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Item 1. Business

2026-04-16 compared with 2025-04-15 · 379 added, 383 removed, 20 unchanged (97% of the section changed)

Corporate History and Business Development

We were 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.

At that time, all of our prior operations were conducted through Lee Building Products and T.

Kilgore & Company, which owned and

operated a home center in League City, Texas, about thirty (30) miles southeast of downtown Houston, Texas.

During 1990, we ceased these

operations, and the secured lenders took possession of our assets.

We changed our name to “Dala Petroleum Corp.”

on August 29, 2014, after re-entering the development stage and the completion of a merger with our newly formed and wholly owned subsidiary,

Dala Acquisition Corp., a Nevada corporation, on June 2, 2014 (respectively, “Dala Acquisition” and the “Dala Merger”).

Dala Nevada was wholly owned by Chisholm Partners II, LLC, a Louisiana limited liability company (“Chisholm II”).

as an early-stage oil exploration company focused on our leased acreage acquired in the Dala Merger until 2016, when Chisholm II returned

a total of 8,567,800 shares of the 10,000,000 shares of our common stock exchanged under the Dala Merger to us for cancellation in exchange

for our assignment of approximately 55,000 acres, more or less, of our leased acreage or approximately 68.75% of our total leased acreage,

to Chisholm II.

All of our remaining oil and gas leasehold interests, comprising leases covering approximately 7,489 and 403 acres, more

or less, expired in 2017 and 2018, respectively.

On July 20, 2017, pursuant to a Common Stock Purchase

Agreement dated July 19, 2017, M2 Equity Partners, LLC, a privately-held Minnesota limited liability company (“M2”), acquired

12,100,000 shares of our common stock in consideration of the sum of $367,500, which resulted in a change in control of our Company.

On November 13, 2017, we filed an Amended and Restated

Certificate of Incorporation with the State of Delaware, which removed all of the designations of our preferred stock from our Certificate

of Incorporation, while reserving our 50,000,000 authorized and unissued one $0.01 par value shares of preferred stock for future issuance

as the Board of Directors may designate and approve.

Effective December 18, 2017, we completed an Agreement

and Plan of Merger (the “KonaTel Merger Agreement”) with our newly formed wholly owned subsidiary, Dala Subsidiary Corp.,

a Nevada corporation (“Dala Nevada”), under which KonaTel, Inc., a Nevada corporation (“KonaTel Nevada”), became

our wholly owned subsidiary on the closing of the merger (the “KonaTel Nevada Merger”);

and we succeeded to the business operations

of KonaTel Nevada, comprised of a full service cellular provider that delivered cellular products and services to individual and business

customers in various retail and wholesale markets nationwide through its sales network, and we changed our name to “KonaTel, Inc.”

on January 16, 2018.

Effective February 7, 2018,

and dated as of February 5, 2018, we entered into an Agreement for the Purchase and Sale of Membership Interest (the “PSMI”),

with the transaction documents being deposited in escrow on February 7, 2018, respecting the acquisition of 100% of the membership interest

in IM Telecom, doing business as “Infiniti Mobile.” The principal asset of IM Telecom at that time was a “Lifeline Program”

license of the Federal Communications Commission (“FCC”), which was an FCC approved wireless “Compliance

On August 9, 2018, we entered

into an Asset Purchase Agreement (the “Telecon Wireless Agreement”) with Telecon Wireless Resources, Inc., a New York corporation

(“Telecon Wireless”), whereby we sold various assets, including furniture, fixtures, equipment, accounts receivable and a

customer list, among other assets and liabilities, to Telecon Wireless.

Effective December 31, 2018,

we completed an Agreement and Plan of Merger with Apeiron Systems (the “Apeiron Systems Merger Agreement”), and under which

we exchanged 7,000,000 shares of our common stock for all of the outstanding shares of Apeiron Systems.

Apeiron Systems became our wholly

owned subsidiary on the closing of the merger (the “Apeiron Systems Merger”).

Apeiron Systems was organized in 2013 as a provider

of a suite of real-time business communications services that included voice, messaging, network connectivity and platform services.

On December 14, 2020, the

shares of our common stock were approved for up listing to the OTC Markets Group LLC (the “OTC Markets”) OTCQB® Venture

Market (“OTCQB Tier”).

OTCQB is a venture market operated by OTC Markets.

To be eligible for quotations on the OTCQB, companies

must be current in their reporting obligations under Section 13 or 15(d) of the Exchange Act and undergo an annual verification and management

certification process and/or meet other compliance provisions of the OTC Markets contained in its “OTC Alternative Reporting Guidelines,”

which include, among other miscellaneous conditions, a minimum bid price of $0.01, a “public float” of not less than 10%

of the total outstanding shares and a minimum of fifty (50) beneficial shareholders.

The OTC Markets is recognized by the SEC as a “Qualified

Interdealer Quotation System” (“IDQS”) under SEC Rule 15c2-11(e)(6);

and the OTCQB is an established public market

that provides current public information to investors.

On August 25, 2021, we filed

a registration statement with the SEC on Form S-8 to register 5,901,884 shares of our common stock reserved for grants underlying our

2018 Incentive Stock Option Plan (the 2018 year designation reflects our change to a calendar year end in 2017, following the closing

of the KonaTel Nevada Merger).

On June 14, 2022, we and

Apeiron Systems and IM Telecom entered into a Note Purchase Agreement (the “NPA”) with CCUR Holdings, Inc., a Delaware corporation

(“CCUR”), as “Collateral Agent”;

and CCUR and Symbolic Logic, Inc., a Delaware corporation (“Symbolic”),

as “Purchasers,” along with a related Guarantee and Security Agreement (the “GSA”), whereby the Company and its

subsidiary companies pledged their assets (including the Company’s equity ownership of its subsidiaries) to secure $3,150,000 (the

“Principal Amount”) in debt financing payable in one (1) year (to be repaid prior to nine (9) months), together with interest

at the rate of 15% per annum (the “Interest Rate”).

On June 1, 2023, we entered into a “First Amendment to the

NPA” with CCUR and Symbolic.

The purpose of the amendment was to add further growth capital to the Company in the form of “Delayed

Draw Notes” in an aggregate principal amount of up to $2,000,000;

and in consideration therefor, we provided additional collateral

See our 8-K Current Report dated June 14, 2022, filed with the SEC on June 21, 2022, and our 8-KA Current Report dated

June 14, 2022, filed with the SEC on June 7, 2023, for additional information on the CCUR Loan.

These Current Reports are available by

Hyperlink in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15 hereof, and are incorporated herein by reference.

The CCUR Loan was paid in full on or about January 23, 2024, which was the “Initial Closing Date” of our “Purchase Agreement”

with Excess Telecom, Inc., a Nevada corporation, which is discussed below.

On July 7, 2022, we filed

a registration statement with the SEC on Form S-8 to register an additional 2,000,000 shares of our common stock reserved for grants underlying

our 2018 Incentive Stock Option Plan.

On August 22, 2022, we filed

an amendment to our registration statement with the SEC on Form S-8 to decrease our shares registered on Form S-8 by 1,500,000 shares;

and on March 20, 2023, we filed a similar amendment on Form S-8 to decrease our shares registered on Form S-8 by 253,764 shares, then

leaving 6,148,120 remaining registered shares, with 1,648,120 shares having been issued and 4,500,000 shares being reserved for future

issuance under outstanding grants or to be granted incentive stock options.

On January 24, 2023, we entered

into a non-material Membership Interest Purchase Agreement to acquire 100% of Tempo Telecom, LLC, a Georgia limited liability company

and an FCC Eligible Telecommunications Carrier (“ETC”) authorized to provide Lifeline services in twenty-one (21) states (respectively,

the “Tempo Purchase Agreement” and “Tempo”), the closing of which is subject to the approval of the FCC and applicable

state and other governmental agencies, among other conditions.

As of December 31, 2024, this agreement continues to be under review by

On April 6, 2023, pursuant

to a Purchase of Contract Rights Agreement between the Company and Insight Mobile, Inc., a Delaware corporation (respectively, the “Insight

Mobile Agreement” and “Insight Mobile”), we and Insight Mobile executed and delivered an Assumption of Membership Interest

Purchase Agreement (the “Assignment Agreement”), which is being held in escrow by counsel for Insight Mobile (the “Escrow

Agent”) pending satisfaction of all conditions to the closing of the Tempo Purchase Agreement, and whereby Insight Mobile has agreed

to pay us the “Purchase Price” of $4,500,000 for our “Contract Rights” under the Tempo Purchase Agreement.

additional information on the Insight Mobile Agreement and the Assignment Agreement, see our 8-K Current Report dated April 6, 2023, filed

with the SEC on April 17, 2023, which is Hyperlinked in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item

15, below, and is incorporated herein by reference.

On December 8, 2023, we filed

an additional registration statement on Form S-8 to increase the number of shares of our common stock available for issuance under our

2018 Incentive Stock Option Plan by 1,700,000 shares.

This amendment resulted in 7,848,120 registered shares equaling 1,748,120 shares

issued and 6,100,000 reserved shares remaining for future issuance.

Effective December 18, 2023,

we and IM Telecom, as the “Purchasers,” entered into an Installment Sale Agreement (the “Installment Sale Agreement”)

with ACP Financing VII Limited Liability Company, a Texas limited liability company (“ACP Financing”), as the “Seller,”

pursuant to which the Seller agreed to purchase new and refurbished cellular devices for distribution through the Purchasers’ distribution

network to Affordable Connectivity Program (the “ACP” [which ended on June 1, 2024, and has not been renewed by the United

States Congress]) , Federal Lifeline and California Lifeline eligible consumers, such devices operating on 4G or better technology platforms

or any such other consumer technology equipment upon the mutual agreement of the Seller and the Purchasers (the “Devices”),

and to sell the Devices to the Purchasers.

It is intended that this Installment Sale Agreement will be utilized by KonaTel following

the payment of all outstanding amounts owed to ACP Financing.

For additional information on the Installment Sale Agreement, see our

8-K Current Report dated December 18, 2023, filed with the SEC on December 22, 2023, which is Hyperlinked in Section 9 – Financial

History and Business Development

were 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.

At that time, all of our prior operations were conducted through Lee Building Products

Kilgore & Company, which owned and operated a home center in League City, Texas, about thirty (30) miles southeast of downtown

Houston, Texas.

During 1990, we ceased these operations, and the secured lenders took possession of our assets.

changed our name to “Dala Petroleum Corp.” on August 29, 2014, after re-entering the development stage and the completion

of a merger with our newly formed and wholly owned subsidiary, Dala Acquisition Corp., a Nevada corporation, on June 2, 2014 (respectively,

the “Dala Acquisition” and the “Dala Merger”).

Dala Nevada was wholly owned by Chisholm Partners II, LLC, a Louisiana

limited liability company (“Chisholm II”).

We operated as an early-stage oil exploration company focused on our leased acreage

acquired in the Dala Merger until 2016, when Chisholm II returned a total of 8,567,800 shares of the 10,000,000 shares of our common

stock exchanged under the Dala Merger to us for cancellation in exchange for our assignment of approximately 55,000 acres, more or less,

of our leased acreage or approximately 68.75% of our total leased acreage, to Chisholm II.

All of our remaining oil and gas leasehold

interests, comprising leases covering approximately 7,489 and 403 acres, more or less, expired in 2017 and 2018, respectively.

July 20, 2017, pursuant to a Common Stock Purchase Agreement dated July 19, 2017, M2 Equity Partners, LLC, a privately-held Minnesota

limited liability company (“M2”), acquired 12,100,000 shares of our common stock in consideration of the sum of $367,500,

which resulted in a change in control of our Company.

November 13, 2017, we filed an Amended and Restated Certificate of Incorporation with the State of Delaware, which removed all of the

designations of our preferred stock from our Certificate of Incorporation, while reserving our 50,000,000 authorized and unissued one

$0.01 par value shares of preferred stock for future issuance as the Board of Directors may designate and approve.

December 18, 2017, we completed an Agreement and Plan of Merger (the “KonaTel Merger Agreement”) with our newly formed wholly

owned subsidiary, Dala Subsidiary Corp., a Nevada corporation (“Dala Nevada”), under which KonaTel, Inc., a Nevada corporation

(“KonaTel Nevada”), became our wholly owned subsidiary on the closing of the merger (the “KonaTel Nevada Merger”);

and we succeeded to the business operations of KonaTel Nevada, comprised of a full service cellular provider that delivered cellular

products and services to individual and business customers in various retail and wholesale markets nationwide through its sales network,

and we changed our name to “KonaTel, Inc.” on January 16, 2018.

February 7, 2018, and dated as of February 5, 2018, we entered into an Agreement for the Purchase and Sale of Membership Interest (the

“PSMI”), with the transaction documents being deposited in escrow on February 7, 2018, respecting the acquisition of 100%

of the membership interest in IM Telecom, doing business as “Infiniti Mobile.” The principal asset of IM Telecom at that

time was a “Lifeline Program” license of the Federal Communications Commission (the “FCC”), which was an FCC

approved wireless “Compliance Plan.”

August 9, 2018, we entered into an Asset Purchase Agreement (the “Telecon Wireless Agreement”) with Telecon Wireless Resources,

Inc., a New York corporation (“Telecon Wireless”), whereby we sold various assets, including furniture, fixtures, equipment,

accounts receivable and a customer list, among other assets and liabilities, to Telecon Wireless.

December 31, 2018, we completed an Agreement and Plan of Merger with Apeiron Systems (the “Apeiron Systems Merger Agreement”),

and under which we exchanged 7,000,000 shares of our common stock for all of the outstanding shares of Apeiron Systems.

Apeiron Systems

became our wholly owned subsidiary on the closing of the merger (the “Apeiron Systems Merger”).

Apeiron Systems was organized

in 2013 as a provider of a suite of real-time business communications services that included voice, messaging, network connectivity and

platform services.

December 14, 2020, the shares of our common stock were approved for up listing to the OTC Markets Group LLC (the “OTC Markets”)

OTCQB® Venture Market (the “OTCQB Tier”).

The OTCQB is a venture market operated by OTC Markets.

To be eligible for quotations

on the OTCQB, companies must be current in their reporting obligations under Section 13 or 15(d) of the Exchange Act and undergo an annual

verification and management certification process and/or meet other compliance provisions of the OTC Markets contained in its “OTC

Alternative Reporting Guidelines,” which include, among other miscellaneous conditions, a minimum bid price of $0.01, a “public

float” of not less than 10% of the total outstanding shares and a minimum of fifty (50) beneficial shareholders.

The OTC Markets

is recognized by the SEC as a “Qualified Interdealer Quotation System” (“IDQS”) under SEC Rule 15c2-11(e)(6);

and the OTCQB is an established public market that provides current public information to investors.

August 25, 2021, we filed a registration statement with the SEC on Form S-8 to register 5,901,884 shares of our common stock reserved

for grants underlying our 2018 Incentive Stock Option Plan (the 2018 year designation reflects our change to a calendar year end in 2017,

following the closing of the KonaTel Nevada Merger).

June 14, 2022, we and Apeiron Systems and IM Telecom entered into a Note Purchase Agreement (the “NPA”) with CCUR Holdings,

Inc., a Delaware corporation (respectively, “CCUR” and the “CCUR Loan”), as “Collateral Agent”;

CCUR and Symbolic Logic, Inc., a Delaware corporation (“Symbolic”), as “Purchasers,” along with a related Guarantee

and Security Agreement (the “GSA”), whereby the Company and its subsidiary companies pledged their assets (including the

Company’s equity ownership of its subsidiaries) to secure $3,150,000 (the “Principal Amount”) in debt financing payable

in one (1) year (to be repaid prior to nine [9] months), together with interest at the rate of 15% per annum (the “Interest Rate”).

On June 1, 2023, we entered into a “First Amendment to the NPA” with CCUR and Symbolic.

The purpose of the amendment was

to add further growth capital to the Company in the form of “Delayed Draw Notes” in an aggregate principal amount of up to

and in consideration therefor, we provided additional collateral for the NPA.

See our 8-K Current Report dated June 14, 2022,

filed with the SEC on June 21, 2022, and our 8-KA Current Report dated June 14, 2022, filed with the SEC on June 7, 2023, for additional

information on the CCUR Loan.

These Current Reports are available by Hyperlink in Section 9 – Financial Statements and Exhibits,

Item 9.01, Part IV, Item 15 hereof, and are incorporated herein by reference.

The CCUR Loan was paid in full on or about January 23,

2024, which was the “Initial Closing Date” of our “Purchase Agreement” with Excess Telecom, Inc., a Nevada corporation,

which is discussed below.

July 7, 2022, we filed a registration statement with the SEC on Form S-8 to register an additional 2,000,000 shares of our common stock

reserved for grants underlying our 2018 Incentive Stock Option Plan.

August 22, 2022, we filed an amendment to our registration statement with the SEC on Form S-8 to decrease our shares registered on Form

S-8 by 1,500,000 shares;

and on March 20, 2023, we filed a similar amendment on Form S-8 to decrease our shares registered on Form S-8

by 253,764 shares, then leaving 6,148,120 remaining registered shares, with 1,648,120 shares having been issued and 4,500,000 shares

being reserved for future issuance under outstanding grants or to be granted incentive stock options.

January 24, 2023, we entered into a non-material Membership Interest Purchase Agreement to acquire 100% of Tempo Telecom, LLC, a Georgia

limited liability company and an FCC Eligible Telecommunications Carrier (“ETC”) authorized to provide Lifeline services

in twenty-one (21) states (respectively, the “Tempo Purchase Agreement” and “Tempo”), the closing of which is

subject to the approval of the FCC and applicable state and other governmental agencies, among other conditions.

As of December 31, 2025,

this agreement continues to be under review by the FCC.

April 6, 2023, pursuant to a Purchase of Contract Rights Agreement between the Company and Insight Mobile, Inc., a Delaware corporation

(respectively, the “Insight Mobile Agreement” and “Insight Mobile”), we and Insight Mobile executed and delivered

an Assumption of Membership Interest Purchase Agreement (the “Assignment Agreement”), which is being held in escrow by counsel

for Insight Mobile (the “Escrow Agent”) pending satisfaction of all conditions to the closing of the Tempo Purchase Agreement,

and whereby Insight Mobile has agreed to pay us the “Purchase Price” of $4,500,000 for our “Contract Rights”

under the Tempo Purchase Agreement.

For additional information on the Insight Mobile Agreement and the Assignment Agreement, see our

8-K Current Report dated April 6, 2023, filed with the SEC on April 17, 2023, which is Hyperlinked in Section 9 – Financial Statements

and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

December 8, 2023, we filed an additional registration statement on Form S-8 to increase the number of shares of our common stock available

for issuance under our 2018 Incentive Stock Option Plan by 1,700,000 shares.

This amendment resulted in 7,848,120 registered shares equaling

1,748,120 shares issued and 6,100,000 reserved shares remaining for future issuance.

December 18, 2023, we and IM Telecom, as the “Purchasers,” entered into an Installment Sale Agreement (the “Installment

Sale Agreement”) with ACP Financing VII Limited Liability Company, a Texas limited liability company (“ACP Financing”),

as the “Seller,” pursuant to which the Seller agreed to purchase new and refurbished cellular devices for distribution through

the Purchasers’ distribution network to Affordable Connectivity Program (the “ACP” or the “ACP Program”

[which ended on June 1, 2024, and has not been renewed by the United States Congress]), Federal Lifeline and California Lifeline eligible

consumers, such devices operating on 4G or better technology platforms or any such other consumer technology equipment upon the mutual

agreement of the Seller and the Purchasers (the “Devices”), and to sell the Devices to the Purchasers.

It is intended that

this Installment Sale Agreement will be utilized by KonaTel following the payment of all outstanding amounts owed to ACP Financing.

additional information on the Installment Sale Agreement, see our 8-K Current Report dated December 18, 2023, filed with the SEC on December

22, 2023, which is Hyperlinked in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated

herein by reference.

November 10, 2023, Apeiron Systems entered into a five (5) year agreement with Viva-US Telecommunications, Inc.

as the exclusive supplier of wholesale cellular voice and data, messaging, international call termination, smart SIM (“Subscriber

Identity Module”) and other telecommunications services.

Apeiron Systems provides these services through its CPaaS (“Communication

Platform as a Service”) cloud platform.

Viva-US is a US MVNO (“Mobile Virtual Network Operator”) and part of the Balesia

Technologies, Inc.

group of companies operating MNOs (“Mobile Network Operator”) and MVNOs throughout North and South America,

supporting over three million customers in Bolivia, Mexico and Argentina.

January 22, 2024 (the “Effective Date”), KonaTel and IM Telecom entered into a Membership Interest Purchase Agreement (the

“Excess Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”) with Excess Telecom, Inc.,

a Nevada corporation (“Excess Telecom”), pursuant to which KonaTel conveyed 49% of its membership interest in IM Telecom

to Excess Telecom on the “Initial Closing Date” in consideration of the sum of $10,000,000, and if approved by the FCC, it

would have conveyed the remaining 51% of the membership interest in IM Telecom to Excess Telecom for the sum of $100 on the “Final

Closing.” If not approved by the FCC, KonaTel would retain 51% of IM Telecom and Excess Telecom shall retain 49% of IM Telecom;

and KonaTel would have no obligation to refund any portion of the funds paid by Excess Telecom to KonaTel on the Initial Closing Date.

Additional agreements were also executed by the parties on the Initial Closing Date, including

a Management Service Agreement, a Master Distribution Agreement and an Amended and Restated Operating Agreement (collectively, the “Transaction

As of December 31, 2025, the approval of this agreement by the FCC was still pending.

For additional information

on these Transaction Documents, see our 8-K Current Report dated January 22, 2024, filed with the SEC on January 30, 2024, which is Hyperlinked

in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

September 19, 2025, KonaTel and Excess Telecom executed a First Omnibus Amendment to Transaction Documents (the “First Omnibus

Agreement”) and a Third Amended and Restated Operating Agreement of IM Telecom (the “Amended Operating Agreement”).

The First Omnibus Amendment was executed to create IM Telecom as a standalone partnership entity owned 51% by KonaTel and 49% by Excess

Telecom, and the parties withdrew the application for FCC approval.

For KonaTel’s part, this entity change included transferring

certain employees previously working for IM Telecom on KonaTel’s payroll to the new entity.

As agreed by KonaTel and Excess Telecom,

effective October 1, 2025, all combined net income of IM Telecom will be reported for federal income tax purposes as a partnership (Form

1065) and KonaTel will continue to receive distributions based upon a new Distribution Agreement for compensation from it sales under

the IM Telecom’s vertical sales channels, including all new sales stemming from our new healthcare vertical partnership as originally

The Management Agreement originally signed on the Initial Closing date of January 22, 2024, has been terminated and is of no

further force or effect and all ongoing business operations will continue under the “new” IM Telecom entity.

The First Omnibus

Agreement facilitated the payment of $700,000 to KonaTel from the remaining note receivable from Excess Telecom from the Initial Closing

Date, and currently, there is a $150,000 note receivable due KonaTel from Excess Telecom under the Transaction Documents.

See our 8-KA-2

Current Report dated January 22, 2024, filed with the SEC on September 30, 2025, which is Hyperlinked in Section 9 – Financial

Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

On November 10, 2023, Apeiron

Systems entered into a five (5) year agreement with Viva-US Telecommunications, Inc.

(“Viva-US”), as the exclusive supplier

of wholesale cellular voice and data, messaging, international call termination, smart SIM (“Subscriber Identity Module”)

and other telecommunications services.

Apeiron Systems provides these services through its CPaaS (“Communication Platform as a

Service”) cloud platform.

Viva-US is a US MVNO (“Mobile Virtual Network Operator”) and part of the Balesia Technologies,

group of companies operating MNOs (“Mobile Network Operator”) and MVNOs throughout North and South America, supporting

over three million customers in Bolivia, Mexico and Argentina.

On January 22, 2024

(the “Effective Date”), KonaTel and IM Telecom entered into a Membership Interest Purchase Agreement (the “Excess

Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”) with Excess Telecom, Inc., a Nevada

corporation (“Excess Telecom”), pursuant to which KonaTel conveyed 49% of its membership interest in IM

Telecom to Excess Telecom on the “Initial Closing Date” in consideration of the sum of $10,000,000, and if approved by

the FCC, will convey the remaining 51% of the membership interest in IM Telecom to Excess Telecom for the sum of $100 on the

“Final Closing.” If not approved by the FCC, KonaTel shall retain 51% of IM Telecom and Excess Telecom shall retain 49%

of IM Telecom;

and KonaTel shall have no obligation to refund any portion of the funds paid by Excess Telecom to KonaTel.

agreements were also executed by the parties at the Initial Closing Date of the Excess Telecom Purchase Agreement, including a

Management Service Agreement, a Master Distribution Agreement and an Amended and Restated Operating Agreement (collectively, the

“Transaction Documents”).

As of December 31, 2024, the approval of this agreement by the FCC is still

For additional information on these Transaction Documents, see our 8-K Current Report dated January 22, 2024, filed

with the SEC on January 30, 2024, which is Hyperlinked in in Section 9 – Financial Statements and Exhibits, Item 9.01, Part

IV, Item 15, below, and are incorporated herein by reference.

Subsequent to December 31, 2024

of Certain Provisions of the Excess Telecom Agreement

IM Telecom and Excess Telecom

have been working together to establish best practices in compliance and building an expanded ETC footprint in the United States.

to our approved Federal Compliance Plan, IM Telecom has increased its state-authorized ETC approvals and is now approved in forty (40)

Although these state approvals are complete, IM Telecom is currently awaiting FCC delivery of several Study Area Codes (“SACs”)

to begin operating in the additional states.

In furtherance of this process, certain of the initial Transaction Documents have been restated

by signature dated March 4, 2025, but effective as of the date or dates set forth at the beginning of each of the referenced Transaction

Documents and copies of which accompany our 8-KA Current Report dated January 22, 2024, filed with the SEC on March 10, 2025, which is

Hyperlinked in in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein

by reference.

KonaTel Nevada was organized under the laws of the

State of Nevada on October 14, 2014, by its founder and then sole shareholder, D.

Sean McEwen, our current Chairman and CEO, to conduct

the business of a full-service cellular provider that delivered cellular products and services to individual and business customers in

various retail and wholesale markets.

Nevada was organized under the laws of the State of Nevada on October 14, 2014, by its founder and then sole shareholder, D.

our current Chairman and CEO, to conduct the business of a full-service cellular provider that delivered cellular products and services

to individual and business customers in various retail and wholesale markets.

Through its sales network, it provides these services nationwide.

In furtherance of its proposed

business, on November 1, 2014, it acquired most of the assets of Coast to Coast Cellular, Inc.

(“Coast to Coast”), including

inventories, property, plant and equipment and its customer list, all valued at approximately $950,000 net of liabilities in the approximate

In furtherance of its proposed business, on November 1, 2014, it acquired most of the assets of Coast to Coast Cellular, Inc.

to Coast”), including inventories, property, plant and equipment and its customer list, all valued at approximately $950,000, net

of liabilities in the approximate amount of $415,000;

and on November 1, 2016, it acquired the assets of CS Agency LLC (“CS Agency”),

consisting of contract rights related to the cellular industry, in consideration of assuming liabilities of CS Agency in the approximate

amount of $300,000.

and on November 1, 2016, it acquired the assets of CS Agency LLC (“CS Agency”), consisting of contract

rights related to the cellular industry, in consideration of assuming liabilities of CS Agency in the approximate amount of $300,000.

With the completion of the KonaTel Nevada Merger, we succeeded to the current and intended business operations of KonaTel Nevada.

On December 31, 2018, we acquired Apeiron Systems

(www.apeiron.io).

Apeiron was organized in 2013 and is an international hosted services Communications Platform as a Service (“CPaaS”)

provider that designed, built, owns and operates its national private core network, supporting a suite of business communications services,

all accessible via proprietary Applications Programming Interfaces (“APIs”).

As an FCC licensed Internet Telephony Service

Provider (“ITSP”), Apeiron also holds an FCC numbering authority license.

Some of Apeiron’s hosted services include

Voice over IP (“VoIP”), cellular and Over-The-Top (“OTT”) telephony, SMS/MMS messaging and broadcast services,

numbering features, including Cloud IVRs, Voicemail, Fax, Call Recording and other services through local, toll-free and international

phone numbers.

Supported by its national redundant network, Apeiron also provides public and private IP network services, including Multiprotocol

Label Switching (“MPLS”), Dedicated Internet and LTE Wireless WAN solutions.

Apeiron’s cloud services include Information

Data Dips, Software-Defined Wide Area Networking (“SD-WAN”) and Internet of Things (“IoT”) data and device management.

Apeiron primarily distributes its services nationally through its website, its sales staff, independent sales agents and Independent Sales

Organizations (“ISOs”).

Apeiron Systems is headquartered in Johnstown, Pennsylvania,

where it has customer service and software engineering resources staffed.

Additional development resources are staffed out of Los Angeles,

California, as well as in Europe and Asia.

On February 5, 2018, we entered into a purchase

agreement to acquire IM Telecom (www.infinitimobile.com).

On October 23, 2018, the FCC approved our acquisition of IM Telecom, and

on January 31, 2019, we completed the purchase of IM Telecom.

IM Telecom currently operates as a 51% owned subsidiary of KonaTel.

is an FCC licensed Eligible Telecommunications Carrier (“ETC”) and is one of twenty-two (22) original FCC licensed

wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan since 2012, of which approximately twelve (12) license

holders remain active today.

The FCC has not approved or granted a new wireless reseller Lifeline Compliance Plan since 2012.

licensed ETC, IM Telecom is also an FCC licensed Affordable Connectivity Program (the “ACP” or the “ACP

With the completion of the KonaTel Nevada Merger, we succeeded to the current and intended business operations of

KonaTel Nevada.

December 31, 2018, we acquired Apeiron Systems (www.apeiron.io).

Apeiron was organized in 2013 and is an international hosted services

Communications Platform as a Service (“CPaaS”) provider that designed, built, owns and operates its national private core

network, supporting a suite of business communications services, all accessible via proprietary Applications Programming Interfaces (“APIs”).

As an FCC licensed Internet Telephony Service Provider (“ITSP”), Apeiron also holds an FCC numbering authority license.

of Apeiron’s hosted services include Voice over IP (“VoIP”), cellular and Over-The-Top (“OTT”) telephony,

SMS/MMS messaging and broadcast services, numbering features, including Cloud IVRs, Voicemail, Fax, Call Recording and other services

through local, toll-free and international phone numbers.

Supported by its national redundant network, Apeiron also provides public and

private IP network services, including Multiprotocol Label Switching (“MPLS”), Dedicated Internet and LTE Wireless WAN solutions.

Apeiron’s cloud services include Information Data Dips, Software-Defined Wide Area Networking (“SD-WAN”) and Internet

of Things (“IoT”) data and device management.

Apeiron primarily distributes its services nationally through its website,

its sales staff, independent sales agents and Independent Sales Organizations (“ISOs”).

February 5, 2018, we entered into a purchase agreement to acquire IM Telecom (www.infinitimobile.com).

On October 23, 2018, the FCC approved

our acquisition of IM Telecom, and on January 31, 2019, we completed the purchase of IM Telecom.

IM Telecom currently operates as a standalone

51% owned subsidiary of KonaTel.

It is an FCC licensed Eligible Telecommunications Carrier (“ETC”) and is one of twenty-two

(22) original FCC licensed wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan since 2012, of which approximately

twelve (12) license holders remain active today.

The FCC has not approved or granted a new wireless reseller Lifeline Compliance Plan

As a licensed ETC, IM Telecom was also an FCC licensed Affordable Connectivity Program (the “ACP” or the “ACP

Program”) provider, authorized to distribute ACP subsidized high-speed Lifeline subsidized mobile voice/data service in eleven

(11) states, which are Vermont, South Carolina, Georgia, Maryland, Kentucky, Wisconsin, Oklahoma, California, New York, Pennsylvania

In addition to Lifeline, IM Telecom is also an FCC approved ACP provider authorized to distribute ACP subsidized

high-speed mobile data service in the fifty (50) states, Washington D.C.

In addition to Lifeline, IM Telecom is also an FCC approved ACP provider authorized to distribute ACP subsidized high-speed

mobile data service in the fifty (50) states, Washington D.C.

and Puerto Rico.

Lifeline is an FCC program that provides

subsidized, fixed or mobile telecommunications services to low-income Americans.

ACP was an FCC program that provided subsidized

high-speed wireless data services to low-income Americans, which expired on June 1, 2024.

Lifeline is an FCC program that provides subsidized, fixed

or mobile telecommunications services to low-income Americans.

ACP was an FCC program that provided subsidized high-speed wireless data

services to low-income Americans, which expired on June 1, 2024.

IM Telecom distributes Lifeline and ACP services under its Infiniti

Mobile brand name through its website, sales staff, retail locations and ISOs.

IM Telecom also offers non-Lifeline and non-ACP

services throughout the United States.

IM Telecom also offers non-Lifeline and non-ACP services

throughout the United States.

IM Telecom has a US-based customer support center located in Atmore, Alabama.

IM Telecom is headquartered in Plano, Texas, and has

a warehouse operation in Tulsa, Oklahoma, and a customer service center in Atmore, Alabama.

We are headquartered in Plano, Texas.

Systems has nine (9) full-time employees;

IM Telecom has fifteen (15) full-time employees;

and we have four (4) full-time employees.

Principal Products

or Services and their Markets

Our principal products and

services, provided through Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP, SMS/MMS, POTS Replacement),

wholesale and retail mobile voice and mobile data IoT services, wholesale voice termination services and our ETC and ACP subsidized services

for low-income Americans.

Except for our ETC Lifeline services distributed in up to forty (40) states/territories and our ACP services,

which until the termination of the ACP Program on June 1, 2024, had been distributed in the fifty (50) states, as well as Washington D.C.

and Puerto Rico, our Apeiron Systems’ products and services are available worldwide and subject to U.S., international and local/national

We generate revenue from

two (2) primary sources, Hosted Services and Mobile Services:

Our Hosted Services include a suite of hosted CPaaS services within Apeiron Systems’ cloud platform, including Cloud IVRs, Voicemail, Fax, Call Recording and other services provided with local, toll-free and international phone numbers.

Apeiron also delivers public and private IP network services from its national redundant network backbone, including MPLS, Dedicated Internet and LTE Wireless WAN solutions.

Additionally, Apeiron’s Cloud Services include Information Data Dips, SD-WAN and IoT data and device management, of which IoT provides device connectivity via wireless 4G/5G.

These Hosted Services are marketed nationally and internationally through the Apeiron website, its sales staff, independent sales agents and ISOs.

Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through Apeiron Systems and IM Telecom.

Mobile voice/text/data and IoT mobile data services are supported by a blend of reseller agreements with select national wireless carriers and national wireless wholesalers.

A wireless communications service reseller typically does not own the wireless network infrastructure over which services are provided to its customers.

Mobile voice/text/data and mobile data solutions are generally sold as traditional post-paid service plans that may include voice/text/data or wireless data only plans.

Sometimes, equipment is provided, which can include, but is not limited to, phones, tablets, modems, routers and accessories.

Also included in our Mobile Services segment is the distribution of government subsidized mobile voice service and mobile data service by IM Telecom under its Infiniti Mobile brand and FCC license to low-income American households that qualify for the FCC’s Lifeline mobile voice service program and/or previously under the FCC’s ACP Program.

Even though government programs like Lifeline have existed since 1985, these programs, along with newer programs like the ACP Program, are subject to change and any change, reduction or elimination may have a material impact on our Mobile Services business;

September 19, 2025, KonaTel and Excess Telecom executed the First Omnibus Amendment to Transaction Documents and an Amended Operating

Agreement related to its Membership Interest Purchase Agreement with Excess Telecom.

The First Omnibus Amendment was executed to create

IM Telecom as a standalone partnership entity owned 51% by KonaTel and 49% by Excess Telecom, and the parties withdrew the application

for FCC approval.

For KonaTel’s part, this entity change included transferring certain employees previously working for IM Telecom

on KonaTel’s payroll to the new entity.

As agreed by KonaTel and Excess Telecom, effective October 1, 2025, all combined net income

of IM Telecom will be reported for federal income tax purposes as a partnership (Form 1065), and KonaTel will continue to receive distributions

based upon a new Distribution Agreement for compensation only from it sales under the IM Telecom’s vertical sales channels, including

all new sales stemming from our new healthcare vertical partnership as originally agreed.

and IM Telecom are headquartered in Plano, Texas.

IM Telecom also has a customer service center in Atmore, Alabama.

KonaTel has six (6)

full-time employees and IM Telecom has seven (7) full-time employees.

IM Telecom closed its warehouse/distribution center in Tulsa, Oklahoma

effective July 31, 2025.

Systems is headquartered in Johnstown, Pennsylvania, where it has customer service and software engineering resources staffed.

development resources are staffed out of Los Angeles, California, as well as in Europe and Asia.

Apeiron has twelve (12) full-time employees.

Products or Services and their Markets

principal products and services, provided through Apeiron Systems and IM Telecom, include our CPaaS suite of services (“SIP/VoIP,”

“SMS/MMS,” “POTS Replacement”), wholesale and retail mobile voice and mobile data IoT services, wholesale voice

termination services and our ETC and ACP subsidized services for low-income Americans.

Except for our ETC Lifeline services distributed

in partnership with Excess Telecom in up to forty (40) states/territories and our ACP services, which until the termination of the ACP

Program on June 1, 2024, had been distributed in the fifty (50) states, as well as Washington D.C.

and Puerto Rico, our Apeiron Systems’

products and services are available worldwide and subject to U.S., international and local/national regulations.

generate revenue from two (2) primary sources, Hosted Services and Mobile Services:

Our Hosted Services include

a suite of hosted CPaaS services within Apeiron Systems’ cloud platform, including Cloud IVRs, Voicemail, Fax, Call Recording

and other services provided with local, toll-free and international phone numbers.

Apeiron also delivers public and private IP network

services from its national redundant network backbone, including MPLS, Dedicated Internet and LTE Wireless WAN solutions.

Additionally,

Apeiron’s Cloud Services include Information Data Dips, SD-WAN and IoT data and device management, of which IoT provides device

connectivity via wireless 4G/5G.

These Hosted Services are marketed nationally and internationally through the Apeiron website, its

sales staff, independent sales agents and ISOs.

Our Mobile Services include

retail and wholesale cellular voice/text/data services and IoT mobile data services through Apeiron Systems and IM Telecom.

voice/text/data and IoT mobile data services are supported by a blend of reseller agreements with select national wireless carriers

and national wireless wholesalers.

A wireless communications service reseller typically does not own the wireless network infrastructure

over which services are provided to its customers.

Mobile voice/text/data and mobile data solutions are generally sold as traditional

post-paid service plans that may include voice/text/data or wireless data only plans.

Sometimes, equipment is provided, which can

include, but is not limited to, phones, tablets, modems, routers and accessories.

Also included in our Mobile Services segment is

the distribution of government subsidized mobile voice service and mobile data service by IM Telecom under its Infiniti Mobile brand

and FCC license to low-income American households that qualify for the FCC’s Lifeline mobile voice service program and/or previously

under the FCC’s ACP Program.

Even though government programs like Lifeline have existed since 1985, these programs, along with

newer programs like the ACP Program, are subject to change and any change, reduction or elimination may have a material impact on

our Mobile Services business;

and as referenced above, the ACP Program terminated on June 1, 2024, and has not been renewed by Congress.

Distribution Methods of the Products or Services

We primarily distribute our

Hosted Services through our website, sales staff, master distribution agreements and ISOs.

We primarily distribute our Mobile Services

through our website, sales staff, retail locations and ISOs.

Since 2021, we have continued to increase our Mobile Service online marketing

efforts to supplement alternative distribution channel growth.

Sources and Availability of Raw Materials

and the Names of Principal Suppliers

Wholesale wireless services

are sourced either directly from the wireless carrier or from wholesalers that sit between us (Apeiron Systems and IM Telecom) and the

wireless carrier.

Methods of the Products or Services

primarily distribute our Hosted Services through our website, sales staff, master distribution agreements and ISOs.

We primarily distribute

our Mobile Services through our website, sales staff, retail locations and Independent Sales Organizations (ISOs).

and Availability of Raw Materials and the Names of Principal Suppliers

wireless services are sourced either directly from the wireless carrier or from wholesalers that sit between us (Apeiron Systems and

IM Telecom) and the wireless carrier.

Carriers can include Verizon, T-Mobile and AT&T.

Wholesalers can include Prepaid Wireless Group (“PWG”)

and Telispire.

Wireless resellers, like us, traditionally do not

own the wireless infrastructure over which services are provided.

We purchase services from the following sources:

Verizon voice, text and data services are provided through master distribution partners of Verizon.

The contract we hold with distribution partners has set per unit pricing for voice, text and data wireless services.

Pricing per unit is in the form of a monthly recurring charge (“MRC”) that may or may not include minutes of use, text units or data units.

Wholesalers can include Prepaid Wireless Group

(“PWG”) and Telispire.

resellers, like us, traditionally do not own the wireless infrastructure over which services are provided.

We purchase services from

the following sources:

Verizon voice,

text and data services are provided through master distribution partners of Verizon.

The contract we hold with distribution partners

has set per unit pricing for voice, text and data wireless services.

Pricing per unit is in the form of a monthly recurring charge

(“MRC”) that may or may not include minutes of use, text units or data units.

Additional data units are available for

text or data service and AT&T IoT service under a contract with us, has set “unit based” pricing for voice, text,

data and IoT wireless services.

Pricing per unit is in the form of an MRC that may or may not include minutes of use, text units

or data units.

Additional data units are available for purchase;

AT&T voice, text or data service

and AT&T IoT service under a contract with us, has set “unit based” pricing for voice, text, data and IoT wireless services.

Pricing per unit is in the form of an MRC that may or may not include minutes of use, text units or data units.

Additional data units

are available for purchase;

Verizon Wireless VPP, a Verizon IoT product:

Verizon Wireless VPP, a

Verizon IoT product:

Verizon VPP, also through a contract with us, has set per unit pricing for IoT wireless services.

Pricing per unit is in the form of an MRC that includes data units with defined over plan use pricing;

T-Mobile voice, text or data Lifeline services are provided through master distribution partners of T-Mobile.

The contract we hold has set pricing for bundled voice, text and data wireless services.

Pricing bundles are in the form of an MRC that include minutes of use, text units or data units.

unit is in the form of an MRC that includes data units with defined over plan use pricing;

T-Mobile voice, text or

data Lifeline services are provided through master distribution partners of T-Mobile.

The contract we hold has set pricing for bundled

voice, text and data wireless services.

Pricing bundles are in the form of an MRC that include minutes of use, text units or data

Larger data plans are available for purchase for consumer requiring larger voice and data packages.

Patents, Trademarks, Licenses, Franchises,

Concessions, Royalty Agreements or Labor Contracts

Our 51% owned subsidiary, IM Telecom, is an FCC licensed

ETC and is one of the original twenty-two (22) FCC licensed wireless cellular resellers to hold an FCC approved wireless Lifeline Compliance

Plan in the United States (as of 2012), of which approximately twelve (12) license holders remain active today.

As a licensed ETC, IM

Telecom is currently authorized to distribute Lifeline subsidized mobile voice/data service in up to forty (40) states.

Although the ACP

program officially ended in June of 2024, IM Telecom is also an FCC licensed ACP carrier, authorized to distribute ACP subsidized mobile

data services in the fifty (50) states, as well as Washington D.C.

and Puerto Rico.

Infiniti Mobile also offers non-Lifeline and non-ACP

IM Telecom intends to maintain the designation with anticipation that the program, or one similar, will be restarted.

We hold a United States Patent

and Trademark Office registered trademark “Lifeline+®” and use this Trademark in our marketing materials.

The telecommunications industry is highly competitive.

Our primary cellular competitors include other resellers and national carriers, such as AT&T, Verizon and T-Mobile.

These national

cellular carriers are facility-based, are significantly larger than us and enjoy trade name and trademark public recognition, as well

as greater resources, scale and competitive advantages, among other substantial factors, as compared to us.

In addition, our cellular

competitors also include numerous smaller regional carriers, existing MVNOs and ETCs, such as Metro PCS, Cricket Wireless, TracFone Wireless,

TruConnect and Assurance Wireless, many of which offer or may offer cellular, mobile data, Lifeline and ACP services, along with no-contract

postpaid and prepaid service plans.

Our CPaaS competitors include, but are not limited to, Twilio, Plivo, Bandwidth, Thinq, VoIP Innovations,

Telnyx, Coredial, Vonage/Nexmo, CLX Comm, Genband Kandy, Tropo, Telestax, 2600Hz and Signal Wire.

Competitive factors within the telecommunications

industry include pricing, market saturation, service and product offerings, customer experience, network investment and quality, development

and deployment of technologies and regulatory changes.

Some competitors have shown a willingness to use aggressive pricing as a source

of differentiation.

Other competitors have sought to add ancillary services, like mobile video, to enhance their offerings.

Taken together,

the competitive factors we face continue to put pressure on margins as companies compete to retain their current customer base and continue

to add new developments, many proprietary or patented, and customers.

Need for any Governmental Approval of Principal

Products or Services

On October 23, 2018, the FCC approved our acquisition

of IM Telecom.

In 1985, during the Reagan administration, the FCC established the Lifeline Assistance program through generic powers afforded

the FCC under the Communications Act of 1934.

Cellular service was added to the Lifeline program in 2009.

The FCC has not approved any

new wireless reseller Lifeline Compliance Plans since 2012.

Existing and Probable Government Regulation to Our Current and Intended

The FCC has several complex requirements and

proceedings that affect our operations and that could increase our costs or diminish our revenues.

For example, the FCC has rules

regarding the provision of 911 and E-911 services, porting telephone numbers, roaming, disabilities access, privacy and

cybersecurity, consumer protection, and the universal service and Lifeline programs, including eligibility, reimbursement and

program requirements.

Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts

51% owned partnership, IM Telecom, is an FCC licensed ETC and is one of the original twenty-two (22) FCC licensed wireless cellular resellers

to hold an FCC approved wireless Lifeline Compliance Plan in the United States (as of 2012), of which approximately twelve (12) license

holders remain active today.

As a licensed ETC, IM Telecom is currently authorized to distribute Lifeline subsidized mobile voice/data

service in up to forty (40) states.

Although the ACP program officially ended on June 1, 2024, IM Telecom is also an FCC licensed ACP

carrier, authorized to distribute ACP subsidized mobile data services in the fifty (50) states, as well as Washington D.C.

It also offers non-Lifeline and non-ACP services.

IM Telecom intends to maintain this designation with anticipation that the program,

or one similar, will be restarted.

telecommunications industry is highly competitive.

Our primary cellular competitors include other resellers and national carriers, such

as AT&T, Verizon and T-Mobile.

These national cellular carriers are facility-based, are significantly larger than us and enjoy trade

name and trademark public recognition, as well as greater resources, scale and competitive advantages, among other substantial factors,

as compared to us.

In addition, our cellular competitors also include numerous smaller regional carriers, existing MVNOs and ETCs, such

as Metro PCS, Cricket Wireless, TracFone Wireless, TruConnect and Assurance Wireless, many of which offer or may offer cellular, mobile

data, Lifeline and ACP services, along with no-contract postpaid and prepaid service plans.

Our CPaaS competitors include, but are not

limited to, Twilio, Plivo, Bandwidth, Thinq, VoIP Innovations, Telnyx, Coredial, Vonage/Nexmo, CLX Comm, Genband Kandy, Tropo, Telestax,

2600Hz and Signal Wire.

Competitive factors within the telecommunications industry include pricing, market saturation, service and product

offerings, customer experience, network investment and quality, development and deployment of technologies and regulatory changes.

competitors have shown a willingness to use aggressive pricing as a source of differentiation.

Other competitors have sought to add ancillary

services, like mobile video, to enhance their offerings.

Taken together, the competitive factors we face continue to put pressure on

margins as companies compete to retain their current customer base and continue to add new developments, many proprietary or patented,

and customers.

for any Governmental Approval of Principal Products or Services

October 23, 2018, the FCC approved our acquisition of IM Telecom.

In 1985, during the Reagan administration, the FCC established the

Lifeline Assistance program through generic powers afforded the FCC under the Communications Act of 1934.

Cellular service was added

to the Lifeline program in 2009.

The FCC has not approved any new wireless reseller Lifeline Compliance Plans since 2012.

and Probable Government Regulation to Our Current and Intended Business

FCC has several complex requirements and proceedings that affect our operations and that could increase our costs or diminish our revenues.

For example, the FCC has rules regarding the provision of 911 and E-911 services, porting telephone numbers, roaming, disabilities access,

privacy and cybersecurity, consumer protection, and the universal service and Lifeline programs, including eligibility, reimbursement

and program requirements.

Many of these and other issues are being considered in ongoing proceedings, and we cannot predict whether or

how such actions will affect our business, financial condition or results of operations.

Our ability to provide services and

generate revenues has and could continue to be harmed by adverse regulatory action or changes to existing laws and regulations.

addition, regulation of companies that offer competing services can impact our business indirectly.

Smaller Reporting Company

We are subject to the reporting requirements of Section

13 of the Exchange Act, and we are subject to the disclosure requirements of Regulation S-K of the SEC, as a “smaller reporting

company.” That designation relieves us of some of the informational requirements of Regulation S-K and Article 8 of Regulation

S-X of the SEC.

Emerging Growth Company

In 2020, our “emerging growth company”

designation as defined in the “Jumpstart Our Business Startups Act of 2012,” or the “JOBS Act,” expired as

of the fifth anniversary of our initial registered public offering.

During our emerging growth company designation, we did not utilize

any financial statement waivers available to us as a result of that designation.

Sarbanes/Oxley Act

We are also subject to the Sarbanes-Oxley Act of 2002.

The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies

and strengthens auditor independence.

It also requires steps to enhance the direct responsibility of senior members of management

for financial reporting and for the quality of financial disclosures made by public companies;

establishes clear statutory rules to limit,

and to expose to public view, possible conflicts of interest affecting securities analysts;

creates guidelines for audit committee members’

appointments, compensation and oversight of the work of public companies’ auditors;

Our ability to provide services and generate

revenues has and could continue to be harmed by adverse regulatory action or changes to existing laws and regulations.

In addition, regulation

of companies that offer competing services can impact our business indirectly.

Reporting Company

are subject to the reporting requirements of Section 13 of the Exchange Act, and we are subject to the disclosure requirements of Regulation

S-K of the SEC, as a “smaller reporting company.” That designation relieves us of some of the informational requirements

of Regulation S-K and Article 8 of Regulation S-X of the SEC.

Growth Company

2020, our “emerging growth company” designation as defined in the “Jumpstart Our Business Startups Act of 2012,”

or the “JOBS Act,” expired as of the fifth anniversary of our initial registered public offering.

During our emerging growth

company designation, we did not utilize any financial statement waivers available to us as a result of that designation.

Sarbanes/Oxley

are also subject to the Sarbanes-Oxley Act of 2002.

The Sarbanes/Oxley Act created a strong and independent accounting oversight board

to oversee the conduct of auditors of public companies and strengthens auditor independence.

It also requires steps to enhance the direct

responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies;

establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts;

creates guidelines for audit committee members’ appointments, compensation and oversight of the work of public companies’

management assessment of our internal controls;

auditor attestation to management’s conclusions about internal controls;

prohibits certain insider trading during pension fund blackout

requires companies and auditors to evaluate internal controls and procedures;

and establishes a federal crime of securities fraud,

among other provisions.

Compliance with the requirements of the Sarbanes/Oxley Act could substantially increase our legal and accounting

Exchange Act Reporting Requirements

Section 14(a) of the Exchange Act requires all companies

with securities registered pursuant to Section 12(g) of the Exchange Act to comply with the rules and regulations of the SEC regarding

proxy solicitations, as outlined in Regulation 14A.

Matters submitted to our shareholders at a special or annual meeting thereof or pursuant

to a written consent will require us to provide our shareholders with the information outlined in Schedules 14A or 14C of Regulation 14;

preliminary copies of this information must be submitted to the SEC at least ten (10) days prior to the date that definitive copies of

this information is forwarded to our shareholders.

We are required to file annual reports on Form 10-K

and quarterly reports on Form 10-Q with the SEC on a regular basis, and are required to timely disclose certain material events (e.g.,

entry into a definitive material agreement, changes in corporate control, acquisitions or dispositions of a significant amount of assets

other than in the ordinary course of business, bankruptcy and receivership filings and the sale of in excess of five percent (5%) of our

outstanding securities, among various other material matters) in a Current Report on Form 8-K.

See SEC Form 8-K for a more complete description

of the type of material events required to be disclosed.

Number of Total Employees and Number of Full-Time

Across our companies, we have a total of twenty-eight

(28) full-time employees and no part-time employees.

We have two (2) wholly owned subsidiaries:

prohibits certain insider trading during pension fund blackout periods;

requires companies and auditors to evaluate internal controls

and procedures;

and establishes a federal crime of securities fraud, among other provisions.

Compliance with the requirements of the

Sarbanes/Oxley Act could substantially increase our legal and accounting costs.

Act Reporting Requirements

14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with

the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A.

Matters submitted to our shareholders

at a special or annual meeting thereof or pursuant to a written consent will require us to provide our shareholders with the information

outlined in Schedules 14A or 14C of Regulation 14;

preliminary copies of this information must be submitted to the SEC at least ten (10)

days prior to the date that definitive copies of this information is forwarded to our shareholders.

are required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis, and are required

to timely disclose certain material events (e.g., entry into a definitive material agreement, changes in corporate control, acquisitions

or dispositions of a significant amount of assets other than in the ordinary course of business, bankruptcy and receivership filings

and the sale of in excess of five percent (5%) of our outstanding securities, among various other material matters) in a Current Report

See SEC Form 8-K for a more complete description of the type of material events required to be disclosed.

of Total Employees and Number of Full-Time Employees

our companies, as of December 31, 2025, we had a total of twenty-five (25) full-time employees and no part-time employees.

have two (2) wholly owned subsidiaries:

KonaTel Nevada and Apeiron Systems;

and we currently own 51% of IM Telecom, with the remaining 49% being owned by Excess Telecom,

which, if our Excess Telecom Purchase Agreement is approved by the FCC, Excess Telecom will own 100% of IM

Telecom, subject to existing related Transaction Documents.

and we currently have a 51% interest in the IM Telecom, with

the remaining 49% interest being owned by Excess Telecom.

Our subsidiary, KonaTel Nevada, has remained inactive since early 2021.

Additional Information

You may read and copy any materials that we file with

the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C.

You may also find all of the reports or

registration statements that we have previously filed electronically with the SEC at its Internet site at www.sec.gov in the Edgar Archives

of the SEC or in our website at konatel.com.

may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington,

You may also find all of the reports or registration statements that we have previously filed electronically with the SEC

at its Internet site at www.sec.gov in the Edgar Archives of the SEC or in our website at konatel.com.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business