When used in this Quarterly Report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act and Section 21e of the Exchange Act regarding events, conditions and financial trends that may affect our future plans of operations, business strategy, operating results, and financial position. Persons reviewing this Quarterly Report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed further below under "Trends and Uncertainties," and include general economic factors and conditions that may directly or indirectly impact our financial condition or results of operations.

Overview of Current and Planned Business Operations

Our Hosted Services are provided by our wholly- owned subsidiary, Apeiron Systems, a CPaaS provider that designed, built, owns, and operates a national network, supporting a suite of business communications services all accessible via its proprietary Applications Programming Interfaces ("APIs"). Some of Apeiron's Hosted Services include SIP/VoIP and cellular telephony, SMS/MMS messaging and numbering features, including Cloud IVRs, Voicemail, Fax, Call Recording, and other functions 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 ethernet, broadband, and LTE wireless WAN solutions. Apeiron's network services enable private WAN networking, Internet access, public cloud connectivity and Low Power Wide Area ("LPWA") network solutions for both mobile & local IoT connectivity. Apeiron's Cloud Services include Information Data Dips, Software-Defined Wide Area Networking ("SD-WAN"), and IoT data processing as well as device and sensor management.

Apeiron continues to expand its agent sales channel outreach, agent sales software platform, and invest in new product development to drive revenue diversification and higher margin services. In addition to new product development and existing channel development, Apeiron continues to enhance its billing system capabilities. Apeiron's expanding billing system can enable distribution channels to increase new product sales and take advantage of Apeiron's customizable white label billing solutions across its product lines.

We believe we are moving towards an increasingly wireless/mobile future, so Apeiron continues to evolve its network, cloud infrastructure, and Hosted Services platforms to capitalize on new and emerging technology trends, including IoT deployments and the inevitable migration to 5G technology across national cellular networks. Apeiron's response to these trends can be seen in its product development cycles and network development efforts, which continue to strategically position Apeiron in the market.

Our Mobile Services include retail and wholesale cellular voice/text/data services delivered using the three major domestic wireless networks. A wireless communications service reseller typically does not own the wireless network infrastructure over which customer services are provided. Mobile voice/text/data and mobile data solutions are generally sold as post-paid or pre-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 cellular voice service and mobile data service to low-income American households that qualify for the FCC's Lifeline program and the FCC's temporary EBB program. Our Lifeline mobile services are provided by our wholly- owned subsidiary, IM Telecom, marketed under its brand name Infiniti Mobile. IM Telecom operates under an FCC approved Compliance Plan and FCC wireless ETC designation across nine (9) states, including California, Georgia, Kentucky, Maryland, Nevada, Oklahoma, South Carolina, Vermont, and Wisconsin.

IM Telecom was approved to participate in the FCC's temporary EBB program on April 6, 2021, and to distribute EBB eligible mobile data services within the states it was then authorized as a Lifeline ETC. Subsequently, on September 1, 2021, the FCC approved IM Telecom's application to expand its EBB authorized distribution territory (not Lifeline) to include the remaining thirty-nine (39) contiguous states, as well as the District of Columbia and Puerto Rico.

There is pending legislation before the U.S. Congress within the Infrastructure Bill (H.R.3684 - Infrastructure Investment and Jobs Act, further described in Title V Broadband Affordability and starting in Section 60501), to offer subsidized mobile data service under a new program, following the expiration of the EBB program, with new rules that is expected to be called the Affordable Connectivity Benefit ("ACB") program; and the ACB program would be subject to interpretation and administration by the FCC and its administration company, USAC. On Friday, November 5, 2021, the above referenced Infrastructure Bill was passed in the House of Representatives and is now expected to be signed into law by President Biden.





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IM Telecom, operating under its brand name Infiniti Mobile, distributes cellular voice and mobile data services through its storefront in Tulsa, Oklahoma, a current group of independent field agents, two (2) new master agent relationships described above in Note 9 - Subsequent Events, of our Condensed Consolidated Financial Statements accompanying this Quarterly Report, and through its Infiniti Mobile website (www.infinitimobile.com). With IM Telecom's recent approval on June 3, 2021, to expand its Lifeline distribution into California, we anticipate California distribution will commence in the fourth quarter of 2021.

In 2017, before it acquired IM Telecom, the Company successfully distributed California Lifeline service under a Virtual ETC ("VETC") distribution agreement with another ETC. Under that agreement, the Company provided marketing, field distribution, agent management, device (equipment) sourcing and configuration, and compliance assurance with FCC and California regulations for the approval and distribution of new Lifeline service.

At its peak, the Company distributed over 10,000 new lines of Lifeline service per month in California. The Company ceased California VETC Lifeline distribution shortly after it acquired IM Telecom in early 2018, while it waited for the California Public Utilities Commission to approve IM Telecom's California Lifeline distribution application.

The FCC's Universal Service Administrative Company ("USAC") website (https://www.usac.org/lifeline/resources/program-data/) currently indicates there are 3,630,292 Lifeline eligible households in California, of which 1,242,787 currently receive service, leaving an estimated 2,387,505 unserved Lifeline eligible households in the State of California.

The Company's previous California VETC Lifeline management team is the same management team now operating IM Telecom. The Company expects that IM Telecom's management team will be successful in the distribution of applicable Lifeline, EBB, and/or ACB (if it becomes law) services in California.





Results of Operations

Comparison of the quarter ended September 30, 2021, to the quarter ended September 30, 2020

For the quarter ended September 30, 2021, we had $3,612,861 in revenues from operations compared to the quarter ended September 30, 2020, where we had $2,527,281 in revenue from operations. The cost of revenue for the quarter ended September 30, 2021, was $1,988,624 compared to $1,625,481 for the quarter ended September 30, 2020. We had a gross profit of $1,624,237 for the quarter ended September 30, 2021, and $901,800 for the quarter ended September 30, 2020.

For quarter ended September 30, 2021, our gross profit margin was 44.9% compared to 35.7% for the three months ended September 30, 2020.

For the quarters ended September 30, 2021, and 2020, respectively, total operating expenses were $1,252,632 and $958,223, for an increase of $294,409. This increase was primarily a result of infrastructure expansion consisting of primarily payroll, professional services, handset costs, and application development costs to support sales channel growth.

For the quarter ended September 30, 2021, non-operating expenses were interest expense of $2,573 and other non-operating expenses of $49,197 consisting primarily of stock option expenses, compared to other income of $81,070 and interest expense of $4,694 for the quarter ended September 30, 2020.

For the quarter ended September 30, 2021, we had a net income of $319,835. For the quarter ended September 30, 2020, we had net income of $19,953.

In comparing our Condensed Consolidated Statements of Operations between the three-month periods ended September 30, 2021, and 2020, respectively, the Company continued diversifying and expanding its service offerings. Revenues for both Hosted Services and Mobile Services were up from the quarter ended September 30, 2021, as compared to the quarter ended September 30, 2020. Hosted Services revenue increased by 3.5%, while Mobile Services revenue increased by 103.9%. Gross profit margin overall was 45% for the three months ended September 30, 2021, compared to 35.7% for the three months ended September 30, 2020. Hosted Services gross profit margin was 35.3% compared to 38.9% for the three months ended September 30, 2021, and 2020, respectively. Mobile Services gross profit margin was 52.6% compared to 30.8% for the three months ended September 30, 2021, and 2020, respectively.

Comparison of the nine months ended September 30, 2021, to the nine months ended September 30, 2020

For the nine months ended September 30, 2021, we had $8,919,573 in revenues from operations compared to the nine months ended September 30, 2020, where we had $6,741,830 in revenue from operations. The cost of revenue for the nine months ended September 30, 2021, was $4,946,786 compared to $4,196,528 for the nine months ended September 30, 2020. We had a gross profit of $3,972,787 for the nine months ended September 30, 2021, and $2,545,302 for the nine months ended September 30, 2020.





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For the nine months ended September 30, 2021, our gross profit margin was 44.5% compared to 37.7% for the nine months ended September 30, 2020. The increase was primarily due to enhanced COGS measures as well as Infiniti Mobile's expansion of the EBB program into new states.

For the nine months ended September 30, 2021, and 2020, respectively, total operating expenses were $3,377,950 and $2,883,526, for an increase of $494,424. This increase was primarily a result of infrastructure expansion, primarily payroll, professional services, handset costs, and application development costs to support sales channel growth.

For the nine months ended September 30, 2021, non-operating expenses were interest expense of $12,329 and other non-operating expenses of $154,310 consisting primarily of stock option expenses, compared to other income (PPP loan forgiveness and settlement income) of $624,518 and interest expense of $23,459 for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, we had a net income of $428,199. For the nine months ended September 30, 2020, we had net income of $262,835.

In comparing our Condensed Consolidated Statements of Operations between the nine-month periods ended September 30, 2021, and 2020, respectively, the Company continued diversifying and expanding its service offerings, including participating in the temporary EBB program. Revenues for both Hosted Services and Mobile Services were up for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. Hosted Services revenue increased by 17.6%, while Mobile Services revenue increased by 50.4%. Gross profit margin was 44.5% overall for the nine months ended September 30, 2021, compared to 37.8% for the nine months ended September 30, 2020. Hosted Services gross profit margin was 36.5% compared to 36.5% for the nine months ended September 30, 2021, and 2020, respectively. Mobile Services gross profit margin was 52.3% compared to 39.3% for the nine months ended September 30, 2021, and 2020, respectively.

Marketing and Advertising expense increased due mostly to an increase in Mobile Services sales activity and an enhancement of our Mobile Services website. Utilities and Facilities expense increased due mostly to the execution of a new headquarters office lease in Plano, TX, combined with a change in rent expense recognition rules. General and Administrative costs increased due mostly to costs related to new hires and increased travel. In 2020, we categorized Hosted Services' software development costs within Operating and Maintenance; then in 2021, we began categorizing software development costs into a new category, "Application Development Costs."

Liquidity and Capital Resources

As of September 30, 2021, we had $1,358,722 in cash and cash equivalents on hand.

In comparing liquidity between the nine-month periods ending September 30, 2021, and September 30, 2020, cash assets increased by 131%. This increase was due largely to expanded revenues from the EBB program and increased cash-flow performance. Liabilities and total overall debt showed a 2.4% decrease in the nine-month period ended September 30, 2021, when compared to September 30, 2020. Going forward, growth in new services as well as the introduction of the ACB program is expected to provide additional liquidity for our business.

Overall, the current ratio (current assets divided by our current liabilities) increased to 2.05 as of September 30, 2021, compared to December 31, 2020, of .94. Working capital increased 117.7%.





Cash Flow from Operations

During the nine months ended September 30, 2021, cash flow provided by operating activities was $636,557, and for the nine months ended September 30, 2020, cash flow provided by operating activities was $441,506.

Cash Flows from Investing Activities

During the nine months ended September 30, 2021, $10,000 of cash flow was used in investing activities for the purchase of a percentage ownership in another telecommunications company. For the nine months ended September 30, 2020, cash flow used in investing activities was $10,833 for the purchase of assets.

Cash Flows from Financing Activities

During the nine months ended September 30, 2021, cash flow provided by financing activities was $16,970 for net cash received from exercises of stock options after repayments of amounts of notes payable of $93,030. For the nine months ended September 30, 2020, net cash flow used in financing activities was $33,934, comprised of proceeds from Federal SBA Covid-19 loans ($459,000), repayments of revolving lines of credit, ($12,237), repayments of amounts due to a related party, ($87,165), and a one-time dividend paid to former Apeiron shareholders of ($310,129) as part of the acquisition of Apeiron Systems.







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Going Concern

For the nine months ended September 30, 2021, the Company generated net income of $428,199. For the three months ended September 30, 2021, net income was $319,835. The Company has sustained itself through the operations of the business, indicated by net cash from operations of $636,557 for the nine months ended September 30, 2021. The accumulated deficit as of September 30, 2021, is $5,540,291.

The Company has ameliorated any substantial going concern doubt issues by generating additional cash flow from operations through diversification of product offerings and revenue growth of its subsidiaries, Apeiron Systems and IM Telecom. We have continued to use additional cash flow to retire debt, while also adding resources to enable further revenue growth. Our working capital continues to improve without the use of lines of credit, borrowings or additional cash investments beyond our long term, low interest SBA EIDL loan proceeds from June 20, 2020.

We continue to diversify sources of revenue and increase margins through cost controls and a shift to higher margin product offerings. Prior to acquiring Apeiron Systems and IM Telecom, we derived nearly 100% of our revenue from cellular (voice) sales. With continued aggressive management and sales channel development we anticipate no future going concern issues.

Off-Balance Sheet Arrangements

We had no Off-Balance Sheet arrangements during the nine-month period ended September 30, 2021.





Critical Accounting Policies



Earnings Per Share

Basic earnings 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 earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. As of September 30, 2021, and September 30, 2020, there are 2,676,266 and 3,400,000 respectively, potentially dilutive common shares.

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.

The Company has a concentration of risk with respect to trade receivables from customers, other cellular providers, and the FCC. As of September 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 $111,672 and $639,429, or 11.23% and 64.33% of total accounts receivable, respectively. As of December 31, 2020, 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 $194,509, or 52.4%, and $52,843, or 14.2%, respectively.

Concentration of Major Customers

A significant amount of the revenue is derived from contracts with major customers, cellular partners and the federal government. For the nine-month period ended September 30, 2021, the Company had two (2) customers that accounted for $3,297,984 or 37% and $2,818,465 or 31.6% of total revenue, respectively. For the nine-month period ended September 30, 2020, the Company had one (1) customer that accounted for $2,332,716 or 34.6%, of revenue.

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.







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