KonaTel Inc. (OTC:KTEL) Stock Gains 12%: But Why?
The voice and data communications holding company KonaTel Inc. (OTC:KTEL) had been in focus on Thursday after it made a major new announcement. The company announced yesterday that it had managed to secure a credit facility with the firm ACP Financing VII LLC to help with the expansion of IM Telecom LLC, its fully owned subsidiary unit.
IM Telecom is a lifeline and ACP provider with a national presence. The company revealed that it had been provided with around $1.5 million in the form of financing for the purpose of purchasing equipment at the close of business yesterday. It was further noted that up to $25 million could be made available to the company to support the expansion of IM Telecom.
The installment sale agreement that had been inked with ACP Finance was a non-dilutive, structured credit facility. It did not involve any issued stock, convertibility, or warrants. The company noted that it was a novel short-term liability that had been created specifically for Lifeline and ACP providers like IM Telecom. The arrangement would allow for the repayment of equipment costs over a period of nine months in a way that would support IM Telecom and help it grow its customer base.
The Chief Executive Officer and Chairman of KonaTel, Sean McEwen, delivered a statement yesterday regarding the move. He noted that ACP Finance had the policy of maintaining strict policies with regards to credit facility qualification. There were minimum revenue and monthly activation thresholds that had to be met, and IM Telecom met all those requirements.
He stated that everyone at KonaTel was excited at the prospect of having a partnership with ACP Finance. McEwen also stated that the company’s team had been working on creating the infrastructure for sparking accelerated growth over the past months.
