What changed in this filing

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Item 1. Business

2021-04-06 compared with 2020-05-12 · 300 added, 466 removed, 73 unchanged (91% of the section changed)

Corporate History

and Business Development

We were incorporated as “Light Tech,

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

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

Houston, Texas.

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

We changed our name to “Dala Petroleum

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

On June 27, 1986, we merged with the Delaware subsidiary, with the survivor being Westcott Products Corporation, a Delaware

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

Company, which owned and operated a home center in League City, Texas, about 30 miles southeast of downtown Houston, Texas.

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

We changed our name to “Dala Petroleum Corp.”

on August 29, 2014;

and then to “KonaTel, Inc.”

on February 5, 2018, following the closing of two respective

mergers that are discussed below.

On March 11, 2000, our Board of Directors

began the process of re-entering the development stage, and on June 2, 2014, we and our newly formed and wholly-owned acquisition

subsidiary, Dala Acquisition Corp., a Nevada corporation (“Dala Acquisition”), and Dala Petroleum Corp., a Nevada

corporation (“Dala Nevada”), completed an Agreement and Plan of Merger (the “Dala Merger Agreement”) under

which Dala Nevada became our wholly-owned subsidiary on the closing of the merger (the “Dala Merger”).

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

Approximately

$2,225,000 was raised in connection with the closing of the Dala Merger for planned development of the 300 oil and gas leases

acquired in north central Kansas under the Dala Merger, with the total leased acreage amounting to approximately 80,000 acres,

more or less.

Following the Dala Merger, we operated as an early-stage oil exploration company focused on our leased acreage,

until 2016, when we entered into a Partial Cancellation Agreement (the “PCA”) whereby Chisholm II and certain members

of Chisholm II returned a total of 8,567,800 shares of the 10,000,000 shares of 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 holdings, 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.

For additional information about the closing of this Common Stock Purchase

Agreement, see our 8-K Current Report dated July 19, 2017, and filed with the SEC on July 20, 2017, which is accessible

by Hyperlink in Part IV, Item 15 hereof.

On November 13, 2017, we filed an Amended

and Restated Certificate of Incorporation with the State of Delaware, which removed all of our designated series of preferred

stock our Certificate of Incorporation, while reserving our 50,000,000 authorized and unissued one mill ($0.01) par value shares

of preferred stock for future issuance as the Board of Directors may designate and approve.

All outstanding series of designated

preferred stock had been cancelled or converted prior to the filing of this Amended and Restated Certificate of Incorporation.

A copy of our Amended and Restated Certificate of Incorporation is incorporated by reference as an Exhibit to this Annual Report.

and then to “KonaTel, Inc.” on February 5, 2018, following the closing of two respective mergers that

are discussed below.

On March 11, 2000, our Board of Directors began the

process of re-entering the development stage, and on June 2, 2014, we completed a merger with Dala Petroleum Corp., a Nevada corporation

(respectively, “Dala Nevada” 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 by Dala Nevada 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 holdings, 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.

additional information about this Common Stock Purchase Agreement, see Part IV, Item 15 hereof, under the heading “M2 Change

of Control.” On April 24, 2018, these 12,100,000 shares were distributed to M2’s members, pro rata, in accordance with their

respective membership interests.

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 mill ($0.01) par value shares of preferred stock for future

issuance as the Board of Directors may designate and approve.

See Part IV, Item 15, Exhibit 3(i).

Effective December 18, 2017, we, our President

and sole director, Mark Savage, and our Secretary, Matthew Atkinson, and our newly formed and wholly-owned acquisition subsidiary,

completed an Agreement and Plan of Merger (the “KonaTel Merger Agreement”) with KonaTel, Inc., a Nevada corporation

(the “KonaTel Nevada”), under which 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.

We issued 13,500,000

shares of our common stock in exchange for all of the outstanding shares of common stock of KonaTel Nevada to D.

Sean McEwen, its

sole shareholder and our current Chairman, President, CEO and a director.

Copies of all filed documents regarding the KonaTel Merger

can be viewed in our 8-K Current Report dated November 15, 2017, and filed with the SEC November 17, 2017, the 8-KA-1 Current Report

of the same date, filed with the SEC on December 20, 2017, and the 8-KA-2 Current Report of the same date, filed with the SEC on

April 17, 2018, which are all accessible by Hyperlink in Part IV, Item 15 hereof.

The Shareholder Voting Agreement and the Lock-Up/Leak-Out

Agreement executed by the parties at closing and referenced therein have expired by their terms.

Following the KonaTel Nevada Merger, our primary

operations have been those carried on by KonaTel Nevada, which are described below under the heading “Business.”

also changed our fiscal year from September 30 of each year to a calendar year end to coincide with the calendar year end of KonaTel

For additional information in this respect, see our 10 -KT Transition Report

for the year ended December 31, 2017, and filed with the SEC on June 29, 2018, which is accessible by Hyperlink in Part IV, Item

On April 24, 2018, the 12,100,000 shares of

our common stock that were acquired by M2 under the Common Stock Purchase Agreement referenced above were distributed to its members,

pro rata, in accordance with their respective membership interests.

This action was approved by the requisite members of M2 on

April 9, 2018.

Effective February 7, 2018, we entered into

an Agreement for the Purchase and Sale of Membership Interest dated as of February 5, 2018 (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, from its sole owner, Trevan Morrow (“Mr.

Morrow”).

The principal asset of IM Telecom was a “Lifeline

Program”

license (a Federal Communications Commission [the “FCC”] approved Compliance Plan), the transfer of

ownership of which required prior approval of the FCC.

Following the FCC approval of the transfer of ownership of IM Telecom

to us on October 23, 2018, the PSMI, as amended, was completed, effective on or about January 31, 2019.

At the closing, we also

Morrow as an independent consultant for ninety (90) days in consideration of $100 and granted him an incentive stock

option to purchase 500,000 shares of our common stock at an exercise price of $0.20 per share, also effective January 31, 2019,

vesting on May 1, 2019 and expiring on January 31, 2022.

For additional information on the PSMI, as amended, and related matters,

see our 8-K Current Report dated February 7, 2018, filed with the SEC on February 12, 2018;

our 8-KA-1 Current Report of the same

date, filed with the SEC on January 14, 2019;

and our 8-KA-2 Current Report of the same date, filed with the SEC on February 6,

2019, which are all accessible by Hyperlink in Part IV, Item 15 hereof.

Subsequently, the 500,000 share incentive stock option

granted to Mr.

Morrow was cancelled under a Settlement Agreement and Release between us, Mr.

Morrow and his spouse, effective

September 4, 2019, in consideration of our release of these parties of their obligation for an over payment of $168,677 to IM

Telecom by Universal Service Administrative Company (USAC) of the FCC under the indemnification provisions of the PSMI.

The indemnification

provisions remain with respect to all other representations and warranties contained therein.

See our 8-K Current Report dated

September 4, 2019, filed with the SEC on September 6, 2019, also Hyperlinked in Part IV, Item 15, and a copy of the Settlement

Agreement and Release is filed as an Exhibit to this Annual Report in Part IV, Item 15.

We increased the number of members of our

Board of Directors to five (5) members, effective February 12, 2018, and we appointed three (3) new directors to our Board of

Directors on that date.

See our 8-K Current Report dated February 7, 2018, and filed with the SEC on February 12, 2018, in Part

IV, Item 15 hereof.

The number of our current Board members is now set at four (4) members.

During 2018, we sold 6,500,000 shares of our

common stock comprised of “restricted securities”

to “accredited investors”

under the private placement

shares contemplated in connection with the closing of the KonaTel Nevada Merger for aggregate gross proceeds of $1,300,000, $100,000

of which was paid by the settlement of an advance in this amount.

See the heading “Recent Sales of Unregistered Securities;

Use of Proceeds from Registered Securities”

of the caption “Market for Registrant’s Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity Securities”

of Part II, Item 5 hereof.

On August 9, 2018, we entered into an Asset

Purchase Agreement (the “Telecon Agreement”) with Telecon Wireless Resources, Inc., a New York corporation (the “Buyer”);

and our wholly-owned subsidiary, KonaTel Nevada (the “Seller”), whereby we sold various assets, including furniture,

fixtures, equipment, account receivable and a customer list, among other assets and liabilities (the “Acquired Assets”).

The Agreement had an effective date of July 31, 2018 (the “Effective Date”

and the “Cut-Off Date”).

These Acquired Assets were previously utilized by us in our wireless services and telecommunications operations conducted under

the name “Telecon Wireless”

in our retail store located in Johnstown, New York.

The purchase price of the Acquired

Assets was approximately $406,000.

See our 8-K Current Report dated August 9, 2018, and filed with the SEC on August 15, 2018,

in Part IV, Item 15 hereof.

On August 28, 2018, we filed a claim in AAA

Arbitration against a former employee, Saul Glosser, and Mr.

Glosser filed a counterclaim against us.

Both matters were consolidated

in KonaTel, Inc.

Saul Glosser, Case No.

01-18-0003-2772, with the American Arbitration Association (International Center for

Dispute Resolution).

In August, 2019, the Company won an arbitration award (ratified by the court) from Mr.

Glosser in the amount

of $357,914, together with arbitrator’s compensation of $4,957, for a total award of $362,871;

Glosser’s counterclaim

was found to be without merit.

The Company and Mr.

Glosser entered into a Settlement Agreement and Mutual Release

on February 24, 2020, pursuant to which this matter was fully settled, resolving all claims, and Mr.

Glosser paid the Company

A copy of the Settlement Agreement and Mutual Release is filed as an Exhibit to this Annual Report in Part IV, Item

December 31, 2018, we and our newly formed and wholly-owned acquisition subsidiary, and Apeiron Systems, completed an Agreement

and Plan of Merger (the “Apeiron Systems Merger Agreement”) under which Apeiron Systems became our wholly-owned subsidiary

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

We issued 7,000,000 shares of our common stock

in exchange for all of the outstanding shares of common stock of Apeiron Systems, to Apeiron Systems two shareholders, Joshua

Ploude (6,300,000 shares) and Vyacheslav Yanson (700,000 shares), pro rata, in accordance with their respective equity interests

in Apeiron Systems.

Closing conditions to the Apeiron Systems Merger Agreement included, among other conditions that:

Apeiron Systems shareholders have a $1.00 per share “Guaranteed Value”

on the KonaTel shares they received under the

Apeiron Systems Merger if the KonaTel shares do not trade at or above $1.00 for ten (10) consecutive days during the period commencing

on December 31, 2020, and ending December 31, 2021, on the applicable trading market for our common stock during that period,

and subject to such shares being continuously owned of record by the Apeiron Systems shareholders, as outlined in Section 5.10

of the Apeiron Systems Merger Agreement;

(ii) there would be a “Net Working Capital”

computation that was intended

to provide sufficient cash resources to operate Apeiron Systems for a period of not less than ninety (90) days, with the understanding

that any overage of the estimate shall be paid to the Apeiron Systems shareholders and any deficit shall be paid by the Apeiron

Systems shareholders to us;

(iii) we would execute Employment Agreements with Messrs.

Ploude and Yanson (see the heading “Significant

Employees”

of Part IIII, Item 12);

and that Messrs.

Ploude and Yanson would execute and deliver a Shareholder Voting Agreement

and a two year Lock-Up/Leak-Out Agreement governing the resale of their respective shares of KonaTel (see the headings “Apeiron

Systems Merger Shareholders Voting Agreement”

and “Apeiron Systems Merger Lock-Up/Leak-Out Agreement”

III, Item 12, hereof, for a summary of these executed and delivered agreements).

See our 8-K Current Report dated December 31,

2018, and filed with the SEC on December 31, 2018, in Part IV, Item 15 hereof.

Effective March 31, 2020, we entered into a Working

Capital Settlement Agreement with Messrs.

Ploude and Yanson regarding the final Net Working Capital adjustments under the Apeiron

Systems Merger Agreement.

A copy of the Working Capital Settlement Agreement is filed as an Exhibit to this Annual Report in Part

Effective January 31, 2019, we changed our

auditors, following prior advice from them that they were intending to decline to stand for re-election as they were anticipating

no longer providing audit reports for publicly-held companies.

See our 8-K Current Report dated February 19, 2019 and filed with

the SEC on January 19, 2019.

Effective October 15, 2019 (though executed

October 17, 2019), the Company and Charles L.

Schneider, Jr., the CEO of our wholly-owned subsidiary, KonaTel Nevada, and the

President and CEO of our wholly-owned subsidiary, Infiniti Mobile, executed and delivered a Severance Agreement and Release (the

“Severance Agreement”).

In connection with the execution and delivery of the Severance Agreement, the parties also

executed and delivered the following additional agreements:

Effective December 18, 2017, we completed an

Agreement and Plan of Merger (the “KonaTel Merger Agreement”) with KonaTel, Inc., a Nevada corporation (the “KonaTel

Nevada”), under which 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.

For additional information on the KonaTel Nevada Merger,

see Part IV, Item 15 hereof, under the heading “KonaTel Merger Current Reports.”

Effective February 7, 2018, we entered into an Agreement

for the Purchase and Sale of Membership Interest dated as of February 5, 2018 (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, LLC, an Oklahoma

limited liability company (“IM Telecom” doing business as “Infiniti Mobile”), from its sole owner, Trevan Morrow

The principal asset of IM Telecom was a “Lifeline Program” license (a Federal Communications

Commission [the “FCC”] approved Compliance Plan).

For additional information regarding the PSMI and transactions with Mr.

Morrow, see Part IV, Item 15 hereof, under the heading “IM Telecom Current Reports.”

On August 9, 2018, we entered into an Asset Purchase

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

whereby we sold various assets, including furniture, fixtures, equipment, account receivable and a customer list, among other assets and

Additional information on the Telecon Agreement can be accessed in Part IV, Item 15 hereof, under the heading “Telecon

Wireless Sale Current Report.”

In August, 2019, we won an arbitration award (ratified

by a court) from Saul Glosser in the amount of $357,914, together with arbitrator’s compensation of $4,957, for a total award of

See Exhibit 10.2 of this Annual Report in Part IV, Item 15.

Effective December 31, 2018, we completed an Agreement

and Plan of Merger with Apeiron Systems, Inc., a Nevada corporation (respectively, “Apeiron Systems” and the “Apeiron

Systems Merger Agreement”), under which Apeiron Systems became our wholly owned subsidiary on the closing of the merger (the “Apeiron

Systems Merger”).

We issued 7,000,000 shares of our common stock in exchange for all of the outstanding shares of common stock

of Apeiron Systems, to Apeiron Systems two shareholders, Joshua Ploude (6,300,000 shares) and Vyacheslav Yanson (700,000 shares), pro

rata, in accordance with their respective equity interests in Apeiron Systems.

Closing conditions to the Apeiron Systems Merger Agreement

included, among other conditions that the Apeiron Systems shareholders would have a $1.00 per share “Guaranteed Value” on

the KonaTel shares they received under the Apeiron Systems Merger if the KonaTel shares do not trade at or above $1.00 for ten (10) consecutive

days during the period commencing on December 31, 2020, and ending December 31, 2021, on the applicable trading market for our common

stock during that period, and subject to such shares being continuously owned of record by the Apeiron Systems shareholders, as outlined

in Section 5.10 of the Apeiron Systems Merger Agreement;

(ii) there would be a “Net Working Capital” computation that was

intended to provide sufficient cash resources to operate Apeiron Systems for a period of not less than ninety (90) days (see Exhibit

10.3 of this Annual Report in Part IV, Item 15);

and (iii) Employment Agreements with Messrs.

Ploude and Yanson were executed and

See the heading “Apeiron Systems Merger Current Reports” in Part IV, Item 15, for additional information on these

Yanson, a former significant employee, resigned as an employee of the Company on February 19, 2021.

Effective October 15, 2019 (though executed October

17, 2019), the Company and Charles L.

Schneider, Jr., the then CEO of our wholly owned subsidiary, KonaTel Nevada, and the President and

CEO of our wholly owned subsidiary, Infiniti Mobile, executed and delivered a Severance Agreement and Release (the “Severance Agreement”).

In connection with the execution and delivery of the Severance Agreement, the parties also executed and delivered the following additional

(i) various assignments to Mr.

Schneider regarding the Company’s

reseller agreement with Standup Wireless;

(ii) an Amended Incentive Stock Option Agreement;

and (iii) an Independent Contractor

Schneider regarding the Company’s reseller agreement with Standup Wireless;

(ii) an Amended

Incentive Stock Option Agreement;

and (iii) an Independent Contractor Agreement.

Pursuant to the Severance Agreement, Mr.

Schneider’s

Employment Agreement with the Company dated July 1, 2016, was terminated.

The Company agreed to pay Mr.

Schneider’s salary

Schneider’s salary ($16,666.66

per month) and benefits through December 31, 2019;

allowed him to retain his laptop, monitors, keyboard/mouse and

and assigned him certain Company contract rights as a reseller of Lifeline services for StandUp Wireless, another Lifeline

provider, which he agreed to assume.

The Company had determined that it was no longer interested in acting as a distributor of

Lifeline services for StandUp Wireless and intended to focus its efforts on distributing Lifeline service under its own FCC Lifeline

allowed him to retain his laptop, monitors, keyboard/mouse and printer;

him certain Company contract rights as a reseller of Lifeline services for StandUp Wireless, another Lifeline provider, which he agreed

Additionally, the parties agreed that 500,000 of the 1,500,000 Incentive Stock Options held by Mr.

Schneider had vested;

that the remaining 1,000,000 Incentive Stock Options that he had been granted were void;

and the Amended Incentive Stock Option

Agreement was revised to include a customary “cashless”

exercise feature for the 500,000 vested options.

A Lock-Up/Leak-Out

Agreement (the “LULO Agreement”) was also executed and delivered by the Company and Mr.

Pursuant to the

Independent Contractor Agreement (the “ICA”) entered into with the Company, Mr.

Schneider has agreed to assist the

Company in having its wholly-owned subsidiary, Infiniti Mobile, being granted its request for Eligible Telecommunications Carrier

(“ETC”) status from the California Public Utilities Commission (“CPUC”) to distribute Lifeline cellular

phone service within the State of California.

In the event that the Company is successful in this process, Mr.

Schneider will

be granted a one (1) year Warrant with a customary “cashless”

exercise feature to purchase 250,000 shares of the Company’s

common stock at an exercise price to be determined on the date of any such approval.

The ICA has a term of one (1) year, and may

be extended by the parties yearly.

The LULO Agreement is applicable to any shares that may be acquired under any such Warrant,

with the eighteen (18) month term commencing on the exercise of any such Warrant that may be issued.

Schneider has more than

thirty (30) year experience in the telecommunications industry and services to us should be invaluable to the Company in this

A copy the Settlement Agreement is filed as an Exhibit to this Annual Report in Part IV, Item 15.

On April 14, 2020, our operating subsidiaries made loan applications

to participate in the Small Business Administration’s (the “SBA”) Paycheck Protection Program created under

the Cares Act as a result of the COVID-19 pandemic.

the remaining 1,000,000 Incentive Stock Options that he had been granted were void;

and the Amended Incentive Stock Option Agreement was

revised to include a customary “cashless” exercise feature for the 500,000 vested options.

A Lock-Up/Leak-Out Agreement (the

“LULO Agreement”) was also executed and delivered by the Company and Mr.

Pursuant to the Independent Contractor

Agreement (the “ICA”) entered into with the Company, Mr.

Schneider agreed to assist the Company in having its wholly owned

subsidiary, Infiniti Mobile, being granted its request for Eligible Telecommunications Carrier (“ETC”) status from the California

Public Utilities Commission (“CPUC”) to distribute Lifeline cellular phone service within the State of California.

event that the Company is successful in this process, Mr.

Schneider will be granted a one (1) year Warrant with a customary “cashless”

exercise feature to purchase 250,000 shares of the Company’s common stock at an exercise price to be determined on the date of any

such approval.

The ICA had a term of one (1) year, extendable by the parties yearly.

The LULO Agreement is applicable to any shares that

may be acquired under any such Warrant, with the eighteen (18) month term commencing on the exercise of any such Warrant to purchase common

stock of the Company that may be issued.

A copy the Settlement Agreement is filed as Exhibit 10.1 to this Annual Report in Part

On April 14, 2020, our operating subsidiaries made

loan applications to participate in the Small Business Administration’s (the “SBA”) Paycheck Protection Program created

under the Cares Act as a result of the COVID-19 pandemic.

On April 15, 2020, the loan applications of Apeiron Systems, IM Telecom and

KonaTel Nevada were approved and loan proceeds in the amounts of $101,800, $20,900 and $186,300, respectively, were received.

We intend to follow all prescribed loan forgiveness guidelines provided by our local bank and the SBA by using these loan proceeds

to fund employee payroll through the 60-day period ending on June 15, 2020.

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, 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.

all prescribed loan forgiveness guidelines provided by our local bank and the SBA by using these loan proceeds to fund employee payroll

through the 60-day period ending on June 15, 2020.

On December 14, 2020, the shares of the Company’s

common stock were approved for uplisting to OTC Markets Group Inc.’s OTCQB ®

Market (“OTCQB”).

OTCQB is a venture market operated by the OTC Markets.

To be eligible for quotation 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.

Companies must also meet a minimum bid price test and other financial conditions.

OTCQB is recognized by the U.S.

Securities and Exchange Commission as an established public market and provides current public information to investors that need to analyze,

value, and trade securities.

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, 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 provided 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 customer list 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

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 ), which now operates as a wholly owned subsidiary of KonaTel.

Apeiron Systems was established in 2015 as a software-based Communications Platform as a Service (“CPaaS”)

telecommunications carrier.

Apeiron Systems provides a wide variety of wholesale and retail telecommunications

products/services including text and messaging services (“SMS/MMS”), voice termination, toll free numbers,

database dip services and least cost routing services, all supported by a redundant national network integrated with numerous

international telecom carriers and most U.S.

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 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.

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 ), which now operates as a wholly owned subsidiary of KonaTel.

Apeiron Systems

was established in 2015 as a software-based Communications Platform as a Service (“CPaaS”) telecommunications carrier.

Systems provides a wide variety of wholesale and retail telecommunications products/services including text and messaging services (“SMS/MMS”),

voice termination, toll free numbers, database dip services and least cost routing services, all supported by a redundant national network

integrated with numerous international telecom carriers and most U.S.

rate centers.

Apeiron Systems’

services are provided through a web-based

management portal and a corresponding library of APIs (Applications Program Interface).

KonaTel’s CPaaS service, the

“Orion”

system, which provides SMS to Email services, KonaTel’s toll-free number service and

KonaTel’s B2B (business to business) wholesale/retail cellular services will merge into Apeiron Systems’

services and be marketed under the Apeiron Systems brand.

On February 5, 2018, we entered into a purchase

agreement to acquire IM Telecom, d/b/a “Infiniti Mobile”

( 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 now operates as a wholly owned subsidiary of KonaTel.

IM Telecom is an Eligible Telecommunications Carrier (“ETC”)

and is one of fifteen (15) carriers that hold an FCC approved Lifeline Compliance Plan.

The FCC has not approved (granted) a new

Lifeline Compliance Plan since 2012.

Lifeline is an FCC program that provides subsidized, fixed or mobile, telecommunications services

to low-income Americans.

We primarily distribute our Lifeline products and services through ISOs (“Independent Sales Organizations”).

Apeiron Systems, headquartered in Los Angeles,

California, also has some customer service and software engineering resources staffed in Johnstown, Pennsylvania, and part of

its software engineering services are staffed in Kiev, Ukraine.

IM Telecom is headquartered in Dallas, Texas, and operates a Lifeline

retail operation in Tulsa, Oklahoma.

KonaTel is headquartered in Dallas, Texas, shared with IM Telecom’s offices.

Systems has nine (9) full-time employees;

IM Telecom has four (4) full-time employees and two (2) part-time employees;

has three (3) full-time employees.

Apeiron Systems’ services are provided through

a web-based management portal and a corresponding library of APIs (“Applications Program Interface”).

KonaTel’s CPaaS

service, the “Orion” system, which provides SMS to Email services, KonaTel’s toll-free number service and KonaTel’s

B2B (business to business) wholesale/retail cellular services have merged into Apeiron Systems suite of services and are marketed under

the Apeiron Systems brand.

On February 5, 2018, we entered into a purchase agreement

to acquire IM Telecom, d/b/a “Infiniti Mobile” ( www.infinitimobile.com ).

23, 2018, the FCC approved our acquisition of IM Telecom, and on January 31, 2019, we completed the purchase of IM Telecom.

now operates as a wholly owned subsidiary of KonaTel.

IM Telecom is an Eligible Telecommunications Carrier (“ETC”) and is

one of fifteen (15) carriers that hold an FCC approved Lifeline Compliance Plan.

The FCC has not approved (granted) a new Lifeline Compliance

Plan since 2012.

Lifeline is an FCC program that provides subsidized, fixed or mobile, telecommunications services to low-income Americans.

We primarily distribute our Lifeline products and services through ISOs (“Independent Sales Organizations”).

Apeiron Systems, headquartered in Los Angeles, California,

also has some customer service and software engineering resources staffed in Johnstown, Pennsylvania, and part of its software engineering

services are staffed in Kiev, Ukraine.

IM Telecom is headquartered in Plano, Texas, and operates a Lifeline retail operation in Tulsa,

We are headquartered in Plano, Texas, shared with IM Telecom’s offices.

Apeiron Systems has twelve (12) full-time employees

and one (1) part time employee;

IM Telecom has three (3) full-time employees and one (1) part-time employee;

and we have four (4) full-time

Principal Products

or Services and their Markets

Our principal products

and services, across our two wholly-owned subsidiaries, Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP,

SMS/MMS), wholesale and retail mobile voice and mobile data services, wholesale voice terminations services, and our ETC and Virtual

Eligible Telecommunications Carrier (“VETC”) Lifeline services.

Except for our ETC Lifeline services distributed in

up to eight (8) states and our VETC Lifeline services distributed in up to twenty (20) states, our Apeiron Systems’

and services are available nationwide and subject to U.S., international and local/national regulations, most Apeiron Systems’

services are available worldwide

The following are

our principal revenue streams:

Our first revenue channel is our Apeiron Systems’

CPaaS channel.

This channel provides a variety of services including SIP/VoIP services, SMS/MMS, BOT integration, NLP (“Natural Language Processing”), ML (“Machine Learning”), mobile numbers, toll free numbers, DID landline numbers, SMS to Email, Database Dip, SD-WAN, voice termination and API driven services.

Our principal products and

services, across our two wholly owned subsidiaries, Apeiron Systems and IM Telecom, include our CPaaS suite of services (SIP/VoIP, SMS/MMS),

wholesale and retail mobile voice and mobile data services, wholesale voice terminations services, and our ETC and Virtual Eligible Telecommunications

Carrier (“VETC”) Lifeline services.

Except for our ETC Lifeline services distributed in up to eight (8) states and our VETC

Lifeline services distributed in up to twenty (20) states, our Apeiron Systems’ products and services are available nationwide and

subject to U.S., international and local/national regulations, most Apeiron Systems’ services are available worldwide

The following are our principal

revenue streams:

Our first revenue channel is our Apeiron Systems’ CPaaS channel.

Apeiron Systems developed, owns and supports its services through its dedicated national telecommunications network.

Apeiron Systems provides telecommunications services to applications developers, call centers and small and medium size businesses.

Apeiron Systems markets these services through the Apeiron Systems’

website, ISOs and Social Media Optimization (“SCO”).

Our second revenue channel is Apeiron Systems’

MVNO and reseller channels marketing mobile voice/text/data and mobile data solutions.

Apeiron Systems’

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

Apeiron Systems markets these services through the Apeiron Systems’ website, ISOs and Social Media Optimization (“SCO”).

Our second revenue channel is Apeiron Systems’ MVNO and reseller channels marketing mobile voice/text/data and mobile data solutions.

Apeiron Systems’ mobile voice/text/data and mobile data services are supported by a blend of MVNO and reseller agreements with select national wireless carriers.

A wireless communications services provider, reseller or MVNO, does not own the wireless network infrastructure over which services are provided to its customers.

Apeiron Systems’

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.

Apeiron Systems’ 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.

Apeiron Systems primarily markets its mobile voice/test/data and mobile data services through ISOs via the “Apeiron Systems”

Apeiron Systems primarily markets its mobile voice/text/data and mobile data services through ISOs via the “Apeiron Systems” brand.

These ISOs market to small and medium sized businesses throughout the United States.

This type of marketing is also considered B2B (“Business to Business”) sales.

Our third revenue channel is Lifeline VETC channel.

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In some states, and depending upon government requirements, we may only provide voice/text service with no mobile data.

Effective August 15, 2019 we ceased to actively market under the VETC channel and reached agreement with both of the ETCs with which we are doing business that we would continue to receive residual commissions on the existing customer base until all customers had disconnected Lifeline service.

Our fourth revenue

channel is our IM Telecom Lifeline ETC channel.

IM Telecom operates under its own FCC approved Compliance Plan and FCC

wireless ETC designation in eight (8) states which include Georgia, Kentucky, Maryland, Nevada, Oklahoma, South Carolina,

Vermont, and Wisconsin.

IM Telecom currently markets, under its Infiniti Mobile brand, through its storefront in Tulsa,

Oklahoma, and through ISOs that specialize in Lifeline products.

These master agencies support dozens of field agents who

market directly to individuals requesting Lifeline service.

We provide phones and wireless voice/text/data service to the

individuals requiring Lifeline service.

In some states, and depending on government requirements, we may only provide

voice/text service with no mobile data.

Methods of the Products or Services

We primarily distribute our Lifeline services

through ISOs and resellers (“Agents”).

Agents are recruited and contractually retained to market these services via

various means such as tradeshows, our website, word of mouth from other agents and cold calling.

Wholesale mobile services are

marketed and distributed via our direct employees.

Wholesale mobile customers are solicited and obtained also via tradeshows, our

website, word of mouth within the industry and cold calling.

Effective August 15, 2019, we ceased to actively market under the VETC channel and reached an agreement with both of the ETCs with which we are doing business that we would continue to receive residual commissions on the existing customer base until all customers had disconnected Lifeline service.

Our fourth revenue channel is our IM Telecom Lifeline ETC channel.

IM Telecom operates under its own FCC approved Compliance Plan and FCC wireless ETC designation in eight (8) states which include Georgia, Kentucky, Maryland, Nevada, Oklahoma, South Carolina, Vermont, and Wisconsin.

IM Telecom currently markets, under its Infiniti Mobile brand, through its storefront in Tulsa, Oklahoma, and through ISOs that specialize in Lifeline products.

These master agencies support dozens of field agents who market directly to individuals requesting Lifeline service.

We provide phones and wireless voice/text/data service to the individuals requiring Lifeline service.

In some states, and depending on government requirements, we may only provide voice/text service with no mobile data.

Distribution Methods of the Products or

We primarily distribute our Lifeline services through

ISOs and resellers (“Agents”).

Agents are recruited and contractually retained to market these services via various means

such as tradeshows, our website, word of mouth from other agents and cold calling.

Wholesale mobile services are marketed and distributed

via our direct employees.

Wholesale mobile customers are solicited and obtained also via tradeshows, our website, word of mouth within

the industry and cold calling.

We primarily distribute our B2B cellular services through Agents.

We market some CPaaS services through Agents and through SCO efforts.

We market some CPaaS services through

Agents and through SCO efforts.

Sources and Availability of Raw Materials

and the Names of Principal Suppliers

Wholesale cellular

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

and the carrier.

Wholesale cellular services

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

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

Wholesalers include Prepaid Wireless Group (“PWG”),

Sprint and Telispire.

Resellers and Mobile Virtual Network Operator

(“MVNOs”) like us typically do not own the wireless infrastructure over which services are provided.

We purchase services

from the following sources:

Wholesalers include Prepaid Wireless Group (“PWG”), Sprint and Telispire.

Resellers and Mobile Virtual Network Operator (“MVNOs”)

like us typically do not own the wireless infrastructure over which services are provided.

We purchase services from the following sources:

Verizon voice, text and data service.

Telispire, through a contract with us, has set pricing for voice, text and data wireless services per unit.

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 add on pricing per unit is available for additional data units;

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T-Mobile, through a contract with us, has set pricing for bundled voice, text and data wireless services.

Pricing bundles are in the form of a monthly recurring charge (“MRC”) that include minutes of use, text units or data units.

Bundled plans include unlimited talk, text and a set amount of data.

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Larger data plans are available for purchase for consumers requiring larger data packages;

Prepaid Wireless Group (“PWG”):

T-Mobile voice, text or data Lifeline service.

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that holds an FCC approved Lifeline Compliance Plan.

Compliance Plan allows IM Telecom, subject to state approval, to expand into additional states to provide Lifeline services.

We have been approved

by the United States Patent and Trademark Office for the trademark “Lifeline+”

and now need to demonstrate use of this

trademark to finalize the Trademark.

The telecommunications industry is highly

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

Sprint 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 (“Metro”), Cricket Wireless, LLC.

(“Cricket”),

TracFone Wireless, Inc.

(“TracFone”) and Assurance Wireless, many of which offer or plan to offer Lifeline

services, and 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,

This Compliance

Plan allows IM Telecom, subject to state approval, to expand into additional states to provide Lifeline services.

We have been approved by

the United States Patent and Trademark Office for the trademark “Lifeline+”

and are now using this Trademark in our marketing

The telecommunications industry is highly competitive.

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

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 (“Metro”), Cricket

Wireless, LLC.

(“Cricket”), TracFone Wireless, Inc.

(“TracFone”) and Assurance Wireless, many of which offer or

plan to offer Lifeline services, and 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.

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

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

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Lifeline was created under President Ronald Reagan as part of the 1984 Telecommunications Act.

Prior to President

Obama taking office, the Lifeline program began to allow cell phones, and there was some initial duplication of service in the

early days of Lifeline cell phone deployment.

Approximately fifteen (15) current ETCs hold an FCC approved Lifeline Compliance

The FCC has not approved any new Lifeline Compliance Plans since 2012, so Lifeline is a tightly controlled market.

We anticipate that approximately one-third of our future gross revenues may come from Lifeline services.

Existing and Probable Government Regulation to Our Current

and Intended Business

The FCC has a number of 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 provision of 911 and E-911 services, porting telephone numbers, roaming, disabilities access, privacy and cyber

security, 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 could 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.

Prior to President Obama

taking office, the Lifeline program began to allow cell phones, and there was some initial duplication of service in the early days of

Lifeline cell phone deployment.

Approximately nineteen (19) current ETCs hold an FCC approved Lifeline Compliance Plan.

has not approved any new Lifeline Compliance Plans since 2012, so Lifeline is a tightly controlled market.

We anticipate that approximately

one-third of our future gross revenues may come from Lifeline services.

Existing and Probable Government Regulation to Our Current and Intended

The FCC has a number of 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 provision

of 911 and E-911 services, porting telephone numbers, roaming, disabilities access, privacy and cyber security, 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 could 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.

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 will relieve us of some of the informational requirements of Regulation S-K.

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 will relieve us of some of the informational requirements of Regulation S-K.

Emerging Growth Company

We are also an “emerging growth company”

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

As long as we remain an “emerging

growth company,”

we may take advantage of certain exemptions from various reporting requirements that are applicable to other

public companies that are not an “emerging growth company,”

including, but not limited to, not being required to comply

with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act;

and exemptions from the requirements of

holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding shareholder approval of any golden

parachute payments not previously approved.

We are also only required to file audited consolidated financial statements for

the previous two fiscal years in our Exchange Act filings, along with reviewed interim financial statements, with correspondingly

reduced “Management’s Discussion and Analysis and Results of Operation.”

We may take advantage of these reporting exemptions

until we are no longer an “emerging growth company.”

We can remain an “emerging growth company”

the fifth anniversary of a registered public offering.

We would also cease to be an “emerging growth company”

prior to such time if we have total annual gross revenues of $1 billion or more, and when we become a “large accelerated

filer,”

have a public float of $700 million or more or we issue more than $1 billion of non-convertible debt over a three-year

Under the JOBS Act, emerging growth companies

can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.

elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the

same new or revised accounting standards as other public companies that are not emerging growth companies.

In 2020 our “emerging growth company”

designation as defined in the Jumpstart Our Business Startups Act of 2012, or “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 as a result of that designation.

Sarbanes/Oxley Act

We are also subject to the Sarbanes-Oxley Act

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’

appointment, compensation and oversight of the work of public companies’

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

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’

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

management assessment of our internal controls;

auditor attestation to management’s conclusions about internal

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.

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 10 days

prior to the date that definitive copies of this information are 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., changes in corporate control;

acquisitions or dispositions of a significant amount of assets other than in the ordinary

course of business;

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 10 days prior to the date that definitive copies of this

information are 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.,

changes in corporate control;

acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business;

and bankruptcy) in a Current Report on Form 8-K.

Number of Total Employees and Number

of Full-Time Employees

Across our companies, we have a total of 18

(16) full-time employees and two (2) part-time employees.

Number of Total Employees and Number of Full-Time

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

(21) employees:

nineteen (19) full-time employees and two (2) part-time employees.

We have three (3) wholly owned operating subsidiaries:

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IM Telecom, LLC (d/b/a Infiniti Mobile) an Oklahoma limited liability company;

Systems, Inc., a Nevada corporation.

and Apeiron Systems,

Inc., a Nevada corporation.

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.

find all the reports or registration statements that we have previously filed electronically with the SEC at its Internet site

at www.sec.gov .

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 the reports

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

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