EX-99 2 exhibit99.htm EXHIBIT 99 Exhibit 99

Exhibit 99

 

KonaTel Reports Third Quarter 2025 Results

 

Diversified Hosted Services Expansion

 

DALLAS, November 20, 2025 -- KonaTel, Inc. (OTCQB: KTEL) (www.konatel.com), a voice/data communications holding company, today announced financial results for the three-month and nine-month periods ended September 30, 2025, respectively.

Third Quarter 2025 Financial Summary

·Revenues of $2.2 million, down 31% compared to the third quarter last year; however, we have formed a consistent quarterly revenue base across the past three quarters. The decrease in year-over-year revenue, as discussed with our year-end 2024 results, relates to fewer activations within the Company’s Mobile Services (“Lifeline”) segment and closure of the Federal Government’s ACP Program.
·Gross profit of $709,037 was flat as compared to $709,372 in the third quarter last year.
·Operating loss of ($50,079) compared to operating loss of ($1,187,220) in the third quarter last year.
·GAAP net loss of $(45,094), which materially includes forfeiture of certain employee stock options, or $(0.00) per share, compared to GAAP net loss of $(1,188,914), or $(0.03) per share, in the third quarter last year.
·Non-GAAP net loss of $(550,935), or $(0.01) per diluted share, compared to a Non-GAAP net loss of $(885,117), or $(0.02) per diluted share, in the third quarter of last year.
·Generally, Q3 revenue, gross profit and Non-GAAP loss improved as compared to Q2.
·Cash remained healthy at $1.2 million, and we have continued to take significant steps to further reduce cash burn as our new growth initiatives gain traction.

Sean McEwen, Chairman and CEO of KonaTel said, “In concert with our IM Telecom d/b/a Infiniti Mobile Lifeline subsidiary, our healthcare partner, began to promote Lifeline service to their California Medicaid customers in October. We expect customer adoption to accelerate as our healthcare partner increases their marketing efforts. Through this relationship, we bear no financial burden for sales, marketing, or equipment (cell phone) costs.

We continue to invest in the expansion of our CPaaS (“Communications Platform as a Service”) cloud platform, including wholesale SMS and wireless POTS (“Plain Old Telephone Service”) wholesale cellular replacement service for telecommunications carriers and resellers.

As a newcomer to our CPaaS services, our wireless POTS product initially represents a small portion of our revenue. However, our wireless POTS installations, funded through cash flow, increased by 20% from Q2 to Q3. To meet the increasing wireless POTS demand and given our proven POTS installed base, we are developing a strategy to accelerate deployments. As our POTS installations grow, we are building a revenue stream expected to last for many years, and in fact, it is not uncommon for POTS lines to generate recurring revenue for decades. By the end of this decade, national copper-line based POTS infrastructure is expected to be decommissioned, which creates a substantial market opportunity as roughly 22 million copper-line based POTS lines will need immediate replacement. Our wireless-based POTS service fulfills this increasing demand with a proven solution.”

McEwen closed, “This quarter, we also trimmed remnant Lifeline costs through the reduction of approximately $600,000 in annualized recurring expenses. Additionally, through the end of this quarter, we have now received $850,000 of the $1,000,000 holdback related to the sale of a minority interest in our IM Telecom Lifeline subsidiary.

Looking forward, we remain focused on the expansion of our CPaaS business and derisking the Company through the addition of future, contracted, low attrition recurring revenue CPaaS services and supporting our healthcare partner’s Lifeline promotion to California Medicaid customers.”

 

 

 


 

Quarterly Financial Summary (Q3 2025 vs. Q3 2024)

Revenue of $2.2 million, a decrease of 31% compared to $3.1 million for the reasons discussed above. The decrease in revenue was primarily due to the loss of mobile services revenues due to lower customer activations.

Gross profit was $709,037, or 32.6% gross profit margin, compared to $709,372, or 22.5% gross profit margin. This increase primarily resulted from adding higher Average Revenue Per User (“ARPU”) activations within our Mobile Services segment, and sourcing lower compensation and network costs.

Total operating expenses were $759,116, compared to $1.9 million. This decrease was primarily due to lower payroll and related expenses associated with the reduction of headcount in our IM Telecom subsidiary in the fourth quarter of 2024, as well as reductions in marketing/advertising costs and application development costs in our Hosted Services division.

GAAP net loss was $(45,094), or $(0.00) per diluted share (based on 43.8 million weighted average shares), compared to a net loss of $(1,188,914), or $(0.03) per diluted share (based on 43.5 million weighted average shares).

Non-GAAP net loss was $(550,935), or $(0.01) per diluted share, compared to a Non-GAAP net loss of $(885,117), or $(0.02) per diluted share. The difference between GAAP net loss and Non-GAAP net loss was due primarily to stock option grants forfeited during the 3rd quarter.

Balance Sheet

The Company ended the quarter with $1.2 million in cash, compared to $2.7 million on September 30, 2024. This decrease was due to a corresponding reduction in operating revenues during the same period.

Year-to-Date Financial Detail (First Nine Months of 2025 vs. First Nine Months of 2024)

Revenues decreased 50.5% to $6.5 million compared to $13.1 million, reflecting a 4.1% increase in Hosted Services revenues and a 77.4% decrease in Mobile Services revenues.

Gross profit was $1,911,170 or 29.4% gross profit margin, compared to gross profit of $2,736,584, or 20.8% gross profit margin. This increase in gross profit margin percentage primarily resulted from adding a higher percentage of activations in the California market in our Mobile Services segment, and sourcing lower per subscriber network costs.

Total operating expenses were $4.1 million, down (32.1%) compared to $6 million. This decrease was primarily due to lower payroll and related expenses associated with the reduction of headcount in our IM Telecom subsidiary and lower application development costs in our Apeiron Systems subsidiary.

GAAP net loss was $(2,149,030) or $(0.05) per diluted share (based on 43.6 million weighted average shares), compared to net income of $5.8 million, or $0.13 per diluted share (based on 43.4 million weighted average shares). This decrease was a result of the gain on sale recognized as part of our sale of 49% interest in IM Telecom in the first quarter of 2024, as well as the expiration of the Affordable Connectivity Program or ACP Program on June 1, 2024.

 

Non-GAAP net loss was $(2,168,716), or $(0.05) per diluted share, compared to non-GAAP net income of $6,644,244, or $0.15 per diluted share.

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About KonaTel

KonaTel provides a variety of retail and wholesale telecommunications services, including mobile voice/text/data service supported by national U.S. mobile networks, mobile numbers, SMS/MMS services, IoT mobile data service, and a range of hosted cloud services. KonaTel’s subsidiary, Apeiron Systems (www.apeiron.io), is a global cloud communications service provider employing a dynamic “as a service” (CPaaS/UCaaS/CCaaS/PaaS) platform. Apeiron provides voice, messaging, SD-WAN, wireless IoT & POTS, and platform services using its national cloud network. All of Apeiron’s services can be accessed through UI interfaces and rich communications APIs. KonaTel’s other subsidiary, IM Telecom d/b/a Infiniti Mobile (www.infinitimobile.com), is an FCC authorized national wireless Lifeline carrier with an FCC approved national wireless Lifeline Compliance Plan, licensed to provide government subsidized cellular service to low-income American families across forty (40) states. KonaTel is headquartered in Plano, Texas.

Safe Harbor Statement

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

Contacts

D. Sean McEwen
inquiries@konatel.com

 

-- Unaudited Balance Sheets and Statements of Operations Follow –

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KonaTel, Inc.

Consolidated Balance Sheets

(unaudited)

 

   September 30, 2025   December 31, 2024 
Assets          
Current Assets          
Cash and Cash Equivalents  $1,182,429   $1,679,345 
Accounts Receivable, Net   510,884    1,533,015 
Inventory, Net   199,164    163,063 
Prepaid Expenses   82,315    94,496 
Other Current Assets   335,154    112,170 
Total Current Assets   2,309,946    3,582,089 
           
Property and Equipment, Net   12,630    15,128 
           
Other Assets          
Intangible Assets, Net   323,468    323,468 
Right of Use Asset   237,362    319,549 
Notes Receivable   150,000    1,000,000 
Other Assets   72,376    74,328 
Total Other Assets   783,206    1,717,345 
Total Assets  $3,105,782   $5,314,562 
           
Liabilities and Stockholders' Equity          
Current Liabilities          
Accounts Payable and Accrued Expenses  $2,249,715   $2,277,597 
Right of Use Operating Lease Obligation - Current   62,713    113,740 
Income Tax Payable   184,051    184,051 
Total Current Liabilities   2,496,479    2,575,388 
           
Long Term Liabilities          
Right of Use Operating Lease Obligation - Long Term   186,113    227,776 
Total Long Term Liabilities   186,113    227,776 
Total Liabilities   2,682,592    2,803,164 
Commitments and Contingencies   —        
Stockholders' Equity          
Common stock, $.001 par value, 50,000,000 shares authorized 43,941,814 outstanding and issued at September 30, 2025 and 43,503,658 outstanding and issued at December 31, 2024   43,942    43,504 
Additional Paid In Capital   10,276,151    10,215,767 
Accumulated Deficit   (9,896,903)   (7,747,873)
Total Stockholders' Equity   423,190    2,511,398 
Total Liabilities and Stockholders' Equity  $3,105,782   $5,314,562 

 

  

 

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KonaTel, Inc.

Consolidated Statements of Operations

(unaudited)

  

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2025   2024   2025   2024 
Revenue  $2,173,273   $3,148,409   $6,500,643   $13,127,425 
Cost of Revenue   1,464,236    2,439,037    4,589,473    10,390,841 
Gross Profit   709,037    709,372    1,911,170    2,736,584 
                 
Operating Expenses                    
Payroll and Related Expenses   220,651    1,316,381    2,406,484    4,108,020 
Operating and Maintenance   2,833    1,179    6,322    4,143 
Credit Loss   —      —      13,910    1,448 
Professional and Other Expenses   140,428    94,435    622,376    435,960 
Utilities and Facilities   42,294    50,292    137,233    160,410 
Depreciation and Amortization   782    2,449    2,347    7,348 
General and Administrative   95,329    54,006    213,725    159,974 
Marketing and Advertising   1,201    24,629    11,683    85,657 
Application Development Costs   235,855    259,836    587,348    853,719 
Taxes and Insurance   19,743    93,385    86,790    208,442 
Total Operating Expenses   759,116    1,896,592    4,088,218    6,025,121 
                     
Operating (Loss)   (50,079)   (1,187,220)   (2,177,048)   (3,288,537)
                     
Other Income and Expense                    
Gain on Sale   —      —      —      9,247,726 
Interest Expense   932    (407)   356    (104,737)
Other Income/(Expense), net   4,053    (1,287)   27,662    (69,979)
Total Other Income and Expenses   4,985    (1,694)   28,018    9,073,010 
                     
Income Before Income Taxes   (45,094)   (1,188,914)   (2,149,030)   5,784,473 
                     
Net Income (Loss)  $(45,094)  $(1,188,914)  $(2,149,030)  $5,784,473 
                     
Earnings (Loss) per Share                    
Basic  $(0.00)  $(0.03)  $(0.05)  $0.13 
Diluted  $(0.00)  $(0.03)  $(0.05)  $0.13 
Weighted Average Outstanding Shares                    
Basic   43,766,648    43,485,560    43,615,339    43,385,493 
Diluted   43,766,648    43,485,560    43,615,339    43,698,965 

 

 

 

 

 

 

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