Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 15, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 22,153,037 | ||
Entity Common Stock, Shares Outstanding | 43,333,220 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | Haynie & Company | ||
Auditor Location | Salt Lake City, Utah | ||
Auditor Firm ID | 457 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and Cash Equivalents | $ 777,103 | $ 2,055,634 |
Accounts Receivable, Net | 1,496,799 | 1,510,118 |
Inventory, Net | 1,229,770 | 526,337 |
Prepaid Expenses | 129,706 | 61,241 |
Other Current Assets | 164 | |
Total Current Assets | 3,633,378 | 4,153,494 |
Property and Equipment, Net | 24,184 | 36,536 |
Intangible Assets, Net | 634,251 | 634,251 |
Right of Use Asset | 443,328 | 553,686 |
Other Assets | 74,543 | 73,883 |
Total Assets | 4,809,684 | 5,451,850 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 3,709,691 | 1,348,931 |
Loans Payable, Net of Loan Fees | 3,655,171 | 3,070,947 |
Right of Use Operating Lease Obligation - Current | 127,716 | 118,382 |
Total Current Liabilities | 7,492,578 | 4,538,260 |
Long Term Liabilities | ||
Right of Use Operating Lease Obligation - Long Term | 330,511 | 458,227 |
Total Long Term Liabilities | 330,511 | 458,227 |
Total Liabilities | 7,823,089 | 4,996,487 |
Stockholders’ Equity | ||
Common stock, $0.001 par value, 50,000,000 shares authorized, 43,145,720 outstanding and issued at December 31, 2023 and 42,240,406 outstanding and issued at December 31, 2022 | 43,146 | 42,240 |
Additional Paid In Capital | 9,182,140 | 8,710,987 |
Accumulated Deficit | (12,238,691) | (8,297,864) |
Total Stockholders’ Equity | (3,013,405) | 455,363 |
Total Liabilities and Stockholders’ Equity | $ 4,809,684 | $ 5,451,850 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
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 | 43,145,720 | 42,240,406 |
Common stock, shares outstanding | 43,145,720 | 42,240,406 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 18,223,745 | $ 20,023,340 |
Cost of Revenue | 14,850,105 | 15,033,733 |
Gross Profit | 3,373,640 | 4,989,607 |
Operating Expenses | ||
Payroll and Related Expenses | 3,995,698 | 4,974,989 |
Operating and Maintenance | 5,804 | 8,129 |
Bad Debt | 215 | 29,133 |
Professional and Other Expenses | 1,526,947 | 1,509,269 |
Utilities and Facilities | 191,556 | 206,380 |
Depreciation and Amortization | 12,352 | 12,352 |
General and Administrative | 155,734 | 300,042 |
Marketing and Advertising | 154,533 | 106,402 |
Application Development Costs | 138,600 | 146,400 |
Taxes and Insurance | 312,804 | 251,196 |
Total Operating Expenses | 6,494,243 | 7,544,292 |
Operating Loss | (3,120,603) | (2,554,685) |
Other Income and Expense | ||
Interest Expense | (820,254) | (399,031) |
Other Income/(Expense), net | 30 | 1,356 |
Total Other Income and Expenses | (820,224) | (397,675) |
Net Loss | $ (3,940,827) | $ (2,952,360) |
Loss per Share | ||
Basic | $ (0.09) | $ (0.07) |
Diluted | $ (0.09) | $ (0.07) |
Weighted Average Outstanding Shares | ||
Basic | 42,773,269 | 41,863,283 |
Diluted | 42,773,269 | 41,863,283 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total |
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 | $ 625 | 107,625 | $ 108,250 | |
Exercised Stock Options, shares | 625,000 | 625,000 | ||
Stock Based Compensation | $ 0 | 692,138 | 0 | $ 692,138 |
Net Loss | 0 | 0 | (2,952,360) | (2,952,360) |
Ending 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 | |||
Exercised Stock Options | $ 906 | 213,596 | $ 214,502 | |
Exercised Stock Options, shares | 905,314 | 950,000 | ||
Stock Based Compensation | $ 0 | 257,557 | 0 | $ 257,557 |
Net Loss | 0 | 0 | (3,940,827) | (3,940,827) |
Ending 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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net Loss | $ (3,940,827) | $ (2,952,360) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and Amortization | 12,352 | 12,352 |
Loan Origination Cost Amortization | 161,474 | 94,478 |
Bad Debt | 215 | 29,133 |
Stock-based Compensation | 257,557 | 692,138 |
Non-Compensatory Stock Options Exercised | 123,750 | |
Change in Right of Use Asset | 110,358 | (83,612) |
Change in Lease Liability | (118,382) | 92,941 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | 13,104 | (264,564) |
Inventory | (703,433) | 40,502 |
Prepaid Expenses | (68,465) | 98,640 |
Accounts Payable and Accrued Expenses | 2,360,760 | 418,483 |
Other Assets | (495) | |
Net cash used in operating activities | (1,792,032) | (1,821,869) |
Cash Flows from Investing Activities | ||
Sale of Assets | 10,000 | |
Net cash provided by investing activities | 10,000 | |
Cash Flows from Financing Activities | ||
Proceeds from short-term note payable | 554,750 | 3,150,000 |
Loan origination cost | (132,000) | (173,532) |
Repayments of amounts of Notes Payable | (150,000) | |
Cash received from Stock Options Exercised | 90,751 | 108,250 |
Net cash provided by financing activities | 513,501 | 2,934,718 |
Net Change in Cash | (1,278,531) | 1,122,849 |
Cash - Beginning of Year | 2,055,634 | 932,785 |
Cash - End of Period | 777,103 | 2,055,634 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 419,525 | 3,099 |
Cash paid for taxes | ||
Non-cash investing and financing activities: | ||
Right of use assets obtained in exchange for new operating lease liabilities | $ 472,974 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (3,940,827) | $ (2,952,360) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual [Table] | |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | true |
Rule 10b5-1 Arrangement Terminated | true |
Non-Rule 10b5-1 Arrangement Terminated | true |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
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., formerly known as Dala Petroleum Corp. (“KonaTel,” the “Company,” “we,” “our,” or “us”), also formerly known as “Westcott Products Corporation,” was incorporated as “Light Tech, Inc.” under the laws of the State of Nevada on May 24, 1984. A subsidiary in the name “Westcott Products Corporation” was organized by us under the laws of the State of Delaware on June 24, 1986, for the purpose of changing our name and domicile to the State of Delaware. On June 27, 1986, we merged with the Delaware subsidiary, with the survivor being Westcott Products Corporation, a Delaware corporation (“Westcott”). On December 18, 2017, we acquired KonaTel, Inc, a Nevada sub S-Corporation (“KonaTel Nevada”), in a merger with our acquisition subsidiary under which KonaTel Nevada became our wholly owned subsidiary. On December 31, 2018, we acquired Apeiron Systems, Inc., a Nevada corporation d/b/a “Apeiron” (“Apeiron Systems”), which is also our wholly owned subsidiary. Apeiron Systems was organized in 2013 and is an international hosted services CPaaS (“Communications Platform as a Service”) provider that designed, built, owns and operates its private core network, supporting a suite of real-time business communications services and Applications Programming Interfaces (“APIs”). As an Internet Telephony Service Provider (“ITSP”), Apeiron Systems holds a Federal Communications Commission (“FCC”) numbering authority license. Some of Apeiron Systems’ hosted services include SIP/VoIP services, SMS/MMS processing, BOT integration, NLP (“Natural Language Processing”), ML (“Machine Learning”) and number services, including mobile, toll free and DID landline numbers, SMS to Email services, Database Dip services, SD-WAN, voice termination, and numerous API driven services including voice, messaging and network management. On January 31, 2019, we acquired IM Telecom, an Oklahoma limited liability company, d/b/a Infiniti Mobile, (“IM Telecom” or “Infiniti Mobile”), which became our wholly owned subsidiary. Infiniti Mobile is an FCC licensed ETC (“Eligible Telecommunications Carrier”) and is one of nineteen (19) FCC licensed carriers to hold an FCC approved Lifeline Compliance Plan in the United States. Under the Lifeline program, Infiniti Mobile is currently authorized to provide government subsidized mobile telecommunications services to eligible low-income Americans currently in eleven (11) states. Basis of Presentation The accompanying financial statements have been prepared using the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and intangible assets. Actual results could differ from those estimates. Certain reclassifications have been made to prior year amounts to conform with the current year presentation. Basis of Consolidation The consolidated financial statements for the year ended December 31, 2023, and 2022, include the Company and its three (3) wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems, and IM Telecom. All significant intercompany transactions are eliminated. Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand and all short-term investments with maturities of three months or less. Trade Accounts Receivable The Company accounts for trade receivables based on amounts billed to customers. Past due receivables are determined based on contractual terms. The Company does not accrue interest and does not require collateral on any of its trade receivables. Net receivables from transactions with customers were $ 1,496,799 1,510,118 Allowance for Doubtful Receivables The allowance for doubtful receivables is determined by management based on customer credit history, specific customer circumstances and general economic conditions. Periodically, management reviews our accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. As of December 31, 2023, and 2022, management has determined that no allowance for doubtful receivables is necessary. Inventory Inventory consists primarily of the cost of cellular phones and tablets. Inventory is reported at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. As of December 31, 2023, total inventory owned by the Company was $ 1,229,770 Due to rapidly changing technology within the industry, inventory is evaluated on a regular basis to determine if any obsolescence exists. As of December 31, 2023, and 2022, the allowance for inventory obsolescence was $ 0 Property and Equipment Property and equipment are recorded at cost and are depreciated on the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the lesser of the lease term or estimated useful life, furniture and fixtures, equipment, and vehicles are depreciated over periods ranging from five to seven (5-7) years, and billing software is depreciated over three (3) years which represents the estimated useful life of the assets. The Company recognizes impairment losses for long-lived assets whenever changes in circumstances result in the carrying amount of the assets exceeding the sum of the expected future cash flows associated with such assets. Management has concluded that no impairment reserves are required as of December 31, 2023, and 2022. Intangible Assets The Company accounts for intangible assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2023, intangible assets include our ETC License. Other Assets Other Assets represent items classified as long-term assets in accordance with the Statement of Financial Accounting Standards ASC 210-10-45. Other Assets include security deposits held with vendors. Customer Deposits Before entering into a contract with a sub-reseller customer, the Company requires the customer to either secure a formal letter of credit with a bank or require a certain level of cash collateral deposits from the customer. These collateral requirements are determined by management and may be adjusted upward or downward depending on the volume of business with the sub-reseller customer, or if management’s assessment of credit risk for a sub-reseller customer would change. The Company held $ 0 Fair Market Value of Assets The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for receivables and short-term loans the carrying amounts approximate fair value due to their short maturities. Long-term assets purchased through acquisitions are valued at the Fair Market Value of the asset at the time of acquisition. The Fair Market Value is based on observable inputs of assets in active market- places for fixed assets, and estimations and assumptions developed by us for Other Intangibles. The Company follows accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices, which are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Leases In February 2016, the FASB updated the accounting guidance related to leases. The most significant change in the updated accounting guidance requires lessees to recognize lease assets and liabilities on the balance sheet for all operating leases with the exception of short-term leases. The standard also expands the disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease did not significantly change from previous guidance. See NOTE 5. Upon adoption, we recorded $ 151,471 458,227 576,609 Revenue Recognition Services revenues are generated from cellular and telecommunication services. The revenue is derived from wholesale and retail services. Telecommunications and mobile telecommunication services include network platforms, voice, data, and text services. The Company recognizes revenue as telecommunications and mobile services are provided in service revenue. Telecommunications and mobile services are billed and paid on a monthly basis. Services are billed and paid on a monthly basis. These bills include an amount for the monthly recurring charge and a usage charge. We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services. We account for these revenues under Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers.” This standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a common revenue standard under U.S. GAAP. The standard update also amends current guidance for the recognition of costs to obtain and fulfill contracts with customers such that incremental costs of obtaining and direct costs of fulfilling contracts with customers will be deferred and amortized consistent with the transfer of the related good or service. The adoption of this guidance did not have a material impact on the consolidated financial statements. We distribute government subsidized mobile services through Master Agents. As part of the distribution process, we deliver mobile phones and/or tablets (devices) to our Master Agents, who then are responsible to subscribe qualifying consumers under a government sponsored program (ACP and/or Lifeline). In most cases, devices that have been delivered to our Master Agents are subscribed to and activated by qualifying consumers within sixty (60) days, at which point we would receive a subsidy from a governing body ( the “Universal Service Administrative Company” or “ USAC” or certain states) and recognize revenue. Once a device is activated, and the intended service provided under the government program is deemed to have occurred, the program revenue is recognized, the expense is recognized, and the device is removed from inventory. Deferred Revenue Services for cellular and telecommunication services have a monthly recurring charge that is billed in advance. This charge covers a thirty (30) or thirty-one (31)-day period. This charge is deferred for the period in which it was received and recorded as revenue at the conclusion of this period. Costs, mainly from outside providers, associated with the deferred revenue are recognized in the same period as revenue is recognized. Cost of Revenue Cost of Revenue includes the cost of communication services, equipment and accessories, shipping costs, and agent compensation. Advertising/Marketing Costs for advertising/marketing of products and services, as well as other promotional and sponsorship costs, are charged to selling, general and administrative expense in the periods in which they are incurred. Advertising/marketing expense was $ 154,533 106,402 Stock-based Compensation The Company records stock-based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from nonemployees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services. Income Taxes Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The benefits of uncertain tax positions are recorded in the Company’s Consolidated Financial Statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. The Company records interest and penalties related to unrecognized tax benefits in interest expense in the Company’s Consolidated Statements of Operations. 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 years ended December 31, 2023, and 2022, are not included in the computation of diluted earnings per share because to do so would be anti-dilutive. As of December 31, 2023, there were potentially 1,981,926 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 Years Ended December 31, 2023 2022 Numerator Net Loss $ (3,940,827 ) $ (2,952,360 ) Denominator Weighted-average common shares outstanding 42,773,269 41,863,283 Dilutive impact of stock options — — Weighted-average common shares outstanding, diluted 42,773,269 41,863,283 Net income per common share Basic $ (0.09 ) $ (0.07 ) Diluted $ (0.09 ) $ (0.07 ) Concentrations of Credit Risk Trade Account Receivables Sales Revenue Customer Concentration Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of receivables, cash, and cash equivalents. All cash and cash equivalents and restricted cash and cash equivalents are held at high credit financial institutions. These deposits are generally insured under the FDIC’s deposit insurance coverage; however, from time to time, the deposit levels may exceed FDIC coverage levels. The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of December 31, 2023, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from two (2) customers in the amounts of $ 1,024,308 68.5 283,536 19.0 It should be noted that the largest customer is the federal government, as administered by USAC, under the authority of the FCC). As of December 31, 2022, the Company had a significant concentration of receivables from two (2) customers in the amounts of $ 859,334 57.0 255,136 16.9 Concentration of Major Customer A significant amount of the revenue is derived from contracts with major customers. For the year ended December 31, 2023, the Company had two (2) customers that accounted for $ 10,492,430 57.6 3,000,498 16.5 12,852,384 64.2 3,431,875 17.1 It should be noted that the largest customer is the federal government, as administered by USAC under the authority of the FCC , as part of our participation in the federal Lifeline and ACP programs. Effect of Recent Accounting Pronouncements The Company has evaluated all other recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statement. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2023 | |
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 December 31, 2023, and December 31, 2022, the Company had inventory of $ 1,229,770 526,337 |
SIGNIFICANT TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Significant Transactions | |
SIGNIFICANT TRANSACTIONS | NOTE 3 – SIGNIFICANT TRANSACTIONS CCUR Loan ( and Extension) In 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 20,248 150,000 In 2023, the Company exercised the first draw under the First Amendment to the NPA of $ 500,000 15,000 3 ACP Finance Line of Credit In December 2023, IM Telecom entered into a structured credit, non-dilutive facility with ACP Financing VII, LLC. The facility is used for mobile device purchases in support of our growing mobile services group. Approximately $ 1,500,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consist of the following major classifications as of December 31, 2023, and 2022: Property and Equipment - Schedule of Property and Equipment December 31, 2023 December 31, 2022 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 (437,427 ) (425,075 ) Property and equipment, net $ 24,184 $ 36,536 Depreciation expense amounted to $ 12,352 12,352 |
RIGHT-OF-USE ASSETS
RIGHT-OF-USE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Right-of-use Assets | |
RIGHT-OF-USE ASSETS | NOTE 5 – 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 7.50 443,328 553,686 The Company has right-of-use assets through leases of properties under non-cancelable leases. As of December 31, 2023, the Company had four (4) properties with lease terms in excess of one (1) year. Of these four (4) leases, two (2) leases expire in 2025; one (1) lease expires in 2026; and one (1) lease expires in 2030 458,227 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 $ 155,325 2025 $ 129,543 2026 $ 65,967 2027 $ 54,000 2028 and Thereafter $ 144,000 Total $ 548,835 Less Interest $ 90,608 Present value of minimum lease payments $ 458,227 Less Current Maturities $ 127,716 Long Term Maturities $ 330,511 The weighted average term of the right-to-use leases is 60.4 6.87 145,485 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions: Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets December 31, 2023 2022 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 443,328 553,686 Intangible Assets net $ 1,077,579 $ 1,187,937 Amortization expense amounted to $ 0 0 Intangible Assets with indefinite useful life consist of the Lifeline license granted by the FCC. The license, because of the nature of the asset and the limitation on the number of granted Lifeline licenses by the FCC, will not be amortized. The license was acquired through an acquisition. The fair market value of the license as of December 31, 2023, and December 31, 2022, was $ 634,251 |
LINES OF CREDIT
LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
LINES OF CREDIT | NOTE 7 – LINES OF CREDIT The Company has no lines of credit as of December 31, 2023. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND COMMITMENTS | NOTE 8 – CONTINGENCIES AND COMMITMENTS Litigation From time to time, the Company may be subject to legal proceedings and claims that arise in the ordinary course of business. As of December 31, 2023, there are no such 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. Regulatory Determination The Company has no outstanding regulatory determinations as of December 31, 2023. 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 was in the amount of $ 115,000 5,500 Letters of Credit The Company had no outstanding letters of credit as of December 31, 2023. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | N OTE 9 – SEGMENT REPORTING The Company operates within two ( 2 The reportable segments consist of Hosted Services and Mobile Services. Mobile Services reporting will now consist of our post-paid and pre-paid cellular business. Hosted Services 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 year ended December 31, 2023 Revenue $ 5,054,210 $ 13,169,535 $ 18,223,745 Gross Profit $ 1,397,711 $ 1,975,929 $ 3,373,640 Depreciation and amortization $ 11,944 $ 408 $ 12,352 Additions to property and equipment $ — $ — $ — For the year ended December 31, 2022 Revenue $ 5,567,308 $ 14,456,032 $ 20,023,340 Gross Profit $ 1,808,393 $ 3,181,214 $ 4,989,607 Depreciation and amortization $ 11,944 $ 408 $ 12,352 Additions to property and equipment $ — $ — $ — |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY Non-Compensatory Stock Options Sole Shareholder Effective December 18, 2017, the Company completed an Agreement and Plan of Merger whereby a newly formed wholly owned subsidiary merged with and into KonaTel Nevada, and under which KonaTel Nevada was the surviving corporation and became a wholly owned subsidiary of the Company. Mr. McEwen was the sole shareholder of KonaTel Nevada and received merger consideration of 13,500,000 1,500,000 0.22 Chief Executive Officer In 2023, D. Sean McEwen, the Chairman and CEO of the Company, exercised 750,000 750,000 0.22 Stock Compensation The Company offers incentive stock option equity awards to directors and key employees. Options vest in tranches and typically expire in five (5) years. During the year ended December 31, 2023, and 2022, the Company recorded options expense of $ 257,557 692,138 1,771,133 In 2023, 3,245,000 Each independent Board member was granted 25,000 shares in the first and second quarter of 2023, for a total of 50,000 shares each. Three (3) key employees were granted a total of 2,050,000 share options. An independent member of the Board of Directors was granted 750,000 share options, and a total of 345,000 share options were granted among nine (9) employees. During the year ended December 31, 2023, 200,000 shares were exercised by two (2) independent members of the Board of Directors. During the year ended 2023, 700,000 partially vested share options were forfeited by two (2) key employees of the Company. The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $0.89 on December 31, 2023. The estimated grant date fair value of stock option grants was calculated using the Black-Scholes-Merton option-pricing model using the following assumptions: Stockholders’ Equity - Schedule of Fair Value of Stock Options Valuation Assumptions 2023 2022 Weighted average volatility 181.29 % 192.71 % Weighted average expected term (years) 5.00 5.00 Risk free interest rate 4.53 % 1.90 % Expected dividend yield — — The following table represents incentive stock option activity as of and for the year ended December 31, 2023: 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, 2022 4,405,000 $ .59 3.22 $ 2,260,138 Granted 3,245,000 .86 Exercised (950,000 ) .53 Forfeited (700,000 ) Options Outstanding – December 31, 2023 6,000,000 $ .75 3.69 $ 872,463 Exercisable and Vested, December 31, 2023 641,155 $ .50 1.58 $ 247,547 The following table represents stock option activity as of and for the year ended December 31, 2022: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding: December 31, 2021 4,260,000 $ .37 2.25 $ 5,862,938 Granted 900,000 $ 1.16 Exercised (625,000 ) .17 920,750 Forfeited (130,000 ) Options Outstanding: December 31, 2022 4,405,000 $ .59 3.22 $ 2,260,138 Exercisable and Vested: December 31, 2022 1,722,041 $ .36 1.80 $ 1,271,653 In 2022, 900,000 Each independent Board member was granted 25,000 shares per quarter of service in 2022, for a total of 100,000 shares each. The key employees were granted 700,000 share options as part of their employment agreements. During the year ended December 31, 2022, 625,000 shares were exercised by three (3) former employees of the Company, who received these options as part of their employment agreements. During 2022, 130,000 share options were forfeited, of which 50,000 options were forfeited by an independent consultant, and 80,000 options were forfeited by two (2) former employees of the Company. The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $1.10 on December 31, 2022. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 11 – INCOME TAX The Company provides for income taxes using an asset and liability-based approach. Deferred income tax assets and liabilities are recorded to reflect the future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Tax Cuts and Jobs Act was enacted on December 22, 2017, which reduced the U.S. corporate statutory tax rate from 35% to 21%. The Company changed its effective federal rate to 21% as the expected rate for our deferred tax items. The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2023, and 2022: Income Tax - Schedule of Deferred Tax Assets and Liabilities December 31, 2023 2022 Net operating losses $ 1,657,095 $ 850,050 Depreciation and amortization (14,128 ) 3,716 Stock option expense 304,978 324,528 Valuation allowance (1,947,945 ) (1,178,294 ) Net Deferred Tax Asset $ — $ — As of December 31, 2023, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate over the next twelve (12) months. A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized for the years ended December 31, 2023, and 2022 is set forth below: For the Year Ended December 31, 2023 2022 Tax at statutory federal rate $ (850,623 ) $ (619,996 ) Non-deductible expenses and other — — Change in valuation allowance 850,623 619,996 Benefit from income taxes $ — $ — As of December 31, 2023, the Company has a net operating loss carry-forward for U.S. federal income tax purposes of approximately ($ 7,890,930 Expiration NOL Amount 2037 $ 759,300 2038 $ 463,895 2039 $ 484,495 2040 $ 87,181 2041 $ 2,045,473 2042 $ 4,050,586 $ 7,890,930 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of this filing, and except for the following, no material subsequent events have occurred: Subsequent Event Excess Telecom Sale of IM Telecom On January 22, 2024 (the “Effective Date”), the Company and IM Telecom entered into a Membership Interest Purchase Agreement (the “Excess Purchase Agreement”) with Excess Telecom, Inc., a Nevada corporation (“Excess”), pursuant to which we 49 of our Membership Interest in IM Telecom to Excess on the “Initial Closing Date” in consideration of the sum of $ 10,000,000 5,000,000 The CCUR Loan and the total liability of Company under the ACP Financing Installment Sale Agreement, which are referenced above in NOTE 3, were paid in full on the Initial Closing Date of the Excess Purchase Agreement. The total payoff amount for the CCUR Loan was $ 3,681,660 Installment Sale Agreement was $ 1,462,345 Extension of Agreement to Acquire Wireless Carrier On January 24, 2023, the Company entered into a non-material purchase agreement to acquire 100% of the membership interest of Tempo Telecom, LLC, a Georgia limited liability company and Eligible Telecommunications Carrier (“ETC”), pending FCC approval. Additionally, the Company has assigned its rights under the purchase agreement to Insight Mobile, Inc., a Delaware corporation, subject to various conditions of closing. If all conditions are timely satisfied, including the required FCC approval, this transaction will be materially beneficial to the Company and will not involve any dilution to the Company’s shareholders. Additional information about this assignment of the Company’s rights to the referenced purchase agreement is contained in the 8-K Current Report of the Company dated April 6, 2023, and filed with the SEC on April 17, 2023. On January 23, 2024, the Company exercised its rights under the aforementioned assigned agreement, seeking an extension of 180 days for closing or such longer period as may be required to satisfy the required Governmental Approvals to closing. Affordable Connectivity Program (ACP) Wind Down On February 7, 2024 the FCC announced that the Affordable Connectivity Program would stop accepting new enrollments and stated the last fully funded month for the program is April, 2024. All consumers in the program as of this enrollment freeze date will receive their benefit until the program ends unless Congress votes to extend the program. Under IM Telecom’s national ETC license, the Company will continue to enroll and provide services to qualifying consumers in the FCC Lifeline program. The Lifeline program is a separate program under the FCC, and remains committed and viable in support of providing affordable communication services for low-income consumers. Non-Compensatory Stock Option Grant On March 15, 2024, Mr. McEwen exercised his fifth tranche of 187,500 187,500 0.22 41,250 Stock Option Grant On March 27, 2024, we granted 100,000 0.626 vest as follows, and they expire on the earlier of March 27, 2029, or ninety (90) days from resignation or termination of employment: 33,333 on March 27, 2024; 33,333 on March 27, 2025; and 33,334 on March 27, 2026 Change of Tax Year The Company petitioned the IRS to change our tax period to a calendar tax year to coincide with our financial year. Additions to our State ETC Designations As of this date, we have filed for multiple state ETC designations, and have received additional ETC designations in Alabama, Colorado, Michigan, Missouri, Rhode Island, Tennessee, West Virginia, and Wyoming. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared using the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and intangible assets. Actual results could differ from those estimates. Certain reclassifications have been made to prior year amounts to conform with the current year presentation. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements for the year ended December 31, 2023, and 2022, include the Company and its three (3) wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems, and IM Telecom. All significant intercompany transactions are eliminated. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand and all short-term investments with maturities of three months or less. |
Trade Accounts Receivable | Trade Accounts Receivable The Company accounts for trade receivables based on amounts billed to customers. Past due receivables are determined based on contractual terms. The Company does not accrue interest and does not require collateral on any of its trade receivables. Net receivables from transactions with customers were $ 1,496,799 1,510,118 |
Allowance for Doubtful Receivables | Allowance for Doubtful Receivables The allowance for doubtful receivables is determined by management based on customer credit history, specific customer circumstances and general economic conditions. Periodically, management reviews our accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. As of December 31, 2023, and 2022, management has determined that no allowance for doubtful receivables is necessary. |
Inventory | Inventory Inventory consists primarily of the cost of cellular phones and tablets. Inventory is reported at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. As of December 31, 2023, total inventory owned by the Company was $ 1,229,770 Due to rapidly changing technology within the industry, inventory is evaluated on a regular basis to determine if any obsolescence exists. As of December 31, 2023, and 2022, the allowance for inventory obsolescence was $ 0 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated on the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the lesser of the lease term or estimated useful life, furniture and fixtures, equipment, and vehicles are depreciated over periods ranging from five to seven (5-7) years, and billing software is depreciated over three (3) years which represents the estimated useful life of the assets. The Company recognizes impairment losses for long-lived assets whenever changes in circumstances result in the carrying amount of the assets exceeding the sum of the expected future cash flows associated with such assets. Management has concluded that no impairment reserves are required as of December 31, 2023, and 2022. |
Intangible Assets | Intangible Assets The Company accounts for intangible assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2023, intangible assets include our ETC License. Other Assets Other Assets represent items classified as long-term assets in accordance with the Statement of Financial Accounting Standards ASC 210-10-45. Other Assets include security deposits held with vendors. |
Customer Deposits | Customer Deposits Before entering into a contract with a sub-reseller customer, the Company requires the customer to either secure a formal letter of credit with a bank or require a certain level of cash collateral deposits from the customer. These collateral requirements are determined by management and may be adjusted upward or downward depending on the volume of business with the sub-reseller customer, or if management’s assessment of credit risk for a sub-reseller customer would change. The Company held $ 0 |
Fair Market Value of Assets | Fair Market Value of Assets The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for receivables and short-term loans the carrying amounts approximate fair value due to their short maturities. Long-term assets purchased through acquisitions are valued at the Fair Market Value of the asset at the time of acquisition. The Fair Market Value is based on observable inputs of assets in active market- places for fixed assets, and estimations and assumptions developed by us for Other Intangibles. The Company follows accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices, which are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
Leases | Leases In February 2016, the FASB updated the accounting guidance related to leases. The most significant change in the updated accounting guidance requires lessees to recognize lease assets and liabilities on the balance sheet for all operating leases with the exception of short-term leases. The standard also expands the disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease did not significantly change from previous guidance. See NOTE 5. Upon adoption, we recorded $ 151,471 458,227 576,609 |
Revenue Recognition | Revenue Recognition Services revenues are generated from cellular and telecommunication services. The revenue is derived from wholesale and retail services. Telecommunications and mobile telecommunication services include network platforms, voice, data, and text services. The Company recognizes revenue as telecommunications and mobile services are provided in service revenue. Telecommunications and mobile services are billed and paid on a monthly basis. Services are billed and paid on a monthly basis. These bills include an amount for the monthly recurring charge and a usage charge. We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services. We account for these revenues under Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers.” This standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a common revenue standard under U.S. GAAP. The standard update also amends current guidance for the recognition of costs to obtain and fulfill contracts with customers such that incremental costs of obtaining and direct costs of fulfilling contracts with customers will be deferred and amortized consistent with the transfer of the related good or service. The adoption of this guidance did not have a material impact on the consolidated financial statements. We distribute government subsidized mobile services through Master Agents. As part of the distribution process, we deliver mobile phones and/or tablets (devices) to our Master Agents, who then are responsible to subscribe qualifying consumers under a government sponsored program (ACP and/or Lifeline). In most cases, devices that have been delivered to our Master Agents are subscribed to and activated by qualifying consumers within sixty (60) days, at which point we would receive a subsidy from a governing body ( the “Universal Service Administrative Company” or “ USAC” or certain states) and recognize revenue. Once a device is activated, and the intended service provided under the government program is deemed to have occurred, the program revenue is recognized, the expense is recognized, and the device is removed from inventory. |
Deferred Revenue | Deferred Revenue Services for cellular and telecommunication services have a monthly recurring charge that is billed in advance. This charge covers a thirty (30) or thirty-one (31)-day period. This charge is deferred for the period in which it was received and recorded as revenue at the conclusion of this period. Costs, mainly from outside providers, associated with the deferred revenue are recognized in the same period as revenue is recognized. |
Cost of Revenue | Cost of Revenue Cost of Revenue includes the cost of communication services, equipment and accessories, shipping costs, and agent compensation. |
Advertising/Marketing | Advertising/Marketing Costs for advertising/marketing of products and services, as well as other promotional and sponsorship costs, are charged to selling, general and administrative expense in the periods in which they are incurred. Advertising/marketing expense was $ 154,533 106,402 |
Stock-based Compensation | Stock-based Compensation The Company records stock-based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from nonemployees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services. |
Income Taxes | Income Taxes Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The benefits of uncertain tax positions are recorded in the Company’s Consolidated Financial Statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. The Company records interest and penalties related to unrecognized tax benefits in interest expense in the Company’s Consolidated Statements of Operations. |
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 years ended December 31, 2023, and 2022, are not included in the computation of diluted earnings per share because to do so would be anti-dilutive. As of December 31, 2023, there were potentially 1,981,926 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 Years Ended December 31, 2023 2022 Numerator Net Loss $ (3,940,827 ) $ (2,952,360 ) Denominator Weighted-average common shares outstanding 42,773,269 41,863,283 Dilutive impact of stock options — — Weighted-average common shares outstanding, diluted 42,773,269 41,863,283 Net income per common share Basic $ (0.09 ) $ (0.07 ) Diluted $ (0.09 ) $ (0.07 ) |
Concentrations of Credit Risk | Concentrations of Credit Risk Trade Account Receivables Sales Revenue Customer Concentration Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of receivables, cash, and cash equivalents. All cash and cash equivalents and restricted cash and cash equivalents are held at high credit financial institutions. These deposits are generally insured under the FDIC’s deposit insurance coverage; however, from time to time, the deposit levels may exceed FDIC coverage levels. The Company has a concentration of risk with respect to trade receivables from customers and cellular providers. As of December 31, 2023, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from two (2) customers in the amounts of $ 1,024,308 68.5 283,536 19.0 It should be noted that the largest customer is the federal government, as administered by USAC, under the authority of the FCC). As of December 31, 2022, the Company had a significant concentration of receivables from two (2) customers in the amounts of $ 859,334 57.0 255,136 16.9 |
Concentration of Major Customer | Concentration of Major Customer A significant amount of the revenue is derived from contracts with major customers. For the year ended December 31, 2023, the Company had two (2) customers that accounted for $ 10,492,430 57.6 3,000,498 16.5 12,852,384 64.2 3,431,875 17.1 It should be noted that the largest customer is the federal government, as administered by USAC under the authority of the FCC , as part of our participation in the federal Lifeline and ACP programs. |
Effect of Recent Accounting Pronouncements | Effect of Recent Accounting Pronouncements The Company has evaluated all other recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statement. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 Years Ended December 31, 2023 2022 Numerator Net Loss $ (3,940,827 ) $ (2,952,360 ) Denominator Weighted-average common shares outstanding 42,773,269 41,863,283 Dilutive impact of stock options — — Weighted-average common shares outstanding, diluted 42,773,269 41,863,283 Net income per common share Basic $ (0.09 ) $ (0.07 ) Diluted $ (0.09 ) $ (0.07 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment - Schedule of Property and Equipment | Property and equipment consist of the following major classifications as of December 31, 2023, and 2022: Property and Equipment - Schedule of Property and Equipment December 31, 2023 December 31, 2022 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 (437,427 ) (425,075 ) Property and equipment, net $ 24,184 $ 36,536 |
RIGHT-OF-USE ASSETS (Tables)
RIGHT-OF-USE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 $ 155,325 2025 $ 129,543 2026 $ 65,967 2027 $ 54,000 2028 and Thereafter $ 144,000 Total $ 548,835 Less Interest $ 90,608 Present value of minimum lease payments $ 458,227 Less Current Maturities $ 127,716 Long Term Maturities $ 330,511 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets | Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions: Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets December 31, 2023 2022 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 443,328 553,686 Intangible Assets net $ 1,077,579 $ 1,187,937 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 year ended December 31, 2023 Revenue $ 5,054,210 $ 13,169,535 $ 18,223,745 Gross Profit $ 1,397,711 $ 1,975,929 $ 3,373,640 Depreciation and amortization $ 11,944 $ 408 $ 12,352 Additions to property and equipment $ — $ — $ — For the year ended December 31, 2022 Revenue $ 5,567,308 $ 14,456,032 $ 20,023,340 Gross Profit $ 1,808,393 $ 3,181,214 $ 4,989,607 Depreciation and amortization $ 11,944 $ 408 $ 12,352 Additions to property and equipment $ — $ — $ — |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity - Schedule of Fair Value of Stock Options Valuation Assumptions | The estimated grant date fair value of stock option grants was calculated using the Black-Scholes-Merton option-pricing model using the following assumptions: Stockholders’ Equity - Schedule of Fair Value of Stock Options Valuation Assumptions 2023 2022 Weighted average volatility 181.29 % 192.71 % Weighted average expected term (years) 5.00 5.00 Risk free interest rate 4.53 % 1.90 % Expected dividend yield — — |
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity | The following table represents incentive stock option activity as of and for the year ended December 31, 2023: 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, 2022 4,405,000 $ .59 3.22 $ 2,260,138 Granted 3,245,000 .86 Exercised (950,000 ) .53 Forfeited (700,000 ) Options Outstanding – December 31, 2023 6,000,000 $ .75 3.69 $ 872,463 Exercisable and Vested, December 31, 2023 641,155 $ .50 1.58 $ 247,547 The following table represents stock option activity as of and for the year ended December 31, 2022: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding: December 31, 2021 4,260,000 $ .37 2.25 $ 5,862,938 Granted 900,000 $ 1.16 Exercised (625,000 ) .17 920,750 Forfeited (130,000 ) Options Outstanding: December 31, 2022 4,405,000 $ .59 3.22 $ 2,260,138 Exercisable and Vested: December 31, 2022 1,722,041 $ .36 1.80 $ 1,271,653 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax - Schedule of Deferred Tax Assets and Liabilities | The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2023, and 2022: Income Tax - Schedule of Deferred Tax Assets and Liabilities December 31, 2023 2022 Net operating losses $ 1,657,095 $ 850,050 Depreciation and amortization (14,128 ) 3,716 Stock option expense 304,978 324,528 Valuation allowance (1,947,945 ) (1,178,294 ) Net Deferred Tax Asset $ — $ — |
Income Tax - Schedule of Components of Income Tax Expense | For the Year Ended December 31, 2023 2022 Tax at statutory federal rate $ (850,623 ) $ (619,996 ) Non-deductible expenses and other — — Change in valuation allowance 850,623 619,996 Benefit from income taxes $ — $ — |
Income Tax - Schedule of Operating Loss Carryforwards | Expiration NOL Amount 2037 $ 759,300 2038 $ 463,895 2039 $ 484,495 2040 $ 87,181 2041 $ 2,045,473 2042 $ 4,050,586 $ 7,890,930 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator | ||
Net Loss | $ (3,940,827) | $ (2,952,360) |
Denominator | ||
Weighted-average common shares outstanding | 42,773,269 | 41,863,283 |
Dilutive impact of stock options | ||
Weighted-average common shares outstanding, diluted | 42,773,269 | 41,863,283 |
Net income per common share | ||
Basic | $ (0.09) | $ (0.07) |
Diluted | $ (0.09) | $ (0.07) |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Accounts Receivable, Net | $ 1,496,799 | $ 1,510,118 |
Inventory, Net | 1,229,770 | 526,337 |
Allowance for inventory obsolescence | $ 0 | 0 |
Property, plant and equipment, depreciation methods | Leasehold improvements are amortized over the lesser of the lease term or estimated useful life, furniture and fixtures, equipment, and vehicles are depreciated over periods ranging from five to seven (5-7) years, and billing software is depreciated over three (3) years which represents the estimated useful life of the assets. | |
Collateral deposits | $ 0 | 0 |
Operating lease assets and liabilities, recorded | 151,471 | |
Operating lease assets and liabilities | 458,227 | 576,609 |
Marketing and Advertising | $ 154,533 | 106,402 |
Potentially dilutive shares | 1,981,926 | |
Revenue | $ 18,223,745 | 20,023,340 |
Trade Account Receivables | Customer Concentration | Customer #1 | ||
Product Information [Line Items] | ||
Receivables, concentration | $ 1,024,308 | $ 859,334 |
Concentration risk | 68.50% | 57% |
Trade Account Receivables | Customer Concentration | Customer #2 | ||
Product Information [Line Items] | ||
Receivables, concentration | $ 283,536 | $ 255,136 |
Concentration risk | 19% | 16.90% |
Sales Revenue | Customer Concentration | Customer #1 | ||
Product Information [Line Items] | ||
Concentration risk | 57.60% | 64.20% |
Revenue | $ 10,492,430 | $ 12,852,384 |
Sales Revenue | Customer Concentration | Customer #2 | ||
Product Information [Line Items] | ||
Concentration risk | 16.50% | 17.10% |
Revenue | $ 3,000,498 | $ 3,431,875 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory, Net | $ 1,229,770 | $ 526,337 |
SIGNIFICANT TRANSACTIONS (Detai
SIGNIFICANT TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Repayments of note payable | $ 150,000 | |
Line of Credit | ACP Financing VII, LLC | ||
Long-Term Line of Credit | $ 1,500,000 | |
Economic Injury Disaster Loan | ||
Repayment of SBA "EIDL" Loan | 150,000 | |
CCUR Holdings, Inc. | Note Purchase Agreement | ||
Note payable | $ 3,150,000 | |
Note payable, term | 12 months | |
Increase in note payable, interest rate | 15% | |
Origination fee and other legal and closing expenses | $ 153,284 | |
Note payable, net | 2,984,181 | |
Legal expense | $ 20,248 | |
CCUR Holdings, Inc. | Note Purchase Agreement | First Draw | ||
Increase in note payable, interest rate | 3% | |
Proceeds from note payable | $ 500,000 | |
Repayments of note payable | $ 15,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 461,611 | $ 461,611 |
Less: Accumulated Depreciation | (437,427) | (425,075) |
Property and equipment, net | 24,184 | 36,536 |
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 ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 12,352 | $ 12,352 |
Property and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 12,352 | $ 12,352 |
Right-of-Use Assets - Schedule
Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Right-of-use Assets | ||
2024 | $ 155,325 | |
2025 | 129,543 | |
2026 | 65,967 | |
2027 | 54,000 | |
2028 and Thereafter | 144,000 | |
Total | 548,835 | |
Less Interest | 90,608 | |
Present value of minimum lease payments | 458,227 | |
Less Current Maturities | 127,716 | $ 118,382 |
Long Term Maturities | $ 330,511 | $ 458,227 |
RIGHT-OF-USE ASSETS (Details Na
RIGHT-OF-USE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Right of Use Asset | $ 443,328 | $ 553,686 |
Lease terms and expirations, description | the Company had four (4) properties with lease terms in excess of one (1) year. Of these four (4) leases, two (2) leases expire in 2025; one (1) lease expires in 2026; and one (1) lease expires in 2030 | |
Lease liability | $ 458,227 | |
Weighted average term | 60 months 12 days | |
Weighted average discount | 6.87% | |
Lease expense | $ 145,485 | |
Minimum | ||
Implied interest rate used | 4.75% | |
Maximum | ||
Implied interest rate used | 7.50% |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Acquired Finite-Lived Intangible Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
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 | 443,328 | 553,686 |
Intangible Assets net | $ 1,077,579 | $ 1,187,937 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0 | $ 0 |
Fair market value of acquired license | $ 634,251 | $ 634,251 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Details Narrative) - State of Pennsylvania - USD ($) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Tax assessment | $ 115,000 | |
Payment plan, tax commitment | $ 5,500 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 18,223,745 | $ 20,023,340 |
Gross Profit | 3,373,640 | 4,989,607 |
Depreciation and amortization | 12,352 | 12,352 |
Additions to property and equipment | 0 | 0 |
Hosted Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 5,054,210 | 5,567,308 |
Gross Profit | 1,397,711 | 1,808,393 |
Depreciation and amortization | 11,944 | 11,944 |
Additions to property and equipment | 0 | 0 |
Mobile Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 13,169,535 | 14,456,032 |
Gross Profit | 1,975,929 | 3,181,214 |
Depreciation and amortization | 408 | 408 |
Additions to property and equipment | $ 0 | $ 0 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Fair Value of Stock Options Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Weighted average volatility | 181.29% | 192.71% |
Weighted average expected term (years) | 5 years | 5 years |
Risk free interest rate | 4.53% | 1.90% |
Expected dividend yield |
Stockholders_ Equity - Schedu_2
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of shares, options outstanding | 4,405,000 | 4,260,000 |
Weighted average exercise price, outstanding | $ 0.59 | $ 0.37 |
Weighted average remaining life, outstanding | 3 years 2 months 19 days | 2 years 3 months |
Aggregate intrinsic value, outstanding | $ 2,260,138 | $ 5,862,938 |
Number of shares, granted | 3,245,000 | 900,000 |
Weighted average exercise price, granted | $ 0.86 | $ 1.16 |
Number of shares, exercised | (950,000) | (625,000) |
Weighted average exercise price, exercised | $ 0.53 | $ 0.17 |
Number of shares, exercised | (700,000) | (130,000) |
Number of shares, options outstanding | 6,000,000 | 4,405,000 |
Weighted average exercise price, outstanding | $ 0.75 | $ 0.59 |
Weighted average remaining life, outstanding | 3 years 8 months 8 days | 3 years 2 months 19 days |
Aggregate intrinsic value, outstanding | $ 872,463 | $ 2,260,138 |
Number of shares, exercisable and vested | 641,155 | 1,722,041 |
Weighted average exercise price, exercisable and vested | $ 0.50 | $ 0.36 |
Weighted average remaining life, exercisable and vested | 1 year 6 months 29 days | 1 year 9 months 18 days |
Aggregate intrinsic value, exercisable and vested | $ 247,547 | $ 1,271,653 |
Aggreage intrinsic value, exercised | $ 920,750 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Incentive stock options, granted | 3,245,000 | 900,000 | |
Options granted, exercise price, per share | $ 0.50 | $ 0.36 | |
Stock options, exercised | 950,000 | 625,000 | |
Stock-based compensation expense | $ 257,557 | $ 692,138 | |
Deferred compensation expense | $ 1,771,133 | ||
Incentive Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Incentive stock options, granted | 3,245,000 | 900,000 | |
Incentive stock options, grant, additional information | Each independent Board member was granted 25,000 shares in the first and second quarter of 2023, for a total of 50,000 shares each. Three (3) key employees were granted a total of 2,050,000 share options. An independent member of the Board of Directors was granted 750,000 share options, and a total of 345,000 share options were granted among nine (9) employees. During the year ended December 31, 2023, 200,000 shares were exercised by two (2) independent members of the Board of Directors. During the year ended 2023, 700,000 partially vested share options were forfeited by two (2) key employees of the Company. The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $0.89 on December 31, 2023. | Each independent Board member was granted 25,000 shares per quarter of service in 2022, for a total of 100,000 shares each. The key employees were granted 700,000 share options as part of their employment agreements. During the year ended December 31, 2022, 625,000 shares were exercised by three (3) former employees of the Company, who received these options as part of their employment agreements. During 2022, 130,000 share options were forfeited, of which 50,000 options were forfeited by an independent consultant, and 80,000 options were forfeited by two (2) former employees of the Company. The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $1.10 on December 31, 2022. | |
Sole Shareholder | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Shares issued, acqusition | 13,500,000 | ||
Incentive stock options, granted | 1,500,000 | ||
Options granted, exercise price, per share | $ 0.22 | ||
Chief Executive Officer | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Stock options, exercised | 750,000 | ||
Shares issued as a result of options exercised | 750,000 | ||
Stock price | $ 0.22 |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 1,657,095 | $ 850,050 |
Depreciation and amortization | (14,128) | 3,716 |
Stock option expense | 304,978 | 324,528 |
Valuation allowance | (1,947,945) | (1,178,294) |
Net Deferred Tax Asset |
Income Tax - Schedule of Compon
Income Tax - Schedule of Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory federal rate | $ (850,623) | $ (619,996) |
Non-deductible expenses and other | ||
Change in valuation allowance | 850,623 | 619,996 |
Benefit from income taxes | $ 0 | $ 0 |
Income Tax - Schedule of Operat
Income Tax - Schedule of Operating Loss Carryforwards (Details) | Dec. 31, 2023 USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 7,890,930 |
Year 2037 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 759,300 |
Year 2038 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 463,895 |
Year 2039 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 484,495 |
Year 2040 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 87,181 |
Year 2041 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 2,045,473 |
Year 2042 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 4,050,586 |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) | Dec. 31, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards, net | $ 7,890,930 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Jan. 22, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Stock options, exercised | 950,000 | 625,000 | ||
Stock options, aggregate value | $ 214,502 | $ 108,250 | ||
Stock options, granted | 3,245,000 | 900,000 | ||
Exercise price | $ 0.50 | $ 0.36 | ||
Chief Executive Officer | ||||
Subsequent Event [Line Items] | ||||
Stock options, exercised | 750,000 | |||
Shares issued as a result of options exercised | 750,000 | |||
Stock price | $ 0.22 | |||
Subsequent Event | Chief Executive Officer | ||||
Subsequent Event [Line Items] | ||||
Stock options, exercised | 187,500 | |||
Shares issued as a result of options exercised | 187,500 | |||
Stock price | $ 0.22 | |||
Stock options, aggregate value | $ 41,250 | |||
Subsequent Event | Director of Sales | ||||
Subsequent Event [Line Items] | ||||
Stock options, granted | 100,000 | |||
Exercise price | $ 0.626 | |||
Stock options, vesting terms | vest as follows, and they expire on the earlier of March 27, 2029, or ninety (90) days from resignation or termination of employment: 33,333 on March 27, 2024; 33,333 on March 27, 2025; and 33,334 on March 27, 2026 | |||
Subsequent Event | CCUR Holdings, Inc. | Note Purchase Agreement | ||||
Subsequent Event [Line Items] | ||||
Repayment of debt | $ 3,681,660 | |||
Subsequent Event | Excess Telecom, Inc. | ||||
Subsequent Event [Line Items] | ||||
Ownership interest | 49% | |||
Proceeds from sale of interest in subsidiary | $ 10,000,000 | |||
Additional commitment contingent upon certain conditions being met | 5,000,000 | |||
Subsequent Event | ACP Financing VII, LLC | Line of Credit | ||||
Subsequent Event [Line Items] | ||||
Repayment of debt | $ 1,462,345 |