KonaTel Reports First Quarter 2021 Financial Results

Revenue of $2.4 Million, Up 22%

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May 25, 2021, 08:30 ET

DALLAS, May 25, 2021 /PRNewswire/ -- KonaTel, Inc. (OTCMKTS: KTEL) (www.konatel.com), a voice/data communications holding company, today announced financial results for three-month period ended March 31, 2021.

First Quarter Financial Summary and Recent Business Highlights

Revenues of $2.4 million, up 22% compared to the first quarter last year.
Gross profit of $911,000, up 19% compared to the first quarter last year.
Operating loss of $(230,000) compared to $(190,000) in the first quarter last year.
Net Loss of $(233,000) or $(0.01) per share, compared to net income of $101,000, inclusive of non-recurring, other income of $300,000, or $0.00 per share, in the first quarter last year.
Subsequent to quarter end, the company's subsidiary, IM Telecom (d/b/a Infiniti Mobile), received approval to participate in the Federal Communications Commission's (FCC) new Emergency Broadband Benefit Program (EBB) (www.fcc.gov/broadbandbenefit) established by Congress to provide temporary broadband data service to low-income American households impacted by COVID.

"Demand for telecommunications and data services continues to be robust as work-from-home trends persist, IoT (Internet of Things) wireless data opportunities increase and consumers seek faster, more reliable connectivity from the accelerating deployment of smart devices," stated KonaTel Chairman and CEO Sean McEwen. "We are increasing our internal infrastructure, primarily employed and contracted personnel, to expand our sales channel strategy to meet this growing demand and pursue additional opportunities to further scale the higher margin, Hosted Services segment of our business."

First Quarter Financial Detail (First Quarter of 2021 vs. First Quarter of 2020)

Revenues increased 22% to $2.4 million compared to $2.0 million, reflecting a 32% increase in Hosted Services revenues and a 14% increase in Mobile Services revenues.

Gross profit was $911,000, or 38.1% profit margin, compared to gross profit of $765,000, or 39.1% profit margin.

Total operating expenses were $1.1 million, up 19.5% compared to $995,000. This increase was primarily a result of infrastructure expansion, mostly payroll and operating & maintenance expenses to support growth.

Net loss was $(233,000), or $(0.01) per diluted share (based on 40.7 million weighted average shares) compared to net income of $101,000, or $0.00 per diluted share (based on 44.1 million weighted average shares), inclusive of non-operating, other income of $300,000 related to a legal settlement.

Balance Sheet

The Company ended the quarter with $569,000 in cash, compared to $715,000 in cash on December 31, 2020. Long term debt was $150,000 as of March 31, 2021 and December 31, 2020.

About KonaTel

KonaTel provides a variety of retail and wholesale telecommunications services including mobile voice/text/data service supported by national U.S. mobile networks, mobile numbers, SMS/MMS services, IoT mobile data service, and a range of hosted cloud services. KonaTel's subsidiary, Apeiron Systems (www.apeiron.io), is a global cloud communications service provider employing a dynamic "as a service" (CPaaS/UCaaS/CCaaS/PaaS) platform. Apeiron provides voice, messaging, SD-WAN, and platform services using its national cloud network. All Apeiron's services can be accessed through legacy interfaces and rich communications APIs. KonaTel's other subsidiary, Infiniti Mobile (www.infinitimobile.com), is an FCC authorized wireless Lifeline carrier with an FCC approved wireless Lifeline Compliance Plan, authorized to provide government subsidized cellular service to low-income Americans. KonaTel is headquartered in Plano, Texas.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 press release. This press release should be considered in light of the disclosures contained in the filings of KonaTel and its "forward-looking statements" in such filings that are contained in the EDGAR Archives of the SEC at www.sec.gov.

-- Tables Follow –

KonaTel, Inc. Condensed Consolidated Balance Sheets (Unaudited)

	March 31, 2021	December 31, 2020
Assets
Current Assets
Cash and Cash Equivalents	$ 569,336	$ 715,195
Accounts Receivable, net	487,753	434,801
Inventory, Net	16,999	17,786
Prepaid Expenses	1,802	2,365
Other Current Asset	164	194
Total Current Assets	1,076,054	1,170,341

Property and Equipment, Net	66,602	79,571

Other Assets
Intangible Assets, Net	1,473,001	1,517,163
Other Assets	172,296	172,065
Total Other Assets	1,645,297	1,689,228
Total Assets	$ 2,787,953	$ 2,939,140

Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable and Accrued Expenses	$ 980,260	$ 1,042,567
Note Payable - current portion	62,743	94,339
Right of Use Operating Lease Obligation - current	98,501	66,323
Deferred Revenue	-	37,677
Total Current Liabilities	1,141,504	1,240,906

Long Term Liabilities
Right of Use Operating Lease Obligation - long term	164,992	15,399
Note Payable - long term	150,000	150,000
Total Long Term Liabilities	314,992	165,399
Total Liabilities	1,456,496	1,406,305

Commitments and contingencies
Stockholders' Equity
Common stock, $.001 par value, 50,000,000 shares authorized, 40,692,286 outstanding and issued at March 31, 2021 and December 31, 2020	40,692	40,692
Additional Paid In Capital	7,491,976	7,460,632
Accumulated Deficit	(6,201,211)	(5,968,489)
Total Stockholders' Equity	1,331,457	1,532,835
Total Liabilities and Stockholders' Equity	$ 2,787,953	$ 2,939,140

KonaTel, Inc. Condensed Consolidated Statement of Operations (Unaudited)

	Three Months Ended March 31,
	2021	2020
Revenue	$ 2,392,838	$ 1,957,355
Cost of Revenue	1,481,677	1,192,177
Gross Profit	911,161	765,178

Operating Expenses
Payroll and Related Expenses	549,199	448,149
Operating and Maintenance	290,322	193,852
Utilities and Facilities	48,366	20,945
Depreciation and Amortization	213,554	258,222
General and Administrative	20,442	14,243
Marketing and Advertising	11,086	944
Taxes and Insurance	8,672	18,814
Total Operating Expenses	1,141,641	955,169

Operating Loss	(230,480)	(189,991)

Other Income and Expense
Other Income	-	301,373
Interest Expense	(2,242)	(10,549)
Total Other Income and Expenses	(2,242)	290,824

Net Income (Loss)	$ (232,722)	$ 100,833

Net Income (Loss) per Share
Basic	$ (0.01)	$ -
Diluted	(0.01)	-

Weighted Average Outstanding Shares
Basic	40,692,286	40,692,286
Diluted	40,692,286	44,092,286