employees of KonaTel under the Excess Telecom Purchase Agreement. These employees continue to engage in the same manner and function of service provided prior to the aforementioned agreement. KonaTel has four (4) other full-time employees.

 

Principal Products or Services and their Markets

 

Our principal products and services, provided through Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP, SMS/MMS, POTS Replacement), 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 thirty-six (36) states/territories and our ACP services, which until June 1, 2024, had been 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.

 

·

Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through  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

 

9

 

 

license to low-income American households that qualify for the FCC’s Lifeline mobile voice service program and/or previously under the FCC’s ACP 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 any change, reduction or elimination may have a material impact on our Mobile Services business.

 

Basis of Presentation

 

Interim Financial Statements

 

The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023.

 

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. Estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and stock-based compensation. Actual results could differ from those estimates.

 

Basis of Consolidation

 

The condensed consolidated financial statements include the Company and our two (2) wholly owned corporate subsidiaries, KonaTel Nevada and Apeiron Systems, and IM Telecom, presently owned 51% by us. All significant intercompany transactions are eliminated.

 

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 the three (3) months ended June 30, 2024, and 2023, and for the six (6) months ended June 30, 2023, are not included in the computation of diluted earnings per share because to do so would be anti-dilutive. As of June 30, 2023, there were potentially 803,480 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: 

Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted

		Three Months Ended June 30,
		2024				2023
Numerator
Net Loss		$	(1,109,697	)		$	(1,222,720	)
Denominator
Weighted-average common shares outstanding, basic			43,412,602				42,520,720
Dilutive impact of stock options			—				—
Weighted-average common shares outstanding, diluted			43,412,602				42,520,720
Net income per common share
Basic		$	(0.03	)		$	(0.03	)
Diluted		$	(0.03	)		$	(0.03	)

 

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		Six Months Ended June 30,
		2024				2023
Numerator
Net Income/Loss		$	6,973,387			$	(2,137,417	)
Denominator
Weighted-average common shares outstanding, basic			43,301,670				42,539,672
Dilutive impact of stock options			—				—
Weighted-average common shares outstanding, diluted			43,301,670				42,539,672
Net income per common share
Basic		$	0.16			$	(0.05	)
Diluted		$	0.16			$	(0.05	)

 

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 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.

Trade Account Receivables

Customer Concentration

Sales Revenue

 

The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of June 30, 2024, 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 amount of $1,071,558 or 58.0%, and $465,576 or 25.2%. It should be noted that the largest customer is the State of California, and the second largest customer is the federal government, as administered by the Universal Service Administrative Company (“USAC”), under the authority of the FCC. As of December 31, 2023, the Company had a significant concentration of receivables from two (2) customers in the amounts of $1,024,308 or 68.5%, and $285,536 or 19.0%.

 

Concentration of Major Customer

 

A significant amount of the revenue is derived from contracts with major customers. For the three (3) months ended June 30, 2024, the Company had two (2) customers that accounted for $1,321,520 or 30.3% and $1,071,558 or 24.6% of revenue, respectively. For the (3) three months ended June 30, 2023, the Company had two (2) customers that accounted for $2,614,769 or 56.8% and $745,484 or 16.2% of revenue, respectively.

 

Other Revenue

 

The Company has a shared relationship with distribution of Lifeline services through Excess Telecom. Revenue through this relationship is recorded on a net revenue basis. We have performed a principal versus agent analysis under ASC 606-10-25-25 and have determined that we are acting as agent under this relationship.

 

Effect of Recent Accounting Pronouncements

 

The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements.

 

Going Concern

 

For the six (6) months ended June 30, 2024, the Company generated net income of $6,973,387, compared to a net loss for the six (6) months ended June 30, 2023, of ($2,137,417). The Company sold a 49% interest in IM Telecom, which allowed the business to pay off all outstanding debt and retain additive cash. The accumulated deficit as of June 30, 2024, is ($5,265,304).

We are one of only a few telecommunication carriers to hold a national wireless ETC Lifeline license, which provides us with additive reimbursement rates within the states we operate. In Q2 2024, we added an additional ten (10) state licenses, which continues to expand our nationally licensed wireless service coverage. We continue to target and expand into additional ETC licensed states.

11

 

As of June 1, 2024, funding for the ACP Program ended, which accounted for approximately 15% of our revenues in Q2 2024 and 33% of our revenues in Q1 2024. There are legislative bills to extend funding currently being discussed with Congressional leaders; however, the decision to further fund the ACP Program (or a similar program) remains uncertain. In light of this uncertainty, the Company has taken initial cost reduction measures while discussions continue in Congress, and further expense reduction steps will be required if the ACP Program is not reinstated. Irrespective of an ACP Program extension, the California Lifeline Program provides ongoing business continuity due to its additional state funding and Linkup program.

 

As a result of the Company’s elimination of outstanding debt and increased cash position, the Company has ameliorated any substantial going concern doubt.

 

NOTE 2 – INVENTORY

 

Inventory primarily consists of sim cards, cell phones and tablets, which are stored at our warehouse, or have been delivered to distributors in the field. Inventories are stated at cost using the first-in, first-out (“FIFO”) valuation method. On a monthly basis, inventory is counted at our warehouse facility, and is reviewed for obsolescence and counted for accuracy with distributors. At June 30, 2024, and December 31, 2023, the Company had inventory of $554,859 and $1,229,770, respectively.

 

NOTE 3 – PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following major classifications as of June 30, 2024, and December 31, 2023:

Property and Equipment - Schedule of Property and Equipment

 

		June 30, 2024				December 31, 2023
Lease Improvements Lease Improvements		$	46,950			$	46,950
Furniture and Fixtures Furniture and Fixtures			102,946				102,946
Billing Software			217,163				217,163
Office Equipment Office Equipment			94,552				94,552
			461,611				461,611
Less:  Accumulated Depreciation			(442,326	)			(437,427	)
Property and equipment, net		$	19,285			$	24,184

 

Depreciation related to Property and Equipment amounted to $2,449 and $3,088 for the three (3) months ended June 30, 2024, and 2023, respectively. Depreciation related to Property and Equipment amounted to $4,899 and $6,176 for the six (6) months ended June 30, 2024, and 2023, respectively. Depreciation and amortization expenses are included as a component of operating expenses in the accompanying statements of operations.

 

NOTE 4 – RIGHT-OF-USE ASSETS

Minimum

Maximum 

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%. Right-of-Use Assets are recorded on the balance sheet as intangible assets.

 

The Company has Right-of-Use Assets through leases of property under non-cancelable leases. As of June 30, 2024, the Company had three (3) properties with lease terms in excess of one (1) year. Of these three (3) leases, one (1) lease expires in 2025, one (1) lease expires in 2026, and one (1) lease expires in 2030. Lease payables as of June 30, 2024, is $406,244.

 

Future lease liability payments under the terms of these leases are as follows:

Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases

2024	$	77,940
2025	$	129,543
2026	$	65,967
2027	$	54,000
2028	$	54,000
Thereafter	$	90,000
Total	$	471,450
Less Interest	$	65,206
Present value of minimum lease payments	$	406,244
Less Current Maturities	$	131,787
Long Term Maturities	$	274,457

 

12

 

The weighted average term of the Right-to-Use leases is 57.4 months recorded with a weighted average discount of 6.96%. Total lease expense for the six (6) months ended June 30, 2024, and 2023, was $87,594 and $86,078, respectively.

 

NOTE 5 – INTANGIBLE ASSETS

 

Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions. 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 June 30, 2024, and December 31, 2023, was $323,468.

 

		June 30, 2024				December 31, 2023
Customer List		$	1,135,962			$	1,135,962
Software			2,407,001				2,407,001
ETC License			323,468				634,251
Less: Amortization			(3,542,963	)			(3,542,963	)
Net Amortizable Intangibles			323,468				634,251
Right of Use Assets - net			382,426				443,328
Intangible Assets net		$	705,894			$	1,077,579

 

Amortization expense amounted to $0, and $0 for the three (3) months ended June 30, 2024, and 2023, respectively. Amortization expense amounted to $0, and $0 for the six (6) months ended June 30, 2024, and 2023, respectively. Amortization expense is included as a component of operating expenses in the accompanying statements of operations. With the exception of the Lifeline license granted by the FCC, all intangible assets are fully amortized as of June 30, 2024.

 

The reclassification in the Balance Sheet for Right of Use Assets has been made in this filing to conform to both the current and future reported presentation.

 

NOTE 6 – NOTES PAYABLE

 

The Company had no outstanding notes payable as of June 30, 2024.

 

NOTE 7 – CONTINGENCIES AND COMMITMENTS

 

Litigation

 

From time to time, the Company may be subject to legal proceedings and claims which arise in the ordinary course of business. As of June 30, 2024, there are no ongoing legal proceedings.

 

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.

 

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 has agreed to a twenty-four (24) month payment plan with the State of Pennsylvania, which commenced in December, 2023. Following the final payoff of the liability, the Company may have the right to 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 of June 30, 2024.

 

13

 

 

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 consists 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 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 Lifeline 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: 

Segment Reporting - Schedule of Segment Reporting Information

 

		Hosted Services				Mobile Services				Total
For the six (6) months period ended June 30, 2024
Revenue		$	3,032,773			$	6,946,243			$	9,979,016
Gross Profit		$	763,590			$	1,263,622			$	2,027,212
Depreciation and amortization		$	4,737			$	162			$	4,899
Additions to property and equipment		$	—			$	—			$	—

 

For the three (3) months period ended June 30, 2024
Revenue		$	1,549,389			$	2,793,790			$	4,343,179
Gross Profit		$	389,981			$	509,726			$	899,707
Depreciation and amortization		$	2,368			$	81			$	2,449
Additions to property and equipment		$	—			$	—			$	—

 

For the six (6) months period ended June 30, 2023
Revenue		$	2,483,918			$	6,149,227			$	8,633,145
Gross Profit		$	708,155			$	1,067,776			$	1,775,931
Depreciation and amortization		$	1,777			$	4,399			$	6,176
Additions to property and equipment		$	—			$	—			$	—

 

For the three (3) months period ended June 30, 2023
Revenue		$	1,250,987			$	3,350,439			$	4,601,426
Gross Profit		$	360,674			$	413,378			$	774,052
Depreciation and amortization		$	840			$	2,248			$	3,088
Additions to property and equipment		$	—			$	—			$	—

 

14

 

NOTE 9 – STOCKHOLDERS’ EQUITY

 

Common Stock

Independent Director 

On May 9, 2024, Robert Beaty, an independent Board member, conveyed to the Company 7,028 shares of the Company’s common stock at a price of $0.63, in an exempt transaction pursuant to Section 16b-3(c), and in full payment of the exercise of 25,000 incentive stock options granted to him in 2019 at a price of $0.1771 per share, which was 110% of the fair market value of our common stock on the date of such grant. These 25,000 ISO shares were issued to Mr. Beaty on May 9, 2024, in exchange for the conveyance of the 7,028 shares to the Company.

 

Non-Compensatory Stock Option Grant 

Chief Executive Officer

 

On June 17, 2024, D. Sean McEwen, the Chairman and CEO of the Company, exercised his sixth tranche of 187,500 equity stock options by conveying to the Company 65,737 shares of the Company’s common stock at a price of $0.6275, in an exempt transaction and in full payment of the exercise of the 187,500 stock options granted to him in 2017 at a price of $0.22 per share, which shares were issued on June 17, 2024.

 

Stock Option Grants

 

There were no Stock Option Grants provided for during the quarter ended June 30, 2024.

 

Stock Compensation

 

The Company offers incentive stock option grants to directors and key employees. Options vest in tranches and typically expire five (5) years from the date of grant. For the six (6) months ended June 30, 2024, and 2023, the Company recorded options expense of $446,747 and $282,569, respectively. For the three months ended June 30, 2024, and 2023, the Company recorded options expense of $222,677 and $139,970, respectively. The option expense not taken as of June 30, 2024, is $2,101,424, with a weighted average term of 3.42 years.

 

The following table represents stock option activity as of and for the six (6) months ended June 30, 2024:

Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity

 

		Number of				Weighted Average				Weighted Average				Aggregate
		Shares				Exercise Price				Remaining Life				Intrinsic Value
Options Outstanding – December 31, 2023			6,000,000			$	0.74				3.69			$	872,463
Granted			100,000				0.78
Exercised			(400,000	)			0.43
Forfeited			—
Options Outstanding – June 30, 2024			5,700,000			$	0.78				3.25			$	—
Exercisable and Vested, June 30, 2024			171,339			$	0.59				1.56			$	5,944

 

The aggregate intrinsic value for options outstanding as of June 30, 2024, is not calculated because the closing stock price on June 30, 2024, is less than the weighted average exercise price of outstanding options on that date.

 

NOTE 10 – SUBSEQUENT EVENTS

 

Below are events that have occurred since June 30, 2024:

Subsequent Event

 

On July 24, 2024, D. Sean McEwen, our Chairman and CEO, received a payment in the amount of $75,000 for his contributions in completing and commencing services for the previously disclosed VIVA-US Telecommunications, Inc. transaction. The payment was approved by our Board of Directors on April 9, 2024.

 

On July 29, 2024, the Company received a cease and desist notice from the State of California Public Utilities Commission (“CPUC”). The cause of the notice was identified as an improperly conducted SMS messaging campaign by one of our distribution channels. Upon receiving the notice, the Company took immediate action to identify the source of the complaint and eliminated the SMS messaging campaign associated with the specific distribution channel. The Company will continue conversations with the CPUC to ensure all marketing campaigns comply.

 

15

 

On August 9, 2024, Robert Beaty, an independent Board member, conveyed to the Company 8,709 shares of the Company’s common stock at a price of $0.48, in an exempt transaction pursuant to Section 16b-3(c), and in full payment of the exercise of 25,000 incentive stock options granted to him in 2019 at a price of $0.1672 per share, which was 110% of the fair market value of our common stock on the date of such grant.

 

 

 

 

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

When used in this Quarterly 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 Quarterly 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 Quarterly Report under the caption “Forward-Looking Statements” and include general economic factors, cybersecurity and conditions that may directly or indirectly impact our financial condition or results of operations.

 

Despite risks and uncertainties specifically related to Covid-19, the Company has not experienced adverse impacts to our business operations as a result of this ongoing health concern.  Possible vulnerabilities to Covid-19, such as supply chain disruptions, inventory shortages and travel or resource limitations and delays will continue to be a risk that is presented to the Company, our suppliers, our customers and our investors.  

 

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 commencing on page nine (9) of this Quarterly 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.

 

Results of Operations

 

As stated previously in our filings during 2023, including our 10-K Annual Report for the year ended December 31, 2023 (see Part II-Other Information, Item 6, Exhibits, below, for a Hyperlink to this Annual Report), we have shifted our focus of mobile services activations to higher ARPU areas (“Average Revenue Per User”) within our eleven (11) Lifeline states.  As of June 30, 2024, we have added twenty-five (25) new Lifeline states/territories, for a total of thirty-six (36) Lifeline states/territories.  This expanded footprint provides our mobile services business with additional opportunities to serve customers.  Under IM Telecom’s national ETC license, and in accordance with the Excess Telecom Purchase Agreement, the Company will continue to enroll and provide services to qualifying consumers in the FCC Lifeline Program. The Lifeline Program is a separate program from the ACP Program under the FCC, and remains committed and viable in support of providing affordable communication services for low-income consumers.

 

As mentioned in our Q1 2024 filing, funding for the FCC ACP Program was expected to sunset, or partially sunset, in April, 2024, according to an FCC announcement on February 7, 2024.  Due to a lack of additional funding from Congress, the ACP program has ended for now, and effective June 1, 2024, households are no longer eligible to receive an ACP discount. The ACP Program had recently contributed approximately 30-35% of total Company revenues. In Q2 2024, ACP revenues were approximately 14% of total Company revenue; Hosted Services (“CPaaS services”) were approximately 40% of total Company revenue; and Lifeline sales accounted for approximately 42% of total Company revenue. The Lifeline Program is a U.S. government subsidized telecommunication program created in 1985.  It is separately funded from the ACP Program through fees collected from all U.S. telecommunication invoices. According to the National Lifeline Association (“NaLA”), there are at least eight (8) separate ACP refunding legislative efforts currently moving through the U.S. Congress.  Approximately 22 million American households were receiving ACP Program benefits, and ACP refunding efforts generally enjoy wide bi-partisan support. Regardless of the ACP’s future funding status, management continues to prioritize its growth initiatives within the Company’s Hosted Services segment.  Specifically, our Hosted Services revenue for the six (6) months ended June 30, 2024, grew 22.1% over the six (6) months period ended June 2023.  In Q1 2024, the Company added direct sales resources to our Hosted Services team, in an effort to expand revenues through established relationships in the wholesale, ISP, and carrier verticals. Operational resources were also added to this segment, to support new growth initiatives.

 

In Q1 2024, the Company chose to expand and reallocate its resources in California to offset the potential risk of an ACP Program end. In lieu of retaining the ACP subsidy, California offers state and federal subsidies which are similar in value to the ACP subsidy. Since Lifeline services are funded by Federal Universal Service Fees (“FUSF”), and not subject to enactment or renewal of government funded appropriations, the Company chose to redirect resources to California Lifeline, where ARPU is equal to or greater than that of ACP.

 

As previously reported during the first quarter of 2024, the Company entered into a Membership Interest Purchase Agreement with Excess Telecom to sell 49% of IM Telecom in consideration of the sum of $10,000,000.  As part of this sale, the Company paid off all existing and outstanding debt, and gained substantial additional liquidity and Owner’s Equity into the business. Upon final sale of the remaining 51%, if approved by the FCC, the Company shall have the right to continue providing Lifeline

 

qualified services through a Master Distribution Agreement with Excess Telecom, for not less than ten (10) years.  If the FCC does not approve Excess Telecom’s petition to acquire IM Telecom under the Membership Interest Purchase Agreement, KonaTel shall retain 51% ownership of IM Telecom and no monies paid by Excess Telecom to KonaTel shall be refundable. Further, if on or before December 31, 2024, the ACP Program is renewed by the U.S. Congress for a duration of greater than four (4) months (the “ACP Renewal Condition”), Excess Telecom shall pay KonaTel the additional sum of $5,000,000 (the “ACP Renewal Earnout), less the balance of a “Finder’s Fee Payment” to an unrelated third party of approximately $125,000. No assurance can be given that the ACP Program will be renewed by the FCC on or prior to December 31, 2024.

 

See the Hyperlinked 8-K Current Report dated January 22, 2024 (Excess Telecom Membership Interest Purchase Agreement and related Agreements), filed with the SEC on January 30, 2024, for additional information, in Part II, Other Information, Item 6, Exhibits, hereof.

 

Comparison of the three (3) months ended June 30, 2024, to the three (3) months ended June 30, 2023

 

For the three (3) months ended June 30, 2024, we had $4,343,179 in revenues from operations compared to $4,601,426 for the three (3) months ended June 30, 2023, for a total revenue decrease of ($258,247). The decrease in revenue was primarily due to the loss of mobile services revenues under the ACP Program, which only partially funded in May of 2024 and ended on June 1, 2024.

 

For the three (3) months ended June 30, 2024, our cost of revenue was $3,443,472 compared to $3,827,374 in the three (3) months ended June 30, 2023, for a cost of revenue decrease of ($383,902). Our cost of revenue decrease was a result of lower network, sales compensation and device costs, related to the activity decreases from our Mobile Services subscribers.

 

For the three (3) months ended June 30, 2024, we had gross profit of $899,707 compared to $774,052 in the three (3) months ended June 30, 2023, for a gross profit increase of $125,655. This increase primarily resulted from adding higher ARPU activations in our Mobile Services segment, and sourcing lower compensation and network costs.

 

For the three (3) months ended June 30, 2024, total operating expenses were $2,154,069 compared to $1,774,350 in the three (3) months ended June 30, 2023, for an increase of $379,719. This increase was primarily due to higher payroll and related expense associated with the addition of headcount in our Apeiron subsidiary.

 

For the three (3) months ended June 30, 2024, other income (expense) was $(4,763) compared to $(222,422) for the quarter ended June 30, 2023. This decrease was primarily the result of no longer owing interest following the payoff of the CCUR loan.

 

For the three (3) months ended June 30, 2024, we had net loss of $(1,109,697) compared to a net loss of ($1,222,720) in the three (3) months ended June 30, 2023.

 

Comparison of the six (6) months ended June 30, 2024, to the six (6) months ended June 30, 2023

 

For the six (6) months ended June 30, 2024, we had $9,979,016 in revenues from operations compared to $8,633,145 for the six (6) months ended June 30, 2023, for a total revenue increase of $1,345,871. The increase in revenue was primarily due to our focus on the California market, where unit economics remains favorable under the Lifeline program. The Company added resources to the California market in 2023, following the completion of our OSS/BSS transition to include the State of California. The Company was fully ramped in the six (6) months ended June 30, 2024, as compared to building a California base in 2023. Revenues in our Mobile Services segment are primarily gained as a result of delivering high-speed mobile voice and data service to low-income consumers. The State of California also includes a one-time Linkup fee, which is additive to the differential when comparing the periods. Revenues in our Hosted Services segment increased 21.2%, or approximately $550,000, by comparison during this same period, generally driven by higher volume contracted voice minutes and from the addition of new LTE Wireless WAN solutions customers.

 

For the six (6) months ended June 30, 2024, our cost of revenue was $7,951,804 compared to $6,857,214 in the six (6) months ended June 30, 2023, for a cost of revenue increase of $1,094,590. Our cost of revenue increase was primarily the result of higher network, sales compensation and device costs, related to a higher level of activity from Mobile Services subscribers.

 

For the six (6) months ended June 30, 2024, we had gross profit of $2,027,212 compared to $1,775,931 in the six (6) months ended June 30, 2023, for a gross profit increase of $251,280. This increase primarily resulted from adding a higher percent of activations in the California market in our Mobile Services segment, and sourcing lower per subscriber equipment and network costs.

 

For the six (6) months ended June 30, 2024, total operating expenses were $4,128,529 compared to $3,472,674 in the six (6) months ended June 30, 2023, for an increase of $655,855. This increase was primarily due to higher payroll and related expense associated with the addition of headcount in our Apeiron subsidiary, as well as higher stock expense from grants provided in Q4 2023.

 

 

For the six (6) months ended June 30, 2024, other income (expense) was $9,074,704 compared to $(440,674) in the six (6) months ended June 30, 2023. This increase was a result of the gain on sale recognized as part of the sale of 49% interest in IM Telecom.

 

For the six (6) months ended June 30, 2024, we had net income of $6,973,387 compared to a net loss of ($2,137,417) in the six (6) months ended June 30, 2023.

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had $3,681,162 in cash and cash equivalents on hand.

 

In comparing liquidity between the six (6) month period ending June 30, 2024, and December 31, 2023, cash increased by 373.7%. This increase is the result of cash received as part of the sale of 49% interest in IM Telecom. Liabilities and total overall debt decreased by 54.7% in the six (6) month period ended June 30, 2024, when compared to December 31, 2023, as part of the funds received with the sale of the 49% interest in IM Telecom were used by the Company to pay all material debt obligations then outstanding.

 

Our current ratio (current assets divided by our current liabilities) increased to 2.20 as of June 30, 2024, compared to .48 as of December 31, 2023. Working capital increased by 201.6%.

 

Cash Flow from Operations

 

During the six (6) months ended June 30, 2024, cash flow used in operating activities was ($2,990,950), primarily as a result of debt and other obligations which were paid off as part of a condition to the 49% sale of IM Telecom, as well as a note receivable resulting from the same sale of IM Telecom.

 

Cash Flows from Investing Activities

 

During the six (6) months ended June 30, 2024, cash flow provided by investing activities was $9,558,509, as a result of the gain on sale of IM Telecom.

 

Cash Flows from Financing Activities

 

During the six (6) months ended June 30, 2024, cash flow used in financing activities was ($3,663,500), primarily as a result of repayments of outstanding notes payable.

 

Going Concern

 

For the six (6) months ended June 30, 2024, the Company generated net income of $6,973,387, compared to a net loss for the six (6) months ended June 30, 2023, of ($2,137,417). The Company sold a 49% interest in IM Telecom, which allowed us to pay off all outstanding material debt and retain additive cash. The accumulated deficit as of June 30, 2024, is ($5,265,304).

We are one of only a few telecommunication carriers to hold a national wireless ETC Lifeline license, which provides us with additive reimbursement rates within the states we operate. In Q2 2024, we added an additional ten (10) state licenses, which continues to expand our nationally licensed wireless service coverage. We continue to target and expand into additional ETC licensed states.

As of June 1, 2024, funding for the ACP Program ended, which accounted for approximately 15% of our revenues in Q2 2024 and 33% of our revenues in Q1 2024. There are legislative bills to extend funding currently being discussed with Congressional leaders, however the decisions to further fund the ACP Program (or a similar program) remains uncertain. In light of this uncertainty, the Company has taken initial cost reduction measures while discussions continue in Congress, but further expense reduction steps will be required should it be clear the program will further lapse. Irrespective of an ACP Program extension, the California Lifeline Program provides ongoing business continuity due to its additional state funding and Linkup program.

As a result of the Company’s elimination of outstanding debt and increased cash position, the Company has ameliorated any substantial going concern doubt.

Off-Balance Sheet Arrangements

 

We had no Off-Balance Sheet arrangements during the six (6) month period ending June 30, 2024.

 

 

Critical Accounting Policies

 

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 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.

 

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 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 June 30, 2024, 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 amount of $1,071,558 or 58.0%, and $465,576 or 25.2%. It should be noted that the largest customer is the State of California, and the second largest customer is the federal government, as administered by USAC, under the authority of the FCC. As of December 31, 2023, the Company had a significant concentration of receivables from two (2) customers in the amounts of $1,024,308 or 68.5%, and $285,536 or 19.0%.

 

Concentration of Major Customer

 

A significant amount of the revenue is derived from contracts with major customers. For the three (3) months ended June 30, 2024, the Company had two (2) customers that accounted for $1,321,520 or 30.3% and $1,071,558 or 24.6% of revenue, respectively. For the three (3) months ended June 30, 2023, the Company had two (2) customers that accounted for $2,614,769 or 56.8% and $745,484 or 16.2% of revenue, respectively.

 

Effect of Recent Accounting Pronouncements

 

The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not required.

 

Item 4. Controls and Procedures.

 

Management’s Quarterly Report on Internal Control Over Financial Reporting

 

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 June 30, 2024, 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 June 30, 2024.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

Not required; however, see Part I, Item 1A. Risk Factors, commencing on page ten (10) of our Annual Report for the year ended December 31, 2023, filed with the SEC on April 1, 2024, for a list of Risk Factors, which Annual Report can be accessed by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof. Also see “Cybersecurity,” enumerated in “Part I, Item 1C. Cybersecurity,” of this Annual Report, which commence on page twenty (20) thereof, for information on matters related to cybersecurity issues that may affect our business.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

See NOTE 9-Stockholders’ Equity and NOTE 10-Subsequent Events, of our Condensed Consolidated Financial Statements included in this Quarterly Report respecting the exercise of certain non-compensatory stock options and the grant of certain incentive stock options during or subsequent to the quarter ended June 30, 2024.

 

The shares of common stock issued on the exercise of the non-compensatory stock option and the issuance of the referenced incentive stock options were exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof and applicable state law registration exemptions. The underlying and/or exercised shares that may be issued under the incentive stock options were registered with the SEC pursuant to an S-8 Registration Statement filed with the SEC on August 25, 2021, and as subsequently amended from time to time.

 

Item 3. Defaults upon Senior Securities

 

None; not applicable.

 

Item 4. Mine Safety Disclosure

 

Not applicable.

 

Item 5. Other Information 

 

(i) Effective July 16, 2024, certain individuals on our executive team voluntarily took up to 50% reductions in gross base salary. This compensation has not been accrued by the Company, and any reductions are to be considered temporarily in place if and until such time that the ACP Program is renewed or extended by Congress, or the Board determines otherwise. Additional reductions in salaries to non-executive positions were also made effective, as of August 1, 2024. These additional reductions have not been accrued by the Company and are also similarly considered temporary. See Part III, Item 11. Executive Compensation, in the December 31, 2023, Annual Report attached hereto by Hyperlink, in Part II, Item 6, Exhibits, hereof, commencing on page 37, regarding management compensation for the years ended December 31, 2023, and 2022.

 

(ii) No director or Section 16 officer adopted or terminated a trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a “non-Rule 10b5–1” trading arrangement during the periods reported in this Quarterly Report.

 

 

 

 

 

Item 6. Exhibits

 

Exhibit Number		Description of Exhibit		Filing
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(i)(a)		Certificate of Amendment to Amended and Restated Certificate of Incorporation (Name Change).		Filed with the Form 8-K filed on February 12, 2018, 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.
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.
101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104		Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL.

 

Exhibits incorporated by reference:

 

Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024.

 

8-K Current Report dated January 22, 2024 (Excess Telecom Membership Interest Purchase Agreement and related Agreements), filed with the SEC on January 30, 2024.

 

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:	August 14, 2024		By:	/s/ D. Sean McEwen
				D. Sean McEwen
				Chairman and CEO

 

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:	August 14, 2024		By:	/s/ D. Sean McEwen
				D. Sean McEwen
				Chairman and CEO

 

Date:	August 14, 2024		By:	/s/ Brian R. Riffle
				Brian R. Riffle
				Chief Financial Officer

 

22

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, D. Sean McEwen, certify that:

 

1.   I have reviewed this Quarterly Report on Form 10-Q of KonaTel, Inc.;

 

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

 

4.   The Registrant other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

a)       designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)       designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

 

c)       evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);

 

a)       all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date:	August 14, 2024		By:	/s/ D. Sean McEwen
				D. Sean McEwen
				Chairman and CEO

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Brian R. Riffle, certify that:

 

1.   I have reviewed this Quarterly Report on Form 10-Q of KonaTel, Inc.;

 

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

 

4.   The Registrant other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

a)       designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)       designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

 

c)       evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)       disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);

 

a)       all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date:	August 14, 2024		By:	/s/ Brian R. Riffle
				Brian R. Riffle
				Chief Financial Officer

 

Exhibit 32

 

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of KonaTel, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), we, D. Sean McEwen, Chief Executive Officer and Brian R. Riffle, Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

 

Date:	August 14, 2024		By:	/s/ D. Sean McEwen
				D. Sean McEwen
				Chairman and CEO

 

Date:	August 14, 2024		By:	/s/ Brian R. Riffle
				Brian R. Riffle
				Chief Financial Officer

 

 

v3.24.2.u1

Cover - shares	6 Months Ended
	Jun. 30, 2024	Aug. 14, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-10171
Entity Registrant Name	KonaTel, Inc.
Entity Central Index Key	0000845819
Entity Tax Identification Number	80-0973608
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	500 N. Central Expressway
Entity Address, Address Line Two	Ste. 202
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75074
City Area Code	214
Local Phone Number	323-8410
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		43,489,245

v3.24.2.u1

Condensed Consolidted Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current Assets
Cash and Cash Equivalents	$ 3,681,162	$ 777,103
Accounts Receivable, Net	1,840,237	1,496,799
Inventory, Net	554,859	1,229,770
Prepaid Expenses	106,688	129,706
Other Current Assets	1,010,797
Total Current Assets	7,193,743	3,633,378
Property and Equipment, Net	19,285	24,184
Intangible Assets, Net	323,468	634,251
Right of Use Assets	382,426	443,328
Other Assets	74,543	74,543
Total Assets	7,993,465	4,809,684
Current Liabilities
Accounts Payable and Accrued Expenses	3,139,243	3,709,691
Loans Payable, Net of Loan Fees		3,655,171
Right of Use Operating Lease Obligation - Current	131,787	127,716
Total Current Liabilities	3,271,030	7,492,578
Long Term Liabilities
Right of Use Operating Lease Obligation - Long Term	274,457	330,511
Total Long Term Liabilities	274,457	330,511
Total Liabilities	3,545,487	7,823,089
Stockholders’ Equity (Deficit)
Common stock, $0.001 par value, 50,000,000 shares authorized, 43,472,954 outstanding and issued at June 30, 2024 and 43,145,720 outstanding and issued at December 31, 2023	43,473	43,146
Additional Paid In Capital	9,669,809	9,182,140
Accumulated Deficit	(5,265,304)	(12,238,691)
Total Stockholders’ Equity (Deficit)	4,447,978	(3,013,405)
Total Liabilities and Stockholders’ Equity (Deficit)	$ 7,993,465	$ 4,809,684

v3.24.2.u1

Condensed Consolidted Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	43,472,954	43,145,720
Common stock, shares issued	43,472,954	43,145,720

v3.24.2.u1

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 4,343,179	$ 4,601,426	$ 9,979,016	$ 8,633,145
Cost of Revenue	3,443,472	3,827,374	7,951,804	6,857,214
Gross Profit	899,707	774,052	2,027,212	1,775,931
Operating Expenses
Payroll and Related Expenses	1,341,046	1,107,303	2,793,146	2,246,849
Operating and Maintenance	1,421	1,621	2,965	3,321
Bad Debt			1,448	14
Professional and Other Expenses	231,302	204,023	341,525	463,418
Utilities and Facilities	59,332	52,030	110,118	109,075
Depreciation and Amortization	2,449	3,088	4,899	6,176
General and Administrative	44,573	43,259	105,968	83,492
Marketing and Advertising	27,031	46,490	61,027	84,008
Application Development Costs	387,800	299,629	593,883	443,158
Taxes and Insurance	59,115	16,907	113,550	33,163
Total Operating Expenses	2,154,069	1,774,350	4,128,529	3,472,674
Operating Loss	(1,254,362)	(1,000,298)	(2,101,317)	(1,696,743)
Other Income and Expense
Gain on Sale			9,247,726
Interest Expense		(179,630)	(104,329)	(341,132)
Other Income/(Expense), net	(4,763)	(42,792)	(68,693)	(99,542)
Total Other Income and Expenses	(4,763)	(222,422)	9,074,704	(440,674)
Income Before Income Taxes	(1,259,125)	(1,222,720)	6,973,387	(2,137,417)
Income Tax Expense (Benefit)	(149,428)
Net Income (Loss)	$ (1,109,697)	$ (1,222,720)	$ 6,973,387	$ (2,137,417)
Earnings (Loss) per Share
Basic	$ (0.03)	$ (0.03)	$ 0.16	$ (0.05)
Diluted	$ (0.03)	$ (0.03)	$ 0.16	$ (0.05)
Weighted Average Outstanding Shares
Basic	43,412,602	42,520,720	43,301,670	42,539,672
Diluted	43,412,602	42,520,720	43,301,670	42,539,672

v3.24.2.u1

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Common Shares	Additional Paid-in Capital	Accumulated Deficit	Total
Beginning balance, value at Dec. 31, 2022	$ 42,240	$ 8,710,987	$ (8,297,864)	$ 455,363
Shares outstanding at Dec. 31, 2022	42,240,406
Stock Based Compensation	$ 0	282,569	0	282,569
Stock Options Exercised	$ 430	82,070		82,500
Exercised Stock Options, shares	430,314
Net Loss	$ 0	0	(2,137,417)	(2,137,417)
Ending balance, value at Jun. 30, 2023	$ 42,670	9,075,626	(10,435,281)	(1,316,985)
Shares outstanding at Jun. 30, 2023	42,670,720
Beginning balance, value at Mar. 31, 2023	$ 42,483	8,894,593	(9,212,561)	(275,485)
Shares outstanding at Mar. 31, 2023	42,483,220
Stock Based Compensation	$ 0	139,970	0	139,970
Stock Options Exercised	$ 187	41,063		41,250
Exercised Stock Options, shares	187,500
Net Loss	$ 0	0	(1,222,720)	(1,222,720)
Ending balance, value at Jun. 30, 2023	$ 42,670	9,075,626	(10,435,281)	(1,316,985)
Shares outstanding at Jun. 30, 2023	42,670,720
Beginning balance, value at Dec. 31, 2023	$ 43,146	9,182,140	(12,238,691)	(3,013,405)
Shares outstanding at Dec. 31, 2023	43,145,720
Stock Based Compensation	$ 0	446,746	0	446,746
Stock Options Exercised	$ 327	40,923		$ 41,250
Exercised Stock Options, shares	327,234			400,000
Net Loss	$ 0	0	6,973,387	$ 6,973,387
Ending balance, value at Jun. 30, 2024	$ 43,473	9,669,809	(5,265,304)	4,447,978
Shares outstanding at Jun. 30, 2024	43,472,954
Beginning balance, value at Mar. 31, 2024	$ 43,333	9,447,272	(4,155,607)	5,334,998
Shares outstanding at Mar. 31, 2024	43,333,220
Stock Based Compensation	$ 0	222,677	0	222,677
Stock Options Exercised	$ 140	(140)
Exercised Stock Options, shares	139,734
Net Loss	$ 0	0	(1,109,697)	(1,109,697)
Ending balance, value at Jun. 30, 2024	$ 43,473	$ 9,669,809	$ (5,265,304)	$ 4,447,978
Shares outstanding at Jun. 30, 2024	43,472,954

v3.24.2.u1

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows from Operating Activities:
Net Income (Loss)	$ 6,973,387	$ (2,137,417)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and Amortization	4,899	6,176
Gain on Sale of IM Telecom (49%)	(9,247,726)
Loan Origination Cost Amortization	49,579	89,516
Bad Debt	1,448	14
Stock-based Compensation	446,747	282,569
Non-Compensatory Stock Options Exercised		41,250
Change in Right of Use Asset	60,901	67,644
Change in Lease Liability	(51,983)	(58,003)
Changes in Operating Assets and Liabilities:
Accounts Receivable	(344,885)	71,762
Inventory	674,911	(266,648)
Prepaid Expenses	23,018	51,647
Other Assets	(10,797)
Notes Receivable	(1,000,000)
Accounts Payable and Accrued Expenses	(570,449)	466,629
Net cash used in operating activities	(2,990,950)	(1,384,861)
Cash Flows from Investing Activities
Sale of IM Telecom (49%)	9,558,509
Net cash provided by investing activities	9,558,509
Cash Flows from Financing Activities
Proceeds from Note Payable		500,000
Repayments of Note Payable	(3,704,750)
Loan Origination Costs		(77,250)
Cash received from Stock Options Exercised	41,250	41,250
Net cash provided by (used in) financing activities	(3,663,500)	464,000
Net Change in Cash	2,904,059	(920,861)
Cash - Beginning of Year	777,103	2,055,634
Cash - End of Period	3,681,162	1,134,773
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	54,750	133,500
Cash paid for taxes

v3.24.2.u1

Pay vs Performance Disclosure - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (1,109,697)	$ (1,222,720)	$ 6,973,387	$ (2,137,417)

v3.24.2.u1

Insider Trading Arrangements	6 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

v3.24.2.u1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Overview of Company   KonaTel Inc., a Delaware corporation, formerly known as Dala Petroleum Corp. (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”). During 1990, we ceased our then current operations. 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”). We operated as an early-stage oil exploration company focused on our leased acreage acquired by Dala Nevada until 2016, at which time we assigned substantially all of our leased acreage to the former owner of Dala Nevada, and 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 December 18, 2017, we acquired KonaTel, Inc, a Nevada subchapter S-Corporation (“KonaTel Nevada”), in a merger with our acquisition subsidiary under which KonaTel Nevada became our wholly owned subsidiary, and we succeeded to its operations; and we changed our name to “KonaTel, Inc.” on February 5, 2018.   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.   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 a Federal Communication Commission (“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, California, as well as in Europe and Asia.   On February 5, 2018, we entered into a purchase agreement to acquire 100% of the membership interest in 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 operated as a wholly owned subsidiary of KonaTel until the sale of 51% of its membership interest to “Excess Telecom” on January 22, 2024, which is discussed below. 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. In addition to being an FCC   licensed ETC in thirty-six (36) states/territories, which are Vermont, South Carolina, Georgia, Maryland, Kentucky, Wisconsin, Oklahoma, California, New York, Pennsylvania, Nevada, Alaska, Arkansas, Florida, Louisiana, North Dakota, Nebraska, Ohio, Alabama, Colorado, Hawaii, Iowa, Idaho, Michigan, Minnesota, Missouri, New Jersey, Puerto Rico, Rhode Island, Tennessee, Utah, US Virgin Islands, Virginia, Washington, West Virginia, and Wyoming, IM Telecom has been an FCC licensed Affordable Connectivity Program (“ACP” and the “ACP Program”) provider, authorized to distribute ACP subsidized high-speed mobile voice/data service in the fifty (50) states, Washington D.C. and Puerto Rico. As of June 1, 2024, the ACP Program ended in its current form. The “ACP Extension Act,” among other legislative initiatives, is being considered by Congress for purposes of extending the ACP Program. Stand-alone ACP customers have been given the opportunity to enroll in the Lifeline program, in lieu of ACP benefits. Customers already enrolled in Lifeline, in combination with ACP benefits, continue with Lifeline services. Lifeline is an FCC program that provides subsidized, fixed or mobile telecommunications services to low-income Americans. The ACP Program was an FCC program that provided subsidized high-speed wireless data services to low-income Americans. IM Telecom distributes Lifeline, and prior to June 1, 2024, had distributed 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.   On January 22, 2024 (the “Effective Date”), KonaTel and IM Telecom entered into a Membership Interest Purchase Agreement (the “Excess Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”) with Excess Telecom, Inc., a Nevada corporation (“Excess Telecom”), pursuant to which KonaTel conveyed 49% of its membership interest in IM Telecom to Excess Telecom on the “Initial Closing Date” in consideration of the sum of $10,000,000, and if approved by the FCC, will convey the remaining 51% of the membership interest in IM Telecom to Excess Telecom for the sum of $100 on the “Final Closing.” If not approved by the FCC, KonaTel shall retain 51% of IM Telecom and Excess Telecom shall retain 49% of IM Telecom; and KonaTel shall have no obligation to refund any portion of the funds paid by Excess Telecom to KonaTel.   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 twelve (12) full-time employees. The current employees of IM Telecom, twenty-two (22) full-time and one (1) part-time, novated to employees of KonaTel under the Excess Telecom Purchase Agreement. These employees continue to engage in the same manner and function of service provided prior to the aforementioned agreement. KonaTel has four (4) other full-time employees.   Principal Products or Services and their Markets   Our principal products and services, provided through Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP, SMS/MMS, POTS Replacement), 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 thirty-six (36) states/territories and our ACP services, which until June 1, 2024, had been 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.     · Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through  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 previously under the FCC’s ACP 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 any change, reduction or elimination may have a material impact on our Mobile Services business.   Basis of Presentation   Interim Financial Statements   The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023.   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. Estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and stock-based compensation. Actual results could differ from those estimates.   Basis of Consolidation   The condensed consolidated financial statements include the Company and our two (2) wholly owned corporate subsidiaries, KonaTel Nevada and Apeiron Systems, and IM Telecom, presently owned 51% by us. All significant intercompany transactions are eliminated.   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 the three (3) months ended June 30, 2024, and 2023, and for the six (6) months ended June 30, 2023, are not included in the computation of diluted earnings per share because to do so would be anti-dilutive. As of June 30, 2023, there were potentially 803,480 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:  Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted                       Three Months Ended June 30,       2024     2023   Numerator             Net Loss   $ (1,109,697 )   $ (1,222,720 )                   Denominator                 Weighted-average common shares outstanding, basic     43,412,602       42,520,720   Dilutive impact of stock options     —         —     Weighted-average common shares outstanding, diluted     43,412,602       42,520,720                     Net income per common share                 Basic   $ (0.03 )   $ (0.03 ) Diluted   $ (0.03 )   $ (0.03 )                           Six Months Ended June 30,       2024     2023   Numerator             Net Income/Loss   $ 6,973,387     $ (2,137,417 )                   Denominator                 Weighted-average common shares outstanding, basic     43,301,670       42,539,672   Dilutive impact of stock options     —       —     Weighted-average common shares outstanding, diluted     43,301,670       42,539,672                     Net income per common share                 Basic   $ 0.16     $ (0.05 ) Diluted   $ 0.16     $ (0.05 )   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 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. Trade Account Receivables Customer Concentration Sales Revenue   The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of June 30, 2024, 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 amount of $1,071,558 or 58.0%, and $465,576 or 25.2%. It should be noted that the largest customer is the State of California, and the second largest customer is the federal government, as administered by the Universal Service Administrative Company (“USAC”), under the authority of the FCC. As of December 31, 2023, the Company had a significant concentration of receivables from two (2) customers in the amounts of $1,024,308 or 68.5%, and $285,536 or 19.0%.   Concentration of Major Customer   A significant amount of the revenue is derived from contracts with major customers. For the three (3) months ended June 30, 2024, the Company had two (2) customers that accounted for $1,321,520 or 30.3% and $1,071,558 or 24.6% of revenue, respectively. For the (3) three months ended June 30, 2023, the Company had two (2) customers that accounted for $2,614,769 or 56.8% and $745,484 or 16.2% of revenue, respectively.   Other Revenue   The Company has a shared relationship with distribution of Lifeline services through Excess Telecom. Revenue through this relationship is recorded on a net revenue basis. We have performed a principal versus agent analysis under ASC 606-10-25-25 and have determined that we are acting as agent under this relationship.   Effect of Recent Accounting Pronouncements   The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements.   Going Concern   For the six (6) months ended June 30, 2024, the Company generated net income of $6,973,387, compared to a net loss for the six (6) months ended June 30, 2023, of ($2,137,417). The Company sold a 49% interest in IM Telecom, which allowed the business to pay off all outstanding debt and retain additive cash. The accumulated deficit as of June 30, 2024, is ($5,265,304). We are one of only a few telecommunication carriers to hold a national wireless ETC Lifeline license, which provides us with additive reimbursement rates within the states we operate. In Q2 2024, we added an additional ten (10) state licenses, which continues to expand our nationally licensed wireless service coverage. We continue to target and expand into additional ETC licensed states. As of June 1, 2024, funding for the ACP Program ended, which accounted for approximately 15% of our revenues in Q2 2024 and 33% of our revenues in Q1 2024. There are legislative bills to extend funding currently being discussed with Congressional leaders; however, the decision to further fund the ACP Program (or a similar program) remains uncertain. In light of this uncertainty, the Company has taken initial cost reduction measures while discussions continue in Congress, and further expense reduction steps will be required if the ACP Program is not reinstated. Irrespective of an ACP Program extension, the California Lifeline Program provides ongoing business continuity due to its additional state funding and Linkup program.   As a result of the Company’s elimination of outstanding debt and increased cash position, the Company has ameliorated any substantial going concern doubt.

v3.24.2.u1

INVENTORY	6 Months Ended
	Jun. 30, 2024
Inventory Disclosure [Abstract]
INVENTORY	NOTE 2 – INVENTORY   Inventory primarily consists of sim cards, cell phones and tablets, which are stored at our warehouse, or have been delivered to distributors in the field. Inventories are stated at cost using the first-in, first-out (“FIFO”) valuation method. On a monthly basis, inventory is counted at our warehouse facility, and is reviewed for obsolescence and counted for accuracy with distributors. At June 30, 2024, and December 31, 2023, the Company had inventory of $554,859 and $1,229,770, respectively.

v3.24.2.u1

PROPERTY AND EQUIPMENT	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 3 – PROPERTY AND EQUIPMENT   Property and equipment consist of the following major classifications as of June 30, 2024, and December 31, 2023: Property and Equipment - Schedule of Property and Equipment       June 30, 2024     December 31, 2023   Lease Improvements Lease Improvements   $ 46,950     $ 46,950   Furniture and Fixtures Furniture and Fixtures     102,946       102,946   Billing Software     217,163       217,163   Office Equipment Office Equipment     94,552       94,552         461,611       461,611   Less:  Accumulated Depreciation     (442,326 )     (437,427 ) Property and equipment, net   $ 19,285     $ 24,184     Depreciation related to Property and Equipment amounted to $2,449 and $3,088 for the three (3) months ended June 30, 2024, and 2023, respectively. Depreciation related to Property and Equipment amounted to $4,899 and $6,176 for the six (6) months ended June 30, 2024, and 2023, respectively. Depreciation and amortization expenses are included as a component of operating expenses in the accompanying statements of operations.

v3.24.2.u1

RIGHT-OF-USE ASSETS	6 Months Ended
	Jun. 30, 2024
Right-of-use Assets
RIGHT-OF-USE ASSETS	NOTE 4 – RIGHT-OF-USE ASSETS Minimum Maximum  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%. Right-of-Use Assets are recorded on the balance sheet as intangible assets.   The Company has Right-of-Use Assets through leases of property under non-cancelable leases. As of June 30, 2024, the Company had three (3) properties with lease terms in excess of one (1) year. Of these three (3) leases, one (1) lease expires in 2025, one (1) lease expires in 2026, and one (1) lease expires in 2030. Lease payables as of June 30, 2024, is $406,244.   Future lease liability payments under the terms of these leases are as follows: Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases 2024 $ 77,940   2025 $ 129,543   2026 $ 65,967   2027 $ 54,000   2028 $ 54,000   Thereafter $ 90,000   Total $ 471,450   Less Interest $ 65,206   Present value of minimum lease payments $ 406,244   Less Current Maturities $ 131,787   Long Term Maturities $ 274,457     The weighted average term of the Right-to-Use leases is 57.4 months recorded with a weighted average discount of 6.96%. Total lease expense for the six (6) months ended June 30, 2024, and 2023, was $87,594 and $86,078, respectively.

v3.24.2.u1

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 5 – INTANGIBLE ASSETS   Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions. 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 June 30, 2024, and December 31, 2023, was $323,468.       June 30, 2024     December 31, 2023   Customer List   $ 1,135,962     $ 1,135,962   Software     2,407,001       2,407,001   ETC License     323,468       634,251   Less: Amortization     (3,542,963 )     (3,542,963 ) Net Amortizable Intangibles     323,468       634,251   Right of Use Assets - net     382,426       443,328   Intangible Assets net   $ 705,894     $ 1,077,579     Amortization expense amounted to $0, and $0 for the three (3) months ended June 30, 2024, and 2023, respectively. Amortization expense amounted to $0, and $0 for the six (6) months ended June 30, 2024, and 2023, respectively. Amortization expense is included as a component of operating expenses in the accompanying statements of operations. With the exception of the Lifeline license granted by the FCC, all intangible assets are fully amortized as of June 30, 2024.   The reclassification in the Balance Sheet for Right of Use Assets has been made in this filing to conform to both the current and future reported presentation.

v3.24.2.u1

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 6 – NOTES PAYABLE   The Company had no outstanding notes payable as of June 30, 2024.

v3.24.2.u1

CONTINGENCIES AND COMMITMENTS	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES AND COMMITMENTS	NOTE 7 – CONTINGENCIES AND COMMITMENTS   Litigation   From time to time, the Company may be subject to legal proceedings and claims which arise in the ordinary course of business. As of June 30, 2024, there are no ongoing legal proceedings.   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.   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 has agreed to a twenty-four (24) month payment plan with the State of Pennsylvania, which commenced in December, 2023. Following the final payoff of the liability, the Company may have the right to 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 of June 30, 2024.

v3.24.2.u1

SEGMENT REPORTING	6 Months Ended
	Jun. 30, 2024
Segment Reporting [Abstract]
SEGMENT REPORTING	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 consists 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 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 Lifeline 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:  Segment Reporting - Schedule of Segment Reporting Information       Hosted Services     Mobile Services     Total   For the six (6) months period ended June 30, 2024                         Revenue   $ 3,032,773     $ 6,946,243     $ 9,979,016   Gross Profit   $ 763,590     $ 1,263,622     $ 2,027,212   Depreciation and amortization   $ 4,737     $ 162     $ 4,899   Additions to property and equipment   $ —       $ —       $ —       For the three (3) months period ended June 30, 2024                         Revenue   $ 1,549,389     $ 2,793,790     $ 4,343,179   Gross Profit   $ 389,981     $ 509,726     $ 899,707   Depreciation and amortization   $ 2,368     $ 81     $ 2,449   Additions to property and equipment   $ —       $ —       $ —       For the six (6) months period ended June 30, 2023                   Revenue   $ 2,483,918     $ 6,149,227     $ 8,633,145   Gross Profit   $ 708,155     $ 1,067,776     $ 1,775,931   Depreciation and amortization   $ 1,777     $ 4,399     $ 6,176   Additions to property and equipment   $ —       $ —       $ —       For the three (3) months period ended June 30, 2023                         Revenue   $ 1,250,987     $ 3,350,439     $ 4,601,426   Gross Profit   $ 360,674     $ 413,378     $ 774,052   Depreciation and amortization   $ 840     $ 2,248     $ 3,088   Additions to property and equipment   $ —       $ —       $ —

v3.24.2.u1

STOCKHOLDERS’ EQUITY	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 9 – STOCKHOLDERS’ EQUITY   Common Stock Independent Director  On May 9, 2024, Robert Beaty, an independent Board member, conveyed to the Company 7,028 shares of the Company’s common stock at a price of $0.63, in an exempt transaction pursuant to Section 16b-3(c), and in full payment of the exercise of 25,000 incentive stock options granted to him in 2019 at a price of $0.1771 per share, which was 110% of the fair market value of our common stock on the date of such grant. These 25,000 ISO shares were issued to Mr. Beaty on May 9, 2024, in exchange for the conveyance of the 7,028 shares to the Company.   Non-Compensatory Stock Option Grant  Chief Executive Officer   On June 17, 2024, D. Sean McEwen, the Chairman and CEO of the Company, exercised his sixth tranche of 187,500 equity stock options by conveying to the Company 65,737 shares of the Company’s common stock at a price of $0.6275, in an exempt transaction and in full payment of the exercise of the 187,500 stock options granted to him in 2017 at a price of $0.22 per share, which shares were issued on June 17, 2024.   Stock Option Grants   There were no Stock Option Grants provided for during the quarter ended June 30, 2024.   Stock Compensation   The Company offers incentive stock option grants to directors and key employees. Options vest in tranches and typically expire five (5) years from the date of grant. For the six (6) months ended June 30, 2024, and 2023, the Company recorded options expense of $446,747 and $282,569, respectively. For the three months ended June 30, 2024, and 2023, the Company recorded options expense of $222,677 and $139,970, respectively. The option expense not taken as of June 30, 2024, is $2,101,424, with a weighted average term of 3.42 years.   The following table represents stock option activity as of and for the six (6) months ended June 30, 2024: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity       Number of     Weighted Average     Weighted Average     Aggregate       Shares     Exercise Price     Remaining Life     Intrinsic Value                             Options Outstanding – December 31, 2023     6,000,000     $ 0.74       3.69     $ 872,463   Granted     100,000       0.78                   Exercised     (400,000 )     0.43                   Forfeited     —                             Options Outstanding – June 30, 2024     5,700,000     $ 0.78       3.25     $ —                                       Exercisable and Vested, June 30, 2024     171,339     $ 0.59       1.56     $ 5,944     The aggregate intrinsic value for options outstanding as of June 30, 2024, is not calculated because the closing stock price on June 30, 2024, is less than the weighted average exercise price of outstanding options on that date.

v3.24.2.u1

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 10 – SUBSEQUENT EVENTS   Below are events that have occurred since June 30, 2024: Subsequent Event   On July 24, 2024, D. Sean McEwen, our Chairman and CEO, received a payment in the amount of $75,000 for his contributions in completing and commencing services for the previously disclosed VIVA-US Telecommunications, Inc. transaction. The payment was approved by our Board of Directors on April 9, 2024.   On July 29, 2024, the Company received a cease and desist notice from the State of California Public Utilities Commission (“CPUC”). The cause of the notice was identified as an improperly conducted SMS messaging campaign by one of our distribution channels. Upon receiving the notice, the Company took immediate action to identify the source of the complaint and eliminated the SMS messaging campaign associated with the specific distribution channel. The Company will continue conversations with the CPUC to ensure all marketing campaigns comply.   On August 9, 2024, Robert Beaty, an independent Board member, conveyed to the Company 8,709 shares of the Company’s common stock at a price of $0.48, in an exempt transaction pursuant to Section 16b-3(c), and in full payment of the exercise of 25,000 incentive stock options granted to him in 2019 at a price of $0.1672 per share, which was 110% of the fair market value of our common stock on the date of such grant.

v3.24.2.u1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation   Interim Financial Statements   The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2023.   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. Estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and stock-based compensation. Actual results could differ from those estimates.
Basis of Consolidation	Basis of Consolidation   The condensed consolidated financial statements include the Company and our two (2) wholly owned corporate subsidiaries, KonaTel Nevada and Apeiron Systems, and IM Telecom, presently owned 51% by us. All significant intercompany transactions are eliminated.
Net Income (Loss) Per Share	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 the three (3) months ended June 30, 2024, and 2023, and for the six (6) months ended June 30, 2023, are not included in the computation of diluted earnings per share because to do so would be anti-dilutive. As of June 30, 2023, there were potentially 803,480 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:  Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted                       Three Months Ended June 30,       2024     2023   Numerator             Net Loss   $ (1,109,697 )   $ (1,222,720 )                   Denominator                 Weighted-average common shares outstanding, basic     43,412,602       42,520,720   Dilutive impact of stock options     —         —     Weighted-average common shares outstanding, diluted     43,412,602       42,520,720                     Net income per common share                 Basic   $ (0.03 )   $ (0.03 ) Diluted   $ (0.03 )   $ (0.03 )                           Six Months Ended June 30,       2024     2023   Numerator             Net Income/Loss   $ 6,973,387     $ (2,137,417 )                   Denominator                 Weighted-average common shares outstanding, basic     43,301,670       42,539,672   Dilutive impact of stock options     —       —     Weighted-average common shares outstanding, diluted     43,301,670       42,539,672                     Net income per common share                 Basic   $ 0.16     $ (0.05 ) Diluted   $ 0.16     $ (0.05 )
Concentrations of Credit Risk	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 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. Trade Account Receivables Customer Concentration Sales Revenue   The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of June 30, 2024, 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 amount of $1,071,558 or 58.0%, and $465,576 or 25.2%. It should be noted that the largest customer is the State of California, and the second largest customer is the federal government, as administered by the Universal Service Administrative Company (“USAC”), under the authority of the FCC. As of December 31, 2023, the Company had a significant concentration of receivables from two (2) customers in the amounts of $1,024,308 or 68.5%, and $285,536 or 19.0%.
Concentration of Major Customer	Concentration of Major Customer   A significant amount of the revenue is derived from contracts with major customers. For the three (3) months ended June 30, 2024, the Company had two (2) customers that accounted for $1,321,520 or 30.3% and $1,071,558 or 24.6% of revenue, respectively. For the (3) three months ended June 30, 2023, the Company had two (2) customers that accounted for $2,614,769 or 56.8% and $745,484 or 16.2% of revenue, respectively.
Other Revenue	Other Revenue   The Company has a shared relationship with distribution of Lifeline services through Excess Telecom. Revenue through this relationship is recorded on a net revenue basis. We have performed a principal versus agent analysis under ASC 606-10-25-25 and have determined that we are acting as agent under this relationship.
Effect of Recent Accounting Pronouncements	Effect of Recent Accounting Pronouncements   The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements.

v3.24.2.u1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted	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:  Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted                       Three Months Ended June 30,       2024     2023   Numerator             Net Loss   $ (1,109,697 )   $ (1,222,720 )                   Denominator                 Weighted-average common shares outstanding, basic     43,412,602       42,520,720   Dilutive impact of stock options     —         —     Weighted-average common shares outstanding, diluted     43,412,602       42,520,720                     Net income per common share                 Basic   $ (0.03 )   $ (0.03 ) Diluted   $ (0.03 )   $ (0.03 )                           Six Months Ended June 30,       2024     2023   Numerator             Net Income/Loss   $ 6,973,387     $ (2,137,417 )                   Denominator                 Weighted-average common shares outstanding, basic     43,301,670       42,539,672   Dilutive impact of stock options     —       —     Weighted-average common shares outstanding, diluted     43,301,670       42,539,672                     Net income per common share                 Basic   $ 0.16     $ (0.05 ) Diluted   $ 0.16     $ (0.05 )

v3.24.2.u1

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Property and Equipment - Schedule of Property and Equipment	Property and equipment consist of the following major classifications as of June 30, 2024, and December 31, 2023: Property and Equipment - Schedule of Property and Equipment       June 30, 2024     December 31, 2023   Lease Improvements Lease Improvements   $ 46,950     $ 46,950   Furniture and Fixtures Furniture and Fixtures     102,946       102,946   Billing Software     217,163       217,163   Office Equipment Office Equipment     94,552       94,552         461,611       461,611   Less:  Accumulated Depreciation     (442,326 )     (437,427 ) Property and equipment, net   $ 19,285     $ 24,184

v3.24.2.u1

RIGHT-OF-USE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2024
Right-of-use Assets
Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases	Future lease liability payments under the terms of these leases are as follows: Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases 2024 $ 77,940   2025 $ 129,543   2026 $ 65,967   2027 $ 54,000   2028 $ 54,000   Thereafter $ 90,000   Total $ 471,450   Less Interest $ 65,206   Present value of minimum lease payments $ 406,244   Less Current Maturities $ 131,787   Long Term Maturities $ 274,457

v3.24.2.u1

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets	June 30, 2024     December 31, 2023   Customer List   $ 1,135,962     $ 1,135,962   Software     2,407,001       2,407,001   ETC License     323,468       634,251   Less: Amortization     (3,542,963 )     (3,542,963 ) Net Amortizable Intangibles     323,468       634,251   Right of Use Assets - net     382,426       443,328   Intangible Assets net   $ 705,894     $ 1,077,579

v3.24.2.u1

SEGMENT REPORTING (Tables)	6 Months Ended
	Jun. 30, 2024
Segment Reporting [Abstract]
Segment Reporting - Schedule of Segment Reporting Information	The following table reflects the result of operations of the Company’s reportable segments:  Segment Reporting - Schedule of Segment Reporting Information       Hosted Services     Mobile Services     Total   For the six (6) months period ended June 30, 2024                         Revenue   $ 3,032,773     $ 6,946,243     $ 9,979,016   Gross Profit   $ 763,590     $ 1,263,622     $ 2,027,212   Depreciation and amortization   $ 4,737     $ 162     $ 4,899   Additions to property and equipment   $ —       $ —       $ —       For the three (3) months period ended June 30, 2024                         Revenue   $ 1,549,389     $ 2,793,790     $ 4,343,179   Gross Profit   $ 389,981     $ 509,726     $ 899,707   Depreciation and amortization   $ 2,368     $ 81     $ 2,449   Additions to property and equipment   $ —       $ —       $ —       For the six (6) months period ended June 30, 2023                   Revenue   $ 2,483,918     $ 6,149,227     $ 8,633,145   Gross Profit   $ 708,155     $ 1,067,776     $ 1,775,931   Depreciation and amortization   $ 1,777     $ 4,399     $ 6,176   Additions to property and equipment   $ —       $ —       $ —       For the three (3) months period ended June 30, 2023                         Revenue   $ 1,250,987     $ 3,350,439     $ 4,601,426   Gross Profit   $ 360,674     $ 413,378     $ 774,052   Depreciation and amortization   $ 840     $ 2,248     $ 3,088   Additions to property and equipment   $ —       $ —       $ —

v3.24.2.u1

STOCKHOLDERS’ EQUITY (Tables)	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity	The following table represents stock option activity as of and for the six (6) months ended June 30, 2024: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity       Number of     Weighted Average     Weighted Average     Aggregate       Shares     Exercise Price     Remaining Life     Intrinsic Value                             Options Outstanding – December 31, 2023     6,000,000     $ 0.74       3.69     $ 872,463   Granted     100,000       0.78                   Exercised     (400,000 )     0.43                   Forfeited     —                             Options Outstanding – June 30, 2024     5,700,000     $ 0.78       3.25     $ —                                       Exercisable and Vested, June 30, 2024     171,339     $ 0.59       1.56     $ 5,944

v3.24.2.u1

Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator
Net Income/Loss	$ (1,109,697)	$ (1,222,720)	$ 6,973,387	$ (2,137,417)
Denominator
Weighted-average common shares outstanding, basic	43,412,602	42,520,720	43,301,670	42,539,672
Dilutive impact of stock options
Weighted-average common shares outstanding, diluted	43,412,602	42,520,720	43,301,670	42,539,672
Net income per common share
Basic	$ (0.03)	$ (0.03)	$ 0.16	$ (0.05)
Diluted	$ (0.03)	$ (0.03)	$ 0.16	$ (0.05)

v3.24.2.u1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 22, 2024	Nov. 30, 2014	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Business acquisition		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.
Potentially dilutive shares						803,480
Revenue			$ 4,343,179	$ 4,601,426	$ 9,979,016	$ 8,633,145
Net Loss			(1,109,697)	(1,222,720)	6,973,387	(2,137,417)
Net loss			1,109,697	$ 1,222,720	(6,973,387)	$ 2,137,417
Accumulated deficit			5,265,304		5,265,304		$ 12,238,691
Trade Account Receivables | Customer Concentration | Customer #1
Product Information [Line Items]
Receivables, concentration			1,071,558		$ 1,071,558		$ 1,024,308
Concentration risk					58.00%		68.50%
Trade Account Receivables | Customer Concentration | Customer #2
Product Information [Line Items]
Receivables, concentration			$ 465,576		$ 465,576		$ 285,536
Concentration risk					25.20%		19.00%
Sales Revenue | Customer Concentration | Customer #1
Product Information [Line Items]
Concentration risk			30.30%	56.80%
Revenue			$ 1,321,520	$ 2,614,769
Sales Revenue | Customer Concentration | Customer #2
Product Information [Line Items]
Concentration risk			24.60%	16.20%
Revenue			$ 1,071,558	$ 745,484
Excess Telecom, Inc.
Product Information [Line Items]
Ownership interest	49.00%
Proceeds from sale of interest in subsidiary	$ 10,000,000

v3.24.2.u1

INVENTORY (Details Narrative) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Inventory, Net	$ 554,859	$ 1,229,770

v3.24.2.u1

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 461,611	$ 461,611
Less:  Accumulated Depreciation	(442,326)	(437,427)
Property and equipment, net	19,285	24,184
Lease Improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	46,950	46,950
Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	102,946	102,946
Billing Software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	217,163	217,163
Office Equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 94,552	$ 94,552

v3.24.2.u1

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 2,449	$ 3,088	$ 4,899	$ 6,176
Property and Equipment
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 2,449	$ 3,088	$ 4,899	$ 6,176

v3.24.2.u1

Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Right-of-use Assets
2024	$ 77,940
2025	129,543
2026	65,967
2027	54,000
2028	54,000
Thereafter	90,000
Total	471,450
Less Interest	65,206
Present value of minimum lease payments	406,244
Less Current Maturities	131,787	$ 127,716
Long Term Maturities	$ 274,457	$ 330,511

v3.24.2.u1

RIGHT-OF-USE ASSETS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Lease terms and expirations, description	the Company had three (3) properties with lease terms in excess of one (1) year. Of these three (3) leases, one (1) lease expires in 2025, one (1) lease expires in 2026, and one (1) lease expires in 2030
Lease liability	$ 406,244
Weighted average term	57 months 12 days
Weighted average discount	6.96%
Lease expense	$ 87,594	$ 86,078
Minimum
Implied interest rate used	4.75%
Maximum
Implied interest rate used	7.50%

v3.24.2.u1

Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Customer List	$ 1,135,962	$ 1,135,962
Software	2,407,001	2,407,001
ETC License	323,468	634,251
Less: Amortization	(3,542,963)	(3,542,963)
Net Amortizable Intangibles	323,468	634,251
Right of Use Assets - net	382,426	443,328
Intangible Assets net	$ 705,894	$ 1,077,579

v3.24.2.u1

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Fair market value of acquired license	$ 323,468		$ 323,468		$ 323,468
Amortization expense	$ 0	$ 0	$ 0	$ 0

v3.24.2.u1

CONTINGENCIES AND COMMITMENTS (Details Narrative)	12 Months Ended
	Dec. 31, 2021 USD ($)
Operating Loss Carryforwards [Line Items]
Expected liability	$ 7,000
State of Pennsylvania
Operating Loss Carryforwards [Line Items]
Tax assessment	$ 115,000

v3.24.2.u1

Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Segment Reporting Information [Line Items]
Revenue	$ 4,343,179	$ 4,601,426	$ 9,979,016	$ 8,633,145
Gross Profit	899,707	774,052	2,027,212	1,775,931
Depreciation and amortization	2,449	3,088	4,899	6,176
Additions to property and equipment	0	0	0	0
Hosted Services
Segment Reporting Information [Line Items]
Revenue	1,549,389	1,250,987	3,032,773	2,483,918
Gross Profit	389,981	360,674	763,590	708,155
Depreciation and amortization	2,368	840	4,737	1,777
Additions to property and equipment	0	0	0	0
Mobile Services
Segment Reporting Information [Line Items]
Revenue	2,793,790	3,350,439	6,946,243	6,149,227
Gross Profit	509,726	413,378	1,263,622	1,067,776
Depreciation and amortization	81	2,248	162	4,399
Additions to property and equipment	$ 0	$ 0	$ 0	$ 0

v3.24.2.u1

SEGMENT REPORTING (Details Narrative)	6 Months Ended
	Jun. 30, 2024 Number
Segment Reporting [Abstract]
Number of reportable segments	2

v3.24.2.u1

Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares
Equity [Abstract]
Number of shares, options outstanding | shares	6,000,000
Weighted average exercise price, outstanding | $ / shares	$ 0.74
Weighted average remaining life, outstanding	3 years 8 months 8 days
Aggregate intrinsic value, outstanding | $	$ 872,463
Number of shares, granted | shares	100,000
Weighted average exercise price, granted | $ / shares	$ 0.78
Number of shares, exercised | shares	(400,000)
Weighted average exercise price, exercised | $ / shares	$ 0.43
Number of shares, options outstanding | shares	5,700,000
Weighted average exercise price, outstanding | $ / shares	$ 0.78
Weighted average remaining life, outstanding	3 years 3 months
Aggregate intrinsic value, outstanding | $	$ 0
Number of shares, exercisable and vested | shares	171,339
Weighted average exercise price, exercisable and vested | $ / shares	$ 0.59
Weighted average remaining life, exercisable and vested	1 year 6 months 21 days
Aggregate intrinsic value, exercisable and vested | $	$ 5,944

v3.24.2.u1

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 09, 2024	Jun. 17, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2017	Dec. 31, 2019
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options, exercised					400,000
Stock options, granted					100,000
Stock-based compensation expense			$ 222,677	$ 139,970	$ 446,747	$ 282,569
Deferred compensation expense					$ 2,101,424
Chief Executive Officer
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares issued as a result of options exercised		65,737
Stock price		$ 0.6275					$ 0.22
Stock options, exercised		187,500
Stock options, granted							187,500
Incentive Stock | Independent Director
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares issued as a result of options exercised	7,028
Stock price	$ 0.63							$ 0.1771
Stock options, exercised	25,000

v3.24.2.u1

SUBSEQUENT EVENTS (Details Narrative) - USD ($)			1 Months Ended		6 Months Ended
	Aug. 09, 2024	May 09, 2024	Jul. 24, 2024	Jun. 17, 2024	Jun. 30, 2024	Dec. 31, 2019	Dec. 31, 2017
Subsequent Event [Line Items]
Stock options, exercised					400,000
Chief Executive Officer
Subsequent Event [Line Items]
Shares issued as a result of options exercised				65,737
Stock price				$ 0.6275			$ 0.22
Stock options, exercised				187,500
Independent Director | Incentive Stock
Subsequent Event [Line Items]
Shares issued as a result of options exercised		7,028
Stock price		$ 0.63				$ 0.1771
Stock options, exercised		25,000
Subsequent Event | Chief Executive Officer
Subsequent Event [Line Items]
Compensation expense			$ 75,000
Subsequent Event | Independent Director | Incentive Stock
Subsequent Event [Line Items]
Shares issued as a result of options exercised	8,709
Stock price	$ 0.48
Stock options, exercised	25,000

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