M&A - KonaTel, Inc.

Form Type: 10-K

Filing Date: 2025-04-15

Corporate Action: Acquisition

Type: Update

Accession Number: 000151597125000041

Filing Summary: KonaTel, Inc. has engaged in a significant transaction by entering into a Membership Interest Purchase Agreement with Excess Telecom, Inc. on January 22, 2024. Under this agreement, KonaTel conveyed 49% of its membership interest in IM Telecom to Excess Telecom for $10,000,000. The final closing, which would involve the transfer of the remaining 51% interest for $100, is contingent upon approval from the Federal Communications Commission (FCC). As of December 31, 2024, this FCC approval is pending. Following this agreement, there are additional documents including a Management Service Agreement and a Master Distribution Agreement aimed at enhancing operational compliance and expanding IM Telecom’s footprint as an Eligible Telecommunications Carrier (ETC) in 40 states. The agreements have undergone modifications recorded as of March 4, 2025, reflecting ongoing collaboration and compliance enhancements in the telecommunications market.

Form Type: 8-K/A

Filing Date: 2025-03-10

Corporate Action: Acquisition

Type: Update

Accession Number: 000151597125000015

Filing Summary: On January 22, 2024, KonaTel, Inc. entered into a Membership Interest Purchase Agreement with Excess Telecom, Inc., agreeing to sell a 49% membership interest in IM Telecom initially, with the remaining 51% subject to FCC approval. A $1,000,000 holdback was established to address potential liabilities of IM Telecom and performance obligations by KonaTel. A partial release of $150,000 of this holdback is being approved as IM Telecom has not faced material issues with FCC-related matters. Additional agreements such as a Management Service Agreement and Master Distribution Agreement were executed to ensure compliance and smooth operations pending FCC approval. The Amended Management Services Agreement was updated to specify operational compliance with FCC regulations. New agreements formalize the distribution relationship, and minor adjustments were made to the IM Telecom Operating Agreement to align with business practices. This report serves to update on these transactions and agreements following the initial report filed on January 30, 2024.