Cover
Cover | 6 Months Ended |
Jun. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jun. 30, 2021 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-10171 |
Entity Registrant Name | KonaTel, Inc. |
Entity Central Index Key | 0000845819 |
Entity Tax Identification Number | 80-0000245 |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 500 N. Central Expressway |
Entity Address, Address Line Two | Ste. 202 |
Entity Address, City or Town | Plano |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 75074 |
City Area Code | 214 |
Local Phone Number | 323-8410 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 40,692,286 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and Cash Equivalents | $ 788,243 | $ 715,195 |
Accounts Receivable, net | 743,678 | 434,801 |
Inventory, Net | 94,634 | 17,786 |
Prepaid Expenses | 6,239 | 2,365 |
Other Current Asset | 164 | 194 |
Total Current Assets | 1,632,958 | 1,170,341 |
Property and Equipment, Net | 53,632 | 79,571 |
Other Assets | ||
Intangible Assets, Net | 1,265,128 | 1,517,163 |
Other Assets | 154,296 | 172,065 |
Total Other Assets | 1,419,424 | 1,689,228 |
Total Assets | 3,106,014 | 2,939,140 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 977,038 | 1,042,567 |
Note Payable - current portion | 17,308 | 94,339 |
Right of Use Operating Lease Obligation - current | 85,532 | 66,323 |
Deferred Revenue | 37,677 | |
Total Current Liabilities | 1,079,878 | 1,240,906 |
Long Term Liabilities | ||
Right of Use Operating Lease Obligation - long term | 155,880 | 15,399 |
Note Payable - long term | 150,000 | 150,000 |
Total Long Term Liabilities | 305,880 | 165,399 |
Total Liabilities | 1,385,758 | 1,406,305 |
Stockholders’ Equity | ||
Common stock, $.001 par value, 50,000,000 shares authorized, 40,692,286 outstanding and issued at June 30, 2021 and December 31, 2020 | 40,692 | 40,692 |
Additional Paid In Capital | 7,539,690 | 7,460,632 |
Accumulated Deficit | (5,860,126) | (5,968,489) |
Total Stockholders’ Equity | 1,720,256 | 1,532,835 |
Total Liabilities and Stockholders’ Equity | $ 3,106,014 | $ 2,939,140 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 40,692,286 | 40,692,286 |
Common stock, shares outstanding | 40,692,286 | 40,692,286 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 2,913,873 | $ 2,257,193 | $ 5,306,711 | $ 4,214,548 |
Cost of Revenue | 1,476,485 | 1,378,868 | 2,958,162 | 2,571,045 |
Gross Profit | 1,437,388 | 878,325 | 2,348,549 | 1,643,503 |
Operating Expenses | ||||
Payroll and Related Expenses | 588,328 | 449,931 | 1,180,871 | 898,080 |
Operating and Maintenance | 228,678 | 420,700 | ||
Bad Debt | 190 | 1,690 | ||
Professional Services | 59,602 | 143,725 | ||
Utilities and Facilities | 18,995 | 22,994 | 70,797 | 47,232 |
Depreciation and Amortization | 213,552 | 231,597 | 427,105 | 486,526 |
General and Administrative | 37,616 | 12,568 | 145,661 | 27,135 |
Marketing and Advertising | 1,637 | 872 | 12,723 | 1,816 |
Application Development Costs | 119,740 | 119,740 | ||
Taxes and Insurance | 16,850 | 23,312 | 24,695 | 42,126 |
Total Operating Expenses | 1,056,320 | 970,142 | 2,125,317 | 1,925,305 |
Operating Income | 381,068 | (91,817) | 223,232 | (281,802) |
Other Income and Expense | ||||
Other Income | 242,080 | 543,449 | ||
Interest Expense | (7,514) | (8,214) | (9,756) | (18,765) |
Other Non-Operating Expenses | (32,469) | (105,113) | ||
Total Other Income and Expenses | (39,983) | 233,866 | (114,869) | 524,684 |
Net Income | $ 341,085 | $ 142,049 | $ 108,363 | $ 242,882 |
Net Income per Share | ||||
Basic | $ 0.01 | $ 0 | $ 0 | $ 0.01 |
Diluted | $ 0.01 | $ 0 | $ 0 | $ 0.01 |
Weighted Average Outstanding Shares | ||||
Basic | 40,692,286 | 40,692,286 | 40,692,286 | 40,692,286 |
Diluted | 44,217,286 | 44,092,286 | 44,217,286 | 44,092,286 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balances as of April 1, 2021 at Dec. 31, 2019 | $ 40,692 | $ 7,380,029 | $ (5,896,977) | $ 1,523,744 |
Shares outstanding at Dec. 31, 2019 | 40,692,286 | |||
Stock Based Compensation | 20,514 | 20,514 | ||
Dividends Paid to Apeiron Systems shareholders | (310,129) | (310,129) | ||
Net Income | 242,882 | 242,882 | ||
Balances as of June 30, 2021 at Jun. 30, 2020 | $ 40,692 | 7,400,543 | (5,964,224) | 1,477,011 |
Shares outstanding at Jun. 30, 2020 | 40,692,286 | |||
Balances as of April 1, 2021 at Mar. 31, 2020 | $ 40,692 | 7,390,286 | (6,106,273) | 1,324,705 |
Shares outstanding at Mar. 31, 2020 | 40,692,286 | |||
Stock Based Compensation | 10,257 | 10,257 | ||
Net Income | 142,049 | 142,049 | ||
Balances as of June 30, 2021 at Jun. 30, 2020 | $ 40,692 | 7,400,543 | (5,964,224) | 1,477,011 |
Shares outstanding at Jun. 30, 2020 | 40,692,286 | |||
Balances as of April 1, 2021 at Dec. 31, 2020 | $ 40,692 | 7,460,632 | (5,968,489) | 1,532,835 |
Shares outstanding at Dec. 31, 2020 | 40,692,286 | |||
Stock Based Compensation | 79,058 | 79,058 | ||
Net Income | 108,363 | 108,363 | ||
Balances as of June 30, 2021 at Jun. 30, 2021 | $ 40,692 | 7,539,690 | (5,860,126) | 1,720,256 |
Shares outstanding at Jun. 30, 2021 | 40,692,286 | |||
Balances as of April 1, 2021 at Mar. 31, 2021 | $ 40,692 | 7,491,976 | (6,201,211) | 1,331,457 |
Shares outstanding at Mar. 31, 2021 | 40,692,286 | |||
Stock Based Compensation | 47,714 | 47,714 | ||
Net Income | 341,085 | 341,085 | ||
Balances as of June 30, 2021 at Jun. 30, 2021 | $ 40,692 | $ 7,539,690 | $ (5,860,126) | $ 1,720,256 |
Shares outstanding at Jun. 30, 2021 | 40,692,286 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 108,363 | $ 242,882 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and Amortization | 427,105 | 486,526 |
Bad Debt | 1,690 | |
Stock-based Compensation | 79,058 | 20,514 |
Amount recorded as loan forgiveness’ on SBA Covid-19 Loans | (229,003) | |
Change in Right of Use Asset | (149,131) | (58,676) |
Change in Lease Liability | 159,690 | 68,034 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | (308,877) | (109,915) |
Inventory | (76,848) | 655 |
Prepaid Expenses | (3,874) | 263 |
Accounts Payable and Accrued Expenses | (65,529) | (102,624) |
Deferred Revenue | (37,677) | (15,072) |
Customer Deposits | (31,087) | |
Other Assets | 17,799 | 35,675 |
Net cash provided by operating activities | 150,079 | 309,862 |
Cash Flows from Investing Activities | ||
Purchase of Assets | (3,168) | |
Net cash (used in) investing activities | (3,168) | |
Cash Flows from Financing Activities | ||
Repayment on Revolving Lines of Credit | (12,237) | |
Proceeds from Federal SBA Covid-19 Loans | 458,900 | |
Repayments of amounts due to Related Party and Seller | (51,760) | |
Repayments of amounts of Notes Payable | (77,031) | |
Dividends Paid to Apeiron shareholders | (256,012) | |
Net cash provided by (used in) financing activities | (77,031) | 138,891 |
Net Change in Cash | 73,048 | 445,585 |
Cash - Beginning of Year | 715,195 | 191,474 |
Cash - End of Period | 788,243 | 637,059 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 3,133 | 17,174 |
Cash paid for taxes | ||
Non-cash investing and financing activities: | ||
Right of use assets obtained in exchange for new operating lease liabilities | $ 199,245 | $ 129,108 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview of Company KonaTel Nevada (as defined below) was organized under the laws of the State of Nevada on October 14, 2014, by its founder and then sole shareholder, D. Sean McEwen, to conduct the business of a full-service MVNO (“Mobile Virtual Network Operator”) provider that delivered cellular products and services to individual and business customers in various retail and wholesale markets. KonaTel Inc., formerly known as Dala Petroleum Corp. (the “Company,” “we,” “our,” or “us”), also formerly known as “Westcott Products Corporation,” was incorporated as “Light Tech, Inc.” under the laws of the State of Nevada on May 24, 1984. A subsidiary in the name “Westcott Products Corporation” was organized by us under the laws of the State of Delaware on June 24, 1986, for the purpose of changing our name and domicile to the State of Delaware. On June 27, 1986, we merged with the Delaware subsidiary, with the survivor being Westcott Products Corporation, a Delaware corporation (“Westcott”). On December 18, 2017, we acquired KonaTel, Inc, a Nevada subchapter S-Corporation (“KonaTel Nevada”), in a merger with our acquisition subsidiary under which KonaTel Nevada became our wholly-owned subsidiary. On December 31, 2018, we acquired Apeiron Systems, Inc., a Nevada corporation d/b/a “Apeiron” (“Apeiron” or “Apeiron Systems”), which is also our wholly-owned subsidiary. Apeiron was organized in 2013 and is an international Hosted Services CPaaS (“Communications Platform as a Service”) provider that designed, built, owns and operates its national private core network, supporting a suite of business communications services all accessible via proprietary Applications Programming Interfaces (“APIs”). As an Internet Telephony Service Provider (“ITSP”), Apeiron holds a Federal Communications Commission (“FCC”) numbering authority license. Some of Apeiron’s Hosted Services include Voice over IP (“VoIP”), cellular and Over-The-Top (“OTT”) telephony, SMS/MMS messaging and broadcast services, numbering features, including Cloud IVRs, Voicemail, Fax, Call Recording, and other services through local, toll-free and international phone numbers. Supported by its national redundant network, Apeiron also provides public and private IP network services including MPLS, Dedicated Internet and LTE Wireless WAN solutions. Apeiron’s Cloud Services include Information Data Dips, Software-Defined Wide Area Networking (“SD-WAN”), and Internet of Things (“IOT”) data and device management. On January 31, 2019, we acquired IM Telecom, LLC, an Oklahoma limited liability company, d/b/a “Infiniti Mobile” (“IM Telecom” or “Infiniti Mobile”), which became our wholly-owned subsidiary. Infiniti Mobile is an FCC licensed Eligible Telecommunications Carrier (“ETC”) and is one of 22 FCC licensed wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan in the United States. Under the FCC’s Lifeline program, Infiniti Mobile is authorized to provide government subsidized mobile telecommunications services to eligible low-income American households, currently in nine states. Basis of Presentation Interim Financial Statements The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2020. The accompanying financial statements have been prepared using the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, stock-based compensation, and customer lists. Actual results could differ from those estimates. Basis of Consolidation The condensed consolidated financial statements include the Company and three wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems and IM Telecom. All significant intercompany transactions are eliminated. Net Income Per Share Basic income per common share calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted income per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents are computed by using the “Treasury Stock Method,” which computes the number of new shares that may potentially be created by unexercised options. Diluted common share equivalents are stock based compensation options. The following table illustrates the computation of the dilutive common share equivalents under the Treasury Stock Method: Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Common Share Equivalents Under Treasury Stock Method Treasury Stock Method Calculation Total Shares Outstanding 40,692,286 Potential Incremental Shares: Average Exercise Price $ 0.22 Current Market Price $ 0.78 Shares eligible for Purchase 3,525,000 Average Price Received 769,586 Shares at Market Price 986,648 Incremental Shares under Treasury Stock Method 2,538,352 The following table reconciles the shares outstanding and net income used in the computations of both basic and diluted earnings per share of common stockholders: Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net income $ 341,085 $ 142,049 $ 108,363 $ 242,882 Weighted average shares outstanding during period on which basic earnings per share is calculated 40,692,286 40,692,286 40,692,286 40,692,286 Effect of dilutive shares Incremental shares under stock-based compensation 2,538,352 3,400,000 2,538,352 3,400,000 Weighted average shares outstanding during period on which diluted earnings per share is calculated 43,230,638 44,092,286 43,230,638 44,092,286 Earnings per share attributable to common stockholders Basic earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 Diluted earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of receivables, cash, and cash equivalents. All cash and cash equivalents are held at high credit financial institutions. These deposits are generally insured under the FDIC’s deposit insurance coverage; however, from time to time, the deposit levels may exceed FDIC coverage levels. Trade Accounts Receivable Sales Revenue The Company has a concentration of risk with respect to trade receivables from customers and other cellular providers. As of June 30, 2021, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from two (2) customers in the amounts of $ 106,783 447,738 14.36 60.21 194,509 52.4 52,843 14.2 Concentration of Major Customer A significant amount of the revenue is derived from contracts with major customers and cellular partners. For the six months ended June 30, 2021, the Company had two (2) customers that accounted for $ 1,774,644 33.4 1,664,735 31.37 1,309,330 31.1 Effect of Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 2 – PROPERTY AND EQUIPMENT Property and equipment consist of the following major classifications as of June 30, 2021, and December 31, 2020: Property and Equipment - Schedule of Property and Equipment June 30, 2021 December 31, 2020 Leasehold Improvements Leasehold Improvements $ 46,950 $ 46,950 Furniture and Fixtures Furniture and Fixtures 102,946 102,946 Billing Software Billing Software 217,163 217,163 Office Equipment Office Equipment 94,552 94,552 461,611 461,611 Less: Accumulated Depreciation (407,979 ) (382,040 ) Property and equipment, net $ 53,632 $ 79,571 Depreciation related to Property and Equipment amounted to $ 12,969 7,216 25,938 14,433 |
RIGHT-OF-USE ASSETS
RIGHT-OF-USE ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
RIGHT-OF-USE ASSETS | NOTE 3 – RIGHT-OF-USE ASSETS Minimum Maximum Right-of-Use Assets consist of assets accounted for under ASC 842. The assets are recorded at present value using implied interest rates between 3.29 5.34 The Company has Right-of-Use Assets through leases of property under three (3) non-cancelable leases. As of June 30, 2021, the Company had one (1) property with a lease term in excess of one (1) year. This lease liability expires March 31, 2026. The Company has two (2) current lease liabilities. These lease liabilities expire December 1, 2021, and May 15, 2022, respectively. In January 2021, the Company entered into a new, five (5) year lease for its corporate headquarters located in Plano, TX. Future lease liability payments under the terms of these leases are as follows: Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases 2021 $ 55,873 2022 $ 58,547 2023 $ 45,578 2024 $ 46,596 2025 $ 47,615 2026 $ 11,968 Total $ 266,177 Less Interest $ 24,765 Present value of minimum lease payments $ 241,412 Current Maturities $ 85,532 Long Term Maturities $ 155,880 The Company also leases two (2) office/retail spaces on a month-to-month basis. Total lease expense for the three months ended June 30, 2021, and 2020, was $ 3,967 3,217 8,185 6,435 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS Intangible Assets with definite useful life consist of licenses, customer lists and software that were acquired through acquisitions. Intangible Assets with indefinite useful life consist of a Lifeline License granted by the FCC. The Lifeline License, because of the nature of the asset and the limitation on the number of granted licenses by the FCC, will not be amortized. The Lifeline License was acquired through an acquisition. The fair market value of the License as of June 30, 2021, was $ 634,251 June 30, 2021 December 31, 2020 Customer List $ 1,135,962 $ 1,135,962 Software 2,407,001 2,407,001 ETC License 634,251 634,251 Less: Amortization (3,141,796 ) (2,740,629 ) Net Amortizable Intangibles 1,035,418 1,436,585 Right of Use Assets - net 229,710 80,578 Intangible Assets net $ 1,265,128 $ 1,517,163 Amortization expenses for the three months ended June 30, 2021, and 2020, was $ 200,583 401,167 Amortization expense is expected to be as follows: Intangible Assets - Schedule of Intangible Assets Future Amortization Expense 2021 $ 401,168 Current intangible assets will be fully amortized as of December 31, 2021. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE In June 2020, the Company received a Small Business Administration (“SBA”) Emergency Injury Disaster Loan (“EIDL”) in the amount of $ 150,000 The maturity date of the 30-year note is June 2050. 3.75 The Company also received three (3) separate SBA Payroll Protection Loans in the amounts of $ 186,300 101,800 20,900 309,000 1 April 14, 2022 101,800 20,900 186,300 In conjunction with the Notes Payable, the Company received $ 10,000 On September 30, 2020, IM Telecom entered into a promissory note agreement to repay a Federal Universal Service Fund overpayment in the amount of $ 67,105 The term of the note is twelve (12) months 12.75 17,308 |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND COMMITMENTS | NOTE 6 – CONTINGENCIES AND COMMITMENTS Litigation From time to time, the Company may be subject to legal proceedings and claims which arise in the ordinary course of business. As of June 30, 2021, there are no ongoing legal proceedings. Contract Contingency The Company has the normal obligation for the completion of its cellular provider contracts in accordance with the appropriate standards of the industry and that may be provided in the contractual agreements. Tax Audits In June of 2021, the Company received an audit determination and assessment from the State of Pennsylvania in respect of an audit of sales and use tax liability for the audit period of January 1, 2016, through September 30, 2019. The assessment is in the amount of $ 111,650 7,000 Letters of Credit The Company had no outstanding letters of credit as of June 30, 2021. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 7 – SEGMENT REPORTING The Company operates within two ( 2 Hosted Services Mobile Services The following table reflects the result of operations of the Company’s reportable segments: Segment Reporting - Schedule of Segment Reporting Information Hosted Services Mobile Services Total For the six months period ended June 30, 2021 Revenue $ 2,545,236 $ 2,761,475 $ 5,306,711 Gross Margin $ 975,966 $ 1,372,583 $ 2,348,549 Depreciation and amortization $ 405,045 $ 22,060 $ 427,105 Additions to property and equipment — — — Gross Margin % 38.3 % 49.7 % 44.3 % For the three months period ended June 30, 2021 Revenue $ 1,319,370 $ 1,594,503 $ 2,913,873 Gross Margin $ 520,030 $ 917,358 $ 1,437,388 Depreciation and amortization $ 207,067 $ 6,485 $ 213,552 Additions to property and equipment — — — Gross Margin % 39.4 % 57.5 % 49.3 % For the six months period ended June 30, 2020 Revenue $ 2,016,861 $ 2,197,687 $ 4,214,548 Gross Margin $ 731,172 $ 912,331 $ 1,643,503 Depreciation and amortization $ 428,475 $ 58,051 $ 486,526 Additions to property and equipment — — — Gross Margin % 36.3 % 41.5 % 39.0 % For the three months period ended June 30, 2020 Revenue $ 1,087,424 $ 1,169,769 $ 2,257,193 Gross Margin $ 384,121 $ 494,204 $ 878,325 Depreciation and amortization $ 208,405 $ 23,192 $ 231,597 Additions to property and equipment — — — Gross Margin % 35.3 % 42.2 % 38.9 % |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Common Stock The Company has not issued any common stock through June 30, 2021, nor for the year ended December 31, 2020; however, one holder of incentive stock options delivered a Notice of Exercise regarding certain granted and vested incentive stock options to the Company on June 29, 2021. See Note 9-Subsequent Events. Stock Compensation The Company offers stock option equity grants to directors and key employees. Options vest in tranches and typically expire in five (5) years. For the six months ended June 30, 2021, and 2020, the Company recorded options expense of $ 79,058 20,514 43,639 3.92 The stock option valuation as of June 30, 2021, was computed using the Black-Scholes-Merton pricing model using an average stock price of $ 0.559 0.531 5 258.10 1.52 The following table represents stock option activity as of and for the six months ended June 30, 2021: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding – December 31, 2020 3,800,000 $ 0.21 3.6 $ — Granted 385,000 0.51 4.8 — Exercised 0 — — — Forfeited 175,000 — — — Options Outstanding – June 30, 2021 4,010,000 $ 0.22 2.7 $ — Exercisable and Vested, June 30, 2021 3,525,000 $ 0.22 2.0 $ — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS Below are events that have occurred since June 30, 2021: Chief Executive Officer Effective October 15, 2019 (though executed October 17, 2019), the Company and Charles L. Schneider, Jr., the then CEO of our wholly-owned subsidiary, KonaTel Nevada, and the President and CEO of our wholly-owned subsidiary, Infiniti Mobile, executed and delivered a Severance Agreement and Release (the “Severance Agreement”). In connection with the execution and delivery of the Severance Agreement, the parties also executed and delivered an Amended Incentive Stock Option Agreement, among other agreements, that included a customary “cashless” exercise feature for the 500,000 vested incentive stock options that had been previously granted to Mr. Schneider, and voiding the remainder of 1,000,000 unvested incentive stock options he had been granted. 98,116 75,000 75,000 401,884 Charles D. Griffin Effective as of July 6, 2021, the Company entered into a six month Amended Consulting Agreement with Impact Telecom Holdings, Inc., dba SessionIP, to provide certain operational consulting services as requested by the Company. As part of that agreement, the Company granted to the owner and sole provider of these services, Charles D. Griffin, incentive stock options under an Amended Incentive Stock Option Agreement effective as of July 6, 2021, in the amount of 1,100,000 0.75 In connection with the granting of these incentive stock options, the Board of Directors of the Company also voted to increase the number of reserved shares for issuance under its Incentive Stock Option plan from 5,000,000 shares to 6,000,000 shares. The Company also granted a quarterly director 25,000 0.813 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Interim Financial Statements The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2020. The accompanying financial statements have been prepared using the accrual basis of accounting. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, stock-based compensation, and customer lists. Actual results could differ from those estimates. |
Basis of Consolidation | Basis of Consolidation The condensed consolidated financial statements include the Company and three wholly owned corporate subsidiaries, KonaTel Nevada, Apeiron Systems and IM Telecom. All significant intercompany transactions are eliminated. |
Net Income Per Share | Net Income Per Share Basic income per common share calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted income per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents are computed by using the “Treasury Stock Method,” which computes the number of new shares that may potentially be created by unexercised options. Diluted common share equivalents are stock based compensation options. The following table illustrates the computation of the dilutive common share equivalents under the Treasury Stock Method: Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Common Share Equivalents Under Treasury Stock Method Treasury Stock Method Calculation Total Shares Outstanding 40,692,286 Potential Incremental Shares: Average Exercise Price $ 0.22 Current Market Price $ 0.78 Shares eligible for Purchase 3,525,000 Average Price Received 769,586 Shares at Market Price 986,648 Incremental Shares under Treasury Stock Method 2,538,352 The following table reconciles the shares outstanding and net income used in the computations of both basic and diluted earnings per share of common stockholders: Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net income $ 341,085 $ 142,049 $ 108,363 $ 242,882 Weighted average shares outstanding during period on which basic earnings per share is calculated 40,692,286 40,692,286 40,692,286 40,692,286 Effect of dilutive shares Incremental shares under stock-based compensation 2,538,352 3,400,000 2,538,352 3,400,000 Weighted average shares outstanding during period on which diluted earnings per share is calculated 43,230,638 44,092,286 43,230,638 44,092,286 Earnings per share attributable to common stockholders Basic earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 Diluted earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of receivables, cash, and cash equivalents. All cash and cash equivalents are held at high credit financial institutions. These deposits are generally insured under the FDIC’s deposit insurance coverage; however, from time to time, the deposit levels may exceed FDIC coverage levels. Trade Accounts Receivable Sales Revenue The Company has a concentration of risk with respect to trade receivables from customers and other cellular providers. As of June 30, 2021, the Company had a significant concentration of receivables (defined as customers whose receivable balances are greater than 10% of total receivables) due from two (2) customers in the amounts of $ 106,783 447,738 14.36 60.21 194,509 52.4 52,843 14.2 |
Concentration of Major Customer | Concentration of Major Customer A significant amount of the revenue is derived from contracts with major customers and cellular partners. For the six months ended June 30, 2021, the Company had two (2) customers that accounted for $ 1,774,644 33.4 1,664,735 31.37 1,309,330 31.1 |
Effect of Recent Accounting Pronouncements | Effect of Recent Accounting Pronouncements The Company has evaluated all recent accounting pronouncements and believes that none will have a significant effect on the Company’s financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Common Share Equivalents Under Treasury Stock Method | The following table illustrates the computation of the dilutive common share equivalents under the Treasury Stock Method: Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Common Share Equivalents Under Treasury Stock Method Treasury Stock Method Calculation Total Shares Outstanding 40,692,286 Potential Incremental Shares: Average Exercise Price $ 0.22 Current Market Price $ 0.78 Shares eligible for Purchase 3,525,000 Average Price Received 769,586 Shares at Market Price 986,648 Incremental Shares under Treasury Stock Method 2,538,352 |
Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the shares outstanding and net income used in the computations of both basic and diluted earnings per share of common stockholders: Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net income $ 341,085 $ 142,049 $ 108,363 $ 242,882 Weighted average shares outstanding during period on which basic earnings per share is calculated 40,692,286 40,692,286 40,692,286 40,692,286 Effect of dilutive shares Incremental shares under stock-based compensation 2,538,352 3,400,000 2,538,352 3,400,000 Weighted average shares outstanding during period on which diluted earnings per share is calculated 43,230,638 44,092,286 43,230,638 44,092,286 Earnings per share attributable to common stockholders Basic earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 Diluted earnings per share $ 0.01 $ 0.00 $ 0.00 $ 0.01 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment - Schedule of Property and Equipment | Property and equipment consist of the following major classifications as of June 30, 2021, and December 31, 2020: Property and Equipment - Schedule of Property and Equipment June 30, 2021 December 31, 2020 Leasehold Improvements Leasehold Improvements $ 46,950 $ 46,950 Furniture and Fixtures Furniture and Fixtures 102,946 102,946 Billing Software Billing Software 217,163 217,163 Office Equipment Office Equipment 94,552 94,552 461,611 461,611 Less: Accumulated Depreciation (407,979 ) (382,040 ) Property and equipment, net $ 53,632 $ 79,571 |
RIGHT-OF-USE ASSETS (Tables)
RIGHT-OF-USE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases | Future lease liability payments under the terms of these leases are as follows: Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases 2021 $ 55,873 2022 $ 58,547 2023 $ 45,578 2024 $ 46,596 2025 $ 47,615 2026 $ 11,968 Total $ 266,177 Less Interest $ 24,765 Present value of minimum lease payments $ 241,412 Current Maturities $ 85,532 Long Term Maturities $ 155,880 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets - Schedule of Acquired Finited-Lived Intangible Assets | June 30, 2021 December 31, 2020 Customer List $ 1,135,962 $ 1,135,962 Software 2,407,001 2,407,001 ETC License 634,251 634,251 Less: Amortization (3,141,796 ) (2,740,629 ) Net Amortizable Intangibles 1,035,418 1,436,585 Right of Use Assets - net 229,710 80,578 Intangible Assets net $ 1,265,128 $ 1,517,163 |
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense | Amortization expense is expected to be as follows: Intangible Assets - Schedule of Intangible Assets Future Amortization Expense 2021 $ 401,168 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting - Schedule of Segment Reporting Information | The following table reflects the result of operations of the Company’s reportable segments: Segment Reporting - Schedule of Segment Reporting Information Hosted Services Mobile Services Total For the six months period ended June 30, 2021 Revenue $ 2,545,236 $ 2,761,475 $ 5,306,711 Gross Margin $ 975,966 $ 1,372,583 $ 2,348,549 Depreciation and amortization $ 405,045 $ 22,060 $ 427,105 Additions to property and equipment — — — Gross Margin % 38.3 % 49.7 % 44.3 % For the three months period ended June 30, 2021 Revenue $ 1,319,370 $ 1,594,503 $ 2,913,873 Gross Margin $ 520,030 $ 917,358 $ 1,437,388 Depreciation and amortization $ 207,067 $ 6,485 $ 213,552 Additions to property and equipment — — — Gross Margin % 39.4 % 57.5 % 49.3 % For the six months period ended June 30, 2020 Revenue $ 2,016,861 $ 2,197,687 $ 4,214,548 Gross Margin $ 731,172 $ 912,331 $ 1,643,503 Depreciation and amortization $ 428,475 $ 58,051 $ 486,526 Additions to property and equipment — — — Gross Margin % 36.3 % 41.5 % 39.0 % For the three months period ended June 30, 2020 Revenue $ 1,087,424 $ 1,169,769 $ 2,257,193 Gross Margin $ 384,121 $ 494,204 $ 878,325 Depreciation and amortization $ 208,405 $ 23,192 $ 231,597 Additions to property and equipment — — — Gross Margin % 35.3 % 42.2 % 38.9 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity | The following table represents stock option activity as of and for the six months ended June 30, 2021: Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Options Outstanding – December 31, 2020 3,800,000 $ 0.21 3.6 $ — Granted 385,000 0.51 4.8 — Exercised 0 — — — Forfeited 175,000 — — — Options Outstanding – June 30, 2021 4,010,000 $ 0.22 2.7 $ — Exercisable and Vested, June 30, 2021 3,525,000 $ 0.22 2.0 $ — |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Computation of Dilutive Common Share Equivalents Under Treasury Stock Method (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||||
Total Shares Outstanding | 40,692,286 | 40,692,286 | 40,692,286 | ||
Potential Incremental Shares: | |||||
Average Exercise Price | $ 0.22 | $ 0.22 | $ 0.21 | ||
Current Market Price | $ 0.78 | $ 0.78 | |||
Shares eligible for Purchase | 3,525,000 | ||||
Average Price Received | $ 769,586 | ||||
Shares at Market Price | 986,648 | ||||
Incremental Shares under Treasury Stock Method | 2,538,352 | 3,400,000 | 2,538,352 | 3,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies -Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Net income | $ 341,085 | $ 142,049 | $ 108,363 | $ 242,882 |
Weighted average shares outstanding during period on which basic earnings per share is calculated | 40,692,286 | 40,692,286 | 40,692,286 | 40,692,286 |
Effect of dilutive shares | ||||
Incremental shares under stock-based compensation | 2,538,352 | 3,400,000 | 2,538,352 | 3,400,000 |
Weighted average shares outstanding during period on which diluted earnings per share is calculated | 43,230,638 | 44,092,286 | 43,230,638 | 44,092,286 |
Earnings per share attributable to common stockholders | ||||
Basic earnings per share | $ 0.01 | $ 0 | $ 0 | $ 0.01 |
Diluted earnings per share | $ 0.01 | $ 0 | $ 0 | $ 0.01 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Product Information [Line Items] | |||||
Revenue | $ 2,913,873 | $ 2,257,193 | $ 5,306,711 | $ 4,214,548 | |
Trade Accounts Receivable | Customer #1 | |||||
Product Information [Line Items] | |||||
Receivable concentration | 106,783 | $ 106,783 | $ 194,509 | ||
Concentration risk, percentage | 14.36% | 52.40% | |||
Trade Accounts Receivable | Customer #2 | |||||
Product Information [Line Items] | |||||
Receivable concentration | $ 447,738 | $ 447,738 | $ 52,843 | ||
Concentration risk, percentage | 60.21% | 14.20% | |||
Sales Revenue | Customer #1 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 33.40% | 31.10% | |||
Revenue | $ 1,774,644 | $ 1,309,330 | |||
Sales Revenue | Customer #2 | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 31.37% | ||||
Revenue | $ 1,664,735 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 461,611 | $ 461,611 |
Less: Accumulated Depreciation | (407,979) | (382,040) |
Property and equipment, net | 53,632 | 79,571 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 46,950 | 46,950 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 102,946 | 102,946 |
Billing Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 217,163 | 217,163 |
Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 94,552 | $ 94,552 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 213,552 | $ 231,597 | $ 427,105 | $ 486,526 |
Property and Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 12,969 | $ 7,216 | $ 25,938 | $ 14,433 |
Right-of-Use Assets - Schedule
Right-of-Use Assets - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 55,873 | |
2022 | 58,547 | |
2023 | 45,578 | |
2024 | 46,596 | |
2025 | 47,615 | |
2026 | 11,968 | |
Total | 266,177 | |
Less Interest | 24,765 | |
Present value of minimum lease payments | 241,412 | |
Current Maturities | 85,532 | $ 66,323 |
Long Term Maturities | $ 155,880 | $ 15,399 |
RIGHT-OF-USE ASSETS (Details Na
RIGHT-OF-USE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Lease terms and expirations, description | the Company had one (1) property with a lease term in excess of one (1) year. This lease liability expires March 31, 2026. The Company has two (2) current lease liabilities. These lease liabilities expire December 1, 2021, and May 15, 2022, respectively. In January 2021, the Company entered into a new, five (5) year lease for its corporate headquarters located in Plano, TX. | |||
Lease expense | $ 3,967 | $ 3,217 | $ 8,185 | $ 6,435 |
Minimum | ||||
Implied interest rate used to record assets at present value | 3.29% | 3.29% | ||
Maximum | ||||
Implied interest rate used to record assets at present value | 5.34% | 5.34% |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Acquired Finited-Lived Intangible Assets (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Customer List | $ 1,135,962 | $ 1,135,962 |
Software | 2,407,001 | 2,407,001 |
ETC License | 634,251 | 634,251 |
Less: Amortization | (3,141,796) | (2,740,629) |
Net Amortizable Intangibles | 1,035,418 | 1,436,585 |
Right of Use Assets - net | 229,710 | 80,578 |
Intangible Assets net | $ 1,265,128 | $ 1,517,163 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) | Jun. 30, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 401,168 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Fair market value of acquired license | $ 634,251 | $ 634,251 | ||
Amortization of intangible assets | $ 200,583 | $ 200,583 | $ 401,167 | $ 401,167 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Sep. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | $ 458,900 | |||
Promissory Note Agreement | ||||
Short-term Debt [Line Items] | ||||
Maturity date, description | The term of the note is twelve (12) months | |||
Interest rate | 12.75% | |||
Promissory note repayment, balance | $ 67,105 | 17,308 | ||
SBA Emergency Injury Disaster Loan (EIDL) | ||||
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | $ 150,000 | |||
Maturity date, description | The maturity date of the 30-year note is June 2050. | |||
Interest rate | 3.75% | |||
Other income | $ 10,000 | |||
SBA Payroll Protection Loan #1 | ||||
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | $ 186,300 | |||
Amount recorded as loan forgiveness on SBA Covid Loans | 186,300 | |||
SBA Payroll Protection Loan #2 | ||||
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | 101,800 | |||
Amount recorded as loan forgiveness on SBA Covid Loans | 101,800 | |||
SBA Payroll Protection Loan #3 | ||||
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | 20,900 | |||
Amount recorded as loan forgiveness on SBA Covid Loans | $ 20,900 | |||
Total SBA Payroll Protection Loans | ||||
Short-term Debt [Line Items] | ||||
Proceeds received from SBA Loans | $ 309,000 | |||
Interest rate | 1.00% | |||
Maturity date | Apr. 14, 2022 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Details Narrative) - State of Pennsylvania | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Income Tax Examination [Line Items] | |
Tax assessment | $ 111,650 |
Potential tax liability | $ 7,000 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 2,913,873 | $ 2,257,193 | $ 5,306,711 | $ 4,214,548 |
Gross Margin | 1,437,388 | 878,325 | 2,348,549 | 1,643,503 |
Depreciation and amortization | 213,552 | 231,597 | 427,105 | 486,526 |
Additions to property and equipment | ||||
Gross Margin % | 49.30% | 38.90% | 44.30% | 39.00% |
Hosted Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,319,370 | $ 1,087,424 | $ 2,545,236 | $ 2,016,861 |
Gross Margin | 520,030 | 384,121 | 975,966 | 731,172 |
Depreciation and amortization | 207,067 | 208,405 | 405,045 | 428,475 |
Additions to property and equipment | ||||
Gross Margin % | 39.40% | 35.30% | 38.30% | 36.30% |
Mobile Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,594,503 | $ 1,169,769 | $ 2,761,475 | $ 2,197,687 |
Gross Margin | 917,358 | 494,204 | 1,372,583 | 912,331 |
Depreciation and amortization | 6,485 | 23,192 | 22,060 | 58,051 |
Additions to property and equipment | ||||
Gross Margin % | 57.50% | 42.20% | 49.70% | 41.50% |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) | 6 Months Ended |
Jun. 30, 2021Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Share-Based Compensation, Stock Option Activity (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Equity [Abstract] | |
Options Outstanding, December 31, 2020 | shares | 3,800,000 |
Weighted average exercise price, outstanding December 31, 2020 | $ / shares | $ 0.21 |
Weighted average remaining life, outstanding December 31, 2021 | 3 years 7 months 6 days |
Aggregate intrinsic value, outstanding December 31, 2020 | $ | $ 0 |
Granted | shares | 385,000 |
Weighted average exercise price, granted | $ / shares | $ 0.51 |
Weighted average remaining life, granted | 4 years 9 months 18 days |
Exercised | shares | 0 |
Weighted average exercise price, exercised | $ / shares | $ 0 |
Forfeited | shares | 175,000 |
Weighted average exercise price, forfeited | $ / shares | |
Options Outstanding, June 30, 2021 | shares | 4,010,000 |
Weighted average exercise price, outstanding June 30, 2021 | $ / shares | $ 0.22 |
Weighted average remaining life, outstanding June 30, 2021 | 2 years 8 months 12 days |
Aggregate intrinsic value, outstanding June 30, 2021 | $ | $ 0 |
Exercisable and Vested, June 30, 2021 | shares | 3,525,000 |
Weighted average exercise price, exercisable and vested June 30, 2021 | $ / shares | $ 0.22 |
Weighted average remaining life, exercisable and vested, June 30, 2021 | 2 years |
Aggregate intriinsic value, exercisable and vested June 30, 2021 | $ | $ 0 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Equity [Abstract] | ||
Stock-based compensation expense, vested options | $ 79,058 | $ 20,514 |
Deferred compensation expense | $ 43,639 | |
Weighted average term, compensation expense | 3 years 11 months 1 day | |
Average stock price | $ 0.559 | |
Strike price | $ 0.531 | |
Weighted average expected term | 5 years | |
Weighted average volatility rate | 258.10% | |
Risk-free discount rate | 1.52% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | Jul. 28, 2021 | Jul. 06, 2021 | Oct. 17, 2019 | Aug. 05, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | |||||
Options outstanding | 4,010,000 | 3,800,000 | ||||
Options granted | 385,000 | |||||
Exercise price | $ 0.51 | |||||
Amended Incentive Stock Option Agreement | Subsequent Event [Member] | Charles D. Griffin | ||||||
Subsequent Event [Line Items] | ||||||
Options granted | 1,100,000 | |||||
Exercise price | $ 0.75 | |||||
Amended Incentive Stock Option Agreement | Chief Executive Officer | ||||||
Subsequent Event [Line Items] | ||||||
Severance and release, description | In connection with the execution and delivery of the Severance Agreement, the parties also executed and delivered an Amended Incentive Stock Option Agreement, among other agreements, that included a customary “cashless” exercise feature for the 500,000 vested incentive stock options that had been previously granted to Mr. Schneider, and voiding the remainder of 1,000,000 unvested incentive stock options he had been granted. | |||||
Amended Incentive Stock Option Agreement | Former Chief Executive Officer | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 98,116 | |||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 75,000 | |||||
Options outstanding | 401,884 | |||||
Incentive Stock Option Plan | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Change in number of shares reserved for issuance, description | In connection with the granting of these incentive stock options, the Board of Directors of the Company also voted to increase the number of reserved shares for issuance under its Incentive Stock Option plan from 5,000,000 shares to 6,000,000 shares. | |||||
Incentive Stock Option Plan | Director / Jeffrey Pearl | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Options granted | 25,000 | |||||
Exercise price | $ 0.813 |