SEGMENT REPORTING

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 10 – SEGMENT REPORTING

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (ASU 2023-07). Beginning with our 2024 annual reporting, we adopted ASU No. 2023-07, which requires that a public entity disclose, on an interim and annual basis, significant segment expense categories and amounts that are regularly provided to its chief operating decision maker (“CODM”) and included in each reported measure of segment profit or loss. An entity must also disclose, by reportable segment, the amount and composition of other expenses. The standard requires an entity disclose the title and position of its CODM and explain how the CODM uses these reported measures in assessing segment performance and determining how to allocate resources.

Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We have two reportable segments: Hosted Serves and Mobile Services. Our CODM is our President. Our CODM uses operating income to evaluate performance and allocate resources, including capital allocations, when managing the business. Our CODM manages operations through the review of actual and forecasted “Operations and Support Expenses” information at a segment and business unit level, of which segments are primarily evaluated on a direct cost basis and comprised of equipment, compensation, network and technology, sales, advertising and other costs. Direct costs are incurred in support of products and services offered by the business units, such as equipment costs (predominantly wireless devices), network access, rents, leases, sales support, customer provisioning and compensation expenses.

The Company operates within two (2) reportable segments. The Company’s management evaluates performance and allocates resources based on the profit or loss from operations. Because the Company is a recurring revenue service business with very few physical assets, management does not use total assets by segment to make decisions regarding operations, and therefore, the total assets disclosure by segment has not been included.

The reportable segments consist of Hosted Services and Mobile Services. Mobile Services reporting will now consist of our post-paid and pre-paid cellular business.

Hosted Services – Our Hosted Services include a suite of hosted CPaaS services within the Apeiron Systems’ cloud platform, including Cloud IVRs, Voicemail, Fax, Call Recording and other services provided with local, toll-free and international phone numbers. Apeiron also delivers public and private IP network services from its national redundant network backbone, including MPLS, Dedicated Internet and LTE Wireless WAN solutions. Additionally, Apeiron’s Cloud Services include Information Data Dips, SD-WAN and IoT data and device management. These Hosted Services are marketed nationally and internationally through the Apeiron website, its sales staff, independent sales agents and ISOs.

Mobile Services – Our Mobile Services include retail and wholesale cellular voice/text/data services and IoT mobile data services through our subsidiaries Apeiron Systems and IM Telecom. Mobile voice/text/data and IoT mobile data services are supported by a blend of reseller agreements with select national wireless carriers and national wireless wholesalers. A wireless communications service reseller typically does not own the wireless network infrastructure over which services are provided to its customers. Mobile voice/text/data and mobile data solutions are generally sold as traditional post-paid service plans that may include voice/text/data or wireless data only plans. Sometimes equipment is provided, which can include, but is not limited to, phones, tablets, modems, routers and accessories. Also included in our Mobile Services segment is the distribution of government subsidized mobile voice service and mobile data service by IM Telecom under its Infiniti Mobile brand and FCC license to low-income American households that qualify for the FCC’s Lifeline mobile voice service program and/or the FCC’s ACP mobile data program. Even though government programs like Lifeline have existed since 1985, these programs, along with newer programs like the ACP Program, are subject to change and may have a material impact on our Mobile Services business if changed, reduced or eliminated.

The following table reflects the result of operations of the Company’s reportable segments:

For the year ended December 31, 2024
					Depreciation				Operating
			Operating		and		Other		Income
	Revenues		Expenses*		Amortization		Gain/Loss		(Loss)
Segment
Hosted Services	$	5,581,069	$	6,476,001	$	8,757	$	—	$	(903,689	)
Mobile Services		9,922,182		10,396,667		299		—		(474,784	)
Segment Total		15,503,251		16,872,668		9,056		—		(1,378,473	)
Corporate
Parent administration support		—		3,378,435		—		—		(3,146,606	)
Gain on sale of subsidiary		—		—		—		9,247,726		9,247,726
Total Corporate		—		3,378,435		—		9,247,726		6,101,120
KonaTel, Inc.	$	15,503,251	$	20,251,103	$	9,056	$	9,247,726	$	4,490,818

For the year ended December 31, 2023
					Depreciation				Operating
			Operating		and		Other		Income
	Revenues		Expenses*		Amortization		Gain/Loss		(Loss)
Segment
Hosted Services	$	5,054,210	$	5,465,812	$	11,944	$	—	$	(423,546	)
Mobile Services		13,169,535		13,932,900		408		—		(763,773	)
Segment Total		18,223,745		19,398,712		12,352		—		(1,187,319	)
Corporate
Parent administration support		—		2,753,508		—		—		(2,753,508	)
Gain on sale of subsidiary		—		—		—		—		—
Total Corporate		—		2,753,508		—		—		(2,753,508	)
KonaTel, Inc.	$	18,223,745	$	22,152,220	$	12,352	$	—	$	(3,940,827	)

*Operating Expenses includes Cost of Revenue, Operating Expenses, Other Income/Expense and Income Tax Expense.