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KonaTel Reports First Quarter 2022 Results


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

Scaling Mobile Services to reach new households under government subsidized programs

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

First Quarter 2022 Financial Summary and Recent Business Highlights

Sean McEwen, Chairman and CEO of KonaTel stated, "Revenue growth accelerated in the first quarter, up 77% compared to the prior year and was derived from multiple lines of business. As one of only a limited number of approved national wireless resellers under expanded government programs, we are moving aggressively to make new wireless voice and data services available to underserved households across the nation."

"Accompanying this exponential growth is an increase in investment in infrastructure as well as an increase in upfront customer acquisition costs, which are expensed as incurred and typically recovered within 120 days," McEwen continued. "In order to effectively scale our business, we more than doubled our line count to approximately 23,000 lines over the past 90 days, the first significant increase in capacity in our history, with additional capacity to continue our growth. Importantly, investment in infrastructure and the acquisition of new customers enables new, sticky recurring revenue streams that provide an attractive return on invested capital."

"We believe the long-term economics of our business are highly attractive and will result in increasing profitability and cash flow beyond this current period of substantial growth," McEwen continued. "With a new, top-notch management team in place we are energized by the emerging opportunities for expansion and to level up our business as we reach critical mass in our customer base."

McEwen concluded, "Furthermore, the additional $3 million in working capital will enable us to activate an additional 30,000 new lines of service each quarter.  We can typically recoup customer acquisition costs in less than 120 days after activation, turning our cash resources at least three times every 12 months.  As stated in our Q4 earnings press release, we are creating a company to substantially grow predictable revenues, earnings and cash flow, even during weaker economic conditions."

Quarterly Financial Summary (Q1 2022 vs. Q1 2021)

Revenue of $4.2 million, an increase of 76.7% compared to $2.4 million. The increase was primarily due to Mobile Services expansion under the Affordable Connectivity Program (ACP) and Lifeline programs.

Gross profit was $1.6 million, or 39.0% gross profit margin, compared to $911,000, or 38.1% gross profit margin.

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

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

Non-GAAP net income was $223,000, or $0.01 per diluted share, compared to $118,000, or $0.00 per diluted share, which does not include an adjustment for one-time legal/application expenses of about $105,000 to expand our Mobile Services into additional states.

Balance Sheet

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

About KonaTel

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

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this press release. This press release should be considered in light of the disclosures contained in the filings of KonaTel and its "forward-looking statements" in such filings that are contained in the EDGAR Archives of the SEC at www.sec.gov.

 

-- Tables Follow ?

 

 

KonaTel, Inc.
Consolidated Balance Sheets



March 31, 2022


December 31, 2021

  Assets




    Current Assets




          Cash and Cash Equivalents

$       1,452,869


$                     932,785

          Accounts Receivable, net

982,112


1,274,687

          Inventory, Net

634,649


566,839

          Prepaid Expenses

33,140


79,467

          Other Current Asset

163


164

    Total Current Assets

3,102,933


2,853,942





Property and Equipment, Net

44,770


48,887





    Other Assets




          Intangible Assets, Net

785,170


807,775

          Other Assets

154,297


154,297

          Investments

10,000


10,000

    Total Other Assets

949,467


972,072

  Total Assets

$    4,097,170


$               3,874,901





  Liabilities and Stockholders' Equity




    Current Liabilities




      Accounts Payable and Accrued Expenses

$       1,068,388


$                     930,449

      Right of Use Operating Lease Obligation - current

37,164


50,672

    Total Current Liabilities

1,105,552


981,121





    Long Term Liabilities




      Right of Use Operating Lease Obligation - long term

126,973


136,445

      Note Payable - long term

150,000


150,000

    Total Long Term Liabilities

276,973


286,445

    Total Liabilities

1,382,525


1,267,566

    Commitments and contingencies




    Stockholders' Equity




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

41,615


41,615

      Additional Paid In Capital

8,062,983


7,911,224

      Accumulated Deficit

(5,389,953)


(5,345,504)

    Total Stockholders' Equity

2,714,645


2,607,335

  Total Liabilities and Stockholders' Equity

$    4,097,170


$               3,874,901

 

 

KonaTel, Inc.
Consolidated Statements of Operations



Three Months Ended March 31,



2022


2021


Revenue

$

4,227,856


$

2,392,838


Cost of Revenue


2,580,595



1,481,677


Gross Profit


1,647,261



911,161









Operating Expenses







     Payroll and Related Expenses


1,132,313



549,199


     Operating and Maintenance


642



290,322


     Bad Debt


55



-


     Professional Services


149,170



-


     Utilities and Facilities


35,687



48,366


     Depreciation and Amortization


4,117



213,554


     General and Administrative


60,918



20,442


     Marketing and Advertising


47,670



11,086


     Application Development Costs


134,605



-


     Taxes and Insurance


31,379



8,672


Total Operating Expenses


1,596,556



1,141,641









Operating Income/(Loss)


50,705



(230,480)









Other Income and Expense







     Interest Expense


(24,030)



(2,242)


     Other Expenses


(71,124)



-


Total Other Income and Expenses


(95,154)



(2,242)









Net Loss

$

(44,449)


$

(232,722))









Earnings (Loss) per Share







     Basic

$

0.00


$

(0.01)


     Diluted

$

0.00


$

(0.01)


Weighted Average Outstanding Shares







     Basic


41,615,406



40,692,286


     Diluted


41,615,406



40,692,286


 

 

SOURCE KonaTel, Inc.


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