Investment reports

KonaTel Reports First Quarter 2022 Results

First quarter revenue increased 77% year-over-year to $4.2 million

Scaling up mobile services to reach new households under government-subsidized programs

DALLAS, May 23, 2022 /PRNewswire/ — KonaTel, Inc. KTEL (www.konatel.com), a voice/data communications holding company, today announced its financial results for the three months ended March 31, 2022.

First Quarter 2022 Financial Summary and Recent Highlights

  • Income from $4.2 millionup 76.7% compared to the first quarter of last year.
  • Gross profit of $1.6 millionup 80.8% from the first quarter of last year.
  • Operating result of $51,000 compared to an operating loss of ($230,000) in the first quarter of last year.
  • GAAP net loss of ($44,000)or $0.00 per share, compared to ($233,000)or $(0.01) per share in the first quarter of last year.
  • Non-GAAP net income of $223,000or $0.01 per diluted share, compared to $118,000or $0.00 per diluted share in the first quarter of last year.
  • In order to significantly accelerate the growth of mobile services, recently executed a non-binding term sheet to provide $3 million in debt financing with minimal shareholder dilution.

Sean McEwenChairman and CEO of KonaTel, said, “Revenue growth accelerated in the first quarter, up 77% year-over-year and coming from multiple lines of business. As one of the few national wireless service resellers approved under expanded government programs, we are taking aggressive action to bring new wireless voice and data services to underserved households across the country. country. »

“With this exponential growth comes increased infrastructure investment as well as increased initial customer acquisition costs, which are expensed as incurred and generally recovered in the 120 days,” McEwen continued. “In order to efficiently grow our business, we have more than doubled our number of lines to approximately 23,000 lines in the last 90 days, the first significant capacity increase in our history, with additional capacity to continue our growth. It is important to note that investments in infrastructure and the acquisition of new customers allow new sources of recurring and stable income which offer an attractive return on the capital invested.

“We believe the long-term economics of our business are very attractive and will result in increased profitability and cash flow beyond this current period of substantial growth,” McEwen continued. “With a new top-notch management team in place, we are energized by emerging opportunities to expand and upgrade our business as we achieve critical mass in our customer base.”

McEwen concluded: “Additionally, the supplement $3 million in working capital will enable us to activate an additional 30,000 new service lines each quarter. We can typically recoup customer acquisition costs within 120 days of activation by returning our cash resources at least three times every 12 months. As outlined in our fourth quarter earnings press release, we are building a business to significantly increase revenue, earnings and predictable cash flow, even in weaker economic conditions.”

Quarterly Financial Summary (Q1 2022 vs Q1 2021)

Income from $4.2 millionan increase of 76.7% compared to $2.4 million. The increase is mainly due to the expansion of mobile services under the Affordable Connectivity Program (ACP) and Lifeline programs.

The gross profit was $1.6 millioni.e. a gross profit margin of 39.0%, compared to $911,000representing a gross profit margin of 38.1%.

Total operating expenses were $1.6 millionup 39.8% compared to $1.1 million. This increase is primarily the result of increases in payroll and related expenses resulting primarily from the hiring of operations-level management positions at the subsidiaries of Apeiron Systems and IM Telecom.

GAAP net loss was ($44,000)or $0.00 per diluted share (based on 41.6 million weighted average shares), compared to a net loss of ($233,000)or $(0.01) per diluted share (based on 40.7 million weighted average shares).

Non-GAAP net income was $223,000or $0.01 per diluted share, compared to $118,000or $0.00 per diluted share, which does not include a one-time legal/application fee adjustment of approximately $105,000 to expand our mobile services to other states.

Balance sheet

The Company ended the quarter with $1.5 million in cash, compared to $933,000 in cash on December 31, 2021. Long-term debt was $150,000 from March 31, 2022and December 31, 2021.

About KonaTel

KonaTel provides a variety of retail and wholesale telecommunications services, including mobile voice/text/data service supported by US national 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 provider of cloud communications services using a dynamic platform “as a service” (CPaaS/UCaaS/CCaaS/PaaS). Apeiron provides voice, messaging, SD-WAN and platform services using its national cloud network. All of Apeiron’s services are accessible through legacy interfaces and rich communication APIs. KonaTel’s other subsidiary, Infiniti Mobile (www.infinitimobile.com), is an FCC-licensed Lifeline Wireless carrier with an FCC-approved Lifeline Wireless Compliance Plan, licensed to provide government-subsidized cellular service low-income American families. KonaTel is headquartered in PlanTexas.

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 guarantees of future performance or results and will not necessarily be precise indications of the times at which 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 expressed or implied information. by the forward-looking statements contained in this press release. This press release should be considered in light of the disclosures contained in KonaTel’s filings and its “forward-looking statements” in such documents which are contained in the SEC’s EDGAR filings at www.sec.gov.

— Tables follow —

KonaTel, Inc.
Consolidated balance sheets



March 31, 2022


December 31, 2021

Assets




Current assets




Cash and cash equivalents

$1,452,869


$932,785

Accounts receivable, net

982 112


1,274,687

Inventory, net

634 649


566,839

Prepaid expenses

33,140


79,467

Other current assets

163


164

Total current assets

3,102,933


2,853,942





Property and equipment, net

44,770


48,887





other assets




Intangible assets, net

785 170


807 775

other assets

154,297


154,297

Investments

10,000


10,000

Total other assets

949 467


972 072

Total assets

$4,097,170


$3,874,901





Liabilities and equity




Current liabilities




Accounts payable and accrued liabilities

$1,068,388


$930,449

Right of use Simple rental obligation – in progress

37,164


50,672

Total current liabilities

1,105,552


981 121





Long-term liabilities




Right of use Simple rental obligation – long term

126,973


136,445

Note payable – long term

150,000


150,000

Total long-term liabilities

276,973


286,445

Total responsibilities

1,382,525


1,267,566

Commitments and contingencies




Equity




Common shares, par value $0.001, 50,000,000 shares
authorized, 41,615,406 outstanding and issued as of March 31, 2022,
and 41,615,406 outstanding and issued as of December 31, 2021

41,615


41,615

Premium

8,062,983


7,911,224

Accumulated deficit

(5,389,953)


(5,345,504)

Full shareholder equity

2,714,645


2,607,335

Total Liabilities and Equity

$4,097,170


$3,874,901

KonaTel, Inc.
Consolidated Statements of Income



Quarter ended March 31



2022


2021


Revenue

$

4,227,856


$

2,392,838


Revenue cost


2,580,595



1,481,677


Gross profit


1,647,261



911 161









Functionnary costs







Payroll and related expenses


1,132,313



549 199


Operation and maintenance


642



290 322


bad debt


55




Professional services


149 170




Utilities and facilities


35,687



48,366


Depreciation and amortization


4,117



213,554


General and administrative


60,918



20,442


Marketing and Advertising


47,670



11,086


Application development costs


134,605




Taxes and insurance


31,379



8,672


Total operating expenses


1,596,556



1,141,641









Operating profit/(loss)


50,705



(230,480)









Other income and expenses







Interest charges


(24,030)



(2,242)


Other expenses


(71,124)




Total other income and expenses


(95,154)



(2,242)









Net loss

$

(44,449)


$

(232,722))









Earnings (loss) per share







Basic

$

0.00


$

(0.01)


Diluted

$

0.00


$

(0.01)


Weighted Average Outstanding Shares







Basic


41,615,406



40,692,286


Diluted


41,615,406



40,692,286


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SOURCE KonaTel, Inc.