Cover
Cover | 9 Months Ended |
Sep. 30, 2022 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Sep. 30, 2022 |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2022 |
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 | 42,215,406 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 2,243,195 | $ 932,785 |
Accounts Receivable, net | 1,503,055 | 1,274,687 |
Inventory, Net | 297,393 | 566,839 |
Prepaid Expenses | 7,443 | 79,467 |
Other Current Asset | 164 | 164 |
Total Current Assets | 4,051,250 | 2,853,942 |
Property and Equipment, Net | 39,624 | 48,887 |
Other Assets | ||
Intangible Assets, Net | 1,224,790 | 807,775 |
Other Assets | 127,864 | 154,297 |
Investments | 10,000 | 10,000 |
Total Other Assets | 1,362,654 | 972,072 |
Total Assets | 5,453,528 | 3,874,901 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 1,445,975 | 930,449 |
Loans Payable, net of origination fees | 3,027,564 | |
Right of Use Operating Lease Obligation - current | 115,653 | 50,672 |
Total Current Liabilities | 4,589,192 | 981,121 |
Long Term Liabilities | ||
Right of Use Operating Lease Obligation - long term | 495,385 | 136,445 |
Note Payable - long term | 150,000 | |
Total Long Term Liabilities | 495,385 | 286,445 |
Total Liabilities | 5,084,577 | 1,267,566 |
Stockholders’ Equity | ||
Common stock, $0.001 par value, 50,000,000 shares authorized, 42,215,406 outstanding and issued at September 30, 2022 and 41,615,406 outstanding and issued at December 31, 2021 | 42,215 | 41,615 |
Additional Paid In Capital | 8,540,557 | 7,911,224 |
Accumulated Deficit | (8,213,821) | (5,345,504) |
Total Stockholders’ Equity | 368,951 | 2,607,335 |
Total Liabilities and Stockholders’ Equity | $ 5,453,528 | $ 3,874,901 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
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 issued | 42,215,406 | 41,615,406 |
Common stock, shares outstanding | 42,215,406 | 41,615,406 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,880,333 | $ 3,612,861 | $ 15,231,288 | $ 8,919,573 |
Cost of Revenue | 4,969,251 | 1,988,624 | 12,230,378 | 4,946,786 |
Gross Profit | 911,082 | 1,624,237 | 3,000,910 | 3,972,787 |
Operating Expenses | ||||
Payroll and Related Expenses | 1,348,152 | 636,329 | 3,719,446 | 1,817,200 |
Operating and Maintenance | 5,321 | 461 | 6,681 | 1,211 |
Bad Debt | 29,133 | 427 | ||
Professional Services | 381,340 | 77,335 | 675,987 | 206,671 |
Utilities and Facilities | 60,083 | 39,726 | 135,118 | 110,523 |
Depreciation and Amortization | 3,088 | 213,552 | 9,264 | 640,657 |
General and Administrative | 71,545 | 32,668 | 251,778 | 93,994 |
Marketing and Advertising | 15,542 | 37,350 | 100,570 | 50,073 |
Application Development Costs | 142,237 | 179,427 | 391,930 | 396,715 |
Taxes and Insurance | 26,729 | 35,784 | 150,389 | 60,479 |
Total Operating Expenses | 2,054,037 | 1,252,632 | 5,470,296 | 3,377,950 |
Operating Income/(Loss) | (1,142,955) | 371,605 | (2,469,386) | 594,837 |
Other Income and Expense | ||||
Interest Expense | (161,977) | (2,573) | (233,153) | (12,328) |
Other Expenses | (40,582) | (49,197) | (165,778) | (154,310) |
Total Other Income and Expenses | (202,559) | (51,770) | (398,931) | (166,638) |
Net Income (Loss) | $ (1,345,514) | $ 319,836 | $ (2,868,317) | $ 428,199 |
Earnings (Loss) per Share | ||||
Basic | $ (0.03) | $ 0.01 | $ (0.07) | $ 0.01 |
Diluted | $ (0.03) | $ 0.01 | $ (0.07) | $ 0.01 |
Weighted Average Outstanding Shares | ||||
Basic | 41,912,145 | 40,899,569 | 41,715,406 | 40,758,495 |
Diluted | 41,912,145 | 43,565,835 | 41,715,406 | 43,434,761 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, value at Dec. 31, 2020 | $ 40,692 | $ 7,460,632 | $ (5,968,489) | $ 1,532,835 |
Shares outstanding at Dec. 31, 2020 | 40,692,286 | |||
Exercised Stock Options | $ 575 | 109,425 | 110,000 | |
Exercised Stock Options, shares | 575,000 | |||
Stock Based Compensation | $ 0 | 141,935 | 0 | 141,935 |
Net Loss | 0 | 0 | 428,199 | 428,199 |
Ending balance, value at Sep. 30, 2021 | $ 41,267 | 7,711,992 | (5,540,290) | 2,212,968 |
Shares outstanding at Sep. 30, 2021 | 41,267,286 | |||
Beginning balance, value at Dec. 31, 2020 | $ 40,692 | 7,460,632 | (5,968,489) | 1,532,835 |
Shares outstanding at Dec. 31, 2020 | 40,692,286 | |||
Ending balance, value at Dec. 31, 2021 | $ 41,615 | 7,911,224 | (5,345,504) | 2,607,335 |
Shares outstanding at Dec. 31, 2021 | 41,615,406 | |||
Beginning balance, value at Jun. 30, 2021 | $ 40,692 | 7,539,690 | (5,860,126) | 1,720,256 |
Shares outstanding at Jun. 30, 2021 | 40,692,286 | |||
Exercised Stock Options | $ 575 | 109,425 | 110,000 | |
Exercised Stock Options, shares | 575,000 | |||
Stock Based Compensation | $ 0 | 62,877 | 0 | 62,877 |
Net Loss | 0 | 0 | 319,836 | 319,836 |
Ending balance, value at Sep. 30, 2021 | $ 41,267 | 7,711,992 | (5,540,290) | 2,212,968 |
Shares outstanding at Sep. 30, 2021 | 41,267,286 | |||
Beginning balance, value at Dec. 31, 2021 | $ 41,615 | 7,911,224 | (5,345,504) | 2,607,335 |
Shares outstanding at Dec. 31, 2021 | 41,615,406 | |||
Exercised Stock Options | $ 600 | 89,400 | $ 90,000 | |
Exercised Stock Options, shares | 600,000 | 600,000 | ||
Stock Based Compensation | $ 0 | 539,933 | 0 | $ 539,933 |
Net Loss | 0 | 0 | (2,868,317) | (2,868,317) |
Ending balance, value at Sep. 30, 2022 | $ 42,215 | 8,540,557 | (8,213,821) | 368,951 |
Shares outstanding at Sep. 30, 2022 | 42,215,406 | |||
Beginning balance, value at Jun. 30, 2022 | $ 41,615 | 8,265,520 | (6,868,307) | 1,438,828 |
Shares outstanding at Jun. 30, 2022 | 41,615,406 | |||
Exercised Stock Options | $ 600 | 89,400 | 90,000 | |
Exercised Stock Options, shares | 600,000 | |||
Stock Based Compensation | $ 0 | 185,637 | 0 | 185,637 |
Net Loss | 0 | 0 | (1,345,514) | (1,345,514) |
Ending balance, value at Sep. 30, 2022 | $ 42,215 | $ 8,540,557 | $ (8,213,821) | $ 368,951 |
Shares outstanding at Sep. 30, 2022 | 42,215,406 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net Income (Loss) | $ (2,868,317) | $ 428,199 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and Amortization | 9,264 | 640,657 |
Loan Origination Cost Amortization | 51,095 | |
Bad Debt | 29,133 | 427 |
Stock-based Compensation | 539,933 | 141,935 |
Change in Right of Use Asset | (417,014) | (118,085) |
Change in Lease Liability | 423,920 | 130,956 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | (257,500) | (559,685) |
Inventory | 269,445 | (90,200) |
Prepaid Expenses | 98,456 | (13,657) |
Accounts Payable and Accrued Expenses | 515,527 | 95,887 |
Deferred Revenue | (37,677) | |
Other Assets | 17,800 | |
Net cash provided by (used in) operating activities | (1,606,058) | 636,557 |
Cash Flows from Investing Activities | ||
Purchase of Assets | (10,000) | |
Net cash (used in) investing activities | (10,000) | |
Cash Flows from Financing Activities | ||
Proceeds from short-term note payable | 3,150,000 | |
Loan origination cost | (173,532) | |
Repayments of amounts of Notes Payable | (150,000) | (93,030) |
Cash received from Stock Options Exercised | 90,000 | 110,000 |
Net cash provided by (used in) financing activities | 2,916,468 | 16,970 |
Net Change in Cash | 1,310,410 | 643,527 |
Cash - Beginning of Year | 932,785 | 715,195 |
Cash - End of Period | 2,243,195 | 1,358,722 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 3,099 | 4,041 |
Cash paid for taxes | ||
Non-cash investing and financing activities: | ||
Right of use assets obtained in exchange for new operating lease liabilities | $ 472,974 | $ 199,245 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview of Company KonaTel Nevada (as defined below) was organized under the laws of the State of Nevada on October 14, 2014, by its founder and then sole shareholder, D. Sean McEwen, to conduct the business of a full-service MVNO (“Mobile Virtual Network Operator”) provider that delivered cellular products and services to individual and business customers in various retail and wholesale markets. KonaTel Inc., 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”). 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. On December 31, 2018, we acquired Apeiron Systems, Inc. (www.apeiron.io) (“Apeiron Systems” or “Apeiron”), which is also our wholly owned subsidiary. 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 Communications Commissions (“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”). On February 5, 2018, we entered into a purchase agreement to acquire IM Telecom, LLC, an Oklahoma limited liability company (www.infinitimobile.com), doing business as Infiniti Mobile (“IM Telecom” or “Infiniti Mobile”). On October 23, 2018, the FCC approved our acquisition of IM Telecom, and on January 31, 2019, we completed the purchase of IM Telecom. IM Telecom operates as a wholly owned subsidiary of KonaTel. It is an FCC licensed Eligible Telecommunications Carrier (“ETC”) and is one of twenty-two (22) original FCC licensed wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan since 2012, of which approximately twelve (12) license holders remain active today. The FCC has not approved (granted) a new wireless reseller Lifeline Compliance Plan since 2012. As a licensed ETC, IM Telecom is currently authorized to distribute Lifeline subsidized mobile voice/data service in nine (9) states. In addition to Lifeline, IM Telecom is also an FCC licensed Affordable Connectivity Program (“ACP”) provider, authorized to distribute ACP subsidized high-speed mobile data service in the forty-eight (48) contiguous states plus Washington D.C. and Puerto Rico. Lifeline is an FCC program that provides subsidized, fixed or mobile telecommunications services to low-income Americans. ACP is an FCC program that provides subsidized high-speed wireless data services to low-income Americans. IM Telecom distributes Lifeline and ACP services under its Infiniti Mobile brand name through its website, sales staff, retail location and ISOs. IM Telecom also offers non-Lifeline and non-ACP services throughout the United States. Apeiron Systems is headquartered in Los Angeles, California. It also has some management staff in Plano, Texas, customer service and software engineering resources staffed in Johnstown, Pennsylvania and software engineering services staffed in Europe and Asia. IM Telecom is headquartered in Plano, Texas, and operates a retail operation in Tulsa, Oklahoma. We are headquartered in Plano, Texas. Apeiron Systems has fourteen (14) full-time employees; IM Telecom has twenty-three (23) full-time employees and two (2) part-time employees; and we have four (4) full-time employees. Principal Products or Services and their Markets Our principal products and services, across our two wholly owned subsidiaries, Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP, SMS/MMS), wholesale and retail mobile voice and mobile data IoT services, wholesale voice termination services, and our ETC and ACP subsidized services for low-income Americans. Except for our ETC Lifeline services distributed in up to nine (9) states and our ACP services distributed in the forty-eight (48) contiguous states, 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 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. · Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through our subsidiaries Apeiron Systems and IM Telecom. Mobile voice/text/data and IoT mobile data services are supported by a blend of reseller agreements with select national wireless carriers and national wireless wholesalers. A wireless communications service reseller typically does not own the wireless network infrastructure over which services are provided to its customers. Mobile voice/text/data and mobile data solutions are generally sold as traditional post-paid service plans that may include voice/text/data or wireless data only plans. Sometimes equipment is provided, which can include, but is not limited to, phones, tablets, modems, routers and accessories. Also included in our Mobile Services segment is the distribution of government subsidized mobile voice service and mobile data service by IM Telecom under its Infiniti Mobile brand and FCC license to low-income American households that qualify for the FCC’s Lifeline mobile voice service program and/or the FCC’s ACP mobile data program. Even though government programs like Lifeline have existed since 1985, these programs, along with newer programs like the ACP program, are subject to change and may have a material impact on our Mobile Services business if changed, reduced or eliminated. 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, 2021. 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 three wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems and IM Telecom. All significant intercompany transactions are eliminated. Earnings (Loss) Per Share Basic income (loss) per common share calculations are determined by dividing net income (loss) 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 by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents are computed by using the “Treasury Stock Method,” which computes the number of new shares that may potentially be created by unexercised options. Diluted common share equivalents are stock based compensation options. The dilutive common shares derived from stock options are 4,490,000 4,490,000 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Income (Loss) $ (1,345,514 ) $ 319,836 $ (2,868,317 ) $ 428,199 Weighted average shares outstanding during period on which basic earnings per share is calculated 41,912,145 40,899,569 41,715,406 40,758,495 Effect of dilutive shares Incremental shares under stock-based compensation 2,676,266 2,676,266 Weighted average shares outstanding during period on which diluted earnings per share was calculated 41,912,145 43,565,835 41,715,406 43,434,761 Earnings per share attributable to common stockholders Basic earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 Diluted earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of receivables, cash and cash equivalents. All cash and cash equivalents 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 Sales Revenue The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of September 30, 2022, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from one (1) customer in the amount of $ 1,305,264 86.8 783,431 63.9 194,647 15.9 Concentration of Major Customer A significant amount of the revenue is derived from large customers and the government. For the three months ended September 30, 2022, the Company had two (2) customers that accounted for $ 826,901 14.1 4,173,492 71.0 1,037,717 28.7 1,637,712 45.3 9,915,189 65.1 2,639,730 17.3 3,297,984 37.0 2,818,465 31.6 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. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2 – INVENTORY Inventory primarily consists of sim cards and cell phones, 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 on a quarterly basis inventory is reviewed for obsolescence and counted for accuracy with distributors. At September 30, 2022, and December 31, 2021, the Company had inventory of $ 297,393 566,839 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consist of the following major classifications as of September 30, 2022, and December 31, 2021: Property and Equipment - Schedule of Property and Equipment September 30, 2022 December 31, 2021 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 (421,987 ) (412,724 ) Property and equipment, net $ 39,624 $ 48,887 Depreciation related to Property and Equipment amounted to $ 3,088 12,969 9,264 38,907 |
RIGHT-OF-USE ASSETS
RIGHT-OF-USE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
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 7.50 The Company has Right-of-Use Assets through leases of property under four (4) non-cancelable leases. As of September 30, 2022, the Company had four (4) properties with a lease term more than one (1) year. These lease liabilities expire June 1, 2025, July 31, 2025, March 31, 2026, and September 2, 2030. The Company has no current lease liabilities. In January 2021, the Company entered a new five (5) year lease for its corporate headquarters located in Plano, TX. In June 2022, the Company entered a three (3) year lease for its new U.S. based national call center operation in Atmore, AL. In August 2022, the Company entered a three (3) year lease in Tulsa, OK, to support its distribution channel. In September 2022, the Company entered an eight (8) year lease in its Johnstown, PA location 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 2022 $ 38,134 2023 $ 153,593 2024 $ 155,325 2025 $ 129,543 2026 $ 65,967 2027 and thereafter $ 198,000 Total $ 740,562 Less Interest $ 129,524 Present value of minimum lease payments $ 611,038 Less Current Maturities $ 115,653 Long Term Maturities $ 495,385 The Company had (2) office/retail spaces on a month-to-month basis during Q3 2022, now supplanted under new lease obligations. Total lease expense for the three months ended September 30, 2022, and 2021, was $ 2,073 6,217 15,508 18,652 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
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 a Lifeline License granted by the FCC. The Lifeline License, because of the nature of the asset and the limitation on the number of granted licenses by the FCC, will not be amortized. The Lifeline License was acquired through an acquisition. The fair market value of the License as of September 30, 2022, was $ 634,251 September 30, 2022 December 31, 2021 Customer List $ 1,135,962 $ 1,135,962 Software 2,407,001 2,407,001 ETC License 634,251 634,251 Less: Amortization (3,542,963 ) (3,542,963 ) Net Amortizable Intangibles 634,251 634,251 Right of Use Assets - net 590,539 173,524 Intangible Assets - net $ 1,224,790 $ 807,775 Amortization expense amounted to $ 0 200,583 0 601,750 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 6 – NOTES PAYABLE In 2020, the Company was granted a $ 150,000 30 3.75 On June 14, 2022, the Company and its wholly owned subsidiary companies entered into a Note Purchase Agreement and related Guarantee and Security Agreement with CCUR Holdings, Inc. (as collateral agent), and Symbolic Logic, Inc., whereby the Company pledged its assets to secure $ 3,150,000 12 15 153,284 2,984,181 153,284 2,984,181 150,000 |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022, there are no ongoing legal proceedings. Contract Contingency 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 7,000 Letters of Credit The Company had no outstanding letters of credit as of September 30, 2022. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 8 – SEGMENT REPORTING The Company operates within two ( 2 The reportable segments consist of Hosted Services and Mobile Services. Hosted Services Mobile Services 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 nine months period ended September 30, 2022 Revenue $ 4,199,365 $ 11,031,923 $ 15,231,288 Gross Profit $ 1,372,019 $ 1,628,891 $ 3,000,910 Depreciation and amortization $ 8,958 $ 306 $ 9,264 Additions to property and equipment $ — $ — $ — For the three months period ended September 30, 2022 Revenue $ 1,328,333 $ 4,552,000 $ 5,880,333 Gross Profit $ 453,087 $ 457,995 $ 911,082 Depreciation and amortization $ 2,986 $ 102 $ 3,088 Additions to property and equipment $ — $ — $ — For the nine months period ended September 30, 2021 Revenue $ 4,380,547 $ 4,539,026 $ 8,919,573 Gross Profit $ 1,600,069 $ 2,372,718 $ 3,972,787 Depreciation and amortization $ 619,472 $ 21,185 $ 640,657 Additions to property and equipment $ — $ — $ — For the three months period ended September 30, 2021 Revenue $ 1,588,035 $ 2,024,826 $ 3,612,861 Gross Profit $ 559,785 $ 1,064,452 $ 1,624,237 Depreciation and amortization $ 206,490 $ 7,062 $ 213,552 Additions to property and equipment $ — $ — $ — |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Common Stock The Company issued 600,000 in consideration of the sum of $90,000, or $45,000 for each 300,000 share tranche 423,120 in a cashless exchange of 76,880 shares underlying a 500,000 share incentive stock option grant made on December 18, 2017 Stock Compensation The Company offers incentive stock option equity grants to directors and key employees. Options vest in tranches and typically expire in five (5) years. For the three months ended September 30, 2022, and 2021, the Company recorded options expense of $ 185,637 62,877 539,933 141,935 1,889,371 2.54 Through September 30, 2022, the Company granted 900,000 700,000 4 150,000 50,000 5 2.32 615.19 1.26 The following table represents stock option activity as of and for the nine months ended September 30, 2022: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity No. Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding – December 31, 2021 4,260,000 $ 0.37 2.25 $ 5,862,938 Granted 900,000 1.13 4.41 Exercised 600,000 — — — Forfeited 70,000 — — — Options Outstanding – September 30, 2022 4,490,000 $ 0.53 2.54 $ 3,351,936 Exercisable and Vested, September 30, 2022 1,936,189 $ 0.36 1.29 $ 1,789,202 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Subsequent Event Below are events that have occurred since September 30, 2022: Incentive Stock Option Grants The Company granted a quarterly director 25,000 1.386 The Company also granted a quarterly director 25,000 1.32 Effective October 14, 2022, and pursuant to a Letter Agreement of that date and the consent of the Board of Directors of the Company dated October 12, 2022, the Company cancelled 50,000 0.85 Exhibit 4.1 50,000 Exhibit 10.2 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021. 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 three wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems and IM Telecom. All significant intercompany transactions are eliminated. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic income (loss) per common share calculations are determined by dividing net income (loss) 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 by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents are computed by using the “Treasury Stock Method,” which computes the number of new shares that may potentially be created by unexercised options. Diluted common share equivalents are stock based compensation options. The dilutive common shares derived from stock options are 4,490,000 4,490,000 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Income (Loss) $ (1,345,514 ) $ 319,836 $ (2,868,317 ) $ 428,199 Weighted average shares outstanding during period on which basic earnings per share is calculated 41,912,145 40,899,569 41,715,406 40,758,495 Effect of dilutive shares Incremental shares under stock-based compensation 2,676,266 2,676,266 Weighted average shares outstanding during period on which diluted earnings per share was calculated 41,912,145 43,565,835 41,715,406 43,434,761 Earnings per share attributable to common stockholders Basic earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 Diluted earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 |
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 Sales Revenue The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of September 30, 2022, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from one (1) customer in the amount of $ 1,305,264 86.8 783,431 63.9 194,647 15.9 |
Concentration of Major Customer | Concentration of Major Customer A significant amount of the revenue is derived from large customers and the government. For the three months ended September 30, 2022, the Company had two (2) customers that accounted for $ 826,901 14.1 4,173,492 71.0 1,037,717 28.7 1,637,712 45.3 9,915,189 65.1 2,639,730 17.3 3,297,984 37.0 2,818,465 31.6 |
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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net Income (Loss) $ (1,345,514 ) $ 319,836 $ (2,868,317 ) $ 428,199 Weighted average shares outstanding during period on which basic earnings per share is calculated 41,912,145 40,899,569 41,715,406 40,758,495 Effect of dilutive shares Incremental shares under stock-based compensation 2,676,266 2,676,266 Weighted average shares outstanding during period on which diluted earnings per share was calculated 41,912,145 43,565,835 41,715,406 43,434,761 Earnings per share attributable to common stockholders Basic earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 Diluted earnings per share $ (0.03 ) $ 0.01 $ (0.07 ) $ 0.01 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment - Schedule of Property and Equipment | Property and equipment consist of the following major classifications as of September 30, 2022, and December 31, 2021: Property and Equipment - Schedule of Property and Equipment September 30, 2022 December 31, 2021 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 (421,987 ) (412,724 ) Property and equipment, net $ 39,624 $ 48,887 |
RIGHT-OF-USE ASSETS (Tables)
RIGHT-OF-USE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 $ 38,134 2023 $ 153,593 2024 $ 155,325 2025 $ 129,543 2026 $ 65,967 2027 and thereafter $ 198,000 Total $ 740,562 Less Interest $ 129,524 Present value of minimum lease payments $ 611,038 Less Current Maturities $ 115,653 Long Term Maturities $ 495,385 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets - Schedule of Acquired Finite Lived Intangible Assets | September 30, 2022 December 31, 2021 Customer List $ 1,135,962 $ 1,135,962 Software 2,407,001 2,407,001 ETC License 634,251 634,251 Less: Amortization (3,542,963 ) (3,542,963 ) Net Amortizable Intangibles 634,251 634,251 Right of Use Assets - net 590,539 173,524 Intangible Assets - net $ 1,224,790 $ 807,775 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 nine months period ended September 30, 2022 Revenue $ 4,199,365 $ 11,031,923 $ 15,231,288 Gross Profit $ 1,372,019 $ 1,628,891 $ 3,000,910 Depreciation and amortization $ 8,958 $ 306 $ 9,264 Additions to property and equipment $ — $ — $ — For the three months period ended September 30, 2022 Revenue $ 1,328,333 $ 4,552,000 $ 5,880,333 Gross Profit $ 453,087 $ 457,995 $ 911,082 Depreciation and amortization $ 2,986 $ 102 $ 3,088 Additions to property and equipment $ — $ — $ — For the nine months period ended September 30, 2021 Revenue $ 4,380,547 $ 4,539,026 $ 8,919,573 Gross Profit $ 1,600,069 $ 2,372,718 $ 3,972,787 Depreciation and amortization $ 619,472 $ 21,185 $ 640,657 Additions to property and equipment $ — $ — $ — For the three months period ended September 30, 2021 Revenue $ 1,588,035 $ 2,024,826 $ 3,612,861 Gross Profit $ 559,785 $ 1,064,452 $ 1,624,237 Depreciation and amortization $ 206,490 $ 7,062 $ 213,552 Additions to property and equipment $ — $ — $ — |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity | The following table represents stock option activity as of and for the nine months ended September 30, 2022: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity No. Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding – December 31, 2021 4,260,000 $ 0.37 2.25 $ 5,862,938 Granted 900,000 1.13 4.41 Exercised 600,000 — — — Forfeited 70,000 — — — Options Outstanding – September 30, 2022 4,490,000 $ 0.53 2.54 $ 3,351,936 Exercisable and Vested, September 30, 2022 1,936,189 $ 0.36 1.29 $ 1,789,202 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Net Income (Loss) | $ (1,345,514) | $ 319,836 | $ (2,868,317) | $ 428,199 |
Weighted average shares outstanding during period on which basic earnings per share is calculated | 41,912,145 | 40,899,569 | 41,715,406 | 40,758,495 |
Effect of dilutive shares | ||||
Incremental shares under stock-based compensation | 2,676,266 | 2,676,266 | ||
Weighted average shares outstanding during period on which diluted earnings per share was calculated | 41,912,145 | 43,565,835 | 41,715,406 | 43,434,761 |
Earnings per share attributable to common stockholders | ||||
Basic earnings per share | $ (0.03) | $ 0.01 | $ (0.07) | $ 0.01 |
Diluted earnings per share | $ (0.03) | $ 0.01 | $ (0.07) | $ 0.01 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Product Information [Line Items] | |||||
Antidilutive shares excluded from computation of diluted earnings per share | 4,490,000 | 4,490,000 | |||
Revenue | $ 5,880,333 | $ 3,612,861 | $ 15,231,288 | $ 8,919,573 | |
Trade Account Receivables | Customer #1 | |||||
Product Information [Line Items] | |||||
Receivables, concentration | $ 1,305,264 | $ 1,305,264 | $ 783,431 | ||
Concentration risk | 86.80% | 63.90% | |||
Trade Account Receivables | Customer #2 | |||||
Product Information [Line Items] | |||||
Receivables, concentration | $ 194,647 | ||||
Concentration risk | 15.90% | ||||
Sales Revenue | Customer #1 | |||||
Product Information [Line Items] | |||||
Concentration risk | 14.10% | 28.70% | 65.10% | 37% | |
Revenue | $ 826,901 | $ 1,037,717 | $ 9,915,189 | $ 3,297,984 | |
Sales Revenue | Customer #2 | |||||
Product Information [Line Items] | |||||
Concentration risk | 71% | 45.30% | 17.30% | 31.60% | |
Revenue | $ 4,173,492 | $ 1,637,712 | $ 2,639,730 | $ 2,818,465 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory, net | $ 297,393 | $ 566,839 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 461,611 | $ 461,611 |
Less: Accumulated Depreciation | (421,987) | (412,724) |
Property and equipment, net | 39,624 | 48,887 |
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 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 3,088 | $ 213,552 | $ 9,264 | $ 640,657 |
Property and Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 3,088 | $ 12,969 | $ 9,264 | $ 38,907 |
Right-of-Use Assets - Schedule
Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Right-of-use Assets | ||
2022 | $ 38,134 | |
2023 | 153,593 | |
2024 | 155,325 | |
2025 | 129,543 | |
2026 | 65,967 | |
2027 and thereafter | 198,000 | |
Total | 740,562 | |
Less Interest | 129,524 | |
Present value of minimum lease payments | 611,038 | |
Less Current Maturities | 115,653 | $ 50,672 |
Long Term Maturities | $ 495,385 | $ 136,445 |
RIGHT-OF-USE ASSETS (Details Na
RIGHT-OF-USE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lease terms and expirations, description | the Company had four (4) properties with a lease term more than one (1) year. These lease liabilities expire June 1, 2025, July 31, 2025, March 31, 2026, and September 2, 2030. The Company has no current lease liabilities. In January 2021, the Company entered a new five (5) year lease for its corporate headquarters located in Plano, TX. In June 2022, the Company entered a three (3) year lease for its new U.S. based national call center operation in Atmore, AL. In August 2022, the Company entered a three (3) year lease in Tulsa, OK, to support its distribution channel. In September 2022, the Company entered an eight (8) year lease in its Johnstown, PA location | |||
Lease expense | $ 2,073 | $ 6,217 | $ 15,508 | $ 18,652 |
Minimum | ||||
Implied interest rate used | 4.75% | 4.75% | ||
Maximum | ||||
Implied interest rate used | 7.50% | 7.50% |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Acquired Finite Lived Intangible Assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Customer List | $ 1,135,962 | $ 1,135,962 |
Software | 2,407,001 | 2,407,001 |
ETC License | 634,251 | 634,251 |
Less: Amortization | (3,542,963) | (3,542,963) |
Net Amortizable Intangibles | 634,251 | 634,251 |
Right of Use Assets - net | 590,539 | 173,524 |
Intangible Assets - net | $ 1,224,790 | $ 807,775 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Lifeline License, fair market value | $ 634,251 | $ 634,251 | ||
Amortization expense | $ 0 | $ 200,583 | $ 0 | $ 601,750 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 14, 2022 | Dec. 31, 2020 | |
Economic Injury Disaster Loan | ||
Short-Term Debt [Line Items] | ||
Proceeds from EIDL loan | $ 150,000 | |
Note payable, term | 30 years | |
Interest rate | 3.75% | |
Repayment of SBA "EIDL" Loan | $ 150,000 | |
Note Purchase Agreement | ||
Short-Term Debt [Line Items] | ||
Note payable, term | 12 months | |
Interest rate | 15% | |
Note payable | $ 3,150,000 | |
Origination fee and other legal and closing expenses | 153,284 | |
Note payable, net | $ 2,984,181 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Details Narrative) - State of Pennsylvania | 1 Months Ended |
Jun. 30, 2021 USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Tax assessment | $ 115,000 |
Potential tax liability | $ 7,000 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 5,880,333 | $ 3,612,861 | $ 15,231,288 | $ 8,919,573 |
Gross Profit | 911,082 | 1,624,237 | 3,000,910 | 3,972,787 |
Depreciation and amortization | 3,088 | 213,552 | 9,264 | 640,657 |
Additions to property and equipment | 0 | 0 | 0 | 0 |
Hosted Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,328,333 | 1,588,035 | 4,199,365 | 4,380,547 |
Gross Profit | 453,087 | 559,785 | 1,372,019 | 1,600,069 |
Depreciation and amortization | 2,986 | 206,490 | 8,958 | 619,472 |
Additions to property and equipment | 0 | 0 | 0 | 0 |
Mobile Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,552,000 | 2,024,826 | 11,031,923 | 4,539,026 |
Gross Profit | 457,995 | 1,064,452 | 1,628,891 | 2,372,718 |
Depreciation and amortization | 102 | 7,062 | 306 | 21,185 |
Additions to property and equipment | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity [Abstract] | |
Number of shares, options outstanding | 4,260,000 |
Weighted average exercise price, outstanding | $ / shares | $ 0.37 |
Weighted average remaining life, outstanding | 2 years 3 months |
Aggregate intrinsic value, outstanding | $ | $ 5,862,938 |
Number of shares, granted | 900,000 |
Weighted average exercise price, granted | $ / shares | $ 1.13 |
Weighted average remaining life, granted | 4 years 4 months 28 days |
Number of shares, exercised | 600,000 |
Number of shares, forfeited | 70,000 |
Number of shares, options outstanding | 4,490,000 |
Weighted average exercise price, outstanding | $ / shares | $ 0.53 |
Weighted average remaining life, outstanding | 2 years 6 months 14 days |
Aggregate intrinsic value, outstanding | $ | $ 3,351,936 |
Number of shares, exercisable and vested | 1,936,189 |
Weighted average exercise price, exercisable and vested | $ / shares | $ 0.36 |
Weighted average remaining life, exercisable and vested | 1 year 3 months 14 days |
Aggregate intrinsic value, exercisable and vested | $ | $ 1,789,202 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, exercise of options | 600,000 | ||||
Stock-based compensation expense, vested options | $ 185,637 | $ 62,877 | $ 539,933 | $ 141,935 | |
Deferred compensation expense | $ 1,889,371 | ||||
Expected term | 2 years 6 months 14 days | ||||
Stock options, granted | 900,000 | ||||
Average exercise price | $ 1.13 | ||||
Incentive Stock | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Expected term | 5 years | ||||
Interest-free rate | 2.32% | ||||
Average volatility rate | 615.19% | ||||
Average exercise price | $ 1.26 | ||||
Incentive Stock | Two Employees | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stock options, granted | 700,000 | ||||
Incentive stock options, vesting term | 4 years | ||||
Incentive Stock | Independent Board Members | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stock options, granted | 150,000 | ||||
Incentive Stock | Independent Consultant | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stock options, granted | 50,000 | ||||
Common Shares | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, exercise of options | 600,000 | 575,000 | 600,000 | 575,000 | |
Common Shares | 2018 Stock Option Plan | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, exercise of options | 600,000 | 423,120 | |||
Common stock issued, exercise of options | in consideration of the sum of $90,000, or $45,000 for each 300,000 share tranche | in a cashless exchange of 76,880 shares underlying a 500,000 share incentive stock option grant made on December 18, 2017 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Nov. 11, 2022 | Oct. 14, 2022 | Oct. 28, 2022 | Sep. 30, 2022 | |
Subsequent Event [Line Items] | ||||
Incentive stock options, granted | 900,000 | |||
Incentive stock options, exercise price | $ 1.13 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 70,000 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Incentive stock options, exercise price | $ 0.85 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 50,000 | |||
[custom:PaymentInLieuOfStockOptions] | $ 50,000 | |||
Subsequent Event | Independent Director #1 | ||||
Subsequent Event [Line Items] | ||||
Incentive stock options, granted | 25,000 | |||
Incentive stock options, exercise price | $ 1.386 | |||
Subsequent Event | Independent Director #2 | ||||
Subsequent Event [Line Items] | ||||
Incentive stock options, granted | 25,000 | |||
Incentive stock options, exercise price | $ 1.32 |