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Item 9A. Controls and Procedures

2021-04-06 compared with 2020-05-12 · 529 added, 653 removed, 268 unchanged (82% of the section changed)

CONTROLS AND PROCEDURES

Management’s Annual Report on Internal

Disclosure Controls and Procedures

We maintain disclosure controls and procedures as

defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that material information relating to us is

made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted

under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required

to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management,

including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow

timely decisions regarding required disclosure.

Management, with the participation of our Chief Executive Officer and Chief Financial

Officer, has evaluated the effectiveness, as of December 31, 2020, of our disclosure controls and procedures.

Based on that evaluation,

our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December

Management’s Annual Report on Internal

Control Over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange

Internal control over financial reporting is a process designed by, or under the supervision of the CEO to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles.

Internal controls over financial reporting includes those policies and

procedures that (i) pertain to the maintenance of records which in reasonable detail accurately and fairly reflect the transactions

Our management is responsible for establishing and

maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.

Internal control

over financial reporting is a process designed by, or under the supervision of our Chief Executive Officer and our Chief Financial Officer,

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes in accordance with generally accepted accounting principles.

Internal controls over financial reporting includes those policies

and procedures that (i) pertain to the maintenance of records, which in reasonable detail, accurately and fairly reflect the transactions

and disposition of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation

of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are

being made in accordance with authorizations of management and directors of the issuer;

and (iii) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material

effect on our consolidated financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree

of compliance with the policies or procedures may deteriorate.

of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being

made in accordance with authorizations of management and directors of the issuer;

and (iii) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our

consolidated financial statements.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods

are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

A material weakness is a deficiency or a combination

of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In evaluating the effectiveness of our internal

control over financial reporting as of December 31, 2019, management used the criteria established in the Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on the criteria established by COSO, management (with the participation of the CEO and the CFO) determined that the internal

controls over financial reporting are effective as of December 31, 2019, and that there are no material weaknesses in the Company’s

internal controls over financial reporting as of such date.

of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In evaluating the effectiveness of our internal control

over financial reporting as of December 31, 2020, management used the criteria established in the Internal Control – Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on the criteria

established by COSO, management (with the participation of the CEO and the CFO) determined that the internal controls over financial reporting

are effective as of December 31, 2020, and that there are no material weaknesses in the Company’s internal controls over financial

reporting as of such date.

This Annual Report does not include an attestation

report of our registered public accounting firm regarding internal control over financial reporting.

Management’s

report is not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to satisfy

these requirements by providing the management’s report only.

Changes in Internal Control Over Financial

There have been no changes in internal control

over financial reporting during the last fiscal quarter of our fiscal year ended December 31, 2019.

Management’s report

is not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to satisfy these requirements

by providing the management’s report only.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over

financial reporting during the last fiscal quarter of our fiscal year ended December 31, 2020.

Limitations on the Effectiveness of Controls

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controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud.

control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control

system’s objectives will be met.

Further, the design of the control system must reflect that there are resource constraints

and that the benefits must be considered relative to their costs.

Because of the inherent limitations in all control systems, no

evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company

have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that

breakdowns can occur because of simple error or mistake.

Controls can also be circumvented by the individual acts of some

persons, by collusion of two or more people, or by management override of controls.

The design of any system of controls is

based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will

succeed in achieving its stated goals under all potential future conditions.

Projections of any evaluation of controls

effectiveness to future periods are subject to risks.

Over time, controls may become inadequate because of changes in conditions

or deterioration in the degree of compliance with policies or procedures.

system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s

objectives will be met.

Further, the design of the control system must reflect that there are resource constraints and that the benefits

must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can

provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

These inherent

limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management

override of controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future

events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

of any evaluation of controls effectiveness to future periods are subject to risks.

Over time, controls may become inadequate because

of changes in conditions or deterioration in the degree of compliance with policies or procedures.

OTHER INFORMATION

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

Identification of Directors and Executive

Our executive officers and directors and their

respective ages, positions and biographical information are set forth below.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors and Executive Officers

Our executive officers and directors and their respective

ages, positions and biographical information are set forth below.

Positions Held

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November 2018

Matthew Atkinson*

Terry Addington*

February 2018

December 2017

February 2018

Jeffrey Pearl

Atkinson, Savage and Addington resigned their respective

director/officer positions subsequent to December 31, 2019, however, prior to the date of the filing of this Annual Report.

Background and Business Experience

McEwen is 59 years of age and founded KonaTel

Nevada in 2014, a wireless data and voice service reseller, and currently focuses his efforts exclusively on our current and planned

business operations.

Nevada in 2014, a wireless data and voice service reseller, and currently focuses his efforts exclusively on our current and planned business

From 2011 to 2013, Mr.

McEwen consulted with multiple international Mobile virtual network operators (“MVNOs”)

in the U.S., Peru, Croatia and China.

From 2010 to 2011, he served as a founding board member of One Fund, a NYSE listed (NYSE:

ONEF) exchange traded fund.

One Fund pioneered the “ETF of ETFs”

concept, and in 2011, came to the attention of Russell

Investments, known for their stock indices (i.e., the Russell 2000).

exchange traded fund.

One Fund pioneered the “ETF of ETFs” concept, and in 2011, came to the attention of Russell Investments,

known for their stock indices (i.e., the Russell 2000).

Russell Investments purchased One Fund in 2011.

McEwen became a member of the venture/angel investment group, Sierra Angels (www.sierraangels.com) serving on several high-tech

due diligence committees and participating in early stage funding transactions.

In early 1983, after departing college prior to

graduation, he co-founded Online Data Corp.

Through a series of acquisitions/mergers, this company was eventually renamed “TriTech

Software Systems”

(www.tritech.com) “TriTech”.

From 1983 to 1990, it developed custom strategic software applications

for numerous businesses, including E.

Hutton Life Insurance, Travel Lodge Hotels, Foodmaker (Jack in the Box restaurants), AT&T,

UCSD’s Scripps Institute of Oceanography and Visa’s Plus Systems national ATM network.

In 1991, TriTech transformed from a custom

software development firm to an enterprise software development and systems integration company specializing in mission critical

public safety (e.g., police, fire, and EMS) telecom software solutions.

TriTech’s flagship product, VisiCAD, was the world’s

first 9-1-1 emergency dispatching system based on Microsoft technology with integrated GPS based tracking and predictive routing

In 1995, TriTech won the Microsoft Most Innovative Windows Application award competing against all Windows applications

In 1998, while Mr.

McEwen became a member

of the venture/angel investment group, Sierra Angels (www.sierraangels.com) serving on several high-tech due diligence committees and

participating in early-stage funding transactions.

In early 1983, after departing college prior to graduation, he co-founded Online Data

Through a series of acquisitions/mergers, this company was eventually renamed “TriTech Software Systems” (www.tritech.com)

From 1983 to 1990, it developed custom strategic software applications for numerous businesses, including E.

Hutton Life Insurance, Travel Lodge Hotels, Foodmaker (Jack in the Box restaurants), AT&T, UCSD’s Scripps Institute of Oceanography

and Visa’s Plus Systems national ATM network.

In 1991, TriTech transformed from a custom software

development firm to an enterprise software development and systems integration company specializing in mission critical public safety

(e.g., police, fire, and EMS) telecom software solutions.

TriTech’s flagship product, VisiCAD, was the world’s first 9-1-1

emergency dispatching system based on Microsoft technology with integrated GPS based tracking and predictive routing technology.

TriTech won the Microsoft Most Innovative Windows Application award competing against all Windows applications worldwide.

In 1998, while

McEwen was CEO, TriTech was named to the Inc.

500 as the 344 th fastest growing privately

held company in the United States.

The following year, Bill Gates cited TriTech and VisiCAD in his book Business at the Speed

of Thought as an example of a mission critical Windows based telecom system utilizing GPS.

500 as the 344 th fastest growing privately held company in the United States.

The following year, Bill Gates cited TriTech and VisiCAD in his book Business at the Speed of Thought as an example of a mission

critical Windows based telecom system utilizing GPS.

McEwen served as Vice President of TriTech

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until controlling interest was sold to Westview Capital Partners in 2006.

In 2017, TriTech celebrated 34 years of continuous operation

and today, with over 700 employees and over 1000 mission critical software installations across five countries, is the largest

public safety software company in the world.

Riffle is 60 years of age and the founder

of CFO Strategies LLC of Johnstown, Pennsylvania (“CFO Strategies”), an accounting firm and consulting firm, which

he founded in May 2008.

In 2017, TriTech celebrated thirty four (34) years of

continuous operation and today, with over 700 employees and over 1000 mission critical software installations across five countries,

is the largest public safety software company in the world.

Riffle is 61 years of age and the founder of CFO

Strategies LLC of Johnstown, Pennsylvania (“CFO Strategies”), an accounting firm and consulting firm, which he founded in

CFO Strategies has thirteen (13) employees;

approximately 180 small business clients and approximately

650 tax clients.

It provides consulting, CFO, accounting, bookkeeping, payroll and tax services, including:

approximately 180 small business clients and approximately 650 tax clients.

consulting, CFO, accounting, bookkeeping, payroll and tax services, including:

CFO for businesses;

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complete payroll processing;

CFO consulting and

small business start-up services;

and prepares taxes for corporations, small businesses, non-profits and individuals.

is the Managing Partner and has extensive experience in various industries, including:

CFO consulting and small business start-up services;

and prepares taxes

for corporations, small businesses, non-profits and individuals.

Riffle is the Managing Partner and has extensive experience in various

industries, including:

Chief Financial Officer, healthcare industry;

telecommunications, security, manufacturing and non-profit industries experience;

Chief Executive Officer in the financial services

industry and healthcare;

Controller in the retail industry;

telecommunications, security, manufacturing and non-profit industries

Chief Executive Officer in the financial services industry and healthcare;

Assistant Controller in the retail industry;

in non-profit, healthcare and event management arenas;

governmental treasurer and board member for over thirty (30) years;

as a college instructor at Mount Aloysius College since 1994.

and as a college

instructor at Mount Aloysius College since 1994.

He is also a Certified Public Accountant (May 1987).

Beaty is 50 years old and currently the

President of AGS Construction Inc., a premier reconstruction company in Denver Metropolitan area.

Previously, he was the founder

and CEO of Impact Telecom, a leader in the telecommunications market, which focused on delivering flexible and effective solutions

to carriers, businesses and homes.

Impact Telecom is comprised of a family of brands all dedicated to innovation, affordability

and execution.

Beaty brings twenty-three (23) years of

experience in telecommunications and managing wholesale and commercial customer bases.

Prior to starting Impact Telecom in 2005,

he served as the Senior Vice President of Sales for ICG Communications.

He helped guide ICG through bankruptcy and was a valued

member of the senior executive team tasked with growing and managing the customer base.

Beaty is 51 years old and currently the President

of AGS Construction Inc., a premier reconstruction company in Denver Metropolitan area.

Previously, he was the founder and CEO of Impact

Telecom, a leader in the telecommunications market, which focused on delivering flexible and effective solutions to carriers, businesses

Impact Telecom is comprised of a family of brands all dedicated to innovation, affordability and execution.

Beaty brings twenty-four (24) years of experience

in telecommunications and managing wholesale and commercial customer bases.

Prior to starting Impact Telecom in 2005, he served as the

Senior Vice President of Sales for ICG Communications.

He helped guide ICG through bankruptcy and was a valued member of the senior executive

team tasked with growing and managing the customer base.

He earned a B.A.

in Psychology from the University of Kansas and

in Psychology from the University of Kansas and his M.B.A.

in Business Administration from Webster University.

LaPier is 61 years of age and has over

twenty (20) years of telecommunications experience working for Fortune 500 companies and small/medium startup companies with annual

revenues ranging from $1 million to $23 billion.

LaPier is 62 years of age and has over twenty-one

(21) years of telecommunications experience working for Fortune 500 companies and small/medium startup companies with annual revenues

ranging from $1 million to $23 billion.

During this time, Mr.

LaPier has held various telecommunications related positions

in the areas of finance, accounting, taxation, billing and regulatory (government) compliance.

Immediately prior to joining KonaTel

in 2018, he served as Finance Manager-Regulatory Fees/Taxes for British Telecom Americas, Inc., from July, 2016, to November, 2018;

and has served as our Vice President of Finance since joining us in November, 2018.

LaPier has held various telecommunications related positions in the areas

of finance, accounting, taxation, billing and regulatory (government) compliance.

Immediately prior to joining KonaTel in 2018, he served

as Finance Manager-Regulatory Fees/Taxes for British Telecom Americas, Inc., from July 2016 to November 2018;

and has served as our Vice

President of Finance since joining us in November 2018.

Prior to British Telecom, Mr.

LaPier served

for over four years as CFO, then President, of US Connect, LLC, a regional wireless Lifeline carrier, from May, 2012, to July,

While at US Connect, Mr.

LaPier oversaw all company operations and the activation/management of over fifty (50) thousand

lines of Lifeline service.

LaPier served for over

four years as CFO, then President, of US Connect, LLC, a regional wireless Lifeline carrier, from May 2012, to July 2016.

LaPier oversaw all company operations and the activation/management of over fifty (50) thousand lines of Lifeline service.

Previously, Mr.

LaPier served as Financial Controller of dPi Teleconnect, a regional prepaid wireline

While at dPi, he lead the creation of the financial and reporting platform for dPi Mobile, which later became the Lifeline

carrier TAG Mobile.

LaPier has held other telecommunications

related management positions across several regional and national telecommunications carriers, including Director of Taxes &

Regulatory Reporting at Sage Telecom, a regional CLEC (Competitive Local Exchange Carrier).

While at Sage, his responsibilities

included overseeing all tax compliance, end user billing for 200,000 customers and regulatory compliance across 12 states.

Telecom and Excel Telecommunications, both national providers of long-distance service across 48 states, Mr.

LaPier served as Director

of Taxes & Regulatory Reporting.

He has also served as a telecommunications and technology tax consultant for Price Waterhouse

LaPier holds a Bachelor of Business Administration in Accounting

from The University of Texas at Austin.

LaPier served as Financial Controller of dPi Teleconnect, a regional prepaid wireline provider.

While at dPi, he led the

creation of the financial and reporting platform for dPi Mobile, which later became the Lifeline carrier TAG Mobile.

LaPier has held other telecommunications related

management positions across several regional and national telecommunications carriers, including Director of Taxes & Regulatory Reporting

at Sage Telecom, a regional CLEC (Competitive Local Exchange Carrier).

While at Sage, his responsibilities included overseeing all tax

compliance, end user billing for 200,000 customers and regulatory compliance across twelve (12) states.

At VarTec Telecom and Excel Telecommunications,

both national providers of long-distance service across forty-eight (48) states, Mr.

LaPier served as Director of Taxes & Regulatory

He has also served as a telecommunications and technology tax consultant for Price Waterhouse Coopers.

LaPier holds a Bachelor of Business Administration in Accounting from

The University of Texas at Austin.

Jeffrey Pearl

Pearl is 56 years of age and brings more

than thirty (30) years of Telecommunications/Cloud Service Provider experience to our Board of Directors.

Jeffrey has experience

in both the startup environment as well as working inside of some of the larger incumbent players, both privately held as well

as publicly traded companies.

This experience will assist us in building out our go to market strategy, focusing both on direct

sales as well as the alternative channels of distribution.

His extensive sales and marketing experience, knowledge of the marketplace

and personal connections in the industry are valuable to us at this stage and throughout our evolution.

Jeffrey currently is involved in running three

Pearl is 57 years of age and brings more than

thirty-one (31) years of Telecommunications/Cloud Service Provider experience to our Board of Directors.

Jeffrey has experience in both

the startup environment as well as working inside of some of the larger incumbent players, both privately held as well as publicly traded

This experience will assist us in building out our go to market strategy, focusing both on direct sales as well as the alternative

channels of distribution.

His extensive sales and marketing experience, knowledge of the marketplace and personal connections in the industry

are valuable to us at this stage and throughout our evolution.

Jeffrey currently is involved in running three companies:

He is currently CEO and Co-founder of OTG Consulting,

which was founded May 2016.

OTG Consulting is a Sales Agency formed by a group of industry

leaders in order to fill a gap in the marketplace.

The group assists executives of SMB and Enterprise businesses as they make the

move to cloud-based services.

OTG Consulting works with most Carriers and service providers delivering solutions for voice

and data Communications, Internet, hosting, managed services and other cloud offerings.

He also consults under PearlCom, a consulting

practice Focusing on telecom companies and Service Providers which was founded in January

PearlCom offers strategic advice, providing direction on sales management, technology implementation, product pricing and

Positioning, bringing his 30 plus years of experience to the table, accelerating timelines and creating efficiencies.

Jeffrey also co-founded Secure View, where

he is Chief Revenue Officer and Partner, which was founded in December 2016.

OTG Consulting is a Sales Agency formed by a group of industry leaders

in order to fill a gap in the marketplace.

The group assists executives of SMB and Enterprise businesses as they make the move to cloud-based

OTG Consulting works with most Carriers and service providers delivering solutions for voice and data Communications,

Internet, hosting, managed services and other cloud offerings.

He also consults under PearlCom, a consulting practice

Focusing on telecom companies and Service Providers which was founded in January 2016.

offers strategic advice, providing direction on sales management, technology implementation, product pricing and Positioning, bringing

his thirty (30) plus years of experience to the table, accelerating timelines and creating efficiencies.

Jeffrey also co-founded Secure View, where he is

Chief Revenue Officer and Partner, which was founded in December 2016.

Secure View is focused

on delivering “best in class”

unified IP-based security solutions.

on delivering “best in class” unified IP-based security solutions.

Its systems are designed to be more accessible

and simpler to use allowing customers to feel that their security needs are 100% covered providing peace of mind allowing them

to focus elsewhere in their business.

Secure View offers the experience, knowledge and technical understanding coupled with relationships

with the players/partners needed to move security systems to the cloud.

to starting and running these three companies, Jeffrey worked at Broadsoft (recently acquired by Cisco) July 2013 to May

2016, where he successfully ran North America Carrier Sales.

In this role he cultivated strong relationships with C-Level executives

within the major Telcos and Service Providers utilizing BroadSoft in the US.

Under his guidance, his organization also pursued

new relationships with startups and providers not utilizing BroadSoft.

After successfully fulfilling those duties, Jeffrey was

next tasked with starting an entirely new division:

Channel Acceleration, focusing on some of the largest customers in and outside

In this role, Jeffrey and his teams engaged with executives and sales organizations to productively assist in accelerating

their efforts around “Go to Market”

strategies, sales training and sales assistance in the area of Hosted VoIP and

SIP Trunking services.

Prior to Broadsoft Jeffrey successfully started, operated and sold two VoIP companies.

and simpler to use allowing customers to feel that their security needs are 100% covered providing peace of mind allowing them to

focus elsewhere on their business.

Secure View offers the experience, knowledge and technical understanding coupled with

relationships with the players/partners needed to move security systems to the cloud.

Prior to starting

and running these three (3) companies, Jeffrey worked at Broadsoft (recently acquired by Cisco) July 2013 to May 2016, where he

successfully ran North America Carrier Sales.

In this role he cultivated strong relationships with C-Level executives within the major

Telcos and Service Providers utilizing BroadSoft in the US.

Under his guidance, his organization also pursued new relationships with startups

and providers not utilizing BroadSoft.

After successfully fulfilling those duties, Jeffrey was next tasked with starting an entirely new

Channel Acceleration, focusing on some of the largest customers in and outside the US.

In this role, Jeffrey and his teams engaged

with executives and sales organizations to productively assist in accelerating their efforts around “Go to Market” strategies,

sales training and sales assistance in the area of Hosted VoIP and SIP Trunking services.

Prior to Broadsoft Jeffrey successfully started,

operated and sold two VoIP companies.

Significant Employees

We have three (3) significant employees who

are not executive officers of the Company, and who are expected to make a substantial contribution to the Company’s business,

Nicholas Metherd as Vice President of IM Telecom, Joshua Ploude as CEO of Apeiron Systems and Vyacheslav “Slava”

as CTO of Apeiron Systems.

All three (3) of these employees have Employment Agreements with our respective wholly-owned subsidiaries.

Nicholas Metherd, 36, Vice President for IM

Telecom, has over fifteen (15) years of telecommunications operational management experience.

Metherd worked at T-Mobile

as a Call Center Manager where he was responsible for managing over ninety (90) agents, responding to 2.3M customer inquiries per

He has also held operational management roles at TAG Mobile, a Lifeline Eligible Telecommunications Carrier and at

RealPage (NASDAQ:

RP), an American multinational corporation that provides property management software solutions for the multifamily,

commercial, single-family and vacation housing industries.

We have currently have two (2) significant employees who are not executive

officers of the Company, and who are expected to make a substantial contribution to the Company’s business, Nicholas Metherd as

Vice President of IM Telecom, and Joshua Ploude as CEO of Apeiron Systems.

Vyacheslav “Slava” Yanson, a third significant

employee since the acquisition by the Company of Apeiron Systems in 2018, resigned as the CTO of Apeiron Systems on February 19, 2021;

however, his resume is also contained below.

Nicholas Metherd

Nicholas Metherd, 37, Vice President for IM Telecom,

has over sixteen (16) years of telecommunications operational management experience.

Metherd worked at T-Mobile as a Call Center

Manager where he was responsible for managing over ninety (90) agents, responding to 2.3M customer inquiries per year.

held operational management roles at TAG Mobile, a Lifeline Eligible Telecommunications Carrier and at RealPage (NASDAQ:

RP), an American

multinational corporation that provides property management software solutions for the multifamily, commercial, single-family and vacation

housing industries.

While serving as VP of Operations for TAG Mobile, Mr.

oversaw the operation of over 160 customer service staff in three countries, FCC compliance requirements, vendor relations, IT

Development, Logistics, Sales support, and over 400,000 cellular lines of service.

His experience includes Project Management Office

leadership, customer service management, information technology, business optimization, data analysis, and leadership development.

Metherd oversaw the operation of over 160 customer service

staff in three countries, FCC compliance requirements, vendor relations, IT Development, Logistics, Sales support, and over 400,000 cellular

lines of service.

His experience includes Project Management Office leadership, customer service management, information technology, business

optimization, data analysis, and leadership development.

For IM Telecom, Mr.

Metherd is responsible for executing operational support of new IM Telecom products such as Lifeline+, expansion

into new states, revenue assurance and financial modeling.

Metherd is responsible for executing operational support

of new IM Telecom products such as Lifeline+, expansion into new states, revenue assurance and financial modeling.

Joshua Ploude

Ploude is 44 years old.

December 31, 2018, Apeiron Systems and Mr.

Ploude executed and delivered a 36-month Employment Agreement under which Mr.

will be the Chief Executive Officer of Apeiron Systems, with the attendant duties and responsibilities outlined in his Employment

Agreement, at a monthly salary of $16,667.

Effective December

31, 2018, Apeiron Systems and Mr.

Ploude executed and delivered a 36-month

Employment Agreement under which Mr.

Ploude will be

the Chief Executive Officer of Apeiron Systems, with the attendant duties and responsibilities outlined in his Employment Agreement, at

a monthly salary of $16,667.

The Employment Agreement has customary provisions regarding trade secrets;

(1) year covenant not to compete;

a one (1) year covenant

not to compete;

confidentiality;

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a duty to cooperate;

free, fully-paid licensing to Apeiron Systems of inventions created by Mr.

Ploude that he provides or incorporates into any Employer

product or system during his employment with Apeiron Systems;

free, fully-paid licensing

to Apeiron Systems of inventions created by Mr.

Ploude that he provides or incorporates into any Employer product or system during his

employment with Apeiron Systems;

and an assignment of Mr.

Ploude’s interest in all relevant

intellectual property utilized by Apeiron Systems, among other terms and conditions.

Ploude’s interest in all relevant intellectual property utilized by Apeiron

Systems, among other terms and conditions.

Ploude is the President and CEO and Co-Founder

of Apeiron Systems, and since 2013, he has been responsible for defining the product vision and operational strategy for Apeiron

He has worked directly with software, hardware and carrier network vendors to oversee the development of Apeiron

Systems’

and has also had the responsibility to work with internal software development teams to ensure Apeiron

Systems’

software provides the requisite function to support product and operational initiatives.

He has also been responsible

for planning and building Competitive Local Exchange Carrier (“CLEC”) and Internet Service Provider (“ISP”)

facilities-based networks since 2001 and has managed 5+ “Greenfield network”

(the installation of a network where

there was not previously one in use) builds across all types of wire-line and wireless network infrastructures.

of Apeiron Systems, and since 2013, he has been responsible for defining the product vision and operational strategy for Apeiron Systems.

He has worked directly with software, hardware and carrier network vendors to oversee the development of Apeiron Systems’ product

and has also had the responsibility to work with internal software development teams to ensure Apeiron Systems’ software provides

the requisite function to support product and operational initiatives.

He has also been responsible for planning and building

Competitive Local Exchange Carrier (“CLEC”) and Internet Service Provider (“ISP”) facilities-based networks since

2001 and has managed 5+ “Greenfield network” (the installation of a network where there was not previously one in use) builds

across all types of wireline and wireless network infrastructures.

Ploude holds a Bachelor of Science in Political

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- President/CEO of Ethos Communications - A consultancy helping CLECs and ISPs with operational and technology development;

- CTO of TNCI - A facilities-based CLEC & ISP, serving a 48 state footprint;

and 2013-Present - Co-Founder, CEO and President

of Apeiron Systems.

Vyacheslav “Slava”

- CTO of TNCI - A facilities-based CLEC & ISP, serving a forty-eight (48)-state footprint;

and 2013-Present - Co-Founder, CEO and

President of Apeiron Systems.

Vyacheslav “Slava” Yanson

Yanson is 35 years old.

December 31, 2018, Apeiron Systems and Mr.

Effective December

31, 2018, Apeiron Systems and Mr.

Yanson executed and delivered a 36-month Employment Agreement under which Mr.

will be the Chief Technology Officer of Apeiron Systems, with the attendant duties and responsibilities outlined in his Employment

Agreement, at a monthly salary of $12,500.

Yanson will be the Chief

Technology Officer of Apeiron Systems, with the attendant duties and responsibilities outlined in his Employment Agreement, at a monthly

salary of $12,500.

The Employment Agreement has customary provisions regarding trade secrets;

(1) year covenant not to compete;

a one (1) year covenant not to compete;

confidentiality;

1 unchanged sentence

a duty to cooperate;

free, fully-paid licensing to Apeiron Systems of inventions created by Mr.

Yanson that he provides or incorporates into any Employer

product or system during his employment with Apeiron Systems;

free, fully-paid licensing to Apeiron

Systems of inventions created by Mr.

Yanson that he provides or incorporates into any Employer product or system during his employment

with Apeiron Systems;

and an assignment of Mr.

Yanson’s interest in all relevant

intellectual property utilized by Apeiron Systems, among other terms and conditions.

Yanson’s interest in all relevant intellectual property utilized by Apeiron Systems,

among other terms and conditions.

Yanson is the CTO of Apeiron Systems.

As CTO of Apeiron Systems, he has overseen the development of all of Apeiron Systems software development operations, with a focus

on code stewardship for sustainable operations at scale.

Apeiron Systems’

business is built on an industry leading “

BSS/OSS ,”

CTO of Apeiron Systems, he has overseen the development of all of Apeiron Systems software development operations, with a focus on code

stewardship for sustainable operations at scale.

Apeiron Systems’ business is built on an industry leading “ BSS/OSS ,”

Yanson has been responsible for this software platform and its integration to the network, product and external partners.

He has had the following business experience since 2006:

2006-2008 - Senior Framework Architect at Wiredrive - Cloud-media sharing

platform for advertising, entertainment and consumer marketing companies;

2008-2010 - CTO of OneCubicle - Social collaboration

and job search platform for college graduates;

2010-2012 - CTO and President of Killer Beaver - Software and Business Process Consultancy

delivering scalable and automated solutions for clients of the company;

2012-2013 - Infrastructure Architect for Grail - news feed

and video content aggregation and distribution platform;

2006-2008 - Senior Framework Architect at Wiredrive - Cloud-media sharing platform

for advertising, entertainment and consumer marketing companies;

2008-2010 - CTO of OneCubicle - Social collaboration and job search platform

for college graduates;

2010-2012 - CTO and President of Killer Beaver - Software and Business Process Consultancy delivering scalable

and automated solutions for clients of the company;

2012-2013 - Infrastructure Architect for Grail - news feed and video content aggregation

and distribution platform;

and 2013-Present - Co-Founder and CTO of Apeiron Systems.

Family Relationships

There are no family relationships between any

of our officers and directors.

There are no family relationships between any of our

officers and directors.

Involvement in Other Public Companies

Except as may be indicated above, none of our officers or directors

is an “affiliate”

of any other publicly held companies.

Except as may be indicated above, none of our officers or directors is

an “affiliate” of any other publicly held companies.

Involvement in Certain Legal Proceedings

During the past ten (10) years, none of our

directors, executive officers or persons nominated to become directors or executive officers (or those in similar positions with

us) has been the subject of any of the following:

(1) A petition under the federal bankruptcy

laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court

for the business or property of such person, or any partnership in which he was a general partner at or within two (2) years before

the time of such filing, or any corporation or business association of which he was an executive officer at or within two (2) years

before the time of such filing;

(2) Such person was convicted in a criminal

proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) Such person was the subject of any order,

judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily

enjoining him or her from, or otherwise limiting, the following activities:

(i) Acting as a futures commission

merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant,

any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as

an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment

company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection

with such activity;

(ii) Engaging in any type of business

(iii) Engaging in any activity in

connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities

laws or Federal commodities laws;

(4) Such person was the subject of any order,

judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise

limiting for more than sixty (60) days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this

section, or to be associated with persons engaged in any such activity;

During the past ten (10) years, none of our directors,

executive officers or persons nominated to become directors or executive officers (or those in similar positions with us) has been the

subject of any of the following:

(1) A petition under the federal bankruptcy laws or

any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business

or property of such person, or any partnership in which he was a general partner at or within two (2) years before the time of such filing,

or any corporation or business association of which he was an executive officer at or within two (2) years before the time of such filing;

(2) Such person was convicted in a criminal proceeding

or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) Such person was the subject of any order, judgment,

or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining

him or her from, or otherwise limiting, the following activities:

(i) Acting as a futures commission merchant, introducing broker, commodity trading

advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading

Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities,

or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or

engaging in or continuing any conduct or practice in connection with such activity;

(ii) Engaging

in any type of business practice;

(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection

with any violation of Federal or State securities laws or Federal commodities laws;

(4) Such person was the subject of any order, judgment

or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting

for more than sixty (60) days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or

to be associated with persons engaged in any such activity;

(5) Such person was found by a court of competent

jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil

action or finding by the SEC has not been subsequently reversed, suspended, or vacated;

jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action

or finding by the SEC has not been subsequently reversed, suspended, or vacated;

(6) Such person was found by a court of competent

jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and

the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended

(7) Such person was the subject of, or a party

to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or

vacated, relating to an alleged violation of:

(i) Any federal or state securities

or commodities law or regulation;

(ii) Any law or regulation respecting

financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement

or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order;

jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment

in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(7) Such person was the subject of, or a party to,

any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated,

relating to an alleged violation of:

(i) Any federal or state securities or commodities

law or regulation;

(ii) Any law or regulation respecting financial

institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,

civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order;

(iii) Any law or regulation prohibiting

mail or wire fraud or fraud in connection with any business entity;

(8) Such person was the subject of, or a party

to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in

Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity

Exchange Act (7 U.S.C.

1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority

over its members or persons associated with a member.

Compliance with Section 16(a) of the

(8) Such person was the subject of, or a party to,

any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26)

of the Exchange Act (15 U.S.C.

78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.

1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons

associated with a member.

Compliance with Section 16(a) of the Exchange

The common stock of the Company is registered

under the Exchange Act, and therefore, the officers, directors and holders of more than 10% of our outstanding shares are subject

to the provisions of Section 16(a) which requires them to file with the SEC initial reports of ownership and reports of changes

in ownership of common stock and our other equity securities.

Officers, directors and greater than 10% beneficial owners are required

by SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Based solely upon review of the copies of

such forms furnished to us during the fiscal year ended December 31, 2019, and based upon a review of the filings contained in

the Edgar Archives, all such required reports were believed to be timely filed.

under the Exchange Act, and therefore, the officers, directors and holders of more than 10% of our outstanding shares are subject to the

provisions of Section 16(a) which requires them to file with the SEC initial reports of ownership and reports of changes in ownership

of common stock and our other equity securities.

Officers, directors and greater than 10% beneficial owners are required by SEC regulations

to furnish us with copies of all Section 16(a) reports they file.

Based solely upon review of the copies of such forms furnished to us

during the fiscal year ended December 31, 2020, and based upon a review of the filings contained in the Edgar Archives, all such required

reports were believed to be timely filed.

Code of Ethics

2 unchanged sentences

See Exhibit 14 in Part IV, Item 15.

We anticipate that our Code of Ethics will

be updated in the near future by our current Board of Directors.

We anticipate that our Code of Ethics will be

updated in the near future by our current Board of Directors.

Corporate Governance

Nominating Committee

We have not established a Nominating Committee

because until our closing of the KonaTel Merger, we had only one (1) director and two (2) executive officers, and we believed

that we were able to effectively manage the issues normally considered by a Nominating Committee and currently believe we can

do without a Nominating Committee.

If we do establish a Nominating Committee,

we will disclose our procedures in recommending nominees by our Board of Directors.

We have not established a Nominating Committee because

until our closing of the KonaTel Nevada Merger, we had only one (1) director and two (2) executive officers, and we believed that we were

able to effectively manage the issues normally considered by a Nominating Committee and currently believe we can do without a Nominating

If we do establish a Nominating Committee, we will

disclose our procedures in recommending nominees by our Board of Directors.

Audit Committee

We have not established an Audit Committee

for the same reasons why we have not established a Nominating Committee, and a further review of this issue will no doubt be necessitated

and undertaken by our management in the future.

We have not established an Audit Committee for the

same reasons why we have not established a Nominating Committee, and a further review of this issue will no doubt be necessitated and

undertaken by our management in the future.

EXECUTIVE COMPENSATION

All Compensation

Chief Executive Officer will be compensated according to the terms of his Employment Agreement that was filed as an Exhibit to

our 8-KA-1 Current Report dated November 15, 2017, filed with the SEC on December 20, 2017 , which

may be accessed by Hyperlink in Part IV, Item 15 hereof, and which is discussed below under the heading “Employment Agreement

Sean McEwen”

of this Item.

There are no other employment contracts, compensatory plans or arrangements, including payments

to be received from us with respect to any executive officer, that would result in payments to such person because of his or her

resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change

in the person’s responsibilities following a change in control of the Company.

However, see the heading “Outstanding

Equity Awards”

of the caption “Executive Compensation”

in Part III, Item 11 hereof.

Our Chief Executive

Officer will be compensated according to the terms of his Employment Agreement that was filed as an Exhibit to our 8-KA-1 Current Report

dated November 15, 2017, filed with the SEC on December 20, 2017 ,

which may be accessed by Hyperlink in Part IV, Item 15 hereof, and which is discussed below under

the heading “Employment Agreement of D.

Sean McEwen” of this Item.

As indicated below, on December 19, 2019, Mr.

annual salary under his Employment Agreement was increased to $200,000, effective January 1, 2020, with all other terms and provision

of his Employment Agreement remaining unchanged.

There are no other employment contracts, compensatory plans or arrangements, including

payments to be received from us with respect to any executive officer, that would result in payments to such person because of his or

her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change

in the person’s responsibilities following a change in control of the Company.

However, see the heading “Outstanding Equity

Awards” of the caption “Executive Compensation” in Part III, Item 11 hereof.

Summary Compensation Table

Principal Position

D Sean McEwen, Chairman, President

Riffle, Chief

Financial Officer

Matthew Atkinson,

Former Secretary

Mark Savage, Former

D Sean McEwen, Chairman and CEO

Robert Beaty, Director

Jeffrey Pearl, Director

Riffle, Chief Financial Officer

Paul LaPier, Secretary

and Vice President of Finance

Joshua Ploude, President,

Apeiron Systems

Nick Metherd, Vice President, IM Telecom

Matthew Atkinson, Former Secretary (3)

Mark Savage, Former Director (4)

Terry Addington, Former Director (2)

Schneider, Jr., Former

1 unchanged sentence

William Riner, Former Significant

Daniel Ryweck,

Former Director (2)

Jeffrey Pearl,

Nick Metherd,

Significant Employee

Paul LaPier, Secretary and Vice

President of Finance

Robert Beaty,

Dennis Miller, Former Director (3)

Terry Addington,

Former Director (4)

(1) See the heading “Outstanding Equity Awards”

Ryweck was appointed as a director

on July 6, 2016 and resigned on August 31, 2017.

He was issued 50,000 shares valued at $0.05 per share on July 25, 2017, for services

rendered and in consideration of a general release.

Miller was appointed as a director

February 12, 2018, and resigned on October 1, 2018.

Addington was appointed as a director

on February 12, 2018, and resigned on January 1, 2020.

Addington was appointed as a director on February 12, 2018, and

resigned on January 1, 2020.

Atkinson was appointed Secretary on July 19, 2017, and resigned

on April 15, 2020.

Savage was appointed as a director on July 19, 2017, and resigned

on May 6, 2020.

Employment Agreement of D.

At the Effective Time of the KonaTel Merger,

we entered into an Employment Agreement with Mr.

McEwen for a term of two (2) years, under which he will serve as the Chairman,

President and CEO of our Company, with customary duties applicable to these positions, which are described in Exhibit A

McEwen will receive the following compensation under his Employment Agreement:

At the Effective Time of the KonaTel Merger, we entered

into an Employment Agreement with Mr.

McEwen for a term of two (2) years, under which he will serve as the Chairman, President and CEO

of our Company, with customary duties applicable to these positions, which are described in his Employment Agreement that can be viewed

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

After the initial term, the Employment Agreement will

continue on a year-to-year basis as specified under Section 3.0 thereof.

During the initial term (2018-2019), Mr.

McEwen received the

following compensation under his Employment Agreement:

$1,000 per month base salary;

and inclusion

in our healthcare plan for employees, including medical, dental and vision, which coverage also includes his spouse.

receive a monthly bonus, computed as follows:

If the combined EBITDA (“Combined EBITDA”) exceeds $85,000 in any calendar

month, where Combined EBITDA is defined to mean the combined earnings (net profits) of the Company and all of its subsidiaries

or other companies owned, and from all other sources before subtracting all interest expense, all income tax, all depreciation

expense, and all amortization expense, on an accrual accounting basis according to GAAP as calculated by the regular account for

the Company, the Company shall pay the employee, within twenty (20) days after the end of the calendar month, a bonus equal to

10% of the monthly Combined EBITDA.

and inclusion in our healthcare plan for employees,

including medical, dental and vision, which coverage also includes his spouse.

Effective January 1, 2020, the Employment Agreement was

amended to adjust the per month base salary to $16,667 per month.

He will also receive a monthly bonus, computed as follows:

If the combined

EBITDA (“Combined EBITDA”) exceeds $85,000 in any calendar month, where Combined EBITDA is defined to mean the combined earnings

(net profits) of the Company and all of its subsidiaries or other companies owned, and from all other sources before subtracting all interest

expense, all income tax, all depreciation expense, and all amortization expense, on an accrual accounting basis according to GAAP as calculated

by the regular account for the Company, the Company shall pay the employee, within twenty (20) days after the end of the calendar month,

a bonus equal to 10% of the monthly Combined EBITDA.

The Employment Agreement has customary termination,

trade secret and dispute resolution clauses, among others.

Securities Authorized for Issuance under Equity Compensation

Securities Authorized for Issuance under Equity Compensation Plans

Outstanding Equity Awards

1 unchanged sentence

unexercisable

Mark Savage (1)

Matthew Atkinson

Sean McEwen (3)

William Riner (4)

Schneider Jr.

John Shadek (6)

Terry Addington

Robert Beaty (7)

Miller (7)(8)

Terry Addington

Jeffrey Pearl

Nick Metherd (10)

Paul Lapier (10)

options vested on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period

of five (5) years from vesting:

Jeffrey Pearl

*Rounded to the nearest whole cent.

(1) These options vested on the following dates and are exercisable in the

following tranches, as vested, and expire December 18, 2022:

31,250 shares exercisable March 18, 2018;

7 unchanged sentences

Savage resigned as a director on May

options vested on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period

of five (5) years from vesting:

(2) These options vested on the following dates and are exercisable in the

following tranches, as vested, and expire December 18, 2022:

31,250 shares exercisable March 18, 2018;

6 unchanged sentences

and December 18, 2019.

Atkinson resigned as the Secretary on April 15, 2020.

options vested on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period

of five (5) years from vesting:

Atkinson resigned as the Secretary on

April 15, 2020.

(3) These options vested on the following dates and are exercisable in the

following tranches, as vested, and expire December 18, 2022:

187,250 shares exercisable March 18, 2018;

6 unchanged sentences

and December 18, 2019.

options all vested on the December 31, 2018, and do not expire for a period of five (5) years from vesting.

options vest on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period of

five (5) years from vesting:

500,000 shares exercisable December 18, 2018;

December 18, 2019;

and December 18, 2020.

options vested on the date of grant, which was the Effective Time of the KonaTel Merger or December 18, 2017, and do not expire

for a period of five (5) years.

(4) These options all vested on the December 31, 2018, and expire December

(5) These options all vested on December 18, 2017, and expire December 18,

part of their designation as directors, Messrs.

Addington, Beaty, Miller and Pearl will receive a monthly cash payment of $2,000;

and a quarterly stock option grant of 25,000 shares of our common stock, with the shares being valued at 110% of the fair market

value of the closing price of our common stock on the date of the grant or $0.33 per share.

These options expire five (5)

years from the date of grant, which was February 12, 2018 (February 12, 2023);

and they vest in 25,000 share tranches on May 12,

August 12, 2018;

November 12, 2018;

and February 12, 2019.

See the Summary Compensation Table above.

Miller resigned

as a director on October 1, 2018;

Addington resigned as a director on January 1, 2020.

options vested on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period of

five years from vesting:

100,000 shares exercisable January 28, 2019, April 28, 2019, July 28, 2019 and October 28, 2019.

was designated as a director on October 28, 2028, to fill the vacancy by the resignation of Mr.

options vest on the following dates and are exercisable in the following tranches, as vested, and do not expire for a period of

five years from grant date (October 24, 2019):

100,000 shares exercisable December 31, 2019;

December 31, 2020;

and December 31,

Addington, Beaty and Dennis Miller (commencing with the quarter beginning on

February 12, 2018) and Pearl (commencing with the quarter beginning on January 28, 2019) were granted quarterly stock option grants

to purchase 25,000 shares of our common stock, with the shares being valued at 110% of the fair market value or the closing price of

our common stock on the date of the grant for the first year, and thereafter at 110% of the fair market value or the closing price

of our common stock on the quarterly date of vesting for the remaining quarters of service as a director.

These options expire

at the earlier of five (5) years from the date of grant or one (1) year from termination or resignation as a director.

directors were also paid $2,000 per month for their service on the Board of Directors.

See the “Summary Compensation

Miller and Addington resigned as directors of the Company on October 1, 2018, and January 1, 2020,

respectively, and Mr.

Miller forfeited 50,000 options that were not exercised within the one (1) year of his resignation;

Addington forfeited 175,000 options that were not exercised within the one (1) year period of his resignation on January 1,

options were granted on October 24, 2019, and vest 100,000 shares on December 31, 2019;

100,000 shares on December 31, 2020;

shares on December 31, 2021;

and they expire on the earlier of five (5) years or three (3) months from the termination of employment.

Compensation of Directors

Currently, and except for compensation of

McEwen under his Employment Agreement and the $2,000 monthly compensation set out above for certain directors, our directors

do not receive any compensation other than the Incentive Stock Options outlined above in this Item under the heading “Outstanding

Equity Awards.”

Currently, and except for compensation of Mr.

under his Employment Agreement and the $2,000 monthly compensation set out above for certain directors, our directors do not receive any

compensation other than the Incentive Stock Options outlined above in this Item under the heading “Outstanding Equity Awards.”

Transactions with Related Persons

For information regarding transactions with

related persons, see the heading “Transactions with Related Persons,”

in Part III, Item 13 below.

For information regarding transactions with related

persons, see the heading “Transactions with Related Persons,” in Part III, Item 13 below.

Promoters and Certain Control Persons

See the heading “Transactions with Related Persons,”

under Item 13 below.

See the heading “Transactions with Related Persons,” under

Item 13 below.

Parents of the Smaller Reporting Company

We have no parents.

( This space intentionally left blank )

SECURITY OWNERSHIP

OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial

The following table sets forth the ownership

by any person known to us to be the beneficial owner of more than five percent (5%) of any of our outstanding voting securities

as of the filing of this Annual Report with the SEC.

Beneficial ownership is determined in accordance with the rules

of the SEC and generally includes voting or investment power with respect to securities.

Other than as indicated below

in footnotes to this table, the persons named in the table below have sole voting power and investment power with respect to all

shares of common stock shown as beneficially owned by them.

Beneficial Owners

intentionally left blank )

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

The following table sets forth the ownership by any

person known to us to be the beneficial owner of more than five percent (5%) of any of our outstanding voting securities as of the filing

of this Annual Report with the SEC.

Beneficial ownership is determined in accordance with the rules of the SEC and generally

includes voting or investment power with respect to securities.

Other than as indicated below in footnotes to this table, the

persons named in the table below have sole voting power and investment power with respect to all shares of common stock shown as beneficially

owned by them.

Security Ownership of Beneficial Owners

Name and Address* of

Officer or Director

Beneficial Owner

Title of Class

Amount and Nature

of Beneficial Ownership (1),

Percent of Class (1), (2) & (3)

Amount and Nature of Beneficial

Ownership (1), (2) & (3)

of Class (1), (2) & (3)

Matthew Atkinson

3 unchanged sentences

Title of Class

Amount and Nature

of Beneficial Ownership (1),

Amount and Nature of Beneficial

Ownership (1), (2) & (3)

Percent of Class (1), (2) &

Matthew Atkinson

Jeffrey Pearl

All Officers and Directors as a Group

Company’s principal executive office address on the cover page.

(1) The number and percentage of shares beneficially

owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other

Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power

or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any

stock option or other right.

The persons named in the table have sole voting and investment power with respect to all shares of

common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained

in the footnotes to this table.

(2) Based on 40,692,286 issued and outstanding

shares of common stock, together with 3,400,000 vested options, for a total of 44,092,286 issued (or issuable with respect to

such options) and outstanding shares of common stock, as of the date of this Annual Report.

SEC Rule 13d-3 generally provides

that beneficial owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment

power with respect to such securities, and any person who has the right to acquire beneficial ownership of such security within

sixty (60) days.

Any securities not outstanding which are subject to such options, warrants or conversion privileges exercisable

within sixty (60) days are treated as outstanding for the purpose of computing the percentage of outstanding securities owned

by that person.

Such securities are not treated as outstanding for the purpose of computing the percentage of the class owned

by any other person.

Joshua Ploude and Vyacheslav Yanson

acquired an aggregate of 7,000,000 shares of our common stock, 6,300,000 and 700,000 shares, respectively, under the Apeiron Systems

Merger Agreement outlined in our 8-K Current Report dated December 31, 2018, and filed with the SEC on December 31, 2018.

these shares are subject to the Shareholder Voting Agreement and the Lock-Up/Leak-Out Agreement described in this Item below.

Under the Shareholder Voting Agreement, Messrs.

Ploude and Yanson have granted Mr.

McEwen an irrevocable proxy to vote all shares

owned by them for a period of two (2) years, among other terms and conditions;

accordingly, Mr.

McEwen is deemed to be the beneficial

owner of approximately 22,000,000 shares of our outstanding 44,092,286 shares of common stock, which includes the 3,400,000 vested

options referenced above.

The beneficial ownership of Mr.

McEwen in the “Beneficial Owners”

table includes 13,500,000

shares directly owned;

1,500,000 shares underlying personally owned vested options, all of which vested options can be exercised

within sixty (60) days of the filing of this Annual Report;

and the 7,000,000 shares of Messrs.

Ploude and Yanson.

Apeiron Systems Shareholder Voting Agreement

Apeiron Systems Merger

Shareholder Voting Agreement

The closing of the KonaTel Nevada Merger was

subject, among other conditions, to the execution and delivery of a Shareholder Voting Agreement between the Company and Messrs.

Ploude and Yanson, whereby Mr.

McEwen was granted an irrevocable proxy to vote the respective shares of our common stock owned

or acquired by each of the foregoing, together with various additional rights, including a right of veto on certain corporate

actions, for a period of two (2) years, including corporate action regarding the following matters:

(i) an increase in the compensation

of any employee of the Company by more than $20,000 in any one calendar year and for these purposes, the term compensation included

any form of remuneration or monetary benefit;

(ii) the issuance of stock, the creation of a new class of stock, the grant of options

or warrants, modification of any shareholder, option holder or warrant holder’s rights, grants, conversion rights or the

taking of any other action that directly or indirectly diluted the outstanding securities of the Company, (iii) the issuance of

debt in excess of $100,000 in the aggregate in any one (1) calendar year;

(iv) the approval of a plan of merger, reorganization

or conversion;

(v) the sale, transfer or other conveyance of assets of the Company having an aggregate value in excess of $100,000

in any one (1) calendar year, other than in the ordinary course of the business;

(vi) the entry into a contract or other transaction

having a total aggregate contractual liability for the Company in excess of $100,000 in any one (1) calendar year;

(vii) any change

in the Bylaws of the Company modifying these requirements (all of which are included in our Amended and Restated Bylaws incorporated

herein by reference as an Exhibit [see Part IV, Item 15, Exhibit 3(ii)]);

and (viii) that Mr.

McEwen be named as a “nominee”

to the Board of Directors of the Company at any special or annual meeting of the Company’s shareholders to elect members

to the Board of Directors and to vote all proxies provided to management in connection with any such meeting for Mr.

one of the “nominees”

to our Board of Directors, so long as Mr.

McEwen owns 5% or more of the outstanding shares of

our common stock, among other provisions.

The irrevocable proxy granted in the Shareholder Voting Agreement shall not prohibit

any person whose shares are subject to the grant from depositing such person’s shares of common stock for public sale with

a broker-dealer and allowing such broker-dealer to transfer such shares into “street name”

for deposit with the Depository

Trust Company;

provided, however, so long as such person’s shares have not been publicly sold, they shall remain subject

to the terms and provisions of the Shareholder Voting Agreement regardless of any such transfer without legend during the term

of the Shareholder Voting Agreement.

The Shareholder Voting Agreement also provides, however, that if Mr.

McEwen has been removed

as a director for cause by our shareholders and such removal has been confirmed by a Delaware court of competent jurisdiction

under Delaware law, this “nominee”

provision shall not be enforceable by Mr.

McEwen and shall be void.

Lock-Up/Leak-Out Agreement

Apeiron Systems Merger

Lock-Up/Leak-Out Agreement

Subject to compliance with all of the applicable

provisions of SEC Rule 144 as now in effect or hereafter amended, including SEC interpretations thereof, or another available exemption

from the registration provisions of the Securities Act, or an effective S-1 registration statement filed with the SEC under the

Securities Act, which is accompanied by a “current”

resale prospectus that includes the shares of common stock that

are sought to be publicly sold by a shareholder subject to the Lock-Up/Leak-Out Agreement through a registered broker-dealer (respectively,

a “Registration Statement,”

the “Shareholder”

and the “Shareholder Broker”), the Shareholder

may only sell shares of common stock of the Company commencing on the later of six (6) months from December 31, 2018, which was

the effective date of the Apeiron Systems Merger (the “Lock-Up Period”);

provided, however, the Lock-Out Period shall

not cover any common Stock owned by the Shareholder that is included in a Registration Statement, though the provisions of the

Leak-Out Period (as defined below) shall continue to be applicable to the Shareholder and the common stock.

The Lock-Up Period

Following the Lock-Up Period, the Shareholder may sell the Common Stock as follows (the “Leak-Out Period”):

one (1) week, no more than the greater

of (5%) of the total shares of the Company publicly traded on any nationally recognized medium of a stature no less than

the OTC Pink Tier over the previous ten (10) trading days;

one percent of the

total outstanding shares of the Company as reported in the Company’s most recently filed SEC report or registration

statement in the Edgar Archives of the SEC, divided by thirteen (13) weeks, which number may be updated from time to time,

based upon the number of shares reflected as being outstanding in the Company’s SEC filings, on a non-cumulative basis,

meaning that if the amount of shares allowed to be sold under this subparagraph are not sold in any specific week, that the

unsold amount cannot be accumulated and sold in any subsequent week or weeks with the sale of other shares that are allowed

to be sold in a specific week and that all of such sales be shall made at the “ask”

price and not at the “bid”

price for the Company’s shares in any applicable public market for such shares.

Any sales made by “affiliates”

of the Company during the Leak-Out Period are also subject to the standard volume limitations applicable to any “affiliate”

of the Company under SEC Rule 144.

except as otherwise

provided, all shares of common stock shall be sold by a covered shareholder in “broker’s transactions”

in compliance with the “manner of sale”

requirements as those terms are defined in Rule 144 of the SEC during

the Leak-Out Period.

an appropriate legend indicating that the Lock-Up/Leak-Out Agreement is in effect shall be imprinted on each stock certificate representing shares of common stock covered thereby, and the transfer records of the Company’s transfer agent shall reflect such resale restrictions.

owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose.

Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power

and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right.

The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially

owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

(2) Based on 40,692,286 issued and outstanding shares

of common stock, together with 2,725,000 vested options, for a total of 43,417,286 issued (or issuable with respect to such options) and

outstanding shares of common stock, as of the date of this Annual Report.

SEC Rule 13d-3 generally provides that beneficial owners of

securities include any person who, directly or indirectly, has or shares voting power and/or investment power with respect to such securities,

and any person who has the right to acquire beneficial ownership of such security within sixty (60) days.

Any securities not outstanding

which are subject to such options, warrants or conversion privileges exercisable within sixty (60) days are treated as outstanding for

the purpose of computing the percentage of outstanding securities owned by that person.

Such securities are not treated as outstanding

for the purpose of computing the percentage of the class owned by any other person.

Joshua Ploude acquired 6,300,000 shares

of our common stock under the Apeiron Systems Merger Agreement outlined in our 8-K Current Report dated December 31, 2018, and filed with

the SEC on December 31, 2018.

See the heading “Apeiron Systems Merger Current Reports” in Part IV, Item 15 hereof.

The beneficial

ownership of Mr.

McEwen in the “Beneficial Owners” table includes 15,500,000 shares directly owned;

and 1,500,000 shares underlying

personally owned vested options, all of which vested options can be exercised within sixty (60) days of the filing of this Annual Report;

and 250,000 options granted to Messrs.

Atkinson and Savage.

Changes in Control

There are no additional present arrangements

or pledges of our securities which may result in a change in control of the Company.

However, provisions in our Amended

and Restated Bylaws could delay, defer or prevent a change in control for a period of two (2) years.

See the heading “Shareholder

Voting Agreement”

There are no additional present arrangements or pledges

of our securities which may result in a change in control of the Company.

However, provisions in our Amended and Restated Bylaws

could delay, defer or prevent a change in control for a period of two (2) years.

See the heading “Shareholder Voting Agreement”

of this Item above.

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND

RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

Transactions with JBS Holdings Inc.

As of December 31, 2016, amounts payable to

JBS Holdings Inc.

amounted to $15,892.

This amount was part of the liabilities assumed when an entity was acquired in 2014.

A significant

employee partly owns JBS Holding, Inc.

This was fully paid as of September 2017.

Transactions with Shareholders

As of December 31, 2017, amounts due from advances

to shareholders were $214,127.

During 2017, the Company’s shareholders, Sean McEwen, Matthew Atkinson, and Mark Savage advanced

$191,500, $15,063, and $7,564, respectively.

The amount advanced was used for working capital purposes and bears no interest and

does not have a maturity date.

On July 25, 2015, we issued 50,000 shares of

our common stock to Daniel Ryweck for his service on our Board of Directors and for a general release.

During 2019, Apeiron System’s CEO Josh Ploude

advanced $200,000 to the Company.

This amount was fully repaid as of October 2020.

During 2017, the Company’s shareholders, D.

Sean McEwen, Matthew Atkinson, and Mark Savage advanced $191,500, $15,063, and $7,564, respectively.

The amounts advanced were used for

working capital purposes and did not bear any interest and had no maturity date.

All advances were fully repaid as of December 31, 2019.

On July 25, 2015, we issued 50,000 shares of our common

stock to Daniel Ryweck for his service on our Board of Directors and for a general release.

Transactions with CFO Strategies LLC

Riffle, CFO of the Company, is the Managing Partner of

CFO Strategies, LLC.

Riffle, CFO of the Company, is the Managing Partner of CFO Strategies,

Payments of $28,548 were made to CFO Strategies LLC as compensation for the CFO services of Mr.

Promoters and Certain Control Persons

See the heading “Transactions with Related Persons”

of this Item above, and Part III, Item 12 for identification of control persons.

See the heading “Transactions with Related Persons” of this

Item above, and Part III, Item 12 hereof for identification of control persons.

Parents of the Smaller Reporting Company

2 unchanged sentences

For purposes of determining director independence,

we have applied the definitions set out in NASDAQ Marketplace Rule 4200(a)(15), which states that “Independent director”

means “a person other than an executive officer or employee of the company or any other individual having a relationship

which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying

out the responsibilities of a director.”

None of the following named directors come within any of the exceptions to

this definition regarding:

being or having been an executive officer;

we have applied the definitions set out in NASDAQ Marketplace Rule 4200(a)(15), which states that “Independent director” means

“a person other than an executive officer or employee of the company or any other individual having a relationship which, in the

opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities

of a director.” None of the following named directors come within any of the exceptions to this definition regarding:

or having been an executive officer;

having an employee-employer relationship with us;

received compensation from us in an amount in excess of $100,000;

and having certain relationships with us, in the case of membership

of a director on an audit committee, including applicable family relationships.

having received compensation from us in an amount

in excess of $100,000;

and having certain relationships with us, in the case of membership of a director on an audit committee, including

applicable family relationships.

Accordingly, Messrs.

Robert Beaty and Jeffrey

Pearl, two (2) of our current directors, are independent directors.

Robert Beaty and Jeffrey Pearl, two (2) of our current directors, are independent

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PRINCIPAL ACCOUNTING FEES AND SERVICES

The following is a summary of the fees billed

to us by our principal accountants during the years ended December 31, 2019, and 2018, respectively:

The following is a summary of the fees billed to us

by our principal accountants, Haynie & Company, CPAs during the years ended December 31, 2020, and 2019, respectively:

Audit-related Fees

1 unchanged sentence

Audit Fees - Consists of fees for professional

services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements

included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and

regulatory filings or engagements.

Audit-related Fees - Consists of fees

for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or

review of our financial statements and are not reported under “Audit fees.”

services rendered by our principal accountants for the audit of our annual financial statements for our 10-K Annual Reports and review

of the financial statements included in our 10-Q Quarterly Reports or services that are normally provided by our principal accountants

in connection with statutory and regulatory filings or engagements.

Audit-related Fees - Consists of fees for assurance

and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial

statements and are not reported under “Audit fees.”

Tax Fees - Consists of fees for professional

services rendered by our principal accountants for tax compliance, tax advice and tax planning.

All Other Fees - Consists of fees for

products and services provided by our principal accountants, other than the services reported under “Audit Fees,”

“Audit-related

and “Tax Fees”

Policy on Audit Committee Pre-Approval of

Audit and Permissible Non-Audit Services of Independent Auditors

All Other Fees - Consists of fees for products

and services provided by our principal accountants, other than the services reported under “Audit Fees,” “Audit-related

Fees,” and “Tax Fees” above.

Policy on Audit Committee Pre-Approval of Audit

and Permissible Non-Audit Services of Independent Auditors

We have not adopted an Audit Committee;

there is no Audit Committee policy in this regard.

However, we do require approval in advance of the performance of professional

services to be provided to us by our principal accountant.

Additionally, all services rendered by our principal accountant are

performed pursuant to a written engagement letter between us and the principal accountant.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

However, we do require approval in advance of the performance of professional services

to be provided to us by our principal accountant.

Additionally, all services rendered by our principal accountant are performed pursuant

to a written engagement letter between us and the principal accountant.

FINANCIAL STATEMENT SCHEDULES

Financial Statements.

See the audited

financial statements of the Company contained in Part II, Item 8 above, of this Annual Report, which are incorporated herein by

this reference.

See the audited financial

statements of the Company contained in Part II, Item 8 above, of this Annual Report, which are incorporated herein by this reference.

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The following exhibits are filed as part of

this Annual Report:

The following exhibits are filed as part of this Annual

(a) Exhibits.

26 unchanged sentences

Exhibits incorporated by reference:

IM Telecom Press Release Current Report

8-K Current Report dated February 19, 2019 and filed with the SEC on February 19, 2019 .

Apeiron Systems Merger Current Report

Apeiron Systems Merger Current Reports

8-K Current Report dated January 31, 2019, and filed with the SEC on January 31, 2019 (Press Release)

20 unchanged sentences

8-KA-1 Current Report of the February 7, 2018, and filed with the SEC on January 14, 2019 .

8-K Current Report dated February 19, 2019 and filed with the SEC on February 19, 2019 .

Press Release

8-K Current Report dated September 4, 2019, filed with the SEC on September 6, 2019 .

31 unchanged sentences

FORM 10-K SUMMARY

Pursuant to the requirements of Section 13

or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d)

of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto

duly authorized.

KonaTel, Inc.

April 6, 2021

Chairman, President and CEO

April 6, 2021

Chief Financial Officer

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities

and on the dates indicated.

Pursuant to the requirements of the Securities Exchange

Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates

April 6, 2021

Chairman, President, CEO and a Director

April 6, 2021

Chief Financial Officer

April 6, 2021

/s/ Robert Beaty

/s/ Jeffrey Pearl

Jeffrey Pearl

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 9A. Controls and Procedures