OTC: KTEL

On
July 20, 2017, pursuant to a Common Stock Purchase Agreement dated July 19, 2017, M2 Equity Partners, LLC, a privately-held Minnesota
limited liability company (“M2”), acquired 12,100,000 shares of our common stock in consideration of the sum of $367,500,
which resulted in a change in control of our Company.

On
November 13, 2017, we filed an Amended and Restated Certificate of Incorporation with the State of Delaware, which removed all of the
designations of our preferred stock from our Certificate of Incorporation, while reserving our 50,000,000 authorized and unissued one
$0.01 par value shares of preferred stock for future issuance as the Board of Directors may designate and approve.

Effective
December 18, 2017, we completed an Agreement and Plan of Merger (the “KonaTel Merger Agreement”) with our newly formed wholly
owned subsidiary, Dala Subsidiary Corp., a Nevada corporation (“Dala Nevada”), under which KonaTel, Inc., a Nevada corporation
(“KonaTel Nevada”), became our wholly owned subsidiary on the closing of the merger (the “KonaTel Nevada Merger”);
and we succeeded to the business operations of KonaTel Nevada, comprised of a full service cellular provider that delivered cellular
products and services to individual and business customers in various retail and wholesale markets nationwide through its sales network,
and we changed our name to “KonaTel, Inc.” on January 16, 2018.

Effective
February 7, 2018, and dated as of February 5, 2018, we entered into an Agreement for the Purchase and Sale of Membership Interest (the
“PSMI”), with the transaction documents being deposited in escrow on February 7, 2018, respecting the acquisition of 100%
of the membership interest in IM Telecom, doing business as “Infiniti Mobile.” The principal asset of IM Telecom at that
time was a “Lifeline Program” license of the Federal Communications Commission (the “FCC”), which was an FCC
approved wireless “Compliance Plan.”

On
August 9, 2018, we entered into an Asset Purchase Agreement (the “Telecon Wireless Agreement”) with Telecon Wireless Resources,
Inc., a New York corporation (“Telecon Wireless”), whereby we sold various assets, including furniture, fixtures, equipment,
accounts receivable and a customer list, among other assets and liabilities, to Telecon Wireless.

Effective
December 31, 2018, we completed an Agreement and Plan of Merger with Apeiron Systems (the “Apeiron Systems Merger Agreement”),
and under which we exchanged 7,000,000 shares of our common stock for all of the outstanding shares of Apeiron Systems. Apeiron Systems
became our wholly owned subsidiary on the closing of the merger (the “Apeiron Systems Merger”). Apeiron Systems was organized
in 2013 as a provider of a suite of real-time business communications services that included voice, messaging, network connectivity and
platform services.

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On
December 14, 2020, the shares of our common stock were approved for up listing to the OTC Markets Group LLC (the “OTC Markets”)
OTCQB® Venture Market (the “OTCQB Tier”). The OTCQB is a venture market operated by OTC Markets. To be eligible for quotations
on the OTCQB, companies must be current in their reporting obligations under Section 13 or 15(d) of the Exchange Act and undergo an annual
verification and management certification process and/or meet other compliance provisions of the OTC Markets contained in its “OTC
Alternative Reporting Guidelines,” which include, among other miscellaneous conditions, a minimum bid price of $0.01, a “public
float” of not less than 10% of the total outstanding shares and a minimum of fifty (50) beneficial shareholders. The OTC Markets
is recognized by the SEC as a “Qualified Interdealer Quotation System” (“IDQS”) under SEC Rule 15c2-11(e)(6);
and the OTCQB is an established public market that provides current public information to investors.

On
August 25, 2021, we filed a registration statement with the SEC on Form S-8 to register 5,901,884 shares of our common stock reserved
for grants underlying our 2018 Incentive Stock Option Plan (the 2018 year designation reflects our change to a calendar year end in 2017,
following the closing of the KonaTel Nevada Merger).

On
June 14, 2022, we and Apeiron Systems and IM Telecom entered into a Note Purchase Agreement (the “NPA”) with CCUR Holdings,
Inc., a Delaware corporation (respectively, “CCUR” and the “CCUR Loan”), as “Collateral Agent”; and
CCUR and Symbolic Logic, Inc., a Delaware corporation (“Symbolic”), as “Purchasers,” along with a related Guarantee
and Security Agreement (the “GSA”), whereby the Company and its subsidiary companies pledged their assets (including the
Company’s equity ownership of its subsidiaries) to secure $3,150,000 (the “Principal Amount”) in debt financing payable
in one (1) year (to be repaid prior to nine [9] months), together with interest at the rate of 15% per annum (the “Interest Rate”).
On June 1, 2023, we entered into a “First Amendment to the NPA” with CCUR and Symbolic. The purpose of the amendment was
to add further growth capital to the Company in the form of “Delayed Draw Notes” in an aggregate principal amount of up to
$2,000,000; and in consideration therefor, we provided additional collateral for the NPA. See our 8-K Current Report dated June 14, 2022,
filed with the SEC on June 21, 2022, and our 8-KA Current Report dated June 14, 2022, filed with the SEC on June 7, 2023, for additional
information on the CCUR Loan. These Current Reports are available by Hyperlink in Section 9 – Financial Statements and Exhibits,
Item 9.01, Part IV, Item 15 hereof, and are incorporated herein by reference. The CCUR Loan was paid in full on or about January 23,
2024, which was the “Initial Closing Date” of our “Purchase Agreement” with Excess Telecom, Inc., a Nevada corporation,
which is discussed below.

On
July 7, 2022, we filed a registration statement with the SEC on Form S-8 to register an additional 2,000,000 shares of our common stock
reserved for grants underlying our 2018 Incentive Stock Option Plan.

On
August 22, 2022, we filed an amendment to our registration statement with the SEC on Form S-8 to decrease our shares registered on Form
S-8 by 1,500,000 shares; and on March 20, 2023, we filed a similar amendment on Form S-8 to decrease our shares registered on Form S-8
by 253,764 shares, then leaving 6,148,120 remaining registered shares, with 1,648,120 shares having been issued and 4,500,000 shares
being reserved for future issuance under outstanding grants or to be granted incentive stock options.

On
January 24, 2023, we entered into a non-material Membership Interest Purchase Agreement to acquire 100% of Tempo Telecom, LLC, a Georgia
limited liability company and an FCC Eligible Telecommunications Carrier (“ETC”) authorized to provide Lifeline services
in twenty-one (21) states (respectively, the “Tempo Purchase Agreement” and “Tempo”), the closing of which is
subject to the approval of the FCC and applicable state and other governmental agencies, among other conditions. As of December 31, 2025,
this agreement continues to be under review by the FCC.

On
April 6, 2023, pursuant to a Purchase of Contract Rights Agreement between the Company and Insight Mobile, Inc., a Delaware corporation
(respectively, the “Insight Mobile Agreement” and “Insight Mobile”), we and Insight Mobile executed and delivered
an Assumption of Membership Interest Purchase Agreement (the “Assignment Agreement”), which is being held in escrow by counsel
for Insight Mobile (the “Escrow Agent”) pending satisfaction of all conditions to the closing of the Tempo Purchase Agreement,
and whereby Insight Mobile has agreed to pay us the “Purchase Price” of $4,500,000 for our “Contract Rights”
under the Tempo Purchase Agreement. For additional information on the Insight Mobile Agreement and the Assignment Agreement, see our
8-K Current Report dated April 6, 2023, filed with the SEC on April 17, 2023, which is Hyperlinked in Section 9 – Financial Statements
and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

On
December 8, 2023, we filed an additional registration statement on Form S-8 to increase the number of shares of our common stock available
for issuance under our 2018 Incentive Stock Option Plan by 1,700,000 shares. This amendment resulted in 7,848,120 registered shares equaling
1,748,120 shares issued and 6,100,000 reserved shares remaining for future issuance.

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Effective
December 18, 2023, we and IM Telecom, as the “Purchasers,” entered into an Installment Sale Agreement (the “Installment
Sale Agreement”) with ACP Financing VII Limited Liability Company, a Texas limited liability company (“ACP Financing”),
as the “Seller,” pursuant to which the Seller agreed to purchase new and refurbished cellular devices for distribution through
the Purchasers’ distribution network to Affordable Connectivity Program (the “ACP” or the “ACP Program”
[which ended on June 1, 2024, and has not been renewed by the United States Congress]), Federal Lifeline and California Lifeline eligible
consumers, such devices operating on 4G or better technology platforms or any such other consumer technology equipment upon the mutual
agreement of the Seller and the Purchasers (the “Devices”), and to sell the Devices to the Purchasers. It is intended that
this Installment Sale Agreement will be utilized by KonaTel following the payment of all outstanding amounts owed to ACP Financing. For
additional information on the Installment Sale Agreement, see our 8-K Current Report dated December 18, 2023, filed with the SEC on December
22, 2023, which is Hyperlinked in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated
herein by reference.

On
November 10, 2023, Apeiron Systems entered into a five (5) year agreement with Viva-US Telecommunications, Inc. (“Viva-US”),
as the exclusive supplier of wholesale cellular voice and data, messaging, international call termination, smart SIM (“Subscriber
Identity Module”) and other telecommunications services. Apeiron Systems provides these services through its CPaaS (“Communication
Platform as a Service”) cloud platform. Viva-US is a US MVNO (“Mobile Virtual Network Operator”) and part of the Balesia
Technologies, Inc. group of companies operating MNOs (“Mobile Network Operator”) and MVNOs throughout North and South America,
supporting over three million customers in Bolivia, Mexico and Argentina.

On
January 22, 2024 (the “Effective Date”), KonaTel and IM Telecom entered into a Membership Interest Purchase Agreement (the
“Excess Telecom Purchase Agreement” or the “Membership Interest Purchase Agreement”) with Excess Telecom, Inc.,
a Nevada corporation (“Excess Telecom”), pursuant to which KonaTel conveyed 49% of its membership interest in IM Telecom
to Excess Telecom on the “Initial Closing Date” in consideration of the sum of $10,000,000, and if approved by the FCC, it
would have conveyed the remaining 51% of the membership interest in IM Telecom to Excess Telecom for the sum of $100 on the “Final
Closing.” If not approved by the FCC, KonaTel would retain 51% of IM Telecom and Excess Telecom shall retain 49% of IM Telecom;
and KonaTel would have no obligation to refund any portion of the funds paid by Excess Telecom to KonaTel on the Initial Closing Date.
Additional agreements were also executed by the parties on the Initial Closing Date, including
a Management Service Agreement, a Master Distribution Agreement and an Amended and Restated Operating Agreement (collectively, the “Transaction
Documents”). As of December 31, 2025, the approval of this agreement by the FCC was still pending. For additional information
on these Transaction Documents, see our 8-K Current Report dated January 22, 2024, filed with the SEC on January 30, 2024, which is Hyperlinked
in Section 9 – Financial Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

On
September 19, 2025, KonaTel and Excess Telecom executed a First Omnibus Amendment to Transaction Documents (the “First Omnibus
Agreement”) and a Third Amended and Restated Operating Agreement of IM Telecom (the “Amended Operating Agreement”).
The First Omnibus Amendment was executed to create IM Telecom as a standalone partnership entity owned 51% by KonaTel and 49% by Excess
Telecom, and the parties withdrew the application for FCC approval. For KonaTel’s part, this entity change included transferring
certain employees previously working for IM Telecom on KonaTel’s payroll to the new entity. As agreed by KonaTel and Excess Telecom,
effective October 1, 2025, all combined net income of IM Telecom will be reported for federal income tax purposes as a partnership (Form
1065) and KonaTel will continue to receive distributions based upon a new Distribution Agreement for compensation from it sales under
the IM Telecom’s vertical sales channels, including all new sales stemming from our new healthcare vertical partnership as originally
agreed. The Management Agreement originally signed on the Initial Closing date of January 22, 2024, has been terminated and is of no
further force or effect and all ongoing business operations will continue under the “new” IM Telecom entity. The First Omnibus
Agreement facilitated the payment of $700,000 to KonaTel from the remaining note receivable from Excess Telecom from the Initial Closing
Date, and currently, there is a $150,000 note receivable due KonaTel from Excess Telecom under the Transaction Documents. See our 8-KA-2
Current Report dated January 22, 2024, filed with the SEC on September 30, 2025, which is Hyperlinked in Section 9 – Financial
Statements and Exhibits, Item 9.01, Part IV, Item 15, below, and is incorporated herein by reference.

BUSINESS

KonaTel
Nevada was organized under the laws of the State of Nevada on October 14, 2014, by its founder and then sole shareholder, D. Sean McEwen,
our current Chairman and CEO, to conduct the business of a full-service cellular provider that delivered cellular products and services
to individual and business customers in various retail and wholesale markets. Through its sales network, it provides these services nationwide.
In furtherance of its proposed business, on November 1, 2014, it acquired most of the assets of Coast to Coast Cellular, Inc. (“Coast
to Coast”), including inventories, property, plant and equipment and its customer list, all valued at approximately $950,000, net
of liabilities in the approximate amount of $415,000; and on November 1, 2016, it acquired the assets of CS Agency LLC (“CS Agency”),
consisting of contract rights related to the cellular industry, in consideration of assuming liabilities of CS Agency in the approximate
amount of $300,000. With the completion of the KonaTel Nevada Merger, we succeeded to the current and intended business operations of
KonaTel Nevada.

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On
December 31, 2018, we acquired Apeiron Systems (www.apeiron.io). Apeiron was organized in 2013 and is an international hosted services
Communications Platform as a Service (“CPaaS”) 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 FCC licensed Internet Telephony Service Provider (“ITSP”), Apeiron also holds an 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 Multiprotocol Label Switching (“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. Apeiron primarily distributes its services nationally through its website,
its sales staff, independent sales agents and Independent Sales Organizations (“ISOs”).

On
February 5, 2018, we entered into a purchase agreement to acquire IM Telecom (www.infinitimobile.com). On October 23, 2018, the FCC approved
our acquisition of IM Telecom, and on January 31, 2019, we completed the purchase of IM Telecom. IM Telecom currently operates as a standalone
51% owned subsidiary of KonaTel. It is an FCC licensed Eligible Telecommunications Carrier (“ETC”) and is one of twenty-two
(22) original FCC licensed wireless cellular resellers to hold an FCC approved Lifeline Compliance Plan since 2012, of which approximately
twelve (12) license holders remain active today. The FCC has not approved or granted a new wireless reseller Lifeline Compliance Plan
since 2012. As a licensed ETC, IM Telecom was also an FCC licensed Affordable Connectivity Program (the “ACP” or the “ACP
Program”) provider, authorized to distribute ACP subsidized high-speed Lifeline subsidized mobile voice/data service in eleven
(11) states, which are Vermont, South Carolina, Georgia, Maryland, Kentucky, Wisconsin, Oklahoma, California, New York, Pennsylvania
and Nevada. In addition to Lifeline, IM Telecom is also an FCC approved ACP provider authorized to distribute ACP subsidized high-speed
mobile data service in the fifty (50) states, Washington D.C. and Puerto Rico. Lifeline is an FCC program that provides subsidized, fixed
or mobile telecommunications services to low-income Americans. ACP was an FCC program that provided subsidized high-speed wireless data
services to low-income Americans, which expired on June 1, 2024. IM Telecom distributes Lifeline and ACP services under its Infiniti
Mobile brand name through its website, sales staff, retail locations and ISOs. IM Telecom also offers non-Lifeline and non-ACP services
throughout the United States. IM Telecom has a US-based customer support center located in Atmore, Alabama.

On
September 19, 2025, KonaTel and Excess Telecom executed the First Omnibus Amendment to Transaction Documents and an Amended Operating
Agreement related to its Membership Interest Purchase Agreement with Excess Telecom. The First Omnibus Amendment was executed to create
IM Telecom as a standalone partnership entity owned 51% by KonaTel and 49% by Excess Telecom, and the parties withdrew the application
for FCC approval. For KonaTel’s part, this entity change included transferring certain employees previously working for IM Telecom
on KonaTel’s payroll to the new entity. As agreed by KonaTel and Excess Telecom, effective October 1, 2025, all combined net income
of IM Telecom will be reported for federal income tax purposes as a partnership (Form 1065), and KonaTel will continue to receive distributions
based upon a new Distribution Agreement for compensation only from it sales under the IM Telecom’s vertical sales channels, including
all new sales stemming from our new healthcare vertical partnership as originally agreed.

KonaTel
and IM Telecom are headquartered in Plano, Texas. IM Telecom also has a customer service center in Atmore, Alabama. KonaTel has six (6)
full-time employees and IM Telecom has seven (7) full-time employees. IM Telecom closed its warehouse/distribution center in Tulsa, Oklahoma
effective July 31, 2025.

Apeiron
Systems is headquartered in Johnstown, Pennsylvania, where it has customer service and software engineering resources staffed. Additional
development resources are staffed out of Los Angeles, California, as well as in Europe and Asia. Apeiron has twelve (12) full-time employees.

Principal
Products or Services and their Markets

Our
principal products and services, provided through Apeiron Systems and IM Telecom, include our CPaaS suite of services (“SIP/VoIP,”
“SMS/MMS,” “POTS Replacement”), wholesale and retail mobile voice and mobile data IoT services, wholesale voice
termination services and our ETC and ACP subsidized services for low-income Americans. Except for our ETC Lifeline services distributed
in partnership with Excess Telecom in up to forty (40) states/territories and our ACP services, which until the termination of the ACP
Program on June 1, 2024, had been distributed in the fifty (50) states, as well as Washington D.C. and Puerto Rico, our Apeiron Systems’
products and services are available worldwide and subject to U.S., international and local/national regulations.

We
generate revenue from two (2) primary sources, Hosted Services and Mobile Services:

●
Our Hosted Services include
a suite of hosted CPaaS services within 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, of which IoT provides device
connectivity via wireless 4G/5G. These Hosted Services are marketed nationally and internationally through the Apeiron website, its
sales staff, independent sales agents and ISOs.

7

●
Our Mobile Services include
retail and wholesale cellular voice/text/data services and IoT mobile data services through 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 previously
under the FCC’s ACP 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 any change, reduction or elimination may have a material impact on
our Mobile Services business; and as referenced above, the ACP Program terminated on June 1, 2024, and has not been renewed by Congress.

Distribution
Methods of the Products or Services

We
primarily distribute our Hosted Services through our website, sales staff, master distribution agreements and ISOs. We primarily distribute
our Mobile Services through our website, sales staff, retail locations and Independent Sales Organizations (ISOs).

Sources
and Availability of Raw Materials and the Names of Principal Suppliers

Wholesale
wireless services are sourced either directly from the wireless carrier or from wholesalers that sit between us (Apeiron Systems and
IM Telecom) and the wireless carrier. Carriers can include Verizon, T-Mobile and AT&T. Wholesalers can include Prepaid Wireless Group
(“PWG”) and Telispire.

Wireless
resellers, like us, traditionally do not own the wireless infrastructure over which services are provided. We purchase services from
the following sources:

●
Verizon: Verizon voice,
text and data services are provided through master distribution partners of Verizon. The contract we hold with distribution partners
has set per unit pricing for voice, text and data wireless services. Pricing per unit is in the form of a monthly recurring charge
(“MRC”) that may or may not include minutes of use, text units or data units. Additional data units are available for
purchase;

●
AT&T: AT&T voice,
text or data service and AT&T IoT service under a contract with us, has set “unit based” pricing for voice, text,
data and IoT wireless services. Pricing per unit is in the form of an MRC that may or may not include minutes of use, text units
or data units. Additional data units are available for purchase;

●
Verizon Wireless VPP, a
Verizon IoT product: Verizon VPP, also through a contract with us, has set per unit pricing for IoT wireless services. Pricing per
unit is in the form of an MRC that includes data units with defined over plan use pricing; and

●
T-Mobile voice, text or
data Lifeline services are provided through master distribution partners of T-Mobile. The contract we hold has set pricing for bundled
voice, text and data wireless services. Pricing bundles are in the form of an MRC that include minutes of use, text units or data
units. Larger data plans are available for purchase for consumer requiring larger voice and data packages.

Patents,
Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts

Our
51% owned partnership, IM Telecom, is an FCC licensed ETC and is one of the original twenty-two (22) FCC licensed wireless cellular resellers
to hold an FCC approved wireless Lifeline Compliance Plan in the United States (as of 2012), of which approximately twelve (12) license
holders remain active today. As a licensed ETC, IM Telecom is currently authorized to distribute Lifeline subsidized mobile voice/data
service in up to forty (40) states. Although the ACP program officially ended on June 1, 2024, IM Telecom is also an FCC licensed ACP
carrier, authorized to distribute ACP subsidized mobile data services in the fifty (50) states, as well as Washington D.C. and Puerto
Rico. It also offers non-Lifeline and non-ACP services. IM Telecom intends to maintain this designation with anticipation that the program,
or one similar, will be restarted.

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Competition

The
telecommunications industry is highly competitive. Our primary cellular competitors include other resellers and national carriers, such
as AT&T, Verizon and T-Mobile. These national cellular carriers are facility-based, are significantly larger than us and enjoy trade
name and trademark public recognition, as well as greater resources, scale and competitive advantages, among other substantial factors,
as compared to us. In addition, our cellular competitors also include numerous smaller regional carriers, existing MVNOs and ETCs, such
as Metro PCS, Cricket Wireless, TracFone Wireless, TruConnect and Assurance Wireless, many of which offer or may offer cellular, mobile
data, Lifeline and ACP services, along with no-contract postpaid and prepaid service plans. Our CPaaS competitors include, but are not
limited to, Twilio, Plivo, Bandwidth, Thinq, VoIP Innovations, Telnyx, Coredial, Vonage/Nexmo, CLX Comm, Genband Kandy, Tropo, Telestax,
2600Hz and Signal Wire. Competitive factors within the telecommunications industry include pricing, market saturation, service and product
offerings, customer experience, network investment and quality, development and deployment of technologies and regulatory changes. Some
competitors have shown a willingness to use aggressive pricing as a source of differentiation. Other competitors have sought to add ancillary
services, like mobile video, to enhance their offerings. Taken together, the competitive factors we face continue to put pressure on
margins as companies compete to retain their current customer base and continue to add new developments, many proprietary or patented,
and customers.

Need
for any Governmental Approval of Principal Products or Services

On
October 23, 2018, the FCC approved our acquisition of IM Telecom. In 1985, during the Reagan administration, the FCC established the
Lifeline Assistance program through generic powers afforded the FCC under the Communications Act of 1934. Cellular service was added
to the Lifeline program in 2009. The FCC has not approved any new wireless reseller Lifeline Compliance Plans since 2012.

Existing
and Probable Government Regulation to Our Current and Intended Business

The
FCC has several complex requirements and proceedings that affect our operations and that could increase our costs or diminish our revenues.
For example, the FCC has rules regarding the provision of 911 and E-911 services, porting telephone numbers, roaming, disabilities access,
privacy and cybersecurity, consumer protection, and the universal service and Lifeline programs, including eligibility, reimbursement
and program requirements. Many of these and other issues are being considered in ongoing proceedings, and we cannot predict whether or
how such actions will affect our business, financial condition or results of operations. Our ability to provide services and generate
revenues has and could continue to be harmed by adverse regulatory action or changes to existing laws and regulations. In addition, regulation
of companies that offer competing services can impact our business indirectly.

Smaller
Reporting Company

We
are subject to the reporting requirements of Section 13 of the Exchange Act, and we are subject to the disclosure requirements of Regulation
S-K of the SEC, as a “smaller reporting company.” That designation relieves us of some of the informational requirements
of Regulation S-K and Article 8 of Regulation S-X of the SEC.

Emerging
Growth Company

In
2020, our “emerging growth company” designation as defined in the “Jumpstart Our Business Startups Act of 2012,”
or the “JOBS Act,” expired as of the fifth anniversary of our initial registered public offering. During our emerging growth
company designation, we did not utilize any financial statement waivers available to us as a result of that designation.

Sarbanes/Oxley
Act

We
are also subject to the Sarbanes-Oxley Act of 2002. The Sarbanes/Oxley Act created a strong and independent accounting oversight board
to oversee the conduct of auditors of public companies and strengthens auditor independence. It also requires steps to enhance the direct
responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies;
establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts;
creates guidelines for audit committee members’ appointments, compensation and oversight of the work of public companies’
auditors; management assessment of our internal controls; auditor attestation to management’s conclusions about internal controls;
prohibits certain insider trading during pension fund blackout periods; requires companies and auditors to evaluate internal controls
and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of the
Sarbanes/Oxley Act could substantially increase our legal and accounting costs.

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Exchange
Act Reporting Requirements

Section
14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with
the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to our shareholders
at a special or annual meeting thereof or pursuant to a written consent will require us to provide our shareholders with the information
outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the SEC at least ten (10)
days prior to the date that definitive copies of this information is forwarded to our shareholders.

We
are required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis, and are required
to timely disclose certain material events (e.g., entry into a definitive material agreement, changes in corporate control, acquisitions
or dispositions of a significant amount of assets other than in the ordinary course of business, bankruptcy and receivership filings
and the sale of in excess of five percent (5%) of our outstanding securities, among various other material matters) in a Current Report
on Form 8-K. See SEC Form 8-K for a more complete description of the type of material events required to be disclosed.

Number
of Total Employees and Number of Full-Time Employees

Across
our companies, as of December 31, 2025, we had a total of twenty-five (25) full-time employees and no part-time employees.

Subsidiaries

We
have two (2) wholly owned subsidiaries: KonaTel Nevada and Apeiron Systems; and we currently have a 51% interest in the IM Telecom, with
the remaining 49% interest being owned by Excess Telecom. Our subsidiary, KonaTel Nevada, has remained inactive since early 2021.

Additional
Information

You
may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You may also find all of the reports or registration statements that we have previously filed electronically with the SEC
at its Internet site at www.sec.gov in the Edgar Archives of the SEC or in our website at konatel.com.